M/S. PEE VEE TEXTILES LTD. Vs. STATE OF MAHARASHTRA & ORS : Supreme Court - Bombay Industrial Relations Act, 1946.
Supreme Court of India
CIVIL APPEAL NO. 1497 OF 2011 Judgment Date: Dec 10, 2014
NON REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1497 OF 2011
M/S PEE VEE TEXTILES LTD. .........APPELLANT
Vs.
STATE OF MAHARASHTRA & ORS. .........RESPONDENTS
J U D G M E N T
V.GOPALA GOWDA, J.
This appeal is directed against the impugned judgment and order dated
20.01.2010 passed by the High Court of Judicature at Bombay, Nagpur Bench
in Writ Petition No. 2069 of 2009, for setting aside the impugned order and
quashing the order of reference dated 18.2.2009 passed by the State
Government of Maharashtra - respondent No.1 herein, raising certain
questions of law and urging grounds in support of the same.
The factual matrix and the rival legal contentions urged on behalf of the
parties are briefly stated hereunder with a view to find out whether the
impugned judgment and order warrants interference by this Court in this
appeal.
The appellant is the employer and respondent nos. 4 to 8 herein are the
representatives of its workmen. The workmen raised an industrial dispute
under the provisions of the Bombay Industrial Relations Act, 1946 (for
short "the B.I.R. Act") read with the relevant provisions of the Bombay
Industrial Relations Rules, 1947 (for short "the B.I.R. Rules") in relation
to the service conditions of the workmen for payment of variable dearness
allowance (VDA) to be given to all categories of workmen, in the industrial
establishment of the appellant with an increased rate from time to time as
per the Government notification dated 1.4.1993. The third respondent -
Assistant Commissioner of Labour, Nagpur, the Conciliation Officer, before
whom the workmen raised an industrial dispute in relation to the above
service conditions of the workmen, has issued a notice to the appellant
either to settle the matter or he will refer the industrial dispute to an
appropriate Industrial Tribunal/Labour Court for adjudication of the same
in accordance with law. The appellant filed objection statement on
14.4.2008 before the Assistant Commissioner of Labour, inter alia, stating
that no industrial dispute was existing between the workmen and the
employer with regard to the claim of variable dearness allowance as per the
Government notification dated 1.4.1993, as the appellant employer and the
elected representatives of the workmen who were elected as per Section 28
of the B.I.R. Act, have signed the settlements with regard to the variable
dearness allowance as per the settlements dated 06.05.1993, 12.06.1996,
29.04.1998, 07.02.2000, 09.05.2003 and lastly on 16.04.2006, which was in
force for a period of 3 years i.e. upto 31.03.2009. Since the industrial
dispute could not be settled between the parties in the conciliation
proceedings and in the light of the legal objections raised by the
appellant, the Assistant Commissioner of Labour forwarded the failure
report to the Commissioner of Labour - the second respondent herein, under
Section 64 of the B.I.R Act. The Commissioner of Labour published the
failure report and forwarded the same with his recommendation to the State
Government to make an order of reference of the industrial dispute to the
Industrial Tribunal having the jurisdiction for adjudication as the
objection raised by the appellant does not have any legal standing. The
State Government, after examining the matter, referred the same for
adjudication to the Industrial Tribunal, Nagpur, as per the point of
dispute in exercise of its powers conferred under Section 73(2) of the
B.I.R. Act vide its order dated 18.02.2009. Aggrieved by the same, the
appellant filed a writ petition before the High Court which was also
dismissed by passing the impugned judgment. Hence this appeal.
Mr. V.A.Mohta, the learned senior counsel appearing for the appellant has
contended that raising of the industrial dispute by the workmen and getting
an order of reference made by the State Government to the Industrial
Tribunal for adjudication of the dispute between the parties is not
maintainable in law as the last settlement dated 16.04.2006 entered into
between the appellant and the representatives of the workmen was in
operation for a period upto 31.3.2009 as per the provisions of the B.I.R.
Act and covered the variable dearness allowance in the said settlement.
Therefore, it is contended by him that the workmen could not have raised
the industrial dispute in this regard and the same could not have been
referred to the Industrial Tribunal by the State Government for its
adjudication in exercise of the power conferred upon the State Government
under Section 73 (1) & (2) of the B.I.R. Act. Further, it has been urged
that accepting the failure report received from the third respondent by the
second respondent without considering the statement of objections filed by
the appellant-employer, is in contravention to Sections 54, 57 and 64 of
the B.I.R. Act. As the order of reference made by the State Government to
the Industrial Tribunal, Nagpur was without jurisdiction; the same should
have been quashed by the High Court in exercise of its extraordinary
jurisdiction under Articles 226 and 227 of the Constitution of India. It is
also contended by the learned senior counsel for the appellant that without
giving a proper hearing to the appellant-employer, the order of reference
made by the State Government to the Industrial Tribunal is not in
accordance with Chapter X of the B.I.R. Act and therefore, the same is
liable to be quashed.
Further, it is contended that the industrial dispute raised by the workmen-
respondent as per the Charter of demands in form "L" under Section 42(2) of
the B.I.R Act, is covered by the provision of Section 64 (a)(III) of B.I.R.
Act, as the registered settlement between the parties includes variable
dearness allowance along with the clause in the settlement that the
representatives of the workmen shall not place any other demand on the
appellant during the "agreement period" which will entail financial burden
upon it. This factual aspect of the case was neither considered by the
Conciliation Officer nor the State Government at the time of making an
order of reference to the Industrial Tribunal nor by the High Court while
examining the correctness of the order of reference. In support of the
above contentions, reliance has been placed by him upon the provisions of
Section 64 clause (a) (III) of the B.I.R. Act, which reads thus :-
"64(a)(iii)- by reason of a direction issued under sub-Section (2) of
Section 114 (or by reason of any other provisions of this Act) the
employers and employees concerned are in respect of the dispute bound by a
registered agreement, settlement, submission or award."
Further, it is contended by the learned senior counsel, placing reliance
upon Section 114(2) of the B.I.R. Act, which provision enables the State
Government to give a direction to the representatives of the workmen and
the appellant after affording an opportunity to them and publish the
notification in the Official Gazette that the settlement dated 16.04.2006
is binding between parties under the above said provisions of the Act,
which is not done by it. It is further contended that the above settlement,
which is in force, is entered into by the appellant-employer with the
elected representatives of the workmen, as per Section 28 of the B.I.R.
Act. Therefore, the State Government, before exercising its statutory power
to make an order of reference to the Industrial Tribunal, should have seen
that the commencement of the conciliation proceedings conducted by the
Conciliation Officer, under Section 55 of the B.I.R. Act is erroneous in
law as he has not considered the material objections filed by the appellant
at the time of submitting the failure report to the State Government
through the second respondent.
On the other hand, Mr. Shivaji M. Jadhav, the learned counsel on behalf of
the workmen- respondent nos. 4 to 8 herein, has contended that the workmen
are justified in raising the industrial dispute in relation to the service
condition of the variable dearness allowance fixed by the State Government
vide its notification referred to supra, issued under the provisions of the
Minimum Wages Act, 1948 and therefore the order of reference made by the
State Government to the Industrial Tribunal is legally correct as it has
subjectively satisfied itself at the time of exercising its power and
further it was of the view that the industrial dispute raised by the
concerned workmen by submitting the Charter of demands submitted to the
appellant and the Conciliation Officer is legally justifiable. It has
rightly exercised its power to make an order of reference to the Tribunal
after following the procedure contemplated under Section 64 of the B.I.R.
Act, on the dispute raised by the workmen. It is further contended that the
Conciliation Officer after holding the conciliation proceedings has
submitted the failure report to the second respondent under Section 58(2)
of the B.I.R. Act, as the employer was not willing to settle the dispute
raised by the concerned workmen. Therefore, it was the statutory duty cast
upon the Conciliation Officer to send the failure report to the Chief
Conciliation Officer for further action in the matter after ascertaining
the facts and circumstances in relation to the dispute and for the reason
that in his opinion, the settlement could not be arrived at between the
parties. Therefore, the State Government has rightly exercised its
statutory power under the provision of Section 73(2) of the B.I.R. Act to
make an order of reference to the Tribunal, which provision is a non-
obstante clause. The power conferred upon it under the provisions of the
Act, provides that it may, at any time refer the industrial dispute for
adjudication to the Industrial Court/Tribunal, if on the report submitted
by the Conciliation Officer or otherwise, it is satisfied that the
industrial dispute is not likely to be settled between the parties by any
other means. He has submitted his failure report along with the objection
letter which was filed by the appellant. The Chief Labour Commissioner
forwarded the same to the State Government stating that the industrial
dispute raised by the concerned workmen with regard to the claim of the
variable dearness allowance fixed by the State Government vide its
notification referred to supra, is neither covered under the settlements
referred to supra upon which reliance is placed by the appellant nor there
is any legal impediment for the State Government to exercise its power
under Section 73 (1) & (2) of the B.I.R. Act, to make an order of reference
to the Industrial Tribunal for its adjudication. Therefore, the order of
reference made by the Government is legal and valid.
The High Court in exercise of its jurisdiction and after considering the
relevant aspects of the case has come to the conclusion that the exercise
of power by the State Government under Section 73 (1) & (2) of the B.I.R.
Act is legal and valid. It has further held that the dispute raised by the
respondent-workmen is an industrial dispute and the dispute was not settled
by the employer on account of the stand taken by it before the Conciliation
Officer. The exercise of power by the State Government cannot be interfered
with as it has rightly concluded after subjective satisfaction that the
dispute raised by the workmen requires to be adjudicated by the Industrial
Tribunal in accordance with law as it has got merit to be considered. The
learned standing counsel on behalf of the State Government has adopted the
submissions made on behalf of the workmen in justification of the order of
reference and the impugned judgment.
After hearing the learned counsel for the parties, it is necessary for us
to examine the rival legal contentions urged on behalf of the parties with
a view to find out as to whether the appellant-employer is entitled for the
relief as sought by it.
After careful examination of the legal pleas urged in this civil appeal
with reference to the relevant provisions of Sections 54, 57, 58, 64 and
73(2) of the B.I.R. Act, we are of the view that the challenge to the order
of reference made by the State Government to the Industrial Tribunal cannot
be interfered with on the plea of the appellant that the dispute raised by
the workmen is not an industrial dispute as it is covered under the
settlements and particularly, the settlement of 2006, is wholly untenable
in both facts and in law and therefore the same is liable to be rejected.
The settlement referred to supra for the period from 2006 to 2009 upon
which strong reliance has been placed by the appellant contending that it
is binding upon the parties as it is in force, has been considered by us in
this appeal. We have to answer the same in the negative for the reason that
the industrial dispute which was raised by the workmen is not covered
either under the said settlement or in the earlier settlements as the
demand of the workmen is based on State Government notification of 1993,
which has fixed the dearness allowance under the provisions of Minimum
Wages Act, 1948, which is also one of the service conditions of workmen and
the same is not included in the settlements. Therefore, the dispute raised
by the workmen is an industrial dispute in terms of the definition of
Section 3(17) of the B.I.R. Act. The legal contention raised by the
appellant regarding the maintainability of the Charter of demands submitted
by the concerned workmen in the said dispute to the appellant during the
existence of the settlement is wholly untenable in law in view of Section
73 (1) & (2) of the B.I.R. Act, which reads thus :-
"73. State Government may refer industrial dispute to industrial court for
arbitration.-
Notwithstanding anything contained in this act, the State Government may,
at any time, refer an Industrial dispute to the arbitration of the
Industrial court, if on a report made by the Labour Officer or otherwise it
satisfied that -
(1) by reason of the continuance of the dispute -
(a) a serious outbreak of disorder or a breach of the public peace is
likely to occur; or
(b) serious or prolonged hardship to a large section of the community is
likely to be caused; or
(c) the industry concerned is likely to be seriously affected or the
prospects and scope for employment therein curtailed; or
(2) the dispute is not likely to be settled by other means; or
(3) it is necessary in the public interest to do so."
13. The statutory power conferred upon the State Government under Section
73 (1) & (2) of the B.I.R. Act is wider, as it is the non-obstante clause
power, the provision of which states that notwithstanding anything
contained in the Act, which is referable to the other provisions of the Act
including the settlements arrived at under the provisions of the B.I.R.
Act, the State Government may refer an existing industrial dispute to
either the Industrial Tribunal or Labour Court for adjudication, on the
failure report submitted by the Chief Labour Commissioner. The Assistant
Labour Commissioner has rightly conducted the conciliation proceedings
under Section 55 of the B.I.R. Act on the Charter of demands of the workmen
in view of the fact that Section 55 of the B.I.R. Act, provides for the
commencement of the conciliation proceedings on receipt of statement of a
case under Section 54 of the B.I.R. Act. The date of commencement of the
proceedings shall be communicated by the Conciliation Officer to the
parties concerned. Section 64(a)(iii) of the B.I.R Act, provides that the
conciliation proceedings ought not to be commenced/ conducted in respect of
industrial dispute in view of Section 114 (2) of the B.I.R. Act or by
reason of any other provisions of the B.I.R. Act. Much emphasis is placed
upon the above provision of the Act by the learned senior counsel on behalf
of the appellant in relation to the dispute governed by the registered
settlements between the parties. However, the said provision of the Act
will also be subject to Section 73(2) of the B.I.R. Act. On the Charter of
demands raised by the workmen representatives, the Assistant Labour
Commissioner has rightly commenced the conciliation proceedings by
following the procedure contemplated under the above provisions of the
B.I.R. Act and the B.I.R. Rules as it mandates him to do so, since the
dispute raised by the workmen with regard to VDA could not be settled
between the parties as the appellant-employer has taken the stand that the
industrial dispute raised by the workmen does not exist as it is covered
under the settlements between the parties which is in force and binding
upon them. Objection statement is filed by them before the Labour
Commissioner against the failure report by placing strong reliance upon the
settlements. The same is considered by the State Government and it has
opined that the dispute raised by the workmen is an existing industrial
dispute in terms of Section 3 (17) of the B.I.R. Act and the same is not
settled between the parties. Therefore, the State Government has rightly
exercised its statutory power conferred under Section 73 (1) & (2) of the
B.I.R. Act, to make an order of reference to the Industrial Tribunal for
its adjudication as per the points of dispute referred to it. Even assuming
for the sake of the argument that the demand of variable dearness allowance
is covered under the settlement of 2006, non termination of the same by
either of the parties does not affect the right of the workmen to raise the
industrial dispute in relation to the variable dearness allowance fixed by
the State Government in its notification. Therefore, the contention raised
on behalf of the appellant that the Charter of demands raised by the
workmen in relation to the payment of variable dearness allowance as per
the notification is illegal and therefore, the conciliation proceedings
should not have been held by the Conciliation Officer as the same is in
violation of Section 64 (a)(iii) of the B.I.R. Act and exercise of power by
the State Government under Section 73 (1) & (2) of the B.I.R. Act is bad in
law, cannot be accepted by this Court, as the said contentions are wholly
untenable in law. Hence, the same are liable to be rejected.
Apart from the power of the State Government to make an order of reference
in relation to the industrial dispute raised by the workmen, we have seen
the settlement dated 16.04.2006, in relation to the senior workers'
increment in the pay scale, which increased to Rs.15 per day in back wages
and the junior workers' pay scale increased to Rs.19 per day in back wages.
Therefore, there is no VDA fixed so far as these workmen are concerned. As
per clause (2) of the settlement, that has fixed the VDA only in relation
to the learners in the Weaving Section. Hence, the said settlement does not
take away the right of the workmen to raise an industrial dispute in
relation to the VDA. Therefore, the workmen are justified in submitting the
Charter of demands in relation to VDA as per the Government notification
w.e.f. 1.4.1993. The absence of the VDA clause is specifically mentioned in
the Charter of demands submitted by the respondent workmen. Hence, the
contention by the learned senior counsel that what is raised by the workmen
and referred to the Industrial Tribunal is not an industrial dispute is
devoid of merit, both on facts and in law and does not warrant
consideration by this Court.
In our considered view, the High Court, no doubt, has referred to and
considered all these aspects and has rightly held that the appellant has
not disputed the fact that the workmen raised the dispute and the same was
not acceded by the appellant. Therefore, the conciliation proceedings under
Section 55 of the B.I.R. Act were held to be valid. The grievance of the
appellant that the industrial dispute raised by the workmen is not tenable
has been rightly rejected by the High Court after recording the findings
and reasons holding that the industrial dispute between the parties exists
and the exercise of its power in relation to making an order of reference
is a subjective satisfaction of the State Government. Therefore, the view
taken by the High Court that the plea taken by the employer in the writ
petition proceedings cannot be the subject matter for its judicial review
is the correct approach for the reason that the State Government on the
basis of materials on record has arrived at the right conclusion and opined
that there exists an industrial dispute for the claim of VDA between the
parties and the same has been referred to the Industrial Tribunal, for its
adjudication as the conciliation proceedings have failed as the appellant-
employer has not acceded to the demands of the workmen and entered into a
settlement with the representatives of the workmen. Therefore, the High
Court has rightly held that there is no ground for interference with the
order of reference made by the State Government to the Industrial Tribunal.
The writ petition is rightly dismissed by the High Court which does not
call for interference by this Court in exercise to its appellate
jurisdiction.
The employer has been incessantly challenging the order of reference made
with regard to the variable dearness allowance as fixed by the State
Government in its notification w.e.f. 1.4.1993. The workmen have been
denied the legitimate monetary benefits for which they are legally entitled
to and the same is denied to them for the last 21 years by taking untenable
pleas and by not acceding to the Charter of demands made by the workmen by
placing reliance upon the settlements which are not applicable to the
demands raised by the workmen as the same is contrary to the Government
notifications. Further, the appellant has been questioning the power of the
State Government under Section 73 (1) & (2) of the B.I.R. Act, to make an
order of reference to the Industrial Tribunal by taking untenable
contention under Section 64 (a)(iii) of the B.I.R. Act. The said provision
of the Act is subject to exercise of power by the State Government under
Section 73 (1) & (2) of the B.I.R. Act, which has rightly been done by the
State Government in the instant case. The appellant-employer has been
litigating the matter since 2009, thereby stalling the adjudication
proceedings, which warrants imposition of exemplary costs to be paid to the
workmen by the appellant for the reasons stated supra. The workmen will
also be entitled to get interest at the bank rate on the monetary benefits
of VDA that may be determined by the Industrial Tribunal on the order of
reference, if decided in their favour.
For the aforesaid reasons, we pass the following order:-
I.The civil appeal is dismissed with exemplary cost of Rs. 1,00,000/-
payable to the workmen within 4 weeks from the date of receipt of copy of
this order.
II.We direct the Industrial Tribunal to adjudicate the dispute in relation
to the variable dearness allowance fixed in the notification dated 1.4.1993
and subsequent notifications issued by the State Government and pass an
award within six months from the date of receipt of the copy of this order.
If, the order of reference made to the Industrial Tribunal is answered in
favour of the workmen, the Tribunal is directed to award an interest in
favour of the workmen on the monetary benefits of VDA on the basis of fixed
deposit rate by any one of the nationalized banks.
.....................................................................J.
[V. GOPALA GOWDA]
.....................................................................J.
[C. NAGAPPAN]
New Delhi,
December 10, 2014
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