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PETITIONER: THE MANAGEMENT OF ORIENTAL MERCANTILEAGENCY

       Vs.

RESPONDENT: THE PRESIDING OFFICER & ORS.

DATE OF JUDGMENT10/11/1972

BENCH: CHANDRACHUD, Y.V. BENCH: CHANDRACHUD, Y.V. KHANNA, HANS RAJ

CITATION:  1973 AIR 1143            1973 SCR  (2) 932  1973 SCC  (1) 287

ACT: Industrial  Disputes Act-Dispute referred to  Labour  Court- High Court remitted back the case to Labour Court for  fresh disposal-The meaning of ’fresh disposal’.

HEADNOTE: The appellants retrenched 6 of their workmen and the dispute was  referred  to the Labour Court  for  adjudication.   The Labour  Court by its Award held that the  non-employment  of the  workmen was justified and no relief was granted to  the workmen.   Against  this  award, the workmen  filed  a  Writ Petition  (No. 209 of 1964) and the learned single Judge  of the High Court set aside the Award of the Labour Court,  and held that the non-employment of the workmen was unjustified. He remitted the matter for ’fresh disposal’.  The appellants appealed  against the said order by Writ Appeal No.  113  of 1967,  before a Division Bench of the said High Court.   The Division Bench dismissed the appeal ex-parte with the obser- vation  that  the  judgment  of  the  learned  single  Judge amounted  to  a quashing of the Award, and  release  of  the proceedings for fresh and proper determination by the Labour Court, for carefully ascertaining the facts and applying the true  principles of Industrial Law applicable to such  cases of  retrenchment".  The matter, therefore, went back to  the Labour  Court for ’fresh disposal’; but when the  appellants attempted  to  reagitate ,.he matters  in  controversy,  the workmen objected. While  the matter was pending before the Labour  Court,  the workmen   moved  a  petition  (CMP  No.  7125/67),   seeking clarification  of the judgment of the learned single  Judge, who  by his order clarified his earlier judgment  by  saying that he had remitted the matter to the Labour Court only for the purpose of determining what relief could be given to the retrenched  employees  and that the Labour Court  could  not reopen  the  matter afresh.  The attention  of  the  learned Judge  was  drawn to the observation made  by  the  Division Bench  of  the  High Court, but he took the  view  that  the appeal  having  been dismissed by the  Division  Bench,  his original judgment stood and that the management might, if it so  chose,  file a review application  before  the  Division Bench. Accordingly, the appellants filed an application for  review

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of  the  order  passed by the  Division  Bench.   The  Bench dismissed  the revision petition with the  observation  that the  learned  single  Judge  had  not  expressed  any  final conclusion.  Further, the order passed by the Division Bench was  prima  facie in favour  of  the  employer-organisation. Therefore,  the  employer-organisation could not ask  for  a review of the order favorable lo them. Thereafter,  the  Labour Court, by its Award dated  May  25, 1968,  held  that  the  retrenchment  of  the  workmen   was justified and observed that the powers of the High Court  in hearing writ petition are limited, only to remitting a  case for Labour Court for fresh disposal in its entirety and that observations  to  the  contrary  are  mainly  obite   dicta. Further,  following the Appellate Court’s observations,  the whole matter was at large.  933 Against this Award, the workmen filed another writ  petition (No. 123 of 1969) and a Division Bench quashed the award  of the Labour Court and remitted the matter with the  direction that  it  ought  not go into the merits  of  the  case,  but dispose  of the matter only in respect of proper reliefs  to be  given  to the petitioner.  The learned Judges  took  the view  that  the  workmen  were not  bound  by  the  ex-parte observations made by the division bench earlier and that the order  of the learned single judge must be treated as  final and therefore, the Labour Court was bound to give effect  to that order., The correctness of this judgment was challenged before this Court. HELD:(i)  The  order of the Division Bench  passed  in  Writ appeal No. 113 of 1967 is set aside as being in violation of the  principles of natural justice.  This order cannot  bind the workmen as it was passed ex-parte. [937 E] (ii) The  clarification order passed by the  learned  single Judge  in C.M.P. No. 7125 of 1967, in face of the  appellate order  is wrong.  The learned judge had no  jurisdiction  to issue  a clarification which was inconsistent with the  view taken  by  the  appellate Court.  The  appellate  order  was binding on the learned single Judge. [938 D] (iii)     The second award of the Labour Court dated May 25, 1968  is  also set aside as that award could not  have  been given without the High Court considering the legality of the judgment  of  the  learned  single  judge.   Therefore,  the judgment  of  the High Court dated July 7, 1970,  passed  in writ  petition No. 122 of 1969, which was filed against  the second award, must also be set aside. (iv) What  remains in the field is (a) the first  awards  of the Labour Court dated June 14. 1963 and (b) the judgment of the  Hon’ble Single Judge heard in writ petition No. 209  of 1964.   Writ appeal No. 113 of 1967 is revived and the  High Court  will  dispose of that appeal on merit  after  issuing notice thereof to the respondents.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 113 of 1971. Appeal  by special leave. from the judgment and order  dated July  7, 1970 of the Madras High Court in Writ Petition  No. 122 of 1969. M.   C. Chagla and S. Gopalakrishnan, for the appellant. M.   K.  Ramamurthi, J. Ramamurthi and N. G. R. Prasad,  for the respondents. The Judgment of the Court was delivered by CHANDRACHUD, J. This is an appeal by special leave from  the judgment dated July 7, 1970 of a Division Bench of the  High

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Court  at Madras in Writ Petition No. 122 of 1969,  quashing an  award  dated May 25, 1968 of the first  respondent,  the Presiding Officer, Labour Court, Madras. While allowing the writ petition the learned Chief  Justice, who  delivered the judgment of the Bench, observed that  the petition 934 discloses  "an  unfortunate state of affairs".   We  are  in regretful agreement with that observation.  It shall be  our endeavor  to  find a solution to the  unfortunate  situation arising  out of irreconcilable orders passed by the  learned Judges of the High Court. In  1961  the appellants, Oriental  Mercantile  Agency,  re- trenched  six  of their workmen resulting in  an  industrial dispute  which was referred by the Government of  Madras  to the Labour Court for adjudication.  The question referred to the Labour’ Court was whether the non-employment of the  six workmen  was justified and what relief they  were entitled to.  By its award dated June 14, 1963 the Labour Court (Shri M.  S.  Abdul  Azeez) held that the  non-employment  of  the workmen  was justified and therefore they were not  entitled to any relief. Against the award of the Labour Court the workmen filed writ petition  No.  209 of 1964 in the Madras High  Court,  under Article  226 of the Constitution.  Setting aside the  award, Venkatadri J. held by his judgment  dated February 20,  1967 that the non-employment of workmen was unjustified, that the intention  of the management was to weed out those  whom  it did  not want and that the reasons given by  the  management for  terminating the services of the workmen were  fanciful. The learned Judge wound up his judgment in these words "I am therefore  of the opinion that the conclusion of the  Labour Court cannot be sustained, on the facts and circumstances of this  case.   Therefore the matter is remitted back  to  the Labour Court for fresh disposal." The appellants filed writ appeal No. 113 of 1967 against the judgment of the learned judge.  That appeal came for hearing before  Anantanarayanan  C.J. and Natesan J., who  by  their order  dated April 4, 1967 dismissed the appeal  in  limine, with the following observations :               "In advancing the arguments before us for  the               admission of the writ appeal, learned  counsel               for the employer Organisation submits that  on               certain  of  the  vital issues  of  fact,  the               learned    Judge   has    already    expressed               conclusions,    which   may   be    ultimately               prejudicial  to the case which the  management               hoped  to establish before the  Labour  Court.               As we understand, this judgment of the learned               Judge amounts to a quashing of the award,  and               release  of  the  proceedings  for  fresh  and               proper determination by the Labour Court,  for               carefully ascertaining the facts and  applying               the   true   principles  of   Industrial   Law               applicable to such cases of retrenchment.   We               do  not understand the learned Judge  to  have               finally expressed any conclusions on the major               questions  of fact, and the Labour Court  need               not interpret the judgment               935               as  such.   It is sufficient that  the  Labour               Court  proceeds  to ascertain the  facts  with               care, in the light of the principles  stressed               by the learned Judge, and in making the  award               it should come to conclusions on facts after a

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             detailed   analysis,   and  apply   the   real               principles  of  Industrial Law  applicable  to               such  cases.   With these  ob  servations  and               clarification the writ appeal is dismissed." Notice  of the appeal was not issued to the workmen and  the order extracted above was passed without hearing them. The matter then went back for "fresh disposal" to the Labour Court.   Relying  upon  the observations made  in  the  writ appeal,  appellants contended before the Labour  Court  that they were entitled to re-agitate the matters in controversy. The  workmen  objected  to  that  course,  contending   that Venkatadri J. had recorded a specific finding that the  non- employment of workmen was unjustified and that this  finding was binding on the Labour Court. While  the matter. was pending before the Labour Court,  the workmen moved a petition in the High Court, CMP No. 7125  of 1967,  seeking clarification of the judgment dated  February 20,  1967 of Venkatadri J. By an order dated June  26,  1967 the  learned Judge clarified his earlier judgment by  saying that  he had remitted the matter to the Labour  Court  "only for  the purpose of determining what reliefs could be  given to the employees who were retrenched from service", and that the  Labour Court was trying to reopen the matter by  taking advantage  of  the concluding portion of  the  judgment,  in which  it was said that the matter was remitted  for  "fresh disposal".  The learned Judge observed : "I do not think the Labour  Court  is justified in going into this  matter  once again  when I have come to the conclusion that  the  reasons given  for terminating the service of the employees who  had put  in  long number of years of service were  fanciful  and that  the  conclusion  of  the Labour  Court  would  not  be sustained.   The  Labour Court can only decide  what  proper reliefs  can be given to the employees who  were  retrenched from service".  The attention of the learned Judge was drawn to  the  order dated April 4, 1967 passed  by  the  Division Bench  in Writ Appeal No. 113 of 1967 but he took  the  view that  in effect, the appeal was dismissed by the High  Court and  that all that was necessary was to give an  opportunity to the management "to reopen the matter by filing a  review" of the order passed in the Writ Appeal. Accordingly,  the management filed CMP No. 8579 of 1967  for review  of  the  order dated April 4,  1967  passed  by  the Division Bench in Writ Appeal No. 113 of 1967.  By its order dated  July  31, 1967 the Division Bench consisting  of  the same learned Judges, (Anantanarayanan C.J. and Natesan  J.), dismissed the 936 review  application.   The  learned Chief  Justice  who,  on behalf  of the Bench, delivered a short order said that  the observation  which they had made while dismissing  the  Writ Appeal,  to the effect that Venkatadri J. had not  expressed any  final  conclusion and that the Labour  Court  need  not interpret that judgment as expressing such a conclusion  was "prima  facie  in favour of the employer  organisation"  and therefore it was difficult to appreciate how they could  ask for  a  review  of that order.  The  learned  Chief  Justice further observed that on the contrary it was "for the Labour Organisation,  if  it  thinks fit, to approach  us  for  the remedy considered appropriate"’. In  the welter of these conflicting orders, the  matter  was taken up by the Labour Court (Shri S. Gonsalves) once again. By  its’ award dated May 25, 1968 the Labour Court took  the view  that  ,,it is settled law that the powers  of  a  High Court  while hearing a writ petition under Article  226  of, the  Constitution of India are limited only to  remitting  a

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case  to the lower Court for fresh disposal in its  entirety and  that  consequently any observations made  by  it  while ordering  such remission are mainly obiter dicta", that  the appellate  court  had  said  that  Venkatadri  J.  had   not expressed  any  final  conclusion and  therefore  the  whole matter was at large.  Resolutely, the Labour Court stuck  to the  conclusion  recorded by Shri M. S. Abdul Azeez  in  his award  dated  June  14, 1963 that the  retrenchment  of  the workmen was justified. Against  that award the workmen filed a writ  petition  (No. 122  of 1969), which was referred by a learned Single  Judge (Ismail J.) to a Division Bench.  By its judgment of July 7, 1970  the Division Bench (Veeraswami C.J. and  Gokulkrishnan J.)  quashed the award of the Labour Court and remitted  the matter to it with a direction that it "ought not to go  into the merits or the propriety of the retrenchment, but dispose of  the  matter  only in respect of  the  proper  relief  or reliefs  to be given to the petitioners".  The teamed  Judge took  the  view that the workmen were not bound by  the  ex- parte   observations  made  by  the  Division  Bench   while dismissing Writ Appeal 113 of 1967 in limine, that the order of Venkatadri J. dated February 20, 1967 must be treated  as final  and  conclusive and therefore the  Labour  Court  was bound to give effect on that order.  The correctness of this judgment is challenged in this appeal by special leave. Obviously,  the  Labour Court found itself  in  a  quandary. While setting aside its award, Venkatadri J. had recorded an unequivocal finding that the retrenchment of the workmen was unjustified.   While dismissing Writ Appeal No. 113 of  1967 against   the   judgment  of  the  learned   single   Judge, Anantanarayanan  C.J.  and  Natesan  J.  observed  that  the learned Judge had passed an order of  937 release   of   the   proceedings  for   fresh   and   proper determination  by  the  Labour Court and  that  he  had  not "finally expressed any conclusions on the major questions of fact, and the Labour Court need no+. interpret the  judgment as  such".   In spite of this view of the  appellate  Court, Venkatadri  J.  passed the clarificatory order of  June  26, 1967  protesting,  that  the  Labour  Court  would  not   be justified in going into the matter once again in face of the finding  recorded by him that the order of retrenchment  was unsustainable.   The Labour Court was called upon to  choose between  these irreconcilable orders and it  exercised  that choice  by  adopting the course commended  by  the  Division Bench,  a  course which accorded with its own  view  of  the matter.   It embarked upon a fresh adjudication  and  firmly adhered to its earlier conclusion which was characterised by Venkatadri J. as unsupportable.  But another Division  Bench in  a  writ  petition against this  fresh  adjudication  has quashed  that  award, upholding in effect  the  judgment  of Venkatadri J. and differing clearly from the order passed by Anantanarayanan  C.J. and Natesan J. while  dismissing  writ appeal No. 113 of 1967 summarily.  We have to determine  the legality of that judgment. It is futile to apportion blame but in a relative assessment of conflicting opinions, it becomes necessary to say who was right and who was wrong.  We have no doubt that the  learned Judges  who  dismissed Writ Appeal 113 of  1967  were,  with respect,   in  error  in  making  observations  which   were calculated  to prejudice the workmen without giving them  an opportunity  of being heard.  True, that the appeal  of  the management  was  dismissed but that was only  in  form.   In substance, the management got the relief it wanted,  because it  was  really interested in getting over the  judgment  of

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Venkatadri  J. so that the Labour Court to which the  matter was  remitted  could  commence a  fresh  adjudication.   The Division Bench, by its order of summary dismissal, asked the Labour  Court to start from scratch, in total  violation  of the principles of natural justice.  We are also clear  that, apart  from this, the Division Bench was in error in  taking the  view  that  Venkatadri J. had  not  expressed  a  final conclusion  on  the  questions arising before  him.   It  is unfortunate  that the learned Judge remitted the  matter  to the  Labour  Court for "fresh disposal", for had he,  as  he sought  to have, specifically directed the Labour  Court  to pass  final orders in accordance with his judgment, the  un- savoury  sequence of events following upon his  order  could have.  been  easily  avoided.   That,  however,  is  not  to indicate  approval  in any manner of the view taken  by  the Division  Bench  that the. learned Judge  had  released  the proceedings  for a fresh determination by the Labour  Court. Thus, the order of the Division Bench in Writ Appeal 113  of 1967 is unsustainable. 938 Venkatadri  J.  was right that he had  decided  the  dispute finally  but he complicated matters by remitting  the  award for a "fresh disposal".  He should also have avoided, in the interests   of   judicial  discipline,  the  making   of   a clarificatory  order.   The Division Bench,  in  the  appeal against  his judgment, had placed a certain construction  on that  judgment.   Right  or  wrong,  that  construction  was binding  on  him and he should therefore  have  declined  to issue   a   clarification  of  his  order.   He   issued   a clarification suggesting that the appellate court was  wrong in  the construction it had placed on his judgment, he  took away  from the Labour Court the liberty of "fresh  disposal" which  it  had  under the form of his order  and  under  the judgment of the appellate court and he even suggested in his clarificatory  order that the management may file  a  review petition  to the appellate court.  That review petition  was rightly  dismissed but the point of the matter is  that  the learned  single  Judge  was  seeking,  without  warrant,  to exercise   jurisdiction  which  was  no  longer  his.    The appellate  judgment  should have been allowed  to  hold  its sway.  It was open to the workmen to challenge that judgment before a proper forum, but so long as that judgment was  not set  aside in an appropriate proceeding, it was  binding  on all subordinate authorities. Coming to the judgment of Veeraswami C.J. and Gokulakrishnan J.which is impugned in this appeal, the Labour Court cannot, in our opinion, be asked simply to work out the judgment  of Venkatadri J. That could be done only if the appellate court came  to the conclusion that Venkatadri J. was justified  in setting   aside   the.   award   of   the   Labour    Court. Unfortunately,  the real point in controversy was missed  in appeal  on both the occasions and attention was paid to  the propriety of orders passed at various stages rather than  to the  legality thereof.  As the High Court has not tested  in appeal  the  validity  of Venkatadri J.’s  judgment,  it  is necessary to direct that to be done.  That can be done  only if,  along  with the judgment under  appeal,  certain  other orders and judgments are set aside. We  set  aside  the order dated April  4,  1967,  passed  by Anantanarayanan  C.J. and Natesan J. in Writ Appeal No.  113 of 1967, as being in violation of the principles of  natural justice.  That order cannot bind the workmen.  We set  aside the  clarificatory  order  dated June  26,  1967  passed  by Venkatadri J. in C.M.P. No. 7125 of 1967 as, in face of  the appellate  order, howsoever wrong, the learned Judge had  no

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jurisdiction to issue a clarification which was inconsistent with  the view taken by the appellate court.  The  appellate order  was binding on the learned Judge.  We set  aside  the award  dated  May  25, 1968 of the  Labour  Court  (Shri  B. Gonsalves), as that award could not have been given  without the  High Court considering the legality of the judgment  of Ven- 939 katadri  J.  Consequently, the judgment of  the  High  Court dated  July 7, 1970 in Writ Petition No. 122 of. 1969  which was  filed against the award of Shri Gonsalves must also  be set aside. What  remains  in the field is (i) the award of  the  Labour Court (Shri M. S. Abdul Azeez) dated June 14, 1963, and (ii) the  judgment  of Venkatadri J. dated February 20,  1967  in Writ  Petition  209 of 1964.  Since it is necessary  in  the interests  of justice that the legality of  Venkatadri  J.’s judgment must be determined, we direct that Writ Appeal  No. 113  of  1967 shall be revived and that the  High  Court  do dispose  of  that  appeal on  merits  after  issuing  notice thereof  to  the respondents-the workmen. ,  Costs  will  be costs in the High Court. S.C.                        Appeal allowed. 940