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1974 DIGILAW 148 (KER)

Trichur Range Gold Workers Union v. State of Kerala

1974-07-23

T.CHANDRASEKHARA MENON

body1974
JUDGMENT Chandrasekhara Menon, J. Between the jewellers of Trichur and their workmen various disputes arose resulting in a rather prolonged strike. On the efforts of the Conciliation Officer an agreement was entered into by the Trichur Chamber of Commerce representing the jewellers and the Trichur Range Gold Workers Union representing the workmen and Industrial Dispute between them was referred to the State Arbitration Board acting as the agreed arbitrators. The strike was withdrawn on the basis of the agreement. The Government of Kerala by a notification dated 2nd December 1970 in exercise of powers conferred by sub-section (3A) of section 10A of the Industrial Disputes Act (shortly stated the Act) read with rule 8A published the matter for information of the employees and workmen who were not parties to the arbitration agreement but who are concerned with the, dispute. The agreement was also simultaneously published by another notification. As per the arbitration agreement (Ext. P-1 is the copy of notification publishing the agreement) the arbitrators were to make their award within a period of six months or within such further time as is extended by mutual agreement between the parties. In case the award is not made within the period of agreement, the reference to arbitrators was to stand automatically cancelled and the parties shall be free to negotiate for fresh arbitration. In the instant case the time was being extended. In 1971 Government passed an order abolishing the Board. The order is marked as Ext. P-4 in this proceedings and is dated 24th December 1971. By the same the Board was to stand abolished after one month from the date of its receipt by the Chairman of the Board. The said order directed the Board to dispose of pending cases within one month. That could not be done and the petitioner herein, the union of workmen concerned, filed O.P. 852/72 before this court. This court stayed the operation of Ext. P-4 order which enabled the Board to proceed with the matter. Later Ext. P-4 was cancelled by the Government and the term of the Board extended by two years. The term of the Board expired on 12th March 1974. The arbitration proceedings as per Ext. P-1 is not yet over. Though the parties to the agreement are willing to have the same Arbitration Board decide the matter, the State has not extended the term of the Board. The term of the Board expired on 12th March 1974. The arbitration proceedings as per Ext. P-1 is not yet over. Though the parties to the agreement are willing to have the same Arbitration Board decide the matter, the State has not extended the term of the Board. The Government as per the proceedings dated 21st March 1974 have reconstituted the Board with new members. According to the Government the petitioner case was referred only to the State Arbitration Board and not to the members of the Board by name. The Government contends that to the extent the reference was made to the Board and not to the members of the Board by name, no prejudice would be caused to the petitioner by the reconstitution of the Board. Otherwise, the State states it would cause difficulties. If the Board cannot be reconstituted until the disposal of all pending cases, the Government will have to go on extending the term of the Board interminably. The petitioner, has therefore approached this court for a writ of mandamus for compelling the State to extend the terms of the State Arbitration Board composed of the personnel who were actually hearing and proceeding with the case till 12th March 1974 or for directing the State to take such steps as are necessary to ensure that the said Board proceeds with the petitioner case. The contention taken up by the petitioner is that the proceedings in the particular arbitration reference has reached the most advanced stage, evidence as such is concluded and the matter has only to be heard. A reference once made could not be dropped half way through, but has of necessity to end in an enforceable award. The petitioner contends that the Government have a public duty under the statute to ensure that the services of the arbitrators to whom the dispute was referred are available to the parties, at least till the pending references are disposed of. When the reference was made, parties were given to understand that such services would be available. According to the learned counsel for the petitioners Sri M. P. Menon, Government could not now retrace its steps so as to bring about serious adverse consequences to such parties. Mr. Menon said that both the parties before the arbitrators are in complete agreement to have the decision rendered by these arbitrators. According to the learned counsel for the petitioners Sri M. P. Menon, Government could not now retrace its steps so as to bring about serious adverse consequences to such parties. Mr. Menon said that both the parties before the arbitrators are in complete agreement to have the decision rendered by these arbitrators. Government cannot ignore such agreement and compel parties to get the matter referred to a new Board. The function of the Government is only to publish the arbitration agreement and the resultant award. It is argued that the Government has no power to order that the arbitrator appointed by the parties should stop functioning. The Government has taken up the position that the reference was only to the State Arbitration Board and not to the members of the Board by name. The existing dispute will not remain without being resolved so long as the Board exists. According to them if the position taken is that eases referred to the Arbitration Board should be disposed of only by the same members as were on the Board at the time of reference, extraordinary situations can arise. The Board cannot be reconstituted until the disposal of all the cases. Different cases may be at different stages of pendency before the Board and fresh cases will continue to be taken on file. This will result in the Government being forced to go on extending the term of the Board interminably. It is argued that vacancies can also arise in the Board for reasons such as voluntary resignation, death, etc. of the members of the Board. Such circumstances will again warrant appointing of new members. The Government states that as the reference was made to the State Arbitration Board and not to individual arbitrators by name, the Government need only make available the service of the Arbitration Board which is still continuing. After hearing the counsel for the petitioner and the Government pleader I am of the view that the contentions raised by the Government are rather misconceived. As pointed out by the petitioner the Code of Discipline in Industry evolved on all India basis by the Standing Labour Conference of 1958 placed special emphasis on the importance of arbitration as an alternative to compulsory adjudication. The Industrial Truce Resolution of 1962 also called upon the employers and employees to eschew adjudication and resort to arbitration. As pointed out by the petitioner the Code of Discipline in Industry evolved on all India basis by the Standing Labour Conference of 1958 placed special emphasis on the importance of arbitration as an alternative to compulsory adjudication. The Industrial Truce Resolution of 1962 also called upon the employers and employees to eschew adjudication and resort to arbitration. Section 10A of the Act was introduced by section 8 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act 1956 Act 36/56 and became effective from 10th March, 1957. Prior to the insertion of section 10A in the Act, arbitration of an industrial dispute could take place only under the Indian Arbitration Act, 1940 and was governed by the provisions of that Act. Sub-section (5) of section 10A, however, now provides that nothing in the Arbitration Act shall apply to arbitration under this section. Section 10A of the Act reads: Voluntary reference of disputes to arbitration. (1) Where any industrial dispute exists or is apprehended and the employer and the workmen agree to refer the dispute to arbitration, they may, at any time before the dispute has been referred under section 10 to a labour court or tribunal or national tribunal, by a written agreement, refer the dispute to arbitration and the reference shall be to such person or persons (including the presiding officer of a labour court or tribunal or national tribunal) as an arbitrator or arbitrators as may be specified in the arbitration agreement. ' (1A) Where an arbitration provides for a reference of the dispute to an even number of arbitrators, the agreement shall provide for the appointment of another person as umpire who shall enter upon the reference, if the arbitrators are equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed to be the arbitration award for the purposes of this Act. (2) An arbitration agreement referred to in sub-section (1) shall be in such form and shall be signed by the parties thereto in such manner as may be prescribed. (3) A copy of the arbitration agreement shall be forwarded to the appropriate Government and the Conciliation Officer and the appropriate Government shall, within one month from the date of the receipt of such copy, publish the same in the official gazette. (3) A copy of the arbitration agreement shall be forwarded to the appropriate Government and the Conciliation Officer and the appropriate Government shall, within one month from the date of the receipt of such copy, publish the same in the official gazette. (3A) Where an industrial dispute has been referred to arbitration and the appropriate Government is satisfied that the persons making the reference represent the majority of such party, the appropriate Government may, within the time referred to in sub-section (3) issue a notification in such manner as may be prescribed; and when any such notification is issued, the employers and workmen who are not parties to the arbitration agreement but are concerned in the dispute, shall be given an opportunity of representing their case before the arbitrator or arbitrators. (4) The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be. (4A) Where an industrial dispute has been referred to arbitration and a notification has been issued under sub-section (3A) the appropriate Government may, by order, prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference. (5) Nothing in the Arbitration Act, 1940 (10 of 1940) shall apply to arbitration under this section. The scope and ambit of this section came up for consideration before the Supreme Court in Engineering Mazdoor Sabha v. Hind Cycles Ltd. ( 1962 (2) L.L.J. 760 . The question the Supreme Court had to consider was whether the Arbitrator under section 10A was a Tribunal within the meaning of Article 136 of the Constitution. The Supreme Court said therein that having regard to several provisions contained in the Act and the rules framed thereunder, an arbitrator appointed under section 10 A cannot be treated to be exactly similar to a private arbitrator to whom a dispute has been referred under an arbitration agreement under the Arbitration Act. The arbitrator under section 10A is clothed with certain powers, his procedure is regulated by certain rules and the award pronounced by him is given by statutory provisions a certain validity and a binding character for a specified period. Having regard to these provisions it may perhaps be possible to describe such an arbitrator as in a loose sense, a statutory arbitrator. Having regard to these provisions it may perhaps be possible to describe such an arbitrator as in a loose sense, a statutory arbitrator. The fact that the arbitrator under section 10A is not exactly in the same position as a private arbitrator does not mean that he is a Tribunal under Article 136. Even if some of the trappings of a court are present in his case, he lacks the basic, the essential and the fundamental requisite in that behalf because he is not invested with the State inherent judicial power. He is appointed by the parties and the power to decide the dispute between the parties who appoint him is derived by him from the agreement of the parties and from no other source. The fact that his appointment once made by the parties is recognised by section 10A and after his appointment he is clothed with certain powers and has thus, no doubt, some of the trapping of a court, does not mean that the power of adjudication which he is exercising is derived from the State. He is not a Tribunal because the State has not invested him with its inherent judicial power and the power of adjudication which he exercises is derived by him from the agreement of the parties. His position, thus may be said to be higher than that of a private arbitrator and lower than that of a Tribunal. A statutory tribunal is appointed under the relevant provisions of a statute which also compulsorily refers to its adjudication certain classified classes of disputes. That is the essential feature of what is properly called statutory adjudication or arbitration. Under section 10 (2) if the parties apply in the prescribed manner for reference and the appropriate Government is satisfied that the persons applying represent majority of each party it must make a reference. Here the reference is made by the appropriate Government and not by the parties whereas under section 10A the reference is by the parties to the arbitrator named by them and it is after the parties have named the arbitrator and entered into a written agreement in that behalf that the appropriate Government steps in to assist the further proceedings before the named arbitrator. Section 19 (2) of the Act also indicates the same conclusion. Section 19 (2) of the Act also indicates the same conclusion. It mentions the parties to the agreement as the parties who have referred the dispute to arbitrator and that indicates that act of reference is not the act of appropriate Government but the act of the parties themselves. The Supreme Court pointed that if the reference to arbitration under section 10A (1) had been made by the appropriate Government, then the legislature could have easily used appropriate language in that behalf assimilating the arbitrator to the position of an industrial tribunal and in that case, it would not have been necessary to provide that the Arbitration Act will not apply. See in this connection the decision of the Patna High Court in Management of Sri Ramduttroy Jute Mills Private Ltd. v. Their Workmen A.I.R. 1968 Pat. 66. In view of the fact that it is an agreement of the parties which confers the jurisdiction on the arbitrator the Government cannot ignore the agreement of the parties and insist on the parties agreeing to other arbitrators. In regard to the contention raised by the State that it is to the State Arbitration Board that the parties have referred the matter and not to the individual members who constitute the Board, it might be noted that the State Arbitration Board as such is not a statutory authority. This was first formed in 1965, on account of the special emphasis that had been laid in various conferences and Industrial Truce Resolution on the importance of arbitration as alternative to compulsory adjudication. Even the National Labour Commission headed by Retired Chief Justice Sri Gagendragadkar has held that industrial peace could be achieved more effectively through arbitration rather than adjudication. Thereafter machinery for arbitration was created in many States under the guidance of the Labour Ministry of the Government of India. When the parties refer a dispute to such a Board, the Government cannot ignore the objection raised by the parties to the arbitration agreement to have the matter decided by a Board constituted of personnel different from that which existed at the time of the reference. It might be noted here that there is no provision in the Act which would enable the Board constituted of a different personnel to continue the proceedings before the earlier Board. It might be noted here that there is no provision in the Act which would enable the Board constituted of a different personnel to continue the proceedings before the earlier Board. Section 8 of the Act provides that when a vacancy occurs in the office of the presiding officer of a Tribunal or Labour Court, Government could appoint another presiding officer and that pending proceedings could then be continued from the stage at which it was at the time of the occurrence of the vacancy. Section 33B of the Act provides that where a dispute is transferred from one tribunal to another, or from one Labour Court to another, proceedings before the new body could either be continued or started de novo. In the absence of such provisions there was nothing improper in the parties of the arbitration reference asking for continuation of the proceedings before the same Tribunal. I cannot understand why the Government should insist that it should come before a new Board as such. Section 10A lays stress on the agreement between the parties. The Government as such has no power in deciding to whom the reference should be made. In 1962 (2) L.L.J. 760 (cited supra) the Supreme Court observed: That takes us to the construction of section 10A. Section 10A enables the employer and the workmen to refer their dispute to arbitration by a written agreement before such a dispute has been referred to the labour court or tribunal or national tribunal under section 10. If an industrial dispute exists or is apprehended, the appropriate Government may refer it for adjudication under section 10; but before such a reference is made, it is open to the parties to agree to refer their dispute to the arbitration of a person of their choice and if they decide to adopt that course, they have to reduce their agreement in writing. When the parties reduce their agreement to writing, the reference shall be to such person as may be specified in the arbitration agreement. The section is not very happily worded; but the essential features if its scheme are not in doubt. When the parties reduce their agreement to writing, the reference shall be to such person as may be specified in the arbitration agreement. The section is not very happily worded; but the essential features if its scheme are not in doubt. If a reference has not been made under section 10, the parties can agree to refer their dispute to the arbitrator of their choice, the agreement is followed by writing, the writing specifies the arbitrator or arbitrators to whom the reference is to be made and the reference shall be made accordingly to such arbitrator or arbitrators. Mr. Sule contends and it is no doubt an ingenious argument that the last clause of section 10A means that after the written agreement is entered into by the parties, the reference shall be made to the person named by the agreement but it shall be made by the appropriate Government. In other words, the argument is that if the parties enter into a written agreement as to the person who should adjudicate upon their disputes, it is the Government that steps in and makes the reference to such named person. The arbitrator or arbitrators are initially named by the parties by consent, but it is when a reference is made to him or them by the appropriate Government that the arbitrator or arbitrators is or are clothed with the authority to adjudicate, and so, it is urged that the act of reference which is the act of the appropriate Government makes the arbitrator an industrial tribunal and he is thereby invested with the State inherent judicial power. We do not think that the section is capable of this construction. The last clause which says that the reference shall be to such person or persons, grammatically must mean that after the written agreement is entered into specifying the person or persons, the reference shall be to such person or persons. We do not think that on the words as they stand, it is possible to introduce the Government at any stage of the operation of section 10-A (1). The said provision deals with what the parties can do and provides that if the parties agree and reduce their agreement to writing, a reference shall be to the person or persons named by such writing. The said provision deals with what the parties can do and provides that if the parties agree and reduce their agreement to writing, a reference shall be to the person or persons named by such writing. The fact that the parties can agree to refer their dispute to the labour court, tribunal or national tribunal makes no difference to the construction of the provision. Sub-section (2) prescribes the form of agreement and this form also supports the same construction. This form requires that the parties should state that they have agreed to refer the subsisting industrial dispose to the arbitration of the persons to be named in the form. Then it is required that the matters in dispute should be specified and several other details indicated. The form ends with the statement that the parties agree that the majority decision of the arbitrators shall be binding on them. This form is to be signed by the respective parties and to be attested by two witnesses. In other words, there is no doubt that the form prescribed by section 10-A (2) is exactly similar to the arbitration agreement; it refers to the dispute, it names the arbitrator and it binds the parties to abide by the majority decision of the arbitrators. Thus, it is dear that what section 10-A contemplates is carried out by prescribing and appropriate form under section 10-A (2).� Further down the Supreme Court states that unlike cases falling under section 10 (1) where in the absence of an agreement between the parties it is in the discretion of the appropriate Government to refer or not to refer any industrial dispute for adjudication, under section 10 (2) if there is an agreement between the parties, the appropriate Government has to refer the dispute for adjudication. But the significant fact is that the reference has to be made by the appropriate Government and not by the parties whereas under section 10-A the reference is by the parties to the arbitrator named by them and it is after the parties have named the arbitrator and entered into a written agreement in that behalf that the appropriate Government steps in to assist the further proceedings before the named arbitrator. Therefore, the Government position under section 10-A is only to give assistance to the parties. Therefore, the Government position under section 10-A is only to give assistance to the parties. It is by way of such assistance that the Rules framed by the Kerala Government under the Act the arbitrator appointed under section 10-A is held liable to draw travelling allowance and halting allowance as labour court or Industrial Tribunal. Similarly, Government has by rule 33 provided that the arbitrator appointed may be granted such fees as may be sanctioned by Government in such cases just like Labour Court or Tribunal. The refusal by the Government to allow the old Board to continue in spite of the request by the parties would be to cancel the reference of arbitration as such. This the Government has no jurisdiction to do. Even in a case of reference for industrial adjudication under section 10 of the Act the Government has no power to cancel the reference see State of Bihar v. Gangull 1958 (2) L.L.J. 634 . There it was said that it is clear that the policy of the Act is to secure and preserve good relations between the employers and their workmen and to maintain industrial peace and harmony. Once an order in Writing is made by the appropriate Government referring an industrial dispute to the tribunal for adjudication under section 10(1) proceedings before the tribunal are deemed to have commenced and they are deemed to have concluded on the day on which the award made by the tribunal becomes enforceable under section 17-A. This is the effect of section 20(3) of the Act. This provision shows that after the dispute is referred to the tribunal, during the continuance of the reference proceedings, it is the tribunal which is seized of the dispute and which can exercise jurisdiction in respect of it. The appropriate Government can act in respect of a reference pending adjudication before a tribunal only under section 10 (5) of the Act, which authorised it to add other parties to the pending dispute subject to the conditions mentioned in the said provision. It would therefore be reasonable to hold that except for cases falling under section 10 (5) the appropriate Government stands outside the reference proceedings, which are under the control and jurisdiction of the tribunal itself. Government has no power to cancel a reference. If that be so with regard to reference under section 10 the position would be stronger. It would therefore be reasonable to hold that except for cases falling under section 10 (5) the appropriate Government stands outside the reference proceedings, which are under the control and jurisdiction of the tribunal itself. Government has no power to cancel a reference. If that be so with regard to reference under section 10 the position would be stronger. In cases of reference for arbitration under section 10A the Government would have no power to cancel such reference. The refusal to continue the old Board to function in the matter would be tantamount to cancellation of the reference already made by agreement between the parties. In stressing on the fact that the reference was made to the State Arbitration Board and not to the individuals named as I pointed out earlier the Government misses one important fact that the State Arbitration Board is not a statutory authority which has got an independent legal existence. Therefore, one has to understand the reference to the individuals who constituted the Board. No doubt, the parties would have well agreed that their dispute could be decided by the new Board. But it is for the parties to decide that and not for an outside agency. Moreover, even then the proceedings will have to start de novo. In this connection I would refer to the decision of the Supreme Court in Rai Sahib Ramdayal Ghasiram Oil Mills v. Labour Appellate Tribunal ( 1963 (2) L.L.J. 65 ). In that case on 13th May 1955 the provisions of section 8(2) of the Industrial Disputes Act, 1947, as they stood in 1955 provided that where the services of an industrial tribunal consisting of one person ceased to be available, the appropriate Government may appoint another independent person in his place and the proceedings shall be continued before the person so appointed. Instead of acting under the said provisions, the State Government acted under sections 7 (1) of the Act and constituted a fresh industrial tribunal when the services of the previous industrial tribunal ceased to be available in view of his retirement from service. No fresh order of reference under section 10 (1) (c) of the Act was made to the industrial tribunal newly constituted of the industrial dispute pending before the previous industrial tribunal. No fresh order of reference under section 10 (1) (c) of the Act was made to the industrial tribunal newly constituted of the industrial dispute pending before the previous industrial tribunal. On the above facts it was held that: "the industrial tribunal had no jurisdiction to hear the industrial dispute which was pending before the previous industrial tribunal in the absence of any fresh order of reference of the industrial dispute under section 10 (1) (c) of the Act. No doubt sub-section (1) of section 7 empowered the Government to constitute a tribunal for adjudicating upon the industrial dispute in accordance with the provisions of the Act. But merely constituting a tribunal for such a purpose is not enough. It had also to act under section 10 and make a specific reference to it of each dispute for adjudication."� Therefore, in this case the new Board would have no jurisdiction to proceed with the case. In the circumstances, the O. P. has to be allowed. Interests of justice and industrial peace require that the court should issue a direction to the State Government to take such steps as are necessary to ensure that the personnel who constituted the State Arbitration Board which was hearing A.B. 7/70 on its file before 12th March 1974 are enabled to proceed further with this case. The O.P. is disposed of accordingly. The 1st respondent would pay the costs to the petitioner.