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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs.10310-10311 OF 2014 (@ SLP(C) NOs.17999-18000 OF 2014)

Ahmedabad Municipal Corporation &  and Anr. etc. ... Appellants

Versus

Rajubhai Somabhai Bharwad  and Anr. etc.      ... Respondents

J U D G M E N T

Dipak Misra, J.

The  present  appeals,  by  special  leave,  assail  the

judgment and order dated 17.7.2013 in LPA No. 1070/1998

whereby the Division Bench of the High Court has opined

that  against  the order of  the learned Single Judge under

Article  227  of  the  Constitution  of  India,  an  intra-court

appeal  is  not  maintainable,  and  also  question  the

defensibility of judgment and order dated 30.7.1998 passed

by the learned Single Judge in Special Civil Application No.

7469 of 1997 whereunder he has concurred with the award

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passed by the Labour Court which had, on the strength of a

compromise entered into by the Sarpanch of Nava Naroda

Gram Panchayat, the 2nd respondent with the workman and

on that basis had directed his reinstatement in service on

the post of a clerk with full back wages.   

2. At the outset, it is necessary to clarify that we are not

disposed  to  dwell  upon the  maintainability  of  the  letters

patent appeal before the Division Bench as that issue would

be addressed separately in other cases.  It is also apposite

to mention here that the orders have been assailed by the

Gram Panchayat as well as by the Ahmedabad Municipal

Corporation  (for  short,  ‘the  Corporation’),  for  both  had

preferred the intra-court appeal assailing the award of the

Labour  Court  as  well  as  the  judgment  and  order  of  the

learned Single Judge.  Be that as it may, as the Panchayat

has  preferred  the  appeal,  it  requires  to  be  addressed  on

merits.  

3. The factual score which is necessary to be depicted are

that the 1st respondent was appointed as a ‘Mukadam’ with

the Gram Panchayat vide order dated 21.5.1995.  He was

dismissed from service by oral order dated 23.1.1996.  The

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said order of dismissal constrained the first respondent to

raise an industrial dispute vide Reference No. 531 of 1996

before the Labour Court, Ahmedabad.  No written statement

was filed before the Labour Court, but a compromise was

entered  into  between  the  workman  and  the  Sarpanch

stating, inter alia, that the workman was working as a clerk

in  the  Gram  Panchayat  and  he  would  be  reinstated  in

service  on the post of  Clerk with continuous service  and

would  be  entitled  to  get  all  future  benefits  and  further

whatever  amount  is  payable  towards  the  post  of  Clerk,

would be paid in three monthly instalments and his service

would be continuous.  

4. The legal  acceptability  of  the award was assailed by

the Gram Panchayat on the ground that the Sarpanch had

entered into a compromise with the workman without any

authority  from  the  Gram  Panchayat  and,  therefore,  the

award passed by the Labour Court was null and void.  It

was  urged  that  in  the  absence  of  any  resolution  by  the

Gram  Panchayat,  the  compromise  and  the  consequent

award were  absolutely  unsustainable  and deserved to  be

axed in exercise of writ jurisdiction by the High Court.  The

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learned  Single  Judge  by  the  impugned  order  dated

30.7.1998  considering  the  submission  opined  that  there

was  no  mention  in  the  writ  petition  that  the  said

compromise was entered into by the village Sarpanch on

account  of  any  fraud  or  misrepresentation  or  undue

influence; that when the Gram Panchayat was made a party

and the Sarpanch was representing the said Panchayat, the

Sarpanch  was  entitled  under  Section  55  of  the  Gujarat

Panchayats  Act,  1993 (for  brevity,  “the  Act”),  to  sign  the

compromise; that the Sarpanch being the Chief Officer is

the employer of the workman as per sub-clause 2 to Section

2(g)  of  the  Industrial  Disputes  Act,  1947 and hence,  the

compromise executed between him and the workman was

valid  and  legally  enforceable;  that  while  interpreting  the

award on the strength of compromise, it was open to the

Panchayat to reinstate him on the post of Mukadam, the

post which he was holding at the time of his retrenchment

and  that  when  there  was  admission  in  respect  of  the

compromise before the Labour Court, there was no illegality

in the award passed by the Labour Court.   Being of  this

view, the learned Single Judge dismissed the writ petition.  

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5. The  Gram Panchayat  and  the  Corporation  preferred

the intra-court appeal and as has been stated hereinbefore,

the Division Bench relying on a Full Bench decision of the

High Court in Revaben wd/o Ambalal Motibhai and Ors.

vs.  Vinubhai Purshottambhai Patel  and others1,  ruled

that the appeal was not maintainable.   Hence, an appeal

has been preferred against the order passed by the Division

Bench and another appeal questioning the justifiability of

the  order  passed  by  the  Labour  Court  that  has  been

affirmed by the learned Single Judge.   

6. As has been clarified earlier, we are not delving into

the issue whether the intra-court appeal was maintainable

or  not.   We  shall  only  address  to  the  correctness  of  the

award passed by the Labour Court and the soundness of

the judgment and order passed by the learned Single Judge

concurring with the same.  There is no cavil over the fact

that the award has been passed by the Labour Court on the

basis of a compromise entered into between the Sarpanch of

the  Gram Panchayat  and the  workman.   Ms.  Hemantika

Wahi,  learned  counsel  appearing  for  the  appellant  has

raised a singular contention that the Sarpanch could not

1  2013 (1) GLH 440

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have entered into a compromise without the authority, that

is, a resolution passed by the Gram Panchayat.  

7. We have heard Ms. Hemantika Wahi, learned counsel

for the appellant and Mr. O.P. Bhadani   learned counsel for

the respondent.  

8.  The singular question that emerges for consideration

is whether the Sarpanch while representing the concerned

Gram Panchayat could have entered into a compromise on

behalf of the Gram Panchayat without a proper resolution of

the Gram Panchayat.  The said issue has to be appreciated

in the backdrop of the provisions of the Act.  Section 55 of

the  Act  enumerates  the  executive  functions  of  Sarpanch

and Upa-Sarpanch.  The relevant part of the said provision

is reproduced below:-

“55.  Executive  functions  of  Sarpanch  and Upa-Sarpanch.-(1)  Save  as  otherwise  expressly provided  by  or  under  this  Act,  the  executive power,  for  the  purpose  of  carrying  out  the provisions of this Act and the resolutions passed by a village panchayat shall vest in the Sarpanch thereof who shall be directly responsible for the due fulfillment  of  the  duties  imposed upon the panchayat by or under this Act.  In the absence of the Sarpanch his powers and duties shall, save as  may  be  otherwise  prescribed  by  rules,  be exercised and performed by the Upa-Sarpanch.  

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(2) Without  prejudice  to  the  generality  of  the foregoing provision:- (a) the Sarpanch shall-

(i) preside over and regulate the meetings of the panchayat;

(ii) exercise  supervision  and  control  over the  acts  done  and  actions  taken  by  all officers and servants of the panchayat;

(iii) incur contingent expenditure upto fifty rupees at any one occasion;

(iv) operate on the fund of the panchayat including authorization of payment, issue of cheques and refunds;

(v) be responsible for the safe custody of the fund of the panchayat;  

(vi) cause  to  prepare  all  statements  and reports required by or under this Act;

(vii) exercise  such  other  powers  and discharge such other  functions as may be conferred or imposed upon him by this Act or rules made thereunder.”

The  aforesaid  provision,  as  is  perceptible,  confers

certain  powers  on  the  Sarpanch  for  carrying  out  the

purpose of provisions of the Act and the resolutions passed

by village Panchayat and he shall be directly responsible for

the  due  fulfillment  of  the  duties  imposed  upon  the

Panchayat by or under the Act.  That apart, the powers that

have been mentioned in sub-Section (1) is qualified by the

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words “Save as otherwise expressly provided by or under

this Act”.  Sub-section (2) stipulates that without prejudice

to the generality of the provision contained in sub-Section

(1), the Sarpanch has been given certain powers.      

9. Having mentioned the powers of  the Sarpanch,  it  is

necessary to appreciate how a Village Panchayat functions

under  the  Act.   Section  2(14)  defines  “Panchayat”  which

means  a  village  panchayat,  taluka  panchayat  or  district

panchayat.   Section  3  deals  with  establishment  of

Panchayats on different tiers.  The said provision reads as

follows:-

“3.   Establishment  of  Panchayats  of  different tiers.- For the purpose of this Act, there shall be in each district-

(1) a village panchayat for each village. (2) A taluka panchayat for each taluka.  (3) A district panchayat for each district.”   

10. Section  4  provides  for  a  Gram  Sabha  for  a  village

performing such functions as provided by or under the Act.

Section 5 stipulates that a village panchayat shall be a body

corporate.   Chapter  V of  the Act  provides for  conduct  of

business, administrative powers and duties,  property and

fund  Accounts,  etc.  of  Panchayat.   Part  I  pertains  to

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provisions relating to Village Panchayat.  Under the heading

(A)  conduct  of  business finds mention.   Section 96 deals

with questions to be decided by majority of votes.  It reads

as follows:-

“96.  Questions to be decided by majority of votes.-  All  questions  before  a  meeting  of  a panchayat  or  committee  thereof  or  of  a  gram sabha shall be decided by a majority of votes of the  members  present  and  unless  otherwise provided in this Act, the presiding officer of the meeting shall have a second or casting vote in all cases of equality of votes:

Provided  that  in  such  circumstances  and subject to such conditions as may be prescribed, a decision on any question before a panchayat or committee  thereof  may be  taken by  circulating the  propositions  therefore  for  the  vote  of members.”  

Under  Caption (B)  administrative  powers and duties

have  been  prescribed.   Section  99  which  deals  with

administrative powers of Panchayat reads as follows:-  

“Administrative  powers  of  panchayats.- Subject to the provisions of this Act it shall be the duty of each panchayat to make in the area within its jurisdiction, and so far as the fund at its disposal  will  allow,  reasonable provisions in regard to all  or  any of the matters specified in Schedule I.”

 Section 100 provides for other functions of Panchayat.

It is as follows:-  

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“100.   Other  functions  of  panchayats.- (1)  A Panchayat may with the previous sanction of the district  panchayat,  incur  expenditure  on education or medical relief outside its jurisdiction if its finances permit.    (2)  A  panchayat  may  also  make  provision  for carrying out in the areas, within the limits of its jurisdiction any other work or measure which is likely to promote.-

(a)  the health, safety, comfort or convenience,

(b) social, economic or cultural well being; and  

(c)  education  including  secondary  education  of the inhabitants of the areas.  

(3) A panchayat may, by resolution passed at its meeting and supported by two-thirds of the whole number  of  members  make  provisions  for  any public  reception,  ceremony  or  entertainment  in the  area  within  its  jurisdiction  or  may  make contribution  towards  an  annual  gathering  or such other gathering of panchayats in the district or  the  State  or  towards  the  fund  of  any institution which is established with the object of promoting the spirit of community, self-help and mutual  aid  among  village  folk  and  suggesting ways and means for the efficient administration of  panchayats  and  which  is  recognized  by  the State Government:

Provided  that  except  with  the  previous sanction  of  the  panchayat  to  which  it  is subordinate under section 6, the panchayat shall not  incur  expenditure  exceeding  one  hundred rupees  on  any  such  reception,  ceremony, entertainment or gathering.  

(4) If  in  respect  of  any  land  it  comes  to  the notice  of  a  panchayat  that  on  account  of  the

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neglect of the occupant or superior holder thereof or  dispute  between  him  and  his  tenant,  the cultivation of the land has seriously suffered the panchayat may bring such fact to the notice of the competent authority.  

(5) A  panchayat  shall,  in  regard  to  the measures for the amelioration of the condition of Scheduled  Castes  and  Scheduled  Tribes  and other backward classes, and in particular, in the removal  of  untouchability,  carry  out  the directions of orders given or issued in this regard from time to time by the State government or the competent authority and in case the panchayat fails to carry out any direction or order so given or  issued,  it  shall  be  lawful  for  the  State Government  to  withhold  the  payment  to  the panchayat  of  all  or  any  of  the  grants  payable under Chapter XI after the panchayat has been given a reasonable opportunity of being heard.  

(6) A panchayat shall perform other duties and functions as are entrusted to it by or under any other law for the time being in force.  

(7) It shall be lawful for a panchayat to render financial  or  other  assistance  to  any  person  for carrying on in the village panchayat any activity which is related to any of the matters specified in Schedule I.”  

11. We have referred to the aforesaid provisions to show

the nature  of  powers  conferred upon the authorities  and

how they are to be exercised.  Section 101 specifically deals

with the power to compromise which is extracted below:-

“101.  Power to compromise

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(1) A  village  panchayat  may  compromise  in respect of any suit instituted by or against it, or in respect of any claim or demand arising out of any contract entered into by it under this Act, for such sum of  money  or  other  compensation  as  it  shall deem sufficient:

Provided that if any sanction in the making of any contract is required by this Act,  the like previous sanction  shall  be  obtained  for  compromising  any claim or demand arising out of such contract.  

(2) The panchayat may give compensation out of its fund to any person sustaining any damage by reason of the exercise of any of the powers vested in it and its officers and servants under this Act.”

12. On  a  plain  reading  of  the  aforesaid  provision  it  is

graphically clear that specific power has been given to enter

into a compromise in respect of suits and certain claims but

the said power is to some extent curbed by the proviso.  Be

that as it may, the power is conferred for entering into any

compromise on the village Panchayat.  

13. In this context Section 227 occurring in Chapter XIII

that deals with provisions relating to services is significant

to  be  taken  note  of.   Section  227  deals  with  Panchayat

service  to  be  regulated  by  rules.   To  appreciate  the

controversy we think it apposite to reproduce Section 227:-  

“227. Panchayat service to be regulated by rules.-  (1)  For  the  purpose  of  bringing  about

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uniform scales of pay and uniform conditions of service for persons employed in the discharge of functions and duties of  panchayats,  there shall be constituted a panchayat service in connection with  the  affairs   of  panchayats.   Such  service shall be distinct from the State service.  

(2) The panchayat service shall consist of such classes, cadres and posts and the initial strength of officers and servants in each such class and cadre  shall  be  such,  as  the  State  Government may, by order from time to time determine :  

Provided  that  nothing  in  this  sub-section shall prevent a district panchayat from altering, with  the  previous  approval  of  the  State Government any class, cadre or number of posts so determined by the State Government.  

(3)(a)  The  cadres  referred  to  in  sub-section  (2) may consists of district cadres, taluka cadres and local cadres.  

(b) A servant belonging to a district cadre shall be liable  to  be  posted  whether  by  promotion  or transfer to any post in any taluka in the district.

(c) A servant belonging to a taluka cadre shall be liable to be posted whether by promotion or transfer to any post in any village in the same taluka.  

(d) A servant belonging to a local cadre shall be liable  to  be  posted  whether  by  promotion  or transfer to any post in the same village.  

(4) In  addition  to  the  posts  in  the  cadres referred to in sub-section (3),  a panchayat may have  such  other  posts  of  such  classes  as  the State  Government  may  by  general  or  special order  determine.   Such  posts  shall  be  called

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“deputation  posts”   and  shall  be  filled  in accordance with the provisions of section 231.  

(5) Subject  to  the  provisions  of  this  Act,  the State Government may make rules regulating the mode  or  recruitment  either  by  holding examinations  or  otherwise  and  conditions  of service  or  persons  appointed  to  the  panchayat service  and  the  powers  in  respect  of appointments,  transfers  and  promotions  of officers  and  servants  in  the  panchayts  service and disciplinary action against any such officers or servants.  

(6)   Rules  made under  sub-section (5)  shall  in particular contain-

(a) a provision entitling servants of such cadres in  the  panchayat  service  to  promotion  to  such cadres in the State service as may be prescribed;

(b) a  provision specifying  the  classes  of  posts recruitment to which shall be made through the District  Panchayat  Service  Selection  Committee and the  classes  of  posts,  recruitment  to  which shall be made by the Gujarat Panchayat Service Selection Board, and

(c)  a  provision  regarding  the  percentage  of vacancies  to  be  reserved  for  the  members  of Scheduled  Castes,  Scheduled  Tribes  and Other Backward Classes in the panchayat service.  

(7) Such  rules  may  provide  for  inter-district transfers of servants belonging to the panchayat service and the circumstances in which and the conditions subject to which such transfers may be made.  

(8)  The promotion of  servant  in  a  cadre  in  the panchayat service to a cadre in the State service

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in accordance with rules made under clause (a) of sub-section (6) shall not affect-

(a) any obligation or liability incurred or default committed by such servant during the period of his  service in a cadre in the panchayat  service while acting or purporting to act in the discharge of his duties as such servant, or  

(b) any  investigation,  disciplinary  action  or remedy in respect of such obligation, liability or default, and any such investigation, disciplinary action or remedy may be instituted, continued or enforced in accordance  with the  law applicable thereto during the said period of service by such authority  as  the  State  Government  may  be general or special order specify in this behalf.”  

On a scrutiny of the aforesaid provision it is vivid that

the  services  of  employees  of  Panchayat  are  regulated  by

rules.  That apart, it is also luminous that it also includes

the services in a Panchayat in a Village.  Be it noted, the

State Government has framed a set of rules namely, Gujarat

Panchayat  Services  (Conduct)  Rules,  1998.   It  is  also

noticeable  there  are  various  rules  like  Mali  (Class  IV)

(Panchayat  Service)  Recruitment  Rules,  1998,  Mazdoors

(Class  IV)  (Panchayat  Service)  Recruitment  Rules,  1999,

Plumber (Class IV) (Panchayat Service) Recruitment Rules,

1999,  the  Post  of  Cleaner  (Class  IV)  (Panchayat  Service)

Recruitment Rules, 1998 etc.   We need not dwell upon the

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facet who would be the competent authority to remove an

employee  from  service,  for  that  is  not  the  controversy

involved in the instant case.  The purpose of  referring to

various provisions and rules is  only  to  highlight  the fact

that  conditions  of  service are  controlled and governed by

rules and certain powers are conferred on the Sarpanch.  As

the provisions would show he has to act in accordance with

the provisions of the Act and the resolutions passed by the

village panchayat.  As we may notice from Section 55, the

Sarpanch  has  been  conferred  certain  executive  functions

under sub-Section 55(2) of the Act but the said power does

not enable him to enter into a compromise.  The said power

has been specifically postulated in Section 101 of the Act

and it is significant to note that the said power has been

conferred on the village panchayat.   

14. Section 5 of the Act, as we have stated earlier, clearly

lays down that a village panchayat is a body corporate.  In

Daman Singh and others v. State of Punjab and others2

while dealing with validity of various cooperative societies

Act, the Court referred to Section 30 of Punjab Cooperative

Societies Act, 1961 which provided that the registration of

2 AIR 1985 SC 973  

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cooperative societies shall make it a body corporate.  While

dealing the concept of corporation the larger Bench stated:-

“What is a corporation? In Halsbury’s Laws of England,  4th  Edition.,  Volume  9,  paragraph 1201, it is said:

“A corporation may be defined as a body of persons (in the case of a corporation aggregate) or an office (in the case of a corporation sole) which  is  recognised  by  the  law  as  having  a personality which is distinct from the separate personalities of the members of the body or the personality of the individual holder for the time being of the office in question.”

A corporation aggregate has been defined in para 1204 as,

“[A] collection of individuals united into one body under a special denomination, having perpetual  succession  under  an  artificial form,  and vested by  the  policy  of  the  law with  the  capacity  of  acting  in  several respects  as  an  individual,  particularly  of taking and granting property, of contracting obligations and of suing and being sued, of enjoying  privileges  and  immunities  in common  and  of  exercising  a  variety  of political  rights,  more  or  less  extensive, according to the design of its institution, or the powers conferred upon it, either at the time  of  its  creation  or  at  any  subsequent period of its existence”

Thereafter the court referred to another Constitution

Bench  decision  in  Board  of  Trustees,  Ayurvedic  and

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Unani Tibia College, Delhi v. State of Delhi3.  In the said

case  the  Constitution  Bench  had  reproduced  statements

contained in  Halsbury’s Laws of England a part of which

was referred to in  Daman Singh (supra) and added:-  

“A corporation aggregate has therefore only one capacity,  namely,  its  corporate  capacity.  A corporation  aggregate  may  be  a  trading corporation  or  a  non-trading  corporation.  The usual examples of  a trading corporation are (1) charter  companies,  (2)  companies  incorporated by  special  Acts  of  Parliament,  (3)  companies registered  under  the  Companies  Act,  etc. Non-trading  corporations  are  illustrated  by  (1) municipal  corporations,  (2)  district  boards,  (3) benevolent  institutions,  (4)  universities  etc.  An essential  element  in  the  legal  conception  of  a corporation is that its identity is continuous, that is, that the original member or members and his or their successors are one. In law the individual corporators, or members, of which it is composed are  something  wholly  different  from  the corporation  itself;  for  a  corporation  is  a  legal persona just as much as an individual. Thus, it has  been  held  that  a  name  is  essential  to  a corporation; that a corporation aggregate can, as a general rule, only act or express its will by deed under its common seal; that at the present day in England a corporation is created by one or other of  two  methods,  namely,  by  Royal  Charter  of incorporation from the Crown or by the authority of  Parliament that is to say,  by or by virtue of statute.  There  is  authority  of  long  standing  for saying that the essence of a corporation consists in  (1)  lawful  authority  of  incorporation,  (2)  the persons to be incorporated, (3) a name by which the persons are incorporated, (4) a place, and (5) words sufficient in law to show incorporation. No

3 1962 Suppl (1) SCR 156 : AIR 1962 SC 458

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particular words are necessary for the creation of a  corporation;  any  expression  showing  an intention to incorporate will be sufficient.”

The purpose of referring to the same is that the village

panchayat by a specific provision of the Act is regarded as a

body corporate.  A body corporate as has been held can sue

or be sued in its name.  Section 101, which we have already

reproduced, confers power on the village panchayat to enter

into  a  compromise.   As  the  factual  matrix  has  been

uncurtained,  the  village  panchayat  represented  itself

through the Sarpanch.  Nothing has been brought on record

that  the  Panchayat  had  conferred  any  authority  on  the

Sarpanch  to  enter  into  any  kind  of  settlement  with  the

workman, the first  respondent herein.  In the absence of

any  authority  and  in  the  absence  of  any  statutory

permissibility  it  is  absolutely  inconceivable  in  law that  a

Sarpanch can enter into settlement with a workman.

15. Another material aspect which is required to be taken

note  of  is  that  the  learned  Single  Judge  has  referred  to

Section 2(g) of Industrial Disputes Act, 1947. It defines the

term  “employer”.   We  are  disposed  to  think  that  by  no

stretch of imagination it can be held that the Sarpanch is

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the employer of  the workman.  He belongs to the village

panchayat services if he had properly been appointed.  It is

the village panchayat which is the employer.  The laconic

analysis  on  the  part  of  the  learned  Single  Judge  in  this

regard does not commend acceptance and we are unable to

agree with the same.   

16. In  the  obtaining  factual  score,  we  are  impelled  to

observe  that  a  Sarpanch  is  required  to  look  after  the

interest of the Gram Panchayat.  The Legislature has given

certain executive powers under Section 55 of the Act.  We

repeat at the cost of repetition that it has its limitations.  He

should not rush into an area where angels fear to tread.

Part  IX  of  the  Constitution  has  been  inserted  by  the

Constitution 73rd (Amendment) Act, 1992.  Article 243 is the

dictionary  clause.   Article  243(d)   defines  “Panchayat”  to

mean  an  institution  (by  whatever  name  called)  of

self-government  constituted  under  article  243B,  for  the

rural  areas.   243B  deals  with  the  constitution  of

Panchayats.  243C provides for composition of Panchayats.

243G deals with powers,  authority  and responsibilities of

Panchayats.  The said article is as follows:-  

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“243G.  Powers, authority and responsibilities of Panchayats - Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function  as  institutions  of  self-government  and such  law  may  contain  provisions  for  the devolution  of  powers  and  responsibilities  upon Panchayats  at  the  appropriate  level,  subject  to such conditions as may be specified therein, with respect to-

(a) the  preparation  of  plans  for  economic development and social justice;

(b) the  implementation  of  schemes  for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule.”

17. The purpose of our referring to the same is that the

parliament by the Constitutional amendment required the

State  Legislature  to  bring  their  State  laws  in  conformity

with Part IX of the Constitution.  Power has been conferred

on the Panchayats so that they are able to function as an

institution of self-Government.   The State Legislature has

also been empowered to make provisions by which powers

are given to the Gram Panchayats.  Once responsibility is

given  they  are  to  be  carried  out  with  sanguine

responsibility.  A Sarpanch, as we perceive in this case, by

entering into a settlement has not only acted contrary to the

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provisions  of  the  Act  and  but  also  the  spirit  of  the

responsibility cast on the local self-Government.   

18. In  this  context,  we  cannot  be  oblivious  of  a  very

significant facet.   The Labour Court as we find in a single

line order has accepted the settlement and has not made

any endeavour to even find out whether the Sarpanch was

authorised  with  any  kind  of  resolution  to  enter  into

compromise/settlement  by  the  village  panchayat.   He

should have borne in mind that it is not the Sarpanch who

was the employer; that much of scrutiny was required on

the part of the Labour Court.  It will not be a hyperbole if it

is  said  that  it  is  the  bounden  duty  on  the  part  of  the

presiding officer of the Labour Court to do so and we say so

without  any  hesitation,  for  court  has  a  sacred  duty  to

scrutinize  whether  a  valid  compromise  has  been  entered

into or not. He has to be satisfied that the compromise is

lawful.    

19. In view of the aforesaid analysis, we allow the appeals

set aside the order passed by the learned Single Judge and

that of the Labour Court and remit the matter to the Labour

Court for fresh adjudication.  We may hasten to clarify that

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we have  not  expressed any  opinion  on the  merits  of  the

case.   As  indicated  earlier  we  have  not  dwelt  upon  as

regards the maintainability of the intra court appeal and we

have  not  expressed  any  opinion  on  that  score.  Be  it

clarified,  the  judgment  of  the  Division  Bench  barring

maintainability  has  not  dealt  with  the  issue  of  merits.

Regard being had to the peculiar facts and circumstances of

the case there shall be no order as to costs.  

.............................J. [Dipak Misra]

..........................., J. [Uday Umesh Lalit]

New Delhi July 1, 2015

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