M/s. Pee Vee Textiles Ltd. Vs State of Maharashtra .

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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