M/S. PEE VEE TEXTILES LTD. Vs STATE OF MAHARASHTRA .
Bench: V. GOPALA GOWDA,C. NAGAPPAN
Case number: C.A. No.-001497-001497 / 2011
Diary number: 12209 / 2010
Advocates: SHISHIR DESHPANDE Vs
SHIVAJI M. JADHAV
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NON REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1497 OF 2011
M/S PEE VEE TEXTILES LTD. ………APPELLANT
Vs.
STATE OF MAHARASHTRA & ORS. ………RESPONDENTS
J U D G M E N T
V.GOPALA GOWDA, J.
This appeal is directed against the
impugned judgment and order dated 20.01.2010
passed by the High Court of Judicature at
Bombay, Nagpur Bench in Writ Petition No. 2069
of 2009, for setting aside the impugned order
and quashing the order of reference dated
18.2.2009 passed by the State Government of
Maharashtra - respondent No.1 herein, raising
certain questions of law and urging grounds in
support of the same.
2. The factual matrix and the rival legal
contentions urged on behalf of the parties are
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briefly stated hereunder with a view to find
out whether the impugned judgment and order
warrants interference by this Court in this
appeal.
3. The appellant is the employer and
respondent nos. 4 to 8 herein are the
representatives of its workmen. The workmen
raised an industrial dispute under the
provisions of the Bombay Industrial Relations
Act, 1946 (for short “the B.I.R. Act”) read
with the relevant provisions of the Bombay
Industrial Relations Rules, 1947 (for short
“the B.I.R. Rules”) in relation to the service
conditions of the workmen for payment of
variable dearness allowance (VDA) to be given
to all categories of workmen, in the industrial
establishment of the appellant with an
increased rate from time to time as per the
Government notification dated 1.4.1993. The
third respondent - Assistant Commissioner of
Labour, Nagpur, the Conciliation Officer,
before whom the workmen raised an industrial
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dispute in relation to the above service
conditions of the workmen, has issued a notice
to the appellant either to settle the matter or
he will refer the industrial dispute to an
appropriate Industrial Tribunal/Labour Court
for adjudication of the same in accordance with
law. The appellant filed objection statement on
14.4.2008 before the Assistant Commissioner of
Labour, inter alia, stating that no industrial
dispute was existing between the workmen and
the employer with regard to the claim of
variable dearness allowance as per the
Government notification dated 1.4.1993, as the
appellant employer and the elected
representatives of the workmen who were elected
as per Section 28 of the B.I.R. Act, have
signed the settlements with regard to the
variable dearness allowance as per the
settlements dated 06.05.1993, 12.06.1996,
29.04.1998, 07.02.2000, 09.05.2003 and lastly
on 16.04.2006, which was in force for a period
of 3 years i.e. upto 31.03.2009. Since the
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industrial dispute could not be settled between
the parties in the conciliation proceedings and
in the light of the legal objections raised by
the appellant, the Assistant Commissioner of
Labour forwarded the failure report to the
Commissioner of Labour – the second respondent
herein, under Section 64 of the B.I.R Act. The
Commissioner of Labour published the failure
report and forwarded the same with his
recommendation to the State Government to make
an order of reference of the industrial dispute
to the Industrial Tribunal having the
jurisdiction for adjudication as the objection
raised by the appellant does not have any legal
standing. The State Government, after examining
the matter, referred the same for adjudication
to the Industrial Tribunal, Nagpur, as per the
point of dispute in exercise of its powers
conferred under Section 73(2) of the B.I.R. Act
vide its order dated 18.02.2009. Aggrieved by
the same, the appellant filed a writ petition
before the High Court which was also dismissed
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by passing the impugned judgment. Hence this
appeal.
4. Mr. V.A.Mohta, the learned senior counsel
appearing for the appellant has contended that
raising of the industrial dispute by the
workmen and getting an order of reference made
by the State Government to the Industrial
Tribunal for adjudication of the dispute
between the parties is not maintainable in law
as the last settlement dated 16.04.2006 entered
into between the appellant and the
representatives of the workmen was in operation
for a period upto 31.3.2009 as per the
provisions of the B.I.R. Act and covered the
variable dearness allowance in the said
settlement. Therefore, it is contended by him
that the workmen could not have raised the
industrial dispute in this regard and the same
could not have been referred to the Industrial
Tribunal by the State Government for its
adjudication in exercise of the power conferred
upon the State Government under Section 73 (1)
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& (2) of the B.I.R. Act. Further, it has been
urged that accepting the failure report
received from the third respondent by the
second respondent without considering the
statement of objections filed by the appellant-
employer, is in contravention to Sections 54,
57 and 64 of the B.I.R. Act. As the order of
reference made by the State Government to the
Industrial Tribunal, Nagpur was without
jurisdiction; the same should have been quashed
by the High Court in exercise of its
extraordinary jurisdiction under Articles 226
and 227 of the Constitution of India. It is
also contended by the learned senior counsel
for the appellant that without giving a proper
hearing to the appellant-employer, the order of
reference made by the State Government to the
Industrial Tribunal is not in accordance with
Chapter X of the B.I.R. Act and therefore, the
same is liable to be quashed.
5. Further, it is contended that the
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industrial dispute raised by the workmen-
respondent as per the Charter of demands in
form “L” under Section 42(2) of the B.I.R Act,
is covered by the provision of Section 64 (a)
(III) of B.I.R. Act, as the registered
settlement between the parties includes
variable dearness allowance along with the
clause in the settlement that the
representatives of the workmen shall not place
any other demand on the appellant during the
“agreement period” which will entail financial
burden upon it. This factual aspect of the case
was neither considered by the Conciliation
Officer nor the State Government at the time of
making an order of reference to the Industrial
Tribunal nor by the High Court while examining
the correctness of the order of reference. In
support of the above contentions, reliance has
been placed by him upon the provisions of
Section 64 clause (a) (III) of the B.I.R. Act,
which reads thus :-
“64(a)(iii)- by reason of a
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direction issued under sub-Section (2) of Section 114 (or by reason of any other provisions of this Act) the employers and employees concerned are in respect of the dispute bound by a registered agreement, settlement, submission or award.”
6. Further, it is contended by the learned
senior counsel, placing reliance upon Section
114(2) of the B.I.R. Act, which provision
enables the State Government to give a
direction to the representatives of the workmen
and the appellant after affording an
opportunity to them and publish the
notification in the Official Gazette that the
settlement dated 16.04.2006 is binding between
parties under the above said provisions of the
Act, which is not done by it. It is further
contended that the above settlement, which is
in force, is entered into by the appellant–
employer with the elected representatives of
the workmen, as per Section 28 of the B.I.R.
Act. Therefore, the State Government, before
exercising its statutory power to make an order
of reference to the Industrial Tribunal, should
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have seen that the commencement of the
conciliation proceedings conducted by the
Conciliation Officer, under Section 55 of the
B.I.R. Act is erroneous in law as he has not
considered the material objections filed by the
appellant at the time of submitting the failure
report to the State Government through the
second respondent.
7. On the other hand, Mr. Shivaji M. Jadhav,
the learned counsel on behalf of the workmen-
respondent nos. 4 to 8 herein, has contended
that the workmen are justified in raising the
industrial dispute in relation to the service
condition of the variable dearness allowance
fixed by the State Government vide its
notification referred to supra, issued under
the provisions of the Minimum Wages Act, 1948
and therefore the order of reference made by
the State Government to the Industrial Tribunal
is legally correct as it has subjectively
satisfied itself at the time of exercising its
power and further it was of the view that the
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industrial dispute raised by the concerned
workmen by submitting the Charter of demands
submitted to the appellant and the Conciliation
Officer is legally justifiable. It has rightly
exercised its power to make an order of
reference to the Tribunal after following the
procedure contemplated under Section 64 of the
B.I.R. Act, on the dispute raised by the
workmen. It is further contended that the
Conciliation Officer after holding the
conciliation proceedings has submitted the
failure report to the second respondent under
Section 58(2) of the B.I.R. Act, as the
employer was not willing to settle the dispute
raised by the concerned workmen. Therefore, it
was the statutory duty cast upon the
Conciliation Officer to send the failure report
to the Chief Conciliation Officer for further
action in the matter after ascertaining the
facts and circumstances in relation to the
dispute and for the reason that in his opinion,
the settlement could not be arrived at between
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the parties. Therefore, the State Government
has rightly exercised its statutory power under
the provision of Section 73(2) of the B.I.R.
Act to make an order of reference to the
Tribunal, which provision is a non-obstante
clause. The power conferred upon it under the
provisions of the Act, provides that it may, at
any time refer the industrial dispute for
adjudication to the Industrial Court/Tribunal,
if on the report submitted by the Conciliation
Officer or otherwise, it is satisfied that the
industrial dispute is not likely to be settled
between the parties by any other means. He has
submitted his failure report along with the
objection letter which was filed by the
appellant. The Chief Labour Commissioner
forwarded the same to the State Government
stating that the industrial dispute raised by
the concerned workmen with regard to the claim
of the variable dearness allowance fixed by
the State Government vide its notification
referred to supra, is neither covered under the
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settlements referred to supra upon which
reliance is placed by the appellant nor there
is any legal impediment for the State
Government to exercise its power under Section
73 (1) & (2) of the B.I.R. Act, to make an
order of reference to the Industrial Tribunal
for its adjudication. Therefore, the order of
reference made by the Government is legal and
valid.
8. The High Court in exercise of its
jurisdiction and after considering the relevant
aspects of the case has come to the conclusion
that the exercise of power by the State
Government under Section 73 (1) & (2) of the
B.I.R. Act is legal and valid. It has further
held that the dispute raised by the respondent-
workmen is an industrial dispute and the
dispute was not settled by the employer on
account of the stand taken by it before the
Conciliation Officer. The exercise of power by
the State Government cannot be interfered with
as it has rightly concluded after subjective
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satisfaction that the dispute raised by the
workmen requires to be adjudicated by the
Industrial Tribunal in accordance with law as
it has got merit to be considered. The learned
standing counsel on behalf of the State
Government has adopted the submissions made on
behalf of the workmen in justification of the
order of reference and the impugned judgment.
9. After hearing the learned counsel for the
parties, it is necessary for us to examine the
rival legal contentions urged on behalf of the
parties with a view to find out as to whether
the appellant-employer is entitled for the
relief as sought by it.
10. After careful examination of the legal
pleas urged in this civil appeal with reference
to the relevant provisions of Sections 54, 57,
58, 64 and 73(2) of the B.I.R. Act, we are of
the view that the challenge to the order of
reference made by the State Government to the
Industrial Tribunal cannot be interfered with
on the plea of the appellant that the dispute
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raised by the workmen is not an industrial
dispute as it is covered under the settlements
and particularly, the settlement of 2006, is
wholly untenable in both facts and in law and
therefore the same is liable to be rejected.
11. The settlement referred to supra for the
period from 2006 to 2009 upon which strong
reliance has been placed by the appellant
contending that it is binding upon the parties
as it is in force, has been considered by us in
this appeal. We have to answer the same in the
negative for the reason that the industrial
dispute which was raised by the workmen is not
covered either under the said settlement or in
the earlier settlements as the demand of the
workmen is based on State Government
notification of 1993, which has fixed the
dearness allowance under the provisions of
Minimum Wages Act, 1948, which is also one of
the service conditions of workmen and the same
is not included in the settlements. Therefore,
the dispute raised by the workmen is an
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industrial dispute in terms of the definition
of Section 3(17) of the B.I.R. Act. The legal
contention raised by the appellant regarding
the maintainability of the Charter of demands
submitted by the concerned workmen in the said
dispute to the appellant during the existence
of the settlement is wholly untenable in law in
view of Section 73 (1) & (2) of the B.I.R. Act,
which reads thus :-
“73. State Government may refer industrial dispute to industrial court for arbitration.-
Notwithstanding anything contained in this act, the State Government may, at any time, refer an Industrial dispute to the arbitration of the Industrial court, if on a report made by the Labour Officer or otherwise it satisfied that -
(1) by reason of the continuance of the dispute -
(a) a serious outbreak of disorder or a breach of the public peace is likely to occur; or
(b) serious or prolonged hardship to a large section of the community is likely to be caused; or
(c) the industry concerned is likely to be seriously affected or the prospects and scope for
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employment therein curtailed; or
(2) the dispute is not likely to be settled by other means; or
(3) it is necessary in the public interest to do so.”
13. The statutory power conferred upon the
State Government under Section 73 (1) & (2) of
the B.I.R. Act is wider, as it is the non-
obstante clause power, the provision of which
states that notwithstanding anything contained
in the Act, which is referable to the other
provisions of the Act including the settlements
arrived at under the provisions of the B.I.R.
Act, the State Government may refer an existing
industrial dispute to either the Industrial
Tribunal or Labour Court for adjudication, on
the failure report submitted by the Chief
Labour Commissioner. The Assistant Labour
Commissioner has rightly conducted the
conciliation proceedings under Section 55 of
the B.I.R. Act on the Charter of demands of the
workmen in view of the fact that Section 55 of
the B.I.R. Act, provides for the commencement
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of the conciliation proceedings on receipt of
statement of a case under Section 54 of the
B.I.R. Act. The date of commencement of the
proceedings shall be communicated by the
Conciliation Officer to the parties concerned.
Section 64(a)(iii) of the B.I.R Act, provides
that the conciliation proceedings ought not to
be commenced/ conducted in respect of
industrial dispute in view of Section 114 (2)
of the B.I.R. Act or by reason of any other
provisions of the B.I.R. Act. Much emphasis is
placed upon the above provision of the Act by
the learned senior counsel on behalf of the
appellant in relation to the dispute governed
by the registered settlements between the
parties. However, the said provision of the Act
will also be subject to Section 73(2) of the
B.I.R. Act. On the Charter of demands raised by
the workmen representatives, the Assistant
Labour Commissioner has rightly commenced the
conciliation proceedings by following the
procedure contemplated under the above
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provisions of the B.I.R. Act and the B.I.R.
Rules as it mandates him to do so, since the
dispute raised by the workmen with regard to
VDA could not be settled between the parties as
the appellant-employer has taken the stand that
the industrial dispute raised by the workmen
does not exist as it is covered under the
settlements between the parties which is in
force and binding upon them. Objection
statement is filed by them before the Labour
Commissioner against the failure report by
placing strong reliance upon the settlements.
The same is considered by the State Government
and it has opined that the dispute raised by
the workmen is an existing industrial dispute
in terms of Section 3 (17) of the B.I.R. Act
and the same is not settled between the
parties. Therefore, the State Government has
rightly exercised its statutory power conferred
under Section 73 (1) & (2) of the B.I.R. Act,
to make an order of reference to the Industrial
Tribunal for its adjudication as per the points
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of dispute referred to it. Even assuming for
the sake of the argument that the demand of
variable dearness allowance is covered under
the settlement of 2006, non termination of the
same by either of the parties does not affect
the right of the workmen to raise the
industrial dispute in relation to the variable
dearness allowance fixed by the State
Government in its notification. Therefore, the
contention raised on behalf of the appellant
that the Charter of demands raised by the
workmen in relation to the payment of variable
dearness allowance as per the notification is
illegal and therefore, the conciliation
proceedings should not have been held by the
Conciliation Officer as the same is in
violation of Section 64 (a)(iii) of the B.I.R.
Act and exercise of power by the State
Government under Section 73 (1) & (2) of the
B.I.R. Act is bad in law, cannot be accepted by
this Court, as the said contentions are wholly
untenable in law. Hence, the same are liable to
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be rejected.
14. Apart from the power of the State
Government to make an order of reference in
relation to the industrial dispute raised by
the workmen, we have seen the settlement dated
16.04.2006, in relation to the senior workers’
increment in the pay scale, which increased to
Rs.15 per day in back wages and the junior
workers’ pay scale increased to Rs.19 per day
in back wages. Therefore, there is no VDA fixed
so far as these workmen are concerned. As per
clause (2) of the settlement, that has fixed
the VDA only in relation to the learners in the
Weaving Section. Hence, the said settlement
does not take away the right of the workmen to
raise an industrial dispute in relation to the
VDA. Therefore, the workmen are justified in
submitting the Charter of demands in relation
to VDA as per the Government notification
w.e.f. 1.4.1993. The absence of the VDA clause
is specifically mentioned in the Charter of
demands submitted by the respondent workmen.
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Hence, the contention by the learned senior
counsel that what is raised by the workmen and
referred to the Industrial Tribunal is not an
industrial dispute is devoid of merit, both on
facts and in law and does not warrant
consideration by this Court.
15. In our considered view, the High Court,
no doubt, has referred to and considered all
these aspects and has rightly held that the
appellant has not disputed the fact that the
workmen raised the dispute and the same was not
acceded by the appellant. Therefore, the
conciliation proceedings under Section 55 of
the B.I.R. Act were held to be valid. The
grievance of the appellant that the industrial
dispute raised by the workmen is not tenable
has been rightly rejected by the High Court
after recording the findings and reasons
holding that the industrial dispute between the
parties exists and the exercise of its power in
relation to making an order of reference is a
subjective satisfaction of the State
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Government. Therefore, the view taken by the
High Court that the plea taken by the employer
in the writ petition proceedings cannot be the
subject matter for its judicial review is the
correct approach for the reason that the State
Government on the basis of materials on record
has arrived at the right conclusion and opined
that there exists an industrial dispute for the
claim of VDA between the parties and the same
has been referred to the Industrial Tribunal,
for its adjudication as the conciliation
proceedings have failed as the appellant-
employer has not acceded to the demands of the
workmen and entered into a settlement with the
representatives of the workmen. Therefore, the
High Court has rightly held that there is no
ground for interference with the order of
reference made by the State Government to the
Industrial Tribunal. The writ petition is
rightly dismissed by the High Court which does
not call for interference by this Court in
exercise to its appellate jurisdiction.
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16. The employer has been incessantly
challenging the order of reference made with
regard to the variable dearness allowance as
fixed by the State Government in its
notification w.e.f. 1.4.1993. The workmen have
been denied the legitimate monetary benefits
for which they are legally entitled to and the
same is denied to them for the last 21 years by
taking untenable pleas and by not acceding to
the Charter of demands made by the workmen by
placing reliance upon the settlements which are
not applicable to the demands raised by the
workmen as the same is contrary to the
Government notifications. Further, the
appellant has been questioning the power of the
State Government under Section 73 (1) & (2) of
the B.I.R. Act, to make an order of reference
to the Industrial Tribunal by taking untenable
contention under Section 64 (a)(iii) of the
B.I.R. Act. The said provision of the Act is
subject to exercise of power by the State
Government under Section 73 (1) & (2) of the
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B.I.R. Act, which has rightly been done by the
State Government in the instant case. The
appellant-employer has been litigating the
matter since 2009, thereby stalling the
adjudication proceedings, which warrants
imposition of exemplary costs to be paid to the
workmen by the appellant for the reasons stated
supra. The workmen will also be entitled to get
interest at the bank rate on the monetary
benefits of VDA that may be determined by the
Industrial Tribunal on the order of reference,
if decided in their favour.
17. For the aforesaid reasons, we pass the
following order:-
I.The civil appeal is dismissed with
exemplary cost of Rs. 1,00,000/- payable
to the workmen within 4 weeks from the
date of receipt of copy of this order.
II.We direct the Industrial Tribunal to
adjudicate the dispute in relation to
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the variable dearness allowance fixed in
the notification dated 1.4.1993 and
subsequent notifications issued by the
State Government and pass an award
within six months from the date of
receipt of the copy of this order. If,
the order of reference made to the
Industrial Tribunal is answered in
favour of the workmen, the Tribunal is
directed to award an interest in favour
of the workmen on the monetary benefits
of VDA on the basis of fixed deposit
rate by any one of the nationalized
banks.
……………………………………………………………J. [V. GOPALA GOWDA]
……………………………………………………………J. [C. NAGAPPAN]
New Delhi, December 10, 2014