Sheroo Kalikushroo Fatakia vs Union Of India (Uoi) And Ors. on 12 July 1990

Bombay High Court
Sheroo Kalikushroo Fatakia vs Union Of India (Uoi) And Ors. on 12 July, 1990
Equivalent citations: (1993)IIILLJ714BOM
JUDGMENT

H.H. Kantharia, J.

1. The petitioner was appointed as Stenographer by the second respondent, Bank of America, vide letter dated September 12, 1966 with effect from November 1, 1966. She was confirmed as Manager’s Steno/Secretary by a communication dated May 1,1967. In October, 1982, she was designated as Financial Analyst. However, by a letter dated July 11, 1988 she was demoted to the post of Assistant Financial Analyst. According to the petitioner she was made to tender her resignation effective from September 1, 1988 on August 2, 1988 but she withdrew her resignation by a telegram dated August 4, 1988. However, according to second respondent, the petitioner was informed on August 4, 1988 itself that her resignation was accepted with immediate effect waiving notice period of one month. Thereafter, on August 10, 1988 the petitioner raised a demand on the second respondent that she should be allowed to resume work but with no success. The petitioner then moved the Conciliation Officer i.e. Assistant Commissioner of Labour (Central) -III, Bombay (the third respondent) and the dispute was admitted in conciliation. At the hearing of the conciliation proceedings, the second respondent-bank took a plea that the petitioner was not a “workman” under Section 2(s) of the Industrial Disputes Act, 1947 (hereinafter referred to as ‘the Act’). On March 10, 1989, the third respondent submitted a failure report upon which the Deputy Secretary of the Ministry of Labour, Government of India, refused to refer the dispute to the Labour Court/Industrial Tribunal for adjudication on the ground that the petitioner was not a “workman” by a communication dated August 18/21, 1989. Feeling aggrieved, the petitioner invoked the writ jurisdiction of this Court under Article 226 of the Constitution and filed this writ petition.

2. In support of the petition, Mr. Talsania urged that it was not for the Government to have adjudicated upon a dispute whether the petitioner was a “workman” or not and at any rate in refusing reference to the petitioner, the Government gave no acceptable reasons and that is how the impugned order was bad-in-law. Controverting the submissions of Mr. Talsania, Mr. Tulzapurkar representing the second respondent-bank submitted that the Government was within its powers and competence to go into the question whether the petitioner was a workman or not and this Court while exercising writ jurisdiction under Article 226 of the Constitution cannot interfere with the action of the Government refusing the reference to the petitioner on the ground of inadequacy of the reasons therefor. Mr. Mehta, learned Government Counsel, appearing on behalf of the Union of India and the Assistant Commissioner of Labour submits to the orders of the Court.

3. Now, the submissions of Mr. Tulzapurkar are that (i) the appropriate Government while exercising discretionary powers under Section 10(1) read with Section 12(5) of the Act is entitled to take into consideration such material as was placed before it by the Conciliation Officer, (ii) the appropriate Government is entitled to consider the prima facie merits of the dispute to ascertain whether the dispute is frivolous; (iii) before making a reference the appropriate Government is required to be satisfied whether an industrial dispute within the meaning of Section 2(k) of the Act exists or not; (iv) the aforesaid question required the appropriate Government to decide whether the person raising the dispute is a workman within the meaning of Section 2(s) of the Act or not; (v) the aforesaid decision is a pre-condition of making a reference; (vi) a reference can only be made of an industrial dispute and unless the employee is a workman there cannot be an industrial dispute within the meaning of Section 2(k) of the Act; (vii) the decision as to whether the employee is a workman or not does not amount to adjudication of the dispute on merits by the appropriate Government; (viii) what the appropriate Government is prohibited from doing is the adjudication of the dispute on merits and not adjudication of the jurisdictional fact; and (ix) on consideration of various authorities, the statement of law pronounced by the Division Bench of this Court in A Sundarambal v. Government of Goa, Daman, Diu and Ors. 1983 1983 M.L.J. 881 which was upheld by the Supreme Court and , is based on the decision of the larger bench of the Supreme Court in State of Bombay (now Maharashtra) and Anr. v. K.P. Krishnan and Ors. and Bombay Union of Journalists and Ors. v. The State of Bombay and Anr. . Mr. Tulzapurkar further submitted that in the event of this Court finding that there are conflicting decisions, on the law of precedents pronounced by the Full Bench of Karnataka High Court in case of Govindanaik G. Kalaghatigi v. West Patent Press Co. Ltd. and Anr. this Court should follow the larger bench decision. Mr. Tulzapurkar also submitted that the decision of the appropriate Government can be challenged if it is perverse or there is non-application of mind or is based on any extraneous or irrelevant considerations and in the instant case there was ample material in the form of failure report of the Conciliation Officer and detailed submissions of the parties made before the Government. The impugned order cannot be equated with a judgment of a Court so as to require analysis of facts or submissions, further urged Mr. Tulzapurkar. According to him, this Court has to be satisfied that the reason given by the appropriate Government was based on material which is germane and that there was proper application of mind and further that this Court cannot quash the impugned order on the ground of insufficiency or inadequacy of reasons. In the final analysis, Mr. Tulzapurkar submitted that the impugned order does not suffer from any defect and cannot be assailed on any ground and should be upheld by this Court. In support of his contentions, Mr. Tulzapurkar relied upon cases of (i) State of Bombay (now Maharashtra) v. K.P. Krishnan and Ors. ; (ii) Bombay Union of Journalists and Ors. v. The State of Bombay and Anr. 1964 S.C. 1617; (iii) Shambu Nath Goyal v. Bank of Baroda ; (iv) Ram A vtar Sharma and Ors. v. State of Haryana and Anr. ; (v) A. Sundarambal v. Government of Goa, Daman, Diu and Ors. AIR 1985 L.L.J. 881; (vi) A. Sundarambal v. Government of Goa, Daman, Diu and Ors. 1988 II C.L.R. 316; (vii) Workmen employed by Hindustan Lever Limited v. Hindustan Lever Limited ; and (viii) Hochtief Gammon v. State of Orissa and Ors. .

4. There is not and cannot be any dispute about the legal proposition made by Mr. Tulzapurkar which are based on various authorities cited by him as above. However [Section 12(5) of the Act envisages that if, on a consideration of the report referred to in Sub-section (4), the appropriate Government is satisfied that there is a case for reference to a Board, Labour Court, Tribunal or National Tribunal, it may make such reference but where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefor. ] The moot question, therefore, is whether the Government can pass the order refusing to make a reference under Section 12(5) of the Act without assigning acceptable reasons.

5. For the sake of convenience, we may here incorporate the impugned order passed by the Deputy Secretary, Ministry of Labour, Government of India, on 18/21st August,1989 which reads as under:

“In continuation of A.L.C.(C), Bombay FOC Report No B-ALC-III/7(40)88 dated 10-3-89 on the subject mentioned above. I am directed to say that Miss Sheroo K. Fatakia cannot be deemed to be a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 and is therefore not entitled for any relief under the provisions of the I.D. Act, 1947 because the nature of job she was performing in the bank was mainly of a managerial nature.
The Central Government, therefore , is of the opinion that there are no prime facie grounds for a reference of the dispute for adjudication by an Industrial Tribunal”.
6. In my opinion, there are no acceptable reasons in the impugned order passed by the Government. The impugned order, according to me, is cryptic. All that it says is that the concerned employee was not a “workman” because she was mainly doing the managerial job and, therefore, the Government was of the opinion that no prima facie grounds for reference were made out. It was held by the Supreme Court in Nirmal Singh v. State of Punjab and Ors. 1984 LLJ 396 that the Labour Commissioner ought to have given reasons why he came to the conclusion that the appellant was not a workman within the meaning of Section 2(s) of the Act and that he only stated that the post held by the appellant did not fall “within the category of workman”. The Supreme Court further held that the Deputy Commissioner of Labour had not given any reasons to justify his conclusions. In the instant case, the Government should have given reasons as to why it was of the opinion that the petitioner herein was a workman. It was not enough to say that the petitioner was mainly doing work of managerial nature and, therefore; she was not a workman.

7. This Court in Krishna Babu Gadigaonkar etc. v. State of Maharashtra and Ors. 1986 L.I.C 1664 had held:

“The powers vested in the Government under Section 12(5) of the Act to make a reference are discretionary. But when the Government chooses not to make a reference, it has to record reasons for not doing so and communicate the same to the parties concerned. This is a mandatory duty of the Government”.
It was further held by this Court:

“While exercising such powers the Government should be slow in declining to make a reference because in doing so, the Government attempts to usurp the powers of the Labour Court in Industrial Tribunal in going into the merits of the matter. It is only when the Government comes to the conclusion that the claims made by the workmen were perverse or frivolous or bogus or were inordinately delayed that the Government may exercise its discretion and refuse to make a reference. In such cases Government is expected to exercise its discretion properly and assign acceptable reasons for its decisions. In view of the introduction of Section 11-A which gives powers to the Labour Courts and Industrial Tribunal to give appropriate relief in the event of discharge or dismissal of the workmen it is all the more incumbent upon the Government to make references.”
8. In case of Abad Dairy Dudh VitranKendra Sanchalak Mandal v. Abad Dairy and Ors. 1989 II C.L.R. 854 the Supreme Court had observed: “We however think that the High Court should not have done this but, instead, should have directed the Government to refer the disputes between the parties to an Industrial Tribunal making the issue of the jurisdictional fact viz., as to “whether the appellants are workmen? also one of the terms of reference”. The Supreme Court therein further observed:” Also, the only ground on which the State Government declined to make a reference was that the appellants were not workmen. This view is not so obvious or patent on the facts before us. In the circumstances, we think the best course is to set aside the order of the High Court and direct that the matter be gone into by an Industrial Tribunal after the Government had made an appropriate order. We, therefore, allow these appeals, set aside the order of the High Court and direct the State Government to refer to an Industrial Tribunal all the disputes between the parties including the preliminary question whether the appellants are workmen within the meaning of Industrial Disputes Act or not”.

9. In M.P. Irrigation Krmachari Sangh v. State of M.P. and Anr. 1985 II C.L.R.10 the Supreme Court had held:

“Therefore, while conceding a very limited jurisdiction to the State Government to examine patent frivolousness of the demands, it is to be understood as a rule, that adjudication of demands made by workmen should be left to the Tribunal to decide. Section 10 permits appropriate Government to determine whether dispute ‘exists or is apprehended’ and then refer it for adjudication on merits. The demarcated functions are (1) reference, (2) adjudication. When a reference is rejected on the specious plea that the Government cannot bear the additional burden, it consitutes adjudication and thereby usurpation of the power of a quasi- judicial Tribunal by an administrative authority, namely, the Appropriate Government. In our opinion, the reasons given by the State Government to decline reference are beyond the powers of the Government under the relevant sections of the Industrial Disputes Act. What the State Government has done in this case is not a prima facie examination of the merits of the question involved. To say that granting of dearness allowance equal to that of the employees of the Central Government would cost additional financial burden on the Government is to make a unilateral decision without necessary evidences and without giving an opportunity to the workmen to rebut this conclusion. This virtually amounts to a final adjudication of the demand itself. The demand can never be characterised as either perverse or frivolous. The conclusion so arrived at robs the employers of an opportunity to place evidence before the Tribunal and to substantiate the reasonableness of the demand”.
10. Again, in Telco Convoy Drivers Mazdoor Sangh and Anr. v. State of Bihar and Ors. 1989 II C.L.R.699 the Supreme Court ruled:

“It is true that in considering the question of making a reference under Section 10(1), the Government is entitled to form an opinion as to whether an industrial dispute “exists or is apprehended” as urged by Mr. Shanti Bhushan. The formation of opinion as to whether an industrial dispute “exists or is apprehended” is not the same thing as to adjudicate the dispute itself on its merits. In the instant case, as already stated, the dispute is as to whether the convoy drivers are employees or workmen of TELCO, that is to say, whether there is relationship of employer and employees between TELCO and the convey drivers. In considering the question whether a reference should be made or not, the Deputy Labour Commissioner and/or the Government have held that the convoy drivers are not workmen and, accordingly, no reference can be made. Thus, the dispute has been decided by the Government which is, undoubtedly, not permissible.”
After referring to the cases of Ram Avtar Sharma v. State of Haryana ; M.P. Irrigation Karmachari Sangh v. State of M.P. 1985 (2) CLR 10 and Shambu Nath Goyal v. Bank of Baroda, Jullundur the Supreme Court further ruled:

“Applying the principle laid down by this Court in the above decisions, there can be no doubt that the Government was not justified in deciding the dispute. Whereas in the instant case, the dispute is whether the persons raising the dispute are workmen or not, the same cannot be decided by the Government in exercise of its administrative function under Section 10(1) of the Act. As has been held in M.P. Irrigation Karmachari Sangh’s Case 1985 (2) CLR 10 there may be exceptional cases in which the State Government may, on a proper examination of the demand, come to a conclusion that the demands are either perverse or frivolous and do not merit a reference. Further, the Government should be very slow to attempt an examination of the demand with a view to declining reference and Courts will always be vigilant whenever the Government attempts to usurp the powers of the Tribunal for adjudication of valid disputes and that to allow the Government to do so would be to render Section 10 and Section 12(5) of the Act nugatory.”
11. Mr. Tulzapurkar submitted that the observations made by the Supreme Court in the aforesaid cases should be read in the context of the facts of each case and these judgments would not be an authority for the proposition that the appropriate Government has no jurisdiction to decide whether the employee is a workman or not. It is no doubt true that the Supreme Court in the cases aforesaid made observation in the facts of the case but the law laid down by the Supreme Court, as stated above, has a binding force on this court and cannot be brushed aside on a specious plea that the observations were made in the facts and circumstances of those cases.

12. In the premises, in my judgment, the impugned order passed by the Central Government in this case cannot be sustained in law. It is not disputed that the High Court while exercising discretionary writ jurisdiction under Article 226 of the Constitution can direct the Government to make a reference to the appropriate authority or forum under Section 12(5) of the Act. However, authority on the point, if required, can be had in the rulings of the Supreme Court, this Court and the Gujarat High Court in (i) Sankari Cement Alai Thozhilalar Munnetra Sangamv. Government of ‘Tamil Nadu and Management of India Cements Ltd. v. S.C.A.T. 1 983 1 L.L.J. 460 S.C., (ii) Nirmal Singh v. State of Punjab and Ors. 1984 II LLJ 396 : 1984 L.I.C. 1312 S.C., (iii) Rohinton P. Daruwalla v. Dy. Commissioner of Labour (Conciliation) Bombay 1985 1 C.L.R. 126 (Bom.) and (iv) Suresh Shantaram Joshi v. Regional Manager, Bank of Maharashtra, Baroda 1985 1 L.LJ.487(Guj.).

13. In the result, the writ petition succeeds and the same is allowed. The impugned order passed by the Deputy Secretary, Ministry of Labour, Government of India (Exh. ‘K’ to the petition) on 18/21st August, 1989 refusing to make a reference in the matter of the dispute raised by the petitioner is quashed and set aside. It is hereby directed that the third respondent shall refer the dispute raised by the petitioner to the appropriate Labour Court or Industrial Tribunal under Section 10(1) read with Section 12(5) of the Act for adjudication within a period of 15 days of the receipt of this writ.

14. Rule is accordingly made absolute with cost of Rs. 2,000/ – by the second respondent to the petitioner.