Skip to content


The Management of Sayani Talkies Represented by Its Managing Partner M.P. Jamal Vs. K.A. Ramamurthi, Deputy Commissioner of Labour, Arbitrator and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial;Arbitration
CourtChennai High Court
Decided On
Reported in(1975)1MLJ35
AppellantThe Management of Sayani Talkies Represented by Its Managing Partner M.P. Jamal
RespondentK.A. Ramamurthi, Deputy Commissioner of Labour, Arbitrator and anr.
Cases ReferredIn Alopi Parshad and Sons v. Union of India
Excerpt:
.....it would amount to enforcement of a contract of personal service which is prohibited by section 14 of the specific relief act ;were urged before the lower court. the union should have known that the arbitrator had failed to file the award and that, therefore, until the award was filed into court, it could not be enforced. union of india [1960]2scr793 ,it is observed thus at page 50: the extent of the jurisdiction of the court to set aside an award on the ground of an error in making the award is well defined......would appear from this decision that the civil court is bound to pass a decree in terms of the award filed into court under section 14 (2) of the act, if the award is not vitiated by any of the grounds mentioned in section 30 of the act. the appellant in this case has not established any of the grounds mentioned in section 30 to show that the award is not acceptable. as observed by the lower court, the first respondent functioned as arbitrator in an industrial dispute as persona designata and not as a civil court. he was entitled to pass an award for reinstatement, and if that award is not set aside for any of the rea-sons mentioned in section 36 of the act, after it is filed into court, a decree in terms of the award has to follow. therefore, i am of the opinion that the petition.....
Judgment:

A. Varadarajan, J.

1. The second respondent was employed under the appellant., the Management of Sayani Talkies, and a dispute arose about his non-employment before the Conciliation Officer, Labour Officer-I, Madras. The appellant and the second respondent entered into a settlement under Section 12 (3) of the Industrial Disputes Act, 1947, on 28th September, 1968 agreeing to refer the dispute to the arbitration of the Commissioner of Labour, Madras, or his nominee. The Commissioner of Labour nominated the first respondent, Deputy Commissioner of Labour, evidently as persona designata, to arbitrate, and he obtained statements from the appellant and the second respondent, recorded evidence, heard them and found that the non-employment of the second respondent; was not justified and that he was entitled to reinstatement with continuity of service and half back wages. Accordingly, he passed an award on 12th May, 1969. These facts are admitted in the appellant's affidavit filed in support of the petition filed by the appellant under Section 14 (2) of the Arbitration Act, 1940 (hereinafter referred to as the Act) for filing the award into the Court. The lower Court allowed that petition,

2. The appellant filed another petition under Section 30 of the Act for setting aside the said award, dated 12th May, 1969 on the following grounds:

(a) The Arbitrator has misconducted himself and the proceedings are vitiated by an error of law apparent on the face of the record.

(b) The Arbitrator failed to appreciate that the arbitration was governed by the Arbitration Act and as such his powers were not larger than those of the civil Court in trying a civil suit ;

(c) The Arbitrator failed to note that it was beyond the scope of his jurisdiction to direct reinstatement of the second respondent as it would amount to enforcement of a contract of personal service which is prohibited by Section 14 of the Specific Relief Act

(d) The Arbitrator should have referred to the enquiry proceedings and should have given a finding as to whether the enquiry was fair and reasonable.

(e) The Arbitrator misdirected himself in going into the evidence led before him before giving a finding as to the fairness of the enquiry.

(f) The Arbitrator exceeded his jurisdiction in re-assessing the evidence placed at the enquiry proceedings.

(g) The Arbitrator grievously erred in law in submitting his judgment for that of the enquiry officer, when there was an enquiry into the charge of misconduct in which the charge had been made out beyond any shadow of doubt.

(h) The Arbitrator has not given any reason to discard the domestic enquiry officer's findings and in the absence of such a finding he ought not to have proceeded to assess the evidence before him with a view to find the guilt of the workman ;

(i) The approach of the Arbitrator in going into the merits of the case was contrary to law.

(j) The Arbitrator should have seen that even if the non-employment was found to be unjustified the only relief to which the second respondent would be entitled was only damages and not reinstatement in service.

3. The second respondent, who alone contested that petition under Section 30 of the Act, contended in his counter statement that the grounds alleged for setting aside the award are not true, and stated that the first respondent reached his conclusion expressed in the award only after considering all the records and evidence placed before him and that his award is valid and cannot be set aside. He contended in the counter-statement filed in the said application under Section 14 (2) of the Act that the parties to the arbitration proceedings have agreed to treat the award of the arbitrator as final and binding on them, that the settlement by way of the award is binding on all parties under Section 18 (3) of the Industrial Disputes Act, and that the Settlement arrived at on 28th September, 1968 under Section 12 (3) of the Act for referring the matter to arbitration is not an arbitration agreement as defined in Section 2 (a) of the Act as alleged in that petition, but is a settlement under Section 12 (3) of the Industrial Disputes Act, the scheme and the provisions of that Act being to exclude the jurisdiction of the civil Court. He thus contended that it is not open to the appellant to invoke the jurisdiction of the civil Court under Section 14 (2) of the Act. He further contended that even if in fact there was an arbitration, Section 10-A of the Industrial Disputes Act would be attracted, and Sub-section (5) of that section says that nothing in the Arbitration Act, 1940 shall apply to arbitrations under Section 10-A and that, therefore, the civil Court has no jurisdiction to entertain the petition.

4. The paints referred for arbitration according to the settlement reached, by the parties on 28th September., 1968 are:

1. Whether the non-employment of the second respondent is justified and if not, to what relief he will be entitled?

2. To compute the relief in terms of money if it could be so computed.

5. It is seen from the lower Court's order that the parties to the industrial disputes were properly represented before the Labour Officer and they signed the said settlement Exhibit B-1, dated 28th September, 1968 agreeing to refer those issues to the informal arbitration of the Commissioner of Labour, Madras or his nominee. The Commissioner of Labour nominated the first respondent, who recorded evidence and admittedly heard the parties and gave a finding that the non-employment of the second respondent was not justified and that he should be reinstated with continuity of service and half back wages as mentioned above. The lower Court held that the first respondent has not functioned as a civil Court in giving the award and is not governed solely by the Arbitration Act and that the appellant having agreed to abide by his decision cannot resile and contend the first respondent had no jurisdiction to pass the award and that the award is not valid. In that view he dismissed the petition lender Section 30 of the Act. Though several grounds had been urged in the petition filed under Section 36 of the Act for setting aside the award, only two grounds, namely:

(1) the arbitrator failed to appreciate that the arbitration was governed by the Arbitration Act and as such his powers were not larger than those of the civil Court in trying a civil suit ; and

(2) The arbitrator failed to note that it was beyond the scope of his jurisdiction to direct reinstatement of the second respondent as it would amount to enforcement of a contract of personal service which is prohibited by Section 14 of the Specific Relief Act ;

were urged before the lower Court. Only those grounds were urged by the learned Counsel for the appellant even before me.

6. There can be no doubt that the civil Court has no jurisdiction to enforce a contract of personal service and that it could award only damages for breach of any such contract. In U. P. S. M. Corporation, Lucknow v. U. K. Tyagi : (1970)ILLJ32SC , which was strongly relied upon, by the learned Counsel for the appellant, it is observed that normally a contract of personal service will not be enforced by an order for specific performance and that it would not be open for a servant to refuse to accept the repudiation of a contract of service by his master and say that the contract has never been terminated. In that case, a civil suit was instituted challenging the dismissal of an employee, who prayed for a declaration that the order of dismissal was null and void and that he is entitled to be reinstated in service. It has been held that the civil Court has no jurisdiction to grant the relief of reinstatement. Having regard to this decision, the learned Counsel for the appellant contended that as the civil Court cannot give the relief of reinstatement to the second respondent, it was not open to the first respondent to pass an award giving the relief of reinstatement to the second respondent and that the award is, therefore, not valid. This decision does not help the learned Counsel for the appellant as it does not lay down that it is not open to an arbitrator appointed in pursuance of a settlement under Section 12 (3) of the Industrial Disputes Act, to pass an award directing reinstatement of an employee even though the reference made to him was to consider whether the non-employment of that employee was justified. The learned Counsel for the appellant relied also upon the decision in Hospital Equipments (Manufacturing) Company v. Labour Court, Madras (1972) 42 F.J.R. 347, where it is observed at pages 362 and 363 thus:

The first question to be considered is whether there was an existing right in favour of the workmen so as to entitle them to apply under Section 33-C (2) for the purpose of computation of any benefit. In other words, the question is whether the decision of the Deputy Commissioner on the basis of which the claims were made by the workmen created any right in their favour and cast an obligation upon the management. That leads to the question whether the decision of the Deputy Commissioner is an enforceable settlement or an enforceble award under the Industrial Disputes Act. Though the matter was taken up by the Conciliation Officer, who was competent to bring about a settlement under Section 12 (3), he merely got an agreement from the parties for referring the dispute to the decision of the Commissioner or his nominee. In the settlement the parties no doubt agreed that the decision of the arbitrator shall be binding and shall be treated as a term of the settlement for all purposes. The binding character of the settlement for the purpose of Section 12 (3) of the Industrial Disputes Act, cannot be extended further to imply that the award made in pursuance of the settlement will be binding or that such an award cannot be impugned on any of the grounds which could be urged by the parties to the reference to the arbitration under the provisions of the Arbitration Act. Section 10-A provides for voluntary reference of dispute for arbitration. Under this provision it is open to the employer and the workmen to agree to refer any dispute to arbitration. This should be by a written agreement, which should be in the prescribed form and should be signed by the parties in the prescribed manner. A copy of the Arbitration agreement should be forwarded to the appropriate Government and the Conciliation Officer. Thereupon, the appropriate Government should, within a month from the date of the receipt of such copy, publish the same in the official gazette. If all these formalities are complied with, then the provisions of the Arbitration Act, 1940, would not apply to such arbitration. That is expressly provided for in Sub-section (5) of Section 10-A. In the instant case, though the parties agreed to have their dispute decided by the Commissioner of Labour or his nominee the other formalities of Section 10-A were not complied with, with the result the decision given by the arbitrator is not saved by Sub-section (5) of Section 10-A. In other words, the said decision is subject to the provisions of the Arbitration Act.

7. If the decision of an arbitrator is subject to the provisions of the Arbitration Act, the question is, does the decision become enforceable merely as a decision given under reference by the parties or does its enforceability depend upon the compliance of any legal formality? Chapter V of the Arbitration Act applies generally to all arbitration except otherwise provided in that Act.

8. It is further observed at pages 356 and 357:

If the award had been filed and if notice of the filing of the award had been given to the management, it was open to the management to take such action as may be available to have the award set aside or modified. Until an award is filed into Court, it is not open to any party to apply under Section 30 of the Arbitration Act to have it set aside. The Union in question was a party to the petition filed by the management under Section 14 (2) of the Act. The Union should have known that the arbitrator had failed to file the award and that, therefore, until the award was filed into Court, it could not be enforced. The Union is not entitled to throw any blame upon the management for not taking action to impugn the award. Nothing prevented the Union from taking such action as was available in law to see that the award was filed in time and notice given to the management. The fact that long time has elapsed since the award was passed is no ground for holding that the award is enforceable, though it has not been made a decree of Court....

It would appear from this decision that the award cannot be enforced until it has been made a decree of Court. This decision also would not help the learned Counsel for the appellant.

9. In Hanskumar Kiskan Chand v. Union of India : [1959]1SCR1177 , it is observed at page 606:

It is true that under the law the Courts have the authority to set aside the awards made by arbitrators on certain grounds such as that they are on matters not referred to arbitration, or that the arbitrators had misconducted themselves, or that there are errors apparent on the face of the award. But where the award is not open to any such objection, the Court has to pass a decree in terms of the award, and under Section 17 of the Arbitration Act, an appeal lies against such a decree only on the ground that it is in excess of or not otherwise in accordance with the award. In other words, it is the decision of the arbitrator where it is not set aside that operates as the real adjudication binding on the parties, and it is with a view to its enforcement that the Court is authorised to pass a decree in terms thereof. There is thus a sharp distinction between ,a decision which is pronounced by a Court in a cause which it hears on the merits, and one which is given by it in a proceeding for the filing of an award. The former is a judgment, decree or order rendered in the exercise of its normal jurisdiction as a civil Court, and that is appealable under the general law....The latter is an adjudication of a private Tribunal with the imprimatur of the Court stamped on it, and to the extent that the award is within the terms of the reference, it is final and not appealable.

10. In that case, the reference to the District Judge, Khandwa, was as arbitrator under Section 19 (1) (V) of the Defence of India Act, 1939, of a dispute as to compensation for requisitioned property. In Alopi Parshad and Sons v. Union of India : [1960]2SCR793 , it is observed thus at page 50:

The extent of the jurisdiction of the Court to set aside an award on the ground of an error in making the award is well defined. The award of an arbitrator may be set aside on the ground of an error on the face thereof only when in the award or in any document incorporated with it, as for in-instance, a note appended by the arbitrators, stating the reasons for his decision, there is found some legal proposition which is the basis of the award and which is erroneous.

It would appear from this decision that the civil Court is bound to pass a decree in terms of the award filed into Court under Section 14 (2) of the Act, if the award is not vitiated by any of the grounds mentioned in Section 30 of the Act. The appellant in this case has not established any of the grounds mentioned in Section 30 to show that the award is not acceptable. As observed by the lower Court, the first respondent functioned as arbitrator in an industrial dispute as persona designata and not as a civil Court. He was entitled to pass an award for reinstatement, and if that award is not set aside for any of the rea-sons mentioned in Section 36 of the Act, after it is filed into Court, a decree in terms of the award has to follow. Therefore, I am of the opinion that the petition was rightly rejected by the lower Court. The appeal fails and is dismissed with costs of the second respondent.


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