http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7  

PETITIONER: M. P. IRRIGATION KARAMCHARI SANGH

       Vs.

RESPONDENT: THE STATE OF M. P. AND ANR.

DATE OF JUDGMENT27/02/1985

BENCH: KHALID, V. (J) BENCH: KHALID, V. (J) DESAI, D.A. ERADI, V. BALAKRISHNA (J)

CITATION:  1985 AIR  860            1985 SCR  (2)1019  1985 SCC  (2) 103        1985 SCALE  (1)322  CITATOR INFO :  RF         1987 SC 695  (5)  E&R        1989 SC1565  (13,14,16)

ACT:      Reference  of   disputes  to   Courts/Tribunal  by  the appropriate  Government   under  section   10  (1)   of  the Industrial  Disputes   Act,   1947-Nature   scope   of   the jurisdiction of  he State  Government under  section 10 read with section 17 (5) of the Act.

HEADNOTE:       The  appellant is  a trade  union registered under the Trade Unions  Act. It  represents employees  in the  Chambal Project of Government of Madhya Pradesh in Gwalior Division. The  union   raised  three   demands,  namely,  (1)  Chambal allowance; (2)  Dearness allowance  equal  to  that  of  the Central Government  employees; and  (3) Wages for the period of strike  lasting 20  days in  the  year  1966  and  served notices of these demands on the Deputy Chief Engineer, Major Project Chambal  Since the  attempts for  settlement by  the canciliation officer  failed, a  full report  of the dispute under section  12 (4)  of the  Act was  sent  to  the  State Government which, by its order dated 15. 3. 1969, refused to refer the  matter to  the concerned  Tribunal. The appellant took  the   matter  before   the  High   Court   by   filing Miscellaneous Petition  No 29169 for a mandamus to the State Government to  refer the  matter for  adjudication. The High Court allowed  the writ  petition, and  directed  the  State Government to  consider the question whether a reference was necessary or not. The Government again refused to  refer  the dispute  to the  Tribunal, taking the stand that the provisions  of the  Industrial  Disputes  Act  were  not applicable to  the workmen  in the  Chambal Scheme as it was not Industry’.  The appellant  approached the High Court for the second  time by  filing Miscellaneous Petition No. 45 of 1970 and challenged  the said orders. The High Court allowed the petition  and directed  the Government  to take suitable action under  section 12  (5) of  the  Act.  The  Government challenged the  said decision  before the  Supreme Court  by filing SLP  No. 933  of 1972  without success. Later, by its order dated  13. 1. 72, the State Government referred to the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7  

Tribunal only the third question of payment of wages for the strike period  and declined to refer the other two questions for the  reasons that  (a)  the  Government  was  not  in  a position to  bear the additional burden and (b) the grant of the special  allowance claimed  would invite similar demands by  other   employees  which   would   affect   the   entire administration. The appellant was perforced 1020 to approach  the High Court, for the third time, by way of a miscellaneous Petition  No. 127  of 1972  for a direction to the State  to refer  the other  two  demands  also.  In  the meanwhile, the  Supreme Court by its decision dated July 20, 1978 confirmed  the High  Court’s order that Chambal Project was a  ’industry’ within  the meaning  of the Act. whereupon the Government reviewed the matter and passed an order on 3. 79 giving  additional reasons  for declining  to  refer  the dispute for  adjudication namely,  (a) the  State Government was not in a position and therefore cannot pay Central DA to any of  its employees  in any  department   and (b) the work charged employees  who get  a consolidated  salary  are  not entitled to  Chambal allowance  under the  rules.  The  High Court, by  its decision  dated 8th August 1980 dismissed the petition holding  that the  reasons given  by the  Court are germane and relevant. Hence the appeal by special leave.       Allowing the appeal, the Court, ^          HELD: 1.1 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. [1026C]           1.2 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.  [1025H; 1026A]       1.3  When a reference is rejected on the specious plea that the  Government cannot  bear the  additional burden, it constitutes adjudication and thereby usurpation of the power of a  quasi judicial Tribunal by an administrative authority namely the Appropriate Government. What the State Government had 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 evidence  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  characterized as  other perverse or frivolous. The conclusion  so  arrived  at  robs  the  &  employees  of  an opportunity to  place evidence  before the  Tribunal and  to substantiate the reasonableness of the demand. [1026B-E]       1.4  What exactly are the conditions of service of the employees and  in what  manner their  conditions of  service could be improved are matters which are the special preserve of the  appropriate Tribunals  to be decided in adjudicatory processes and  are not  once to be decided by the Government on a  prima facie  examination of  the demand.  The question whether the emp- 1021 loyees were/were  not entitled  to the  Chambal allowance as

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7  

they are  in A  receipt of a consolidated pay relates to the conditions of  service of  the employees Further this demand also cannot  be said  to be  either perverse  or  frivolous. [1026F-G]       1.5  However, 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. Government should  be very slow to attempt an examination of the demand  with a view to decline reference and Courts will always be vigilant whenever the Government attempts to usurp the  powers  of  the  Tribunal  for  adjudication  of  valid disputes. To  allow the  Government to  do so  would  be  to render section  10 and  section 12  (5)  of  the  Industrial Disputes Act nugatory. [1026G-H; 1027A] C       Bombay  Union of  Journalists v.  State of  Bombay AIR 1964 SC 1617, explained and followed.

JUDGMENT:       CIVIL  APPELLATE JURISDICTION:  Civil Appeal  No. 8454 (NL) Of 1983.       From the Judgment and order dated the 8th August, 1980 of the  Madhya Pradesh  High Court Bench at Gwalior in Civil Miscellaneous Petition No. 127 of 1972.       H.K. Puri, for the Appellant.       A.K. Sanghi for the Respondent.       The Judgment of the Court was delivered by       KHALID.  J. This  is  an  appeal,  by  special  leave, against the  Judgment dated  8th August,  1980, by  the High Court of  Madhya Pradesh  at Jabalpur in Civil Miscellaneous Petition No. 127 of l972.       2. The appellant is a trade union registered under the Trade Union  Act. It  represents employees  in  the  Chambal Hydel Irrigation  Scheme under  the  Department  of  Chambal Project of Government of Madhya Pradesh in Gwalior Division. The union  raised three  demands and served notices of these demands  on   the  Deputy  Chief  Engineer,  Major  Project, Chambal, Bhopal.  The demands  were: (1)  Chambal allowance; (2)  Dearness   allowance  equal  to  that  of  the  Central Government employees; and (3) Wages for the 1022 period of strike lasting 20 days in the year 1966. Copies of these  notices   were   sent   to   the   Assistant   Labour Commissioner, Indore and the Secretary, Government of Madhya Pradesh. The  Deputy Chief  Engineer did  not respond to the demands.  There-upon,  the  Assistant  Labour  Commissioner, Gwalior,  at   the  instance   of  the  union  tried  for  a settlement, but  did not  succeed. He  sent a  report  under Section 12(4)  of the  Industrial Disputes  Act.  The  State Government, the  first respondent  in the  appeal refused to refer the  matter to  the concerned  Tribunal by  its  order dated 15.3.1969.  The appellant  took the  matter before the High Court  by filing  Miscellaneous petition No 29/69 for a mandamus to  the State  Government to  refer the dispute for adjudication. The  High Court  allowed  the  writ  petition. quashed the  order of the State Government dated 15th March, 1969, and  directed it  to consider  the question  whether a reference was necessary or not. When the matter went back to the Government,  the Government  took  the  stand  that  the provisions  of   the  Industrial   Disputes  Act   were  not applicable to  the workmen  in the  Chambal Hydel Irrigation Scheme since  the Scheme was not an Industry and hence again refused to  refer the dispute to the Tribunal. The appellant

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7  

pursued the  matter further by filing miscellaneous petition No. 45 of 1970 before the High Court. The High Court allowed the petition  and directed  the Government  to take suitable action  under  Section  12(5  of  the  Act.  The  Government challenged  this   decision  before  this  Court  by  filing S.L.P.No.  933   of  1972,   without  success.  The  matter, therefore, went  back to the Government again. ’By its order dated 13.1.1972,  the State  Government  referred  only  one question to  the Tribunal  and that related to the wages for the strike  period but  declined  to  refer  the  other  two questions. The  reason given  for this  was:  (1)  that  the Government was  not in  a position  to bear  the  additional burden; and  (2) that grant of the special allowance claimed would invite  similar demands by other employees which would affect the entire administration. Miscellaneous Petition No. 127 of  1972 was,  therefore, filed  for a  direction to the State to refer the other two demands also. In the meanwhile, this Court  as per  its decision  dated July  20, 1978,  bad confirmed the  decision  of  the  High  Court  that  Chambal Project was an Industry within the meaning of the Industrial Disputes Act.  After this  decision  was  rendered  by  this Court, the  Government reviewed  the matter  and  passed  an order on  3.5.1979 giving additional reasons for refusing to refer the  dispute for adjudication. The reasons stated were as under: 1023                  "(1) That the State Government was not in a      position A  to pay  dearness allowance equal to that of      Central Government  employees. In the present situation      the State  Government would  not pay dearness allowance      equal to  that of  Central Government  employees to any      particular department.  the question of such payment to      the petitioners, therefore, does not arise. B                  (2) The work charged employees were already      given a  consolidated  pay.  Therefore,  there  was  no      justification for  paying such  employees  the  Chambal      allowance. The  rules regulating the service conditions      of the  work-charged employees  of the Chambal division      do not  provide for  payment of  Chambal  allowance  to      them.’’       3.  Before the  High Court,  it was  contended by  the appellant that the State Government had by refusing to refer the dispute  to the  Tribunal giving the above reasons taken upon itself  the power to decide the dispute and had usurped the powers  of the  Tribunal. It  was further contended that the question  raised related to the conditions of service of the employees  and was,  therefore, a matter primarily to be decided  by  the  Tribunal-  The  High  Court  repelled  the contention and held as follows:                 "It is now 12 years that the matter has been      pending. But  it would  appear from  the history of the      case that  the delay  has been  mostly due  to the fact      that the  case was  pending before  various Courts. The      Government has  not materially  changed its  stand.  As      regards Chambal  allowance, they  were, from  the  very      inception, taking  the stand  P that  the  work-charged      employees of  the Project  were  given  a  consolidated      salary and  the  service  conditions  did  not  warrant      payment of  extra allowance.  Now the  rules regulating      service conditions of the work-charged employees of the      project did  not contain  the provision  for payment of      Chambal allowance  to them.  The Government  was of the      opinion that  prima facie no case arises, particularly,      when the  extra benefit  was already  being granted  to      them. The  Government undoubtedly  could no  decide the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7  

    matter  finally,  but  they  could  certainly  consider      whether a  prima facie case for reference has been made      out on merits. If no case is made out, it would be open      to the Government to refuse 1024      to refer  such a question and it could not be said that      the  Government  was  usurping  the  functions  of  the      Tribunal and deciding the case finally. In our opinion,      the State  Government’s order  could not  be said to be      punitive and  it takes  into account the entitlement of      the Chambal employees for the Chambal allowance.                  As regards  the other  question, the  State      Government are on a firmer ground. Since the Government      is not  paying dearness  allowance equal to that of the      Central Government  employees to  the employees  in any      other department  in the  State, there  is no reason to      discriminate and pay the same to the Chambal employees.      This is  what the  State Government  have stated and we      think that  if the allowance at the rate payable to the      Central Government  employees is not paid to any one in      the State, the Government was justified in holding that      no prima facie case has been made out by the petitioner      for referring  this dispute  to the Tribunal. The State      Government  have   also  considered   the  question  of      expediency that  by payment  of such  allowance to  the      Chambal employees alone, there would be dissatisfaction      amongst the  other employees  of the  State. Both these      reasons are  germane and  relevant. The Government here      was not  deciding the  case finally.  It has  to decide      question of  expediency and  whether a prima facie case      has been made out.. "       In  support of  this conclusion  the High Court relied upon the  observations made  by this Court in Bombay . Union of Journalists  P v.  State of  Bombay(l) and  held that the Government was  not precluded  from  making  a  prima  facie examination of  the merits  of the dispute while considering whether a  reference was  necessary or  not. It  was further held that  "the two  reasons given  by the  State Government fulfilled necessary  test laid  down by  the orders  of this Court earlier  and the various Supreme Court decisions cited by the petitioners."       4.  In the appeal before us, it was contended that the approach made  by the  High Court was erroneous and that the High Court had failed to properly delineate the jurisdiction of the  Government under  Section 10 read with Section 12(5) of the Industrial Disputes          (1) A.I.R. 1964 S.C. 1617. 1025 Act. It  was contended before us that the question raised by the appellant  had to be decided by the Tribunal on evidence to be  adduced before  it and it could not be decided by the Government on  a prima facie examination of the facts of the case. This  submission  was  met  with  the  plea  that  the Government had  in appropriate  cases  at  least  a  limited jurisdiction to consider on a prima facie examination of the merits of  the demands,  whether they merited a reference or not.       5.  We have  considered the  rival contentions  raised before us  The High  Court apparently  has relied  upon  the following passage in Bombay Union of Journalists v. State of Bombay, (Supra) C                ".. ...But it would not be possible to accept      the plea  that the  appropriate Government is precluded      from considering  even prima  facie the  merits of  the      dispute when  it decides the question as to whether its

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7  

    power to  make a  reference should  be exercised  under      Section 10(1)  read with  Section 12(5)  or not. If the      claim  made   is  patently  frivolous,  or  is  clearly      belated, the  appropriate Government may refuse to make      a reference.  Likewise, if  the impact  of the claim on      the general  relations between  the  employer  and  the      employees in  the region  is likely  to be adverse, the      appropriate Government  may take  that into  account in      deciding whether a reference should be made or not.’’       We  find that  the approach made by the High Court was wrong and  the reliance on the above passage on the facts of this case,  is misplaced  and unsupportable.  This Court had made it clear in the same Judgment in the sentence preceding the passage  quoted above  that it  was the  province of the Industrial   Tribunal to  decide the  disputed questions  of fact.                ".. Similarly, on disputed questions of fact,      the appropriate  Government  cannot  purport  to  reach      final conclusions, for that again would be the province      of the Industrial Tribunal.. "       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 1026 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 constitutes 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 evidence  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 preverse or frivolous. The conclusion so arrived at robs the employees of  an opportunity  to place  evidence before  the Tribunal and  to  substantiate  the  reasonableness  of  the demand.           6. Same is the case with the conclusion arrived at by  the   High  Court  accepting  the  stand  of  the  State Government that  the employees  were  not  entitled  to  the Chambal  allowance   as  the   same  was   included  in  the consolidated pay.  This question,  in fact,  relates to  the conditions of service of the employees. What exactly are the conditions of  service of  the employees  and in what manner their conditions  of service  could be  improved are matters which are  the special preserve of the appropriate Tribunals to be  decided in adjudicatory processes and are not ones to be decided by the Government on a prima facie examination of the demand. This demand again can never be said to be either perverse or frivolous.       7.  There may  be exceptional cases in which the State

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7  

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. Government should be very slow  to attempt  an examination  of the  demand with a view to decline reference and Courts will always be vigilant whenever the  Government attempts to usurp the powers of the Tribunal for adjudication of valid dis- 1027 putes. To allow the Government to do so would be to render A Section 10  and Section 12(5) of the Industrial Disputes Act nugatory.       8.  We have  no hesitation  to hold that in this case, the Government  had exceeded its jurisdiction in refusing to refer  the  dispute  to  the  Tribunal  by  making  its  own assessment unilaterally of the reasonableness of the demands on merits. The High Court erred in accepting the plea of the Government that  refusal to  refer the  demands in this case was  justified.   The  demands  raised  in  this  case  have necessarily to  be decided  by the  appropriate Tribunal  on merits.       9.  In the  result, we  set aside  the Judgment of the High  Court,   allow  this   appeal  and  direct  the  State Government  to   refer  all  the  questions  raised  by  the appellant to the appropriate Tribunal. The appeal is allowed with costs to the appellant quantified at Rs.2,500 n S.R.                                          Appeal allowed. 1028