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Vaikuntam Estate (Represented by S.S. Sarma, Former Superintendent, Now Director) Vs. Arbitrator [Ramaswami (T.S.)] and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1968)ILLJ93Mad
AppellantVaikuntam Estate (Represented by S.S. Sarma, Former Superintendent, Now Director)
RespondentArbitrator [Ramaswami (T.S.)] and anr.
Cases ReferredBhakthavitsalu v. Chrome Leather Company
Excerpt:
.....year 1958. the award will be quashed to the extent it refers to the provident fund and the interim award awarded by the wage board. 10. in view of my decision that the terms of reference include also the period of the permanency, which has relation both to the background of the dispute as well as the computation of the benefits under the plantations labour act, it is unnecessary to refer to the elaborate argument of the learned counsel for the petitioner based upon the scope of section 17a of the industrial disputes act and the decisions thereunder relating to the date of commencement of an award. in effect, the arbitrator has not said anything about the date of commencement of the award, but he has gone to the substance of the claim regarding the benefits under the plantations labour..........year 1958. the award will be quashed to the extent it refers to the provident fund and the interim award awarded by the wage board.10. in view of my decision that the terms of reference include also the period of the permanency, which has relation both to the background of the dispute as well as the computation of the benefits under the plantations labour act, it is unnecessary to refer to the elaborate argument of the learned counsel for the petitioner based upon the scope of section 17a of the industrial disputes act and the decisions thereunder relating to the date of commencement of an award. in effect, the arbitrator has not said anything about the date of commencement of the award, but he has gone to the substance of the claim regarding the benefits under the plantations labour act.....
Judgment:
ORDER

Ramakrishnan, J.

1. In this writ petition, filed under Article 226 of the Constitution of India, the scope of the powers of en arbitrator, to whom the parties to an industrial dispute have made a voluntary reference under Section 10A. of the Industrial Disputes Act (14 of 1947)(hereinafter called the Act), comes in for consideration. The employer is the management of the Vaikun-tam Estate, Murthandam, in the Kanyakumari district, who is the petitioner in this writ petition. The arbitrator is Sri T.S. Ramaswami, respondent 1, and the workers of the Vaikuntam estate are represented by the secretary, Kumari Estate Workers' Union, Nagercoil, Kanyaknmari district, respondent 2. A number (42) of workers of the estate filed claim petitions under Section 33C(2) of the Act contending that they were permanent field workers in the estate which maintains a plantation, that they had been denied several benefits to which they were entitled under the provisions of the Plantations Labour Act, 1951, by the management, and that the right to these benefits should be determined and their quantum also determined. While these claim petitions were pending, the parties filed a joint memorandum agreeing to refer their disputes to arbitration, and the Joint memorandum mentioned that the point referred to the arbitration, was whether any or all of the 42 workers referred to in the list attached are to be treated as permanent labourers and whether they are eligible to get the benefits under the Plantations Labour Act, 1951.

2. Before the arbitrator both the workers and the management elaborated their claims. A reference to the claim statement on behalf of the workers shows that they placed before the arbitrator for decision

(a) claim to bonus from 1953-59;

(b) claim to provident fund from 1959-60;

(c) claim to umbrella and protective cloth from 1958-59;

(d) claim to leave with wages from 1958-59; and

(e) a claim also to an additional benefit by way of 15 L.P. increase in the wages per day in pursuance of an interim award by the wage board.

The management in their statement before the arbitrator urged that the claim to bonus and wage increase felt outside the terms of the reference to the arbitrator and therefore Could not be decided by him. The management next alleged that each of the workers should independently establish his claim to be a permanent worker for the period he was claiming relief. There was also a reference to the fact that the workers' union had given notice of a strike on 21 July 1958 and there was a reference for settlement of the dispute to adjudication under Section 10(2) of the Plantations Labour Act, 1951, and the award of the labour court in that connexion was published in the gazette on 20 April 1960. The management urged that the award would show that the workers were not permanent. The management pressed the claim that the workers were really casual workers and were not entitled to the benefits claimed.

3. The arbitrator, however, in his award found

(1) that the 42 workers were permanent field workers of the Vaikuntam Estate;

(2) that consequently they were entitled to the benefits of the Plantations Labour Act, such as umbrella and protective cloth, leave with wages, sickness allowance, maternity allowance from the year 1958 and provident fund from the year 1959; and

(3) that they should also be paid the increase of wage of 16 nP., as per interim wage award passed by the wage board from the date of the a ward.

The arbitrator also directed that the arrears due to the 42 workers under the award should be paid by the management within a period of three months from the date of the award.

4. Learned counsel appearing for the petitioner-management, in this writ petition attacks the above award of the arbitrator on the following grounds:

(1) The arbitrator in giving a decision about the benefits like umbrella and protective cloth, leave with wages, sickness allowance and maternity allowance from the year 1958. went really beyond the terms of the reference to the arbitration, and the award, therefore, should be treated as vitiated. In any event, if certain general principles applicable to awards by arbitrators are to be applied, it should be possible to strike out the portions of the award which travel beyond the terms of the reference as outside the Jurisdiction of the arbitrator and maintain only that portion of the award which fell within the terms of reference.

(2) The direction for the payment of provident fund from the year 1959 and the direction to pay the increase of wages of 15 nP. as per interim wage award passed by the wage board are not strictly benefits under the Plantations Labour Act, but benefits under other enactments or awards, and therefore inclusion of these amounts in the claim by the workers must also be construed as beyond the Jurisdiction of the arbitrator.

(3) Tae arbitrator in passing his award has committed serious impropriety in relying upon information gathered by him behind the back of the petitioner.

Reference was made to Para. 13 of the award where the arbitrator has stated that he had made enquiries of one Sri M.M. George, the previous superintendent of the Vaikuatam Estate, revealing that the 43 field workers were treated as permanent workers during his period of office. Reference was also made to the muster-roll maintained by Sri M.M. George for the field workers, and a perusal of that mustor-roll in the office of management showed that the names of the 43 workers were found therein. It was urged that the said Sri George, the previous superintendent, was not examined as a witness on either side, and the arbitrator violated the principles of natural Justice in relying upon information supplied by George. In fact, Sri George himself had maintained wage slips during his term of office and these wage slips would afford evidence contrary to the statement given by Sri George to the arbitrator. The arbitrator has referred in Para. 12 of his award that he made enquiries, from which he learnt that other estates maintain permanent men in field section also. This was also attacked as information which the arbitrator had gathered behind the back of the management.

5. Learned Counsel Sri M.R. Narayanaswami appearing for the management, referred to a certain important principle in the law of arbitration, namely, that an arbitrator would be acting without authority if he travelled beyond the terms of reference. At the same time, he also made reference to the observations of Russell on Arbitration, 17 Edn., at p. 347:

If, notwithstanding that some portion of the award is clearly void, the remaining part contains a final and certain determination of every question submitted, the valid portion may well be maintainable as the award, the void part being rejected.

At the same page the learned commentator observed:

If the arbitrator has exceeded his authority as to part of the award only, and the bad part is clearly separable from the rest of the award, and does not affect the good part, 'the good part may be allowed to stand: the mere presence of superfluous matter does not invalidate as award.

Observations of Halsbury's Laws of England, Simonds' edition, Vol. 2, at pp. 43 and 44 to the same purport were also relied on. The decision of the Supreme Court in Jivarajbhai v. Chintamanrao A.I.R. 1985 S.C. 214 dealt with a case of commercial arbitration, wherein the Supreme Court observed that in that case it was impossible to separate from the award the portion which was within the Jurisdiction of the arbitrator and the portion which was outside, and therefore, the award must fail in its entirety. This decision was also quoted by the petitioner's learned Counsel.

6. Per contra, learned Counsel appearing for the workers has referred to an important distinction between arbitration in commercial matters or in case of civil disputes on the one hand and industrial arbitration on the other. He urges that the approach to industrial arbitration must be different from the approach to arbitration in commercial disputes and civil disputes. In the latter types of arbitration, the arbitrator is strictly bound by the legal requirements of relevant statutes including the provisions of the Indian Arbitration Act. For stressing this distinction, reference was made to Section 10A(5) of the Act, which states Specifically that nothing is the Arbitration Act, 1940, shall apply to arbitration under that section. It was urged that industrial arbitration is primarily designed to bring about industrial peace and provide effective means to settle the dispute that brought about this intervention of the arbitrator, and for scouring Industrial peace. Reference was also made to the provisions in Section 10(4) of the Act, which says that when an industrial dispute is referred to a labour court or tribunal or national tribunal under Section 10, the tribunal shall confine its adjudication to the points referred and matters incidental thereto, but in the case of reference to arbitration, there is no such restriction found in the Act. In Section 10A what is mentioned is an industrial dispute which is referred to the arbitrator, and the arbitrator in passing the award thereafter brings about a settlement of the dispute. The essential distinction between industrial arbitration on the one hand, and commercial as well as statutory arbitration on the other, is pointed out in an early decision of the Federal Court in Western India Automobile Association v. Industrial Tribunal, Bombay 1949 L.L. J. 245, where at p. 266 of the report it was observed:

The award of the tribunal may contain provisions for settlement of a dispute which no Court could order if it was bound by ordinary law, but the tribunal is not fettered in any way by these limitations. In Vol. I of Labour Disputes and Collective Bargaining by Ludwig Teller, it is said at p. 536 that industrial arbitration may involve the extension of an existing agreement or the making of a new one, or in general the creation of new obligation or modification of old ones, while commercial arbitration generally concerns itself with interpretation of existing obligations and disputes relating to existing agreements. In our opinion, it is a true statement about the functions of an industrial tribunal in labour disputes.

In a decision reported in Anglo-American Direct Tea Trading Company v. its workmen 1963 II L.L.J. 752 (Srinivasan, J.) it has been observed that the arbitrator appointed under Section 10A of the Act with a specific agreement that his decision shall be binding on the parties is not a statutory arbitrator, that his authority does not depend on any statutory Jurisdiction and that he is a private tribunal set up by an agreement. The jurisdiction of an arbitrator under Section 10A is certainly different from that of an industrial tribunal under Section 10. Against such an arbitrator's decision, assuming that a writ of certiorari can issue, unless it is made apparent that the arbitrator gives a finding unsupported by any material and that the finding is so perverse that it cannot be supported, the Court cannot possibly interfere under Article 226 of the Constitution.

7. It is in the background, of the above principles that we have got to approach the circumstances of the present case. I have already referred to the fact that the specific points referred to the arbitrator for decision arose in the background of claim petitions under Section 33C of the Act for determining the extent of the benefits available to the workers including the claim for bonus based upon their being permanent workers and for determining the quantum of those benefits. Therefore, the first point referred to the Arbitrator for decision whether any or all of the 42 workers referred to in the list attached are to be treated as permanent labourers, would also include the question of the period covered by the permanent employment. I must stress once again the fact that the dispute arose in the context of determining the quantum of benefits payable to the workers depending upon whether their employment was permanent or not and this will again depend on the period of such permanent employment. Therefore, it is not possible to agree with the contention of the petitioner that the reference to arbitration did not include the period of permanent employment, and the arbitrator should have merely given a decision whether the workers were permanent workers or casual workers. A reference was also made to the statement of claim by the workers before the arbitrator which shows that they laid equal stress on their permanency of the employment as well as the period of such permanent employment which continued uninterrupted from the time of the previous management till 1958, when the present management took over the estate, and continued uninterruptedly thereafter. I am of the opinion that the arbitrator did not travel beyond the scope of the reference when he decided that the workers were permanent workers, that they were being treated as permanent workers even prior to 1958 and that in view of the above, they should be given each benefits as are available to permanent workers from the year 1958, after which date admittedly the benefits were not given to them by the existing management.

8. Taking up the second point about the nature of the benefits of umbrella, protective cloth, leave with wages, sickness allowance and maternity allowance, a reference to the Plantations Labour Act, 1951, shows that these are benefit's made available to plantation labourers under the statute. The arbitrator has made it clear that he was mentioning these benefits as illustrations, and that what he was really having in mind was that the workers were entitled to the statutory benefits under the Plantations Labour Act, which would necessarily include the above items. Its cannot, therefore, be held that because the arbitrator has specified certain Items of benefits, he travelled beyond the scope of the reference, which called upon him to determine whether the workers were eligible to get the benefits under the Plantations Labour Act.

9. In regard to bonus, the labourers put forward a claim to its. But the arbitrator decided that bonus was outside the scope of the reference and therefore, did not make an award in respect of it, But he appears to have given a decision about the workers being eligible to provident fund and also an interim wage award as per the award of the wage board. It is clear that these two items are not directly traceable as benefits conferred under the Plantations Labour Act, but benefits which other enactments confer-red upon the workers, like the Provident Fund Acts and the award of the wage board. Therefore, it appears to me that the arbitrator did travel beyond the terms of the reference in making provision for provident fund and the Interim award granted by the wage board. It would have been better if he had left these two items to be claimed by the workers independently on the basis of the present award recognizing their status as permanent workers from the year 1958. The award will be quashed to the extent it refers to the provident fund and the interim award awarded by the wage board.

10. In view of my decision that the terms of reference include also the period of the permanency, which has relation both to the background of the dispute as well as the computation of the benefits under the Plantations Labour Act, it is unnecessary to refer to the elaborate argument of the learned Counsel for the petitioner based upon the scope of Section 17A of the Industrial Disputes Act and the decisions thereunder relating to the date of commencement of an award. In effect, the arbitrator has not said anything about the date of commencement of the award, but he has gone to the substance of the claim regarding the benefits under the Plantations Labour Act to permanent workers and held that is this case the workers were permanent workers even prior to 1958 and they would be entitled to the benefits under the Plantations Labour Act, which were not paid to them subsequent to 1958.

11. Regarding the argument that the arbitrator took into account the result of enquiries made by him in other estates and also hit questioning one Sri George, the previous superintendent of the Vaikantam Estate, it appears to me that such enquiries cannot be considered to be beyond the scope of the arbitrator's investigation when a dispute like the present one is referred to him. As mentioned already, the arbitrator in such a reference is not in the same position as an arbitrator is commercial disputes or is civil disputes. The latter type of arbitrator has to be bound strictly by the terms of the law as applied to the rights of parties and in a sense takes the place of a Court of law for deciding a dispute between parties but in industrial arbitration, the arbitrator's powers are much wider his enquiries can be spread over a larger field, so that he can decide for himself, the best way to fled out a solution for bringing to an end the dispute referred to here. One may refer to the following observations found in a publication of the I.L.O., viz., 'Conciliation and Arbitration in Industrial Disputes,' which are extracted in the decision in Bhakthavitsalu v. Chrome Leather Company 1949 L.L J 1:

In disputes on collective interests, knowledge of the circumstances is needed to enable the conciliation or arbitration Institution to form an opinion as to what regulation of the dispute will first be voluntarily adopted by the parties or what compulsory solution is likely to be the most Just, if need be with due reference to public interests.

The arbitrator in the present case was Just fled in finding out the practice in other estates regarding the question whether permanent workers were allowed to work in the field section especially in view of the fact that the management had contended that the workers were working in the field section, and that on that account they could not be deemed to be permanent. The enquiry of the arbitrator was, therefore, made to make himself familiar with the practice in the industry in regard to such workmen. It cannot be held that the arbitrator went oat of his way in gathering such information. Secondly, his Questioning of Sri George was also to obtain a relevant piece of information, because Sri George was the superintendent of the Vajkuntam Estate before the present management took over and he had maintained a muster-roll which was available in the office of the present management and which the arbitrator had necessarily to peruse in the context of the settlement of the present dispute. This apart, even if one were to exclude the items of information above referred to, there were other data before the arbitrator, and which he has referred to in the award, for supporting his findings. For the aforesaid reasons, I am of the opinion that the award of the arbitrator in the present case has not erred on any of the grounds urged by the petitioner and that it has got to be upheld except in regard to the direction in respect of the provident fund and the interim award of additional wages awarded by the wage board. In respect of these latter claims, the workers will have to establish their rights independently as they do not directly fall within the benefits under the Plantations Labour Act, which was the subject-matter of the reference.

12. The writ petition is, therefore, allowed in part, and the award of the arbitrator is struck down so far as the direction in respect of provident fund and the increase of wages awarded by the wage board is concerned, but dismissed in other respects. There will be no order as to costs.


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