Skip to content


State of Madras by the Secretary, Development Deparment Vs. K.N. Padmanabha Iyer and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Reported in(1958)2MLJ266
AppellantState of Madras by the Secretary, Development Deparment
RespondentK.N. Padmanabha Iyer and ors.
Cases ReferredK.M. Padmanabha Ayyar v. State of Madras
Excerpt:
.....closure of the business in july, 1952, the order of the government referring the matter to the industrial tribunal in january, 1953, when the business was not in existence was bad because on the date of the reference it could not be said that there was a dispute between the workmen and the management of the business. it is true that an executive act by itself cannot be quashed by a writ of certiorari, but if by virtue of such an administrative act a quasi-judicial tribunal like the industrial tribunal is vested with jurisdiction to proceed with an adjudication which certainly will be proper subject-matter of a writ of certiorari at a later stage, then it would be open to this court, under the powers conferred on it by article 226 of the constitution, to issue a writ in the nature of..........and management of the lakshmi cafe, madras, to be referred for adjudication to the industrial tribunal, madras. in the annexure to the order they gave the list of the items of dispute between the parties. the list is as follows:(1) fixation of scales of wages for different categories of employees.(2) fixation of the quantum of dearness allowance in the place of boarding and lodging.(3) fixation of number of days for sick leave with wages in a year.(4) fixadon of the quantum of bonus for the years 1947, 1948, 1949, 1950 and 1951.(5) fixation of the quantum of gratuity.(6) whether the closure of the hotel in july, 1952 and the discharge of workers are justified and if not, to what relief the discharged workmen are entitled?2. thereupon padmanabha iyer, a member of the joint family.....
Judgment:

Rajamannar, C.J.

1. This is an appeal against the judgment of Govinda Menon, j., disposing of an application under Article 226 of the Constitution filed by one K.N. Padmanabha Iyer in the following circumstances. The joint family to which the said Padmanabha Iyer belonged was running a hotel called Lakshmi Cafe at 311, Mint Street, George Town, Madras. On behalf of the workers of the said cafe the Madras City Hotel Workers Association put up a number of demands to the management relating to wages, dearness allowance, holidays, leave facilities, bonus, gratuity, provision of room for taking tiffin, etc. There were attempts at reconciliation by the Labour Officer; but the attempts did not succeed. On 2nd May, 1952, the proprietor of the cafe addressed the Labour Officer that owing to a slump in the business and high cost of foodstuffs, the business was running at a loss. There was also considerable trouble from the workers and therefore he had decided to close down the cafe section of the business from the 8th May and requested the permission of the Labour Officer to do so. Eventually, on 1st July, 1952, the business of the cafe was closed down. On 28th January, 1953, the Government passed an order G.O. Ms. 397, Development Department, in and by which in exercise of the powers conferred on them by Section 10(1)(c) of the Industrial Disputes Act, 1947, they directed the industrial dispute which had arisen between the workers and management of the Lakshmi Cafe, Madras, to be referred for adjudication to the Industrial Tribunal, Madras. In the annexure to the order they gave the list of the items of dispute between the parties. The list is as follows:

(1) Fixation of scales of wages for different categories of employees.

(2) Fixation of the quantum of dearness allowance in the place of boarding and lodging.

(3) Fixation of number of days for sick leave with wages in a year.

(4) Fixadon of the quantum of bonus for the years 1947, 1948, 1949, 1950 and 1951.

(5) Fixation of the quantum of gratuity.

(6) Whether the closure of the hotel in July, 1952 and the discharge of workers are justified and if not, to what relief the discharged workmen are entitled?

2. Thereupon Padmanabha Iyer, a member of the joint family which was running the hotel, filed the petition above referred to under Article 226 of the Constitution for the issue of a writ quashing the order of reference of the first respondent, dated 28th January, 1953 and the proceedings before the Industrial Tribunal, Madras, in pursuance of the said order of the Government. In the counter-affidavit filed on behalf of the Government it was inter alia stated that there was no bona fide closure of the business and that the business was actually being conducted. Govinda Menon, J. before whom the writ petition came on for hearing, after considering the report of a Commissioner who had been specially appointed to find out if the closure was really genuine, held that there was a bona fide closure of the business and that the management had not closed down the business with a view to victimise the workmen and force them to accept their own terms. The learned Judge also took the view that in view of his finding that there had been a bona fide closure of the business in July, 1952, the order of the Government referring the matter to the Industrial Tribunal in January, 1953, when the business was not in existence was bad because on the date of the reference it could not be said that there was a dispute between the workmen and the management of the business. He therefore quashed the order of Government. The State of Madras is the appellant before us and the learned Additional Government Pleader has challenged the correctness of this view.

3. We may mention that at the outset the learned Government Pleader put forth a technical objection to the maintainability of the petition under Article 226 to quash the order of reference made by the Government, on the ground that such an order was administrative in its nature and a writ of certiorari would not lie to quash an administrative or executive act. It cannot be denied that there is force in this contention. But in our opinion this technical objection should not be allowed to prevail so as to deny this Court an opportunity to interfere if the justice of the case calls for such interfefence. It is true that an executive act by itself cannot be quashed by a writ of certiorari, but if by virtue of such an administrative act a quasi-judicial Tribunal like the Industrial Tribunal is vested with jurisdiction to proceed with an adjudication which certainly will be proper subject-matter of a writ of certiorari at a later stage, then it would be open to this Court, under the powers conferred on it by Article 226 of the Constitution, to issue a writ in the nature of a writ of prohibition prohibiting the quasi-judicial Tribunal, that is, the Industrial Tribunal, from proceeding with the enquiry in pursuance of the administrative order of the Government, if this Court is convinced that the executive act is illegal or ultra vires. We, therefore, overrule the preliminary objection and shall proceed with the case as if the petitioner had prayed for an appropriate writ in the circumstances, that is, a writ of prohibition and not a wirt of ceritorari which happened to be mentioned specifically in the petition, though there was an omnibus prayer for the passing of any other order which may appear just to this Court in the circumstances.

4. On the main point the matter is concluded by the recent decision of the Supreme Court in P.S. Mills, Ltd. v. P.S. Mills Mazdoor Union (1957) S.C.J. 38. In that case, it was held by the Supreme Court construing a section of the U.P. Industrial Disputes Act corresponding to Section 10 of the Industrial Disputes Act, 1947, that the power of the State to make a reference must be determined with reference not to the date on which it is made but the date on which the right which is the subject-matter of the dispute arises, and the machinery provided under the Act would be available for working out the rights which had accrued prior to the dissolution of the business. In that case the reference was made at a time when the business had been closed; but the reference was in respect of a claim which arose when the business was working. Following that decision we must hold that the ground on which Govinda Menon, J., quashed the order of the Government was wrong.

5. Our attention was drawn to the fact that in the judgment of Venkatarama Ayyar, J., who delivered the judgment on behalf of the Supreme Court there is an approval of the very judgment of Govinda Menon, J., against which this present writ appeal has been filed. That approval is contained in the following passage:

The view therefore expressed in Indian Metal and Metallurgical Corporation v. Industrial Tribunal, Madras (1952) 1 M.L.J. 481 and K.M. Padmanabha Ayyar v. The State of Madras (1954) 1 Lab. L.J. 469, that the industrial dispute to which the provisions of the Act apply is only one which arises out of an existing industry is clearly correct. Therefore, where the business has been closed and it is either admitted or found that the closure is real and bona fide, any dispute arising with reference thereto would, as held in K.M. Padmanabha Ayyar v. State of Madras (1954) 1 Lab. L.J. 469, fall outside the purview of the Industrial Disputes Act.

It is obvious that this approval cannot certainly mean that they were approving of a, proposition which is opposed to the very decision in that case. It appears to be clear to us that the learned Judge's attention was not drawn to the fact that in the case before us, though the reference was made at a time when the business had been closed down, the dispute arose when the industry was in existence, that is, when the-business was running.

6. Mr. V. Tyagaraja Ayyar appearing for the management drew our attention to the fact that one of the items referred to by the Government cannot really be said to remain after the finding of the learned Judge, Govinda Menon, J., that the closure of the business was bona fide. Item 6 as already mentioned, relates to the propriety of the closure. We agree with him. The Tribunal will not proceed to adjudicate as regards that item of dispute in view of the finding of this Court. Otherwise the Industrial Tribunal will have jurisdiction to proceed with the enquiry in accordance with the order of the Government. It was represented to us by Mr. Tyagaraja Ayyar that some of the other items have since become academic in view of the closure of the business, as for instance fixing the number of days for sick leave. That, however, will not deprive the Industrial Tribunal of jurisdiction to proceed with the enquiry on the reference. It can be represented to the Tribunal by the management that some of the items have really become academic and have no practical significance.

7. In the result we allow the appeal and dismiss the application filed by the management. The Industrial Tribunal will go on with the enquiry and make an adjudication having regard to the observations made by us in this order. There will be no order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //