CHHOTOBHAI JETHABHAI PATEL & CO versus THE INDUSTRIAL COURT, MAHARASHTRA NAGPUR BENCH, NAGPUR & OTHERS.

CllHOTOBRAI JETHABRAI PATEL &: CO.

THE INDUSTRIAL· COURT, MAHARASHTRA NAGPUR BENCH, NAGPUR &: OTHERS.

March 9, 1972

[C. A. VAIDIALINGAM, J. D. DUA AND G. K. MITTER, JJ.J

Bomba>' Industrial Re/r.1ionr Ac/, 194&-ss. 78(1) D, 42{4)-Compliance wit!h s. 42(4) i/ condition precedent for invoking jurisdic· tion of Labour Court under s. 78(1) D.

Against the order of the appellant company dismissing him, an employer filed an application before the Labour Court under secltion 78 of the Bombay Industrial· Relations Act, 1946. The Labour Court set aside the order. The Industrial Court ®d the High Court confirm· ed the order Of the Labour Court rejecting the appellant's contention that the order of the Labour Court was liable to be set aside on the ground that the employee did not make an application under s. 42( 4) in Ch:lpttl' VIII of the Act which was condition precedent to apo proaching the Labour Court. On the question whether the Labour Court could exerc.'ise jurisdiction under s. 78(1) of the· Act in cue where the employee of an industry governed by the Act had not com• plied with the provisions of .sub-oection ( 4) of s. 42 of the Act ~cad with the provisc to the sub-oection,

HELD : Allowing the appeal.

(i) The scheme of Chapter VIII of the Act is that in regard to any "Change" in an industrial m'ltter there must be compliance with the provisions of that chltpter. There is nothing in the Act: which warrants .the conclusion that the legislattire bv inserting paragraph in s. 78 ( i) intended to chalk out wholly different course of ac~ion to that prescribed in Ch1pter VIII dealing with changes. The 'cheme of s. 78(1) is that Labour Court is to have power to decide all 'the dis-putes covered by paragraph A. In other words, efforts must first be made. by the employer intending to effect any change in respect of matten cove"'d by s. 42 (I), or an employee desiring change in respect of any order p:is.ed by the employer under standing· order which would of necessity include an order 9f dismissal, to see whether it was possible to come to any agreement · and an applicjation , to the Labour Court could only be resorted to after efforts had been made to settle the dispute and no agreement had been arrived at. P39C-Gl ·

(ii) person who is di, missed would be an employee within the meaning of s. 3(13) of the Act and there is no valid reason for differen-tiating the case of dismimd employee from one who complains of some other change. P39Hl · · ·

CML APPELLATE JURISDICTION : 1968.

Civil Appeal No. 12 of

Appeal from th~ judgment and order dated April 12, 1967 of the Bombay High Court, Nagpur Bench in Special Civil Applica-tion No. 812 of 1966.

M. N. Phadke and M ohinder Narain, for the appellant.

The Judgment of the Court was delivered by

Mitter, 1. In this appeal by certificate the question involv-ed is, whetner the Labour Court at Nagpur could exercise juris-diction under s. 7 8 (1) of the Bombay Industrial Relations Act in case where the employee of an industry governed by the Act had not complied with the provisions of s. 42( 4) of the said statute read with the proviso to the said sub-section. The Bom-bay High Court has held that it was not necessary for an empl<>-yee first to approach the employer or to follow the procedure laid down in s. 42 ( 4) including the proviso before he could apply to the Labour Court for relief under s. 78 (I) D.The facts are as follows. One Nathu, respondent No. 3 herein, was employed as munshi in the appellant's Bidi factory at Bhandara. The appellant had framed charge sheet against him in respect of certain acts of misconduct, gross negligence of duty, insubordination etc. on May 13, 1965. Aµ enquiry in res-pect thereof was held on May 15th after receipt of written state-ment from Nathu. Holding that the charges levelled against him were proved, the employer dismissed the third respondent with effect from August I, 1965. The said respondent filed an appli-cation challenging the order of dismissal before the Labour Court under s. 78 of the Bombay Industrial Relations Act, 1946, here· inafter referred to as the 'Act', on the 5th August. His com-plaint was that the charge sheet was not proper, that the Head Office of the appellant had no authority to deal with his case under the Standing Orders, that no evidence was allowed or filed on behalf of the employer and that \he finding was based only on his statement and in particular his cross-examination. He had been forced to append hi~ signature to certain paper without the same having been read over to him. The Labour Court after holding an enquiry took the view that the findings of the enquiry officer 'vere ·perverse, that the order of dismissal was pa~sed by person not authorised to exercise the power and con-sequently the Labour Court directed the reinstatement of the third respondent with all back wages. The appellant preferred an appeal to the State Industrial Court contending, inter alia, that the third respondent had failed to comply with the provisions of law in that he did not make an application under s. 42 ( 4) of the Act which was condition precedent to approaching the Labour Court and prayed that the order of the Labour Court should be sot aside on that ground alone. The Industrial Court confirn!.ed the order of the Labour Court. The appellant then filed peti·

lion under Art. 227 of the Constitution before the Bombay High • Court. The High Court held against the appellant. Uiifortu· nately, there is no appearance for the resp011dent. before us. In order to appreciate the scope of the Labour Court's juris- · diction under the Act and in particular the attractability of. s. 78 ( 1) it is necessary to exaniine the scheme of the Act as whole including the provisions relevant for this appeal. The Act when first passed in 1946 known as the Bombay Industrial Rela-tions A~ was applicable to limited area within -the State. In the Vidarbha region of the State, there was anothet similar· Act in operation. The Act suffered numyous amendments from time to time until 1965 when MaharaShtra Act 22 of 1965 was passed. The new Act was described as an Act .. "to extend the Bombay Industrial Relations Act, 1946 throughout the State of Maharashtra and for that and for certain other pi\tposes further to amend that Act, and to repeal correspQPding laws in force in any part of the State". Under s. 2 of that Act the Bombay Indus-trial Relations Act of 1946 as in force immediately . before the commencement of the 1965 Act in the Bombay area of the State of Maharashtra was extended to· the rest of the State. The C.P. and Berar Act· was repealed. As n:Sult, the Act now extends to the whole of the State. Chapter I contains only .three sections : s. 2 deals with the extent, commencement. and application of the Act and s. 3 is the definition section. Chapter II sets out tbe authorities . to ,be ,co,nstituted or appointed under. the ;\ct. S. 9 provides for the constitution of Labour Courts and s.J!O of Indus-trial Courts. Chapter Ill containing ss. 11 to 22 deals with registration of Unions and Chapter IV with approved .:Unions. Chapter V deals with representatives of employers arid employees. and appearance in ptoceedings on their behalf. Chapter VI deals with powers and duties of labour officer and Chapter VIII deals with Standing Orders. Chapter VIII containing ss. 42 to 4 7 deals with "changes". Chapter IX deals with Joint Committees, Chap-ter X with Conciliation Proceedings, Chapter XI with Arbitration and Chapter XII with Labour Courts, their territorial jurisdiction, their powers,· commencement of proceedings before the Labour. Court etc. It is not .necessary to take note of . other Chapters excepting s. 123 in Chapter XIII which deals ·with the rule-making power. , The relevant definitive clauses in . s. . 3 are :-" ( 8) "change" means an alteration in an industrial matter;

(13) "employee" means any person employed to do any skilled or unskilled work for hire or reward in any 'industry, and includes-

( a) person employed by contractor to do al)y -work for him in the execution[1 ]of contract with an

employer within the meaning of sub-clause ( e) of clause (14);

(b) person who has been dismissed, discharged or retrenched or whose services have been terminated from employment on account of any dispute relating to change in respect of which notice is given or an appli-cation made under section 42 whether before or after bis dismissal. discharge, retrenchment or, as the case may be, termination from employment;

but does not include--

(i) person employed primarily in managerial administrative, supervisory or technical capacity drawing basic pay (excluding allowances) exceeding five hUll· dred and fifty rupees per month;

(ii) any other person or class. of persons employed in the same capacity as those specified in clause (i) above irrespective of the amount of the pay drawn by such person which the State Government may, by noti-fication in the Official Gazette, specify in this behalf.

( 17) "Industrial dispute" means any dispute or difference between an employer and employee or between employers and employees or between employees and employe.es and which is connected with any _indus-trial matter;

(18) "industrial matter" means any matter relating to employment, work, wages, hours of work, privileges, rights or duties of employers or employees. or the mode, terms and conditions of employment, and includes--

(a) all matters pertaining to the relationship between employers and employees, or to the dismissal or non-employment of any person;

(b) all .matters pertaining to the demarcation of functions of any employees or class of employees; . .

( c) all matters pertaining to any right or claim under or in respect of or concerning registered agree· ment or submission, settlement or award made under this Act;

( d) all questions of what is fair and right in rela-H tion to any industrial matter having regard to the per-son immediately concerned and of the community as whole;"

Under s. 31 (1) every employer must submit for approval ta the Commissioner of Labour in the prescribed manner standing Orders regulating the relations between him and his employees with regard to the industrial matters mentioned in Schedule I within six weeks from the date of the application of the Act to the industrr-Under sub-s. (5) of the section:

"Until standing orders in respect of an undertaking come into operation u.nder the provisions of sub-section ( 4), model standing orders, if any, notified in the Offi-cial Gazette .by the State Government in respect of the industry shall apply to such undertaking."

Schedule I to the Act contains among other matters items IO and 11 relating to termination of employment including notice to be given by the employer and employee and punishment including warning, censure, fine, suspension or dismissal for, misconduct, suspension pending enquiry into alleged misconduct and the acts or omissions .which constitute misconduct.

Normally, therefore, standing orders must deal with miscon-duct which can lead to dismissal or other punishment.

Under s. 41 the provisions of the Industrial Employment (Standing Orders) Act, 1946 are not to apply to any industry to w]jich the provisions of Chapter VII of the Act apply.

As 'industrial matter' as defined in s. 3(18} includes all matters pertaining to the dismissal or non-employment of any per-son, an industrial dispute within the meaning of s. 3(17) must nec~ssarily arise when there is any difference between an -employer and an employee about such dismissal.

The solution to the question before us turns on. the interpre-F tation of the relevant provisions in Chapter Vlli headed "changes". - 'Change' as already noticed means any alteration iii an industrial matter. Under s. 42(1) any employer.intending fo effect any change in respect of an industrial matter specified in· Schedule II of which item 3 reads

. "Dismissal of any employee except as provided lat in the standing orders applicable under this Act'\

must,.give notice of such intention in the prescribed fonn to the representative of the employees. He must also send copy of such notice to the Chief Conciliator, the Conciliator for the indus-try co11cerned for the local area, the Registrar, the Laboiir Officer and such other person as may be prescribed. He has also to affix copy of such notice at conspicuous place of the premises where the employees affected by the change are e111ployed. Under sub-s. (2) of s. 42 an employee desiring change in·respect of an indus-

trial matter not specified in Schedule I or Schedule III has to give notice in th~ prescribed form to the employer with similar intima-tion to others. · Under sub-s. ( 4) any employee desiring change in resj>«t iTJter alia, of any industrial matter specified in Schedule m of which item ~ reads : .

"EmplQyment including-

(i) reinstatement and ,recruitnient" must ma)ce au application to the Labour Court. 1bis sub-section has proviso which runs : · .·

"Provided that no such application shall lie unless the employee or tepresentative union has in t,be pres-cribed manner approached the employer with request for the change and no agreement has been arrived at in respect of the· change within the prescribed period."

S. 44 envisages an agreement between the parties · regarding · "change" at)d registration of the memorandum thereof by the Registrar. Under s. 44-A memorandum of agreement arrived lit is to be forwarded by either party to the Registrar' by re.gistered post and an agreement which is registered under s: 44 is to come into operatioµ as laid down in s. 45.

The territQrial jurisdiction of Labour Courts extends to lcical areas for which they are constitutr.d under s. 77 in Part XII. S. ~8 runs as follows:-·

"78. ( 1) Labour Court shall· have power to-

1'1.. decide-

(a) displlctes regarding~

( i) the propriety or legality of an. order passed by an employer ··acting or purporting to act under the standing orders;

(ii) the application and intertiretation of standing orders; ·

(iii) any change made by an employer or desired by an employee in respect of .an industrial matter specified in Schedule III [except item ( 5) thereof] and matters arising out of such change;

(b) industrial disputes--

( i) referred to it under section 71 or 72;

tii) in respect of which It is appointed as an arbi-trator by submission;

(c) whether strike; lock-out, closure, stoppage or

any change is illegal under this Act;

B. try offences punishable under this Act where the , payment of compensation on conviction for an offence is provided for, determine the compensation and order its payment;

C. require any employer to-

(a) withdraw any change which is held by it to be illegal, O!\ withdraw temporarily any change the legality of which is matter of issue in any proceeding pend· ~ng final decision, or

(b) carry out any change J•rovided such .change is

matter in issue in any proceeding before it under this Act.

D. require an employer, where it finds that the order

of dismissal, discharge, removal, retrenchment, ter-mination of service or suspension of an empl(l}'ee made by the employer,-

( i) was for fault or misconduct committed by the employee which came to the notice of the· employer more than six months prior to the date of such order; or

(ii) was in contravention of any of the provisions of any law, or of any standing order in force applicable to such employee, or

(iii) was otherwise improper or illegal,

(a) reinstate the employee forthwith or by date

, specified by it in this behalf and ~y.-him wages for the period beginning on the date of such , order · of dis-missal, discharge, removal, retrenchment, termination of bervice or suspension, as the case may be, and ending on the date ·on which the Labour Court orders his re-, instatement or on the date cif his reinstatement, which-ever is later, or

(b) to pay to the .employee in addition to wages (being wages for the period commencing on the date of his dismissal, discharge, removal, retrenchment or termination[1 ]of service and ending on the date on which the, Labour Court orders such payment), such sum not exceeding four thousand rupees by way of , compensa'. tion, regard being had to loss of employment and possi-bility of getting suitable employment therea~.

( 2) Every offence punishable under this Act shall be tried by the Labour Court within the local limits of whose jurisdiction it was committed.

Explanation-A dispute falllilg under clause (a) of paragraph of sub-section ( 1) shall be deemed to have arisen if within the period prescribed under the proviso to sub-section ( 4) of section 42, no agreement is arrived at in respect of an order, matter or change referred to in the said proviso."

Clause of s. 78(1) was introduced in the Act of Maharashtra Act 22 of 1965. S. 31 of the Act of 1965 not only introduced Cl. but also made changes in paragraphs and thereof. · The forerunner of Act 22 of 1965 i.e. Bill No. LXVI of 1964, the object of which was to make numerous changes in the Act shows in its Statement of Objects and Reasons that clause 31 of the Bill was meant to "enlarge the power8 of the Labour Court under s. 78". According to th!s clause ·

"The Labour .Court is empowered (by paragraph D) tq direct temporary withdrawal of any change the lega-lity of which is matter of issue in i1ny proceedings before it, pending, its finaLdecision."

The LabOur Court was· also thereby• fui:ther empowered "to require an employer to reinstate an employee with full back wages or pay him wages and compensation not exceeding Rs. 2,500/-.... if the· employee was dismissed, discharged" etc.

The Statement of Objects and Reasons amply demonstrate&· that by introducing paragraph in s. 78 (1) the legislature was on1y seeking to arm the Labour Court with · further · and more effective powers to grant relief.

Under s. 79(1) proceediiigs before Labour Court in respect· of disputes fiilling under clause (a) of paragraph of sub-s. ( 1) of s. 78 must be commenced on an application made by any of the parties to the dispute etc. and under sub-s. (2) every applica-tion under sub-s, ( 1 ) ·has to be made in the prescribed form and manner. Under s. 84 an appCal Iies to the Industrial Court against the decision of. LaliOur Court .in respect of matter · falling under clause (a) or cl. ( c) of paragraph of sub-s~ ( 1 ) of s. 78 except in the case of lock-out eto. or decision of such court under paragraph of sui;,s. ( 1) of the said section.

Reading s. 78 as whole, there is no doubt left in our minds that the legislature wanted the provision to be comprehensive one. · It contains all the powers of the Labour Court in the matter ~f all disputes mentioned and gives it jurisdiction to punish

certain offences under the Act. It does not lay down the proce-dure for the attraction of such jurisdiction. So far as disputes are concerned, the procedure is as laid down in s. 79.

. It will be noteyd that no mention is made in s. 84 of paragraph of s. 78 ( 1) but inasmuch as orders of dismissal, discharge, 8 removal, retrenchment, termination of service or suspension of an employee. would c(ll!le under s. 78 ( 1) paragraph A, the legisla-ture felt it unnecessary to make ai;iy mention of an order under , paragraph .D in s. 84. Paragraph D, so far as we can see, is not referred to anywhere else in the Act.

The question therefore narrows down to this i.e. whether the legislature by inserting paragraph in s. 78 ( 1) intended to chalk oulf'a wholly different course of :iction to that prescribed in Chapter VIII dealing with changes. In our view, there is nothing in the Act which warrants such conclusion. The' scheme of Chapter VIII seems to be that in regard to any "change" in an industrial matter there must be compliance with the provisions of that ·Chapter. In other words, effort must first be made by the employer intending ·to effect any change in respect _oL matters covered bys. 42(1) or an employee desiring change in respect of any order passed by the employe~ under standing orders which would of necessity include an order of dismissal, to see whether it was possible to;come to any agreement and .an application to the labour court could only be resorted to after efforts had been made · to settle the dispute and no agreement had been arrived at.

'the scheme of s. 78 (1) seems to be that Labour Court is to hav1rpower to decide all the disputes covered by paragraph A. P~ph thereof gives the Labour Court the power to try olfe\).~s punishable under the Act and cognizance of such offences can <lilly be take.n under s. 82. Paragraphs and set out what ll' relief .the Labour Courts are empowered to give including direc-tions .a$ may be found necessary,Jn that behalf. As already noted. the Statement pf Objects and ~ons of clause 31 of the J:lill .which later resulted in Act 22 of 1965, shows that the underlymg ldea was to enlarge the powers .of the Labour Court. The Legis-laturec nowhere intended to make complete departure from the procedure to be adopted when powers under s. 78 ( 1) were to be exercised.

Rule 55 of the Bombay Industrial Rclatians R~les, 1_9~7 . shows how an application is to be made and the penod w1thm which .it is to be made. ·

ltmust be held that person who is dismissed would be an emp!Oyee within the meaning of s. 3 ( 13) of the Act and we can

7 40 SUPREME COURT REPORTS

(1'972] 3 S.C.R.

, see no villid reason for differentiating the case of dismissed employee from one who complains of some other ~hange. As the scheme of the Act is that disputes should be settled as ell Ill! possible and primarily through conciliation and agreement, it does not stand to reason that an employee should be able to side-step all this by direct reference to the Labour Court. Labour Court is· creature of the statute and it can only exercise Sl!Ch jurisdiction as the statute confers on it : if !here are certain pre· condition~ to the exereise of its jurisdiction, it must refuse to entertain any sµch application unless such pre-conditions are first complied with.

In the result we set aside the order of the High Court, allow the appeal and qul!Sh the orders of the Labour Court and the Industrial Court but do not make any order for CO!!SC<!Uential .C relief, in view of the solemn assurance give!} to this Co&t i?Y Mr. Phadke, learned counsel for the appellant that his client does not desire to give effect to the order of termination of service passed on the third respondi:nt. In the ~ircumstances .of the ·c::ase, we make no order as to costs.

Appeal al/owed.