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PETITIONER: B.B.RAJWANSHI

       Vs.

RESPONDENT: STATE OF U.P. & ORS.

DATE OF JUDGMENT08/04/1988

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) OJHA, N.D. (J)

CITATION:  1988 AIR 1089            1988 SCR  (3) 469  1988 SCC  (2) 415        JT 1988 (2)    46  1988 SCALE  (1)663

ACT:      U.P.   Industrial    Disputes   Act,   1947-Challenging Constitutional validity  of sub-section (4) of section 6 of- Also validity  of  Order  of  Government  of  Uttar  Pradesh remitting award passed by Labour Court for reconsideration.

HEADNOTE: %      In  this   appeal,   the   appellant   questioned   the constitutional validity  of sub-section  (4) of section 6 of the U.P.  Industrial Disputes Act, 1947 (’The Act’) and also the validity  of the order passed by the Govt. remitting the award passed by the Labour Court for reconsideration by it.      The appellant was an employee of respondent No. 5. M/s. Electric (India) Ltd., Meerut. The services of the appellant were terminated  by the  Management of  the said respondent. The termination  of services  led to  an industrial dispute. The State  Government of  Uttar Pradesh under section 4-K of the Act  referred the  said dispute  for adjudication of the Labour Court,  Meerut. The  Labour Court passed an award and forwarded it  to the State Government. Instead of publishing the award  in the  Official Gazette,  as  required  by  sub- Section (3)  of section  6 of  the Act, the State Government passed an order under section 6(4) of the Act, remitting the award for  reconsideration. The  appellant submitted  before the Labour  Court that  he did not want any re-consideration of  the   award.  On   7.2.1985,  the  Management  filed  an application saying  that the case might be fixed for hearing after two months. The appellant opposed the application. The case was  adjourned to  11.3.85 and on 11.3.85 to 26.3.85 at the further request of the management. In the meanwhile, the management moved  the State  Government to transfer the case from the  Labour Court,  Meerut, to  another Labour Court or the Industrial  Tribunal. The  State  Government  passed  an order transferring  the  case  to  the  Industrial  Tribunal Meerut. Aggrieved  by the  order, remitting the award to the Labour Court and the subsequent order, transferring the case to the  Industrial Tribunal,  the  appellant  filed  a  writ petition in  the High  Court, challenging the above said two orders. The  High  Court  dismissed  the  writ  petition  in respect of the order made under section 6(4) of the Act, but

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set aside  the order  of transfer. Aggrieved by the judgment of the High Court, upholding the 470 order passed  under section  6(4) of  the Act, the appellant filed this appeal in this Court for relief by special leave.      Allowing the appeal, the Court, ^      HELD: By  leave of  the Court,  the appellant raised an additional  ground   before  the   Court,  questioning   the constitutional validity  of sub-section  (4) of section 6 of the  Act   itself,  and   the  Court   first  took   up  for consideration the  question relating  to the  constitutional validity of  sub-section  (4)  of  section  6  of  the  Act. [476B-C]      The questions  raised before the Labour Court were very simple ones.  They had  no effect  on the  national economy. They did  not in  any way  interfere with  the principles of social justice.  No grave  consequences would have ensued if the award had been published in the Official Gazette and the parties, allowed  to question  its validity  before the High Court under  Article 226  of the  Constitution of  India  or before  the   Supreme  Court   under  Article   136  of  the Constitution. The  parties had  not been given notice by the State Government  to show  cause why the award should not be remitted to  the Labour Court for a fresh consideration. The order of  the State Government also did not state why and on what points  the State Government was not satisfied with the award and  the questions  on  which  the  Labour  Court  was required to reconsider its award. [479G-H; 480A-B]      When once  a decision  is  given  by  a  quasi-judicial authority, it  would not  be safe to confer on any executive authority the power of review or remission in respect of the said  decision   without  imposing  any  limitation  on  the exercise of  such power,  Even when a Court is conferred the power of  review, such  power can  be  exercised  ordinarily under the well-known limitations as are found in Order 17 of the Code  of Civil Procedure. Similarly, under section 16 of the Arbitration  Act, 1940,  the power  to remit an award to the Arbitrator  can be exercised by a Civil Court only under the circumstances  specified in that connection. Sub-section (4) of  section 6  of the  act imposes  no such limitations. [482C-D]      The argument  of the  State Government that it was open to the  State Government to seek necessary guidance from the object  and   contents  of  the  Act,  and  that  the  State Government could  remit the  award to  the Labour Court only for a  reason which  was germane to the statute in question, was not  of any  assistance to  the State Government in this case because  even though the reason for remitting the award may be a 471 reason connected  with industry  or labour,  it can still be used arbitrarily  to favour  one party  or  the  other.  The ground for  remitting the  award should be one corresponding to a  ground mentioned in section 16 of the Arbitration Act, 1940; otherwise  the power  is capable  of serious mischief. The  facts   in  this   case  themselves  serve  as  a  good illustration of  the above  proposition. There were only two main issues  for consideration  before the Labour Court: (1) whether the  appellant was  a workman,  and (2)  whether his services had  been validly  terminated. The Labour Court had recorded its  findings on  both the  issues in favour of the appellant. From  the prayers  made before  the Labour  Court after the  case had been remitted to it, it is seen that the Management wanted  to adduce  additional evidence before the

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Labour Court  in support of its case. It was not the case of the  Management  that  the  Labour  Court  had  unreasonably refused permission  to the  Management  to  adduce  all  its evidence before the award was passed. It was not even a case where industrial  peace was  likely to  be disturbed  if the award had  been implemented  as it  was. The award would not have also  affected prejudicially either national economy or social justice.  In the  above circumstances,  it would  not certainly be  proper for  the State  Government to  make  an order remitting the award. The State Government in this case could do so because it had been entrusted with such unguided power under section 6(4) of the Act. [482E-H; 483A-C]      It was  urged by  counsel for the State Government that sub-section 4  of section  6 of  the Act  needed not  to  be struck down  but the  Court  might  direct  that  the  State Government should  give a  hearing to  the parties before an order was  passed under  section 6(4),  remitting the award, and also  require the  State Government  to give  reasons in support of  its order. The Court did not think that this was an appropriate  case where  the impugned  provision could be upheld by  reading into it the requirement of issuing notice to the parties and the requirement of giving reasons for its orders. The provisions could not be upheld in the absence of necessary statutory guidelines for the exercise of the power conferred  by  it,  having  regard  to  the  fact  that  the proceeding  before   the  Labour  Court  or  the  Industrial Tribunal is  in the nature of quasijudicial proceeding where parties have  adequate opportunity to state their respective cases, to  lead evidence  and make all their submissions. It is significant  that the corresponding Act which is in force in the  other parts  of India,  i.e., the Industrial Dispute Act, 1947  (Central) Act  XIV of  1947) does not contain any provision corresponding  to section 6(4) of the Act, and the absence of  such a  provision in the Central Act has not led to any serious inconvenience to the general public. [483D-F] 472      The Management  could not  derive much  assistance from the decision  of this  Court in  the Sirsilk  Ltd. &  Ors v. Government of  Andhra Pradesh  & Anr.[1964]  2 SCR 448 as in this case  there was  no settlement  arrived at  between the appellant and  the Management, which made the publication of the award unnecessary. [484H; 485F]      There was  one other  good reason  for taking  the view that without  any guidelines  it will  not be appropriate to confer power  on the  State Government  to nullify virtually the effect of an award by exercising its power under section 6(4) of  the Act.  The Act  applies not  merely to  disputes arising between private management and labour unions and the workmen employed by them but also to industries owned by the State Government  and their  workmen. In the cases where the Government is  the  owner  of  the  industry,  it  would  be inappropriate to  confer uncontrolled  and unguided power on the State Government itself to remit the award passed on the industrial disputes  arising in such industries for there is every chance  of the  power being  exercised arbitrarily  in such  cases.   The  danger   of  entrusting   unguided   and uncontrolled power  to remit an award for reconsideration of the Labour  Court or  Industrial Tribunal  can very  well be perceived, particularly where the award has gone against the State Government  in a  dispute arising  out of  an industry owned by  it. The  sub-section (4)  of section 6 of the Act, which is so widely worded is, therefore, likely to result in grave injustice  to a party in whose favour an award is made as the said provisions can be used to reopen the whole case. The Court  did not agree with the view expressed by the High

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Court of  Allahabad in  V.E. Thamas & Ors. v. State of Uttar Pradesh &  Ors., [1978] Allahabad Law Journal 1118, in which the validity  of sub-section (4) of section 6 of the Act had been upheld. [485F-H; 486G-H; 487C-D]      Taking into  consideration all the aspects of the case, including the  object with  which the  Act was  enacted, the Court felt  that sub-section (4) of section 6 of the Act was violative of  Article 14  of the Constitution of India as it conferred unguided  and uncontrolled  powers  on  the  State Government. The  Court declared sub-section (4) of section 6 of the  Act as  unconstitutional  and  struck  it  down.  It followed that  the order  passed by  the  State  Government, remitting the  case for  reconsideration by the Labour Court was also  liable to  be set  aside. The State Government was directed to publish the award under section 6(3) of the Act. On publication  of the  award, it  was open  to any  of  the parties aggrieved by the award to resort to such remedies as might be available to it in law. [487H; 488A-C] 473      Messrs. Dwarka  Prasad Laxmi  Narain v.  The  State  of Uttar Pradesh  and two  others, [1954]  S.C.R. 803; State of Bihar v.  D.N. Ganguly & Ors., [1959] SCR 1191; Sirsilk Ltd. JUDGMENT: 448; P.  Sambamurthy &  Ors. v.  State of  Andhra Pradesh  & Anr., [1987] 1 S.C.C. 362 and Star Paper Mills Mazdoor Sangh & Ors.  v. Star  Paper Mills Ltd., Saharanpur & Ors., [1974] Allahabad Law Journal 71, referred to.      V.E. Thamas  & Ors. v. State of Uttar Pradesh and Ors., [1978] Allahabad Law Journal 1118, disapproved.

&      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 864 of 1987.      From the  Judgment and  Order dated  23.5.1986  of  the Allahabad High Court in C.M.W.P. No. 13975 of 1985.      M.K. Ramamurthi and A.K. Sangal for the Appellant.      Anil Dev  Singh, G.B.  Pai, O.P.  Sharma,  Mrs.  Shobha Dikshit, R.C.  Gubrela, K.R.  Gupta and  R.K. Sharma for the Respondents.      The Judgment of the Court was delivered by      VENKATARAMIAH, J.  The appellant has questioned in this appeal by  special leave the constitutional validity of sub- section (4)  of section  6 of  the U.P. Industrial Disputes, Act, 1947  (hereinafter referred  to as  ’the Act’) and also the validity  of the  Order dated December 5, 1984 passed by the Government of Uttar Pradesh remitting an award passed by the Labour Court, Meerut for reconsideration by it.      The appellant  was an  employee of the Management, M/s. Electra (India)  Ltd., Meerut-Respondent  No. 5 in the above appeal. The services of the appellant were terminated by the Management by  its Order  dated April  4, 1977  and the said termination  led   to  an   industrial  dispute.  The  State Government by its Order dated May 5, 1979 made under section 4-K of the Act referred the said dispute for adjudication to the Labour Court, Meerut. The question which was referred to the Labour Court read as follows:                "Whether the termination/removal from work of           the employee  Shri B.P. Rajwanshi by the employers           by their  Order dated 4.4.1977 is justified and/or           legal? If not, to 474           what benefits/damages  is the  concerned  employee           entitled to and with what other details?"

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    On the basis of the pleadings filed by the parties, the following issues were framed by the Labour Court:           1. Was  Shri  B.B.  Rajwanshi  not  a  workman  as      defined in  the U.P. Industrial Disputes Act? If so has      this court jurisdiction to try this case?           2. Did  Shri B.B.  Rajwanshi not  make efforts  to      minimise the losses due to unemployment?           3. To  what relief, if any, is Shri B.B. Rajwanshi      entitled?           4. Has Shri B.B. Rajwanshi been retrenched? If so,      how does it affect the case?      After recording the evidence adduced by the parties and hearing the  arguments the  Labour Court  held, (i) that the appellant was a workman as defined in the Act, (ii) that the termination of the services of the appellant was illegal and (iii) that  the appellant  was entitled  to be reinstated in his post  with continuity of service and also to the payment of  backwages   and  other   benefits.  The   Labour   Court accordingly passed  an award on August 2, 1984 and forwarded it to  the State Government. Instead of publishing the award in the  Official Gazette,  as required by sub-section (3) of section 6  of the  Act, the State Government passed an Order dated December  5, 1984  under section 6(4) of the Act which read as follows:                 "GOVERNMENT OF UTTAR PRADESH