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PETITIONER: GRINDLAYS BANK LTD.

       Vs.

RESPONDENT: CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL AND ORS.

DATE OF JUDGMENT12/12/1980

BENCH: SEN, A.P. (J) BENCH: SEN, A.P. (J) CHANDRACHUD, Y.V. ((CJ)

CITATION:  1981 AIR  606            1981 SCR  (2) 341  CITATOR INFO :  F          1985 SC 294  (6,7)

ACT:      Powers of  the Industrial  Tribunal to set aside an ex- parte award  passed on merits-Whether such an ex parte award passed on  merits,  when  sought  to  be  set  aside  by  an application showing  sufficient  cause  amounts  to  seeking review-Point of  time at  which jurisdiction of the Tribunal begins,  for  setting  aside  the  ex  parte  award-Rule  of statutory  construction   Industrial  Disputes   Act   1957, sections 11,17,  17-A and  20 part  III  of  the  Industrial Dispute (Central)  Rules, 1957,  Orders IX  and XVII  of the Civil Procedure Code.

HEADNOTE:      Dismissing the appeal, the Court ^      HELD:  (1)   It  is  a  well-known  rule  of  statutory construction that a Tribunal or body should be considered to be endowed  with such  ancillary or incidental powers as are necessary to  discharge its  functions effectively  for  the purpose of  doing justice  between the parties. In a case of this nature,  the Tribunal  should be considered as invested with such incidental or ancillary powers unless there is any indication in  the statute to the contrary. The words "shall follow such  procedure as  the arbitrator or other authority may think  fit" in  sub-section (1)  of section  11  of  the Industrial Disputes  Act are  of the  widest  amplitude  and confer ample  power upon  the Tribunal and other authorities to devise such procedure as the justice of the case demands. The  discretion  thus  conferred  on  these  authorities  to determine the  procedure as  they may think fit, however, is subject to the rules made by the ’appropriate Government’ in this  behalf.  Nevertheless,  all  these  authorities  being quasi-judicial in  nature  objectively  determining  matters referred to  them, have  to exercise  their discretion  in a judicial manner,  without  caprice,  and  according  to  the general principles of law and rules of natural justice. [344 E-F, H, 345A, C, F]      (2) Where  a party  is prevented  from appearing at the hearing due  to a  sufficient cause  and is faced with an ex parte award,  it is as if the party is visited with an award without a  notice of  the proceedings.  Where  the  Tribunal

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proceeds to  make an  award without  notice to  a party, the award is  nothing but  a nullity. In such circumstances, the Tribunal has  not only  the power  but also  the duty to set aside the  ex parte  award and  to direct  the matter  to be heard afresh.  Further, Rules 22 and 24(b) of the Industrial Disputes (Central)  Rules,  1957  make  it  clear  that  the Tribunal was  competent to  entertain an  application to set aside an ex parte award. [346 C-E]      (3) Merely  because the ex parte award was based on the statement of the manager of the appellant, the order setting aside the  ex parte  award, in  fact,  does  not  amount  to review. The  expression "review"  is used  in  two  distinct senses, namely,  (i) a  procedural review  which  is  either inherent or  implied in  a court  or Tribunal to set aside a palpably erroneous order passed under a 342 misapprehension by  it, and (ii) a review on merits when the error sought  to be  corrected is one of law and is apparent on the  face of the record. When a review is sought due to a procedural defect,  the inadvertent  error committed  by the Tribunal must  be corrected  ex debito  justitiae to prevent the abuse  of its  process, and  such power inheres in every court or Tribunal. [347 B-C, E-G]      Narshi Thakershi  v. Pradvumansinghji, A.I.R. [1970] SC 1273, distinguished.      (4) The  Tribunal had  not become  functus officio and, therefore, had  the jurisdiction  to set  aside the ex parte award. To  contend that  the Central  Government alone could set aside  the ex  parte award is not correct. Under section 17-A an  award becomes  enforceable on the expiry of 30 days from the  date of  its publication  under  section  17.  The proceedings with  regard to  a reference under section 10 of the Act are, therefore, not deemed to be concluded until the expiry of  30 days  from the  publication of the award. Till then the  Tribunal retains  jurisdiction  over  the  dispute referred to  it for  adjudication and  upto that date it has the power  to entertain  an application  in connection  with such dispute.  That stage  is not  reached  till  the  award becomes enforceable under section 17-A. [347 G, 348 A-B]      (5) The  jurisdiction of the Tribunal had to be seen on the date  of the  application made to it and not the date on which it  passed the  impugned order.  There is  no finality attached to  an ex  parte award because it is always subject to its  being set aside on sufficient cause being shown. The Tribunal had  the power to deal with an application properly made before it for setting aside the ex parte award and pass suitable orders. [348 D-E]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2355 of 1979.      Appeal by  Special Leave  from the  Judgment and  Order dated 25-7-1979  of the  Calcutta High  Court in  Appeal No. 3/1978.      G.B. Pai,  Mrs. Rashmi  Dhariwal, Miss  Bina Gupta, Mr. Praveen Kumar and J.R. Das for the Appellant.      Amlan Ghosh for Respondents 3-4.      The Judgment of the Court was delivered by      SEN, J.  This is  an appeal  by special  leave  from  a judgment of  the Calcutta  High Court, by which it refrained from interfering  with an  order of  the Central  Government Industrial Tribunal,  Calcutta, constituted  under s.  7A of the Industrial Disputes Act, 1947, setting aside an ex parte

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award made by it.      The facts  giving rise  to the  appeal are  these:  The Government of  India, Ministry  of Labour  by an order dated July  26,  1975  referred  an  industrial  dispute  existing between the  employers in  relation to  the  Grindlays  Bank Ltd., Calcutta  and their workmen, to the Central Government Industrial Tribunal in exercise of its powers under s. 10 of the Industrial  Disputes Act,  1947 for  adjudication. By  a notice 343 dated March 6, 1976 the Tribunal fixed peremptory hearing of the  reference  for  May  28,  1976,  but  the  hearing  was adjourned  from  time  to  time  on  one  ground  or  other. Eventually, the  hearing of  the  reference  was  fixed  for December 9,  1976. On  December 9, 1976 counsel appearing on behalf of  respondent No.  3, the  Commercial establishments Employees Association,  representing respondents  Nos. 5  to 17, sought  an adjournment  on the  ground that  the General Secretary of  the Association  had suffered a bereavement as his father had died on November 25, 1976, and, therefore, he had to  leave to  perform the  shradhha ceremony  falling on December 9,  1976. In support of his prayer for adjournment, the counsel produced a telegram, but the Tribunal refused to grant any  further adjournment  and proceeded  to make an ex parte award.  On the  basis of the statement recorded by the manager  of  the  appellant,  the  Tribunal  held  that  the respondents Nos.  5 to  17 were  employed as  drivers by the officers of  the appellant and were not the employees of the appellant and,  therefore, they  were not  entitled  to  the benefits enjoyed  by the  drivers employed by the appellant. On  January   19,  1977,   respondent  No.   3,  acting  for respondents Nos.  5 to  17 applied  for setting aside the ex parte award  on the  ground  that  they  were  prevented  by sufficient cause  from  appearing  when  the  reference  was called on  for hearing  on December 9, 1976. The Tribunal by its order  dated April 12, 1977 set aside the ex parte award on being  satisfied that  there was  sufficient cause within the meaning  of O. IX, r. 13 of the Code of Civil procedure, 1908. The  appellant challenged  the  order  passed  by  the Tribunal setting aside the ex parte award but the High Court declined to interfere.      Two questions  arise in  the appeal, namely (1) whether the Tribunal  had any jurisdiction to set aside the ex parte award, particularly  when it  was based on evidence, and (2) whether the Tribunal became functus officio on the expiry of the 30  days from  the date  of publication  of the ex parte award under  s. 17,  by reason  of sub-s.  (3) of s. 20 and, therefore, had  no jurisdiction  to set  aside the award and the Central  Government alone had the power under sub-s. (1) of s. 17-A to set it aside.      It is  contended that  neither the  Act nor  the  rules framed there  under confer  any powers  upon the Tribunal to set aside  an ex  parte award.  It is  urged that  the award although ex  parte, was  an adjudication on merits as it was based on  the evidence led by the appellant, and, therefore, the application  made by  respondent No. 3 was in reality an application for  review  and  not  a  mere  application  for setting aside  an ex parte award. A distinction is sought to be drawn between 344 an application  for review  and an  application for  setting aside an ex parte award based on evidence. The contention is that if  there is no evidence led before the Tribunal, there may be  power to  set aside  an ex  parte award,  but if the award is  based on  evidence, the setting aside of the award

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cannot but virtually amount to a review.      In dealing  with these contentions, it must be borne in mind that  the Industrial  Disputes Act,  1947 is a piece of legislation calculated  to ensure  social  justice  to  both employers and the employees and advance progress of industry by  bringing  harmony  and  cordial  relations  between  the parties. In other words, the purpose of the Act is to settle disputes between workmen and employers which if not settled, would result  in strikes  or lockouts and entail dislocation of work,  essential to the life of the community. The scheme of  the  Act  shows  that  it  aims  at  settlement  of  all industrial disputes  arising between  the capital and labour by  peaceful   methods  and   through   the   machinery   of conciliation, arbitration  and if  necessary, by approaching the Tribunal  constituted  under  the  Act.  It,  therefore, endeavours to  resolve the competing claims of employers and employees by  finding a  solution which  is just and fair to both the parties.      We are  of the  opinion that the Tribunal had the power to pass the impugned order if it thought fit in the interest of justice. It is true that there is no express provision in the Act  or the  rules framed thereunder giving the Tribunal jurisdiction to  do so.  But it  is  a  well-known  rule  of statutory construction  that a  Tribunal or  body should  be considered to  be endowed  with such ancillary or incidental powers  as   are  necessary   to  discharge   its  functions effectively for  the purpose  of doing  justice between  the parties. In  a case  of this nature, we are of the view that the Tribunal  should be  considered as  invested  with  such incidental  or   ancillary  powers   unless  there   is  any indication in  the statute  to the  contrary. We do not find any such statutory prohibition. On the other hand, there are indications to the contrary.      Sub-section (1)  of s. 11 of the Act, as substituted by s. 9  of the  Industrial Disputes (Amendment & Miscellaneous Provisions) Act, 1956 is in these terms:           "11. (1)  Subject to any rules that may be made in      this behalf,  an arbitrator,  a  Board,  Court,  Labour      Court, Tribunal  or National Tribunal shall follow such      procedure  as   the  arbitrator   or  other   authority      concerned may think fit." The words  ’shall follow such procedure as the arbitrator or other authority  may think  fit’ are of the widest amplitude and  confer   ample  power   upon  the  Tribunal  and  other authorities to devise such proce- 345 dure as  the justice  of the case demands. Under cls. (a) to (c)  of  sub-s.  (3)  of  s.  11,  the  Tribunal  and  other authorities have  the same  powers as  are vested  in  civil courts under  the Code  of Civil  Procedure,  1908,  of  (a) enforcing the  attendance of any person and examining him on oath,  (b)   compelling  the  production  of  documents  and material  objects,  and  (c)  issuing  commissions  for  the examination  of   witnesses.  Under  cl.  (d)  thereof,  the Tribunal or such other authorities have also the same powers as are  vested in  civil courts  under  the  Code  of  Civil Procedure, 1908  in respect  of such other matters as may be prescribed.  Although  the  Tribunal  or  other  authorities specified in  s.  11  are  not  courts  but  they  have  the trappings  of  a  court  and  they  exercise  quasi-judicial functions.      The object  of giving  such wide  powers is to mitigate the rigour  of the  technicalities of the law, for achieving the object  of effective  investigation  and  settlement  of industrial disputes,  and thus assuring industrial peace and

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harmony. The  discretion thus conferred on these authorities to determine  the procedure  as they may think fit, however, is subject to the rules made by the ’appropriate Government’ in  this   behalf.  Part  III  of  the  Industrial  Disputes (Central) Rules, 1957 makes rules in this behalf. Rules 9 to 30  are  the  relevant  rules  regulating  procedure.  State Governments too  have made  their own  corresponding  rules. Except to  the extent specified in sub-s.(3) of s. 11 of the Act and  the rules  framed thereunder, the provisions of the Code  of   Civil  Procedure,  1908  are  not  applicable  to proceedings before  the authorities  mentioned in sub-s.(1). The provisions  of the  Evidence Act, in their strict sense, likewise do not apply to proceedings before the authorities. Nevertheless, all  these authorities being quasi-judicial in nature objectively  determining matters  referred  to  them, have to  exercise their  discretion in  a  judicial  manner, without caprice,  and according to the general principles of law and rules of natural justice.      Rule 22  of the  Industrial Disputes  (Central  Rules), 1957 framed  by the  Central Government  in exercise  of its powers under s. 38 of the Act, provides:           "22. If  without sufficient cause being shown, any      party to  proceedings before  a  Board,  Court,  Labour      Court, Tribunal,  National Tribunal or arbitrator fails      to attend  or to  be  represented,  the  Board,  Court,      Labour Court, Tribunal, National Tribunal or arbitrator      may proceed,  as if  the party had duly attended or had      been represented." 346 Rule 24(b)  provides that  the Tribunal  or other body shall have the  power of  a civil  court under  the Code  of Civil Procedure, 1908  in the  matter of grant of adjournments. It runs thus:           "24. In  addition to  the powers  conferred by the      Act,  Boards,  Courts,  Labour  Courts,  Tribunals  and      National Tribunals  shall have  the same  powers as are      vested in  a  civil  court  under  the  Code  of  Civil      Procedure, 1908,  when trying a suit, in respect of the      following matters, namely;      (a) ......................      (b) granting adjournment;"      When sub-s.  (1) of  s. 11 expressly and in clear terms confers  power   upon  the  Tribunal  to  regulate  its  own procedure, it  must necessarily  be endowed  with all powers which bring  about an adjudication of an existing industrial dispute, after affording all the parties an opportunity of a hearing. We  are inclined  to the view that where a party is prevented from  appearing at the hearing due to a sufficient cause, and  is faced with an ex parte award, it is as if the party is  visited with  an award  without a  notice  of  the proceedings.  It  is  needless  to  stress  that  where  the Tribunal proceeds  to make  an award  without  notice  to  a party,  the   award  is  nothing  but  a  nullity.  In  such circumstances, the  Tribunal has not only the power but also the duty  to set  aside the ex parte award and to direct the matter to be heard afresh.      The  language   of  r.   22  unequivocally   makes  the jurisdiction of  the Tribunal  to render  an ex  parte award conditional upon  the fulfilment  of  its  requirements.  If there is no sufficient cause for the absence of a party, the Tribunal undoubtedly  has jurisdiction  to proceed ex parte. But if  there was  sufficient cause  shown which prevented a party from  appearing, then  under the  terms of  r. 22, the Tribunal will  have  had  no  jurisdiction  to  proceed  and consequently, it  must necessarily  have power  to set aside

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the ex  parte award.  In other  words,  there  is  power  to proceed  ex   parte,  but  this  power  is  subject  to  the fulfilment of the condition laid down in r. 22. The power to proceed ex  parte under  r. 22  carries with it the power to enquire whether  or not  there was  sufficient cause for the absence of a party at the hearing.      Under r.  24(b) a Tribunal or other body has the powers of a  civil court  under  O.  XVII  of  the  Code  of  Civil Procedure, relating  to the  grant of adjournments. Under O. XVII, r.  1, a  civil court  has the  discretion to grant or refuse an  adjournment. Where  it  refuses  to  adjourn  the hearing of a suit, it may proceed either under O. XVII, 347 r. 2  or r.  3. When it decides to proceed under O. XVII, r. 2, it may proceed to dispose of the suit in one of the modes directed in  that behalf  by O.  IX, or  to make  such other order as  it thinks  fit. As a necessary corollary, when the Tribunal or  other body  refuses to  adjourn the hearing, it may proceed  ex parte.  In a  case in  which the Tribunal or other body makes an ex parte award, the provisions of O. IX, r. 13  of the  Code  are  clearly  attracted.  It  logically follows that  the Tribunal  was competent  to  entertain  an application to set aside an ex parte award.      We are  unable to appreciate the contention that merely because the ex parte award was based on the statement of the manager of  the appellant,  the order  setting aside  the ex parte award,  in fact,  amounts to  review. The  decision in Narshi Thakershi  v. Pradyumansinghji is distinguishable. It is an authority for the proposition that the power of review is not  an inherent  power,  it  must  be  conferred  either specifically or  by necessary  implication. Sub-sections (1) and (3)  of s.  11 of  the Act themselves make a distinction between procedure  and powers of the Tribunal under the Act. While the procedure is left to be devised by the Tribunal to suit carrying out its functions under the Act, the powers of civil court  conferred upon  it  are  clearly  defined.  The question  whether  a  party  must  be  heard  before  it  is proceeded against  is one  of procedure  and not of power in the sense  in which  the words are used in s. 11. The answer to the  question is, therefore, to be found in sub-s. (1) of s. 11 and not in sub-s. (3) of s. 11. Furthermore, different considerations arise  on review.  The expression ’review’ is used in  two distinct senses, namely (1) a procedural review which is  either inherent  or implied in a court or Tribunal to set  aside a  palpably erroneous  order  passed  under  a misapprehension by  it, and  (2) a review on merits when the error sought  to be  corrected is one of law and is apparent on the  face of  the record.  It is in the latter sense that the Court  in Narshi  Thakershi’s case  held that  no review lies on merits unless a status specifically provides for it. Obviously when  a review  is  sought  due  to  a  procedural defect, the inadvertent error committed by the Tribunal must be corrected ex debito justitiae to prevent the abuse of its process, and such power inheres in every court or Tribunal.      The contention  that the  Tribunal had  become  functus officio and  therefore, had no jurisdiction to set aside the ex parte  award and  that the Central Government alone could set it  aside, does not commend to us. Sub-section (3) of s. 20 of  the Act  provides that  the  proceedings  before  the Tribunal would be deemed to continue till the date on 348 which the  award becomes  enforceable under s. 17A. Under s. 17A of  the Act,  an award becomes enforceable on the expiry of 30 days from the date of its publication under s. 17. The proceedings with  regard to  a reference  under s. 10 of the

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Act are,  therefore, not  deemed to  be concluded  until the expiry of  30 days  from the  publication of the award. Till then the  Tribunal retains  jurisdiction  over  the  dispute referred to  it for  adjudication and  upto that date it has the power  to entertain  an application  in connection  with such dispute.  That stage  is not  reached  till  the  award becomes enforceable  under s.  17A. In the instant case, the Tribunal made  the ex  parte award on December 9, 1976. That award was published by the Central Government in the Gazette of India  dated  December  25,  1976.  The  application  for setting aside the ex parte award was filed by respondent No. 3, acting  on behalf  of respondents Nos. 5 to 17 on January 19,  1977  i.e.,  before  the  expiry  of  30  days  of  its publication and  was, therefore,  rightly entertained by the Tribunal. It  had jurisdiction to entertain it and decide it on merits. It was, however, urged that on April 12, 1977 the date on which the impugned order was passed the Tribunal had in any  event become  functus officio.  We cannot  accede to this argument.  The jurisdiction  of the  Tribunal had to be seen on  the date  of the application made to it and not the date on  which it  passed the  impugned order.  There is  no finality attached  to an ex parte award because it is always subject to  its being  set aside  on sufficient  cause being shown.  The   Tribunal  had   the  power  to  deal  with  an application properly made before it for setting aside the ex parte award and pass suitable orders.      The result, therefore, is that the appeal must fail and is dismissed with costs throughout. V.D.K.                                     Appeal dismissed. 349