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

PETITIONER: V. VEERARAJAN & ORS.

       Vs.

RESPONDENT: GOVERNMENT OF TAMIL NADU & ORS.

DATE OF JUDGMENT14/01/1987

BENCH: MISRA RANGNATH BENCH: MISRA RANGNATH DUTT, M.M. (J)

CITATION:  1987 AIR  695            1987 SCR  (1) 997  1987 SCC  (1) 479        JT 1987 (1)   141  1987 SCALE  (1)42

ACT:     Industrial  Disputes  Act, 1947--Ss. 10  &  12(5)--State Government-Reference  of dispute for adjudication--Fit  case where reference should be made--What is.

HEADNOTE:     A large number of workmen of the respondent-company were proceeded  against  by the management  on  certain  charges. Later most of them were taken back to employment. On failure of  conciliation  in regard to 7 of the  dismissed  workmen, disputes  were raised under s. 11-A of the  Industrial  Dis- putes Act, 1947. The Government declined to make a reference to the Labour Court for adjudication. A Single Judge as well as  the  Division Bench rejected the Writ  Petition  of  the workmen.     On  appeal, this Court on 9th July, 1985 set  aside  the judgments passed by the Single Judge and the Division  Bench and  directed the State Government to reconsider the  matter without  taking  into account the ground that  the  domestic inquiry had been conducted by the employer according to  the principles of natural justice and the punishment imposed was not disproportionate to the gravity of the offence committed by the dismissed workmen and come to decision within 30 days whether it would make a reference of the industrial  dispute to the Labour Court.     The Government again declined to make a reference  stat- ing: (1) that the company manufactures and supplies  certain items  to the Defence Department; (2) that there was  indus- trial  unrest followed by violence and stoppage of  work  in the  establishment due to inter-union rivalry; (3) that  the management charge-sheeted the workmen under specific  provi- sions of the standing order; (4) that the workmen themselves had  admitted the charges against them; (5) that in view  of the proven charges and the need to preserve industrial peace in the establishment it was not a fit case for  adjudication both on expediency and on merits.     When  the appeal came up for further hearing, on  behalf of the appellants-workmen it was contended that the  grounds given in support 998 of  the order are totally irrelevant, immaterial and do  not

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

justify the refusal to refer the dispute.     On behalf of the respondents it was contended: (1 ) that the statute authorises the State to take a prima facie  view of  the  matter for ascertaining whether it was a  fit  case wherein  exercise of jurisdiction under Section  10(1)  read with 12(5) was called for and a reference was warranted; (2) that  the State Government in declining to make a  reference has  kept itself within the limit set by law; (3)  that  the grounds  advanced in support of refusal to make a  reference were clearly tenable and indicated that a broad and  overall view  of the matter was taken by the State  Government;  (4) that  since the jurisdiction of this Court is not  appellate and  order  of  the State Government  is  administrative  in character,  no interference was warranted; and (5)  that  if the  grounds advanced by the State Government  were  neither germane nor relevant, the matter should go back to the State Government for fresh disposal as it is not for this Court to direct a reference to be made. Allowing the Appeal,     HELD:  I. 1 It is open to the State Government  to  take the  broad  features  into  consideration  while  exercising jurisdiction under s. 10(1) of the Industrial Disputes  Act, 1947.  If the dispute in question raises a question  of  law the  appropriate  Government should not purport to  reach  a final  conclusion on the said question of law  because  that would normally lie within the jurisdiction of the Industrial Tribunal.  Similarly,  on disputed questions  of  fact,  the appropriate Government cannot purport to reach final conclu- sions for that again would be the province of the Industrial Tribunal. [1003H; 1004A-B]     1.2  S. 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. [1004F-G]     1.3  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 he 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 he to render s. 10 and s. 12(5) of the Industrial Disputes Act nugatory. [1005A-C] 999     Bombay Union of Journalists v. State of Bombay,’  [1964] 6  SCR  22 = AIR 1964 S.C. 1617 M.P.  Irrigation  Karamchari Sangh v. State of M.P., [1985] 2 SCC 103 & Ram Awtar  Sharma JUDGMENT: upon.     2. This is a fit case where a reference should be  made. In  the  order  of this Court on July 9, 1985  it  had  been clearly  stated that a direction to make a  reference  would have been given but for the submission advanced on behalf of the  counsel for the respondents that the matter  should  go back and the State Government should be given an opportunity of  giving  other valid reasons, if any, in support  of  its order. [1005G; 1006A]     Nirmal  Singh v. State of Punjab & Ors., [1984]  Lab  IC 1312  &  Sankari Cement Alai Thozhilalar Munnetra  Sangam  & Anr.  v. Management of India Cements Ltd., [1983]  1  L.L.J. 460, referred to.     3. The matter should go back to the State Government for fresh  disposal  and the State Government  should  make  its order of reference within one month and the Labour Court  to

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

which  the  dispute  may be referred shall  dispose  of  the reference within four months from the date of the receipt of the reference. [1006C-D]

&     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3 144  of 1985.     From  the  Judgment and Order dated 20.11. 1984  of  the Madras High Court in Writ Appeal No. 178 of 1982     M.K.  Ramamurthy,  Ambrish Kumar and Rajaraman  for  the Appellants.     K.  Parasaran, Attorney General, G.L. Sanghi,  Dr.  Y.S. Chitale, A.V. Rangam, T.V. Ratnam and A.T.M. Samanth for the Respondents. The Judgment of the Court was delivered by     RANGANATH  MISRA, J-154 workmen were  proceeded  against by  the  management  of Lucas-T.V.S.  Limited,  Madras,  for wilful  disobedience  of lawful orders  of  superiors,  acts subversive  of good and proper behaviour within  the  estab- lishment  after authorised hours of work without  permission and  shouting of slogans within the establishment  amounting to misconduct under Standing Orders. Later  1000 134of them were taken back to employment. In regard to 7  of the  dismissed workmen conciliation was undertaken and  upon its  failure,  disputes  raised under section  11-A  of  the Industrial  Disputes  Act were asked to be referred  to  the Labour  Court for adjudication. When Government declined  to make  a  reference, the High Court was  moved.  The  learned Single  Judge  rejected the writ petition and  the  Division Bench upheld such rejection. This appeal by special leave is against the order of the Division Bench of the High Court.     This  Court  on July 9, 1985 after hearing  counsel  for parties came to the conclusion.               "Now  it is clear from the order made  by  the               State  Government on 11th October, 1979  which               order  has been reaffirmed by the State  Govt.               by  its  order dated 3rd May. 1981,  that  the               only  ground  on which  the  State  Government               refused to make a reference, of the dispute to               the labour court was that, in its opinion  the               domestic inquiry had been conducted by the 3rd               respondent (employer) according to the princi-               ples  of  natural justice and  the  punishment               imposed  by the 3rd respondent on  the  appel-               lants was not disproportionate to the  gravity               of the offence committed by them. This is also               borne  out  from paragraph 6 of  the  counter-               affidavit filed on behalf of the 1st  respond-               ent ........  where it has been clearly stated               that  the Labour Department of the  Government               of  Tamil Nadu opined that the management  had               conducted  a fair and proper inquiry and  also               taken  in  consideration the  gravity  of  the               offence  before dismissing the appellants  and               the  punishment imposed on the appellants  was               not  disproportionate  having  regard  to  the               nature  of  the charges proved  against  them.               This ground on which the State Government  has               acted in refusing to refer the dispute to  the               labour court is clearly an irrelevant  ground.               It  is  now  settled law as a  result  of  the               decisions  of this Court in Workmen of  Syndi

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

cate  Bank, Madras v. Government of India & Anr.,  [1985]  1 L.L.J. 93 and Ramawatar Sharma and Ors., v. State of Haryana &  Anr., [1985] 1 Scale 713 that the appropriate  Government cannot  decline to make reference of an  industrial  dispute arising  out of the termination of the service of a  workman on  the  ground that the domestic inquiry resulting  in  the termination of the services of the workman was in the  opin- ion of the State Government in conformity with the 1001 principles  of natural justice and that the  punishment  im- posed on the workman was not disproportionate to the offence with which he was charged  ......  "         "We  would  therefore have  ordinarily  allowed  the appeal  and  set aside the judgments of the  learned  Single Judge and the Division Bench of the High Court and  directed the  State Government to make a reference of the  industrial dispute  between the appellants and the 3rd respondent.  But Dr. Chitale appearing on behalf of the 3rd respondent  urged that  there might be some other relevant grounds  which  may still  be required to be considered by the State  Government before  deciding whether to make a reference or not and  the case  should  therefore go back to the State  Government  to reconsider  the question in the. same manner in  which  this Court  directed  the State Government to reconsider  in  the Workmen  of Syndicate Bank case (supra). But this is a  case in which more than 7 years have elapsed since the appellants were dismissed from service and they are still nowhere  near a  reference.  We would therefore set  aside  the  judgments passed  by the learned Single Judge and the  Division  Bench and  direct  the State government to reconsider  the  matter without taking into account the aforesaid irrelevant  ground and  come to a decision within a period of 30 days from  the date  of receipt of the copy of this order whether it  would make  a  reference of the industrial dispute to  the  Labour Court.  We  would keep the appeal pending before us  and  as soon  as  the decision is reached by the  State  Government, which  of course should be within a period of 30  days  from the  date of receipt of the copy of this order by the  State Government,  intimation of such decision shall be  given  to the  Court so that the Court can then consider  whether  the decision  reached by the State Government is legally  justi- fied or not. We are informed that V. Kondiah the 2nd  appel- lant has already settled the dispute with the 3rd respondent and  therefore  the question of making a  reference  of  the dispute  will have to be considered by the State  Government only in regard to the remaining 6 appellants."     After the matter went back the State Government has made the following order: 1002 "Accordingly  the Government have re-examined the  conCilia- tion  report first read above and all other connected  rele- vant records and consider that it is not necessary to  refer the cases of Thiruvalargal K. Arinathan, A.C.  Kabaleswaran, V. Srinivasan, V. Veerarajan, P. Subramanian and H.  Indira- rajan for adjudication both on merits and on expediency  for the following reasons:          (1)  Lucas-T.V.S.  Limited are  suppliers  of  some items to the Defence.           (2)  There was industrial unrest followed by  vio- lence and stoppage of work in this establishment in 1977 due to inter union rivalry.          Again  there  was industrial unrest  due  to  inter union  rivalry in this establishment in 1978 employing  2400 workmen. To avoid recurrence of such incidence and  stoppage of  work  again  in 1978 the  Management  took  disciplinary

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

action  against  154 workmen. The Management took  back  134 workmen  out of 154. The seven workmen are among  those  who were dismissed considering the gravity of the offence.          (3)  The  Management  charge-sheeted  these   seven workmen under the specific provisions of the standing orders for misconduct such as wilful disobedience of lawful  orders of  the  superiors, acts of subversive of  good  and  proper behaviour within the establishment, being within the  estab- lishment  after authorised hours of work without  permission shouting slogans within the establishment etc.-          (4)  All  the workmen admitted the  charges  framed against  them during the enquiries and hence  the  Managment dismissed  them  from service based on these  enquiries  and taking into account their past services.           (5) Since the workmen themselves have admitted the charges  against  them.  The Government  consider  that  the charges have been proved.           (6)  The Government also considered the nature  of proven charges and the quantum of punishment imposed 1003 on  them  with  a view to decide the  question  whether  the reference should be made or not.          (7) Considering the proven charges and the need  to preserve  industrial peace in the establishment the  Govern- ment  consider that this is not a fit case for  adjudication both on expediency and on merits.          No action is considered necessary in respect of the case  of  Thiru  A. Kondaiah who has  settled  his  accounts finally with Management."     With reference to the order made by the State Government the  appeal has been further heard. Mr. Ramamurthi  for  the appellants,  learned Attorney General for the Government  of Tamil Nadu and Dr. Chitale for the Management have  advanced their respective contentions.     The seven grounds given in support of the order refusing to  make a reference have been challenged by Mr.  Ramamurthi as  irrelevant. The facts that the Company manufactures  and supplies  certain  items to the Defence  Department  of  the Union  of India and there was industrial unrest followed  by violence and stoppage of work, according to learned counsel, are not germane and relevant for the purpose of deciding  as to  whether the dispute raised by the six workmen should  be referred  to  industrial adjudication. So far as  the  third ground  is concerned, according to Mr. Ramamurthi, it is  in effect  repetition of the earlier grounds which  this  Court found  to be irrelevant. The language has been  changed  and the grounds have been made descriptive and detailed.  Coming to  the 4th ground it is contended that all the  154  delin- quent workmen had accepted their guilt when negotiation  for a settlement was undertaken. There was no justification  for the  employer to discriminate between 134 workmen  who  were restored  to service and the remaining 20 including the  six appellants  to whom re-employment was not given.  Mr.  Rama- murthi  states  that  ground No. 5  is  totally  irrelevant. Similarly, grounds nos. 6 and 7 are not at all material  and do not justify the refusal to refer the dispute. In  support of the appeal the learned counsel has further contended that in  a series of decisions beginning with the case of  Bombay Union of Journalists v. State of Bombay, [1964] 6 SCR 22=AIR 1964  SC  1617 this Court has clearly laid down that  it  is open to the State Government to take the broad features into consideration  while exercising jurisdiction  under  section 10(1) of the Act. If the dispute in question raises a  ques- tion of  1004

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

law the appropriate Government should not purport to reach a final  conclusion on the said question of law  because  that would normally lie within the jurisdiction of the Industrial Tribunal.  Similarly,  on disputed questions  of  fact,  the appropriate Government cannot purport to reach final conclu- sions for that again would be the province of the Industrial Tribunal. Gajendragadkar, J. as he then was speaking in that case indicated: "   ....  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 power to make  a  reference should  be exercised under section 10(1) read with the  sec- tion 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. It must, therefore, be held that a prima facie examination of the merits cannot be  said to  be foreign to the enquiry which the appropriate  Govern- ment  is  entitled to make in dealing with a  dispute  under section 10(1)  ...... Mr.  Ramamurthi also placed reliance on the decision in  the case  of M.P. Irrigation Karamchari Sangh v. State of  M.P., [1985] 2 SCC 103 where it has been said: "There,  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 refer- ence  is rejected on the specious plea that  the  Government cannot bear the additional burden, it constitutes  adjudica- tion and thereby usurpation of the power of a quasi-judicial Tribunal by an administrative authority namely the appropri- ate Government  .....  What the State Government has done in this case is not a prima 1005 facie examination of the merits of the question involved."          "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  Sec- tion 12(5) of the Industrial Disputes Act nugatory."     In  the  case  of Ram Awtar Sharma & Ors.  v.  State  of Haryana  &  Anr., [1985] 3 SCC 189 the ratio in  the  Bombay Union of Journalists’ case has been reiterated.     Learned  Attorney  General for the State of  Tamil  Nadu submitted  that the statute authorises the State to  take  a prima facie view of the matter for the purpose of ascertain- ing whether it was a fit case wherein exercise of  jurisdic- tion under section 10(1) read with section 12(5) of the  Act was  called  for and a reference was  warranted.  The  State Government  in declining to make a reference in the  present case has kept itself within the limit set by law as  deline- ated by this Court.

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

   Dr.  Chitale  contended  that the  grounds  advanced  in support or refusal to make a reference were clearly  tenable and  indicated that a broad and overall view of  the  matter was taken by the State Government. Since the jurisdiction of this  Court  is  not appellate and the order  of  the  State Government  is administrative in character, no  interference was  warranted.  Dr. Chitale further added that if  we  took view that the grounds advanced by the State Government  were neither  germane nor relevant, the matter should go back  to the  State Government for afresh disposal as it is  not  for this Court to direct a reference to be made.     Having  heard learned counsel for the parties we are  of the view that this is a fit case where a reference should be made. In the order of this Court in the present case on July 9, 1985 it has been clearly stated that a direction to  make a  reference  would have been given but for  the  submission advanced  by Dr. Chitale that the matter should go back  and the  State  Government  should be given  an  opportunity  of giving 1006 other valid reasons, if any, in support of its order. In the case  of Nirmal Singh v. State of Punjab & Ors., [1984]  Lab IC 13 12 this Court gave a direction that reference be  made forthwith.  Similarly,  in the case of Sankari  Cement  Alai Thozhilalar  Munnetra Sangam & Anr. v. Management  of  India Cements  Ltd., [1983] 1 L.L.J. 460 this court gave a  direc- tion for making of a reference.     The  criticism advanced by Mr. Ramamurthi in  regard  to the  reasons given by the State Government seem to be  well- founded and we are of the opinion that the  respondent-State Government should have a direction to refer the dispute  for adjudication  by  the labour court. The  State  Government’s order  should be made within one month from to-day  and  the Labour Court to which the dispute may be referred shall have a  direction to dispose of the reference within four  months hence from the date of receipt of the reference. The  appel- lants shall be entitled to costs. Hearing fee is assessed at Rs. 3,000 and is recoverable from Respondent No. 1. A.P.J.                                          Appeal   al- lowed. 1007