M/S RAHMAN INDUSTRIES PVT.LTD. Vs. STATE OF UP AND ORS

INDUSTRIAL DISPUTES ACT, 1947

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 286 of 2016, Judgment Date: Jan 18, 2016

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 286 OF 2016
(Arising out of SLP(C) No.8906 of 2011)

M/S RAHMAN INDUSTRIES PVT. LTD. … APPELLANT (S)

VERSUS

STATE OF U.P. AND OTHERS … RESPONDENT (S)

J U D G M E N T

KURIAN, J.:

Leave granted.

The appellant challenged the award dated 27.08.2010 passed under the
provisions of the Timely Payment of Wages Act, 1978 and the recovery before
the High Court leading to the impugned judgment dated 09.02.2011. The High
Court found that the order passed by the Labour Court was without
jurisdiction, and hence, the impugned orders were quashed. However, it was
clarified that the judgment of the High Court did not mean that the workmen
was left without any remedy. The question was only on invocation of proper
remedy before the appropriate forum. And thus, it was directed that in
case, any such matter is brought before the Government, the Government will
refer it for adjudication before the Labour Court. To quote:

“However, quashing of the orders under the Timely Payment of Wages Act,
1978 by this Court will not mean that the claim of the workmen has been
rejected in any manner. The Court has not given any finding on the rights
of the workmen or the amount of wages which had to be adjudicated by proper
forum. The opposite party No. 6 and the workmen will be at liberty to
approach the proper forum under the Payment of Wages Act, 1936 or any other
forum under the Payment of Wages Act, 1936 or any other forum which they
deem fit in the facts and circumstances of the case. It is also provided
that in case matter is brought before the government it will refer it for
adjudication at the earliest and the Labour Court will decide the whole
matter within a maximum period of four months from the date of reference.”

The grievance of the appellant is in a very narrow compass. It is pointed
out that there is a peremptory direction by the High Court to refer the
dispute raised by the workmen for adjudication, virtually taking away the
discretion on the part of the Government to look into the issue as to
whether there is a referable dispute at all.
We find force in the submission made by the learned Counsel. In the scheme
of the Industrial Disputes Act, 1947 (hereinafter referred to as ‘the
Act’), it is not as if the Government has to act as a post office by
referring each and every petition received by them. The Government is well
within its jurisdiction to see whether there exists a dispute worth
referring for adjudication. No doubt, the Government is not entitled to
enter a finding on the merits of the case and decline reference. The
Government has to satisfy itself, after applying its mind to the relevant
factors and satisfy itself to the existence of dispute before taking a
decision to refer the same for adjudication. Only in case, on judicial
scrutiny, the court finds that the refusal of the Government to make a
reference of the dispute is unjustified on irrelevant factors, the court
may issue a direction to the Government to make a reference.
The jurisdiction of the Government under the scheme of the Act to satisfy
itself as to the existence of the dispute has been the subject matter of
catena of judgments of this Court, some of which have been referred to in
Steel Authority of India v. Union of India[1], wherein it has been held at
paragraph-18, which reads as follows:

“ 18. Before adverting to the questions raised before us, we may at this
juncture notice the contention of Mr V.N. Raghupathy that whereas in the
reference only 26 workmen were made parties, more than 600 workmen were
made parties in the writ petition and, thus, only because before the
appropriate Government a demand was raised by some of the workmen
contending that they were workmen of the contractors, an industrial dispute
could be raised that the contract was a sham one and in truth and substance
the workmen were employed by the management.”

In Rashtriya Chemicals and Fertilizers Limited and another v. General
Employees’Association and others[2], following Steel Authority of India
(supra), it has been held at paragraph-8 that … “It is for the appropriate
Government to apply its mind to relevant factors and satisfy itself as to
the existence of a dispute before deciding to refer the dispute. …”.
In Telco Convoy Drivers Mazdoor Sangh and another v. State of Bihar and
others[3], it has been held that on judicial review, if the court finds
that the appropriate Government was not justified in not making a
reference, the court may issue a positive direction to make a reference.
This Court, in Sarva Shramik Sangh v. Indian Oil Corporation Limited[4],
has cited almost all the previous decisions on this point with approval.
The High Court has, in the impugned order, denied the jurisdiction vested
in the Government in the scheme of the Act to examine a case for the
purpose of satisfying itself as to whether there exists a dispute for
referring to the Labour Court/Industrial Tribunal for adjudication. The
High Court has issued a mandatory direction in the very first instance to
refer the dispute, if any, raised by the workmen for adjudication before
the Labour Court. That is against the scheme of the Act as we have seen
from the legal position settled by this Court.
We, hence, set aside the impugned order to the extent that there is a
mandatory direction for referring the issues raised by the workman for
adjudication. However, we make it clear that the Government must examine
whether a dispute exists or not, and in case it is so satisfied, it should
refer the same for adjudication before the Labour Court. Needful should be
done within a period of three months from the date on which the issue is
raised by the workmen.
The appeal is allowed to the above extent. There shall be no orders as to
costs.

…………………………………………………………J.
(KURIAN JOSEPH)

…………………………………………………………J.
(ROHINTON FALI NARIMAN)
NEW DELHI;
JANUARY 18, 2016.
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[1] (2006) 12 SCC 233
[2] (2007) 5 SCC 273
[3] (1989) 3 SCC 271
[4] (2009) 11 SCC 609

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