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PETITIONER: RAIPUR MANUFACTURING CO. LTD.

       Vs.

RESPONDENT: OKHABHAI DEVRAJBHAI PATNI

DATE OF JUDGMENT26/11/1975

BENCH: BHAGWATI, P.N. BENCH: BHAGWATI, P.N. FAZALALI, SYED MURTAZA SHINGAL, P.N.

CITATION:  1976 AIR  683            1976 SCR  (2) 818  1976 SCC  (1) 346

ACT:      Bombay  Industrial  Relations  Act,  1946,  ss.  42(4), 78(1)(A)(a)(i) and 79(1) and (3) and r. 53 of the Rules made thereunder-Scope of-Power  to extend  period after expiry of the inifial period-"Mutually fixed", meaning of.

HEADNOTE:      A combined  reading of ss. 42(4), 78(1)(A)(a)(i), 79(1) and (3) of the Bombay Industrial Relations Act, 1946, and r. 53  of   the  Rules  made  under  the  Act,  shows  that  an application under  s. 79(1)  to the Labour Court, in respect of a  dispute falling  under s.  78(1)(A)(a)(i) must be made within 3  months of the arising of the dispute; and that the dispute would  be deemed  to have arisen if, within a period of 15 days from the receipt of a letter of approach under s. 42(4) by  the employer, or within such further period as may be mutually  fixed by  the employer  and  the  employee,  no agreement is  arrived at in respect of the change desired by the employee.      In the  present case,  the letter  of approach under s. 42(4) claiming  that his  age was  only 56  years and  so he should not be retired, was sent by the employee (respondent) to the  employer (appellant)  on February  13,  1973.  Since there was  no response,  the respondent requested the Labour Commissioner on  March 17,  1973, to  intervene. The  Labour Officer  of   the  appellant   appeared  before  the  Labour Commissioner and took adjournment in order to compromise the dispute. As  no compromise  was arrived  at, the  respondent filed his  application under  s. 78(1)(A)(a)(i) read with s. 79(1) before  the Labour  Court on  June 7, 1973. The Labour Court and  on appeal  the Industrial  Court, held,  that the period of 15 days from the date of the receipt of the letter of approach  expired on  February 28, 1973; that the dispute between the  parties should  be deemed to have arisen at the latest on March 1, 1973; that the application under s. 79(1) to the  Labour Court  should have been filed within 3 months of that  date, that is, on or before June 1, 1973; and that, therefore, the application filed on June 7, 1973, was barred under s.  79(3)(a). The  High Court,  however took  the view that by reason of the Labour Officer of the appellant asking for adjournment  for compromising  the matter  on  or  after

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March 17, 1973, there was an extension of the period to some date beyond  March 17,  1973 by mutual agreement between the parties, and  that therefore.  the application filed on June 7, 1973, was within 3 months of the arising of the dispute.      In appeal  to this  Court, the appellant contended that (1)  there   was  no  valid  extension  of  the  period  for settlement as  such extension  should have been fixed before the expiry  of the  initial period  of 15  days, and  (2) no period was mutually fixed between the parties.      Allowing the appeal on the second ground, ^      HELD:  (1)   The  further  period  for  arriving  at  a settlement under  r. 53(2) can be mutually fixed between the parties even  after the  expiration of the initial period of 15 days;  and in such a case, the dispute would be deemed to have arisen only on the expiration of the extended period if within that time no settlement is arrived at. [824-G]      (a) There  is nothing  in the  rule which provides that the further  period should be fixed before the expiration of the initial period. The words in the rule "within 15 days of the receipt  of the  application by  the employer  or within such further  period as  may be  mutually fixed  between the employer and  the employee" are sufficiently wide to cover a situation where  the  further  period  is  fixed  after  the expiration of the initial period. [824 B.C.]. 819      (h) The object of the rule is that, as far as possible, the employer  and the employee should arrive at an agreement by negotiation  in respect  of the  change  desired  by  the employee and  it is  only where  such an  agreement  is  not possible that  the employee should approach the Labour Court for adjudication.  It is possible that even after the expiry of  the   initial  period,  the  parties  may  arrive  at  a settlement and  such settlement should not be discouraged by compelling the  employee to apply to the Labour Court within 3 months of the expiration of the initial period of 15 days. [824 D-F]      [Obiter: The  further period  cannot, however, be fixed after 3  months have  elapsed from  the  expiration  of  the initial period  of 15  days and  the application  has become barred under s. 79(3)(a).] [825 B]      (2) But, it cannot be said in the present case that the further period  was mutually  fixed by the appellant and the respondent before the Labour Commissioner. [825-C]      (a) There must be a specific period agreed upon between the parties but there is no reference to any specific period in the present case. [825-E]      (b) Even on a liberal view that the Labour Commissioner granted  the  adjournment  to  the  Labour  Officer  of  the appellant for arriving at a settlement up to a specific date implying a  specific period,  there is  no averment  in  the application under  s. 79  to the  Labour  Court,  that  such specific period  was mutually fixed between the parties, nor even a  remote suggestion  to that  effect. It  is not  even stated that  the respondent  consented to the adjournment as to enable an inference of mutual agreement to be made. [825- EF]      (c) In fact, it was not the case of the respondent that any  further   period  was   mutually  fixed   to  save  the application from  the bar of limitation. On the contrary, he prayed for condonation of delay, but the Labour Court has no power to condone the delay.

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JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1102 of 1975.      Appeal by  special leave  from the  judgment and  order dated the  18th September  1974 of the Gujarat High Court in Civil Spl. Appln. No. 1224 of 1974.      F. S.  Nariman, V.  B. Patel  and I.  N. Shroff for the appellant.      V. N. Tarkunde, Vimal Dave for the Respondents.      The Judgment of the Court was delivered by      BHAGWATI, J.-This  appeal, by  special leave,  raises a short question  of construction of certain provisions of the Bombay Industrial  Relations Act, 1946 (hereinafter referred to as  the Act). The facts giving rise to the appeal are few and may be briefly stated as follows.      The appellant  carries  on  business  of  manufacturing cloth in  a textile  mill situate  in the city of Ahmedabad. The respondent  was working  as a jobber in the textile mill in the  employment of  the appellant  and, according  to the records of  the appellant, he was due to superannuate on 7th January, 1971 on reaching the age of 60 years and intimation to that effect was accordingly given to him by the appellant by a notice dated 1st October, 1970 under Standing Order 19. It appears,  however, that the appellant decided to continue the respondent in service for a period of one year after the date superannuation  and the  appellant accordingly  gave  a notice dated 820 24th September,  1970 under  Standing Order  19-A continuing the service  of the  respondent for a period of one year and intimating to  him that  he would be retired on 8th January, 1972. Thereafter  there was  another  extension  of  service granted by  the appellant  by a  notice dated  12th January, 1972 issued  under Standing  Order 19-A and it was intimated to the  respondent that  he would be retired on 8th January, 1973. The respondent, by his letter dated 5th January, 1973, requested the  appellant on  compassionate grounds  to grant him further  extension of  service for a period of two years from 8th  January, 1973, but the appellant declined to do so and in  the result  the service of the respondent came to an end by  retirement on  8th January, 1973. The respondent did not at  any time  until his  retirement on 8th January, 1973 question the  correctness of the records of the appellant or challenge the  stand of  the appellant  showing that  he had completed the  age of  60 years on 7th January, 1971. It was only after  his retirement that the respondent for the first time, by  his letter  dated 13th February, 1973, gave notice to the  appellant that  his age  was only  56 years  on  8th January, 1973  and his  retirement was,  therefore, null and void and  he should  be  reinstated  in  service.  This  was rightly regarded  as a  letter of approach by the respondent to  the  appellant  under  s.  42  sub-s.  (4)  of  the  Act requesting for  a change  in respect  of the order passed by the  appellant   under  Standing   Order  19   retiring  the respondent. The  appellant did  not send  any reply  to this letter of  approach and  no agreement was arrived at between the appellant  and the  respondent within  15  days  of  the receipt of  the letter  of approach  by  the  appellant.  It appears that since there was no favourable response from the appellant, the  respondent made an application to the Labour Commissioner on 17th March, 1973 requesting his intervention in the  matter. The Labour Officer of the appellant appeared before the Labour Commissioner pursuant to the notice issued to the  appellant and,  to  quote  the  words  used  by  the respondent in his application before the Labour Court, "took

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adjournment for  making compromise".  But no  compromise was arrived at between the parties and the respondent ultimately on 7th  June, 1973  filed an  application before  the Labour Court under  s. 79(1)  read with s. 78(1) (A) (a) (i) of the Act praying  that the order passed by the appellant resisted him from  service should  be treated as null and void and he should be  reinstated in  service  with  all  benefits.  The appellant resisted  the application  on various  grounds and apart from  disputing the claim of the respondent on merits, the  appellant  raised  a  preliminary  objection  that  the application was barred by time under s. 79(3) (a) of the Act since it  was filed more than three months after the arising of the dispute. The respondent had also filed along with the application under  s. 78  (1) (A) (a) (i) an application for condonation of  delay and  to this  application, the  answer given by  the appellant  was that  the Labour  Court had  no jurisdiction to  condone the delay in filing the application under s.  78(1) (A)  (a) (i). The Labour Court took the view that the  application of  the respondent  under s. 78(1) (A) (a) (i)  was barred  under s.  79(3) (a) as it was not filed within three  months of  the arising  of the dispute and the Labour Court  had no  jurisdiction to  condone the  delay in filing the 821 application and  in this view, the Labour Court rejected the application without  going into  the merits.  The respondent preferred  an  appeal  to  the  Industrial  Court,  but  the Industrial Court  also took  the same view and dismissed the appeal. The respondent thereupon preferred a petition in the High Court under Article 226 of the Constitution and on this petition, the  High Court  reversed the  view taken  by  the Labour Court  and the  Industrial Court  and held  that  the application filed  by the respondent under s. 78 (1) (A) (a) (i) was  within three  months of  the arising of the dispute and hence  it could  not be said to be barred under s. 79(3) (a). The  High Court  accordingly set aside the order passed by the  Industrial Court and remanded the application to the Labour Court  to dispose  it of  on merits. This decision of the High  Court is  impugned in  the present  appeal brought with special leave obtained from this Court.      The question  which arises  for determination  in  this appeal lies  in a  very narrow  compass,  but  in  order  to appreciate it,  it is  necessary to  refer to a few relevant sections of  the Act. The first material section to which we must refer  is s.  42, sub-s.  (4) which is in the following terms:           "42 (4).  Any employee  or a  representative Union      desiring a change in respect of-           (i)   any  order  passed  by  the  employer  under                Standing Orders, or           (ii) -------------------------------------           (iii)-------------------------------------           shall make an application to the Labour Court.           Provided that no such application shall lie unless                the employee or a representative Union has in                the prescribed manner approached the employer                with  a   request  for   the  change  and  no                agreement has  been arrived  at in respect of                the change within the prescribed period." What is  the ’prescribed  period’ is to be found in r. 53 of the Rules  made under  the Act. That rule so far as material reads:           "53(1). Any  employee or  a  representative  Union      desiring a change in respect of (i) any order passed by      the employer concerned under Standing Orders..... shall

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    make an  application in  writing to  the  employer.  An      application for change in respect of an order passed by      the employer under standing orders shall be made within      a period  of six  months from  the date  of such order.      Where such application is made by an employee it may be      made to  the employer  direct  or  through  the  Labour      Officer for  the local  area or  the representative  of      employees concerned. A copy of the application shall be      forwarded to  the Commissioner  of Labour  and in cases      where such  application is  not made through the Labour      Officer for the local area to that officer. 822           (2) Where  an application  has  been  made  by  an      employee  under  sub-rule  (1)  the  employer  and  the      employee may arrive at an agreement within fifteen days      of the  receipt of  the  application  by  the  employer      within such  further period as may be mutually fixed by      the employer and the employee or the Labour Officer for      the local area or the representative of employee as the      case may be.           (3) Where  an  application  has  been  made  by  a      representative Union  under sub-rule  (1), the employer      and the Representative Union may arrive at an agreement      within fifteen  days of  the receipt of the application      by the employer or within such further period as may be      mutually agreed upon by the parties.      Then there  is s. 78 which deals with the powers of the Labour Court  and sub-s.  (1) (A)  (a) (i)  of that  section provides inter alia:           "78(1). A Labour Court shall have power to-                A. decide-      (a) disputes regarding-           (i)  the propriety  or legality of an order passed                by an  employer acting  or purporting  to act                under the Standing Orders                     *         *         *         *           Explanation.-A dispute falling under clause (a) of      Paragraph A  of sub-section (1) shall be deemed to have      arisen  if  within  the  prescribed  period  under  the      Proviso to  sub-section (4) of section 42, no agreement      is arrived  at in respect of an order, matter or change      referred to in the said Proviso." And lastly, sub-ss. (1) and (3) (a) of s. 79 provide how and within what  time  proceedings  before  a  Labour  Court  in respect of  a dispute falling under s. 78 (A) (a) (i) are to be commenced and they read as follows:           "79(1).  Proceedings  before  a  Labour  Court  in      respect  of   dispute  falling   under  caluse  (a)  of      Paragraph A  of sub-section  (1) of Section 78 shall be      commenced on  an application made by any of the parties      to the dispute...           (2)            *              *              *           (3)  An  application   in  respect  of  a  dispute                falling under  clause (a)  of paragraph  A of                sub-section (1) of section 78 shall be made-           (a)  if it  is a  dispute falling under sub-clause                (i) or  (ii) of the said clause, within three                months of the arising of the dispute;" 823 It will  be seen  on a  combined reading of these provisions that an  application to  the Labour  Court under s. 79(1) in respect of a dispute falling under s. 78(1) (A) (a) (i) must be made  within three  months of  the arising of the dispute and the  dispute would be deemed to have arisen if, within a period of 15 days from the receipt of the letter of approach

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under s.  42, sub-s.  (4) by  the employer  or  within  such further period  as may be mutually fixed by the employer and the employee,  no agreement  is arrived at in respect of the change desired by the employee.      Here in  the present case, the letter of approach under s. 42 sub-s. (4) was sent by the respondent to the appellant on 13th  February, 1973  and it  may be presumed that it was received by  the appellant on the same day. The period of 15 days calculated  from the  date of the receipt of the letter of approach  by the  appellant, therefore,  expired on  28th February, 1973  and admittedly  until that time no agreement was arrived  at between  the appellant and the respondent in respect of  the change desired by the respondent. There can, therefore,  be   no  doubt   that  if  nothing  further  had transpired, the  dispute between the parties would be deemed to have  arisen at  the latest  on 1st  March, 1973  and the application under  s. 79,  sub-s. (1) read with s. 78(1) (A) (a) (i) should have been filed within three months from that date, that  is, on  or before  1st June,  1973  and  in  the circumstances, the application made by the respondent on 7th June, 1973  would be clearly barred under s. 79(3) (a). Both the Labour Court and the Industrial Court accepted this view and rejected  the application  of the  respondent in  limine without examining  the merits  of the  case. The High Court, however, took  a different  view and  held that by reason of the Labour  Officer of  the appellant asking for adjournment on or  after 17th  March, 1973  in order  to compromise  the dispute between  the parties,  the period  of  15  days  was extended by  mutual agreement  between the  parties to  some date beyond  17th March,  1973 and  the application filed by the respondent  on 7th  June, 1973  was,  therefore,  within three  months   of  the  arising  of  the  dispute  and  was accordingly saved  from the  bar  of  s.  79  (3)  (a).  The question is:  whether this  view taken  by the High Court is correct, or it suffers from any infirmity and requires to be set aside ?      Now, it  is obvious  that the  view taken  by the  High Court can  be sustained only if it can be shown that, though no settlement  in respect  of  the  change  desired  by  the respondent was  arrived at  within a  period of 15 days from the receipt  of the  letter of  approach by  the  appellant, further period  upto some  date beyond  7th March,  1973 was mutually fixed between the appellant and the respondent, for then the  dispute would be deemed to have arisen on or after that date  and in  that event,  the application filed by the respondent on 7th June, 1973 would be within three months of the arising  of the  dispute  and  hence  within  time.  The appellant submitted  that two conditions were required to be satisfied for  this purpose: (1) further period for arriving at a  settlement must  have been fixed before the expiration of the initial period of 15 days, and (2) it must have been 824 mutually fixed between the appellant and the respondent. The respondent  conceded   that  the   second  was  a  necessary condition, but  so far as the first condition was concerned, the respondent  contended that it was not necessary that the further period  should have been fixed before the expiration of the  initial period  of 15  days. It  was  sufficient  to attract  the   applicability  of  the  provision,  said  the respondent, even  if the  further period was fixed after the expiration of the initial period of 15 days, so long as that was done  before the  period of three months expired and the application of  the respondent  became barred under s. 79(3) (a). We  think there is great force in the contention of the respondent. We  do not  find anything  in rule  53(2)  which

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provides that further period should be mutually fixed by the employer and  the employee  before  the  expiration  of  the initial period  of 15 days from the receipt of the letter of approach by  the employer. The words used by the rule making authority  are  "within  15  days  of  the  receipt  of  the application by the employer or within such further period as may be mutually fixed between the employer and the employee" and these  words are  sufficiently wide to cover a situation where further  period is mutually fixed after the expiration of the initial period of 15 days. There is really no warrant for reading  in the  words used by the rule making authority any restriction  that further  period must be mutually fixed before the  expiration of  the initial period of 15 days. It must be  remembered that  the object  of this  provision  is that, as  far as  possible, the  employer and  the  employee should arrive  at an  agreement in  respect  of  the  change desired by the employee and it is only where an agreement is not possible that the employee should be allowed to approach the Labour  Court. The provisions of the Act are intended to bring about  settlement of disputes between the employer and the employees  and so far as the methodology or mechanics of the resolution  of such  disputes is concerned, the greatest importance is  attached by  the legislature to settlement by negotiations.  It   is   only   where   settlement   through negotiations  fails   that  other  modes  of  resolution  of disputes are  provided by  the legislature  in the different provisions of the Act. It is in the light of this philosophy underlying the  provisions of  the Act  and this  policy and principle to  promote, as  far as  possible,  settlement  by negotiation and  avoid adjudication,  that the words used by the rule  making authority  in rule  53(2) must be construed and if  that is done, there can be little doubt that further period may  be mutually  fixed between  the employer and the employee even  after the  initial  period  of  15  days  has expired. It is quite possible that even after the expiration of the  initial period  of 15  days, the  employer  and  the employee may  come together  and arrive at a settlement. Why should that  be discouraged  by compelling  the employee  to file an  application under s. 78(1) (A) (a) (i) within three months of  the expiration  of the initial period of 15 days, on pain  of his  application becoming  time barred.  Such an interpretation would  not advance  the object and purpose of the Act.  The employer and the employee may very well agree, even after  the expiration of the initial period of 15 days, that they  will try to negotiate a settlement and that would impliedly mean  that during  the time fixed by them for such negotiations, the  employee should  not rush  to the  Labour Court. It is only when such period mutually 825 fixed by  them expires  without any  settlement having  been arrived at  that a  dispute can  be  deemed  to  arise,  for adjudication of  which the  employee may approach the Labour Court under  s. 78(1) (A) (a) (i). We are, therefore, of the view that further period for arriving at a settlement can be mutually fixed  by the  employer and the employee even after the expiration  of the  initial period  of 15 days and where such is  the case,  the dispute  would be deemed to arise on the expiration  of such  further period, if within that time no settlement  is arrived  at between the parties. We should of course make it clear that prima facie it seems to us that such further  period cannot  be mutually  fixed after  three months have  elapsed from  the  expiration  of  the  initial period of  15 days and the application of the employee under s.  78(1)(A)(a)(i)   has  already  become  barred  under  s. 79(3)(a).

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    It would, therefore, seem clear that if, as a result of what transpired  before  the  Labour  Commissioner,  further period for arriving at a settlement in respect of the change desired by  the respondent  was mutually  fixed between  the appellant and  the respondent,  the  dispute  would  not  be deemed to  have arisen  till the  expiration of such further period and  in that  event,  the  application  made  by  the respondent on  7th June,  1973 would  be  within  time.  The question, however,  is whether  it can  be said  at all that further period  was mutually  fixed by the appellant and the respondent before  the Labour  Commissioner. We do not think this question  can be  answered in favour of the respondent. If we  look at  the application of the respondent, we do not find in  it anything  even remotely  suggesting that further period for arriving at a settlement was mutually agreed upon between the  appellant and  the  respondent.  In  the  first place, there  must be  a specific period agreed upon between the parties.  Here we do not find any averment of a specific period.  Even   if  we   construe  the  application  of  the respondent most liberally, the utmost we can extract from it is that  adjournment must  have been  granted by  the Labour Commissioner to  the  Labour  Officer  for  the  purpose  of arriving at a settlement upto a specific date and that would indicate a  specific period.  The difficulty, however, still remains that  there is no averment that such specific period was mutually fixed by the parties. The only averment made in the application  of the  respondent is  that at  the hearing before the  Labour Commissioner,  the Labour  Officer of the appellant "took  adjournment  to  make  a  compromise",  but ultimately no  compromise was  arrived at.  It is  not  even stated in  the application  that the respondent consented to the adjournment,  so that the application for adjournment by the appellant  and the  consent to  the adjournment  by  the respondent could  be  construed  as  an  agreement  mutually fixing further  period for  arriving at  a settlement. There being  absolutely   no  averment  of  further  period  being mutually fixed  between the  parties, it is difficult to see how the  case of  the respondent could be brought within the latter part  of rule  53(2). It  was never  the case  of the respondent that  further period  was mutually fixed and that saved his  case from  the bar of limitation. The relief that he asked  for from  the Labour  Court as  well as Industrial Court was  condonation of delay but so far as this relief is concerned, the  Labour Court  has unfortunately  no power to condone the delay and hence 826 his request  was rejected.  We are,  therefore, of  the view that the  High Court  was  in  error  in  holding  that  the application made  by the  respondent under s. 78(1)(A)(a)(i) was within  three months  of the  arising of the dispute and was hence not barred under s. 79(3) (a).      We accordingly  allow the  appeal set  aside the  order passed by  the High  Court and  restore  the  order  of  the Industrial Court rejecting the application of the respondent as barred  under s.  79(3)(a). So  far as  the cost  of this appeal is  concerned, when the appellant was granted special leave, it  was made  a condition that the appellant would in any event  pay the  cost of  the respondent.  Therefore, the appellant, though it has succeeded, will pay the cost of the appeal to the respondent. V.P.S                                        Appeal allowed. 827