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PETITIONER: CHHOTOBHAI JETHABHAI PATEL & CO.

       Vs.

RESPONDENT: THE  INDUSTRIAL  COURT, MAHARASHTRA NAGPUR BENCH,  NAGPUR  &

DATE OF JUDGMENT09/03/1972

BENCH: MITTER, G.K. BENCH: MITTER, G.K. VAIDYIALINGAM, C.A. DUA, I.D.

CITATION:  1972 AIR 1268            1972 SCR  (3) 731  1972 SCC  (2)  46  CITATOR INFO :  R          1973 SC 883  (16)

ACT: Bombay  Industrial  Relations   Act,   1948--ss.  78(1)   D, 42(4)--Compliance  with s. 42(4) if condition precedent  for invoking jurisdiction of Labour Court under s. 78(1) D.

HEADNOTE: Against  the order of the appellant company dismissing  him, an  employer  filed an application before the  Labour  Court under  section  78 of the Bombay Industrial  Relations  Act, 1946.  The Labour Court set aside the order.  The Industrial Court  and the High Court confirmed the order of the  Labour Court rejecting the appellant’s contention that the order of the  Labour Court was liable to be set aside on  the  ground that the employee did not make an application under s. 42(4) in Chapter VIII of the Act’ which was a condition  precedent to  approaching the Labour Court.  On the  question  whether the Labour Court could exercise jurisdiction under s.  78(1) D  of  the Act in a case where the employee of  an  industry governed by the Act had not complied with the provisions  of sub-section (4) of s. 42 of the Act read with the proviso to the sub-section, HELD:Allowing the appeal. (i) The scheme of Chapter VIII of the Act is that in  regard to  any  "Change"  in an industrial  matter  there  must  be compliance  with the provisions of that chapter.   There  is nothing  in the Act which warrants the conclusion  that  the legislature by inserting paragraph D in s. 78(i) intended to chalk  out  a  wholly different course  of  action  to  that prescribed  in  Chapter  VIII  dealing  with  changes.   The ,scheme  of s. 78 (1) is that Labour Court is to have  power to decide all the disputes covered by paragraph A. In  other words, efforts must first be made by the employer  intending to  effect  any change in respect of matters covered  by  s. 42(1),  or an employee desiring a change in respect  of  any order  passed  by the employer under  standing  order  which would  of  necessity include an order of dismissal,  to  see whether  it  was possible to come to any  agreement  and  an application  to the Labour Court could only be  resorted  to after  efforts  had been made to settle the dispute  and  no

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agreement had been arrived at. [739C-G] (ii) A person who is dismissed would, be an employee  within the  meaning  of s. 3(13) of the Act and there is  no  valid reason for differentiating the case of a dismissed  employee from one who complains of some other change. [739H]

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 12 of 1968. 732 Appeal  from the judgment and order dated April 12, 1967  of the  Bombay  High  Court,  Nagpur  Bench  in  Special  Civil Application No. 812 of 1966. M. N. Phadke and Mohinder Narain, for the appellant. The Judgment of the Court was delivered by Mitter,  J.  In  this appeal  by  certificate  the  question involved  is,  whether  the Labour  Court  at  Nagpur  could exercise   jurisdiction  under  s.  78(1)D  of  the   Bombay Industrial Relations Act in a case where the employee of  an industry  governed  by  the Act had not  complied  with  the provisions  of  s. 42(4) of the said statute read  with  the proviso to the said sub-section.  The Bombay High Court  has held  that  it was not necessary for an  employee  first  to approach  the employer or to follow the procedure laid  down in  s. 42(4) including the proviso before he could apply  to the Labour Court for relief under S. 7 8 (1) D. The  facts  are as follows.  One Nathu,  respondent  No.   3 herein,  was  employed as a munshi in the  appellant’s  Bidi factor at Bhandara.  The appellant had framed a charge sheet against him in respect of certain acts of misconduct,  gross negligence  of duty, insubordination etc. on May  13,  1965. An  enquiry  in respect thereof was held on May  15th  after receipt  of written statement from Nathu.  Holding that  the charges  leveled  against  him  were  proved,  the  employer dismissed  the third respondent with effect from  August  1, 1965.  The said respondent filed an application  challenging the  order of dismissal before the Labour Court under s.  78 of  the Bombay Industrial Relations Act,  1946,  hereinafter referred to as the ’Act’, on the 5th August.  His  complaint was  that  the charge sheet was not proper,  that  the  Head Office  of the appellant had no authority to deal  with  his case  tinder  the  Standing Orders,  that  no  evidence  was allowed  or  filed on behalf of the employer  and  that  the finding  was based only on his statement and  in  particular his  cross-examination.   He had been forced to  append  his signature  to a certain paper without the same  having  been read over to him.  The Labour Court after holding an enquiry took the view that the findings of the enquiry officer were perverse, that the order of dismissal was passed by a person not  authorised to exercise the power and  consequently  the Labour  Court  directed  the  reinstatement  of  the   third respondent with all back wages.  The appellant preferred  an appeal to the State Industrial Court contending, inter alia, that  the  third respondent had failed to  comply  with  the provisions  of  law in that he did not make  an  application under S. 42(4) of the Act which was a condition precedent to approaching  the Labour Court and prayed that the  order  of the  Labour Court should be set aside on that ground  alone. The  Industrial  Court  confirmed the order  of  the  Labour Court.  The appellant then filed a peti- 733 tion  under Art. 227 of the Constitution before  the  Bombay High  Court.   The High Court field against  the  appellant. Unfortunately,  there  is no appearance for  the  respondent

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before us. In  order  to  appreciate the scope of  the  Labour  Court’s jurisdiction   under   the  Act  and   in   particular   the attractability  of s. 78(1)D it is necessary to examine  the scheme  of  the  Act as a  whole  including  the  provisions relevant for this appeal.  The Act when first passed in 1946 known as the Bombay Industrial Relations Act was  applicable to a limited area within the State.  In the Vidarbha  region of  the State, there was another similar Act  in  operation. The Act suffered numerous amendments from time to time until 1965 when Maharashtra Act 22 of 1965 was passed The new, Act was  described  as an Act "to extend the  Bombay  Industrial Relations Act, 1946 throughout the State of Maharashtra  and for  that and for certain other purposes further lo  amend that  Act, and to repeal corresponding laws in force in  any part  of  the  State".  Under s. 2 of that  Act  the  Bombay Industrial  Relations  Act of 1946 as in  force  immediately before  the commencement of the 1965 Act in the Bombay  area of the State of Maharashtra was extended to the rest of  the State.   The C.P. and Berar Act was repealed.  As a  result, the  Act now extends to the whole of the State.   Chapter  I contains  only three sections : s. 2 deals with the  extent, commencement  and  application of the Act and s.  3  is  the definition section.  Chapter 11 sets out the authorities  to be  constituted or appointed under the Act.  S.  9  provides for  the constitution of Labour Courts and S. 10  of  Indus- trial  Courts.   Chapter III containing ss. 11 to  22  deals with  registration  of Unions and Chapter IV  with  approved Unions.   Chapter V deals with representatives of  employers and employees and appearance in proceedings on their behalf. Chapter  VI deals with Powers and duties of  labour  officer and Chapter VIII deals with standing, Orders.  Chapter  VIII containing  ss. 42 to 47 deals with "changes".   Chapter  IX deals  with  Joint Committees, Chapter X  with  Conciliation Proceedings,  Chapter  XI with Arbitration and  Chapter  XII with  Labour  Courts, their territorial  jurisdiction,  heir powers,  commencement of proceedings before the Labour  etc. It is not necessary to take note of other Chapters excepting S.  123  in Chapter XIII which deals with  the  rule  making power.  ’the relevant definitive clauses in s. 3 are               "(8)  "change"  means  an  alteration  in   an               industrial matter;               (13)  "employee" means any person employed  to               do  any skilled or unskilled work for hire  or               reward in any industry, and includes-               (a)  a person employed by a contractor  to  do               any  ,work  for  him in  the  execution  of  a               contract with an 734               employer within the meaning of sub-clause  (e)               of clause (14)               (b)   a   person  who  has   been   dismissed,               discharged  or  retrenched or  Whose  services               have   been  terminated  from  employment   on               account  of any dispute relating to change  in               respect  of  which  a notice is  given  or  an               application  made,  under section  42  whether               before  or  after  his  dismissal.  discharge,               retrenchment   or,   as  the  case   may   be,               termination from employment;               but does not include-               (i)   a  per.-,on  employed  primarily  in   a               managerial   administrative,  supervisory   or               technical    capacity   drawing   basic    pay               (excluding allowances) exceeding five  hundred

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             and fifty rupees per month;               (ii)  any  other person or  class  of  persons               employed   in  the  same  capacity  as   those               specified in clause (i) above irrespective  of               the  amount  of the pay drawn by  such  person               which  the  State  Government  may,  by  noti-               fication  in the Official Gazette, specify  in               this behalf.               (17) "Industrial dispute" means any dispute or               difference between an employer and employee or               between  employers  and employees  or  between               employees and employees and which is connected               with any industrial matter;               (18)  "industrial  matter’  means  any  matter               relating to employment, work, wages, hours  of               work,   privileges,   rights  or   duties   of               employers  or employees. or the  mode..  terms               and conditions of employment, and includes-               (a) all matters pertaining to the relationship               between,  employers and employees, or to,  the               dismissal or non-employment of any person;               (b) all matters pertaining to the  demarcation               of  functions  of any employees  or  class  of               employees; .               (c)  all  matters pertaining to any  right  or               claim  under or in respect of or concerning  a               registered   agreement   or   a    submission,               settlement or award made under this Act;               (d) all questions of what is fair and right in               relation  to  any  industrial  matter   having               regard to the person immediately concerned and               of the community as a whole;" 735 Under s. 3 1 (1) every employer must submit for approval  to the  Commissioner,  of  Labour  in  the  prescribed   manner standing Orders regulating the relations between him and his employees.  with regard to the industrial matters  mentioned in   Schedule  within  six  weeks  from  the  date  of   the application of the Act to the industry.  Under sub-s. (5) of the section :               "Until  standing  orders  in  respect  of   an               undertaking  come  into  operation  under  the               provisions of sub-section (4), model  standing               orders,  if  any,  notified  in  the  Official               Gazette by the State Government in respect  of               the industry shall apply to such undertaking." Schedule 1 to the Act contains among other matters items  10 and  11  relating  to termination  of  employment  including notice  to  be  given  by  the  employer  and  employee  and punishment  including warning, censure, fine, suspension  or dismissal  for misconduct, suspension pending  enquiry  into alleged   misconduct  and  the  acts  or   omissions   which constitute misconduct. Normally, therefore, standing orders must deal with  miscon- duct which can lead to dismissal or other punishment. Under  s.  41 the provisions of  the  Industrial  Employment (Standing Orders) Act, 1946 are not to apply to any industry to which the provisions of Chapter VII of the Act apply. As  ’industrial matter’ as defined in s. 3(18) includes  all matters pertaining to the dismissal or non-employment of any person, an industrial dispute within the meaning of s. 3(17) must necessarily arise when there is any difference  between an employer and an employee about such dismissal. The  solution  to  the  question  before  us  turns  on  the interpretation  of the relevant provisions in  Chapter  VIII

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headed  "changes".   ’Change’ as already noticed  means  any alteration  in  an industrial matter.  Under  s.  42(1)  any employer  intending  to effect any change in respect  of  an industrial  matter specified in Schedule 11 of which item  3 reads               "Dismissal of any employee except as  provided               for  in the standing orders  applicable  under               this Act". must give notice of such intention in the prescribed form to the  representative of the employees.  He must also  send  a copy  of  such  notice  to  the  ,  Chief  Conciliator,  the Conciliator  for the industry concerned for the local  area, the  Registrar, the Labour Officer and such other person  as may  be  prescribed.  He has also to affix a  copy  of  such notice  at  a conspicuous place of the  premises  where  the employees affected by the change are employed.  Under sub-s. (2) of s. 42 an employee desiring a change in respect of  an indus- 736 trial matter not specified in Schedule I or Schedule III has to give notice in the, prescribed form to the employer  with similar intimation to others.  Under sub-s. (4) any employee desiring  a chance in respect inter alia, of any  industrial matter specified in Schedule III of which item 6 reads               "Employment including-               (i)  reinstatement and recruitment" must  make               an  application  to the Labour  Court.   ’This               subsection has a proviso which runs :               "Provided  that no such application shall  lie               unless the employee or a representative  union               has  in the prescribed manner approached,  the               employer with a request for the change and  no               agreement  has been arrived at in  respect  of               the change within the prescribed period." S.  44 envisages an agreement between the parties  regarding "change"  and registration of the memorandum thereof by  the Registrar.  Under s. 44-A a memorandum of agreement  arrived at  is to be forwarded by either party to the  Registrar  by registered  post and an agreement which is registered  under s. 44 is to come into operation as laid down in s. 45. The  territorial  jurisdiction of Labour Courts  extends  to local  areas for which they are constituted under s.  77  in Part XII.  S. 78 runs as follows :               "78. (1) A Labour Court shall have power to-A.               decide-               (a)   disputes regarding-               (i)  the  propriety or legality of  an.  order               passed by an employer acting or purporting  to               act under the standing orders;               (ii)the  application and  interpretation  of               standing order;               (iii)  any  change  made  by  an  employer  or               desired  by  an  employee  in  respect  of  an               industrial  matter specified in  Schedule  III               except  item (5) thereof and  matters  arising               out of such change;               (b)   industrial disputes-               (i)   referred to it under section 71 or 72;               (ii)  in  respect of which it is appointed  as               an arbitrator by a submission; 737 .lm15 (c)whether  a strike, lock-out, closure, stoppage  or  any change is illegal under this Act; B. try offenses punishable under this Act where the  payment

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of  compensation  on conviction for an offence  is  provided for, determine the compensation and order it,-; payment; C. require any employer to- (a)  withdraw any change which is held by it to be  illegal, or withdraw temporarily any change the legality of which  is a matter of issue in any proceeding pending final  decision, or (b)   carry out any change provided such change is a  matter in issue in any proceeding before it under this Act.D.require an  employer,  where it finds that the order  of  dismissal, discharge, removal, retrenchment, termination of service, or suspension of an employee made; by the employer,- (i)  was for fault or misconduct committed by  the  employee which  came  to  the notice of the employer  more  than  six months prior to the date of such order;, or (ii)  was in contravention of any of the provisions of’  any law,  or of any standing order in force applicable  to  such employee, or (iii) was otherwise improper or illegal, (a) reinstate the employee forthwith or by a date  specified by  it  in  this behalf and pay him  wages  for  the  period beginning   can  the  date  of  such  order  of   dismissal, discharge, removal, retrenchment, termination of’ service or suspension,  as the case may be, and ending on the  date  on which  the Labour Court orders his reinstatement or  on  the date of his reinstatement, whichever is later, or (b) to pay to the employee in addition to wages (being wages for  the  period commencing on the date  of  his  dismissal, discharge,  removal, retrenchment or termination of  service and ending on the date on which the Labour Court orders such payment), such sum not exceeding four thousand rupees by way of compensation, regard being had to-loss of employment  and possibility of getting suitable employment thereafter. 738               (2)  Every offence punishable under  this  Act               shall he tried by the Labour Court within  the                             local  limits  of  whose  jurisdiction   it  was               committed.               Explanations dispute falling under clause  (a)               of  paragraph  A of sub-section (1)  shall  be               deemed  to  have arisen if within  the  period               prescribed  under the proviso  to  sub-section               (4) of section 42, no agreement is arrived  at               in  respect  of  an order,  matter  or  change               referred to in the said proviso." Clause  D  of  s.  78(1)  was  introduced  in  the  Act   of Maharashtra  Act 22 of 1965.  S. 31 of the Act of  1965  not only introduced cl. D but also made changes in paragraphs  A and  C thereof.  The forerunner of Act 22 of 1965 i.e.  Bill No.  LXVI of 1964, the object of which was to make  numerous changes  in  the Act shows in its Statement of  Objects  and Reasons that clause 31 of the Bill was meant to "enlarge the powers  of the Labour Court under s.78".  According to  this clause               "The  Labour Court is empowered (by  paragraph               D)  to  direct  temporary  withdrawal  of  any               change  the legality of which is a  matter  of               issue  in any proceedings before  it,  pending               its final decision." The  Labour  Court was also thereby  further  empowered  "to require an employer to reinstate an employee with full  back wages  or pay him wages and compensation not  exceeding  Rs. 2,500/.... if the employee Was dismissed, discharged" etc. The Statement of Objects and Reasons amply demonstrates that

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by  introducing paragraph D in S. 78(1) the legislature  was ’Only seeking to arm the Labour Court with further and  more effective powers to grant relief. Under s. 79(1) proceedings before a Labour Court in  respect of disputes falling under clause (a) of paragraph A of  sub- s. (1) of s. 78 must be commenced on an application made  by any of the parties to the dispute etc. and under sub-s.  (2) every  application  under sub-s.(1) has to be  made  in  the prescribed  from and manner.  Under S. 84 an appeal lies  to the Industrial Court against the decision of a Labour  Court in respect _ of a matter falling under clause (a) or cl. (c) of paragraph A of sub-s. (1) ,of s. 78 except in the case of lock-out etc. or a decision of such .court under paragraph C of sub-s. (1) of the said section. Reading  s.  78 as a whole, there is no doubt  left  in  our minds  ’that  the legislature wanted the provision to  be  a comprehensive  one. It contains all the powers of the Labour Court  in the matter of all disputes mentioned and gives  it jurisdiction to punish 739 certain  offenses under the Act.  It does not lay  down  the procedure  for the attraction of such jurisdiction.  So  far as disputes are concerned, the procedure is as laid down  in s. 79. It  will  be  noted  that no mention is made  in  s.  84  of paragraph D of S. 78(1) but inasmuch as orders of dismissal, discharge, removal ,retrenchment, termination of service  or suspension  of  an  employee  would  come  under  s.   78(1) paragraph A, the legislature felt it unnecessary to make any mention  of an order under paragraph D in s. 84.   Paragraph D,  so far as we can see, is not referred to anywhere,  else in the Act. The question therefore narrows down to this i.e. whether the legislature by inserting paragraph D in s. 78(1) intended to chalk  out  a  wholly different course  of  action  to  that prescribed  in  Chapter VIII dealing with changes.   In  our view,  there  is nothing in the Act which  warrants  such  a conclusion.  The scheme of Chapter VIII seems to be that  in regard to any "change" in an matter there must be compliance with the provisions of that Chapter.  In other words, effort must  first be made by the employer intending to effect  any change  in  respect  of matters covered by s.  42(1)  or  an employee desiring a change in respect of any order passed by the employer under standing orders which would of  necessity include  an  order  of  dismissal, to  see  whether  it  was possible to come to any agreement and an application to  the labour  court  could only be resorted to after  efforts  had been  made to settle the dispute and no agreement  had  been arrived at. The scheme of S. 7 8 (1) seems to be that a Labour Court  is to  have  power  to  decide, all  the  disputes  covered  by paragraph A. Paragraph B thereof gives the Labour Court  the power   to  try  offenses  punishable  under  the  Act   and cognizance of such offenses .;an only be taken under s.  82. Paragraphs  C and D set out what relief the  Labour  Courts are  empowered to give including directions as may be  found necessary  in that behalf.  As already noted, the  Statement of Objects and Reasons (A clause 31 of the Bill which  later resulted  in Act 22 of 1965, shows that the  underlying  dea was  to  enlarge  the  powers  of  the  Labour  Court.   The Legislature  nowhere intended to make a  complete  departure from the procedure to be adopted when powers under s. 78(1)D were to be exercised. Rule  5  5 of the Bombay Industrial  Relations  Rules,  1947 shows how an application is to be made and the period within

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which it is to be made. It  must be held that a person who is dismissed would be  an employee  within the meaning of s. 3(13) of the Act  and  we can 740 see  no  valid  reason for differentiating  the  case  of  a dismissed  employee  from one who complains  of  some  other change.  As the scheme of the Act is that disputes should be settled   as   far  as  possible   and   primarily   through conciliation and agreement, it does not stand to reason that an employee should be able to side-step all this by a direct reference to the Labour Court.  A Labour Court is a creature of the statute and it can only exercise such jurisdiction as the  statute  confers  on it : if  there  are  certain  pre- conditions  to  the exercise of  its-jurisdiction,  it  must refuse  to entertain any such application unless  such  pre- conditions are first complied with. In  the  result we set aside the order of  the  High  Court, allow  the appeal and quash the orders of the  Labour  Court and  the  Industrial  Court but do not make  any  order  for consequential relief, in view of the solemn assurance  given to  this  Court  by  Mr. Phadke,  learned  counsel  for  the appellant that his client does not desire to give effect  to the  order  of termination of service passed  on  the  third respondent.   In the circumstances of the case, we  make  no order as to costs. K.B.N.                      Appeal allowed L1031 Sup.  Cl/72-2500-25-8-73--GIPF. 741