P.S. Kailasam, J.
1. This petition is filed by the Antiseptic Employees Unit represented by the Tamilnad Press Workers Union, for the issue of a writ of mandamus, directing the State Government to refer the dispute relating to all the demands contained in the order of the State Government in G.O.Rt. No. 1306, dated 7th July, 5966 for adjudication under Section 10 of the Industrial Disputes Act. The second respondent is a journal represented by its partner one Sri Vyasa Rao. The journal is an English medical monthly with a circulation of 14,000 copies under the name and style of ' Antiseptic '. Besides this, a monthly medical journal known as ' Health ' is also printed and published by the second respondent with a circulation of 3,400 copies monthly. There are 13 clerical staff and about 22 workers employed by the management. A settlement was arrived at between the management of the Press on the one hand and the clerical staff and the workmen on the other on 27th March, 1962 relating to service conditions of the staff, dearness allowance, bonus and gratuity. The agreement provided that the staff and the labourers should be provided with 21/2 months bonus a year. The agreement was to be in force for three years. The Madras Press Labour Union on 22nd April, 1965 made certain claims and the Tamilnad Press Workers Union also came out with certain claims on 7th June, 1965. On 13th August, 1965 an agreement was reached by the management with the Madras Press Labour Union for two years regarding the annual increment, dearness allowance, bonus and gratuity. The petitioner Union was not a party to this agreement. Regarding the claims made by the petitioner Union, a failure report was made on 20th January, 1966, and the Government declined to make a reference on 7th July, 1966. Hence this writ petition is filed for a direction to refer the dispute for arbitration.
2. The impugned order is dated 7th July, 1966. It relates to six demands. The petitioner Union confines its relief to demands 1 to 3 in this petition and the other demands, therefore, need not be considered in this petition.
3. Demand (3) refers to payment of bonus. The reason given by the Government for not referring the dispute is stated as follows:
The bonus issue for the years 1962-63, 1963-64 and 1964-65 is covered by the settlement dated 27th March, 1962 entered into by the management with the Madras Press Labour Union under Section 12 (3) of the Industrial Disputes Act.
Mr. Dolia, the learned Counsel for the petitioner submitted that the Bonus Ordinance was passed on 31st May, 1965 and the Payment of Bonus Act came into force on 20th May, 1965. Section 34 (1) of the Act enacts that the provisions of the Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force or in the terms of any award, agreement, settlement or contract of service made before the 29th May, 1965. If the Act is; applicable, no agreement settlement or contract of service made before 29th of May, 1965 can be relied on by the parties and the provisions of the Act will have to be applied. Section 22 of the Act enacts that where any dispute arises between an employer and his employees with respect to the bonus payable under this Act or with respect to the application of the Act to an establishment in public sector, then such dispute shall be deemed to be an industrial dispute within the meaning of the Industrial Disputes Act. Section 3 of the Act provides that where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under the Act. The proviso states that where for any accounting year a separate balance sheet and profit and loss account are prepared and maintained an respect of any such department or undertaking or branch, then such department or undertaking or branch shall be treated as a separate establishment for the purpose of computation of bonus under the Act for that year, unless such department or undertaking or branch was immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus. The Government have declined to make a reference on the ground that the bonus issue is covered by the settlement dated 27th March, 1962. As pointed out, Section 34 (1) of the Payment of Bonus Act makes it clear that an agreement, settlement or contract of service made before 29th May, 1965 will not be effective and the provisions of the Act will govern the issue relating to bonus, if the Act is applicable. The Government have not refused to refer the demand relating to payment of bonus on the ground that the Act is not applicable. The question as to whether the Payment of Bonus Act, 1965 is applicable or not has to be considered with regard to the demand made by the petitioner union. The reliance on the settlement deed dated 27th March, 1962 is an obvious error. The order of the Government refusing to refer the demand for payment of bonus will have to be set aside, and is accordingly set aside. The Government is directed to consider the question whether the Payment of Bonus Act, 1965 is applicable or not to the demand and decide the question as to whether a reference should be made or not.
4. Demand (1) relates to enhancement of dearness allowance, and demand (2) relates to revision of grades and wages scales. The Government declined to refer the demand for enhancement of dearness allowance on the ground that the management was prepared to pay the staff the same dearness allowance agreed to be paid under the settlement dated 13th August, 1965, under Section 12 (3) of the Act entered into with the Madras Press Labour Union, and that that rate compared favourably with the rates in other presses. The Government declined to refer the demand for revision of grades and wages scales on the ground that the existing grades and wages compared favourably with those in similar establishments. The law relating to the power of the Government to make a reference has been laid down by the Supreme Court in State of Madras v. C. P. Sarathy : (1953)ILLJ174SC , State of Bihar v. D. N. Ganguly : (1958)IILLJ634SC , and State of Bombay v. Krishnan (1960) 2 L.L.J. 592, and by a Bench of this Court in Government of Madras v. Workmen of South India Saiva Sidhanta Works Publishing Society (1965) 1 M.L.J. 517 : I.L.R. (1964) 1 dad. 850 : (1964) 1 L.L.J. 228, The above decisions were considered by this Court in Coimbatore District Textiles Mills Staff Union v. State of Madras (1967) 2 M.L.J. 508 : (1967) 2 L.L.J. 107, and the position was summed up thus:
A consideration of the authorities cited above makes it clear that the High Court cannot sit as a Court of appeal on the order passed by the Government. The Government in passing an order under Section 10(1) read with Section 12 (5), is acting in an administrative character (capacity) and it has the option to make a reference or not to make a reference on the facts, taking into consideration the expediency in each case; the decision is for the Government to take and not for the Courts to interfere. The Government will be justified in refusing to make a reference where the dispute is inconsistent with the agreement between the parties. But the Court will be justified in issuing a writ of mandamus if the Government did not act bona fide or base its conclusions wholly on irrelevant or extraneous materials or materials which were not germane for deciding the question whether a reference should be made or not.
5. Mr. Dolia, the learned Counsel for the petitioner, strongly relied on a decision of the Supreme Court in Bombay Union of Journalists v. State of Bombay : (1964)ILLJ351SC . The Supreme Court held:
It is true that if the dispute in question raises questions of law, the appropriate Government should not purport to reach a final decision on the said questions of law, because that would normally lie within the jurisdiction of the Industrial Tribunal. Similarly on disputed questions of fact the appropriate Government cannot purport to reach final conclusions, for that again would be the province of the industrial tribunal.
This passage is later explained by their Lordships as meaning that the appropriate Government is not precluded from considering even prima facie the merits of the dispute when it decides the question as to whether its power to make a reference should be exercised under Section 10 (1) read with Section 12 (5) or not, and that it must be held that a prima facie examination of the merits cannot be said to be foreign to the enquiry which the appropriate Government is entitled to make in dealing with a dispute under Section 10 (1).
6. Mr. Dolia submitted that the order relating to demand (1) is unsustainable on two grounds, namely, that the staff had not consented to accept the dearness allowance as agreed to by the Labour Union and therefore the settlement dated 13th August, 1965, is not binding on the labourers. The Government has said that the management was prepared to pay the staff the same dearness allowance agreed to be paid under the settlement dated 13th August, 1965, and that that rate compared favourably with that in other presses. The statement that the rate compared favourably with the rates in other presses was vehemently challenged on the ground that there is no material on record to show that the Government compared the rates prevailing in other presses. I do not think this question can be gone into by this Court, for, as observed by the Supreme Court in State of Madras v. C. P. Sarathy : (1953)ILLJ174SC , the Court could not canvass the order of reference closely to see if there was any material before the Government to support its conclusion, as if it was judicial or quasi-judicial determination. The Government has the discretion to make a reference or not. Considering the circumstances of the case there is no material for coming to the conclusion that the Government was not light in coming to the conclusion that the dearness allowance agreed to be paid compared favourably with the rates in other presses.
7. Regarding the second demand for revision of grades and wages scales also, the Government on a consideration of the facts have come to the conclusion that the existing grades and wages compared favourably with those in similar establishments. I do not think in the circumstances, the Court will be justified in examining the materials that were available before the Government for coming to the conclusion. Suffice it to say that there is no material to hold that the Government was in any way influenced by any extraneous material for coming to that conclusion. On these grounds, the order of the Government declining to refer demands (1) and (2) for arbitration should be upheld.
8. Mr. Swaminathan, learned Counsel for the respondent submitted that the order of the Government should be upheld on legal grounds also. He submitted that under Section 19 (2) of the Industrial Disputes Act, 1947 a settlement arrived at shall be binding for such period as is agreed upon by the parties and shall continue to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party to the settlement. On record, there is no material for holding that any such notice as required under Section 19 (2) of the Act was given to the management. In a recent decision of the Supreme Court in B. W. C. and S. Mills v. Workmen : (1968)ILLJ555SC , it has been held that the Tribunal had no jurisdiction to adjudicate upon any claim unless a notice under Section 19 (2) had been given. The Court observed that when there is no notice as required under Section 19 (2), it would follow that there is a subsisting award binding on the parties and the Tribunal will have no jurisdiction to consider the same in a reference. Mr. Dolia, learned Counsel for the petitioner submitted that the decision will not be applicable to a case where the absence of notice under Section 19 (2) was not raised at the earliest point of time. I am unable to find any support for this contention in the judgment. As seen from the decision, it is clear that if the agreement is not validly terminated under Section 19 (2), it continues to be subsisting and binding on the parties. Learned Counsel for the petitioner submitted that the order of the Government cannot be sought to be supported on any ground not mentioned in the order itself, and therefore this ground cannot be taken into account. Even accepting this contention, I find that the order of the Government refusing to refer demands (1) and (2) cannot be interfered with. I am also of the view that as the failure to give notice under Section 19 (2) of the Act, goes to the root of the matter, the order of the Government can be supported on that ground also.
9. In the result, the writ petition is allowed with regard to demand (3), namely, demand for payment of bonus. The Government will consider the question whether the Payment of Bonus Act, 1965, is applicable or not and decide as to whether the demand should be referred to adjudication or not. With regard to demands (1) and (2), the writ petition is dismissed. There will be no order as to costs.