REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6737   OF 2008 [Arising out of SLP (C) No.18340/2006]

Radhakrishna Mani Tripathi … Appellant

Versus

L. H. Patel & Anr. … Respondents

J U D G M E N T

AFTAB ALAM,J.

1. Heard counsel for the parties.

2. Leave granted.

3. In an industrial dispute concerning the termination of service of the

appellant  (the  workman)  the  Second  Labour  Court,  Thane,  Maharashtra

gave an ex-parte award in Reference (IDA) no.224 of 1994 in favour of the

appellant on 12 June 1998 directing his reinstatement with full back wages

and continuity in service. The award was made after taking evidence (ex-

parte) led on behalf of the appellant. It was published on 5 August 1998. On

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29 January 1999 respondent no.1 filed a petition (Misc. Application [IBA]

no.2 of 1999) before the Labour Court  making a prayer for recall  of the

award. It was stated on behalf of the respondent that no notice was served

on him and he was not aware of the proceedings before the Labour Court.

He came to know about the matter only on 27 January 1999 on receiving a

copy of the award sent to him by the court. And then without any loss of

time he filed the petition for recall of the award. After a full dressed hearing

on the recall petition the Tribunal found and held, vide order dated 12 July

2005,  that  the  appellant  obtained  the  order  for  ex-parte  hearing  of  the

reference by knowingly suppressing the correct address of respondent no.1

and as a result the notice issued by the Labour Court was never served on

him. In light of the finding, the Labour Court recalled its earlier award dated

12 June 1998 and fixed the matter for fresh hearing.

4. The appellant challenged the order of Labour Court setting aside the

award before the Bombay High Court in Writ petition no. 7985 of 2005. The

High Court, by its judgment and order dated 25 January 2006 dismissed the

writ  petition  and  confirmed  the  order  passed  by the  Labour  Court.  This

appeal  is  preferred  against  the  orders  passed  by the High  Court  and the

Labour Court.  

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5. At this stage it will be useful to take note of certain provisions of the

Industrial  Disputes Act,  1947 (hereinafter  referred to as the Act) and the

Rules  framed  there-under.  Section  11  of  the  Act  permits  the  Industrial

Tribunal,  the  Labour  Court  (and  the  other  authorities  under  the  Act)  to

follow, ‘subject to any rules that may be made in this regard’ such procedure

as  they  may  think  fit.  Section  38  of  the  Act  gives  the  power  to  the

‘appropriate government’ to make rules for the purpose of giving effect to

the  provisions  of  the  Act.  Under  Section  38  of  the  Act  the  Central

Government and many State Governments have framed rules. The case in

hand  coming  from  Maharashtra  is  governed  by  the  provisions  of  the

Industrial Disputes (Bombay) Rules (hereinafter referred to as the Bombay

Rules). Rule 26 of the Bombay Rules lays down the circumstances in which

an industrial court may proceed ex parte as also the conditions on which it

may set aside an ex parte award. It reads as  follows:      

“26. Board Court, Labour Court, Tribunal or Arbitrator may proceed ex-parte –

(1) If without sufficient cause being shown, any party to a  proceeding  before  a  Board,  Court,  Labour  Court, Tribunal  or  an  Arbitrator  fails  to  attend  or  to  be represented the Board, Court, Labour Court, Tribunal or Arbitrator may proceed ex-parte

(2) Where any award, order or decisions made ex-parte under sub-rule(1), the aggrieved party, may within thirty days of the receipt of a copy thereof, make an application

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to  the  Board,  Court,  Labour  Court,  Tribunal  or  an Arbitrator, as the case may be, to set aside such award, order  or  decision.  If  the  Board,  Court,  Labour  Court, Tribunal  or  Arbitrator  is  satisfied  that  there  was sufficient  cause  for  non-appearance  of  the  aggrieved party, it or he may set aside the award, order or decisions so made and shall appoint a date for proceeding with the matter:

Provided that, no award, order or decision shall be set  aside on  any application  as  aforesaid  unless  notice thereof has been served on the opposite party]. (n)  

[It may be stated here that originally rule 26 was limited to what now

comprises sub-rule 1; sub-rule 2 was added by govt. notification dated 20

August 1970 and the original and the added provisions were numbered as

sub-rules 1 and 2 respectively.]

6.      Rule 31A of the Bombay Rules provides as follows:

“Publication of report or award etc. -  (1) Within thirty days of the date of receipt  of the report  of a Board or award  of  a  Labour  Court  or  Tribunal  by  it  the  State Government, -

(a) shall, if it considers that having regard to the importance of such report or award its publication in the Official Gazette is  necessary  cause  it  to  be  published  in  the  Official Gazette;

(b) If it considers that the report or award is not sufficiently important  it  may  cause  a  copy  thereof  together  with  a notification under section 17 to be forwarded to the Board or a Court or Tribunal, as the case may be, for publication on the Notice Board at its office.

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(2) Where the report or award is published in the Official Gazette  or  on  notice  board  of  the  Board,  Court  or Tribunal, the State Government shall at the time of such publication forward a copy thereof to the parties to the dispute, and where the report or award is published on notice board of the Board, Court or Tribunal, such board, Court  or  Tribunal,  shall  inform the  State  Government and the parties concerned of the date of such publication on the notice board.”

7. It is undeniable that the order of the Labour Court recalling the ex-

parte award was completely in accord with Rule 26(2) of the Bombay Rules.

The petition for recall was filed by respondent no.1 within two days of the

receipt  of  a copy of  the award  and he was also able  to  fully satisfy the

Labour Court that there was sufficient cause for his non appearance since no

notice was ever served on him.

8. However, Mrs. Issar, learned counsel appearing for the appellant tried

to  question  the  validity  of  rule  26(2)  itself.   She  submitted  that  under

Section 17-A of the Act an award becomes enforceable on expiry of thirty

days from the date of its publication whereupon the labour court is rendered

functus officio. Hence, any application for recall could only be made within

thirty days from the date of publication of the award, otherwise it would not

be open to the Labour Court to entertain it, as the matter would have gone

completely  beyond its  authority.  In  support  of  the  submission  she  relied

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upon certain  observations  in  the decision  in  Grindlays  Bank vs.  Central

Government Industrial Tribunal & Ors., 1980 (Supp) SCC 240. She further

submitted  that  the  provision  of  rule  26(2)  of  the  Bombay Rules  was  in

derogation of Section 17-A of the Act in so far as it extended the time for

making an application for  recall  of the  award and stretched it  to  a point

where the Labour Court ceased to have any control or authority over the

matter. Learned counsel submitted that rule 26(2) of the Bombay Rules was

in conflict with Section 17-A of the Act and tended to supplement it. The

provision of the rule must, therefore, be held to be invalid and inoperative.

In support of the submission she relied upon a number of decisions which it

is not necessary to mention here.  

9. We  are  unable  to  accept  the  submissions  made  on  behalf  of  the

appellant  and we think any reliance placed on the decision in  Grindlays

Bank is quite misplaced. In Grindlays Bank an order passed by the Labour

Court, recalling its award, was assailed on the same lines as advocated by

Mrs. Issar before us. In view of the submissions made before it in that case

the  Court  framed  the  second  question  arising  for  its  consideration  as

follows:

“Whether  the  Tribunal  becomes functus  officio  on  the expiry of 30 days from the date of publication of the ex- parte award under Section 17, by reason of sub-section (3) of Sec. 20 and, therefore, had no jurisdiction to set

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aside the award and the Central Government alone had the power under sub (1) of Sec.17-A to set it aside.”

10. Here it needs to be noted that the case of Grindlays Bank arose under

the Industrial Disputes (Central) Rules. In the Central Rules there is nothing

like rule 26(2) of the Maharashtra Rules but rule 22 is almost identical to

rule 26(1) of the Maharashtra Rules. Rule 22 of the Central rules reads as

follows:

“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.”

11.    Further, rule 24 of the Central Rules gives to the Industrial Tribunal,

Labour Court (and the other authorities under the Act) certain powers under

the Civil Procedure Code as vested in a Civil Court when trying a suit. The

powers  enumerated  under  the  rule  include  the  power  of  granting

adjournments.

12.    In  Grindlays  Bank this  Court  held  that  rules  22  and  24  (b)  were

sufficiently the source of power for the industrial courts to recall an ex-parte

award. It was pointed out that in terms of rule 22 the industrial courts could

proceed ex parte in the matter only in case a party to the proceeding failed

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to attend or be represented without showing sufficient cause. The Court held

that power to proceed ex-parte under rule 22 carried with it  the power to

inquire whether or not there was sufficient cause for the absence of the party

at the hearing and in case the party was able to show sufficient cause for its

non appearance on the date the court had proceeded ex parte against it, to

recall the award. (vide paragraph 11 of the decision).  

13.    Similarly,  the  Court  pointed  out,  the  provision  of  rule  24(b)

empowered  the  industrial  courts  to  refuse  to  adjourn  the  hearing  and  to

proceed ex-parte. Hence, in a case in which the industrial court makes an

ex-parte award the provisions of Order 9 Rule 13 of CPC would be clearly

attracted. It logically follows that the Tribunal is competent to entertain an

application  to  set  aside  an  ex  parte  award.  (vide  paragraph  12  of  the

decision)

14. The Court thus founded the industrial court’s jurisdiction and power

to recall an ex-parte award on rule 22 and 24 (b) of Central Rules.

15.      It is thus to be seen that in Grindlays Bank what this Court held to be

implicit  in rule 22 of the Central Rules is  made explicit  and clear  in the

Bombay Rules in the form of sub rule (2) of rule 26.

16.     Coming now to the submission based on Sec.17-A of the Act the

Court in paragraph 14 of the decision held and observed as follows:

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“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 Section 20 of the Act provides that the proceedings before the Tribunal would be deemed to continue till the date  on  which  the  award  becomes  enforceable  under Section .  Under Section  of the Act, 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 up to 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  .   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 3, acting on behalf of respondents 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.”  

                                                               (emphasis added)

17.    From the above quotation it would appear that in Grindlays Bank the

recall application was filed within 30 days from the date of publication of

the award and hence, the objection raised on the basis of Sec.17A did not

arise in this case. In Grindlays Bank this Court didn’t say that the industrial

courts  would  have  no  jurisdiction  to  entertain  an  application  for  setting

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aside an award made after 30 days of its publication. Nevertheless, on the

basis  of  the  passage  marked in  italics  in  the  above  quotation  Mrs.  Issar

strongly contended that is the true import of the judgment.

18.     We are  unable  to  accept.  The position  is  made clear  in  the  later

decision in Anil Sood vs. Presiding Officer Labour Court II, (2001) 10 SCC

534.  In  Anil  Sood interestingly the Labour Court had rejected the recall

application on the very same ground that after making the award it became

functus officio in the matter. The order of the Labour Court was challenged

before the High Court but the High Court also took the same view. In appeal

this Court noted that the award was made on 11.09.1995 and the application

for its recall was filed on 6.11.95. The Court referred to the earlier decision

in Grindlays Bank and the provisions of sub-sections (1) and (3) of Section

11 of the Act and in paragraphs 6, 7, and 8 of the decision observed and

held as follows:  

“6. The aspect that the party against whom award is to be made  due  opportunity  to  defend  has  to  be  given  is  a matter of procedure and not that of power in the sense in which  the  language  is  adopted  in  Section  11.   When matters are referred to the tribunal or court they have to be decided objectively and the tribunals/courts  have to exercise  their  discretion  in  a  judicial  manner  without arbitrariness by following the general principles of law and rules of natural justice.

“7. The power to proceed ex-parte is available under Rule  22  of  the  Central  Rules  which  also  includes  the power  to  inquire  whether  or  not  there  was  sufficient

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cause for  the absence of a party at  the hearing,  and if there is sufficient cause shown which prevented a party from appearing, then if the party is visited with an award without  a  notice  which  is  a  nullity  and  therefore  the Tribunal  will  have  no  jurisdiction  to  proceed  and consequently, it must necessarily have power to set aside the ex-parte award.

“8. If this be the position in law, both the High Court and the Tribunal (sic Labour Court) fell into an error in stating that the Labour Court had become functus officio after making the award though ex-parte.   We set aside the  order  made  and  the  award  passed  by  the  Labour Court and affirmed by the High Court in this regard, in view  of  the  fact  that  the  learned  counsel  for  the respondent  conceded  that  application  filed  by  the appellant  be allowed, set  aside the ex-parte  award and restore the reference.”

19.     In light  of the decision in  Anil  Sood we find no substance in the

appellant’s submission based on Section 17-A of the Act. There being no

substance in the first  limb of the submission there is  no question of any

conflict between rule 26(2) of the Maharashtra Rules and Section 17-A of

the Act.  

20.    We find no merit in the appeal. It is accordingly dismissed.  Having

regard to the fact that the appellant is a workman we refrain from imposing

any cost

………………………J.

[Tarun Chatterjee]

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………………………J.

[Aftab Alam]

New Delhi,

November 21, 2008.

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