Bombay Union Of Journalists and Ors vs The State Of Bombay and Anr

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 497 of 1963

Decision Date: 19 December, 1963

Coram: P.B. Gajendragadkar, K.N. Wanchoo, K.C. Das Gupta

In the case titled Bombay Union of Journalists and Others versus the State of Bombay and another, the Supreme Court rendered its judgment on 19 December 1963. The opinion was authored by Justice P. B. Gajendragadkar and was delivered by a bench comprising Justices P. B. Gajendragadkar, K. N. Wanchoo and K. C. Das Gupta. The petitioners were the Bombay Union of Journalists together with other applicants, and the respondents were the State of Bombay and an additional party. The decision was reported in the 1964 volume of the All India Reporter at page 1617 and also appears in the 1964 Supreme Court Reports, volume six, page 22. Subsequent citations of the judgment are found in several law reports and citators, including references such as 1967 SC1206, 1975 SC1735, 1975 SC2226, 1975 SC2238, 1976 SC1474, 1985 SC860, 1985 SC915, 1987 SC695, and 1990 SC255. The dispute centered on the interpretation of section twenty‑five F of the Industrial Disputes Act, 1947, which governs the duty of the government to refer industrial disputes for adjudication.

The factual background showed that the second and third appellants were employed as journalists and were retrenched by their employer, receiving three months’ salary in lieu of notice. The first appellant challenged the termination, alleging that the retrenchment was not bona fide and that he had been victimised. Conciliation proceedings failed, and a report was subsequently submitted to the State Government, identified as respondent No. 1. After hearing the parties, the Government issued an order refusing to refer the dispute to an industrial tribunal, stating that the termination constituted retrenchment and that the management had not acted mala fide. The appellants then filed a petition under article 226 of the Constitution seeking a writ of mandamus directing the Government to reconsider the matter afresh. A single judge dismissed the petition; an appeal to a Division Bench also failed, leading the appellants to seek special leave to appeal before the Supreme Court. Their principal contentions were that the Government, in deciding whether to make a reference, had in effect decided the merits of the case, rendering the refusal illegal, and that the service of notice required by section twenty‑five F(c) of the Act was mandatory, a requirement the management had not fulfilled and which the Government had failed to consider. The Court held that when the appropriate Government evaluates whether an industrial dispute should be referred for adjudication, it may, at the first instance, consider the merits of the dispute and other relevant factors to determine whether a reference would be expedient. However, if the dispute raises a question of law or a disputed question of fact, the Government should not purport to reach final conclusions, as such issues ordinarily fall within the jurisdiction of the Industrial Tribunal. The Court further explained that a claim which is patently frivolous or clearly...

In the discussion of when the Government may decline to refer an industrial dispute for adjudication, the Court observed that a refusal is permissible if the claim is unduly delayed or if the effect of the claim on the overall relationship between employers and employees in the region is likely to be detrimental. The Court cited the authority of State of Bombay v. K. P. Krishnan, [1961] 1 S.C.R. 227, in support of this principle. Regarding clause (c) of section 25F of the Industrial Disputes Act, the Court held that this provision cannot be described as a condition precedent that must be satisfied before a retrenchment can be lawfully carried out, even though clause (c) is listed alongside clauses (a) and (b), which are expressly conditions precedent. The Court further explained that previous observations characterising section 25F(c) as mandatory were merely obiter dicta, as illustrated by the decisions in State of Bombay v. The Hospital Mazdoor Sabha, [1960] 2 S.C.R. 866; The District Labour Association, Calcutta v. Ex‑Employees of Tea Districts Labour Association, [1960] 3 S.C.R. 206; and Workmen of Subhong Tea Estate v. The Outgoing Management of Subhong Tea Estate, [1964] Y L.L.J. 333. The Court proceeded to consider the hypothetical situation in which clause (c) were treated as a condition precedent. It concluded that even in such a circumstance, the issuance of a writ of mandamus against the Government would not automatically follow. While the breach of section 25F(c) by an employer represents a serious violation that ordinarily prompts the Government to refer the dispute for adjudication, the statutory scheme embodied in section 10(1) read with section 12(5) requires the Government also to assess the expediency of making a reference. Consequently, the Government retains discretion to refuse a reference if it deems the reference unwise, provided that the refusal is not based on irrelevant considerations, extraneous grounds, or mala fide conduct. In those improper cases, an aggrieved party may approach the High Court seeking a writ of mandamus to compel the Government to refer the dispute.

The judgment was rendered in a civil appellate jurisdiction concerning Civil Appeal No. 497 of 1963, which was entertained by special leave from the Bombay High Court judgment and order dated 10 September 1960 in Appeal No. 10 of 1959. Counsel for the appellant included senior advocates, while the respondents were represented by the Solicitor General of India, additional senior counsel, and other counsel appointed for the respective respondents. The judgment was delivered on 19 December 1963 by Justice Gajendragadkar. The principal question of law addressed by the Court concerned the interpretation of section 25F(c) of the Industrial Disputes Act, 1947 (No. 14 of 1947). The parties before the Court were the Bombay Union of Journalists, a trade union registered under the Trade Unions Act, 1926, together with Mrs. Aruna Mukherji and Mr. M. T. Thomas as appellants 1 to 3, and the State of Bombay and the Indian National Press, Bombay, a private limited company, as respondents 1 and 2 respectively. Appellant 2 had been appointed to the staff of the second respondent at a salary of Rs. 500 per month, effective from 1 January 1955. On 30 November 1957, she received a notice of termination of her services, the contents of which are described in the subsequent portion of the judgment.

With effect from 1 December 1957, the employer issued a notice terminating the services of Shrimati Aruna Mukherji. The notice explained that the management, after consulting the Editor, had decided to retrench her. Similarly, Mr M T Thomas, who had been employed as a Sub‑Editor of the Free Press Journal since 1953, received a notice of retrenchment dated 30 November 1957, which also took effect from 1 December 1957. Both notices informed the respective employees that their termination was made under section 3(2) of the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955, and that instead of the statutory notice period the employer would pay them salary in lieu for three months. The two appellants collected their November salaries and ceased to work for the second respondent from 1 December 1957.

It appears that on 3 December 1957 the first appellant wrote to the Director‑in‑charge of the second respondent, alleging that the action taken against the second and third appellants was vindictive and demanding that the termination notices be withdrawn and that the employees be reinstated in their former posts. The second respondent rejected this demand, and consequently the first appellant approached the Labour Commissioner of the first respondent seeking further action. The Conciliation Officer then intervened and summoned the parties for discussion. After hearing the parties, the Conciliation Officer concluded that no settlement could be reached and, on 15 April 1958, filed a failure report under section 12(4) of the Industrial Disputes Act. In that report the Officer expressed the view that, given the positions taken by the parties, a settlement was impossible and therefore a failure had to be recorded. Following the report, both parties submitted their respective statements to the first respondent. The first respondent examined those statements together with the Conciliation Officer’s report and decided that it was unnecessary to refer the dispute to an Industrial Tribunal under section 12(5) of the Act. This decision was communicated to the appellants by a letter dated 1 July 1958, signed by the Deputy Secretary of the Labour and Social Welfare Department. The letter set out two reasons for not referring the matter to a Tribunal: first, that the terminations of Shrimati Mukherji and Mr Thomas appeared to be legitimate retrenchments for which the management was prepared to pay all legal dues; and second, that in effecting the terminations the management did not act in a mala fide or vindictive manner nor did it engage in victimisation for trade‑union activities.

In this matter, the Court recorded that the management had not acted dishonestly, vindictively, or with the intention of victimising trade‑union activities. The appellants subsequently filed a petition under Article 226 of the Constitution in the Bombay High Court, seeking a writ of mandamus against respondent No 1. They argued that respondent No 1’s refusal to refer the industrial dispute to the Industrial Tribunal under section 12(5) of the relevant Act was unlawful, and therefore they prayed that the High Court issue a writ directing respondent No 1 to re‑examine the case and decide anew whether a reference to the Tribunal was required. A single judge of the High Court heard the writ petition and ultimately dismissed it. Unhappy with that outcome, the appellants appealed the decision by way of a Letters Patent Appeal before a Division Bench of the same High Court. The Division Bench affirmed the view of the learned single judge and dismissed the appeal. Consequently, the appellants approached this Court by way of special leave. The first contention advanced on their behalf, through counsel, was that the reasons supplied by respondent No 1 for declining to make a reference demonstrated that respondent No 1 had examined the merits of the dispute and concluded that a reference would not be justified; counsel further contended that by considering the merits while deciding whether a reference should be made under section 12(5), respondent No 1 had acted illegally and improperly. The Court noted that the scheme of the Act, as set out in section 12, is unequivocal. When an industrial dispute exists or is anticipated, the Conciliation Officer may conduct conciliation proceedings as prescribed by section 12. If the officer’s attempts to secure a settlement fail, a failure report must be made under section 12(4). Section 12(5) then provides that, upon reviewing the failure report, the appropriate Government may, if satisfied that a case exists, refer the dispute to the Tribunal; however, if the Government decides not to refer, it must record and communicate its reasons to the parties concerned. The appellants argued that section 12(5) obliges respondent No 1 to state reasons for refusing a reference and that the reasons given indicated that respondent No 1 exceeded its jurisdiction by evaluating the merits of the dispute when deciding on a reference. The Court held that this argument must be rejected because, when the appropriate Government assesses whether a reference should be made under section 12(5), it must act in accordance with section 10(1) of the Act, which confers a discretionary power on the Government.

In this case, the Court explained that the appropriate Government possessed a discretionary power under section 10(1) of the Act to either refer an industrial dispute for adjudication or to decline such a reference, depending upon whether it considered a reference to be expedient. The Court clarified that when a failure report had been filed under section 12(4), the appropriate Government still exercised the power conferred by section 10(1), but section 12(5) simultaneously imposed a duty on it to record and communicate the reasons for any decision not to refer the dispute. The Court referred to its earlier decision in State of Bombay v. K. P. Krishnan & Others (1961) 1 S.C.R. 227, which held that, while deciding whether to make a reference, the appropriate Government could, at a preliminary stage, examine the merits of the dispute and consider other relevant factors that would help it determine the expediency of a reference. The Court stressed that, although questions of law ordinarily fell within the jurisdiction of an Industrial Tribunal and therefore the appropriate Government should not render a final legal ruling, and likewise that final findings on factual disputes belonged to the Tribunal, this limitation did not prevent the Government from making a prima‑facie assessment of the dispute when exercising its power under section 10(1) read with section 12(5). The Court further noted that if a claim appeared plainly frivolous or was unreasonably delayed, the appropriate Government could refuse to refer it. In addition, the Court observed that the Government might take into account the likely effect of the claim on the broader relationship between employers and employees in the region, and that an adverse impact could justify a decision not to refer. Consequently, the Court held that a preliminary examination of the merits was not foreign to the enquiry required by section 10(1), and therefore rejected the argument that the appropriate Government had exceeded its jurisdiction by expressing a prima‑facie view on the nature of the termination of services of appellants 2 and 3. Counsel for the petitioner, identified as Mr. Bishan Narain, then argued that the principal dispute between the parties concerned respondent No. 2’s failure to comply with the provisions of section 25F(c) of the Act, and that this issue had not been considered by respondent No. 1 when it refused to make a reference. The Court observed that section 25F(c) required a prescribed notice to be served on the appropriate Government before an employer could retrench a workman to whom the provision applied, and that it was a matter of common ground that such notice had not been served by respondent No. 2 prior to the termination of the services of appellants 2 and 3. The Court concluded that the argument that respondent No. 1 had omitted consideration of this aspect, thereby rendering its refusal unreasonable and warranting a writ of mandamus, lacked any substance. The Court therefore declined to grant the relief sought on that ground.

Section 25F(c) of the Act stipulated that no workman to whom the provision applied could be retrenched by his employer until a notice, prepared in the manner prescribed, had been served upon the appropriate Government. The parties agreed that respondent No 2 had failed to serve such a notice on respondent No 1 before the services of appellants 2 and 3 were terminated. The appellants contended that the reasons supplied by respondent No 1 in its communication to appellant 1, which explained the refusal to make a reference, demonstrated that this particular issue had not been taken into account. On that basis they urged that a serious defect existed in respondent No 1’s reasoning and that a writ of mandamus should be issued to compel respondent No 1 to rectify the omission. The Court examined this contention and found that it lacked any substantive foundation. It observed that the rules framed by respondent No 1 under the Act revealed a different interpretation of Section 25F(c). Specifically, Rule 80 of those rules indicated that where an employer retrenched an employee by offering payment in lieu of the notice required by Section 25F(a), the employer was obligated to serve the notice of the retrenchment within seven days of the retrenchment date. Consequently, the notice prescribed by Section 25F(c) was treated as a condition subsequent rather than a condition precedent to the validity of the retrenchment. Because Rule 80 itself answered the appellants’ plea, respondent No 1 likely considered it unnecessary to refer to the alleged failure to serve notice or to elaborate on that point in its communication to the appellants.

The Court further explained that when an application for a writ of mandamus is filed against an order made by the appropriate Government under Section 10(1) read with Section 12(5), the Court does not sit in appeal of that order and therefore is not empowered to scrutinise the propriety or the adequacy of the reasons given by the Government. While it was desirable for the Government to state its reasons clearly so that they could withstand public scrutiny, the Court held that the Government was not required to produce an exhaustive, detailed order enumerating every factor that influenced its decision to refuse a reference. The Court stated that it would be idle to demand such an elaborate explanation and that intervention would be warranted only if the reasons disclosed an irrelevant or foreign consideration. Accordingly, the mere allegation that two of the pleas raised by the appellants had been considered whereas the third had not did not, by itself, justify the issuance of a writ of mandamus under Article 226.

In discussing the requirement of section 12(5), the Court observed that the party concerned must be informed clearly and precisely of the reasons why a reference was not made, because the purpose of the provision is to compel the appropriate Government to state its reasons so that they may be subject to public scrutiny. However, the Court clarified that this does not empower a party challenging the Government’s decision not to make a reference to compel the Court, in writ proceedings, to examine the propriety or correctness of those reasons. The Court added that if the reasons shown indicate that the Government considered an irrelevant or foreign factor, such a situation may justify the issuance of a writ of mandamus. Nevertheless, the mere allegation that the Government considered two of the pleas raised by the appellants and ignored the third does not, by itself, entitle the party to obtain relief under article 226. The discussion then moved to the principal argument presented by counsel for the appellants concerning the construction of section 25F(c). Counsel contended that, just as clauses (a) and (b) of section 25F are mandatory and constitute conditions precedent for a valid retrenchment, clause (c) should likewise be regarded as mandatory and a condition precedent. The Court noted that the prohibition contained in section 25F is expressed in the negative and is coupled with the condition that no retrenchment may be effected until the three conditions enumerated in clauses (a), (b) and (c) are satisfied. The negative formulation of the provision together with the use of the word “until” to introduce the three conditions indicates that the conditions must be fulfilled before a retrenchment can be validly effected. Counsel referred to the decision of this Court in State of Bombay and Others v. The Hospital Mazdoor Sabha and Ors., where it was held that the requirement prescribed by clause (b) of section 25F is mandatory and must be complied with before an industrial employee can be retrenched. That judgment also observed that clauses (a) and (c) of the same section prescribe similar conditions, although the Court then refrained from construing them. Counsel further cited the case of Tea Districts Labour Association, Calcutta v. Ex‑Employees of Tea Districts Labour Association and Anr., in which it was conceded that the notice requirement in clause (c) of section 25F is mandatory and amounts to a condition precedent. Additionally, counsel mentioned the recent decision of this Court in The Workmen of Subong Tea Estate v. The Outgoing Management of Subong Tea Estate and Anr., where it was incidentally stated that, on a prima facie view, the three conditions in clauses (a), (b) and (c) of section 25F appear to constitute conditions precedent before an industrial workman can be validly retrenched. The Court noted that in that case no specific question arose regarding the construction of the provision.

The Court observed that the comments on the meaning and operation of section 25F were merely obiter statements, yet even those fleeting remarks suggested that, at first glance, the three stipulated conditions might appear to be alike. However, the Court also noted that no previous decision of this Court had directly addressed the precise question of whether all three clauses should be treated identically as conditions precedent to a valid retrenchment. Counsel for the petitioner, Mr Bishan Narain, argued vigorously that the ordinary rule of statutory construction demands that if clauses (a) and (b) of section 25F are interpreted as conditions precedent, then clause (c) must, by the same logic, receive the same interpretation. While that line of reasoning is initially appealing, a careful reading of the statute reveals that clause (c) cannot be given the same effect as clauses (a) and (b). Section 25F(a) mandates that the employer give the workman one month’s written notice indicating the reasons for retrenchment, and that this notice period must lapse before the termination takes effect. The provision also allows the employer to compensate the workman with wages in lieu of that notice period. It is this latter sub‑provision that demands close attention when assessing the nature of the requirement imposed by clause (c). The sub‑clause permitting payment in lieu of notice enables the employer to terminate the employee immediately upon payment of the appropriate wages, without waiting for the month‑long notice to run. If a retrenchment is carried out under this payment‑in‑lieu mechanism, the question arises as to how clause (c) would function. Should the law require that the employer first serve the prescribed notice to the appropriate Government before executing the retrenchment, then even a termination effected by payment in lieu would be invalid unless that notice were given beforehand, a result that seems illogical and unreasonable. By reading the latter part of clause (a) together with clause (c), it becomes apparent that, in cases where the employer relies on the payment‑in‑lieu provision, the notice required by clause (c) must be given after the retrenchment has occurred; otherwise, the statutory allowance for immediate termination would be rendered ineffective. Consequently, clause (c) cannot be regarded as a condition precedent, even though it is placed within section 25F alongside clauses (a) and (b), which do prescribe conditions that must be satisfied before a retrenchment is lawfully effected.

The Court observed that although the appellant’s argument relied on the negative phrasing of the provision and the use of the word “until,” the surrounding context required a different interpretation of the requirement contained in clause (c). The Court explained that the condition expressed by the word “until” was nevertheless satisfied under the approach it was inclined to adopt, because after a retrenchment is carried out the employer is still obligated to give notice of that retrenchment to the appropriate Government, and that is precisely the point at which clause (c) gives significance to the manner in which the notice must be served. The Court noted that the Central Government and the State Governments have framed Rules governing the service of such notice, and, in general, these Rules do not obligate an employer to serve notice before the retrenchment takes place. In cases where the employer effects retrenchment by paying the workman wages in lieu of notice, the Rules provide that the notice must be served within the period prescribed by the Rules; consequently, under the Rules the notice is required to be given after the retrenchment, not before, and within the specified time‑frame. While counsel for the appellant, Mr. Bishan Narain, contended that if his construction of section 25F(c) were correct the Rules would become invalid, the Court held that, on the view it favored, the Rules framed by the Government were consistent with the policy underlying the provision of section 25F(c). Therefore, the Court was satisfied that section 25F(c) could not be described as a condition precedent that must be fulfilled before a retrenchment can be validly effected. The Court then turned to another relevant consideration, namely the requirement of section 25F(a). It pointed out that a proviso to section 25F(a) provides that no notice is necessary where the retrenchment is governed by an agreement that specifies a termination date. Clause (a) therefore offers a safeguard for the retrenched employee by obligating the employer either to give one month’s notice or to pay wages in lieu of such notice before the employee is retrenched. In a similar vein, clause (b) mandates that the workman receive compensation at the time of retrenchment equal to fifteen days’ average pay for each completed year of service, or for any part thereof exceeding six months. The Court noted that this compensation must also be paid at the time of retrenchment, providing an additional safeguard for the employee. Thus, while clauses (a) and (b) were clearly intended to protect the interests of the workman and were made conditions precedent, clause (c) was seen as a procedural requirement meant solely to inform the appropriate Government about the retrenchment, rather than to serve as a protective measure for the employee.

In explaining the purpose of the two mandatory requirements of clause (a) and clause (b), the Court observed that the legislature clearly intended these conditions to operate as safeguards for the employee before any retrenchment could take place. The Court said that because the hardship caused by retrenchment was at least partly alleviated by the one‑month notice or payment in lieu of notice required by clause (a) and by the retrenchment compensation prescribed in clause (b), it was reasonable to treat those provisions as conditions precedent. By contrast, the Court noted that clause (c) served a different purpose. Clause (c) was designed merely to give notice to the appropriate Government about the occurrence of a retrenchment so that the Government could keep itself informed of employment conditions across various industries. The Court found no compelling reason to make clause (c) a condition precedent in the same way as clauses (a) and (b). Consequently, the Court held that it was not unreasonable to conclude that clause (c) did not operate as a condition precedent.

The Court then addressed a further issue that arose in the appeal. Even if clause (c) were treated as a condition precedent, the Court explained that it would still be difficult to accept the petitioner’s argument that a writ of mandamus should be issued against respondent No. 1. The Court explained that a writ of mandamus could be granted only if it were shown that respondent No. 1 had a duty to refer the industrial dispute for adjudication when the employee alleged that the employer’s retrenchment violated clause (c). The Court questioned whether the appropriate Government was bound to refer a dispute when one of the issues concerned a breach of a mandatory provision of the Act. The Court answered in the negative. The Court clarified that a breach of section 25F, although serious, did not automatically require the Government to refer the dispute for industrial adjudication. The Court pointed to the provisions of section 10(1) read with section 12(5), which allowed the Government to consider whether making a reference was expedient. If, after weighing all relevant facts, the Government concluded that a reference would be inexpedient, it was competent to refuse to make such a reference.

Finally, the Court noted that this analysis assumed the Government acted honestly and in good faith. The Court warned that if the Government refused to refer a dispute for irrelevant or extraneous reasons, or acted in a mala‑fide manner, a party could then seek a writ of mandamus from the High Court. On the basis of the foregoing reasoning, the Court dismissed the appeal, ordered that no costs be awarded, and concluded that the appeal failed.

In addressing the legal position, the Court expressly assumed that the appropriate Government would act honestly and in good faith, noting that such an assumption was indispensable for the analysis it was undertaking. The Court further explained that if the appropriate Government were to refuse to make a reference on a ground that was irrelevant, on an extraneous consideration, or if it were to act with dishonest intent, the circumstances would be fundamentally different from those before it. In that alternative scenario, the Court indicated that the aggrieved party would be entitled to approach the High Court and seek a writ of mandamus compelling the Government to carry out the reference. After reviewing the material placed before it, the Court determined that none of those exceptional circumstances existed and, consequently, found that the appeal could not succeed. Accordingly, the Court ordered that the appeal fail and be dismissed. The Court also directed that there would be no order as to costs, meaning that neither party would be awarded costs in respect of the proceedings. In sum, the final order recorded the dismissal of the appeal without any award of costs.