IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5650  OF 2018 (Arising out of S.L.P.(C) No. 6091 of 2010)

M/S. HARYANA SURAJ MALTING LTD.          ...  APPELLANT (S)

VERSUS

PHOOL CHAND           ... RESPONDENT (S)

      WITH

CIVIL APPEAL NO.  5649  OF 2018 (Arising out of S.L.P.(C) No. 6092 of 2010)

       AND CIVIL APPEAL NO.5893 OF  2012

J U D G M E N T KURIAN, J.:

Leave granted.  

2. The  question  arising  for  consideration  in  this  case  is

whether  the  Industrial  Tribunal/Labour  Court  is  functus

officio after  the  award  has  become  enforceable,  and  is

thus, prevented from considering an application for setting

aside an ex parte award.

3. In view of the conflict between two decisions of this Court -

Sangham Tape  Co. v.  Hans  Raj  1 and  Radhakrishna

1  (2005) 9 SCC 331

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REPORTABLE

Mani Tripathi v. L.H Patel and another  2, by order dated

21.01.2011  in Haryana Suraj Malting Limited v. Phool

Chand  3,  a reference to a larger bench was made in the

following terms:  

“1. Whether the Industrial Tribunal/Labour Court becomes  functus  officio  after  30  days  of  the pronouncement/publication of the award and loses all  powers  to  recall  an  ex  parte  award  on  an application made by the aggrieved party after  30 days from the date of pronouncement/publication of the award is the question that once again arises for consideration in these cases.

2. It  may be noted that  on this  question two Division  Bench  decisions  have  taken  apparently conflicting views. In Sangham Tape Co. v.  Hans Raj a  two-Judge  Bench  held  and  observed  that  an application for recall of an ex parte award may be entertained by the Industrial Tribunal/Labour Court only in case it is filed before the expiry of 30 days from the date of pronouncement/publication of the award. A contrary view was taken in  Radhakrishna Mani Tripathi v. L.H. Patel to which one of us (Aftab Alam, J.) was a party.

 3. In both cases, that is to say, Sangham Tape Co. and  Radhakrishna  Mani  Tripathi,  the  Court referred to and relied upon the earlier decisions in Grindlays  Bank  Ltd. v.  Central  Govt.  Industrial Tribunal and Anil Sood v. Labour Court but read and interpreted  those  two  decisions  completely differently.

 4. The conflict which has arisen as a result of the two decisions can only be resolved by a larger

2  (2009) 2 SCC 81 3  (2012) 8 SCC 579

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Bench. Let these cases be, therefore, listed before a three-Judge Bench.”

4. Heard learned counsel  appearing for  the parties and Mr.

Shekhar  Naphade,  learned  senior  counsel  assisting  the

Court as Amicus Curiae.

 5. The Industrial Disputes Act, 1947 (hereinafter referred to

as “the Act”)  was enacted “…to  make provision for  the

investigation and settlement of industrial disputes, and for

certain  other  purposes”.  Chapter  IV  provides  for  the

“procedure,  powers  and  duties  of  authorities”.  Under

Section 11(1) of Chapter IV, it is provided that the Labour

Court or Tribunal can follow such procedure as it thinks fit.  

“11(1)  Subject  to  any  rules  that  may  be made in this behalf, an arbitrator, a Board, Court, Labour  Court,  Tribunal  or  National  Tribunal  shall follow such procedure as the arbitrator or other authority concerned may think fit.”

 6. Under Section 17(1), an award shall be published by the

appropriate  Government  within  30  days  of  its  receipt.

Under Section 17(2), the award becomes final subject to

Section  17A.  Under  Section  17A,  an  award  becomes

enforceable on the expiry of 30 days from the date of its

publication under Section 17.  

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7. Section 20 deals with the commencement and conclusion

of  proceedings.  Under  Section 20(3),  proceedings before

the  Court/Tribunal  shall  be  deemed  to  have  been

concluded  on  the  date  on  which  the  award  becomes

enforceable under Section 17A.  

“20.  Commencement and conclusion  of proceedings.-(1) A  conciliation  proceeding  shall be deemed to have commenced on the date on which a notice of strike or lock- out under section 22 is received by the conciliation officer or on the date of the order referring the dispute to a Board, as the case may be.

(2) A conciliation proceeding shall be deemed to have concluded-

(a) where a settlement is arrived at, when a memorandum  of  the  settlement  is signed by the parties to the dispute;

(b) where no settlement is arrived at, when the  report  of  the  conciliation  officer  is received by the appropriate Government or  when  the  report  of  the  Board  is published under section 17, as the case may be; or

(c) when  a  reference is  made to  a  Court, Labour  Court,  Tribunal  or  National Tribunal]  under  section  10  during  the pendency of conciliation proceedings.

(3) Proceedings  before  an  arbitrator  under section 10A or before a Labour Court, Tribunal or National  Tribunal  shall  be  deemed  to  have commenced  on  the  date  of  the reference  of  the dispute for arbitration or adjudication, as the case

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may be and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under section 17A.”

8. Section  38  provides  for  power  to  frame  rules  for  the

purpose  of  giving  effect  to  the  provisions  of  the  Act

including  the  powers  and  procedure  of  the

Courts/Tribunals.

9.  Rule  10B(9),  as  introduced  in  1984  of  the  Industrial

Disputes (Central) Rules, 1957 (hereinafter referred to as

the “Central Rules”), reads as follows:

“10B(9). In case any party defaults or fails to appear  at  any  stage  the  Labour  Court, Tribunal or National Tribunal, as the case may be, may proceed with the reference ex parte and decide the reference application in  the absence of the defaulting party:                 Provided that the Labour Court, Tribunal or National Tribunal, as the case may be,  may  on  the  application  of  either  party filed  before  the  submission  of  the  award revoke the order that the case shall proceed ex parte, if it is satisfied that the absence of the party was on justifiable grounds.”

10.  Rule  22  of  the  Central  Rules  also  provides  that  the

Court/Tribunal can proceed ex parte in case any party fails

to attend the Court/Tribunal without sufficient cause being

shown. The Rule reads as follows:

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“22.  Board,  Court,  Labour  Court,  Tribunal,  National Tribunal or Arbitrator may proceed  ex parte.-If without  sufficient  cause being  shown,  any  party  to proceeding  before  a  Board,  Court,  Labour  Court, Tribunal, National Tribunal or Arbitrator fails to attend or to be represented, the Board, Court, Labour Court, Tribunal, National Tribunal or Arbitrator may proceed, as  if  the  party  had  duly  attended  or  had  been represented.”

11. Rule 24 provides that the Boards, Courts, Labour Courts,

Tribunals  and  National  Tribunals  shall  have  the  same

powers  as  are  vested  in  a  Civil  Court  in  respect  of  the

matters  specified  within  the  Rule.  The  Rule  reads  as

follows:

“24.  Power  of  Boards,  Courts,  Labour Courts, Tribunals and National Tribunals.- In addition to the powers conferred by the Act, Boards,  Courts,  Labour  Courts,  Tribunals  and National Tribunals shall have the same powers as are vested in a Civil Court under the Code of Civil  Procedure,  1908,  when trying  a  suit,  in respect of the following matters, namely:-

(a) discovery and inspection;

(b)     granting adjournment;

(b)  reception of evidence taken on affidavit, and the Board, Court, Labour Court, Tribunals or National Tribunal may summon and examine any person whose evidence appears to it to be material and shall be deemed to a civil court within the meaning of sections 480 and 482 of the Code of Criminal Procedure, 1973.”

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12. Thus,  under  the  statutory  scheme,  the  Labour

Court/Tribunal is empowered to follow its own procedure as

it thinks fit, meaning thereby, a procedure which is fit and

proper for the settlement of the industrial dispute and for

maintaining industrial peace. If a party fails to attend the

Court/Tribunal  without  showing  sufficient  cause,  the

Court/Tribunal can proceed ex parte and pass an ex parte

award. The award, ex parte or otherwise, has to be sent to

the appropriate Government as soon as it is made and the

appropriate Government has to publish it within 30 days of

its receipt. The award thus published becomes enforceable

after a period of 30 days of its publication.

 13. In case of an  ex parte award, whether the Court/Tribunal

can set aside the same after 30 days of its publication, is

the question to be considered.

14. That  an  ex  parte award  can  be  set  aside  in  case  the

Court/Tribunal  is  approached  within  30  days  of  its

publication under Section 17 of  the Act,  is  no more  res

integra. In Grindlays Bank Ltd. v. Central Government

Industrial  Tribunal  and  others  4,  it  has  been  held  at 4  1980 (Supp) SCC 420

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paragraph-14 that:

“14. The contention that the Tribunal had become functus officio and,  therefore,  had no jurisdiction to set aside the ex parte award and that the Central Government alone could set it aside, does not commend to us. Sub-section (3) of  Section  20  of  the  Act  provides  that  the proceedings  before  the  Tribunal  would  be deemed to continue till  the date on which the award becomes enforceable under Section 17-A. Under  Section  17-A  of  the  Act,  an  award becomes enforceable on the expiry of 30 days from the date of  its  publication under Section 17. The proceedings with regard to a reference under Section 10 of the Act are, therefore, not deemed to be concluded until the expiry of 30 days from the publication of the award. Till then the Tribunal retains jurisdiction over the dispute referred  to  it  for  adjudication  and  up  to  that date it has the power to entertain an application in connection with such dispute. That stage is not reached till the award becomes enforceable under Section        17-A…….”

At paragraph-6 in  Grindlays (supra), it was held that the Tribunal

can exercise such powers, if it thinks fit, in the interest of justice. It

has also been held that the Tribunal is endowed with such incidental

or  ancillary  powers  as  are  necessary  to  discharge  its  functions

effectively  for  the  purpose  of  doing  justice  between  the  parties,

unless there is any express indication in the statute to the contrary.

To quote:  

“6. We are of the opinion that the Tribunal

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had the power to pass the impugned order if it thought fit  in the interest  of  justice.  It  is  true that there is no express provision in the Act or the rules framed thereunder giving the Tribunal jurisdiction to do so. But it is a well known rule of statutory construction that a Tribunal or body should be considered to be endowed with such ancillary or incidental powers as are necessary to  discharge  its  functions  effectively  for  the purpose of doing justice between the parties. In a case of this nature, we are of the view that the Tribunal should be considered as invested with such incidental or ancillary powers unless there is any indication in the statute to the contrary. We do not find any such statutory prohibition. On the other hand, there are indications to the contrary.”

15.  In paragraph-7, it has been held that although the Tribunal

or other authorities specified in Section 11 of the Act are

not Courts, they have the trappings of a Court and they

exercise quasi-judicial functions.

16. At   paragraph-8,  it  has  been  held  that  “...  all  these

authorities  being  quasi-judicial  in  nature,  objectively

determining  matters  referred  to  them,  have to  exercise

their discretion in a judicial manner, without caprice and

according  to  the  general  principles  of  law  and  rules  of

natural justice”.

17. At paragraph-10, it has been held that an award passed

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without participation on sufficient causes is a nullity, and

hence, the Court/Tribunal has the power and duty to set

aside an ex parte award.

18. At paragraph-11, it has been held that the view taken at

paragraph-10 is in consonance with the mandate of Rule

22.

19. At paragraph-12,  the Court  took the view that  going by

Rule  24  of  the  Central  Rules  regarding  grant  of

adjournment  being  governed  by  the  Code  of  Civil

Procedure, 1908 (hereinafter referred to as “the CPC”), the

provisions of Order IX Rule 13 of the CPC would apply in

case of an ex parte award.

 20. In paragraph-13, it was held that setting aside an ex parte

award is a matter of procedural review exercised ex debito

justitiae to prevent abuse of its process and such powers

are inherent in every Court or Tribunal.

21. Paragraphs-10 to 13 read as follows:  

“10. When  sub-section  (1)  of  Section  11 expressly and in clear terms confers power upon the  Tribunal  to  regulate  its  own  procedure,  it must  necessarily  be  endowed  with  all  powers

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which bring about an adjudication of an existing industrial dispute, after affording all the parties an opportunity of a hearing. We are inclined to the view that where a party is prevented from appearing  at  the  hearing  due  to  a  sufficient cause, and is faced with an ex parte award, it is as if the party is visited with an award without a notice of the proceedings. It is needless to stress that  where  the  Tribunal  proceeds  to  make  an award  without  notice  to  a  party,  the  award  is nothing but a nullity. In such circumstances, the Tribunal has not only the power but also the duty to set aside the ex parte award and to direct the matter to be heard afresh.

11. The language of Rule 22 unequivocally makes the jurisdiction of the Tribunal to render an  ex  parte  award  conditional  upon  the fulfilment  of  its  requirements.  If  there  is  no sufficient cause for the absence of a party, the Tribunal undoubtedly has jurisdiction to proceed ex parte. But if there was sufficient cause shown which prevented a  party  from appearing,  then under the terms of Rule 22, the Tribunal will have had no jurisdiction to proceed and consequently, it must necessarily have power to set aside the ex parte award. In other words, there is power to proceed ex parte, but such power is subject to the fulfilment of the condition laid down in Rule 22. The power to proceed ex parte under Rule 22 carries with it the power to enquire whether or not there was sufficient cause for the absence of a party at the hearing.

12. Under  Rule  24(b)  a  Tribunal  or  other body has the powers of a civil court under Order 17 of the Code of Civil Procedure, relating to the grant of adjournments. Under Order 17, Rule 1, a civil court has the discretion to grant or refuse an adjournment. Where it refuses to adjourn the hearing of a suit,  it  may proceed either under Order 17, Rule 2 or Rule 3. When it decides to

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proceed under Order 17, Rule 2, it may proceed to  dispose  of  the  suit  in  one  of  the  modes directed in that behalf by Order 9,  or to make such other order as it thinks fit. As a necessary corollary,  when  the  Tribunal  or  other  body refuses to adjourn the hearing, it may proceed ex parte. In a case in which the Tribunal or other body makes an ex parte award, the provisions of Order  9,  Rule  13  of  the  Code  are  clearly attracted.  It  logically  follows  that  the  Tribunal was competent to entertain an application to set aside an ex parte award.

13. We  are  unable  to  appreciate  the contention  that  merely  because  the  ex  parte award  was  based  on  the  statement  of  the manager  of  the  appellant,  the  order  setting aside the ex  parte  award,  in  fact,  amounts  to review. The decision in Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji is distinguishable. It  is  an  authority  for  the  proposition  that  the power of review is not an inherent power, it must be conferred either specifically or by necessary implication. Sub-sections (1) and (3) of Section 11  of  the  Act  themselves  make  a  distinction between procedure and powers of the Tribunal under the Act. While the procedure is left to be devised by the Tribunal to suit carrying out its functions under the Act, the powers of civil court conferred  upon  it  are  clearly  defined.  The question whether a party must be heard before it is proceeded against is one of procedure and not of power in the sense in which the words are used in Section 11. The answer to the question is,  therefore,  to  be found in  sub-section (1)  of Section 11 and not in sub-section (3) of Section 11.  Furthermore,  different  considerations  arise on review. The expression “review” is used in the two  distinct  senses,  namely  (1)  a  procedural review which is  either inherent or implied in a court  or  Tribunal  to  set  aside  a  palpably erroneous  order  passed  under  a

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misapprehension  by  it,  and  (2)  a  review  on merits when the error sought to be corrected is one of law and is  apparent on the face of the record. It is in the latter sense that the court in Patel Narshi Thakershi case held that no review lies  on  merits  unless  a  statute  specifically provides  for  it.  Obviously  when  a  review  is sought  due  to  a  procedural  defect,  the inadvertent  error  committed  by  the  Tribunal must be corrected   ex debito justitiae to prevent the abuse of its process, and such power inheres in every court or Tribunal.”

                                                                                    (Emphasis supplied)

22. The Court has unambiguously held that it is the power and

duty of the Tribunal exercising its ancillary and incidental

powers to  set  aside an award which is  a nullity.  In  that

process, the Tribunal is governed by the principles of Order

IX Rule 13 of the CPC. However, apparently, on facts, the

Court came to the conclusion that the power to set aside

an  ex  parte award  remained  only  till  the  award  had

become enforceable  under  Section  17A,  viz.,  before  the

expiry of 30 days from the date of its publication under

Section 17.  It may be seen that the application for setting

aside the award in  Grindlays (supra) was filed within 30

days of publication; the award was made on 09.12.1970,

published on 25.12.1976 and the application was filed on

19.01.1977.  It  is  interesting  to  note  that  in  Grindlays

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(supra),  the  Court  summarised  the  legal  position  in  the

concluding paragraph to  the effect  that   “...  There is  no

finality attached to an ex parte award because it is always

subject  to  its  being  set  aside  on  sufficient  cause being

shown. The  Tribunal  had  the  power  to  deal  with  an

application properly made before it for setting aside the ex

parte award and pass suitable orders.”  

23.   In Anil Sood v. Presiding Officer, Labour Court II  5 ,

the Court relied on  Grindlays (supra). The facts in the

case of Anil Sood (supra) are important for the purpose

of  calculating  the  30  days  period.  In  this  case,  a

reference was made to the Labour Court and the award

was made on 11-09-1995. An application was filed by

the appellant therein on 06-11-1995 contending that he

had no notice of the proceedings. That application was

dismissed  on  the  ground  that  the  Labour  Court  had

become  functus officio. It is pertinent to note that the

decision does not mention the date of publication of the

award. Following the decision in Grindlays (supra), the

Court held as follows:

5  (2001) 10 SCC 534

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“5. This  Court  in  Grindlays  Bank  Ltd.  case examined the scheme of the provisions under the Industrial  Disputes  Act  and  enunciated  that Section 11 of the Industrial Disputes Act conferred ample powers upon the Tribunal to devise its own procedure in the interest of justice which includes powers  which  bring  out  the  adjudication  of  an existing  industrial  dispute.  Sub-sections  (1)  and (3) of Section 11 of the Act thereby indicate the difference between procedure and powers of the Tribunal under the Act, while the procedure is left to be devised by the Tribunal to suit carrying out its functions under the Act, the extent of powers of the civil court are clearly set out.

6. The  aspect  that  the  party  against  whom award is to be made due opportunity to defend has to be given is a matter of procedure and not that of power in the sense in which the language is  adopted  in  Section  11.  When  matters  are referred to the tribunal or court they have to be decided objectively and the tribunals/courts have to  exercise  their  discretion  in  a  judicial  manner without  arbitrariness  by  following  the  general principles of law and rules of natural justice.

7. The power to proceed ex parte is available under  Rule  22  of  the  Central  Rules  which  also includes the power to inquire whether or not there was sufficient cause for the absence of a party at the hearing, and if there is sufficient cause shown which prevented a party from appearing, then if the party is visited with an award without a notice which is a nullity and therefore the Tribunal will have no jurisdiction to proceed and consequently, it must necessarily have power to set aside the ex parte award.

8. If this be the position in law, both the High Court and the Tribunal (sic Labour Court) fell into an  error  in  stating  that  the  Labour  Court  had become  functus  officio  after  making  the  award though ex parte. We set aside the order made and the  award  passed  by  the  Labour  Court  and

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affirmed by the High Court in this regard, in view of  the  fact  that  the  learned  counsel  for  the respondent conceded that application filed by the appellant  be  allowed,  set  aside  the  ex  parte award  and restore  the  reference.  To  decide  the matter afresh, the parties shall appear before the Labour  Court  on  11-12-2000  to  take  further directions  as  regards  the  proceedings.  As  the matter is very old, it would be appropriate for the Labour  Court  to  dispose  of  this  reference  as expeditiously  as  possible  but  not  later  than  six months from today.”

24. In  Sangham (supra),  the  Court  took  the  view  that  the

Labour  Court/Tribunal  retains  jurisdiction  over  disputes

referred to it for adjudication only up to the expiry of 30

days of the publication of the award, and thereafter, the

Court/Tribunal  becomes  functus  officio.  Referring  to

paragraph-14  in  Grindlays  (supra),  the  Court  held  as

follows:

“8. The  said  decision  is,  therefore,  an authority  for  the  proposition  that  while  an Industrial Court will have jurisdiction to set aside an  ex  parte  award,  but  having  regard  to  the provision contained in Section 17-A of the Act, an application  therefor  must  be  filed  before  the expiry of 30 days from the publication thereof. Till then  the  Tribunal  retains  jurisdiction  over  the dispute referred to it for adjudication, and only up to  that  date,  it  has  the  power  to  entertain  an application in connection with such dispute.

  XXX              XXX                    XXX 10.     In  view  of  this  Court's  decision  in

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Grindlays Bank   [1980 Supp SCC 420 : 1981 SCC (L&S) 309] such jurisdiction could be exercised by the  Labour  Court  within  a  limited  time  frame, namely,  within  thirty  days  from  the  date  of publication of the award.   Once an award becomes enforceable in terms of Section 17-A of the Act, the Labour Court or the Tribunal, as the case may be, does not retain any jurisdiction in relation to setting aside of an award passed by it.  In other words, upon the expiry of 30 days from the date of  publication  of  the  award  in  the  gazette,  the same  having  become  enforceable,  the  Labour Court would become functus officio.

11. Grindlays  Bank has  been  followed  in Satnam  Verma v.  Union  of  India and  J.K. Synthetics Ltd. v. CCE.”

(Emphasis supplied)

25. This  Court  in  Sangham (supra)  also  referred  to  the

decision in Anil Sood (supra) and noted as follows:  

“12.This  Court  in    Anil  Sood    did  not  lay down any  law  to  the  contrary.   The  contention raised on the part of Mr Jain to the effect that in fact in that case an application for setting aside an award was made long after 30 days cannot be accepted for more than one reason. Firstly, a fact  situation obtaining in  one case cannot  be said  to  be  a  precedent  for  another.  (See Mehboob  Dawood  Shaikh v.  State  of Maharashtra).  Secondly,  from a  perusal  of  the said decision, it does not appear that any date of publication of the award was mentioned therein so  as  to  establish  that  even  on  fact,  the application was made 30 days after the expiry of publication of the award. Furthermore, the said decision  appears  to  have  been  rendered  on concession.”

(Emphasis supplied)

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26. In  Jammu  Tehsil v.  Hakumar  Singh  and  others  6,

following the decisions in Grindlays  (supra), this Court at

paragraph-5  held  that  “In  view  of  this  Court's  decision

in Grindlays Bank case such jurisdiction could be exercised

by the Labour Court within a limited time-frame, namely,

within  thirty  days  from  the  date  of  publication  of  the

award. Once an award becomes enforceable in  terms of

Section 17-A of the Act, the Labour Court or the Tribunal,

as  the case may be,  does not  retain  any jurisdiction in

relation to setting aside of an award passed by it. In other

words,  upon  the  expiry  of  30  days  from  the  date  of

publication of the award in the Gazette, the same having

become  enforceable,  the  Labour  Court  would  become

functus officio”.

27. In  Radhakrishna Mani Tripathi   (supra)  the argument

was that Rule 26 (2) of the Industrial Disputes (Bombay)

Rules is ultra vires. The Rule as quoted in the decision, to

the extent relevant, reads as follows:  

“(2)  Where  any  award,  order  or  decision  is made ex parte under sub-rule (1), the aggrieved party, may within thirty days of the receipt of a

6  (2006) 12 SCC 193

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copy thereof,  make an application to the Board, Court, Labour Court, Tribunal or an arbitrator, as the case may be, to set aside such award, order or  decision.  If  the  Board,  Court,  Labour  Court, Tribunal  or  arbitrator  is  satisfied that  there was sufficient  cause  for  non-appearance  of  the aggrieved party, it or he may set aside the award, order  or  decision  so  made  and  shall  appoint  a date for proceeding with the matter: Provided that, no award, order or decision shall be set aside on any application as aforesaid unless notice thereof has been served on the opposite party.”

It  was  contended  that  under  Section  17-A  of  the  Act  an  award

becomes  enforceable  on  expiry  of  30  days  from  the  date  of  its

publication whereupon the Labour Court is rendered functus officio.

Reliance was placed on certain observations in  Grindlays (supra)

and it was further submitted that the provision of Rule 26(2) of the

Bombay  Rules  was  in  derogation  of  Section  17-A  of  the  Act.

However, the Court held as follows:  

“15. Similarly,  the  Court  pointed  out  in Grindlays  Bank,  the  provision  of  Rule  24(b) empowered  the  Industrial  Courts  to  refuse  to adjourn the hearing and to  proceed ex parte. Hence, in a case in which the Industrial Court makes  an  ex  parte  award  the  provisions  of Order 9 Rule 13 CPC would be clearly attracted. It logically follows that the Tribunal is competent to entertain an application to set  aside an ex parte award. (Vide para 12 of the decision.) The Court  thus  founded  the  Industrial  Court’s jurisdiction  and  power  to  recall  an  ex  parte award  on  Rules  22  and  24(b)  of  the  Central Rules.  It  is  thus  to  be  seen that  in  Grindlays

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Bank what this Court held to be implicit in Rule 22  of  the  Central  Rules  is  made  explicit  and clear  in  the  Bombay  Rules  in  the  form  of sub-rule (2) of Rule 26.”

28. After referring to and quoting paragraph-14 in  Grindlays

(supra), it was further held that:  

“16. ...From  the  above  quotation  it  would appear  that  in  Grindlays  Bank the  recall application was filed within thirty days from the date of publication of the award and hence, the objection raised on the basis of Section 17-A did not  arise  in  this  case.  In    Grindlays  Bank   this Court  did  not  say  that  the  Industrial  Courts would  have  no  jurisdiction  to  entertain  an application  for  setting  aside  an  award  made after thirty days of its publication. Nevertheless, on the basis of the passage marked in italics in the  above  quotation  Ms  Issar  strongly contended that  that  is  the true import  of  the judgment.

17. We are unable to accept. The position is made clear in the later decision in  Anil Sood v. Labour  Court.  In  Anil  Sood interestingly  the Labour Court had rejected the recall application on the very same ground that after making the award it  became  functus officio in the matter. The order of the Labour Court was challenged before the High Court but the High Court also took the same view. In appeal this Court noted that the award was made on 11-9-1995 and the application for its recall was filed on 6-11-1995. …

18.In light of the decision in    Anil Sood    we find no substance in the appellant's submission based on Section 17-A of the Act. There being no substance in the first limb of the submission

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there  is  no  question  of  any  conflict  between Rule  26(2)  of  the  Bombay  Rules  and  Section 17-A of the Act.”

                                              (Emphasis supplied)

29. Kapra Mazdoor Ekta Union v. Birla Cotton Spinning

and Weaving Mills Ltd. and Another  7 is a decision by a

Bench of 3 Judges which has also referred to  Grindlays

(supra).  It  is  a  case  where  the  award  was  made  on

12.06.1987  and  published  on  10.08.1987.  The  recall

application was made on 07.09.1987, before the expiry of

the 30 days period provided under Section 17A. It is also to

be noted that the application for recall of the award was

with a prayer for raising an additional issue. To quote from

paragraph-20 of the judgment,  “...The recall of the award

of  the  Tribunal  was  sought  not  on  the  ground  that  in

passing  the  award  the  Tribunal  had  committed  any

procedural illegality or mistake of the nature which vitiated

the proceeding itself and consequently the award, but on

the ground that some matters which ought to have been

considered  by  the  Tribunal  were  not  duly  considered.

7  (2005) 13 SCC 777

21

Apparently  the  recall  or  review  sought  was  not  a

procedural review, but a review on merits. Such a review

was not permissible in the absence of a provision in the

Act conferring the power of review on the Tribunal either

expressly or by necessary implication.” Therefore,  Kapra

(supra) is distinguishable on facts and on the question of

law dealt with therein: it was a case of substantive review

whereas, setting aside an  ex parte award is a matter of

procedural review. In the case of procedural review, as held

in  Kapra (supra), the party “... has to establish that the

procedure  followed  by  the  court  or  the  quasi-judicial

authority suffered from such illegality that it vitiated the

proceeding  and  invalidated  the  order  made  therein,

inasmuch as the opposite party concerned was not heard

for  no  fault  of  his,  or  that  the  matter  was  heard  and

decided on a date other than the one fixed for hearing of

the matter which he could not attend for no fault of his. In

such  cases,  therefore,  the  matter  has  to  be  reheard  in

accordance with law without going into the merit of the

order passed. The order passed is liable to be recalled and

reviewed  not  because  it  is  found  to  be  erroneous,  but

22

because it  was passed in  a proceeding which was itself

vitiated by an error of procedure or mistake which went to

the  root  of  the  matter  and  invalidated  the  entire

proceeding.  In Grindlays  Bank  Ltd. v. Central  Govt.

Industrial Tribunal it was held that once it is established

that the respondents were prevented from appearing at

the hearing due to sufficient cause,  it  followed that  the

matter must be reheard and decided again.”

30. Therefore,  all  the  decisions  hereinabove  noted  by  us

referred  to  Grindlays (supra).  On  a  close  reading  of

paragraph-14 of  Grindlays (supra), in the background of

the analysis of law under paragraphs-10 to 13, it is difficult

for us to comprehend that the power to set aside an  ex

parte award is not available to a Labour Court/Industrial

Tribunal.  On  the  principles  of  natural  justice,  and  on  a

purposive  interpretation  of  the  scheme  of  the  Act  and

Rules, we find it difficult also to discern that the ratio of the

decision  in  Grindlays (supra),  is  what  is  stated  in

paragraph-14 to the extent that an application for setting

aside an ex parte award has to be filed within 30 days of

publication  of  the  award.  On  the  contrary,  the  ratio  in

23

Grindlays (supra)  is  that  the  Tribunal  can  exercise  its

ancillary and incidental powers, on the broader principles

contained under Order IX Rule 13 of the CPC. No doubt, the

Limitation  Act,  1963  is  not  applicable  to  the  Labour

Court/Tribunal8.

31. In Union of India and another v. Paras Laminates (P)

Ltd  9 this Court held that the legislature has intended and

has  conceded  certain  powers  to  the  tribunals  in  their

assigned  field  of  jurisdiction  for  the  efficacious  and

meaningful  exercise  of  their  power.  Such  powers  are

implied in every tribunal unless expressly barred.  

“8. There is no doubt that the Tribunal functions as a court within the limits of its jurisdiction. It has all  the powers  conferred expressly  by the statute. Furthermore, being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the express grant of statutory powers. Certain powers are recognised as incidental and ancillary, not because they are inherent in the Tribunal, nor because its jurisdiction is plenary, but because it  is  the legislative intent  that  the power which is expressly granted in the assigned field of jurisdiction  is  efficaciously  and  meaningfully exercised. The powers of the Tribunal are no doubt limited. Its area of jurisdiction is clearly defined, but within  the bounds of  its  jurisdiction,  it  has all  the

8  M.P. Steel Corporation v. Commissioner of Central Excise (2015) 7  SCC 58; Nityananda, M. Joshi and others v. Life Insurance Corporation of India  and others (1969) 2 SCC 199. 9  (1990) 4 SCC 453

24

powers expressly and impliedly granted. The implied grant is, of course, limited by the express grant and, therefore,  it  can only be such powers as are truly incidental  and  ancillary  for  doing  all  such  acts  or employing  all  such  means  as  are  reasonably necessary  to  make  the  grant  effective.  As  stated in Maxwell on Interpretation of Statutes (11th edn.) “where an Act confers a jurisdiction, it impliedly also grants  the  power  of  doing  all  such  acts,  or employing such means, as are essentially necessary to  its  execution”.  [See also ITO v. M.K.  Mohammed Kunhi].”

In  J. K. Synthetics Ltd v.  Collector of Central Excise  10,  while

dealing with a case from the Customs,  Excise and Gold (Control)

Appellate Tribunal (CEGAT), this Court went a step further to hold

that there are certain inherent powers vested in every tribunal in

regulating their own procedure. It held at paragraph-6 as follows:

“6. If,  in  a  given  case,  it  is  established  that  the respondent was unable to appear before it for no fault of his own, the ends of justice would clearly require that the ex parte order against him should be set aside. Not to  do  so  on  the  ground  of  lack  of  power  would  be manifest injustice. Quite apart from the inherent power that every tribunal and court constituted to do justice has in this respect, CEGAT is clothed with express power under Rule 41 to make such order as is  necessary to secure  the  ends  of  justice.  CEGAT has,  therefore,  the power to set aside an order passed ex parte against the respondent before it  if it  is found that the respondent had, for sufficient cause, been unable to appear.”

32. In case a party is in a position to show sufficient cause for

its absence before the Labour Court/ Tribunal when it was

10  (1996) 6 SCC 92

25

set  ex parte, the Labour Court/Tribunal, in exercise of its

ancillary or  incidental  powers,  is  competent  to  entertain

such an application. That power cannot be circumscribed

by limitation. What is the sufficient cause and whether its

jurisdiction is invoked within a reasonable time should be

left to the judicious discretion of the Labour Court/Tribunal.

33. It is a matter of natural justice that any party to the judicial

proceedings should get an opportunity of being heard, and

if  such  an  opportunity  has  been  denied  for  want  of

sufficient reason, the Labour Court/Tribunal which denied

such an opportunity, being satisfied of the sufficient cause

and within a reasonable time, should be in a position to set

right its own procedure. Otherwise, as held in  Grindlays,

an award which may be a nullity will have to be technically

enforced.  It  is  difficult  to  comprehend  such  a  situation

under law.  

34. In this context, it is also necessary to refer to Section 29,

the penal sanction which includes imprisonment for breach

of award.  

“29. Penalty  for  breach  of  settlement  or award.- Any person who commits a breach of any term

26

of  any  settlement  or  award,  which  is  binding  on  him under this Act,  shall  be punishable with imprisonment for a term which may extend to six months, or with fine, or with both, and where the breach is a continuing one, with a further  fine which may extend to two hundred rupees for every day during which the breach continues after the conviction for the first and the Court trying the offence,  if  it  fines  the  offender,  may  direct  that  the whole or any part of the fine realised from him shall be paid, by way of compensation, to any person who, in its opinion, has been injured by such breach.”

 35. Merely because an award has become enforceable, does

not necessarily mean that it has become binding. For an

award  to  become  binding,  it  should  be  passed  in

compliance with the principles of natural justice. An award

passed denying an opportunity of hearing when there was

a sufficient cause for non-appearance can be challenged

on the ground of it being nullity. An award which is a nullity

cannot be and shall not be a binding award. In case a party

is able to show sufficient cause within a reasonable time

for its non-appearance in the Labour Court/Tribunal when it

was set  ex parte,  the Labour  Court/Tribunal  is  bound to

consider such an application and the application cannot be

rejected on the ground that it was filed after the award had

become  enforceable.  The  Labour  Court/Tribunal  is  not

functus officio after the award has become enforceable as

27

far as setting aside an  ex parte award is concerned. It is

within  its  powers  to  entertain  an application  as  per  the

scheme of  the  Act  and in  terms of  the  rules  of  natural

justice. It needs to be restated that the Industrial Disputes

Act,  1947  is  a  welfare  legislation  intended  to  maintain

industrial peace. In that view of the matter, certain powers

to  do  justice  have  to  be  conceded  to  the  Labour

Court/Tribunal,  whether  we call  it  ancillary,  incidental  or

inherent.  

36. We may also add that when an application for setting aside

an  ex  parte award  is  made  at  the  instance  of  the

management,  the  Labour  Court/Tribunal  has  to  balance

equities. The appeals are hence disposed of as follows. The

awards are remitted to the Labour Court for consideration

as  to  whether  there  was  sufficient  cause  for  non-

appearance of the management.  Since the litigation has

been pending for a long time, we direct the appellants to

pay  an  amount  of   Rs.1,00,000/-  in  each  case  to  the

workmen  by  way  of  provisional  payment.  However,  we

make  it  clear  that  the  payment  is  subject  to  the  final

outcome of the awards and will be adjusted appropriately.

28

We  record  our  deep  appreciation  for  the  gracious

assistance rendered by Mr. Shekhar Naphade.  

..............................................J.                                              [KURIAN JOSEPH]  

..............................................J.                              [MOHAN M. SHANTANAGOUDAR]  

...............................................J.                                                        [NAVIN SINHA]

NEW DELHI; May  18, 2018.

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ITEM NO.1501               COURT NO.5               SECTION IV                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Petition for Special Leave to Appeal (C)  No. 6091 of 2010  M/S. HARYANA SURAJ MALTING LTD.                    Appellant(s)                                 VERSUS PHOOL CHAND                                        Respondent(s) WITH SLP (C) No. 6092 of 2010 (IV) C.A. No. 5893/2012 (XIV)   Date : 18-05-2018 These matters were called on for Judgment today.  For Appellant(s) Mr. Chetan Joshi, Adv.                      Mr. Rameshwar Prasad Goyal, AOR                     Mr. Aftab Ali Khan, AOR                     For Respondent(s)   Mr. Rishi Malhotra, AOR                      

Hon'ble Mr. Justice Kurian Joseph pronounced the reportable Judgment of the Bench comprising His Lordship, Hon'ble Mr. Justice Mohan M. Shantanagoudar and Hon'ble Mr. Justice Navin Sinha.   

Leave granted in SLP (C) No. 6091 of 2010 and SLP (C) No. 6092 of 2010.   

The appeals are disposed of.   Pending Interlocutory Applications, if any, stand disposed of.

(JAYANT KUMAR ARORA)                              (RENU DIWAN)    COURT MASTER                                ASSISTANT REGISTRAR

(Signed reportable Judgment is placed on the file)

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