NIEMLA TEXTILE FINISHING MILLS LTD. v. THE 2ND PUNJAB INDUSTRIAL TRIBUNAL
Citation: [1957] 1 S.C.R. 335; 1957 INSC 1
Court: Supreme Court of India
Bench: SUDHI RANJAN DAS , NATWARLAL HARILAL BHAGWATI, T.L. VENKATARAMA AIYYAR, BHUVNESHWAR PRASAD SINHA, S.K. DAS
Judgment date:
Case summary
1957 INSC 1. Supreme Court of India judgment dated 1957-01-10. NIEMLA TEXTILE FINISHING MILLS LTD. v. THE 2ND PUNJAB INDUSTRIAL TRIBUNAL. Read the judgment...
Judgment text
S. C. R. SUPREME COURT REPORTS 335 necessary to re-examine the witnesses who have already been examined m court unless the court thinks it necessary. Appeal allowed. Case remanded for retrial. NIEMLA TEXTILE FINISHING MILLS LTD. v. THE 2No PUNJAB INDUSTRIAL TRIBUNAL (with connected appeals and petitions) rs. R. DAS C. J. , BHAGWATI, VENKATARAMA AYYAR, B. P. SINHA and S. K. DAs JJ. ] Industrial Disputes Act, 1947 (XIV of 1947)-Constitutional 1'alidity-Legislative competency-Powers of Industrial Tribunals- Whether Legislative-The Government of India Act, 1935 (25 & 26 Geo. 5, Ch. 42), Sch. VII, List III, Entt·ies 27, 29-Constitution of India, Arts. 14, 19 (1) (f) and (g). The disputes between the appellants and their workmen were referred to the Industrial Tribunal for adjudication by the appropriate Government, under the provisions of the Industrial Disputes Act, 1947. It was contended for the appellants that the reference to the Tribunal was bad because ( l) the Act was ultm vires.
the Constitution inasmuch as its provisions are Yiobtive of the fundamental rights enshrined in Art. 14 and Art. 19 (I) ( f) and ( g) of the Constitution, (2) the Industrial Tribunals are legislating in the guise of adjudication, and this amounts to delegation of the powers of legislation which it was not competent to the Central Legislature to do so, and ( 3) the definition of the term "industry" comprises industrial as well as non-industrial concerns and, therefore, the Act was not within the legislative competence of the Central Legislature under Entry 29 of List Ill of the Seventh Schedule to the Government of India Act, 1935. Held: (1) The Industrial Disputes Act, 1947, 1s not unconstitutional and the provisions of the Act do not contravene Arts. 14 and 19 (l) (£) and (g) of the Constitution.
The basic idea underlying all the provisions of the Act is the 'settlement of industrial disputes and the promotion of industrial peace so that production may not, be interrupted and the the Act. The Works Committee consists of reprcsenta-ti ves of employers and workmen engaged in a particular establishmrnt and is constituted in the prescribed manner in order to promote measures for securing and preserving amity and good relations between the employers and workmen and to that end to comment upon matters of their common interest or concern and en pute consisting of a Chairman and 2 or 4 other. members as it thinks fit, charged with the duty of doing all such things as it thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.
If the Board succeeds in arriving at a settlement, a report thereof together with a memorandum of the settlement will be sent by it to the appropriate Government but if no such settlement is arrived at the Board will send to the appropriate Government a full report in the manner indicated above including its recommendations for the determination of the dispute. It may be noted that a reference to the Board of Conciliation is but a preliminary step for the settlement of the industrial dispute and the -report made by it in the event of a failure to bring about such settlement will furnish materials to the appropriate Government to make up its mind whether it will refer the dispute for adjudication to an Industrial Tribunal. Before, however, any such reference is made by the appropriate Government it may set up a Court of Enquiry for the purpose of enquiring into any matter appearing to be connected with or relevant to an industrial dispute.
The Court of Enquiry will enquire into those matters and report thereon to the appropriate Government within six months from the . commencement of the enquiry. That report will furnish materials to the appropriate Government for finally . determining whether the industrial dispute shall be referred by it for adjudication to the Industrial Tribunal. It may be that the report of the Court of Enquiry discloses circumstances under which the appropriate Government considers that it is not necessary to refer the industrial dispute for adjudication to the Industrial Tribunal. In that event the matter will end there and the appropriate Government may await further developments before referring the industrial dispute for adjudication to the Industrial Tribunal.
If, -0n the other hand, the materials embodied in the report of the Court of Enquiry disclose circumstances which make it necessary for the appropriate Government to refer the industrial dispute for adjudication to the Industrial Tribuna~ the appropriate Government will constitute an Industrial Tribunal for adjudication of the industrial dispute in accordance with the provisions of the Act. The Industrial Tribunal would then adjudicate upon such dispute and submit its award to the appropriate Government. These are the steps which are contemplated in the manner indicated in s. 10 of the Act for reference of disputes to Boards, Courts or Tribunals. It is not necessary that all these steps should be taken seriatim one after tqe other.
Whether one or the otht;r of the steps should be taken by the appropriate Government must depend upon the exigencies of the situation, the i1Pminence of industrial strife resulting in cessation or interruption of industrial production and breach of industrial peace endangering public tranquillity and law and order. If the matter brooks delay the appropriate Government may start conciliation proceedings culminating in a reference to a Board of Conciliation and also Court of Enquiry, if need be, before a full-fledged reference ·is made to an Industrial Tribunal. If, on the other hand, the matter brooks no delay the appropriate. - Government may possibly refer the dispute to a Board of Conciliation before referring it for adjudication to an Industrial Tribunal or may straightaway refer it for adjudication by the Industrial Tribunal.
What step would be taken by the appropriate Government in the matter of the industrial dispute must, therefore, be determined by the surrounding circumstances, and the discretion vested in the appropriate Government for setting up one or the other of the authorities for the purpose of investigation and settlement of industrial disputes must be exercised by it having regard to the exigencies of the situation and the objects to be achieved. No hard and fast rule can be laid down as to the setting up of one or the other of the authorities for the purpose of bringing about the desired end which is the settlement of industrial disputes and promotion of industrial peace and it is hardly legitimate to say that such discretion as is vested in the appropriate Government will be exercised "with an evil eye and an unequal hand. " It is contended in the first instance that the provisions of the Act are violative of the fundamental rights enshrined in Art. 14 and Art.
19( 1) (f) and (g) of the Constitution ; that it is open to the appropriate Government to differentiate between the parties similarly placed and circumstanced in every respect and in the absence of any rules made in this behalf th rd to the circumstances of a particular case. There is no warrant for the suggestion that such discretion will be exercised by the appropriate Government arbitrarily or capriciously or so as to prejudice the interest of any of the parties ,concerned. The basic idea underlying all the provisions of the Act is th~ settlement of industrial disputes and the promotion of industrial peace so that production may not he interrupted and the community in general may be benefited.
This is the end which has gqt to be kept in view by the appropriate Government when exercising the discretion which is vested in it in the matter of making the reference to one or the other of the authorities under the Act and also in the matter of carrying out the various provisions contained in the other sections of_ the Act including the curtailment or extension of the period of operation of the award of the Industrial Tribunal. We are, of opinion that there is no substance jn the contention urged before us that the relevant provisions of the Act and in particular s. 10 thereof are unconstitutional and void as infringing the fundamental rights guaranteed under Art. 14 and Art. 19 (1) (f) and (g) of the Constitution. If these provisions are thus intra vire!
there is no need to consider the further argument advanced before us that 'hese provisions are so inextricably interwoven with the other provisions of the Act or are such that the Legislature would not have enacted the other provisions of the Act without incorporating the same therein. It is next contended that the Industrial Tribunals to whom industrial disputes are referred for adjudication by the appropriate Government are legislating in the guise of adjudication and this amounts to delegation of the powers of legislation which it was not competent to the Central Legislature to do. The argument is that the Industrial Courts are not bound to follow the provisions of the ordinary law of the land as enacted in the Indian Contract Act, the Payment of Wages Act, the Workmen's Compensation Act, the Indian Limitation.
Act and the like, but are authorised by the terms of the Act to lay down their own code of conduct in regard to industrial relations and their own policy in regard to the promotion of industrial peace. This, it is submitted is legislation and the Legislature has in effect abdicated its powers in favour of the Industrial Courts. The provisions in regard to reinstatement of dismissed or discharged employees, the provisions in regard to lay-off and retrenchment and the provisions in regard to strikes and lock-outs, amongst others, are pointed out as introducing provisions contrary to the positive law of the lapd and as laying down a code of conduct or policy, and reference is made in this behalf to a decision of the Federal Court in Western India Automobile Association v. Industrial 1 Tribunal, Bombay, and Others ( ) and two decisions of the Madras High Court, viz. , The Electro Mechanical Industries Ltd. , Madras v. The Industrial Tribunal No.
2 for Engineering Firms and Type Foundries, Fort 2 St. George, Madras, and Another( ) and Shree Meenakshi 3 Mills Ltd. v. State of Madras( ). It has to be remem-bered, however, that the functions of the Industrial Tribunals, while adjudicating upon the industrial disputes referred to them for adjudication, are quite different from those of arbitration tribunals in commercial matters. As has been observed by Ludwig Teller in 'Labour Disputes and Collective Bargaining', Vol. 1, p. 536 : "Then too, industrial arbitration may involve the extension ot an existing agreement, or the making of a new one, or in general the creation of new obligations or modifications of old ones, while commercial arbitration generally concerns itself with interpretation of (2) [1950) II M. L. J. 479· existing obligations and disputes relating to existing agreements. " It was also observed by the Privy Council in Labour Relations Board of Saskatchewan v.
John East Iron Works, Ltd(), while referring to a claim for reinstatement by a dismissed employee as one of the typical matters in dispute between employers and employees: "The jurisdiction of the Board (Labour Relations Board) .......... is not invoked by the employee for the enforcement of his contractual rights : those, whatever they may be, he can assert elsewhere. But his reinstatement, which the terms of his contract of employment might not by themselves justify, is the means by which labour practices regarded as unfair are frustrated and the policy of collective bargaining as a road to industrial peace is secured. It is in the light of this new conception of industrial relations that the question to be determined by the. Board must be viewed. " After quoting these observations of the Privy Council, Rajamannar, C. J. , pointed out in Shru Meenakshi Mills Ltd. v. State of Madras(') at p.
388: "The essential object of all recent labour legislation has been not so much to lay down categorically the mutual rights and liabilities of employer and employees as to 'provide recourse to a given form of procedure for the settlement of disputes in the interests of the maintenance of peaceful relations between parties, without apparent conflicts such as are likely to inter-rupt production and entail other dangers. It is with this object that in the United States there has been legislation arranging for the adjustment of . conflicting interests by collective bargaining. In Great Britain there have been Acts like the Industrial Courts Act, 1919, which provides for Industrial Courts to enquire i11to and decide trade disputes. There is also provision for Conciliation Boards under the Conciliation Act, 1896. In fact, our Industrial Disputes Act is modelled on these two British Acts. " I•) (1949] A. C. 134.
This being the object of the enactment of the Act by the Central Legislature, the powers vested in the Industrial Tribunals in the matter of the settlement of industrial disputes referred to them for adjudication, wide though they may be but guided as they are by considerations of policy as indicated above, can . hardly be characterised as legislative powers. No doubt they lay down certain general principles to be observed in regard to the determination of bonus, reinstatement of dismissed or discharged employees and other allied topics but they are enunciated mainly with the object of promoting industrial peace while settling particular industrial disputes referred to them. These principles or rules of conduct, though they are applied as precedents by the Industrial Tribunals while adjudicating upon other similar industrial disputes referred to them, are not rules of law strictly so-called and do not amount to legislation by the Industrial Tribunals.
Even i: the analogy of the Courts of Law be applied to the Industrial Tribunals, the Industrial Tribunals at best lay down or declare what the principles or the rules of conduct governing the relations between employers and the employees should be. A declaration of the principles or rules of conduct governing the relationi between the parties appearing before the Industrial Tribunals is quite different from legislation which would be binding on all parties and indeed there is no provision in the Act which confers on the Indus. -trial Tribunals either the power to make rules which would have statutory effect or the power to legislate in regard to certain matters which crop up between employers and employees.
In the absence of any such provision, the mere fact that the Industrial Tribunals, while pronouncing awards in the several industrial dispute1; referred for their adjudication by the appropriate Government, lay down certain principles or rules of conduct for the guidance of employers and employees, does not amount to exercise of any legislative power and no question of their being invested with any legislative powers can arise. So far as delegated legislation is concerned, abstract definitions of the difference between the judicial and the legislative functions have been offered (Sec the distinction drawn by Mr. Justice Field in the Sinking- . Fund cases(') ), but they are of little use when applied to a situation of complicated facts. The function of a Court is to decide cases and leading jurists recognize that in the decision of many cases a Court must fill interstices in legislation.
A legislator cannot anticipate every possible legal problem ; neither can he do justice in cases after they had arisen. This inherent limitation in the legislative process makes it essential that there must be some elasticity in the judicial process. Even the ordinary courts of law apply the principles of justice, equity and good ·conscience in many cases ; e. g. , cases in tort and other cases where the law is not codified or does not in terms cover the problem under consideration. The Industrial Courts are to adjudicate on the disputes between employers and their workmen etc. , and in the course of such adjudication they must determine the "rights" and "wrongs" of the claims made, and in so doing they are undoubtedly free to apply the principles of justice, equity and good conscience, keeping in view the further principle that their jurisdiction is invoked not for the enforcement of mere contractual rights .
but for preventing labour practices regarded as unfair and for restoring industrial peace on the basis of collective barganing. The process does not cease to be judicial by reason of that elasticity or by reason of the application of the principles of justice, equity and good conscience. • It is not necessary to discuss the various authorities to which we have been referred on the nature and scope of the legislative process. Suffice it to say that there is neither legislation nor delegated legislation in the awards which are pronounced by the Industrial Tribunals while adjudicating upon the industrial disputes referred to them for adjudication and this contention is devoid of any force. It is lastly contended that the Act was not within the legislative competence of the Central Legislature inasmuch as the definition of the term "industry" in (t) (1879) 99 U. S. 700, 761; 25 L. Ed. 496, 516. s.
2(j) of the Act comprises industrial as well as non-industrial concerns and the Act which was expressly enacted with the object of investigation and settlement of industrial disputes is not covered by Entry 29 of List III of the Seventh Schedule to the Government of India Act, 1935. That Entry relates to "Trade unions; industrial and labour disputes" and it is urged that industrial disputes being the subject of legislation, there was no warrant for defining the term "industry" so as to include therein labour disputes and those too in non-industrial concerns. The definition of industry contained in s. 2(j) of the Act being comprehensive enough to include labour disputes in non-industrial concerns, it is not possible to separate the ultra vires part of that definition from the intra vires part of it with the result that th. :: whole of the definition must be held to be ultra vlres and in so far as it permeated the whole of the Act, the Act as a whole should be declared void.
This argument is sought to be supported by drawing our attention to certain decisions of the Industrial Tribunals which have included hospitals, educational institutions and even the business of Chartered Accountants within the definition of "industry" contained in the Act and it is urged that if such non-industrial concerns are also included in the definition of the term "industry'', the Act is certainly ultra vires Entry 29. We need not pause to consider whether the decisiom of the Industrial Tribunals above referred to are correct. Tha~ will have to be done when the question is raised directly before us for adjudication. The fact that the Industrial Tribunals have put an extended construction on the term "industry" is no reason for holding that the definition itself is bad or ultra vires.
What we have got to see is whether the definition of the term "industry" is within the legislative competence of the Central Legislature and on a prim a facie reading of the same we are not prepared to say that the same is unwarranted or not covered by Entry 2~. A wrong application of the definition to cases which are not strictly covered by it cannot vitiate th~ definition if otherwise it is not open to challenge. lt should be n(l(ed that, according to the preamble, the Act was enacted not only for settlement of industrial disputes but for other. purposes also. It is open to the respondents also to justify the definition of the term "industry" as contained in s. 2(j) of the Act by having resort to Entry 27 of the same List which refers to "Welfare of labour ; conditions of labour ; provident funds ; employers' liability and workmen's compensation ; health insurance, including invalidity pensions ; old age pensions".
The definition of the term "industry" including as it does any calling, service, employment, handicraft, or industrial occupa-tion or avocation of workmen, would, therfore, be justified under this Entry even if the same is not covered by Entry 29 above referred to. The Entries in the Legislative Lists should not be given a narrow construction, they include within their scope and ambit all ancillary matters which legitimately come within the topics mentioned therein. In the matters before us, moreover, the concerns or undertakings 3re all industrial concerns and fall squarely within the definition of the term "industry" strictly so-called and it is not open to the pursuers, situated as they are, to challenge the same. This contention also has no substance and must be rejected. It, therfore, follows that the Act is intra vires the Constitution and Civil Appeals Nos. 333, 334 and 335 of 1955 as also Petitions Nos. 203, 182 and 65 of 1956 must be dismissed.
There will, however, be one set of costs payable by the appellants in Civil Appeals Nos. 333 to 335 of 1955 to the respondents therein. So far as Petitions Nos. 203 of 1956, 182 of 1956 and 65 of 1956 are concerned, each party will bear and pay its respective costs thereoL Appeals and petitions dismissed. GIPN-87-100 S. C. lndia/59-24-5-60-1,000.
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