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CASE NO.: Appeal (civil)  3475 of 2003

PETITIONER: Kapra Mazdoor Ekta Union                                      

RESPONDENT: Management of M/s. Birla Cotton Spinning and Weaving Mills Ltd. & Anr.      

DATE OF JUDGMENT: 16/03/2005

BENCH: N. SANTOSH HEGDE,B.P. SINGH & S.B. SINHA  

JUDGMENT: J U D G M E N T  

B.P. SINGH, J.

       The appellant Kapra Mazdoor Ekta Union has preferred  this appeal by special leave which is directed against the  judgment and order of the High Court of Delhi at New Delhi in  Civil Writ Petition No. 2084 of 1990 dated August 31, 2001  whereby the writ petition preferred by the respondent- Management of M/s. Birla Cotton Spinning and Weaving Mills  Limited was allowed and the order dated February 19, 1990  passed by the Presiding Officer, Industrial Tribunal No. II,  Delhi was quashed. By the said order the Industrial Tribunal  had in effect recalled its Award of June 12, 1987 and framed an  additional issue to be tried by the Tribunal.  The High Court  held that the Award dated June 12, 1987 had effectively  terminated the industrial dispute referred to the Tribunal by the  appropriate Government on December 13, 1982.

       With a view to appreciate the submissions urged before us  it would be necessary to notice the factual background in which  these questions have arisen.  

       The appellant-Union is one of the eight Unions representing  the workers employed in the respondent-Company.  In the year 1982  on account of closure of some looms of the Weaving Section of the  Mill disputes arose between the workmen and the Management of  the respondent-Company.  The appropriate Government in exercise  of its powers conferred by Section 10(1)(d) and 12(5) of the  Industrial Disputes Act, 1947 (hereinafter referred to as ’the Act’)  referred the said disputes to the Industrial Tribunal, Delhi vide  Notification dated December 13, 1982.  The reference was in the  following terms :-

"1.     Whether the action of the Management in refusing  duties to a large number of workers is illegal  and/or unjustified, and if so, what directions are  necessary in this regard?

2.      Whether the Management is justified in closing  down a large number of looms in the mill and if  not to what relief the affected workers are entitled  and what further directions are necessary in this  respect?"

While the reference was pending before the Industrial

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Tribunal, a settlement is purported to have been arrived at between  the respondent-Management and its workmen.  According to the  Management this settlement was reached in the course of  conciliation proceedings with the assistance and concurrence of the  Conciliation Officer, namely the Deputy Labour Commissioner- cum-Conciliation Officer, Delhi M. Basai.  It is the case of the   respondent-Management that after reference of the dispute further  disputes arose between the Management and the Workmen and a  notice of strike was served on the Management and some more  demands were raised.  The notice of strike was served on February  14, 1983 and the Management on April 4, 1983 gave notice under  Section 25FFA of the Industrial Disputes Act for closing the  undertaking relating to the Weaving Mill on account of labour  trouble resulting in huge financial losses. It is the case of the  respondent-Management that in these circumstances conciliation  proceedings commenced and after great and sustained efforts, a  settlement was arrived at between the Management and its Workmen  in the course of conciliation proceedings.  The settlement has been  reduced into writing, and it is not disputed that the same has been  signed by representatives of the Management as well as the  representatives of two Workers’ Union as also by the Deputy Labour  Commissioner-cum-Conciliation Officer, M. Basai.      

In view of the settlement reached between the parties, an  application was moved before the Industrial Tribunal which was  seized of the disputes, which were the subject matter of the reference  made on December 13, 1982, with a prayer that in view of the  settlement reached between the parties the Industrial Tribunal may  be pleased to give its award in terms of the conciliation settlement  dated May 17, 1983.  One of the terms of the settlement was to the  effect that both the parties will present a petition before the  Industrial Tribunal, Delhi with a request to accept the terms of the  settlement as fair and reasonable and to give its award in terms of  the settlement in the disputes pending before it pursuant to the  reference made on December 13, 1982.   

The application made by the Management for passing an  award in terms of the settlement dated May 17, 1983 was opposed  by the appellant-Union on various grounds.  It was submitted by the  appellant-Union that only two of the Unions had signed the  settlement who represented a very insignificant number of workmen.   The settlement was a private settlement and the workers who were  not members of those two Unions were not bound by the settlement.   It was further submitted that in May, 1983, when the settlement is  said to have been arrived at, no conciliation proceedings were  pending before the Conciliation Officer and, therefore, the  Conciliation Officer had no power or justification to record such a  settlement, particularly during the pendency of the earlier reference.  It was also the case of the appellant-Union that the settlement did  not settle the disputes which had been referred to the Tribunal for  adjudication.  The settlement was unfair and unjust to the workmen  and, therefore, not acceptable to the appellant-Union.

The appellant-Union filed a writ petition before the High  Court of Delhi at New Delhi contending that the settlement dated  May 17, 1983 was not a conciliation settlement binding upon all the  workmen.   The writ petition was dismissed by the High Court by its  order dated January 3, 1986.  The matter was brought before this  Court in Special Leave Petition (Civil) No. 1526 of 1985 which was  also dismissed by this Court on August 5, 1986 with the following  observations :-

"       We have heard learned counsel for the parties.  We  do not see any reason why we should entertain this  Special Leave Petition at this stage.  It is conceded that

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the settlement between the employer and certain trade  Unions has been filed before the Industrial Tribunal to  which a reference of this dispute was made and a  settlement was filed before the Tribunal three years ago.    It is for the Industrial Tribunal to dispose of the question  whether the settlement is valid and binding between the  employer and the workmen.  It is only after the Industrial  Tribunal has disposed of the matter that this Court may  look into it.  While we dismiss the Special Leave  Petition, we may observe that the Industrial Tribunal  should dispose of the question as to the validity and  binding nature of the settlement as expeditiously as  possible.  Having regard to the lapse of time which has  taken place we trust that the Industrial Tribunal will be  able to adjudicate on the matter within three months from  today."

       In the light of the order of this Court the Industrial Tribunal  heard the parties and passed an Award on June 12, 1987.  The  Award is a detailed reasoned Award.  The Tribunal took note of the  background in which the disputes had arisen and the reference made  to it.  It rejected the argument of the appellant-Union that once a  reference is made, the Labour Department of the appropriate  Government becomes functus officio in the matter. After  considering to the decisions of this Court in State of Bihar vs. D.N.  Ganguly & Ors. : 1959 1 SCR 1191 ; Sirsilk Limited  vs.   Government of Andhra Pradesh and another  : AIR 1964 SC 160  and Paraga Tools Ltd. vs. Mazdoor Sabha : 1975(I) LLJ 210 it  concluded that merely because a dispute had been referred to the  Industrial Tribunal for adjudication, it did not prevent the  Conciliation Officer from playing his role when other disputes arose  between the parties and the industrial peace was disturbed.   It  noticed the fact that in the instant case a notice of strike was given  on February 14, 1983 and a notice of closure of a part of the  undertaking on April 4, 1983.  The workers were disturbed and the  atmosphere was surcharged.   In this background if the Conciliation  Officer intervened in an attempt to bring about a settlement, it  cannot be contended that he had no jurisdiction to do so.  In fact the  Labour Department was not only justified but legally competent and  compelled to set the conciliation proceedings in motion so as to  restore industrial peace.   

Having found that the settlement was brought about in the  course of conciliation proceedings, the Tribunal considered the  terms of settlement and recorded the following conclusion :-

"       I have carefully gone through the terms of the  settlement.  These are not only well bargained but quite  detailed and very sound in the circumstances obtaining.   It’s various items made provision for meeting all the  relevant problems of relief and rehabilitation of the  affected workers because of the closure of weaving  section of the mill and envisages an expert technical body  for deciding on the possibility and extent of the revival of  weaving work in the Mill, under the time bound  schedule.  I find the settlement fair and just."

       The Tribunal, therefore, concluded that the settlement of  May  17, 1983 was a settlement reached between the Workmen and the  Management in the course of conciliation proceedings and hence  binding on all the workers of the respondent-Company.  It proceeded  to decide the reference declaring that the disputes stood settled as  between the parties by a valid and binding settlement dated May 17,

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1983 and thus the reference had been rendered redundant.  There  was no dispute surviving and no purpose was left in making the  terms of a valid and binding settlement of 1983 as a part of the  award, as all the agreed terms should stood executed and  implemented.  The order of the Industrial Tribunal making the  Award is of June 12, 1987.  The said Award was duly published by  the appropriate Government in the Gazette on August 10, 1987.

       On September 7, 1987 the appellant-Union filed an  application before the Industrial Tribunal to the effect that the only  question which had been argued before the Tribunal was in relation  to the power and jurisdiction of the Conciliation Officer to record  settlement between the parties during the pendency of the disputes.   The question as to whether the settlement was fair and just, and  should be accepted by the Tribunal, was not argued since that  required evidence.  It was, therefore, understood that the said  question will be decided later on in case the Tribunal held that the  Conciliation Officer had jurisdiction to record the settlement.  Under  some misconception the Tribunal had determined the terms of the  settlement to be fair and just and had passed an Award on June 12,  1987.  It was, therefore, prayed that the appellant-Union be given an  opportunity to establish that the settlement was neither just nor fair.   For this purpose the Award may be recalled and the appellant-Union  be given an opportunity to establish that the settlement is unjust and  unfair, adversely affecting a large number of workmen.  It was  prayed that the Award may be recalled which was in fact an ex-parte  Award, and the question of fairness of the settlement be decided  after providing an opportunity to the parties to produce evidence.   

       This application filed by the appellant-Union was strongly  opposed by the respondent-Management, but the successor Presiding  Officer of Industrial Tribunal No.II, Delhi allowed the application.   It observed that a perusal of the order dated June 12, 1987 showed  that the then Tribunal did not make a single observation as to  whether the settlement dated May 17, 1983 was just and fair.  No  issue was framed nor any evidence was recorded on that point.  No  argument was advanced and no finding was given by his learned  predecessor on this point.  Relying upon the judgment of this Court  in Satnam Verma  vs.  Union of India :  1984 (supp) SCC 712 and  Grindlays Bank Ltd. vs.  Central Government Industrial Tribunal  and others : 1980 (Supp) SCC 420  it was held that where the  Tribunal proceeds to make an Award without notice to a party, the  Award is a nullity and, therefore, the Tribunal has not only the  power but also the duty to set aside such an ex-parte Award.  It was  held that in the instant case no arguments were advanced and no  finding was given as to whether the settlement was just and fair.  In  view of its finding that the Tribunal has power to review its Award  even if the same is published in the Gazette, the Tribunal proceeded  to exercise its power to review its earlier order dated June 12, 1987.   It further framed an additional issue which is as follows:-

"Whether the settlement dated 17.5.1983 is just and fair  and if so, is it not binding on the parties?"

It further directed that only arguments shall be heard since there was  no need to record evidence on this point.  Accordingly by its order  of February 19, 1990 the Industrial Tribunal decided to review its  earlier order and framed an additional issue as to whether the  settlement was just and fair.

       The Management-respondent herein preferred a writ petition  before the High Court of Delhi at New Delhi and sought quashing of  the order dated February 19, 1990 passed by Industrial Tribunal No.  II, Delhi, and for declaration that the Award dated June 12, 1987

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earlier made by the Tribunal effectively terminated the reference  pending before it.  The High Court by its impugned judgment and  order allowed the writ petition and granted the reliefs prayed for.   The judgment and order of the High Court has been impugned  before us in this appeal.

       The core question which arises for consideration is whether  the Industrial Tribunal was justified in recalling the earlier Award  made on June 12, 1987 and in framing an additional issue for  adjudication by the Tribunal.  According to the appellant the recall  of the order was fully justified in the facts of the case, while the  respondents contend to the contrary.  Two issues arise for our  consideration while considering the legality and propriety of the  Tribunal in recalling its earlier Award.  Firstly - whether the  Tribunal had jurisdiction to recall its earlier order which amounted  virtually to a review of its earlier order; and secondly -  whether the  Tribunal had no jurisdiction to entertain the application for recall as  it had become functus offico.  The High Court answered the first  question in favour of the respondent-Management and the second in  favour of the appellant.   

       We shall first take up the second question namely \026 whether  the Tribunal was functus offico having earlier made an Award which  was published by the appropriate Government.   It is not in dispute  that the Award was made on June 12, 1987 and was published in the  Gazette on August 10, 1987.  The application for recall was made on  September 7, 1987.  Under sub-section (1) of Section 17A of the Act  an Award becomes enforceable on the expiry of 30 days from the  date of its publication under Section 17 of the Act.  Thus the Award  would have become enforceable with effect from September 9,  1987.  However, the application for recalling the Award was made  on September 7, 1987 i.e. 2 days before the Award would have  become enforceable in terms of sub-section (1) of Section 17A of  the Act.  The High Court rightly took the view that since the  application for recall of the order was made before the Award had  become enforceable, the Tribunal had not become fuctus offico and  had jurisdiction to entertain the application for recall.  This view  also find supports from the judgment of this Court in  Grindlays  Bank Ltd. vs.  Central Government Industrial Tribunal and others  (supra).  This Court after noticing the provisions of sub-section (3)  of Section 20 of the Act which provides that the proceedings before  the Tribunal would be deemed to continue till the date on which the  Award become enforceable under Section 17A, held that till the  Award becomes enforceable the Tribunal retains jurisdiction over  the dispute referred to it for adjudication, and up to that date it has  the power to entertain the application in connection with such  dispute.  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.   The judgment in Grindlays Bank Ltd. vs.  Central  Government Industrial Tribunal and others (supra) has been  reiterated by this Court in Satnam Verma  vs.  Union of India  (supra), J.K. Synthetics Ltd.  vs.  Collector of Central Excise : (1996)  6 SCC 92 and M.P. Electricity Board  vs.  Hariram etc. : JT 2004  (8) SC 98.   

       In the instant case as well we find that as on September 7,  1987 the Award had not become enforceable and, therefore, on that  date the Tribunal had jurisdiction over the disputes referred to it for  adjudication. Consequently it had the power to entertain an  application in connection with such dispute.  The order of recall  passed by the Tribunal on February 19, 1990, therefore, cannot be  assailed on the ground that the Tribunal had become fuctus offico.   

       The question still remains whether the Tribunal had  jurisdiction to recall its earlier Award dated June 12, 1987.  The

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High Court was of the view that in the absence of an express  provision in the Act conferring upon the Tribunal the power of  review the Tribunal could not review its earlier Award.  The High  Court has relied upon the judgments of this Court in Dr. (Smt.)  Kuntesh Gupta  vs.  Management of Hindu Kanya Maha Vidyalaya,  Sitapur (U.P.) and others  : (1987) 4 SCC 525 and Patel Narshi  Thakershi and others vs.  Pradyumansinghji Arjunsingji : AIR 1970  SC 1273 wherein this Court has clearly held that the power of  review is not an inherent power and must be conferred by law either  expressly  or by necessary implication.  The appellant sought to get  over this legal hurdle by relying upon the judgment of this Court in  Grindlays Bank Ltd. vs.  Central Government Industrial Tribunal  and others (supra). In that case the Tribunal made an ex-parte  Award.  Respondents 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.  The  Tribunal set aside the ex-parte Award on being satisfied that there  was sufficient cause within the meaning of Order 9 Rule 13 of the  Code of Civil Procedure and accordingly set aside the ex-parte  Award.  That order was upheld by the High Court and thereafter in  appeal by this Court.   

       It was, therefore, submitted before us relying upon Grindlays  Bank Ltd. vs.  Central Government Industrial Tribunal and others  (supra) that even in the absence of an express power of review, the  Tribunal had the power to review its order if some illegality was  pointed out.  The submission must be rejected as misconceived.  The  submission does not take notice of the difference between a  procedural review and a review on merits.  This Court in Grindlays  Bank Ltd. vs.  Central Government Industrial Tribunal and others  (supra) clearly highlighted this distinction when it observed :-

"Furthermore, different considerations arise on  review.  The expression ’review’ is used in the 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 mis-apprehension 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 Patel Narshi Thakershi case held that no review  lies on merits unless a statute 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 debita  justitiae to prevent the abuse of its process, and  such power inheres in every court or Tribunal".                  Applying these principles it is apparent that where a Court or  quasi judicial authority having jurisdiction to adjudicate on merit  proceeds to do so, its judgment or order can be reviewed on merit  only if the Court or the quasi judicial authority is vested with power  of review by express provision or by necessary implication.  The  procedural review belongs to a different category.  In such a review,  the Court or quasi judicial authority having jurisdiction to adjudicate  proceeds to do so, but in doing so commits a procedural illegality  which goes to the root of the matter and invalidates the proceeding  itself, and consequently the order passed therein. Cases where a  decision is rendered by the Court or quasi judicial authority without  notice to the opposite party or under a mistaken impression that the  notice had been served upon the opposite party, or where a matter is  taken up for hearing and decision on a date other than the date fixed  for its hearing, are some illustrative cases in which the power of  procedural review may be invoked.  In such a case the party seeking

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review or recall of the order does not have to substantiate the ground  that the order passed suffers from an error apparent on the face of  the record or any other ground which may justify a review.  He has  to establish that the procedure followed by the Court or the quasi  judicial authority suffered from such illegality that it vitiated the  proceeding and invalidated the order made therein, inasmuch the  opposite party concerned was not heard for no fault of his, or that  the matter was heard and decided on a date other than the one fixed  for hearing of the matter which he could not attend for no fault of  his.  In such cases, therefore, the matter has to be re-heard in  accordance with law without going into the merit of the order  passed.  The order passed is liable to be recalled and reviewed not  because it is found to be erroneous, but because it was passed in a  proceeding which was itself vitiated by an error of procedure or  mistake which went to the root of the matter and invalidated the  entire proceeding.  In Grindlays Bank Ltd. vs.  Central Government  Industrial Tribunal and others (supra), it was held that once it is  established that the respondents were prevented from appearing at  the hearing due to sufficient cause, it followed that the matter must  be re-heard and decided again.

       The facts of the instant case are quite different.  The recall of  the Award of the Tribunal was sought not on the ground that in  passing the Award the Tribunal had committed any procedural  illegality or mistake of the nature which vitiated the proceeding  itself and consequently the Award, but on the ground that some  mattes which ought to have been considered by the Tribunal were  not duly considered.  Apparently the recall or review sought was not  a procedural review, but a review on merits.  Such a review was not  permissible in the absence of a provision in the Act conferring the  power of review on the Tribunal either expressly or by necessary  implication.

       Learned counsel for the appellant then sought to argue that  there was no conciliation proceeding in progress when the alleged  settlement is said to have been reached on May 17, 1983.  The  submission ignores the findings of fact recorded by the Tribunal in  its order dated June 12, 1987 that while the reference was pending  before the Tribunal certain events took place which compelled the  Deputy Labour Commissioner-cum-Conciliation Officer to  intervene.  As noticed earlier a notice of strike was served on the  Management on February 14, 1983 by one of the Unions.  On the  other hand the Management gave notice on April 4, 1983 under  Section 25 FFFA of the Act for closing part of the undertaking  related to the weaving section.  These facts leave no manner of  doubt that there was labour unrest coupled with the fear of strike and  closure.  The settlement itself recites the fact that there were series  of bipartite and tripartite meetings between the representatives of the  Management and the Unions in view of the labour unrest and threat  of closing down the operation of the weaving department.  Meetings  were also held in the office of the Chief Labour Commissioner with  a view to resolve the dispute and a meeting was thereafter held on  May 17, 1983 in the office of Shri K. Saran, Joint Chief Labour  Commissioner (Central) where the representatives of the  Management and the Unions participated alongwith the officers of  the Labour Depatment which ultimately resulted in a settlement.  All  these facts establish beyond doubt that there was labour unrest and  the Conciliation Officer intervened in the matter and made attempts  to bring about a settlement.  The submission, therefore, that no  conciliation proceeding was in progress when the settlement was  arrived at, must be rejected.         

       Learned counsel for the appellant then submitted that the  settlement was not arrived at with the assistance and concurrence of  the Conciliation Officer.  It was submitted, relying upon the decision

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of this Court in  :  The Bata Shoe Co. (P) Ltd.  vs. D.N. Ganguly and  others : AIR 1961 SC 1158  that a settlement which is made binding  under Section 18(3) of the Act on the ground that it is arrived at in  the course of conciliation proceedings is a settlement arrived at with  the assistance and concurrence of the Conciliation Officer.  Such a  settlement brought about while conciliation proceedings are  pending, are made binding on all parties under Section 18 of the Act.   Reliance was placed on the judgment of this Court in Workmen of  M/s. Delhi Cloth and General Mills Ltd. vs. The Management of  M/s. Delhi Cloth and General Mills Ltd. : (1969) 3 SCC 302.   

Learned counsel for the respondents did not dispute the legal  position as it emerges from these two judgments.  It was submitted  that the facts of this case clearly establish that the Conciliation  Officer intervened when there was considerable labour unrest and  brought the parties to the negotiating table.  Several meetings were  held, some of them in the chambers of higher officials of the Labour  Department, and ultimately a settlement was worked out.  This is  quite apparent from the fact that the terms of settlement has also  been signed by the Conciliation Officer, apart from the  representatives of the Management and representatives of the two  workers’ Union.  We entertain no doubt that the settlement was  brought about in the course of conciliation proceedings with the  assistance and concurrence of the Conciliation Officer.

It was also urged before us by the learned counsel for the  appellant that the Tribunal ought to have considered, while passing  an Award on June 12, 1987, that the settlement was just and fair and  protected the interest of the workmen.  The recall of the order was  sought on the ground that this aspect of the matter had not been  considered when an Award was made in terms of the settlement.   This was precisely the ground on which the Tribunal entertained the  application for recall and allowed it by order dated February 19,  1990.  The Tribunal in our view proceeded on a factually incorrect  assumption.  The High Court has found that the Tribunal while  making an Award in terms of the settlement has in clear terms  recorded its satisfaction in paragraph 25 of its order (which we have  quoted earlier in the judgment) that the settlement was fair and just.   We entirely agree with the High Court.

It was lastly submitted that the settlement did not resolve the  disputes which were subject matter of reference made to the  Tribunal.  The submission again proceeds on a misreading of the  settlement.  It is no doubt true that the disputes referred to the  Tribunal mainly arose on account of the Management closing down  a large number of looms which necessitated a curtailment of the  work force on account of which the Management refused to give  work to a large number of workers.  We find that Clause 3.2 of the  settlement in terms deals with the dispute relating to the weaving  department and other allied departments.  This submission,  therefore, has no force.

In the result we find no merit in this appeal and the same is  accordingly dismissed, but with no order as to costs.