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The Staff Superintendent of State Bank of Patiala Vs. the Presiding Officer and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 756 of 1980
Judge
Reported in1985(1)SLJ411(Delhi)
ActsIndustrial Disputes Act - Sections 10, 10(1), 12(5), 33, 33A; Evidence Act - Sections 123; ;Bank of Patiala Staff Rules, 1954; Monopolies and Restrictive Trade Practice Act - Sections 31(1); Industrial Disputes (Amendment) Act, 1971 - Sections 11A
AppellantThe Staff Superintendent of State Bank of Patiala
RespondentThe Presiding Officer and ors.
Advocates: Anand Prakash,; Samir, Prakash and; C.L. Choudhry, Advs
Cases ReferredPadfield v. Minister of Agriculture
Excerpt:
labour and industrial - discharge from service - sections 10, 12 and 33 of industrial disputes act, section 123 of indian evidence act and section 11a of industrial disputes (amendment) act, 1971 - petitioner discharged from service by management - tribunal ordered against petitioner - petition against such order - government cannot exercise power of reconsideration arbitrarily or without any justifiable ground - government's decision not to make reference under section 10 (1) vocative to principles of natural justice as no opportunity of hearing given to petitioner - government's decision to refer matter without recording reasons or material before it was invalid - compensation and not reinstatement was proper relief if termination of service was validly set aside - tribunal has no.....sachar, j.(1) this petition is directed against the aware dated 17-4-1980 given by the presiding officer. central government industrial tribunal-cum-labour court (and published in gazette dated it-5-1980) wherein it was held that the discharge of respondent no. 3 from service of the petitioner management was not justified and was illegal. consequently the same was set aside and the respondent no. 3 workman was directed to be reinstated with continuity of service, full back wages and other benefits.(2) the central government by its order dated 16-8-1974 made a reference to the industrial tribunal-whether the action of the management in terminating the services of respondent no. 3 was justified. the background leading to this reference is that the respondent no. 3 was charge sheeted by the.....
Judgment:

Sachar, J.

(1) This petition is directed against the aware dated 17-4-1980 given by the Presiding Officer. Central Government Industrial Tribunal-cum-labour Court (and published in Gazette dated IT-5-1980) wherein it was held that the discharge of respondent No. 3 from service of the petitioner management was not justified and was illegal. Consequently the same was set aside and the respondent No. 3 workman was directed to be reinstated with continuity of service, full back wages and other benefits.

(2) The Central Government by its order dated 16-8-1974 made a reference to the Industrial Tribunal-whether the action of the management in terminating the services of respondent No. 3 was justified. The background leading to this reference is that the respondent No. 3 was charge sheeted by the management by a chargesheet dated 8-12-1969. The management is stated to have held an enquiry and after the consideration of the enquiry report the respondent No. 3's services were terminated by an order dated 10-8-1971. The respondent No. 3 raised a dispute before the Conciliation Officer. Conciliation proceedings were held and the Conciliation Officer duly .made his report and after consideration of the report the Central Government by its order dated 1-8-1972 intimated its decision not to make a reference for adjudication. The order was in following words :

'IN continuation of this Ministry's letter No. L-12012] 35172-LRIII, dated the, 30th March, 1972 on the abovesubject, I am directed to say that Shri L. R. Singla has been discharged from the Bank's service on the basis of the findings of a properly held departmental enquiry. As such the action of the management does not appear to be mala fide. Government of India, thereforee, do not consider the dispute prima facie fit for reference to adjudication.

Subsequently, the Central Government passed, an order dated 16-8-1974 making a reference under Section 10 of the Industrial Disputes Act in the following words :-

Whether the action of the management of State Bank of Patiala in terminating the services of Shri L.R. Singla, Clerk-cum-typist, State Bank of Patiala, The Presiding Officer & Others Mohindergarh Branch with effect from the 14th August, 1971 :s justified? H not, to what relief is he entitled?'.

BEFOREthe Tribunal the management sought to justify its action and pleaded that a proper enquiry had been held and there was no illegality in it and raised other points. On this the Tribunal framed the following issues :-

1. Whether the reference is invalid oi vitiated for the reasons stated in para No. I of the preliminary objections? (M). 2. Whether a demand notice was given by the workman to the Bank. If not, is the reference valid by an individual? 3. Can this court adjudicate with regard to the pleas which were not taken in the previous proceedings including demand notice and proceedings before the Conciliation Officer by the parties? 4. What rules govern the conditions of service of the workman involved in this case? (M) 5. Whether the domestic enquiry is valid and proper and the action of the management based- thereon is illegal? 6. As in the terms of reference?

(3) The Tribunal first tried issue No 5 as a preliminary one and by its order dated 5-6-1976 came to the conclusion that the findings of the enquiry officer were perverse and the enquiry was thus vitiated. Thereafter the management sought opportunity and were allowed to lead evidence so as to justify its action in terminating the services of respondent No. 3. The Tribunal then decided the rest of the issues and by its order of 17-4-1980 set aside the termination of the respondent No. 3 and allowed his claim. It is in these circumstances that the present writ petition has been filed.

(4) At the outset Dr. Anand Prakash, learned counsel for the petitioner, management took up the pica reflected in Issue No. 1 namely-Uiat the government had no competence to make the reference and it was thereforee, vitiated. The Tribunal however, did not decide this issue because it took the view, and in .my opinion rightly that the challenge that the reference was invalid was based en the objection which could not be raised before the Industrial Tribunal, the later being a creature of the Statute and if at all the challenge can be made it could be made in writ proceedings.

(5) The points raised by Dr. Anand Prakash, the learned counsel for the management are broadly as follows : Point No. 1:

As the government had communicated its decision dated 1-8-1972 not to make the reference under Section 10(1) of the Act, it acted in breach of principles of natural justice to refer the matter for adjudication per its order dated 16th August, 1974 without first having given any opportunity of hearing or making representation against the proposed order of reference.

Point No. 2

THAT the government made a reference, after it had already refused to refer the matter earlier and recorded reasons for the refusal had been communicated to the parties in accordance with the Industrial Disputes Act, without recording reasons or having material before it, the said reference is invalid.

point No. 3.

THE Tribunal acted illegally in setting aside the termination of service of the workman. Even if termination of service was validly set aside compensation, and not reinstatement was the proper relief to be awarded.

The Tribunal exceeded its jurisdiction in purporting to award promotional benefits, which is our side the terms of reference.

(6) Now it is not disputed by the Counsel for the parties that by an order of 1-8-1972 the Central Government had communicated to them its refusal to refer the matter for adjudication. It is also not disputed that before making the order of reference dated 16-8-1974 the Central Government did not any opportunity of hearing or making a representation of any kind against the proposed decision to the petitioner management. Dr. Anand Prakash would have it that on these admitted facts alone the reference order of 16-8-1974 would be vitiated and by necessary consequence result in the Test of the proceedings leading even to the award as being null and void.

(7) Mr. Ramamurthy, fie learned counsel for the respondem, workman, however, takes the stand that it was not necessary in law to give any kind of hearing or opportunity to the petitioner 'management' before making a reference by the Central Government notwithstanding thru at an earlier stage at one point of time the Central Government had communicated its refusal to make a reference as per its order of 1-8-1972.

(8) Dr. AnandPrakash of course did not go so far as to contend that simply because the Central Government had refused to make a reference at one point of time, its power to make a reference stood exhausted and thereforee, it could not make an order of reference subsequently, even if it was of the opinion that the industrial dispute exists. He however. strongly contended that in a case where the government refuses to make a reference and communicates its reasons for it, as required by Section 12(5) of the Act, it becomes incumbent on the Government to give a hearing to the affected party i.e. the management, if subsequently it seeks to make a reference of that very dispute, lor adjudication.

(9) Section 10 of the Act empowers the appropriate Government where it is of the opinion that any industrial dispute exists or is apprehended it may at any time by order in writing refer the dispute to a Labour Court or a Tribunal for adjudication as the case may be Section 12 catalogues the duties of a Conciliation Officer and requires him where an industrial disputes exists or is apprehended to hold conciliation proceedings. The Conciliating Officer is to investigate the dispute and to make all efforts for inducing the parties to come to a fair and amicable settlement of the dispute. If no settlement of dispute is arrived at in course of conciliation proceedings he will send to the appropriate government a full report setting forth the steps taken up by him for bringing about a settlement thereof ... .. ... and the reasons on account of which a settlement could not be arrived at. Then conies Section 12(5) which may be read in full :- Section 12(5):

IF on a consideration of the report referred to in sub-section (4), the appropriate Government is satisfied that there is a eases for reference to a board. Labour Court. Tribunal or National tribunal. it may make such reference. Where the appropriate Government docs not make such a reference it shall record and communicate to the parties concerned its reasons thereforee.

Evidently the communicated. dated 1-3-1972 de-lining to make a reference was made in pursuance of Section 12(5) of the Act.

(10) Dr. Anand Prakash's main argument is that' on receipt of the order of 1-8-1972 the petitioner management was justified in assuming that there was an end of the controversy so far as reference of the matter to the Tribunal was concerned and that if this quietus was subsequently to be disturbed the least that was expected in the name of fair play was that the petitioner should have been given an opportunity and a hearing by the government before making the impugned order of reference dated 16-8-1974. According to the counsel not having been given an opportunity has vitiated the whole reference. The underlying assumption in this argument seems to be that as refusal was communicated under Section 12(5) and when subsequently a reference is made on 16-8-1974 it is again exercise of power under Section 12(5) and no review under the same provision is permissible unless first a hearing is given. But the argument is fallacious. It is by now well settled that when Section 12(5) says that the Government may made such reference it really means it may make such reference under Section 10(1). thereforee it would net be reasonable to hold E that Section 12(5) by itself and independently of 'Section 10(1) confers power on the appropriate Government to make a reference vide State of Bombay v. K. P. Krishnan : (1960)IILLJ592SC See also Bombay Union of Journalists and others V. The State of Bombay and another : (1964)ILLJ351SC .

(11) In Madras State v. C. P. Sarathy : (1953)ILLJ174SC the court observed that 'It must be remembered that in making a reference under Section 10(1) the Government is doing and administrative act and the fact that it has to form an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function .does not make it any the less administrative in character.'

(12) The question that if at an earlier time the Government has refused to make a reference it is not debarred from making the reference of the very same industrial dispute for the subsequent period, is no longer rest integra. Thus in Western India Watch Co. V. Its Workman : (1970)IILLJ256SC the Uttar Pradesh Government had refused io make a reference of the termination of an employee in 1959 presumably because the workman was not a member of the Union. The workman became a member of the Union some time .in 1962 and thereafter the State Government made a reference by its order dated 28-8-1962. This reference-was .challenged by the management by urging that the Government-could not take a somersault arid decide to make a reference for adjudication when it had earlier refused to do so and that by such act it would cause great dislocation in the industries as the employer had made' substitute arrangement 'This plea was negatived by the Supreme Court which observed that in the light of the nature of the functions of the government and the object en which the power is conferred en the tribunal under the Industrial Disputes Act. it would be difficult to, hold that once the Government has refused to refer, it cannot change its mind on a reconsideration of the matter either because new facts have come to-light or because it had misunderstood the existing facts or for any other relevant consideration and decide to make the reference.' The pregnantly added, 'in fact. when the Government refused to make a referees it does not exercise its power on the other hand it refuses to exercise its power and it is only when decides to refere that it exercises its power. Consequently, the power to refer cannot be said to have been exhausted when it has declined to make reference at an earlier stage.

(13) Similar view was taken in a subsequent case of Binny Limitea V. Their.workmen : (1972)ILLJ478SC wherein it was held that 'the mere fact that on two previous occasions .Government had taken the view that no reference was called for does 'not entitle us to conclude that there could' be no cause for reference in 1966.

(14) This question again came up- for consideration in M/s. Avon Services-Production-Agendes-CP) Ltd., V. Industrial that case the Government earlier by its communication of 19-2-1972 refused to make a reference about the termination of certain employees. Subsequently, however, by its order refused to do so and that by such act it would cause great dislocation in, the industries as the employer had made substitute arrangements. This plea was negatived by the Supreme Court which observed that in the. light of the nature of the functions of the government and the object on which the power is conferred on the tribunal under the Industrial Disputes Act, 'it would be difficult to hold that once the Government has refused to refer, it cannot change its mind on a reconsideration of the matter either because new facts have come to light or because it had misunderstood the existing facts or for any other relevant consideration and decide to make the reference.

(15) Similar view was taken in a subsequent case of Binny Limited V. Their Workmen : (1972)ILLJ478SC wherein it was held that 'the mere fact that on two previous occasions Government had taken the view that no reference was called for docs not entitle us to conclude that there could be no cause for reference in 1966.

(16) This question again came up for consideration in M/s Avon Services Production Agencies (P) Ltd. V. Industrial Tribunal Haryana and others : (1979)ILLJ1SC (Supra). In that case the Government earlier by its communication of 19-2-1972 refused to make reference about the termination of certain employees. Subsequently however; by its order of 23-11-1972 it referred the dispute namely-whether the retrenchment of these workmen was justified. The management objected to this reference. amongst others on the ground that after having once declined to make a reference it could not subsequently do so. Negativing this plea the court observed. that 'merely because the Government rejects a request for a reference or declines to make a reference, it cannot be said that the industrial dispute has ceased to exist, nor could it be said to be a review of any judicial or quasi judicial order or determination.' (Para 7). .'government does not lack the power to make the reference in respect of the same industrial dispute which it once declined to refer.'

(17) Dr. Anand Parkash however says that though he does not dispute that it is open to the government to refer the matter even though it had earlier refused it the condition precedent for the valid exercise of that power is that it must be done after giving an opportunity to the management concerned. Now it will be seen that Supreme Court in a series of cases has upheld as valid a reference made by appropriate government even when it had refused to do so earlier. In impugning the competence of the' government to make a reference no argument was even raised that the govt. had acted illegally by not having first given an opportunity of hearing to the management concerned, before making a reference. Though no argument as such was raised, it is not. in view of the Supreme Court decision, open to the High Court to deny such a power to the Government on the ground that the decision would have been different if such an. argument was raised. It is well settled that the decision was binding on the High Court and the High Court could not ignore it because the thought that relevant provision was not brought to the notice of the Supreme Court. (See Ballabhdas and Lakhani and others V. Municipal Committee Malkapur. : AIR1970SC1002. It is wise to remember that fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority merely because it was badly argued, inadequately considered and fallaciously reasoned,-Salmond Jurisprudence, p. 215. 11th Edition (See Ambika Prasad V. State of U.P. : [1980]3SCR1159 .

(18) As however we heard the matter at length on this aspect, I deem it proper to deal with this aspect. Dr. Anand Parkash naturally relies on a number of authorities in support of his contention that a reference made by government without first hearing the management in a case in which it had declined to make a reference earlier is in breach of principles of natural justice and consequently the reference and resultant award are null and void. The cases relied in his favor by Dr. Anand Parkash are (1) G. Muthukrishnan V. The Administrative Manager, Mew Horizon Sugar Mills Pvt. Ltd. and others 1980 Lab. I.C. 475(9) (2) M/s. Escorts Limited V. Industrial Tribunal Haryana 1983 Lab. I.C. 223(10) D.B. Punjab and Haryana High Court) (3) Indian Telephone Industries Ltd. V. State of Karnataka and others (1978 Llj 544(11) (D.B. Karnataka)

(19) All these cases accept (i) that the power to refer a dispute under Section 10(1) of the Act is in administrative act; (ii) they however, hold that it has civil consequences and, thereforee an opportunity of hearing has to be given to the management before making a reference (iii) another assumption common in all these cases is that when the Government having once originally refused to refer the dispute later on decides to refer the matter for adjudication it is exercising its power second time under the Statute and thereforee, if no opportunity is given to the management the some is in breach of the principles of natural Justice and resultant award is thereforee void.

(20) But this finding is given on the basis of assumption which run counter to the well settled principles laid down by the Supreme Court and other authorities. Thus in New Horizon Sugar Mills Case (Supra) the Full Bench mainly relied on an earlier single bench judgment of that court in K. Abdul Salam and company V. State of Tamil Nadu and others 1973 43 F.J.R. 180(12) where the following observations were relied upon for the answer given by the full bench namely: if the government having refused to refer an alleged industrial dispute for adjudication. subsequently re-exercises its power and. refers the dispute for adjudication solely on further representations...' Same infirmity is to be found in the judgment of the Punjab and Haryana High Court in M[s. Excorts Ltd. (supra) as is clear from the question posed by the division bench, namely, 'whether the rule of audi alteram palter is attracted to the exercise of power a second time under Section 10(1) of the Act whilst referring the matter for adjudication after the same had been rejected earlier.'

(21) New Horizon Sugar Mills Case (supra) also accepts that if the government suo moto changes its mind without any one prompting them to do so and wanted to exercise its inherent power the position would be different. I cannot appreciate the difference because either making a reference under Section 10 of the Act has civil consequence or not. From the trend of the New Horizon Sugar Mills Case it would be logical to say that even. when in the first instance reference is made under Section 10 parties should be entitled to a hearing but no such extreme position was even put forth by Dr. Anand Parkash.

(22) A reading of these authorities cited by Dr. Anand Parkash clearly show that the overwhelming consideration which made the learned judges come to the conclusion that a hearing is necessary was solely brought about by assuming that when the government had earlier refused to refer the matter to adjudication it had exercised its power once under Section 10 of the Act in favor of the management and, thereforee. when it later on chose to refer the matter for adjudication it was exercising its power second time but against the management and in favor of the workmen and thereforee an opportunity of hearing to the management was necessary. This was the point emphasised in the Escorts case when the Bench observed that though hearing may not be necessary under Section 10 in the first instance different consideration apply where the original reference has been rejected and a second reference is sought to be made afresh. This basis and fundamental plank on which these judgments rest, runs counter to the settled view of the Supreme Court which has clearly laid down, In fact, when the Government refuses to make a reference it does not exercise its power, on the other hand it refuses to exercise its power and it is only when it decides to refer that it exercises its power. Consequently,' the power to refer cannot be said to have been exhausted when it has declined to make a reference at an earlier stage; Western India Watch Co. (supra). 'A refusal of the appropriate government to make a reference is not indicative of an exercise of power under S. 10(1), the exercise of power would be a positive act of making a reference-,' para 8 of M/s Avon Services Production Agencies Pvt. Ltd.

(23) In M/s. Excorts case (supra) the adverse consequences which were said to accrue by making of the reference having once been declined were mentioned to be that because of the earlier reference communicated the management, may assume that the validity of termination of large number of workmen had been up-held and may proceed to. set its working arrangement accordingly. But if a reference is made later on, it would mean that the whole gamut of industrial relations between the workman and the management would remain, in continuous flux if inspire of the earlier rejection of the matter, it can be re-opened with impunity either independently or at the behest of the workmen without any notice and entirely behind the back of the employer. It appears tome that t)iis .reasoning of the Punjab High Court are contradictory to its own finding in para 7 of the said judgment where it accepts that the earlier rejection docs not give any vested right to the employer to have issue finally closed but yet surprisingly brings back this very result as entailing adverse consequences. This approach also runs contrary to what has been laid down by the Supreme Court where it observed; In. this view, the mere fact that there has been a lapse of time or that a party to the dispute was, by the earlier rrfusal. led to believe that there would be no reference and acts upon such belief, does; not affect the jurisdiction of the Government to make the reference Sec Western India Watch Co. (supra).

(24) The Escorts' case (supra) had followed the Full Bench of Madras High Court and also an earlier Bench of Karnataka High Court in Indian Telephone Industries Ltd. (supra incoming to the conclusion that making of a reference by the Government after, it has once declined, civil consequences How, both tile Punjab and Haryana as well as Karnataka High Courts have sought to invoke the principles laid down in Mohinder Singh Gill V. Chief Election Commr. : [1978]2SCR272 and seem to have held that the broad sweep of civil consequences accepted in this case makes the exercise of power under Section 10(1) of the Act, if the government had declined to make it earlier, one which results in affecting civil consequences to the management. In my view this is a misappreciation of the decision in Gill's case. The Supreme Court only observed that in comprehensive connotation everything that affects the civil rights includes civil consequences.

INGill's ease the Chief Election Commissioner had cancelled the pool which had taken place find ordered a re-poll but without hearing the candidates concerned. The Supreme Court was impressed with the argument that the whole re-poll is not a joke and it will cause irreparable punishment to the constituency and the candidate. The only remedy was by way of an election petition which by the very nature of it would take more time and also not. be certain whether the relief could be available the candidate concerned.

(25) An order of repoll would have deprived the petitioner of the fruits of victory and the right to sit in the Parliament would be deployed by a number of years. The court notice that effect of the order of repoll was not of prima fuci nature but was immediate. The Supreme Court accepted that no bear ing is necessary if the matter is still at a prima facie stage when it broadly accepted Lord Reid's observations made in Re. Wiseman and another V. Borneman and others 1971 Ac 297 (7)(14) (HL) at page 308 to the following. effort

ITis, I, think, not entirely irrelevant to have in mind that it is very unusual for there to be a judicial The Presiding Officer & Others determination' of the question, whether there is a prima fade case. Every public officer who has to decide whether to prosecute or raise proceedings, ought first to decide whether there is a prima facie case but no one supposes that justice requires that he should first seek the comments of the accused or the defendant on the material before him. So there is nothing inherently unjust in reaching such a decision in the absence of the other party.

GILL'Scase is of no assistance to the petitioner. The point really seems to have been settled by a Division Bench of this court in M/s. Khadi Gramudyog Bhawan V. The Delhi Administration and others (C.W. 802-D/1966 decided on 13-7-1967)(15). In that case after the conciliation proceedings were submitted, the appropriate government on consideration of the report by its letter of 4-7-1966 informed the management that there was no sufficient reason to consider the dispute a fit one for reference to the Industrial Tribunal. Later on the matter was refereed for adjudication. This action of the government was challenged by the management as being arbitrary and also illegal because it had not given any hearing to the management before making a reference. K.S. Hegde, C.J, as the his Lordship then was amongst others laid down the following principles :

(ii) A reference can be made to a Tribunal without notice to the concerned parties. (iv) But if the Govt. refuses to refer the dispute, it is open to it to revise its earner decision, such a revision can be made without notice to the parties.

THE Bench thereafter came to the conclusion that it was within the competence of the government to revise its earlier order without notice to the concerned parties. This authority was followed in Goodyear India V. Industrial Tribunal: (1968) 2 Llj 682(16) (D.B. Rajasthan). In that case a reference was refused and intimation communicated to the management by the Government by its letter of 18-1-1967. Later on the government by its order of 16-5-1967 made the notification referring for adjudication. Objection that. no hearing was given to the management by the Government was negatived and it was held that there was no infirmity in , government making the reference even when it had refused- it earlier. Khadi Gramodyog Bhawan's case was specifically referred to with approval.

(26) In Kirloskar Electric Co. Ltd. V. Workmen of Kirloskar Electric Co. Ltd.; : (1974)IILLJ537Kant (17). Venkataramiah, J. (as his Lordship then was) rejected the argument that any hearing was necessary to be given by the State Government in making a reference even though it had declined to make a reference at an earlier stage. This judgment 'of Venkataramiah, J. was upheld in appeal by a Division Bench of the Karnataka High Court' in Writ Appeal No. ' 16411974 decided on 29-7-1975.. Notwithstanding this the Division Bench of Karnataka High Court 'in 'Indian Telephones case (supra) chose to take a different view. The apparent reason in not referring the matter to a larger Bench was that Venkataramiah. J's .judgment was given earlier to Mohinder Singh Gill's case and,, thereforee, a detailed examination of the view expressed by Venkataramiah, J. was not necessary. T have already mentioned the mis-apprehension by the learned judges of the real ratio in Gill's case, which openly accepted that if a decision taken on a prima facie matter and a final decision has still to be made there-is no requirement, .of .fair-play that any party should be heard and on analogy no hearing would be necessary before making a reference under Section 10 of the Act. The only civil consequences which are said to accrue by the making. of reference revolve on invoking of Section 33 Which prohibits, an employer to alter to the prejudice of workmen the conditions of service applicable to them immediately before the commencement of such reference or to proceed for misconduct connected with the dispute against a workman save with the express permission of the authorities before which the proceeding is pending, or to permit the employee where an employer contravenes the provisions of Section. 33 to make a complaint to the Labour Court etc. which on receipt of such complaint shall adjudicate upon it as if it were a dispute referred to or, pending before it. In my view reliance on these provisions is inapposite. I can do no better than quote and rely on the observations made by Venkataramiah, J. in Kirloskar's case-'the provisions of Section 33 and 33A of the Act do not in any way take away any existing right of the management. Those sections only .require the management to submit its action to the scrutiny of the Court either in the form of application for permission: to take disciplinary action against a workman or in the form of an application for approval to an action taken against a workman ..................... any decision taken by the State Government under Section 10 of the Act does not lead to any finality in so far as the dispute between the parties is concerned. The dispute is normally heard by Court or Tribunal presided over by Judges with judicial experience. In that situation, it cannot be said that the management would suffer any kind of prejudice if the State Government proceeds to make a reference under Section 10(1) of the Act. without hearing the parties although it has. on an earlier occasion, declined to do so.'

(27) Section 10(a)(3) which was referred to by the counsel for the management only empowers the Government to prohibit the continuance of any strike or lockout in connection with a dispute which; may be in existence on the date of the reference. I cannot appreciate how a general prohibition of strike and lockout which is meant to keep the peace during the pendency of the proceedings before the Tribunal can be said to be an interference and affection' the civil. rights of the petitioner management. Surely it is too late in the day to urge that management has inherent right to declare lock out even if it causes industrial strike. Even in terms of Section 33 of the Act this prohibition is subject to the permission being granted by the authority before which the proceedings arc pending. There is thus no denial of the right to take any action on misconduct or alter conditions of service provided permission of the authorities is taken. This provision is in public interest and in no way affect any civil rights.

(28) In Srikrishna Jute Mills V. Government of A.P. & Ors. : (1977)IILLJ363AP (18), a Division Bench of Andhra Pradesh High Court held that even if the Government choses to refer the matter even though it had earlier refused to do so it is not necessary to give notice to the employer of the proposed action because no civil rights of any party are being adjudicated upon. That Bench specifically approved of the observations of Venkataramiah, J. m Kirloskar's case. It dissented from the Madras High Court decision in K. Abdul Salam's case (supra), which was the basis of the decision given in New Horizon Sugar Mills case.

(29) A Division Bench of this court in Dunlop India Lid. V. Delhi Administration & Others.: (1972) 42 F.J.R. 147(19), rejected the argument that hearing is necessary to be given to a party before making a reference under Section 10(1) of the Act with the observations-'while making the reference the appropriate Government was not deciding any rights of the parties. It simply referred the dispute for adjudication to a Tribunal which has the jurisdiction to decide file controversy and is bound to give hearing to the contending parties. There is thus no occasion for granting a hearing to any party by the appropriate Government at the time it makes the reference.'

(30) I may in this connection refer to Colgate Palmolive India (P) Ltd. V. Union of India & Others; (1981) Ii Del 249(20). Section 31 of the M.R P.P. Act empowers the Central Government to make an order of reference only if it appears to it that. one or more monopolistic undertakings are indulging in Monopolistic Trade Practices. One of the arguments against the invalidity of the reference was that as no show cause notice was issued nor any opportunity given by thc Central Government as to why reference should not be made under Section 31(1) of the M.R.T.P. Act; the reference was illegal. This plea was rejected and it was observed by me that:

THE order of reference decides nothing it only sets the investigative machinery of the Commission into motion. This is a preliminary stage where on a prima facie view of the matter the Central Government makes a reference under Section 31(1) of the Act. Law does not require any hearing at this preliminary stage, (page 267).

IN coming to the said conclusion support was drawn from Section 10(1) of the Industrial Dispute Act and it was observed It is apparent that any such reference necessarily would entail lot of expense and energy for the employer. The management may have a grievance that Industrial disputes do not exist and no reference should have been made. But it has never been urged that reference was illegal because no hearing had been given in the appropriate government before making the reference. Such a contention if urged would be negatived because of the opportunity to urges this point before the Industrial Tribunal', [page 278, Colgate case (supra.) 1.

(31) Admittedly an order under Section 10(1) is an administrative order. Unless, thereforee, civil consequences flow by the making of a reference under Section 10(1) the question of giving a hearing does not arise. It is also settled that no hearing is necessary if the government makes a reference without having already communicated the refusal under Section 12(5) of the Act. Now had the refused been in exercise of power under Section 10 of the Act. the argument could have been put forth that no subsequent action in revising the earlier action under Section 10 was permissible without giving an opportunity of hearing to the management is necessary. But it is not so. Exercise of power under Section 10 of the Act only takes place when reference is made under Section 10(1) of the Act. If admittedly, thereforee, government is under no obligation to hear the parties when making a reference in the first instance it is not understood by what logic hearing is asked for even) when government had earlier declined to make a reference because in either case exercise of power under Section 10(1) of the Act is taking place for the first time.

(32) In the present case it is on. a prima facie view of the matter and in the opinion of the appropriate government that a reference was made. No adjudication was made, no rights were affected, no benefits given to the workman nor any liability imposed or financial restraint put on the management by the order of reference. The whole case had to be decided by the Tribunal where full fledged opportunity has been given to the parties. In my view, thereforee, the plea of violation of natural Justice and the denial of right of hearing put forth by the management as a sword to destroy the order of reference made by the government on 16-8-1974 is plainly untenable and meritless and must be rejected.

(33) Point No. 2: That however, does not conclude the challenge to the reference. Counsel for the management urges that in making the reference on 16-8-197.4. the 'government has acted arbitrarily because there was no material before it to make the reference, more so as it had already declined to make the reference by its earlier order of 1-8-1972. It 'is correct that 'where it reconsiders its earlier decision it can make the reference only if the dispute is an industrial one and either exists at that stage or is apprehended and the reference it makes must be with regard to that a'd no other industrial dispute. (Vide Western India Watch Co. V Its Workmen: : (1970)IILLJ256SC ) .But it is equally well settled that if the dispute was an industrial dispute as The Presiding Officer & Others defined in the Act, its factual existence and the expediency of making a reference, in the circumstances of a particular case are matters entirely for the Government to decide upon, and it will not be competent for the Court to hold the reference bad and quash the proceeding for want of jurisdiction. merely because there was, in its opinion, no material before the Government on which it could have come to an affirmative conclusion on those matters.' (Vide Madras State V. C.P. Sarathy : : (1953)ILLJ174SC ).

(34) Now let us see as to how correct is the contention of Dr. Anand Prakash that there Was no material before the Government justifying it to make the reference after it had once refused to do so. Before the Tribunal the Management had taken objection that under pressure of certain members of Parliament and for reasons which are not germane the Government had reviewed its earlier order of reference and that the order now made is unwarranted and illegal. In order to support it case the management has made an application on 14-2-1975 that Conciliation record of the case becalled. Though the Tribunal called for the record, the Secretary to. the Government of India claimed privilege under Section 123 of the Evidence Act. The Tribunal allowed the privilege.. The result being that the record was not allowed to be examined (though I am very doubtful whether such a claim could have been upheld).

(35) No specific details of exfraneolis pressure have been given in the writ petition except for a bald averment that the present reference was made under political pressure. This plea has been denied in the counter affidavit by the workmen and it is specifically denied that the reference was made under, any political pressure. It is pointed out, that the answering respondent highlighted the facts on record by detailed-representations pointing out the infirmity in the domestic enquiry and emphasizing the wider powers on the Tribunal conferred by Section 11-A of the Act which empowered it to enquire not only into the validity of the action but also about the punishment. It was stated that it was because of these over all considerations that the government had made thet reference. Though the Union of India was a party to the petition, it did not choose to file any affidavit in reply. It was felt that it was proper for it to have filed an affidavit. Thereafter Mr. Chaudhary the learned counsel for Union of India, filed an affidavit, of Mr. V. S. Ahilawadi, Joint Secretary dated 4-5-1984 staling therein that the office file containing the reference appears to have been mixed up somewhere in the shifting of the record. The entire record has been searched but this file was not traceable.. We were still not satisfied with the affidavit and directed by our order of 7-5-1984 that further affidavit be filed. The same has now been filed dated 28-5-1984 by Mr. S. S. Mehta, the Desk Officer in the Department of Labour. The substance of the affidavit is that as the section dealing with the industrial disputes in the Bank was converted into desk pattern and consequently shifting took place, the old relevant registers and files are not available. It is again repeated that the entire record was searched but the file is not traceable. It is needless to comment on the working of the Ministry where a file is not traceable. I very much hope that the concerned authorities will give it a serious thought as to how a file which is meant to be preserved is not traceable, a rather embarrassing situation. Dr. Anand Prakash contended thereupon that as the government had not filed any affidavit in reply it must be presumed that there is in fact no reason at all on the basis of which reference order 16-8-1974 could have been made validly. I cannot agree. It is unfortunate that because of the laxity of the Union of India the file is not traceable and hence the court is denied the opportunity to look into the records for itself not does it have the advantage of Explanationn of Union of India in this regard. But the absence of counter affidavit by Union of India cannot by itself be a reason to prejudice the workman's case. A similar situation arose in Khadi Gramodyog's case (supra) where Delhi Administration also did not file any affidavit explaining as to why the Delhi Administration referred the matter having refused it earlier. The Bench called for the file and while observing-'it was contended by him (workman) and rightly that he should not be penalised by this inaction or the omission of the respondent', looked into the file and upheld order of reference. Of course the workman in that case was more fortunate because the file was available and the same could be perused by the Court, unlike the present case. But I do not think it is either fair or equitable, that the workman's case should fail at the threshold without enquiry simply because Union of India has bungled either deliberately or incompetently, and more especially when the material placed on record by the workman does show that there was relevant justifiable reason for the government to make the impugned reference, even after having refused it earlier. It is on record that after the government bad conveyed its refusal on 1-8-1972 a letter was written by the Delhi State Bank Workers' Organisation dated 14-8-1972 to the Minister of Labour and Rehabilitation which is Ex. W/25 (and annexure L, page 435 of the writ file). In this objection is taken to the Government's letter of 1-8-1972 refusing to refer the matter for adjudication. It is pointed out that the services of the respondents were arbitrarily terminated; that the enquiry proceedings will show that the charge made against the workman were wrong; natural justice was also stated to have been violated. Various other discrepencies in the order of the enquiry officers were pointed out. Even the competency of the officer who had passed the order of dismissal was challenged. Special reference was made to Section 11-A which had come into effect in December, 1971 and it was prayed that the matter be reconsidered and justice got done to the workman. Again in an affidavit dated 23-2-1978. filed before the Tribunal by the respondent workman it was stated in para 25 that the respondent after removal from the service had to struggle hard for reference of the Industrial dispute to the tribunal by making and pursuing representations to the Hon'ble Minister, Prime Minister and the President. It may also be mentioned that in the rejoinder on behalf of the workman filed before the Industrial Tribunal dated 19-11-1974 (page 235 of the Tribunal's record), in para 17 it was specifically denied that the Government had made a reference under political pressure. Stand was taken that the reference was made after due application of mind; keeping in view the salient features of Section 11-A read with Section 10 of the Act. The workman is stated to have made representations to the various authorities and the details of the representation show that the workman had written to the Minister of Finance on 7-8-1973 making a grievance of his termination of service and pointing out that even the quantum of punishment was excessive and making a prayer that the management be directed to reinstate him or the Ministry may make a reference more especially in the light of the amendment in the Industrial Law empowering the Tribunal to look into the quantum of punishment. Another letter Ex. W[33 dated 9-7-1973 (page 329 of Tribunal's record) was also attached showing that though originally the Ministry of Finance was not inclined to make a reference the matter was represented by the workman and in that view of the fact that Labour Ministry had again sent the case to the Ministry of Finance in September, 1972 for reference arid the Finance Ministry did not accept but this was under a wrong view. The workman took up the matter with the Labour Ministry which referred the matter to the Finance Ministry in March, 1973 and requested it for its approval. This was again followed by a letter of 9-10-1973, Ex. W/35 (page 335 of Tribunal's record) addressed to the Ministry of Labour emphasising that the workman had no alternative remedy against the punishment inflicted but by the incorporation of Section 11-A in the Act relief can be claimed in case the Government was to refer the matter to the Tribunal. There is also on record Ex. W/37 (dt. 3-7-1974. page 339 of Tribune's record) a letter from the Office of the Prime Minister, addressed to the workman acknowledging the receipt of the letter of 24-6-1974 and had been forwarded to the Ministry of Finance. It will thus be seen that there was number of representations made by the workman demanding that a reference be made to the Tribunal. It is quite evident that all these representations could not be brushed aside without the Government being accused of arbitrariness. As it is the earlier order of 1-8-1972 refusing to make a reference would itself appear to be an irregular exercise of power by the Union of India. The reasons mentioned in the order of 1-8-1872 do not merely prima facie examine the merits of the dispute, but seek to give a final finding of fact on disputed questions. It is clear from the fact that the Government's refusal to refer the matter for adjudication is sought to be justified by stating that Shri L. R. Singla has been discharged from the service of the Bank on the basis of the findings of a properly held departmental enquiry. This approach of the Government of India is certainly impermissible because it is well settled 'that on disputed questions of fact the appropriate government cannot purport to reach final conclusions, for that would be the province of the Industrial Tribunal, nor can the Tribunal purport to reach a final decision on questions of law'. See Bombay Union of Journalists v. State of Bombay; : (1964)ILLJ351SC , head note (a).

(36) Similarly the Government cannot go into the merits of dispute, its function being only to refer such a dispute for adjudication so that the industrial relation between the employer and his employee may not continue to remain disturbed. (Vide Western India Watch Co. v. Its Workmen; : (1970)IILLJ256SC ).

(37) The only requirement for the government to make a reference is that it should satisfy that an industrial dispute exists within the meaning of the Act, but beyond that no obligation can be held to lie on the Government to ascertain the particulars of the dispute before making a reference under section 10. (Sec State of Madras V. C. P. Sarathy Air 1953 Sc 51). I have no doubt that if after the refusal order of 1-8-1972 the workman had invoked this court's jurisdiction it would have been impossible to refuse him the relief and a mandamus would have had to issue directing the government to reconsider the matter because it is well established that if in refusing to make a reference the government has acted on irrelevant and extraneous consideration a writ of mandamus can issue by the High Court, and mandamus can issue to the Government to reconsider the question of making a reference and to make the same if circumstances so warrant.' (See Punjab National Bank V. Aipnbe Federation; : (1959)IILLJ666SC ).

IF in refusing to make a reference the Government is unpressed by reasons which are wholly extraneous or irrelevant, or which are not germane, then its decision is open to challenge in a court of law.' (See State of Bombay V. K. P. Krishnan ; : (1960)IILLJ592SC ).

(38) Now in the present case the earlier order of 1-8-1972 refusing to refer the matter was not based on the finding that there was no industrial dispute. No other requirement of expediency or other relevant considerations were indicated to show that it was not a fit case for making a reference. If after going through the detailed representations of the workman the Government has ultimately seen the wisdom and expediency of making a reference how can it be said that it has been done without any material on record or without application of mind. 'The only requirement for taking action under Section 10(1) is that there must be some material before the Government which will enable the appropriate government to form an opinion that an industrial dispute exists or is apprehended. Refusal to make a reference does not tantamount to saying that the dispute if at all existed stands resolved.' (Vide Avon's Production Agencies V. Industrial Tribunal, Haryana; : (1979)ILLJ1SC ). The industrial dispute continued to exist. No circumstances warranted it to refuse to make the reference. On what principle of fair play or equity can it be argued that the impugned order of reference dated 16-8-1974 and the award, a result of about 10 years' labour should be quashed on no other ground except the irrelevant one that the file from the Government record has not been made available to the court. I could understand that if there was no material placed by the workman before the court to show the circumstances which might have persuaded the Government

THE Presiding Officer & Others then it would have been a different case. But that is not the position in the present case. Here the representations made by the workman, the consideration at the Government level have been produced. The management does not dispute the authenticity of his material. Relevance of these documents is not challenged. Applicability of section 11-A to the present proceedings is also accepted. Are these not relevant facts which could legitimately have persuaded the government to make the reference. It was not even suggested that the termination of service of the workman was not an industrial dispute, or that it had ceased to exist to be an industrial dispute in the sense that there has been a subsequent settlement?

(39) In these circumstances it is not possible to appreciate the counsel for the petitioner's argument that the reference should be quashed as being not based on relevant considerations. The considerations are staring me in the face. The whole, purpose of the Act is to resolve the dispute by settlement or adjudication. The former having failed, the only alternative left was to make a reference. Not to have done so would have been for the Government to have refrained to do its. duty under the Act. 'It is not absolutely necessary that there ought to be some fresh material before the Government for reconsideration of its earlier decision. The Government may reconsider its decision on account of some new facts brought to its notice or for any other relevant consideration and such other relevant consideration, may include the threat to industrial peace by the continued existence of the industrial disputed without any attempt at resolving it, and that a reference would atleast bring the parties to the talking table.' (Avon's case Pr. 8). As it is, in the present case there was certainly a fresh angle and an aspect pointing out the relevancy of Section 11-A of the Act which enlarged the power of the Tribunal to give relief to the workman. In my opinion, it is not, thereforee, possible to fault the action of the Government in having made the reference dated 16-8-1974 and this contention must fail.

(40) Point No. 3 Under this point the first aspect that Dr. Anand Prakash raised was that after the Tribunal had found by its order of 5-6-1976 that the findings of the enquiry Officer were perverse, it had no jurisdiction to allow further evidence to be led before it as by virtue of Section 11-A of the Act it was only open to it to reappraise the evidence for it self, and come to its conclusion. It was further contended that the decision of the Tribunal dated 17-4-1980 (published on 6-5-1980) holding that the charges were not proved against the workman, based as it is on the additional evidence led before the Tribunal not only on the evidence taken by the Enquiry Officer, is vitiated, and reliance is sought from the observations in Ritz Theatre Pvt. ltd. v. Its workman; : (1962)IILLJ498bSC. In my opinion that case has no relevancy after the incorporation of Section 11-A to the Act. In that case which was decided in 1962 it was sought to be argued that because the management had led evidence before the Tribunal it must be assumed that the management had given up its rights to reply on the enquiry held by it and conceded the right of the Tribunal to deal with the merits of the dispute for itself. The Supreme Court negatived this and held that simply because evidence is led by the employer does not result in the conclusion that no proper enquiry has been held and that the Tribunal is at liberty to examine the question and decide it on merits for itself. In that case it had not been found that there was any infirmity in the managerial enquiry. The Tribunal had however, come to the conclusion that the findings recorded at the departmental enquiry were baseless. This finding however, was not accepted by the Supreme Court because as it observer 'it is true that the Tribunal has observed that the findings recorded at the departmental enquiry were baseless, but that clearly is the result of its appreciation of the whole of the evidence adduced before it and this course should not have been adopted by the Tribunal.' These observations however, were made when the law was that once a Tribunal accepts that 'there has been a fair enquiry in accordance with the principles of natural justice it had no jurisdiction to substitute its own judgment in the matter of imposing penalty. But

THE Presiding Officer & Others the position is now totally different after the incorporation of Section 11-A to the Act, and the law is that 'even where the dismissal of a workman by an employer on ground of misconduct is preceded by a proper and valid domestic enquiry. Section 11-A now empowers the Labour Court or Tribunal to reappraise the evidence and examine the correctness of the finding threat. Section 11-A further empowers it to interfere with the punishment and alter the same.' (See Workmen to T & R Co. V. The Management, : (1973)ILLJ278SC ), Head Note 'C'). It is common case that Section 11-A was applicable to the reference because the reference was made on 16-8-1974 much later than 15-12-1971 when Section 11-A was brought into force. In that view no limitation can be read on the powers of the Tribunal to take additional evidence if 13 it feels necessary. Dr. Anand Prakash however, urges that as the Tribunal had not found that principles of natural justice were violated and as it was open to it to reappraise the evidence for itself, it should have given a finding on the evidence recorded at the managerial enquiry. It is true that in view of Section 11-A 11-Athe Tribunal could have reappraised the evidence and given its own findings without necessarily allowing any additional evidence to be led before it. But there is no law which forbids such an evidence to be taken before the Tribunal if the circumstances so warrant, nor can it be held that any illegality was committed when it permitted both the management and the workman to lead evidence before it, It is true that it was Open to the Tribunal to act on the evidence on record and it need not have permitted the management and the workman to lead independent evidence before it and if it had so acted its action could not have been faulted by the management on the ground that it got no opportunity to lead evidence before the Tribunal. But now I also feel that the contention of the management that no evidence should have been allowed to be led or relied upon by the Tribunal in coming to its conclusion whether the charges were proved or not is an argument with tongue in cheek. The management had itself in para 18 of its written statement at the very first instance taken the stand that it be allowed to lead evidence if the enquiry held by the management is found to be defective. This plea was reiterated by it by its application of 3-1-1976 filed before the Tribunal where it stated what if Issue No. 5 which related to the validity of domestic enquiry conducted by the management was held against the management it be given an opportunity to lead evidence on merits before the Tribunal. This application of the management was opposed by the workman in his reply of 31-1-1976 wherein it took the stand that management had already led its evidence in support of its case and no more opportunity should be given to it and application was vexatious and malicious. Again after the decision of the Tribunal dated 5-6-1976 given on preliminary issue No. 5 the workmen put in application dated 9-7-1976 (page 393 of Tribunal record) and after especially referring to the Firestone's case had prayed that as the management had already led its evidence in support of its enquiry the matter may be decided in the light of evidence already led by the parties, without allowing and further evidence to be led. To this application a reply was filed by the management dated 29-7-1976 (page 387 of Tribunal's record taking the stand that the management had a legal right to adduced further evidence and it had already prayed that in case the Tribunal sets aside the enquiry it should be allowed to lead evidence It, thereforee, psychiatrically grayed that the workman's application be rejected and the management may be allowed to lead the evidence. It is in these circumstances that the Tribunal allowed the evidence to be led by the management. It is clear that the workman was keen that the matter be decided on the state of evidence on record as existing prior to order of 5-6-1976. The management vehemently opposed it and wanted an opportunity to lead additional evidence. Having forced the same it does not lie in the mouth of the management now to say that the Tribunal's order of 17-4-1980 is vitiated solely on the ground that it allowed additional evidence to be led before the Tribunal. This situation was brought about by the management. It cannot approbate and reprobate. The management must be held to be estopped from raising such a plea (See Commissioner of Income Tax V. Mr. P. Firm Muar; Air 19G5 Sc 1216). (26) Moreover it is not the petitioner's case that opportunity was given to the workman but not the management to lead additional evidence. I cannot, thereforee, find any infinity in the additional evidence having been led before the Tribunal and the same. having been relied upon by it to give its finding.

(41) Dr. Anand Prakash than made an effort to persuade me to hold that the conclusion of the Tribunal dated 5-6-1976 that the findings given by the enquiry Officer were perverse, 'is completely unsubstantiated. Apparently his effort was to so persuade me to hold as a first step to his further argument that if the findings given by the enquiry officer are not perverse the Tribunal had no jurisdiction to decide for itself on merits the validity or otherwise of the charge sheet. But this assumption of Dr. Anand Prakash is obviously misconceived after the incorporation of Section 11-A to the Act. In view of Section 11-A it is no longer necessary for the Tribunal to first arrive at ft finding of perversity about the enquiry officer's conclusion befor getting jurisdiction to decide the case on merits itself. It is, thereforee, of no consequence whether the conclusion of the enquiry officer that the findings were per versed or not is upheld or not because in any case it was open to the Tribunal to reappraise the evidence for itself and come' to its own conclusion, and for this jurisdiction the Tribunal does not have to fortify itself by first giving a finding of perversity. I do not think, thereforee, that it is necessary to deal With the question as to whether the findings of the enquiry officer were correctly described as perverse by the Tribunal for the purpose of the present case, because in any case the Tribunal was competent to re-assess the evidence for itself and come to its own conclusion on merits. Dr. Anand Prakash then went through the various evidence' and the findings recorded by the Tribunal to persuade me to hold that the findings of the Tribunal holding that the' charges have not been proved is perverse and should be interfered with.

(42) Now by a chargesheet of 8-12-1969 the workman was served with the following charges:

(I)In the month of July, 1969 payment of work done by Shri Amer Chand Sharma, Cashier-cum-Go down Keeper, Juliana Branch was made to him. You threatened and extorted money to the tune of Rs. 31 from him on the plea that he was not entitled to over time wages being a temporary employee.

(II)You threatened Shri A. C. Sharma with termination of his services if he refused to oblige you with the payment of over time money demanded by you. Consequently, he paid you overtime amount of Rs. 11 in cash and Rs. 20 vide withdrawal form No. 688766 which was posted by you in the Saving Bank Ledger and paid to you on the 24th July, 1969 through Shri Rajinder Parshad whom you are not able to produce.

(III)You approached and openly demanded a sum of Rs. 20 from Shri Amar Nath, peon in connection with the loan of M/s. Janta Radios.

(IV)You also paid an unauthorised visit to the house of Shri Devi Singh, who had applied for a loan for tempo and influenced him unduly to extort money from him.

(43) The Enquiry Officer by his order of 16-3-1971 found that Devi Singh was not examined and charge 4 was not proved. With regard to charge No. 3 also he held that this was not proved. With regard to charge No. I and 2 he held that workman Lajje Ram got an amount of Rs. 31 from Shri Amar Chand Sharma on some false pretext and thus had extorted this amount out of Amar Chand Sharma.

(44) Now the Tribunal in its impugned order of 17-4-1980 has disbelieved the main witness, Amar Chand Sharma from whom the workman is stated to have extorted Rs. 31. The Tribunal has observed that it is difficult to believe that he can be threatened so as to part with a sum of Rs. 31 from any body much less an ordinary clerk as the respondent workman. The Tribunal has given a finding that the Bank had failed to prove that Singla workman h ad extended any threat whatsoever to Amar Chand Sharma, as alleged by the Bank. Rs. 31 are said to have been extorted by the workman and to have been taken in two Installments of Rs. Ii in cash and the remaining Rs. 20 through a refund voucher. The Tribunal has discussed the evidence of Mr. Amar Chand Sharma, the respondent workman and has given a finding that because of the changing testimony of Amar Chand Sharma, it goes to show that no sum of Rs. 31 was extorted by Singla or paid to Singla by Amar Chand Sharma. The next charge related, to the payment of Rs. 20 through a withdrawal form said to have been signed by Amar Chand Sharma. The withdrawal form bears the signatures of Amar Chand Sharma who is stated to have given it to the respondent/workman, to withdraw the amount. Undoubtedly the amount was withdrawn from the account of Amar Chand Sharma, but bears an endorsement as having been withdrawn by one Rajinder Parshad. The stand of the respondent workman was that he did not withdraw on this withdrawal form as was alleged by Amar Chand Sharma, that he only attested the signatures of Rajinder Parshad in English, as was the practice in Bank because Rajinder Parshad had signed it in Hindi. The Tribunal has observed that it was never the case of the Bank that the signatures of Rajinder Parshad on the back of the withdrawal form were in fact written by and in the handwriting of the workman. He, thereforee, came to the finding of fact that this withdrawal of amount was not done by the respondent wormkan. Another piece of evidence allegedly to prove the charge against the respondent workman is stated to be the extra-judicial confession (MW 113) a statement .made by Mehar Chand, Dw 3 who stated that the respondent workmen had admitted before him the receipt of this amount. The Tribunal has referred to the fact that different dates had been given of the alleged settlement, some time in August, or September or October and he, thereforee, disbelieved the said settlement

(45) It may be noted that one Rajinder Parshad was examined by the workman before the Tribunal. He stated that Mr. Amar Chand Sharma had taken the loan from him and that he had given him a withdrawal form for Rs. 20 which he had borrowed from him. He had also stated that he had signed the withdrawal form on its reverse at the bank counter and that he had received the payment. This was naturally an important piece of evidence in favor of the workman. Dr. Anand Prakash had however, sought to show the unreliability of such an evidence by urging that one Rajinder Parshad had also been called before the enquiry officer by the workman and when the respondent workman was asked that he had produced Rajinder Parshad as witness and whether he was the same person whose signatures were translated by him in English at the back of the withdrawal form, the respondent? workman was evasive and had only stated that he had produced his defense statement and that at this stage he could neither comment nor he could forecast. Dr. Anand Prakash's comment was that as Rajinder Parshad in the enquiry proceedings had not said anything about the withdrawal form, another person has now been produced before the Tribunal and this evidence does not deserve any credence. The respondent workman who argued in person stated however, that Rajinder Prasad called before the Enquiry Officer had only been called for the purpose of proving that there was a conspiracy of Amar Chand with one Mr. D. L. Sikka another bank employee to involve him in this case arid that it was only after great deal of search that he had been able to locate the real Rajinder Pershad who had withdrawn the money through the withdrawal form. The Tribunal who had the benefit of hearing the testimony of the witness Rajinder Pershad produced before him has chosen to believe him. The Bank produced ro evidence of the handwriting expert or other relevant evidence to show that the signatures on the back of the withdrawal form were not of the person named Rajinder Pershad who was produced before the Tribunal nor was it Bank's case that Rajinder Persad was a non-existent person, nor was it its case that the signatures purported to be of Rajinder Pershad were infact written by the respondent workman. Though we have been taken in great detail by Dr. Anand Prakash to the various facets of the evidence, I feel that this exercise was futile because it is not possible for this court under Article 226 to sit as a court of appeal and reappraise the evidence for itself because the final arbiter on facts is the Tribunal.

(46) The Tribunal is a repository of findings of fact. It had the evidence before it and had made its own assessment of the credibility or otherwise of the various witnesses and the pieces of evidence. This Court is not sitting as a court of appeal over the findings given by the Tribunal. The finding of the Tribunal that these two charges have no: been established against the respondent workman, thereforee, cannot be interfered with. On that finding the consequence naturally follows that the termination of the services of respondent was illegal and unjustified because the only reason for terminating the services was the establishment of charges by the Enquiry Officer. But as those charges have not been held proved by the Tribunal no justification for the termination of the services of the respondent workman can be pleaded or accepted. In this connection I must also note that under issue No. 4 the Tribunal has also held that the respondent/workman was governed by the Bank of Patiala Staff Rules, 1954 and only the General Manager of the Bank was his disciplinary authority and competent to take action to terminate his services and as the termination was made by the Staff Superintendent of the Bank the termination of service is by an officer other than the disciplinary authority and the same is, thereforee, illegal on his ground also. It was not disputed by Dr. Anand Prakash that the Bank of Patiala Staff Rules 1954 did apply to the respondent/workman. But he maintains that Staff Superintendent was the Competent Authority to take action against the respondent/workman.

(47) Now the Bank of Patiala' Staff Rules, 1954 as framed by the Board define by Rule 3(1) 'competent authority' to mean Board in case of employees in the grade of Sub-Accountant and above and the Managing Director in the case of Assistants....... .Subordinate Staff. Rules 15(1)(e) provides the penalties which are imposable on an employee including removal or dismissal from service of the Bank. The penalties enumerated in sub-clause (e) i.e. removal or dismissal from service shall be ordered only by the competent authority in each case. The argument is that the competent authority which could pass the order of removal or dismissal is the Managing Director in the Case of the petitioner who is a member of the Subordinate Staff. If one went by the Rules only; there may have been some plausibility in 'the argument of the respondent/workman. But in my view the Tribunal has erred in ignoring some of the vital changes made in the Rules. Thus by a circular of 11th December, 1967 it was intimated to all concerned that as the Bank of Patiala has become a subsidiary of the State Bank of India the Management of the aforesaid is now vested in the General Manager and, thereforee, wherever the work 'Managing Director' appears in the Bank of Patiala Staff Rules the same is to be replaced by the 'General Manager'. This had the approval of the Board of Directors held at its meeting on 18-10-1967. The Board's decision was a consequence of a Bipartite Settlement and in terms of para 19.14 which laid down the various competent authorities to take action in the Bank. Thus by virtue of this circular the authority to take disciplinary action was the Staff Superintendent at the relevant time. It is for this reason that the Staff Superintendent took action against the respondent workman. In my view no fault can be found about the competency of the Staff Superintendent to proceed against the respondent. The finding given on issue No. 4 by the Tribunal is. thereforee, upheld. But in view of my findings on the rest of the points I can find no fault with the finding of the Tribunal and agree with it that the termination of the services of the respondent {workman was illegal and unjustified. Point No. 3 is, thereforee, decided against the management. Point No. 4 :

(48) The next contention of Dr. Anand Prakash was that even if termination was to be set aside this was not a case where reinstatement with back wages should have been ordered and instead compensation should have been awarded. I cannot agree. The law is now well settled that ordinarily a workman whose services have been illegally terminated either by dismissal, discharge or retrenchment will be entitled to reinstatement with full back wages except to the extern that he was gainfully employed during the enforced idleness. That is the normal rule. (See Hindustan Tin Works V. Its Employees) : (1978)IILLJ474SC. Of course the Tribunal has the discretion to award compensation instead of reinstatement if the circumstances of a particular case are unusual or exceptional so as to make reinstatement inexpedient or improper. Dr. Anand Prakash did seek to urge that this was an exceptional case in which relief of reinstatement should be substituted by an award of compensation. He could, however, not put forth any special reason justifying why the ordinary relief of reinstatement should be denied to the workman. It must be appreciated' that the discretion to award compensation instead of the ordinary relief of reinstatement can only be exercised for very compelling reasons. It is fallacious to assure that there is an equal balance of choices before the Tribunal whether to order reinstatement or compensation even after it was found that the dismissal was illegal or unjustified as in the present case. That is no so. The cases where reinstatement was refused related to the special relationship of a Stenographer attached to an employer as in the case of Ruby Gen. Ins. Co. V. Chopra; (1970) 1 LLJ. 63(28) or Hindustan Steel Ltd. V. A. K. Roy; 1960 Illj 228(29) where it was found undesirable to retain a person in service because of the recommendation of the Senior A security Officer based on verification report of the police that it would not be desirable to retain him in service particularly When the workman was employed in a blast furnace-a crucial part of the work, with respect to which the workman had been employed.

(49) In the present case the respondent/workman was an ordinary clerk. There is no evidence to suggest that he was engaged in any sensitively confidential work of the Bank and action had been taken against him for the alleged breach of that confidentiality. All that Dr. Anand Prakash could urge was that though the Bank was itself initially reluctant to take action against the respondent/workman it was compelled to do so because of the representations received from the Office Bearers of the Union. This if any thing may suggest that the action of the Bank was not malafide. But it also shows able to find cogent material on which the establishment can Union than by the overwhelming realisation that the conduct of the respondent workman was harmful to the interests of the Bank. I am not suggesting whether the action, should or should not have been taken; nor am I saying that the pressure of the Union to proceed against the respondent workman was an act of malafide because it is possible that the Union may have genuinely felt that if the respondent workman had really extorted the money he should be proceeded against .But once after the enquiry is held and as the Tribunal has found that the charges were not proved and the respondent/workman stands exonerated it stands to reason that he must be put back in the same position to which he would be entitled if he had not been dismissed. This obviously can only be done by directing his reinstatement which is a normal relief. The argument of the Bank in not being keen to hold an enquiry rather goes against the contention of Dr. Anand Prakash that it has lost confidence in the employee, It. must be emphasised that 'the ipse-dixit of the management that it has lost confidence in the workman is not a mantra or charm that it can be used at management's pleasure to deny the normal relief of restatement to a workman even when the dismissal has been found to be unjustified. The plea of loss of confidence must have some rational relation to the fact that the employee had misused his position of trust and rendered it undesirable to retain him in service.' (R. Krishnaswamy V. Union of India & others; (1982) 1 All S.L.J. 255(30). 'Loss of confidence in the integrity of an employee should be substantiated by cogent evidence before the Labour Court. If a workman is entitled as a general rule to be reinstated after his Wrongful dismissal is set aside and on the facts it is not possible that it was motivated more because of the pressure put by the genuinely be considered to have lost confidence in the integrity of the workman, he is enticed to be reinstated'. (Management of Panitole Tea Estate V. Workman; (1971) I L.L.J. seeking license to work as a Typist and that the requisite

(50) I can thus find no unusual feature so as to deny .the normal relief of reinstatement with full back wages to the respondent /workman.

(51) The next contention was to the period for which full backwages should be paid to the workman. Now a workman is entitled to full back wages during the period he has been out of employment excepting to the extent he has been gainfully employed elsewhere during that period. Here the services of the respondent were terminated w.e.f. 14-8-1971. The plea of the management, however, was that the respondent had been gainfully employed in as much as he had got a license as a Typist to work in the District Court in 1976. The respondent/Workman had taken the plea in his evidence before the Tribunal that he had not done any work and he was unemployed during all the period. He had denied the suggestion that he worked as a Typist in District Courts at Jind. He also even denied a suggestion that he had submitted an application to the Deputy Commissioner to permit him to sit as a Typist to work there. The management in order to prove its case produced one Partap Singh, District Nazir, DC's Office who proved that the respondent 'workman had applied seeking license to work as a Typist and that the requisite permission was granted on 3-9-1976 and orders were communicated to the workman vide Ex. W-27. The receipt of this letter also hears the endorsement of the respondent/workman dated 11-10-1976. It is thus clear that the respondent/workman was given a permission to work as a Typist in October, 1976. The Tribunal had noticed it but had said that the mere fact that he had got permission to sit as a licensed Typist does not establish that he had worked as such and as there have been number of hearings before the Tribunal, the work- man could not have worked and he saw no reason not to give full back wages for all the period to the workman. In my opinion this part of the finding of the Tribunal disclosed error apparent on record. The respondent had taken the completely indefensible plea that he had not even applied for a license or that he had received a letter from the office of the Deputy Commissioner granting him permission. This is found to be against the record. In such circumstances the normal presumption would be that he was trying to conceal the fact that he was making some earnings as a typist in the District Court. No doubt in the normal course if there is anything to show that a workman was gainfully employed the onus is on the management to show that the workman had made some earnings during the period he remained out of employment with the management. But in the present case the respondent/workman cannot avail of that advantage because of the obviously wrong plea taken by him that he had not even applied to work as a Typist nor had he got the permission. Now that this plea of his has been found to be un submitted the workman had to show that notwithstanding having got the permission be in fact did not work as a Typist or that if he worked as a Typist he made no earnings. But in view of the plea taken by the workman that he had never got any permission he obviously led no evidence on that account. He having got the permission by 11-10-1976 it would be a normal presumption that he would have started working as a Typist atleast from 1-11-1976. There is no evidence of the respondent/workman having been employ elsewhere from the date of his dismissal i.e. 14-8-1971 to 31-10-1976. The respondent/workman, thereforee, would bo entitled to reinstatement and full back wages for this period. The respondent/workman would also be entitled to full back wages from the period from 18-4-1980 to the date of his being allowed to join by the Bank because the fault for not taking him back during all this period is not of the workman because the Bank itself had obtained an order of stay of reinstatement. The respondent/workman obviously, thereforee, is entitled to full back wages for this period also. As from the period between 31-11-1976 to 17-4-1978 the respondent workman had undoubtedly a license to work as a Typist; he was familiar with this line being an employee of the Bank, he has led no evidence to show as to how much he earned during this period. But I cannot also ignore the fact that the respondent/workman had to spend lot of his time and energy in pursuing the reference which remained pending till April, 1980. Considering this I feel over all that it may not have been possible for the respondent/ workman even if he had worked as a Typist to make as much money as he would have got at his salary if he had been working in the Bank. I would, thereforee, feel that on a broad conspectus of equity the respondent workman may be paid only 1/4th of his salary of what would have been due to him for the period 1-11-1976 to 17-4-1980. Dr. Anand Prakash had urged that a very great liability will be put on the Bank by payment of back wages, and all this is because the matter remained pending before the Tribunal for all these years. No doubt there is this uncalled for delay but the workman cannot be made to suffer for the fault of the Government in not appointing adequate Labour Courts and Tribunals to deal with the matters. This peculiar problems was recognised and commented upon in a Division Bench Judgment of this Court in C.W. 264611982(32); Inder Mohan V. Union of India etc. decided on 8-5-1984 where I observed that 'The serious impact of such delay has only to be mentioned to be understood. Most of the cases before the Industrial Tribunal and Labour Court relate to the individual grievances like wrongful termination of servies. In such a case it is harsh and unjust both to the employers and employees if the cases continue to remain undecided for years. A workman does not know whether he is going to be reinstated and thereforee, cannot provide for himself any permanent employment elsewhere. If at the end of years a workman gets reinstatement the management feels the pinch of reinstatement with back wages, the inevitable dislocation of the existing strength and the feeling of paying salary for a period when no work was performed by the workman but for which the workman also cannot be faulted because his termination of service was unlawful. I can only hope that the Administration will look into the matter and try to remedy this deficiency of the forums so that the industrial adjudication can be disposed of at the earliest. Point No. 4 thereforee is decided subject to what has been mentioned above, against the management. Point No. 5 :

(52) The Tribunal when directing reinstatement with full back wages and other benefits has also mentioned the benefit of promotion as one of the directions. Objection has been taken by Dr. Anand Prakash to this part of the direction. Of course in so far as the direction means that the workman when he is to be paid full back wages with all benefits would be entitled to the benefit of raise of pay and other allowances admissible to other employees like him, had he remained in service no objection can be raised. Dr. Anand Prakash, however, urges that this direction of promotional benefit was uncalled for because there was no controversy or no reference as to what precise promotion was the petitioner entitled to. He says that if in the normal course any promotion had become due during this period to the petitioner then subject to the Rules and law the Bank will naturally and necessarily look into the matter and take a decision as the circumstances warrant. I feel that there is justification in the criticism. The direction for promotional benefits is too vague and uncalled for because it never formed a part of any reference. I have no doubt that if in the normal

THE Staff Supdt. of State Bank of Patiala v. The Presiding Officer & Others course any promotion is found due to the respondent workman which fell to him during the period he has remained out of employment and as he is now being reinstated with full back wages it would be open to him to ask that he should be treated to be in service at that relevant time and given all the advantages and other benefits that would have been available to him. But no such direction can be given in the present reference for the simple reason that it is not known what, if any benefit is asked for and what, if any, decision the management will take. These are all matters which necessarily lie in the lap of future and could not be the subject matter of any direction in the present adjudication. The direction, thereforee, about the promotional benefits was really uncalled for and being superfluous is quashed only to this extent. of course the direction of reinstatement with full back wages with all benefits due to him in the normal circumstances given by the Tribunal but subject to my finding under point No. 4 will stand. Point No. 5 is decided accordingly.

(53) As a result of the above discussion I find no merit in the petition and the same is thereforee dismissed. In the circumstances there will be no order as to costs. Petition dismissed.

(54) Leila Seth, J.-I have read the judgment of my learned brother. Mr. Justice Rajindar Sachar. On the merits of the case I agree with him that it is not for this Court exercising jurisdiction under Article 226 of the Constitution of India to sit in appeal and reappraise the evidence but I do not see eye to eye on the aspect of jurisdictional challenge to the validity of the reference.

(55) Dr. Anand Prakash. learned counsel for the petitioner, has challenged the validity of reference made on 16th August, 1974. The proposition posed by him is, that once a reference has been refused, the decision can only be reviewed after notice to the parties, a full hearing and recording of reasons on the basis of material before the Government; as this has not happened in the present case the reference is without jurisdiction.

(56) The submission has to be split up into three limbs and each examined independently. The question is Can the Government make a reference when it has already refused to refer the matter earlier and reasons for the refusal have been recorded and communicated to the parties as required under Section 12(5) of the Industrial Disputes Act,1947 to be referred to in short the Act (i) without notice to the parties (ii) without hearing the parties, and or (iii) without recording reasons or having material before it.

(57) My learned brother, Mr. Justice Rajindar Sachar has elaborately dealt with the first two aspects of the argument i.e, notice and hearing. A number of decisions both for and against the proposition have been referred to and he has come to the conclusion after due consideration that neither notice nor hearing are necessary.

(58) Though I might have been inclined to lean towards the more liberal approach of applying the principles of natural Justice recently expressed in the decisions of the Madras Karnataka, Calcutta and Punjab & Haryana High Courts in G. Muthukrishnan v. Administrative Manager New Horizon Sugar Mills (P) Ltd., Pondicherry and other 1980(1) Llj 215, 'Indian Telephones Industries Ltd. v. State of Karnataka & others' 1978 (1) Llj 544, 'American Express International Banking Corporation v. Union of India and others' 1979 (2) Llj 22(33) and M|s. Escorts Limited v. Industrial Tribunal, Haryana & others' 1983 Lab. I.C.223 respectively, I find, I have no choice as the matter has been settled by a bench of this Court in M|s. Khadi Gramodyog Bhavan v. Delhi Administration and others Civil Writ No. 802-D of 1966 decided on 13th July, 1967 said to be reported in 1968 L.D.J. 79. As such, I am in respectful agreement with my learned brother.

(59) However, the third limb of the contention I cannot agree.

(60) In the present case it has been asserted that there was no material before the government justifying it to make a reference on 16th August, 1974 after it had refused to do so on 1st August, 1972. The management alleged, at the earliest stage before the Tribunal, that the order refusing reference had been reviewed for extraneous reasons such as pressure by certain Members of Parliament and reasons not germane. In order to substantiate its stand, the management made an application dated 12th February, 1975. requesting that the record of the conciliation proceedings be called for. On 14th February, 1975 the Tribunal called for the record i.e. file No. L- 12012|35|75-LR-IIT neatening to Department of Labour, Ministry of Labour, Government of India, Shram Shakti Bhawan, New Delhi. But, the Secretary to the Government old India, claimed privilege, under section 123 of the Evidence Act, 1872. to the noting portion of the file.

(61) By its order dated 4th June, 1975, the Tribunal upheld the claim of privilege and after referring to the case of H. L. Bodhey V. Delhi Administration 1969 LIC 974(34) observed that 'documents containing notes which are candid expression of the views of the concerned officers are documents which belong to a class, the non-disclosure of which was necessary for the proper functioning of the public service and the disclosure of which would affect the freedom and condor of expression of public servant and would thus cause injury to public interest'.

(62) As a result of this unfortunate claim of privilege being upheld, the petitioner was prejudiced as he was denied the opportunity, at the earliest, of establishing that the exercise of power in making the reference was malafide and arbitrary.

(63) The said order, inter alia, has been challenged in the writ petition and is annexed to the writ petition. It has been asserted in the writ petition that the order of 4th June, 1975 was clearly wrong and that if the documents had been permitted to be produced they would have effectively supported the petitioner's contention that the reference was made under political pressure.

(64) The Secretary to the Government of India, Ministry of Labour is respondent No. 2 in the writ petition. The workman is respondent No. 3. After 'Rule. D.B.' was issued and an interim order providing for payment to the workman was made, the Court directed early hearing. Though the workman filed an affidavit in reply and denied that the reference was made under political pressure, the Union of India chose to remain silent. By not filing an affidavit in reply, it did not dispute the allegations of the petitioner that the order of reference dated 16th August, 1974 was made mala fide and made for extraneous reasons. Though the Court had desired the hearing to take place in 1980, the matter came up only in 1984. Despite this no affidavit was filed by the Government of India before the hearing started.

(65) During the course of the hearing, counsel for the Union of India was repeatedly asked as to the stand of the Union, but no reply was forthcoming. It was felt, that in order to do justice, it was necessary to have the record. Mr. C. L. Chaudhary, appearing for Union of India, was directed to produce the record. It was also opined that it would be fit and proper lor the government to file a reply qua the allegations made against it But no reply was filed. Ultimately, we were informed that the file was not available.

(66) On 15th March, 1984, we recorded the facts and also directed the registry to ask for the file from the Tribunal in case the file was there. Counsel for title Union of India was requested to take steps and to see that the file was produced.

(67) During the protracted hearing, the file was not produced nor was any affidavit filed by the Union of India. As such, the petitioner-management moved an application on 16th April, 1984. The said application, being C.M. 1360 of 1984, was under Order Vi Rule 17 read with Section 151, Civil Procedure Code. In the said application it was stated, inter alia, that in the writ petition and in the rejoinder it had been asserted that the petitioner did not dispute the government's right to reconsider the matter and make a reference, but challenged the order of reference on the ground that it was made winder political pressure and without giving any opportunity to the petitioner. Since no notice had been given to the petitioner before the order of reference, the petitioner had no opportunity to deal with the matter of political pressure. However, the petitioner had wanted to establish before the Tribunal that the reference was made under political pressure and it was for that reason that the relevant filed had been summoned. The facts, however, could not be brought before the Tribunal as the government claimed privilege in respect of the noting portion of the file and the said claim was upheld by the Tribunal. This caused grave injury and prejudice, to the petitioner. It was reiterated that had the file been produced, the petitioner would have been able to prove that the reference was made under political pressure. It was further stated that the government had made a party to the writ petition so that it would feel compelled to produce the file in court so file a counter-affidavit thus the malafides of the government's action would be established before this court. But the government failed to produce the file or file a counter affidavit in rebuttal of the allegations, despite the fact that during the course of arguments the court had asked it to do so. The claim of the government now is that the file has been lost but even with regard to this assertion the government has not filed any affidavit nor given any Explanationn with regard to 'whether the files were lost and how'. In view of this attitude of the government during the course of hearing of the petition, the petitioner wanted to amend the petition by adding paragraph 2(a) as follows 'That the Government's attitude has been malafide throughout. It has withheld the records which would have proved the contentions as made by the petitioner in its written statement. This Hon able Court has given repeated opportunities to the Government to produce the records and if it cannot be produced or is not available, file a proper affidavit. The Government has not filed any affidavit because it does not want to do so as it will reflect on the persons concerned in the present case and conclusively prove the potitioner's contention as made in the written statement filed before the Tribunal. For this reason, the entire reference may be struck down.'

(68) The workman respondent No. 3, filed a reply dated 17th April, 1984 to this application. It was asserted there in that 'as per information gathered by respondent No. 3, the file is not traceable so the government is not able to prepare the counter-affidavit'. Despite this assertion, there was still total silence on the part of the government. 69. It was only on 4th May, 1984. that Mr. V.S. Ailawadi, Joint Secretary in the Ministry of Labour and Rehabilitation, (Department of Labour), filed a vague and cryptic affidavit and asserted, 'that in pursuance of the directions of Hon'ble High Court dated 16-4-84, I state that the office File bearing No. L-12012135)72-LR.III, containing the reference in question appears to have been. mixed up. somewhere in the process of shifting of records from one room to another. All possible efforts have been made to trace out the file but it could not be traced. The file is not available. It is not lying at the place where it should have been. The entire record has been searched out, but we have not beein able to lay our hands on this file.'.

(69) On 7th May, 1984, Mr. Chaudhary was informed that the affidavit was devoid of details, as such, government was directed to file a further affidavit.

(70) After the hearing was concluded, the case was directed to be listed on 10th May, 1984 in order to give parties an opportunity of arriving at a viable financial arrangement. But the workman, who was present, categorically stated that he would not agree to any arrangement and that the court should proceed to judgment. Even on that date no affidavit was filed on behalf of the Union of India.

(71) It was only thereafter, on 28th May, 1984 that Mr. S.S. Mehta, Desk Officer, Ministry of Labour and Rehabilitation stated in an affidavit as follows:

IN pursuance to the directions of the Hon'ble High Court dated 7-5-84, I State that the conventional Section dealing with Industrial Disputes in Banks was converted into Desk Pattern on 1-1-75 and consequently shifting took place sometime in early 1975, the exact date being not available. The old relevant Movement Register of the file in question for the year 1972 i.e. the file was opened in the year 1972, and reference made in 1974, is also not available to find out various movements of the file. Again the entire record has been searched out but the file was not traceable.

(72) To say the lea,st, the two affidavits and the stand of the government speak volumes. At no stage, despite being a party, did the government repudiate the assertion of the petitioner that the reference was made because of political pressure and reasons not germane. The government did not even feel that it was necessary to repudiated the allegation of malafides despite having claimed privilege and having denied the State Bank of Patiala, a nationalized undertaking, an opportunity of seeing the record. The government's entire attitude was like that of a reluctant debutante and it was only after constant prodding by the court, that the vague and cryptic affidavit of 4th May, 1984 was forthcoming.

(73) The facts that average from the two affidavits of the government dated 4th May, 1984 and 28th May, 1984 read together are : (1) the file is not traceable despite search; (2) the file was mixed up at the time of shifting from one room to another; (3) that the conventional section was converted into desk pattern on 1st January, 1985; (4) the shifting took place as a consequence in early 1975; (5) the movement register of the file is not traceable.

(74) thereforee, the positive assertions made in the said affidavits are that the file was misplaced at the time of shifting which took place in early 1975. This assertion is belied by the record. This is apparent from the fact that the file was summoned by the Tribunal on 14th February, 1975 as a result of the application of the petitioner dated 12th February, 1975. Thereafter, the file was brought before the Tribunal and the claim of privilege to the 'noting portion' of the file was made by an affidavit dated 11th March, 1975. The order on the said claim was made only on 4th June, 1975. It is, thereforee, clear that the file was not misplaced in early 1975, at the time of shifting, as asserted.

(75) The conduct and tenor of the Government's stand is strange. The petitioner alleges malafides and arbitrariness at the earliest, opportunity. The Government does not deny this at any stage. On the other hand, it denies the petitioner an opportunity of establishing its assertions. The noting on the relevant Government file would have been the best answer to the charge of the petitioner. But the Government succeeds ill preventing the petitioner from looking at it. When this Court wants to look at the file, it is stayed that the file is not traceable. When pushed to explaining its absence, it is erroneously asserted that it was lost in early 1975. Further, ever before the Government files an affidavit regarding the nonavailability of the file, respondent No. 3, the workman, asserts this position. He appears to know even more than the Union of India. The silence of the Government and lack of traverse coupled with other factors abovementioned, would prima facie lead me to believe, that there is substance in the charge of the petitioner regarding malafides and arbitrariness. It has been observed in Halsbury's Laws of England, 4th Edition Vol. I, paragraph 60, page 67 as follows :

WHERE a prima facie case of misuse of power has been made out, it is open to a Court to draw the inference that unauthorised purposes have been pursued if the competent authority fails to adduce any grounds supporting the validity of its conduct.

INM/s.Khadhi Gramodyog Bhavan (supra), while discussing the scope and power of the appropriate government to refer an industrial dispute to the Industrial Tribunal after once having come to the conclusion that it does not consider the dispute a fit one for reference. Mr. Justice S. N. Shankar observed:

'ITis, thereforee, clear that there can be no dispute as far as the power of the appropriate government to refer the same dispute again to the Tribunal is concerned even though on a previous occasion it might have come to the conclusion that there were no sufficient grounds for doing so. But this does not permit the State Government to exercise that right or that power arbitrarily or without any justifiable grounds-justifiable not for the purpose of being determined by the court but justifiable in the sense that they are reasonably good grounds.'

'THEcourt, of course, cannot go into the merits of the recommendations. The court is only concerned to see that such a review is not arbitrary or capricious'

(76) Chief Justice Hegde who concurred with the Justice S.N. Shanker summed up the position as follows:

1.A reference under section 10(1) of the Act is an administrative act, it is neither a judicial order nor a quasi-judicial order.

2.A reference can be made to a Tribunal without notice to the concerned parties.

3.If a dispute is referred to a Tribunal, thereafter the Government is functus-officio.

4.But if the Government refused to refer the dispute, it is open to it to revise its earlier decision, such a revision can be made without notice to the parties.

(77) But he specifically observed thereafter, that, 'The bona fides of. the Government has not been questioned at any stage. thereforee, there is no question of striking down the impugned order on the ground of malafides'.

(78) From the said judgment, it is clear, that though no notice of hearing is essential, yet the power of revision or review cannot be exercised malafide, arbitrarily or capriciously.

(79) In that case also the petitioner had imp leaded the Government i.e. the Delhi Administration, as respondent No. 1. The Court observed : '...unfortunately for reasons that are not clear to us, the said respondent did not file any return and it was not clear as to why the Delhi Administration was not interested in upholding the order made by it'. The workman made an application for permission to summon the relevant file to show that the power had not been exercised by the Government capriciously or arbitrarily. In these circumstances the Court observed, 'it was contended by him, and rightly so, that he should not be penalised for the inaction or the omission of the respondents'. The application was allowed and the relevant file inspected. From the file, the Court noted, 'that the Government has revised its order on the recommendation of the Labour Commissioner. This Court, of course, cannot go into the merits of, the recommendation. The Court is only concerned to see that such a revision is not arbitrary or capricious. We find that prima facie the appropriate Government has rightly exercised its power in this case in referring the dispute to the Tribunal'.

(80) It is pertinent to note that in that case it was the workman who asked for inspection of the file in order to establish that the Government's order was not arbitrary or capricious. It was in that context that the Court observed, that the workman could not be penalised for the inaction or omission of the Government. Further, the Court had an opportunity to see the file and satisfy itself that the order was not arbitrary or capricious.

(81) In the present case, the bonafides of the Government have clearly been questioned but the Government had failed to file a reply and rebut these allegations, despite ample opportunities. Further, it is the petitioner who has repeatedly been pressing for production and inspection of the file in order to establish its claim of malafides and arbitrariness. But first the Government closed the door, by claiming privilege, and the Tribunal barred the petitioner from inspecting the record, and thereafter in this Court, by asserting that the file is not traceable, resulting in the reality not coming to light. So here, it is the petitioner-management which is prejudiced by the inaction and the omission of the government. For it is only from the noting of the government file that the petitioner could establish its case of malafides, if any.

(82) The power to make a reference is no doubt an administrative and discretionary power. As observed in de Smith's Judicial Review of Administrative Action (4th Edition) at page 324 : 'A discretionary power may be abused in good faith or in bad faith. Bad faith is often referred to as a ground of invalidity sui genre is, but it can also be regarded as a quality which brings the exercise of a power within the ambit of one or the other recognised categories of invalidity. The relevant category will usually be the exercise of a power for an improper purpose'.

(83) The power to make a reference can be exercised by the Government 'at any time' in terms of Section 10(1), read with Section 12(5) of the Act. However, the discretion is neither unfettered nor arbitrary. In M/s. Western India Watch Co. Ltd. v. The Western India Watch Co. Workers' Union and Others : : (1970)IILLJ256SC the Supreme Court observed that,

THE power to refer cannot be said to have been exhausted when it has declined to make a reference at an earlier stage. There is thus considerable body of judicial opinion according to which so long as an industrial dispute exists or is apprehended and the Government is of the opinion that it is so, the fact that it had earlier refused to exercise its power does not preclude it from exercising it at a later stage. In this view, the mere fact that there has been a lapse of time or that a party to the dispute was, by the earlier refusal, led to believe that there would be no reference and acts upon such belief, does not affect the jurisdiction of the Government to make the reference.

Further,

IN the light of the nature of the function of Government and the object for which the power is conferred on it, it would be difficult to hold that once the Government has refused to refer, it cannot change its mind on a reconsideration of the matter either because new facts have come to light or because it had misunderstood the existing facts or for any other relevant consideration and decide to make the reference.

If went on to note:

IT is true that where a Government reconsiders its previous decision and decides to make the reference, such a decision might cause inconvenience to the employer because the employer in the meantime might have acted on the belief that there would be no proceedings by way of adjudication of the dispute between him and his workmen. Such a consideration would, we should think, be taken into account by the Government whenever, in exercise of its discretion, it decides to reopen its previous decision as also the time which has lapsed between its earlier decision and the date when it decides to reconsider it. These are matters which the Government would have to take into account while deciding whether it should reopen its former decision in the interest of justice and industrial peace. but have nothing to do with its jurisdiction...

(84) thereforee, from the above decision, it is clear that though delay may be a factor, to be taken into consideration, when reconsidering the decision to refer, it does not affect the jurisdiction of the reference. That is dependent on the formation of the opinion of the Government for relevant consideration and proper purposes.

(85) It is clear that it is the opinion of the appropriate Government that is relevant in referring a dispute. The change of mind can be because new facts have come to light or because it had misunderstood the existing facts or for any other relevant consideration. As such, when a challenge is thrown and it is categorically asserted, that the reference has been made arbitrarily on the basis of political pressure and extraneous grounds, it is surely necessary and proper for the Government to file an affidavit at the earliest and contradict the allegations. if it can, especially when the order of reference is made two years after the speaking order refusing reference has been communicated.

(86) But the somersault of the Government is submerged in silence. The whole stand of the Government, in the facts already indicated above, gives the impression that the assertion of the petitioner before the Tribunal as also its petition in this Court, with regard to political pressure is correct. Or else, why should it claim privilege from a nationalised bank or feel shy of asserting to the contrary? The assertions of the workman, to the contrary, that the order is not malafide or arbitrary are not relevant, as it is the satisfaction of the Government that is in issue, while making the reference and not of a party.

(87) Even in the case of M/s. Avon Services Production Agencies (P) Ltd. v. Industrial Tribunal, Haryana & Others : Toe Presiding Officer & Others : (1979)ILLJ1SC though the Supreme Court observed that it was not necessary for the Government to have fresh material, subsequent to its refusal, before the formation of a fresh opinion for making a reference, yet it opined, that there must be 'some material'. In paragraph 8, it observed, 'The Government may reconsider its decision on account of some new facts brought to its notice or for any other relevant consideration and such other relevant consideration may include the threat to industrial peace...', also 'that, 'the power to make the reference remains intact.. .'. It specifically noted that its view was in accord with the decision in Binny Ltd. v. Their Workmen ; : (1972)ILLJ478SC .

In that case, the Supreme Court observed, that the mere fact that Government had previously taken the view that no reference was called for, would not, entitle the Count to conclude that there could be no cause for reference of the dispute subsequently. Further, from the earlier refusal it did not follow 'that Government could not thereafter either change its mind or make an order of reference on fresh material before it'. S. 10(1) empowered the appropriate Government to make a reference 'at any time' whenever it is of the opinion that any industrial dispute exists or is apprehended. But the Court could not go into the question, whether the Government had any material justifying the reference for want of the relevant material before it. This point could only be canvassed either in a proceeding to which the Government was a party or where the Court was in possession of all the available material relating to the dispute. In the absence of the Government from the array of the parties, it was not possible to come to any finding as to whether there was any such material or not.

(89) In the present case, a reference had been refused on 1st August, 1972 and under section 12(5) of the Act the reasons in writing had been recorded and communicated to the parties concerned as required. The Government has reviewed that decision and referred the matter on 16th August, 1974. The petitioner has doubted the bonafides of the Government's action. It has taken a specific plea with regard to political pressure, however brief. The Government is a party in these proceedings, but has failed to file a reply or produce the record to satisfy the Court that the power has not been exercised, arbitrarily or for an improper purpose. All the representation and assertions of the workman to the contrary cannot be a substitute for a statement by the Government when it is the Government's satisfaction that is in issue. There must be some 'relevant bearings between the purpose of the power and the formation of the opinion. When the motives of the Government are challenged, the considerations which weighed with it should be indicated by the Government. The Government, however, is silent on this aspect. Its incorrect averments with regard to misplacing of the file, as above indicated, are also pertinent.

(90) It is not in dispute, that the adequacy or sufficiency of the material is beyond the pale of judicial scrutiny, but the existence of 'some material' is surely relevant, especially when malafides is asserted. True, the power of reference is an administrative act and normally not subject to examination; but if malafides are alleged then even an administrative order is subject to scrutiny. Malafides eats at the entrails of all action.

(91) The order of refusal dated 1st August, 1972 is not in issue. Section 11A introduced by the Industrial Disputes (Amendment) Act, 1971 (45 of 1971), with effect from 15th December, 1971 was already on the statute book when the earlier order of refusal was passed. No case has been either asserted or argued by the Union of India with regard to any earlier misunderstanding of the said provision or any other fact; nor is there any submission or assertion with regard to any material or facts or other relevant considerations, including threat to industrial peace, having been brought to its notice for reconsidering its earlier reasoned decision not to refer. In fact, the Government's stand has been shrouded in total silence. The Government cannot 'disarm' the Court by taking refuge in silence, as has so aptly been stated by H. W. R. Wade in 'Administrative Law' (4th Edition). The failure to explain the decision when challenged is itself arbitrary and unreasonable. As observed in 'Padfield v. Minister of Agriculture, Fisheries and Food' : 1968 A. C. 997(35), at page 1061:

MYLords, I would only add this : that without throwing any doubt upon what are well known as the club expulsion cases where the absence of reasons has not proved fatal to the decision of expulsion by a club committee, a decision of the Minister stands on quite a different basis; he is a public officer charged by Parliament with the discharge of a public discretion affecting Her Majesty's subjects; it he does not give any reason for his decision it may be. if circumstances warrant it, that a court may be ait liberty to come to the conclusion that he had no good reason for reaching that conclusion and order a prerogative writ to issue accordingly.

IN Shanti Theatre (P) Ltd. v. State of Tamil Nadu 1971 (55) Ifj 389(36), after referring to various views, Mr. Justice Padmanabhan observed at page 409, as under-

I have referred to the above decisions only to focus the attention on the question as to how far the rights of the management are affected by the subsequent reversal of the stand of the Government In such a situation, the court would expect the Government to give reasons for the change of the decision or at least to have before them the reasons on the basis of which they decided to change their earlier decision so that the courts could be convinced that the Government had appropriate material on the basis of which they took the decision.

(92) It would, thereforee, appear to me, .that H is a condition precedent for reviewing its earlier reasoned order that the government have some reason/material before it. Now, is there any? None has been shown or even suggested by the Union of India. In these circumstances, it would appear to me that the order of reference must be struck down as arbitrary.

(93) This is not in conflict with the judgment in the case of M/s. Khadhi Gramodyog Bhavan (supra) wherein it was specifically noted that the bonafides of the Government had not been questioned at any stage. In fact as already noticed, the court observed therein that the power to reconsider did not permit the Government to exercise the right arbitrarily or without any justifiable grounds.

(94) The formation of the opinion by the Government to refer a matter must have some nexus or relevant connection with the purpose for which it is to be exercised and cannot be a mere pretense. However had, striking down the order of reference may be on the workman, there is no choice, as it is a matter of jurisdiction. In this case, it is the workman who will be aggrieved by the result, but in another case it may be the management; but, this fact cannot make any difference in deciding the validity of the reference.

(95) As such, for the reasons outlined above, the writ petition is allowed and the award of the Tribunal is set aside; but in the circumstances of the case, there will be no order as to costs. Petition allowed.

(96) Rajinda R Sachar & Leila Seth, JJ.-The points urged by Dr Anand Prakash, learned counsel for the management were as follows:

1.As the government had communicated its decision dated 1st August, 1972 not to make the reference under Section 10(1) of the Act it acted in breach of the principles of natural justice to refer the matter for adjudication as per its order dated 16th August, 1974 without first having given any opportunity of hearing or making representation against the proposed order or reference.

2.That the government makes a reference, after it has already refused to refer the matter earlier and recorded reasons for the refusal have been communicated to the parties in accordance with the Industrial Disputes Act, without recording reasons or having material before it, the said reference is invalid.

3.The Tribunal acted illegally in setting aside the termination of service of the workman.

4.Even if termination of service was validly set aside compensation, and not reinstatement was the proper relief to be awarded.

5.The Tribunal exceeded its jurisdiction in purporting to award promotional benefits, which is outside the terms of reference.

(97) Both of us are agreed as to the conclusion in regard to points 1, 3, 4 and 5. On these findings subject to the modification in point No. 5, the result would be the dismissal of the writ petition.

(98) However, on point No. 2, which is a challenge to the jurisdictional competency to make the reference, there -is a difference of opinion between us: while Sachar, J holds that there was relevant admissible material on record on the basis of which the Central Government made the reference as per its order dated 16th August, 1974, Leila Seth, J. is of the opinion that no reason or material has been shown by the Central Government for the basis of the formation of its opinion to make the reference dated 16th August, 1974, even though malafides had been asserted.

(99) The result of Sachar, J's decision would be a dismissal of the petition while the decision of Leila Seth. J. would result in the petition being allowed.

(100) As we have differed on point No. 2, it is evident that the matter must be placed before another Judge, we would, thereforee, direct that the papers be placed before Hon'bie the Chief Justice for referring point No. 2* to another Judge. Only point No. 2 is being referred as on the other four points we are in agreement.

(101) As the reference was made over a decade back and the matter relates to the termination of the services of the employee, we feel that the matter should be heard at the earliest.


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