20 December 1956
Supreme Court


Case number: Appeal (civil) 134 of 1955






DATE OF JUDGMENT: 20/12/1956


CITATION:  1957 AIR  276            1957 SCR  220

ACT: Industrial Dispute-Travelling and halting allowances to  the workers’  representatives-Order  of the  Tribunal  directing employer  Payment  of  such  expenses  pending  adjudication proceedings--jurisdiction   -Practice  of   the   industrial Courts-Costs--Discretion    of   the,    Tribunal-Industrial Disputes Act 1947 (XIV Of 1947), s. 11(3) (7)-Code of  Civil Procedure. (Act V of 1908), s. 35.

HEADNOTE: Sub-section  (7)  Of s. ii of the Industrial  Disputes  Act, 1947, as inserted by Act 48 of 1950, provides: " Subject  to the rules made under this Act, the costs of, and  incidental to,  any  proceeding  before  a Tribunal  shall  be  in  the discretion  of  that Tribunal, and the Tribunal  shall  have full  power to determine by and to whom and to  what  extent and subject to what conditions, if any, such,                             221 costs  are to be paid and to give all  necessary  directions for   the  purposes  aforesaid,  and  such  costs  may,   on application made to it by the person entitled, be  recovered as  arrears  of land revenue or as a public  demand  by  the appropriate Government. t. During the pendency of the proceedings before the Industrial Tribunal  for  the  adjudication of a  dispute  between  the appellant Bank and its workman, an application  was made  by one  of the’ representatives of the, workmen  praying  inter alia that the appellant should be ordered to pay  travelling and  halting   allowances  for the  representatives  of  the various  Unions coming from different, stations  other  than ’Delhi  to attend the hearing before the Tribunal at  Delhi, on the ground that the appellant had branches all over India and  that  there ’Were several Unions of. its  employees  at those  branches  who  were,  involved  in  the  dispute   in question.   The Tribunal while conceding that there  was  no provision  of law in support of the claim, made by the  res- pondents nevertheless made the order relying on the  general practice of the Industrial.  Courts.  The appellant appealed by  special  leave and contended that the order  was  wholly without   jurisdiction  and  was  also  unjust,  while   the



respondents supported the order relying on s. II (7) Of  the Industrial Disputes Act, 1947: Held,   that   the  order  of  the  Tribunal   was   without jurisdiction and could not be- supported either on the basis of  the  general practice of the Industrial Courts  or  with reference to the provisions of s. II (7) Of the Act, because (1)  there  was  no uniform or consistent  practice  in  the matter  and  even  if there was any such  practice,  it  was neither warranted by law nor by the principles of reason and justice  ; (2) on a proper construction’ of the  sub-section there was no power in the Tribunal to direct the payment  of the  costs  of  a  party in  advance  by  the  other  party, irrespective of the final result of the proceeding. The  discretion which is given to a Tribunal under s.  II(7) of  the Act is a judicial discretion and must be  exercised. according to the rules of reason and justice, not by chance. or  caprice  or  private opinion or some  fanciful  idea  of benevolence or sympathy. jeevan  Textile Mills, Hyderabad (Deccan) v. Their  Workmen, (1956) I L.L.J. 423- approved. Certain Banking Companies v. Their Workmen, (1952) 2 L.L.J. 54, in so far as it decided that the :Tribunal had power and jurisdiction under s. I 1(7) of the Act to direct the  Banks to meet the expenses of the workmen in a pending proceeding, disapproved

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil’ Appeal  No.  134  of 1955. Appeal by -special leave from the order dated April 17,1954, of,  Sri Ram Kanwar, Industrial Tribunal, Delhi, made on  an application filed, on April 17, 1954. 222 Ram Lal Anand and Naunit Lal, for the appellant.  Y. Kumar, for respondent No. 13. 1956.  December 20.  The Judgment of the Court was delivered by S.   K.  DAS  J.-The  Punjab  National:  Bank  Ltd.  is  the appellant before us.  Shorn of all details not necessary for our  purpose,  the facts are these.  By its  Order  No.  LR- 100(98)  dated September 2, 1953, the Government, of  India, Ministry  of Labour, appointed Shri Ram  Kanwar,  respondent No. 1, as the Industrial Tribunal for the adjudication of  a dispute  which  had  arisen between the  appellant  and  its workmen in respect--of the following matter: "Absorption of Bharat Bank employees in the Punjab  National Bank Ltd., and their service conditions." On  April  17, 1954, in the course  of  certain  preliminary proceedings  before  respondent No. 1, -an  application  was made  on  behalf  of  the All  India  Punjab  National  Bank Employees’ Federation, in which it was stated that a  number of  other Unions Were involved in the dispute  in  question, because the appellant had branches all over India and  there were several Unions of its employees at those branches.   It was  further  stated in the application that some  of  those Unions  had submitted their statements when the  dispute  in question  was referred to the Industrial Tribunal ,  Bombay, with  Shri  Panchapagesa  Shastri as  its  sole  member  and Chairman;  that Tribunal did not, however, function as  Shri Panchapagesa  Shastri was appointed a member of  the  Labour Apllate  Tribunal  of India.  Two substantial  prayers  were made in the application of April 17, 1954: one was that  due publicity of the adjudication proceedings should be given by



issuing  notices to all those Unions to participate  in  the proceedings, and the second prayer was that an order  should be  made  directing  the appellant  to  pay  travelling  and halting  allowances  to the representatives of  the  various Unions   so   as  to  enable  the  latter  to   send   their representatives to Delhi, the place where the.                             223 adjudication  proceedings were pending.  A list of  fourteen Unions   and   organisations  was  given  along   with   the application,  with the number of representatives which  each Union or Organisation wished, send. In the present appeal we are concerned only with the  second prayer  made  in the aforesaid application,, and  the  order which  respondent  No. I made with regard to  that,  prayer, being the order impugned before us, was in these terms: "  The  management  objects to the grant of  any  T.  A.  or halting allowance to the representatives of the Unions.   It is,  no doubt, correct that there is no pro-, vision of  law on  this  point in favour of the  representatives,  but  the general practice of various Tribunals has all along been  to allow  reasonable  T.  A.  and  halting  allowance  to   the representatives  of the Unions, specially in  Banks’  cases. It  is, therefore, ordered that the representatives  of  the Unions, who put in appearance in the Tribunal from  stations outside  Delhi,  shall be paid 2 1/2  second  class  railway fares  to and from Delhi, plus Rs. 10/- per day  as  halting allowance, by the management of the Bank. The Bank is also requested to direct its respective branches to  pay travelling and halting allowances in advance to  the employees who intend to come to Court. as representatives." It  may be stated here that out of the fourteen  Unions  and organisations which wanted to send their representatives  to take  part in the adjudication proceedings, two  have  their offices in Delhi.  Respondent No. 1 directed the payment  of travelling and halting allowances to the representatives  of the remaining twelve Unions and organisations and fixed  the number  of  representatives  to be  sent by  each  Union  or organisation. The  plea  of  the appellant was that the  order  passed  by respondent  No.  I was wholly without jurisdiction  and  was also unjust, involving as it did an expenditure of not  less than Rs. 2,500/- for each day of hearing in 224 the ’Courts of the, proceedings before respondent No. 1.  On that plea the appellant moved the Punjab High Court for  the issue of ’a writ of certiorari - or such other writ as might be  appropriate  for the purpose of quashing  the  order  of respondent No. 1. The Punjab High Court, however,  dismissed the  petition of the appellant, in limine on May  14,  1954. The  appellant’  then asked for and obtained  special  leave from this Court on October 18, 1954.  The   question  for  decision is a  very  short  one.   The respondents, appearing before us have sought to support  the impugned  order on the strength of the provisions of  sub-a. (7)  of s. 11 of the Industrial Disputes Act, 1947  (XIV  of 1947),  hereinafter referred to as the Act That  sub-section which  was  added  by Act 48 of 1950  and,  which  we  shall presently  read, lays down, inter alia, that the  costs  of, and incidental to, any proceeding before a Tribunal shall be in  the discretion of that Tribunal, and the Tribunal  shall have  full  power to determine by and to whom  and  to  what extent  and subject to what -conditions, if any, such  costs are to be paid and to give all necessary directions for  the purposes aforesaid.  The question is whether respondent  No. I  had  power, in the exercise of his discretion  under  the



provisions of sub-s. (7) of s. 11, to direct the payment  of costs in advance by one of the parties to the dispute to the other parties in a pending proceeding, irrespective ’of  the final result of that proceeding. In  our  opinion, the question admits of  only  one  answer. Sub-section (3) of s. 11 enumerates certain powers vested in a  Civil Court under the Code of Civil Procedure,  and  says that  every  Board, Court and Tribunal under the  Act  shall have  those powers; the last enumerated power is in  general terms,  being  respect  of  such other  matters  as  may  be prescribed.   No  rules made under the Act  bearing  on  the question of costs have been brought to our notice; there re, all  that can be said, with regard to the effect  of  sub-s. (3)  of s. II, is that except the  enumerated powers,  other powers  vested  in a Civil Court under the Code,  of,  Civil Procedure have not been given to the Board,                             225 Court or Tribunal under the Act.  The Act however,  contains a separate provision in the matter of costs and that is sub- s. (7) of s. 11.  That sub-section reads (we are quoting  it as  it stood at the relevant time prior to the amendment  of 1956): "  Subject to the rules made under this Act, the  costs  of, and incidental to, any proceeding before a Tribunal shall be in  the discretion of that Tribunal, and the Tribunal  shall have  full  power to determine by and to whom  and  to  what extent  and subject to what conditions, if any,  such  costs are to be paid, and to give all necessary directions for the purposes aforesaid, and such costs may, on application  made to  it  by the person entitled, be recovered as  arrears  of land  revenue  or  as a public  demand  by  the  appropriate Government." A  comparison of the sub-section with s. 35 of the  Code  of Civil  Procedure  shows  that the sub-section  is  in  terms similar  to  those of s. 35 of the Code of  Civil  Procedure except  for the’ concluding portion of the subsection  which relates  to  the  recovery  of costs  as  arrears  of-  land revenue.   There is also another difference in that  sub-ss. (2)  and (3) of s. 35 of the Code of Civil Procedure do  not find  place  in  the Act.  On a plain reading  of  the  sub- section,  it is manifest that (1) the expression " costs  of any  proceeding  " means costs of the entire  proceeding  as determined  on  its conclusion and not costs  in  a  pending proceeding,  nor costs to be incurred in future by a  party; and (2) the expression " costs" incidental to any proceeding " similarly means costs of interlocutory applications  etc.- such   costs  as  have  been  determined  thereon,  at   the conclusion  of the hearing.  Neither of the two  expressions has  any  reference, to costs payable in advance or  to  be- incurred  in  future by a party; far less do they  refer  to halting and travelling allowances to be incurred by a  party while attending the Court on his own behalf.  Respondent No. 1 correctly appreciated the legal position, and said I  that there  was no provision of law in support of the claim  made by 29 226 the  respondents.   He  relied,  however,  on  the   general practice of Industrial Courts, particularly in Banks’ cases. We  doubt  it  there  was any  such  general  or  consistent practice;  nor  do we think that such practice, if  any,  is legally justified.  But we shall advert to this matter  when considering such of the decisions of Industrial Tribunals as have been placed before us. Learned  counsel  for  the respondents has  -not  relied  on



practice,  but  on  the terms of  the  subsection.   He  has submitted that the concluding portion of, the sub-;  section which  states that " such costs may, on application made  to it  by the person entitled, be recovered as arrears of  land revenue or as a public demand by the appropriate  Government "  shows that costs may be granted in advance in  a  pending proceeding.   His, argument -has proceeded on  these  lines: firstly,  he  has  submitted  that  an  Industrial  Tribunal becomes  functus officio with the submission of the  award.; second the concluding portion of the. sub-section shows that an  application  for recovery of costs can be made to  it  " that is, the Tribunal); therefore, the , application must be made before the Tribunal becomes functus officio; that  is,. at  a stage when the proceedings is still pending.   In  our opinion, this argument is wholly fallacious and proceeds  on a  misreading of the sub-section.  The expression " it "  in the  concluding  portion of the sub-section  refers  to  the appropriate,  Government. and not to the Tribunal; thus  the very basis of the argument disappears and it is  unnecessary to consider if the Tribunal becomes functus Officio with the submission  of its award-& proposition regarding  which  we- express no opinion. It is not disputed that sub-s. (7) of s. 11 of the Act gives a  discretion  to  the Tribunal, and it has  full  power  to determine by and, to whom and to what extent and subject  to what  conditions, if any, the costs are to be paid.   It  is clear, however, that the discretion is a jusicial discretion and must be exercised according to the rules. of reason  and justice--not by chance or caprice or private opinion or some fanciful                             227 idea  of  benevolence  or sympathy.  It is  a,  negation  of justice and reason to direct the appellant to pay in advance the  costs  of  the respondents irrespective  of  the  final result  of the proceeding.  The general rule is  that  costs follow  the  event  unless  the  Court,  for  good  reasons, otherwise orders.  Respondent No. I gave no reasons for  his order  except that of practice---a practice, assuming  there be  any such practice, which is neither legal nor just.   It may  be  conceded  that the jurisdiction  of  an  Industrial Tribunal  is  not  invoked  for  the  enforcement  of   mere contractual  rights  and liabilities of the parties  to  the dispute  referred  to  the Tribunal  for  adjudication;  its jurisdiction in the matter of adjudication of an  industrial dispute is wider and more flexible.  All the same, it is not an  arbitrary jurisdiction; it may be readily conceded  that an  employee  is  as  much entitled to a  fair  deal  as  an employer  and  he must be protected from  victimisation  and unfair labour practice, but I social justice’ does not  mean that   reason  and  fairness  must  always  ’yield  to   the convenience  of a party-convenience of the employee  at  the cost  of  the  employer as in  this  cases  an  adjudication proceeding.   Such one-sided or partial view is really  next of  kin to caprice or humour.  Lord Halsbury L. C.  put  the matter  in  characteristically forceful  language  when,  he said:  "......  ’discretion’  means when  it  is  said  that something  is  to  be  done within  the  discretion  of  the authorities  that ,something is to be done according to  the rules  of  reason  and justice,  not  according  to  private opinion: Rooke’s Case (1); according to law, and not humour. It  is to be, not arbitrary, vague, and fanciful, but  legal and regular." (Susannah Sharp v. Wakefield) (2). There  are special cases where in a pending proceeding  some costs  may have to be borne by a party to a litigation;  for example,  sub-r.  (4)  of r. 4 of 0. XXXII,  Code  of  Civil



Procedure, says that where there is no other person fit  and willing  to  act as guardian of a minor for  the  suit,  the Court  may appoint any of its officers to be such  guardian, and may. direct that the (t) 5 Rep. 100,a. (2) [1891] A.C. 173. 179. 228 costs  to be incurred by such officer in the performance  of his  duties  as such guardian shall be borne either  by  the parties  or by any one or more of the parties to the  -suit. Section  35  of  the  Code  is  not  only  subject  to  such conditions and limitations as may be prescribed, but is also subject  to the provisions of any law for the time being  in force.   Under  the  Matrimonial  Causes  Rules,  1950,  the practice  in  English Courts is that after  the  registrar’s certificate  for trial has been granted, or, with leave,  at an  earlier stage of ’the cause, a wife who is a  petitioner and has asked for costs or who has filed an answer may apply for  security for her costs of the cause up to the  hearing, and of and incidental to the hearing (see Halsbury’s Laws of England, 3rd Ed., Vol. 12, para. 765 at p. 358).  When  such security  is ordered, unless the husband elects to  pay  the amount  into  the registry and gives notice  to  the  wife’s solicitor, a bond is required from him.  Such cases stand on a special footing and are governed by special statutory pro- visions.   They have no application in the present case  and afford no justification for the order impugned before us. We  now  turn  to the question of  practice  in  the  Labour Courts.  The earliest decision which has been brought to our notice is Kirloskar Brothers Ltd. v. Their Workmen(1).  That was a case in which one of the demands for adjudication  was the demand for travelling and other expenses of the  workers representatives, when such representatives were required  to -go  out at the instance, of any duly constituted  authority or  Court  in  respect of any  industrial  matter.   It  was observed: " The demand according to the company amounted  to financing the administration of the Union and was  therefore objectionable even on psychological grounds." The:  Tribunal directed  that  the;  travelling and other  expenses  to  be incurred, in connection with the Union work must be paid out of  the Union funds and the employer--could not be  required to contribute the sum. (1)  [1951] 2 L.L.J. 557. 229 In  the well-known case, Certain Banking Companies V.  Their Workmen  (1),  the  question  of  facilities  for  effective representation of their cases on behalf of the employees was raised  and considered at -some length.  The decision  given was that the Tribunal had power and jurisdiction, under sub- s. (7) of s. 11 of the Act, to direct the Banks to meet  the reasonable  expenses of the workmen in a pending  proceeding in  order  to  ensure a fair  and  effective  hearing.   The grounds on which the decision was based were these: (1)  the Banks  were well organised and their managements we’re  -in. possess-ion  of resources; (2) the adjudication by a  Iabour Court  or Industrial Tribunal was a compulsory  adjudication in the interests of the public, and as disputes relating  to Banking  companies,  with establishments, in more  than  one State,  were  referred  to  the  Tribunal  by  the   Central Government,  the circumstance that various workmen  residing in   various   States  were  compelled  to  submit   to   an adjudication  by  a.  Central  Tribunal  was  sufficient  to justify  an  order for the payment of their  travelling  and halting  allowances;  (3) there was nothing in the  Act.  to preclude  the  exercise, of such power on the  part  of  the



Industrial  Tribunal  as  was  required  to  carry  on   the fundamental object of ensuring a proper hearing for the two, parties  to the dispute, and the weaker party,, namely,  the comparatively  unorganised, numerous and  scattered  workmen employed in different branches, needed assistance to present their  case  ; (4) prior to the addition of, sub-s.  (7)  of s.11  in  1950, various Industrial Tribunals  used  to  pass similar orders and it was in recognition of the necessity of such orders that the statutory provision in the  sub-section was  made;  and  (5)  the  principles  of  natural  justice. required  that  a real opportunity should be  given  to  the workmen to. present their case by asking the employer to pay for  their  expenses.   In  our  opinion,  not  one  of  the aforesaid grounds is really sustainable, either in law or on the  principle of justice, equity and good conscience.,  The circumstance  that  the Banks are well organised  and  their managements are in possession of (1)  [1952] 2 L.L.J. 54. 230 resources  cannot be a ground for making -them pay  for  the expenses of the other party; if that is the principle to  be applied, then in every case the richer party must be made to pay  the expenses of- the weaker party, irrespective of  the ultimate result of the dispute ; even in a dispute raised by the workmen, which may be ultimately found to be -devoid  of all merit, the employer must be made to finance the workmen. Such  a  principle  will  merely  encourage  frivolous   and unsubstantial  disputes and will run counter to  the  object and purposes of the Act, namely; the promotion of industrial peace     in  the  interests  of the  general  public.   The second      circumstance  that the adjudication  is  a  com- pulsory  adjudication applies equally to both parties.If  it is  a  compulsory  -adjudication for the  employees,  it  is equally  so 1 or the employer and we can see no  reason  why that circumstance should involve the imposition of a penalty on  one of the parties to the dispute and not on the  other. We,  have already pointed out that on a proper  construction of  the  sub-section there is no power in  the  Tribunal  to direct the Repayment of the costs of a party,, in advance by the  other party, irrespective of the final result,  of  the proceeding,  and  the view expressed by  the  Bank  Disputes Tribunal as to the construction of the relevant  sub-section is manifestly erroneous; nor are we satisfied, that prior to the addition of the sub-section, there was any consistent or uniform  practice  in  the  matter, so as  to  lead  to  the inference  that  the  provisions  of  the  sub-section  gave statutory recognition to; the practice.’ It is difficult  to understand  how  the principles of natural  justice  can  be invoked  in aid of an order which penalises one party  to  a dispute by making it pay for the costs of the other party in advance,  irrespective of the result of the  proceding.   We can  only say that such an order is neither natural nor  has any element of justice in it. In   a   later  decision,   Asssociated   Cement   Companies Ltd.,Dwarka Cement  Works,  Dwarka V. Workmen Employed under it(1),it   Was   observed:  "   It,therefore,   the   Unions representatives thought it proper -to attend on the (1)  [l953] I.C.R. BOM. 292 at 307.-                             231 various  dates  before, the Tribunal, it is  the  Union  who should  bear the costs." In a still later  decision,  Jeevan Textile  Mills, Hyderabad (Deccan) v. Their Workmen(1),  the question  was again considered at some length.  With  regard to sub-s. (7) of s. II it was observed: " Although s. 11 (7) is  worded  in a very wide way and the power  to  order  the



payment of costs granted under it to industrial tribunals is made comprehensive and is  not even fettered by a  provision like s. 35 (2) of the Code of Civil Procedure, requiring the tribunal  to state its reasons if costs are not  ordered  to follow the event, orders for costs can only be made, even by industrial tribunals, on well-recognised principles and  not on  any  abstract  ideas as to what,  irrespective  of  such principles,  should  be  considered  as  desirable  in   any particular  case: vide United Commercial Bank Case(2)".   We are in agreement with the view expressed above. It  would appear from what we have stated above  that  there was no uniform or consistent practice in the matter, and  we are further of the view that if there was any such practice, it  was  neither warranted by law nor by the  principles  of reason and justice.  In Ex parte Snow In re Sherwell(3),  an application  was made to review a taxation of costs and  the appellant,  who  was  a  Barrister-at-law  and  resided   at Liverpool, claimed his travelling expenses from Liverpool to London  and  back,  on the ground that by  arguing  his  own appeal he had saved the expense of engaging counsel to which he  would  have been entitled.  The claim was  dismissed  as "preposterous and unheard of As  we  began, so we -end: there is only one answer  to  the question  and  that answer is that respondent No. I  had  no power, in the exercise of his discretion under sub-s. (7) of section II of the Act, to direct the appellant in this -case to  pay  the  travelling  and  halting  allowances  of   the representatives  of the Unions in a pending  proceeding  and irrespective of its final (1)  [1956] 1 L.L.J. 423. (2)  [1952],2 L.L. J. 1. (3) [1879] Weekly NoteS 22. 232 result.  For the reasons given.  this appeal is allowed with costs,  and  the  costs  must  be  paid  by  the  contesting respondents.   The order of respondent No. 1, so far  as  it relates to the payment in a pending proceeding of travelling and halting allowances to the representatives of the various Unions, must and is hereby, set aside. Appeal allowed.                             233