18 December 1975
Supreme Court


Case number: W.P.(C) No.-005222-005222 / 1985
Diary number: 65857 / 1985
Advocates: S. K. VERMA Vs V. K. VERMA








CITATION:  1976 AIR  425            1976 SCR  (3)  12  1976 SCC  (2)  82  CITATOR INFO :  R          1980 SC1896  (80)  R          1988 SC1340  (7)  D          1990 SC1426  (31)

ACT:      Constitution of India Article 226 and 226(1A)-Powers of High Court  to issue  Writ against arbitrators under section 10A  of   Industrial  Disputes  Act-  Arbitration  Act-Error apparent on  the face of the record-Speaking award- Error of Law. Industrial  Disputes Act, 1947-Secs. 2(k) 10-A, 23, 24, 33C- Whether  employers can be awarded compensation for loss of profit  due to  illegal strike  under Industrial Disputes Act-Industrial Dispute-Enforcement of special rights created by special  statute whether confined to remedies provided by the statute.

HEADNOTE:      During the  year 1948,  the respondent, workmen working with both  the appellants  went on illegal strike on account of Trade  Union rivalry. The workmen were not paid wages for the strike  period and  the  appellants  lost  their  profit during the  period. The  employers and  the workmen  entered into an  agreement during  the pendency  of the conciliation proceedings and  referred the claims of workmen for salaries during the strike period and the claims of the employers for compensation for  loss  due  to  the  strike  to  the  joint arbitration of two retired High Court Judges and one retired Member of  a Labour Appellate Tribunal under section 10-A of the Industrial Disputes Act 1947.      The arbitrator  delivered their award and held that the workmen participating  in the  strike were  not entitled  to wages  for  the  strike  period.  The  arbitrators  however, awarded huge  compensation  to  the  employers  against  the workmen for  the losses incurred by the employers during the strike period.  The workmen  challenged the award as illegal and void by filing two writ petitions in the High Court. The High Court upheld that part of the award which directed that the workmen participating in tho strike were not entitled to wages. The High Court however, quashed the part of the award which directed payment of compensation by the workers to the management.



    In appeal  by Special  Leave  under  Article  136,  the appellants contended:-      1. The award under section 10-A of the Act savours of a private arbitration  and is not amenable to correction under Article 226 of the Constitution.      2. The award of compensation by the arbitrators suffers from no vice which can be regarded as recognised grounds for the High Court interference. ^      HELD: (1) The expansive and extraordinary powers of the High Court  under Article  226, as  wide as the amplitude of the language used, indicates and so can affect "any person", even a  private individual  and be  available for "any other purpose", even  one for  which another remedy may exist. The insertion of  Article 226(1A) reiterates that writ power can be  exercised   against  any  person  by  reference  to  the residence of  such person.  It is  one thing  to affirm  the jurisdiction and  another to  authorise free  exercise. This Court has  spelt out wise and clear restraints on the use of this extraordinary remedy and High Courts will not go beyond those wholesome  inhibitions except where the monstrosity of the situation  or other  exceptional circumstances  cry  for timely judicial interdict or mandate. [17C-E]      2. An  arbitrator exercising  powers under  section 10A can bind  even those who are not parties to the reference or agreement and  the whole  exercise under section 10A as well as the  source of  the force  of the  award  on  publication derive from  the statute. It is legitimate to regard such an arbitrator now as part of the methodology of the sovereign’s dispensation of  justice, thus falling within the rainbow of statutory tribunals  amenable to  judicial review. The award in the present case is not beyond the legal reach of Article 226. [18B-C] 13      3. The  answer to  the question  whether the High Court should have  exercised its  powers under  Article 226 in the present case  will depend  upon whether  the arbitrator  has tied himself  down to obviously unsound legal proposition in reaching his  verdict appearing  from the face of the award. The arbitrator  may not  state the law such, even- then such cute silence  confers no greater or subtler: immunity on the award than  plain speech. The need for speaking order, where considerable  numbers  are  affected  in  their  substantial rights, may  well be  a facet  of natural  justice  or  fair procedure although in this case we do not have to go so far. The law  sets no premium on juggling with drafting the award or hiding  the legal error by balancing out. The inscrutable face of  the sphinx  has no  better title to invulnerability than a  speaking face  which is  a candid index of the mind. [19D. 20F-H]      4. According to the arbitrators, the strike was illegal being in  violation of  section 24  of the  Act. the illegal strike was  animated by  inter-union power struggle and that it inflicted  loss on  the management  by forced closure and that the  loss flowing  from the  strike was  liable  to  be recompensed by  award of damages. In this chain of reasoning the question  of law  whether an illegal strike causing loss of  profit   justifies  award   of  damages  is  necessarily involved.  The   arbitrator  held  in  the  affirmative  and according to  us it  is an  unhappy error  of  law.  In  the present  case  the  arbitrators  have  made  a  sufficiently speaking award both on facts and on law. After coming to the conclusion that  the  strike  was  illegal  they  held  that compensation  necessarily  follows  based  on  the  rule  of English common  law. The  English cases laying down the rule



of  common  law  were  a  response  to  the  requirement  of Industrial civilization  of the  19th Century England. Trade and industry  on the  laissez faire  doctrine flourished and the law  of torts was shaped to serve the economic interests of the trading and industrial community. Whatever the merits of the norms, violation of which constituted ’conspiracy’ in English  Law,   it  is   a  problem   for  creative   Indian Jurisprudence to  consider how far a mere combination of men working for  furthering certain  objective can be prohibited as  a  tort  according  to  the  Indian  value  system.  Our constitution guarantees  the right to form associations, not for gregarious  pleasure, but  to fight  effectively for the redressal of  grievances. Our  constitution is  sensitive to workers rights.  English history,  political theory and life style being  different  from  Indian  conditions  where  the Father of the Nation organised boycotts and mass satyagrahas we  cannot   incorporate  English   conditions  without  any adaptation into Indian Law. [21B-C, 22A, B-C, D]      5. Even  in England, till recently it could not be said with  any   certainty  that  there  was  any  such  tort  as conspiracy. The  tort is  unusual because  it emphasizes the purpose of  the defendants  rather than  the result of their conduct. Even  when, there  are mixed motives liability will depend on  ascertaining which  is the  predominant object of the true  motive or  the real  purpose of the defendant. The motive of  an illegal  strike may be to advance the workers’ interest or  steal a  march over  a rival union but never or rarely to  destroy or  damage the  industry. However if some individuals destroy  the plant  and machinery  willfully  to cause loss  to the  employer such individuals will be liable for the  injury so caused. Sabotage is no weapon in workers’ legal armoury.  It is  absolutely plain  that  the  tort  of conspiracy necessarily  involves advertence to the object of the combination  being  the  infliction  of  damage  on  The plaintiff. The strike may be illegal but if the object is to bring the  employer to  terms with the employees or to bully the rival  trade union  into submission  there cannot  be an actionable combination  in tort.  In the  present case,  the arbitrators did  not investigate  the object  of the strike. The arbitrators  assumed that  if the  strike is illegal the tort  of  conspiracy  is  made  out.  The  counsel  for  the appellants fairly conceded that the object of the strike was inter-union rivalry.  There is thus a clear lapse in the law on the  part of  the arbitrators manifest on the face of the award. [22F, 231B-C, E, H. & 24A-B]      6. It  is common  case that  the demand  for the  wages during the  strike period  constitutes an industrial Dispute within section  2(k) of  the Act.  It is  agreed by both the sides that  section 23 read with section 24 makes the strike in question  illegal. An  illegal strike  is the creation of the statute  and the  remedy for  the illegal strike and its fall, out  has to  be sought  within the  statute and not de hors 14 it. No  other relief  outside the  Act  can  be  claimed  on general principles  of jurisprudence.  The case  of  Premier Automobiles followed. [25 B-C]      7. The  enforcement of  a right or obligation under the Act must  be by  a remedy provided in the Statute. The right of the  management to  claim compensation is not provided by the Act,  and, therefore,  the arbitrators  Committed an  ex facie legal  error. The consent of the parties cannot create arbitral jurisdiction under the Industrial Disputes Act. The claim for  compensation  cannot  be  a  lawful  subject  for arbitration because  it is not covered within the definition



of Industrial  Disputes in  section 2(k).  We are  unable to imagine a tort of liability or compensation based on loss of business being  regarded as an industrial dispute as defined in the Act. Section 33 provides for speedy recovery of money due to  a workman  from an  employer under  a settlement  or award. It  does not  provide for  recovery of  money by  the employer from  the workman.  Obviously because  the  workman belongs to  the weaker  section. Claims by employers against the workmen  on grounds of tortious liability have not found a place in the pharmacopeia of Indian Industrial Law. [26 D, 27A, C, D-E]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeals Nos. 1721- 1728 of 1969.      Appeals by  Special Leave  from the  Judgment and order dated the 2nd May 1962 of the Patna High Court of Judicature at Patna, in M.J.C. Nos. 475 and 498 of 1959.      A. B.  N. Sinha,  B. P. Maheshwari and Suresh Sethi for the Appellants (in both the appeals).      B. C.  Ghose, S.  S. Jauhar, D. N. Pandey, A. Sinha and D.  P.  Mukherjee  for  Respondent  1  (In  C.A.  1727)  and Respondents 1-3 (In CA 1728).      D. P.  Singh, S.  C. Agarwal  and  V.  J.  Francis  for respondents 7  and  8  (In  CA  1727  and  Respondent  4  in (1728/69).      The Judgment of the Court was delivered by      KRISHNA IYER,  J.-We permit ourselves a few preliminary observations disturbingly  induced  by  the  not  altogether untypical  circumstances   of  these   two  appeals,  before proceeding to  state the  facts, set out the submissions and decide the points.      Industrial law  in India  has not fully lived up to the current  challenges   of  industrial   life,  both   in  the substantive norms  or regulations binding the three parties- the States,  Management and  Labour-and  in  the  processual system which  has baulked,  by dawdling  dysfunction,  early finality and  prompt remedy  in a sensitive area where quick solution is  of  the  very  essence  of  real  justice.  The legislative and  judicial processes have promises to keep if positive  industrial   peace,  in   tune  with  distributive economic justice  and continuity  of active production, were to be  accomplished. The architects of these processes will, we hopefully  expect,  fabricate  creative  changes  in  the system, normative and adjectival.      The two  appeals before us, passported by special leave under Art.  136, relate  to an  industrial dispute  with its roots in  1948, meandering along truce union rivalry and the like, into strikes and settlements, the last of which led to an arbitration  award in  1959 which,  in turn, prompted two writ petitions before the High Court. After a spell of a few years they  ripened into  a judgment.  Appeals to this Court followed  and,   after  long  gestation  of  six  years  for preparation of papers and a 15 like period  the  cases  are  ready  for  final  hearing  or parturition, in  all 12  years after  the grant of leave. By this cumulative  lapse of time the generation of workers who struck work two decades ago have themselves all but retired, the representative  Union itself which sponsored the dispute has, the  other  side  faintly  states,  ceased  to  command representative character,  the Managements  themselves have, out of many motives, disclaimed the intention to recover the



huge sums  awarded to  them by  the arbitrators and the only survival after  death, as  it were, is a die-hard litigation tied up  to a few near-academic, but important, legal points for adjudication by the highest Bench!  On this elegiac note we will  enter the  relevant area  of facts and law since we must decide cases brought before us, however stale the lis.      At this  stage we  may mention  our strong feeling that where the superior courts, after hearing full arguments, are clearly inclined  to, affirm  the judgment  under appeal for substantially similar reasons as have weighed with the lower Court,  there  is  no  need  to  give  lengthy  reasons  for dismissing the appeal. Brevity, except in special cases, may well fill  the bill  where the  fate is  dismissal. On  this score we  are disposed  to make  short shrift of the appeals with stating  but the  necessary facts  and focusing  on the larger legal  facets.  Nevertheless,  the  significance  and plurality of  the points pressed have defeated condensation. D The facts      Two connected  managements of  industries in  the  same locality, who  figure as appellants before us, had a running industrial dispute  with their workers, which has had a long history moving  in a  zigzag course  and  sicklied  over  by alleged internecine trade-union strife. There were two trade unions  which  were  perhaps  of  competitive  strength  and enjoying recognition.  One of  them, the  Rohtas  Industries Mazdoor  Sangh  (for  short,  the  Mazdoor  Sangh)  was  the representative union  during the  relevant period  while the other, the  Rohtas Industries  Seva Sangh  (for brevity, the Seva Sangh)  is not  a party before this Court and so we are not concerned with it except for the purpose of noticing its presence in  the settlement  of the dispute which starts the story so  far as  the litigation  is concerned.  There was a strike in  the Industry  (for our  purposes this  expression embraces both the appellants) which came to an end by virtue of a memorandum of agreement dated October 2, 1957, to which not merely the management but also the two registered unions aforementioned and  the two  unregistered unions which had a lesser  following,   were  party.  The  terms  of  the  said agreement provided inter alia that :           "The employees’  claim for  wages and salaries for      the period  of  strike  and  the  company’s  claim  for      compensation  for   losses  due   to  strike  shall  be      submitted for arbitration of Sri J. N. Majumdar and Sri      R. C.  Mitter, ex-High  Court Judges  and Ex Members of      the  Labour   Appellate  Tribunal  of  India  as  joint      arbitrators and  their decisions  on the  two questions      shall be final and binding on all the parties."                                      (Clause 7 of agreement) 16 This agreement was admittedly arrived at during conciliation proceedings contemplated  by the  Industrial  Disputes  Act, 1947 (for  short, the  Act) and the reference to arbitration spelt out in clause 7 directly and. admittedly fell under s. 10A of the Act.      It is  apparent that the arbitrators were seized of two questions: (a)  the claim  of the  workers for wages for the period of  strike; and  (b) the  claim of the management for compensation for  its losses  flowing from  the strike.  The Board of  arbitrators, two  retired Judges  of the  Calcutta High Court-held  extensive hearings spread over a year and a half,  made   a  lengthy  award  marshalling  the  evidence, adducing the  reasons, discussing  the law and recording its decision on the two vital issues. At the end of the detailed and reasoned record of conclusions, the award runs thus :



         "Our award accordingly is:-           (1) That  the workmen  participating in the strike      are not  entitled to  wages and salaries for the period      of the strike.           (2) That  the company  do recover from the workmen      participating in  the strike,  compensation assessed at      Rs. 80,000(rupees eighty thousand).           (3) That  the workmen jointly and severally do pay      to the  company one  eighth of  the total  costs of the      arbitration. In  default of payment the company will be      at liberty  to recover  the same  in such  manner as it      thinks fit.  Subject to  this the parties do bear their      respective costs."      The workmen  were deprived  of their  wages during  the period of  the. strike  on the  score that it was an illegal strike. Both  sides seem to have accepted this finding after an unsuccessful  challenge in  the High  Court  and  happily industrial peace  is said  to be  prevailing currently. What did hurt  the Mazdoor Sangh more and what the management did try to  have and to hold as a bonanza was the second finding that the  strikers, apart.  from forfeiting  wages,  do  pay compensation in  the huge  sum of Rs. 6,90,000/- in one case and Rs.  80,000/- in  the other,  for the  loss  of  profits suffered by  the manufacturing business of the management, a pronouncement unusual  even according  to  counsel  for  the appellant, although  sustainable in  law, according  to him. For the  workers this  unique direction of industrial law is fraught with  ominous consternation and dangerous detriment. The Mazdoor  Sangh challenged  the award as illegal and void by filing two writ petitions but the High Court quashed that part of  the award which directed payment of compensation by the workers  to the  management and, as earlier pointed out, both sides  have chosen to abide by the award in relation to the denial of wages during the strike period. The Main Points Urged      The short but important issue, which has projected some serious questions of law, is as to whether the impugned part of the  award has; been rightly voided by the High Court. We may as well formulate 17 them but  highlight the  only major  submission that  merits close  examination,   dealing  with   the  rest  with  terse sufficiency. In  logical order,  counsel for  the  appellant urged that  (1) (a) an award under s. 10A of the Act savours of a  private arbitration  and is not amenable to correction under Art.  226 of  the Constitution.  (b) Even  if there be jurisdiction, a  discretionary desistance  from its exercise is wise,  proper  and  in  consonance  with  the  canons  of restraint  this  Court  has  set  down.  (2)  The  award  of compensation by  the arbitrators  suffers from no vice which can be  regarded as a recognised ground for the High Court’s interference. (3) The view of law taken by the High Court on (1) the  supposed flaw in the award based on ’mixed motives’ for the  offending strike;  (ii) the  exclusion of  remedies other than  under s.  26 of  the Act;  and (iii) the implied immunity  from   all  legal   proceedings  against  strikers allegedly arising  from s.  18 of the Trade Unions Act, 1926 is wrong.  A few  other incidental arguments have cropped up but the core contentions are what we have itemised above. (1)-(a) & (b)      The expansive  and  extraordinary  power  of  the  High Courts under  Art. 226  as wide  as  the  amplitude  of  the language used  indicates and so can affect any person-even a private individual-and be available for any (other) purpose- even one for which another remedy may exist. f The amendment



to Art.  226 in  1963 inserting  Art. 226(1A) reiterates the targets of  the writ power as inclusive of any person by the expressive reference  to ’the residence of such person’. But it is  one thing  to affirm  the  jurisdiction,  another  to authorise its  free exercise  like a  bull in  a China shop. This Court  has spelt  out wise  and clear restraints on the use of  this extra-ordinary  remedy and High Courts will not go beyond  those  wholesome  inhibitions  except  where  the monstrosity  of   the   situation   or   other   exceptional circumstances cry  for timely judicial interdict or mandate. The mentor  of law  is justice  and a  potent drug should be judiciously administered.  Speaking in  critical  retrospect and portentous  prospect, the  writ power has, by and large, been the  people’s sentinel  on the qui vive and to cut back on or liquidate that power may cast a peril to human rights. We hold that the award here is not beyond the legal reach of Art. 226,  although this  power must  be  kept  in  severely judicious leash.      Many rulings  of the  High Courts,  pro and  con,  were cited before  us to  show that  an award under s. 10A of the Act is  insulated from  interference under  Art. 226  but we respectfully agree  with the  observations of Gajendragadkar J., (as  he then  was) in  Engineering Mazdoor Sabha v. Hind Cycles Ltd(1)  which nail the argument against the existence of jurisdiction. The learned Judge clarified at p. 640:           "Article 226  under which a writ of certiorari can      be issued in an appropriate case, is, in a sense, wider      than Art.  136, because the power conferred on the High      Courts to  issue certain  writs is  not conditioned  or      limited by  the requirement  that the said writs can be      issued only  against the orders of Courts or Tribunals.      Under Art. 226(1), an appropriate writ can      (1) [1963] Supp. I S.C.R. 625. 18      be issued  to any  person or  authority,  including  in      appropriate   cases    any   Government,   within   the      territories   prescribed.   Therefore   even   if   the      arbitrator  appointed   under  section  10A  is  not  a      Tribunal under  Art. 136  in a proper cases, a writ may      lie against his award under Art. 226". (p. 640)      We agree  that the  position of  an arbitrator under s. 10A of  the Act  (as it then stood) vis a vis Art. 227 might have been  different. Today, however, such an arbitrator has power to  bind  even  those  who  are  not  parties  to  the reference or  agreement and  the whole exercise under s. 10A as well  as  the  source  of  the  force  of  the  award  on publication derive  from the  statute. It  is legitimate  to regard such  an arbitrator now as part of the methodology of the sovereign’s dispensation of justice, thus falling within the rainbow  of statutory  tribunals  amenable  to  judicial review. i  This observation made en passant by us is induced by the  discussion at the bar and turns on the amendments to s. 10A  and cognate  provisions like  s. 23, by Act XXXVI of 1964.      Should the  Court invoke  this high  prerogative  under Art. 226 in the present case ? That depends. We will examine the grounds  on which  the High  Court has,  in the  present case, excised  a portion of the award as illegal, keeping in mind the  settled rules governing judicial review of private arbitrator’s awards.  Suffice it  to say,  an award under s. 10A is  not  only  not  invulnerable  but  more  sensitively susceptible to  the  writ  lancet  being  a  quasi-statutory body’s decision.  Admittedly, such  an award can be upset if an apparent  error of  law stains its face. The distinction, in this  area, between  a private award and one under s. 10A



is  fine,  but  real.  However  it  makes  slight  practical difference in  the present  case; in other cases it may. The further grounds  for  invalidating  an  award  need  not  be considered as enough unto the day is the evil thereof.      (2)  Thus,   we  arrive   at  a  consideration  of  the appellants second  submission, perhaps  the most significant in  the   case,  that  the  High  Court  had  no  legitimate justification to  jettison the  compensation portion  of the award.  Even  here,  we  may  state  that  counsel  for  the appellants, right at the outset, mollified possible judicial apprehensions springing  from striking  workers  being  held liable for  loss of  management’s profits  during the strike period by  the assurance  that his  clients were inclined to abandon realisation of the entire compensation, even if this Court up  held that  part of  the award  in reversal  of the judgment of  the High  Court a generous realism. He fought a battle for  principle, not  pecunia. We  record this welcome fact and proceed on that footing.      The relevant  law which  is beyond  controversy now has been clearly stated in Halsbury’s Laws of England thus :           "Error  of   law  on   the  face   of  award:   An      arbitrator’s award  may be  set aside  for error of law      appearing on the face of it, though the jurisdiction is      not lightly  to be  exercised. .  . The jurisdiction is      one that exists at common law independently of statute.      In order to be a ground for setting aside the award, an      error in law on the face of the award must be such that      there can  be found  in the  award, or  in  a  document      actually 19      incorporated with  it, some  legal proposition which is      the basis of the award and which is erroneous.      ....where the  question referred  for arbitration  is a      question of construction, which is, generally speaking,      a question  of law, the arbitrator’s decision cannot be      set aside  only be  cause the  court would  itself have      come to  a different  conclusion; but  if it appears on      the face of the award that the arbitrator has proceeded      illegally, as  for instance,  by deciding  on  evidence      which  was   not  admissible,   or  on   principles  of      construction which  the law do s not countenance, there      is error  in law  which may be ground for setting aside      the award.                       (para 623, p. 334, Vol. 2, Fourth Edn) We adopt  this as  sound statement  of  the  law.  Not  that English law  binds us but that the jurisprudence of judicial review in this branch is substantially common for Indian and Anglo-American systems  and  so  Halsbury  has  considerable persuasive value.  The wider  emergence of  common canons of judicial review  is a  welcome trend  towards  a  one  world public law.  Indeed, this  Court has  relied on  the leading English decisions in several cases. We may content ourselves with adverting  to  Bungo  Steel  Furniture(1)  and  to  the unreported decision  Babu Ram(2). In simple terms, the Court has to  ask itself  whether  the  arbitrator  has  not  tied himself down  to an  obviously unsound  legal proposition in reaching his  verdict as appears from the face of the award. Bhargava J.,  speaking for  the majority,  in Bungo Steel(1) stated the law:           "It is  now a  well-settled principle  that if  an      arbitrator, in  deciding a dispute before him, does not      record his reasons and does not indicate the principles      of law  on which  he has proceeded, the award is not on      that account  vitiated. It  is only when the arbitrator      proceeds to  give his reasons or to lay down principles



    on which he has arrived at his decisions that the Court      is  competent  to  examine  whether  he  has  proceeded      contrary to  law and  is entitled  to interfere if such      error in  law is  apparent on  the face  of  the  award      itself."                                                 (p. 640-641) In Bharat Barrel & Drum Manufacturing Co. (8) dealing with a private award  and the  conditions necessary for exercise of writ jurisdiction to correct an error of law apparent on the record, did  not lay  down the  law differently from what we have delineated.      In one  of the  leading English  cases Champsey Bhara & Co. (4)  followed in  India, Lord  Dunedin defined ’error of law on  the face of the award’ as ’where the question of law necessarily arises  on the  face of  the award  or upon some paper accompanying  and forming  part of the award’ and said that then  only the  error  of  law  therein  would  warrant judicial correction. The Law Lord expressed himself lucently when he stated:           "An error  in law  on the face of the award means,      in their  Lordships’ view,  that you  can find  in  the      award . . . some legal      (1) [1967] 1 S.C.R.633.  (2) C.A.107 of 1966 decided on                                                     5-12-68.      (3) A.I.R 1967 S.C. 361.               (4) 50 I.A. 324. 20      proposition which  is the  basis of the award and which      you can, then say is erroneous." Williams J.,  in the  case of  Hodkinson v. Verne(1) hit the nail on  the head  by  using  the  telling  test  as  firmly established, viz.,  ’where the  question of  law necessarily arises on  the face  of the award’. In this view the enquiry by the  Court before  venturing to interfere is to ascertain whether an  erroneous legal  proposition is the basis of the award. Nay,  still less.  Does a question of law (not even a proposition of  law) necessarily arise on the award followed by a flawsome finding explicit or visibly implicit? Then the Court can correct.      Tucker J.,  in James  Clark (2)  formulates the  law to mean that  if the  award were  founded on  a  finding  which admits of  only one proposition of law as its foundation and that law  is erroneous  on its face, the Court has the power and, therefore,  the duty  to set  right.  While  the  Judge cannot explore,  by changing  subterranean routes  or ferret out by  delving  deep  what  lies  buried  in  the  unspoken cerebration of the arbitrator and ‘ interfere with the award on the discovery of an error of law by such adventure, it is within his  purview to look closely at the face of the award to discern  the law  on which the arbitrator has acted if it is transparent,  even translucent  but lingering between the lines or  merely wearing  a  verbal  veil.  If  by  such  an intelligent inspection  of the mien of the award-which is an index of  the mind of the author-an error of law forming the basis of  the verdict is directly disclosed, the decision is liable to judicial demolition. In James Clark (2), the issue was posed  with considerable  clarity and nicety. If, at its face value,  the award  appears to  be based on an erroneous finding of law alone, it must fail. The clincher is that the factual  conclusion   involving  a   legal   question   must necessarily be  wrong in point of law. Even though the award contains no statement of the legal proposition, if the facts found raise  ’a clear point of law which is erroneous on the face of it’, the Court may rightly hold that an error of law on the face of the award exists and invalidates.      Let  us  put  the  proposition  more  expressively  and



explicitly. What  is important  is a question of law arising on the  face of  the facts  found and  ’F its  resolution ex facie of  sub silentio. The arbitrator may not state the law as such.  Even then  such cute silence confers no greater or subtler immunity  on the  award than  plain speech. The need for  a   speaking  order,  where  considerable  numbers  are affected in  their substantial  r t  rights, may  well be  a facet of  natural justice  or fair  procedure, although,  in this case,  we do  not have  to go  so far. If, as here, you find an  erroneous   law as the necessary buckle between the facts found  and the  conclusions recorded,  the award bears its  condemnation  on  its  bosom.  Not  a  reference  in  a narrative but  a clear legal nexus between the facts and the finding. The  law sets  no premium on juggling with drafting the award  or hiding  the legal  error by  blanking out. The inscrutable face  of the  sphinx  has  no  better  title  to invulnerability than a speaking face which is a candid index of the  mind. We  may, by  way aside,  express hopefully the view that a minimal judicialisation by statement, laconic or lengthy, of  the essential  law that guides the decision, is not only  reasonable and  desirable but  has, over the ages, been observed by arbitrators and quasi-judicial tribunals as a norm of processual justice. We      (1) [1857] 3 C.B. (N.S.) 189,          (2) [1944]1 K.B.                                                         566. 21 do not  dilate on  this part  of  the  argument  as  we  are satisfied that  be the  test the  deeply embedded  rules  to issue certiorari  or the traditional grounds to set aside an arbitration award ’thin partition do their bounds divide’ on the facts and circumstances of the present case.      The decisive  question now  comes to  the fore. Did the arbitrators commit  an error of law on the face of the award in the  expanded sense  we have  explained ? The basic facts found by  the arbitrators  are beyond dispute and admit of a brief statement.  We summarise the fact situation succinctly and fairly  when we state that according to the arbitrators, the strike  in question was in violation of s. 24 of the Act and therefore  illegal.  This  illegal  strike  animated  by inter-union  power   struggle,  inflicted   losses  on   the management by  forced closure.  The loss  flowing  from  the strike was  liable to be recompensed by award of damages. In this  2chain   of  reasoning  is  necessarily  involved  the question of law as to whether an illegal strike causing loss of profit  is a  delict justifying  award  of  damages.  The arbitrators held,  yes. We  hold this to be an unhappy error of law-loudly  obtrusive on the face of the award. We may as well set out, for the sake of assurance, the simple steps in the logic  of the  arbitrators best  expressed in  their own words which we excerpt:           "(a) It  is argued  that strike  is  a  legitimate      weapon in  the hands  of workmen for redressal of their      grievances and  if they  are made  liable for  loss  on      account of  strike then  the basic  idea of strike as a      means for having the grievances redressed will be taken      away.  The   fallacy  in   this  argument  is  that  it      presupposes  the   strike  not   to  be   illegal   and      unjustified. In  the pre  sent case we found the strike      to be  otherwise. The  workmen have  got  no  right  of      getting their  grievances  redressed  by  resorting  to      illegal means which is an offence.           (b)  It   has  been  argued  that  the  claim  for      compensation is not an industrial dispute as defined in      the Industrial  Disputes Act.  Considering the issue of      compensation in  a water-tight compartment the argument



    might appear  to be attractive. But, in our opinion, in      this case  the claim for compensation by the company is      a consequence  flowing from  an admitted  industrial  J      dispute, which  in this  case is whether the strike was      illegal and/or unjustified and as against the condition      of service as laid down in the certified standing order      on  which  point  our  finding  has  been  against  the      workmen. ."      The award  of the  Tribunal, in  its totality, is quite prolix the  reasons stated  in arguing  out its  conclusions many and  thus it  is just to state that in the present case the arbitrators-two  retired Judges  of  the  Calcutta  High Court-have made  a sufficiently  speaking award  both  t  on facts and  on law.  They have  referred to  the strike being illegal with  specific reference  to the  provisions of  the Act, but  faulted them selves in law by upholding a case for compensation as  axiomatic, necessarily  based on  a rule of common law  i.e., English common law. The rule of common law thus necessarily arising on the face of the award is a clear question of law. 22      What is  this rule  of  common  law?  Counsel  for  the appellants inevitably relied on the tort of ’conspiracy’ and referred us  to Moghul  Steamship Co.(1); Allen v. Floor(2); Quinn v. Leathem(3) and Sorrel v. Smith (4). These decisions of the  English  Courts  are  a  response  to  the  societal requirements of  the industrial  civilisation  of  the  19th Century England.  Trade and  Industry on  the laissez  faire doctrine flourished  and the law of torts was shaped to sene the  economic   interests  of  the  trading  and  industrial community. Political  philosophy and  economic necessity  of the dominant  class animate  legal  theory.  Naturally,  the British  law  in  this  area  protected  business  from  the operations of  a combination  of men,  including workers, in certain circumstances.  Whatever the  merits of  the  norms, violation of  which constituted ’conspiracy’ in English law, it  is  a  problem  for  creative  Indian  jurisprudence  to consider, detached  from anglo-phonic inclination, how far a mere combination  of  men  working  for  furthering  certain objectives can  be prohibited  as a  tort, according  to the Indian value  system. Our  Constitution guarantees the right to form  associations, not  for gregarious  pleasure, but to fight effectively  for  the  redressal  of  grievances.  Our Constitution is  sensitive to  workers’ rights. Our story of freedom and  social emancipation  led by  the Father  of the Nation has  employed, from  the highest of motives, combined action to  resist evil  and to  right wrong even if it meant loss of  business profits for the Liquor vendor, the brothel keeper and  the foreign-cloth dealer. Without expatiating on these seminal  factors, we may observe that English history, political theory  and life-style being different from Indian conditions  replete   with  organised   boycotts  and   mass satyagrahas, we cannot incorporate English torts without any adaptation into  Indian law. A tort transplant into a social organism is  as complex and careful an operation as a heart- transplant into  an individual  organism, law  being  life’s instrumentality and  rejection of  exotics being  a  natural tendency. Here, judges are sociological surgeons.      Let us examine ’conspiracy’ in the English Law of Torts to see  if even there it is possible to hold that an illegal strike per  se spells  the wrong.  We may  state  that  till recently it  could not be said with any certainty that there was any  such tort  as ’conspiracy’.  Salmond  thought  that there was  not (See  Salmond-Law of Torts-p. 505, 15 s Ed.). It is  interesting that  in Edition  of  Salmond,  Mogul  is



linked up  by the  learned author with a capitalist economy. Be that  as it  may, the common law of England today is more or less clear, some rumblings notwithstanding.           "A combination  wilfully  to  do  an  act  causing      damage to  a man  in his  trade or  other interests  is      unlawful and  if damage in fact is caused is actionable      as a  conspiracy. To  this there  is an exception where      the defendants’  real and  predominant  purpose  is  to      advance their own lawful interests in a matter in which      they  honestly   believe  that  those  interests  would      directly suffer if the action against the plaintiff was      not taken.  In truth, the Crofter case has made section      1 1, (1) [1892] A.C. 25.                       (2) [1898] A.C. 1. (3) [1901] A.C. 495.                    (4) [1925] A.C. 700. 23      of the  Trade Disputes  Act, 1906, largely unnecessary,      for   there will now be few conspiracies arising out of      trade disputes which are not protected at common law."                    (pp. 508-509, 15th Edn., Sweet & Maxwell)                                             (emphasis, ours) The essence  of actionable conspiracy is best brought out by Salmond:           "The tort  is unusual  because it  emphasises  the      purpose of  the defendants  rather than  the results of      their conduct."                          (p.513, 15th Edn., Sweet & Maxwell)                                             (emphasis, ours)      Even when  there are  mixed  motives,  ’liability  will depend on  ascertaining which  is the  predominant object or the true  motive or  the real purpose of the defendant. Mere combination or action, even  if it be by illegal strike, may be far  away from  a ’conspiracy’  in the - sense of the law because in all such cases, except in conceivably exceptional instances, the  object or  motive is to advance the workers’ interests or  to steal  a march over a rival union but never or rarely to destroy or damage the industry. It is difficult to fancy  workers  who  live  by  working  in  the  industry combining to  kill the  goose that lays the golden eggs. The inevitable by-product  of combination  for cessation of work may be  loss to the management but the obvious intendment of such a  collective  bargaining  strategy  is  to  force  the employer to  accept the demand of the workers for betterment of their  lot or  redressal of  injustice,  not  to  inflict damage on the boss. In short, it is far too recondite for an employer  to   urge  that  a  strike,  albeit  illegal,  was motivated by  destruction of  the industry. A scorched earth policy may,  in critical  times of  a  war,  be  reluctantly adopted by  a people,  but such an imputed motive is largely imaginary in strike situations. However, we are clear in our minds that  if some  individuals destroy the plant or damage the machinery  wilfully to  cause loss to the employer, such individuals  will  be  liable  for  the  injury  so  caused. Sabotage is no weapon in workers’ legal armoury.      The leading  case of Sorrel v. Smith (supra) emphasizes that a combination of two or more persons for the purpose of injuring a  man in  his trade is unlawful and, if it results in damage  to him,  is actionable.  The real  purpose of the combination  is  the  crucial  test  between  innocence  and injury. It may well be that even where there is an offending object, it  may be  difficult for a court to hold that there is a  tort if  one may  read into the facts an equal anxiety for the  defendants to  promote their success which produces the plaintiff’s  extinction. There is a penumbral region, as Lord Sumner pointed out in Sorrel (Supra): ‘



         "How any definite line is to be drawn between acts      whose  real  purpose  is  to  advance  the  defendant’s      interests, and  acts, whose  real purpose  is to injure      the plaintiff  in his trade, is a thing which I feel at      present beyond my power."      It is  absolutely plain  that the  tort  of  conspiracy necessarily involves  advertence to  and affirmation  of the object of  the combination being the infliction of damage or distraction on the plaintiff. The strike 3-L390SCI/76 24 may be illegal but if the object is to bring the employer to terms with  the employees  or to bully the rival trade union into submission,  there cannot  be an actionable combination in tort.  In the  present case,  it is  unfortunate that the arbitrators simply  did not  investigate or  pass  upon  the object of  the strike. If the strike is illegal, the tort of conspiracy is made out, appears to be the proposition of law writ tersely into the award. On the other hand, it is freely conceded by  counsel for  the appellant  that the object was inter-union rivalry.  There is thus a clear lapse in the law on the  part of  the arbitrators  manifest. , on the face of the award.      We have  earlier referred  to the need for a fresh look at conspiracy F as a tort when we bodily borrow the elements of English  law and  apply them to Indian law. It is as well that we  notice that  even in England considerable criticism is  mounting   on  the  confused  state  of  1  the  law  of conspiracy. J.T.  Cameron has argued (in 1965 Vol. 28 Modern Law Review p. 448) that:      "experience has  already shown  that  conspiracy  is  a      hydra perfectly capable of growing two heads to replace      an amputated  one, and the authorities contain material      which could  be used  to impose  liability in very wide      and varied  circumstances. It  is time,  therefore,  to      consider what form legislation should take, and to urge      that the  proper  answer  is  to  remove  the  tort  of      conspiracy from  the law  altogether, and  with it  the      Rookes v.  Barnard version  of intimidation, and to put      in its place a different basis of liability.      (CONSPIRACY  AND  INTIMIDATION:  An  Anti-Meta-physical      Approach) The  author   complains  that   the  fundamental   basis  is unsatisfactory and uncertain and demands that a complete re- writing of  the principles  on which  the tort of conspiracy and intimidation is necessary.      We may  as  well  suggest  that,  to  silence  possible mischief flowing  from the  confused state  of the  law  and remembering how dangerous J it would be if long, protracted, but technically  illegal strikes  were  to  be  followed  by claims by  managements for compensation for loss of profits, a legislative  reform and re-statement of the law were under taken at  a time  when the  State is  anxious for industrial harmony  consistent   with  workers’  welfare,  This  rather longish discussion  has become necessary because the problem is serious  and sensitive  and the  law is somewhat slippery even in  England. We  are convinced  that the  award is  bad because the error of law is patent.      The High  Court has  touched upon another fatal frailty in the ten ability of the award of compensation for the loss of profits  flowing from  the illegal strike. We express our concurrence with  the High  Court that  the sole  and  whole foundation of  the award of compensation by the arbitrators, ignoring the  casual reference  to an  ulterior ,  motive of inter-union rivalry,  is  squarely  the  illegality  of  the



strike, The workers went on strike claiming payment of bonus as crystalized 25 by the earlier settlement (d/2-10-1957). There thus arose an industrial  dispute   within  s.  2(k)  of  the  Act.  Since conciliation proceedings  were pending  the strike  was ipso jure illegal  (ss. 23  and 24,.  The  consequence,  near  or remote, of  this combined  cessation of  work caused loss to the management. Therefore the strikers were liable in damage to make good the loss. Such is the logic of the award.      It is  common case  that the  demands  covered  by  the strike and  the  wages  during  the  period  of  the  strike constitute an  industrial dispute  within the  sense  of  s. 2(k), of  the Act. Section 23, read with s. 24, it is agreed by both  sides, make  the strike  in  question  illegal.  An ’illegal strike’  is a  creation of  the  Act.  As  we  have pointed out earlier, the compensation claimed and awarded is a direct  reparation for the loss of profits of the employer caused by  the illegal strike. If so, it is contended by the respondents, the remedy for the illegal strike and its fall- out has  to be sought within the statute and not de hors it. If this  stand of the workers is right, the remedy indicated in s.  26 of  the Act,  viz., prosecution  for starting  and continuing an  illegal strike,  is the  designated statutory remedy. No  other relief  outside the  Act can be claimed on general principles  of jurisprudence. The result is that the relief of  compensation by  proceedings  in  arbitration  is contrary to law and bad.      The Premier Automobiles Case(1) settles the legal issue involved in  the above argument. The industrial Disputes Act is a  comprehensive and  self-contained Code  so far  as  it speaks and  the enforcement  of rights  created thereby  can only be through the procedure laid down therein. Neither the civil court nor any other Tribunal or body can award relief. Untwalia J., speaking for an unanimous court, has, n Premier Automobiles (Supra) observed:      "The object  of the  Act, as its preamble indicates, is      to make  provision for the investigation and settlement      of industrial  disputes, which  means  adjudication  of      such  disputes   also.  The  Act  envisages  collective      bargaining, contracts  between Union  representing  the      workmen and  the management,  a matter which is outside      the realm  of the  common law  or  the  Indian  law  of      Contract." After sketching  the scheme  of the  Act, the  learned Judge stated the law thus.           ". .  . the  Civil Court will have no jurisdiction      to try  and adjudicate upon an industrial dispute if it      concerned enforcement  of certain  right  or  liability      created only under the Act." *            *            *            *              *           "In Deo  v. Bridges  (1831 1B  and  Ad,  847  (2)-      (1898)) A.C. 387 at p. 859 are the famous and of quoted      words of Lord Tenterden, C.J., saying:           "where an  Act creates  an obligation and enforces      the performance in a specified manner, we take it to be      a general  rule that  performance cannot be enforced in      any other."      (1) [1976] 1 S.C.R. 427. 26 Barraclough v. Brown & Ors(1), decided by the House of Lords is telling,  particularly Lord Watson’s statement of the law at p. 622:           "The right  and the remedy are given uno flatu and      one cannot be dissociated from the other."



In short, the enforcement of a right or obligation under the Act, must  be by a remedy provided uno flatu in the statute. To sum  up, in  the language of the Premier Automobiles Ltd. (Supra):           "If  the   industrial  dispute   relates  to   the      enforcement of  a right  or an obligation created under      the Act, then the only , remedy available to the suitor      is to get an adjudication under the Act."      Since the  Act which creates rights and remedies has to be considered  as  one  homogeneous  whole,  it  has  to  be regarded uno  flatu, in  one breath,  as it  were.  On  this doctrinal basis,  the  remedy  for  the  illegal  strike  (a concept which  is the  creature not of the common law but of s. 24  of the  Act) has to be sought exclusively in s. 26 of the Act. The claim for compensation and the award thereof in arbitral proceedings  is invalid on its face’on its face’ we say because this jurisdictional point has been considered by the arbitrators  and decided by committing an ex-facie legal error.      It was  argued, and  with force  in our  view, that the question of  compensation by  workers to  the management was wholly extraneous  to the  Act and  therefore,  outside  the jurisdiction of  a voluntary reference of industrial dispute under s.  10 A.  While we  are not  called upon to pronounce conclusively on the contention, since we have ex pressed our concurrence with  the High  Court on  other grounds, we rest content  with   briefly  sketching  the  reasoning  and  its apparent tenability.  The scheme  of  the  Act,  if  we  may silhouette it,  is to  codify the  law bearing on industrial dispute. The jurisdictional essence of proceedings under the Act is  the presence of an ’industrial dispute’. Strikes and lock-outs stem  from  such  disputes.  l  he  machinery  for settlement of  such disputes  at various  stages is provided for by  the  act.  The  statutory  imprimatur  is  given  to settlement and  awards, and  norms of  discipline during the pendency of  proceedings  are  set  down  in  the  Act.  The proscriptions stipulated,  as for example the prohibition of a strike,  are followed  by penalties,  if breached. Summary procedures for  adjudication as  to  whether  conditions  of service etc.,  of employees  have been  changed during the s pendency of  proceedings, special  provision for recovery of money due  to  workers  from  employers  and  other  related regulations, are  also written  into the  Act. Against  this backdrop, we have to see whether a claim by an employer from his workmen  of compensation  . consequent on any conduct of theirs, comes  within the  purview of the Act. Suffice it to say that  a reference  to  arbitration  under  s.  10  A  is restricted to  existing or  apprehended industrial disputes. Be it  noted that  we  are  not  concerned  with  a  private arbitration but  a statutory  one governed by the Industrial Disputes Act,  deriving  its  validity,  enforceability  and protective mantle  during the  pendency of  the proceedings, from 10 A. No industrial dispute, no valid arbitral      (1) [1897] A.C. 615. 27 reference. Once  we grasp  this truth, the rest of the logic is simple.  What is  the industrial  dispute in  the present case? Everything  that overflows  such disputes  spills into areas where  the arbitrator deriving authority under s. 10 A has no  jurisdiction. The  consent  of  the  parties  cannot create  arbitral   jurisdiction  under   the  Act.  In  this perspective, the  claim for  compensation can  be  a  lawful subject for  arbitration only  if it  can be accommodated by the  definition   of  ’industrial  dispute’  in  s.2  (k)  . Undoubtedly  this  expression  must  receive  a  wide  coll-



notation, calculated  as it  is to produce industrial peace. Indeed, the  legislation  substitutes  for  free  bargaining between the  parties a  binding award;  but what disputes or differences fall  within the  scope of  the Act? This matter fell for  the consideration  of the Federal Court in Western India Automobile Association(1). Without launching on a long discussion, we  may state  that  compensation  for  loss  of business is  not a  dispute or  difference between employers and workmen  ’which is connected with the employment or non- employment or the terms of employment or with the conditions of labour,  of any  person’. We are unable to imagine a tort liability or  compensation claim  based on  loss of business being regarded  as an  industrial dispute  as defined in the Act, having  regard to  the language  used, the  setting and purpose of  the statute  and the  industrial flavour  of the dispute as one between the management and workmen.      In this  context, we are strengthened in our conclusion by the  provisions of  s.  33C  which  provides  for  speedy recovery of  money due to a workman from an employer under a settlement or  an award,  but not  for the  converse case of money due to an employer from workmen. There is no provision in the  Act which  contemplates a  claim  for  money  by  an employer from  the workmen.-  And indeed, it may be a little startling to find such a provision, having regard to workmen being the  weaker section  and Part  IV of  the Constitution being loaded  in their  favour. The  new light  shed by  the benign  clauses   of  Part   IV  must   illumine  even  pre- Independence statutes in the interpretative process. As yet, and hopefully, claims by employers against workmen on ground of  tortious  liability  have  not  found  a  place  in  the pharmacopoeia of  Indian Industrial Law. However, as earlier stated, we do not pronounce finally as it is not necessary.      There was  argument at  the bar that the High Court was in error  in relying  on s. 18 of the Trade Unions Act, 1926 to rebuff  the claim  for compensation.  We have listened to the arguments  of Shri  B.C. Ghosh in support of the view of the High  Court, understood  on a wider basis. Nevertheless, we do  not wish to rest our judgment on that ground. Counsel for the  appellants cited  some decisions  to show  that  an award falling  outside the  orbit of  the Indian Arbitration Act can  be enforced by action in court. We do not think the problem so posed arises in the instant case.      We dismiss  the appeal but, in the circumstances, there will be no order as to costs. P.H.P.                                     Appeal dismissed.      (1) [1949] I L. L. J. 245. 28