P. P. BOPANNA, J. ( 1 ) AN important point touching the powers of the appropriate Government under Ss. 10 and 12 (5) of the Industrial disputes Act (in short the Act) after the incorporation of S. 11a of the Act by Act 45 of 1971 with effect from 15-12-1971, arises for consideration in this writ petition. ( 2 ) THE petitioner who was a workman under the 3rd respondent-Society has challenged the correctness of the endorsement issued by the State Government produced as Annexure-L with the writ petition refusing to refer the industrial dispute relating to the termination of his services on the ground that the 3rd respondent-Management had conclusively proved the charge of misappropriation in the domestic enquiry held by it. ( 3 ) THE learned Counsel for the petitioner Sri K. Subba Rao maintained, inter alia that after the incorporation of s. 11a in the Act by Amendment Act 45 of 1971 which came into force on 15-12-1971, the State Government while exercising its powers under S. 10 of the act must necessarily consider whether the punishment suffered by the workman was excessive or disproportionate to the gravity of the misconduct proved against him and in the absence of application of its mind on this aspect of the case, the impugned order rejecting the reference is bad in law. Sri Subba rao secondly maintained that it was beyond the jurisdiction of the State government to record a finding in the impugned endorsement that the management had proved the case conclusively against the workman since such finding could have been recorded only by the Labour Court after the dispute was referred to it for adjudication. ( 4 ) SECTION 11a of the Act reads as:"11a. ( 4 ) SECTION 11a of the Act reads as:"11a. Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a labour Court, Tribunal or National tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or national Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct reinstatement of the workman on such, terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require; provided that in any proceeding under this section the Labour Court, tribunal or National Tribunal, as the case may be shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter. "admittedly, the impugned order was made after Section 11a came into force. This section has the effect of altering or abridging the rights of the employers inasmuch as it gives power to the Tribunal for the first time to differ both on the finding of misconduct arrived at by an employer as well as the punishment imposed by him (See Workmen of Firestone tyre and Rubber Co. of India (P) Ltd. v. The Management (1 ). ( 5 ) FROM the scheme of the Act, it is dear that S. 11a comes into operation after the dispute is referred to the Tribunal or the Labour Court as the case may be by the appropriate government. The power to refer or not to refer the dispute for adjudication is controlled by the relevant provisions of Ss. 10 and 12 of the Act. In this case those relevant provisions are s. 10 (1) (c) and S. 12 (5) of the Act, which read as:"s. 10 (1) - Where the appropriate government is of opinion that any industrial dispute exists or is apprehended, it may at any time. by order in writing: (a ). . . . . . . . . . (b ). . . . . . . . . . by order in writing: (a ). . . . . . . . . . (b ). . . . . . . . . . (c) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second schedule, to a Labour Court for adjudication, or (d ). . . . . . . . . . . . . . ""12 (5) If, on a consideration of the report referred to in sub-sec. (4), the appropriate Government is satisfied that there is a case for reference to a Board, (Labour Court tribunal or National Tribunal), it may make such reference. Where the appropriate Government does not make such a reference it shall record and communicate to, the parties concerned its reasons therefor. "the word 'dispute' in Sec. 10 (1) (c) of the Act means an 'industrial dispute as defined under S. 2 (k) of the Act as is evident from the opening words of Section 10 of the Act. A fortiori, a case for reference to a Board. Labour court, Tribunal or National Tribunal means reference of an industrial dispute as defined in Section 2 (k) of the Act. In this case,, an individual workman having raised the dispute, what he sought for reference was a 'deemed' industrial dispute; arising out of his dismissal by his employer. Such dispute relating to his dismissal ordinarily raises three essential issues for adjudication by the labour Court: viz. , (i) Whether the charge of misconduct was properly proved against him in the domestic enquiry? (ii) If so, whether the punishment of dismissal was justified regard being had to the gravity of the misconduct? (iii) If the answer to question No. (ii) is in the negative, what is the proper punishment or relief to be given to the workmen? issues Nos. (ii) and (iii) are now given statutory recognition by S. 11a of the Act. (ii) If so, whether the punishment of dismissal was justified regard being had to the gravity of the misconduct? (iii) If the answer to question No. (ii) is in the negative, what is the proper punishment or relief to be given to the workmen? issues Nos. (ii) and (iii) are now given statutory recognition by S. 11a of the Act. It therefore follows, after S. 11a was incorporated in the Act, the Conciliation Officer must necessarily apply his mind to the quantum of punishment imposed on the workman as the words "a full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof, together with a full statement of such facts and circumstances, and the reasons on account of which, in his opinion, a settlement could not be arrived at" appearing in S. 12 (4) of the Act, should include, in the case of a dispute relating to dismissal of the workman, a consideration of the efforts made for effecting a settlement by persuading the parties to agree for a lesser punishment like fine, reduction in rank or censure etc. A fortiori under S. 12 (5) of the Act, a consideration of the report forwarded by the Concilation Officer to the Government will necessarily involve the consideration of the punishment imposed on the workman. That is to say, if the Government is of the view that the enquiry is valid and that the punishment is not excessive but just and proper, it may refuse to make a reference. Even if the report of the Conciliation Officer is silent on the question of punishment, the Government could consider the punitive aspect of the case as it is settled law that the Govt. could, while exercising its powers of reference, take into consideration matters which are relevant but are not considered by. the Conciliation officer in his report State of bombay v. K. P. Krishnan (2 ). ( 6 ) IN the objection statement filed by the State Government, it is contended that provisions of S. 11a are not attracted at the time the Government exercises its powers under S. 10 (1) of the Act and, therefore, the Government is not bound to consider the gravity or otherwise of the punishment imposed on the workman. ( 6 ) IN the objection statement filed by the State Government, it is contended that provisions of S. 11a are not attracted at the time the Government exercises its powers under S. 10 (1) of the Act and, therefore, the Government is not bound to consider the gravity or otherwise of the punishment imposed on the workman. The contention of sri P. Subba Rao, learned Counsel for the Respondent-3 Society is that in the proceedings before the Government, there is material to show that the government has applied its mind to the quantum of punishment imposed on the workman and hence the requirement of section 11a of the Act has been satisfied by the Government while refusing to make the reference. The stand taken by the Government is contrary to the contention of respondent-3 and hence the assertion of Respondents that the government applied its mind to the quantum of punishment imposed on the workman must necessarily fail. Such a contention was also not taken in the return filed by it, but on the contrary, there is an averment that the workman had made good the amount alleged to have been misappropriated by him. This assertion has some relevance to the quantum of punishment. ( 7 ) NOW, the only point for consideration is whether it was incumbent on the government to examine the gravity of the punishment imposed on the workman before refusing the reference. As noticed earlier S. 11a came intoi force in the year 1971 and the decisions of the supreme Court relied upon by the learned Counsel for the Third respondent as well as by the learned Government Advocate are not applicable to the facts of this case, because the Supreme Court had no occasion to consider the effect of S. 11a, on the powers of the Government to make a reference in the aforesaid decisions. It appears to be reasonable on a proper construction of S. 12 (4) and S. 12 (5) of the Act, that the relief of lesser or lighter punishment given to the workman under S. 11a of the act could not be taken away by an administrative act of the Government when it exercises its power of refusing to make a reference unless it was satisfied that the punishment was just and proper and not excessive. It will be repugnant to notions of social justice and indeed preposterous to take the view, in the absence of definite words to the contrary in S. 12 (4) and 12 (5) of the Act, that the workman, whose right to approach the Labour court directly for an adjudication of his dispute is circumscribed and delayed by the procedural constraints of those sections and whose right to approach the Civil Court is seriously curtailed by the truncated reliefs available to him in that Court, should be deprived of the benefit of adjudication by the Labour court without an examination by the government of the severity of the punishment suffered by him when the object of the Act among other things is avowedly the protection of the workman against arbitrary action and preservation of industrial peace. It is trite law that the Govt. cannot decline to make the reference on grounds which are wholly extraneous or irrelevant to the matter in dispute. On the same analogy, after S. 11a came on the statute book, the Government cannot decline to make the reference without examining the gravity of punishment imposed on the workman. ( 8 ) THOUGH this point appears to be res Integra so far as this Court is concerned, the Madras High Court in k. Ramaswamy v. Government of TN (3), a Division Bench of Gujarat High high Court in Woollen Mill Kamgar sangh, Jamnagar v. State of Gujarat (4) and the Kerala High Court in workmen of Cochin Chamber of commerce v. State of Kerala (5) have taken the view that after section 11a came into force the government while exercising its powers under S. 10 of the Act should apply its mind to the quantum of punishment imposed on the workman and satisfy itself about its severity or otherwise. The Gujarat High Court in Woollen mill's case (1977 (2) LLJ, 353 observed:". . . . . . It is now setttled the the question how far such cases of discretion could be properly reviewed. The basic principle to be borne in mind is that like all other judicial discretion, the discretion must be exercised according to common sense and according to justice, and if there is a miscarriage in the exercise of it, it must always be reviewed. The basic principle to be borne in mind is that like all other judicial discretion, the discretion must be exercised according to common sense and according to justice, and if there is a miscarriage in the exercise of it, it must always be reviewed. Therefore, when in such a matter of industrial adjudication when the law has now so sufficiently advanced to provide such wide measure of power of adjudication of this dispute of individual discharge and dismissal, if the officer of the State Government exercising this power is in complete darkness about his enlargement of the jurisdiction of the Industrial tribunal and if he seeks to exercise his power of refusing a reference of individual disputes in this "cavalier manner without applying his mind to the relevant 'aspects and the relevant statutory guidelines which are evolved for exercising this discretion, this High Court could surely review the discretion in such cases as it is in complete contravention of the, statute. It is true that the mandamus would not be to make a reference but the mandamus would have to be issued only to reconsider the matter in the light of the aforesaid settled principles by properly applying the mind. " ( 9 ) THE learned counsel for the state Government and the learned counsel for the 3rd respondent have not brought to my notice any decision which has taken a contrary view. ( 10 ) SINCE the petitioner has to succeed on the 1st point, his second contention does not require consideration. ( 11 ) FOR these reasons, this petition is allowed and a writ in the nature of mandamus shall be issued to the government to consider afresh, in the light of the above observations, the question of making a reference of the dispute to the Labour Court for adjudication when, admittedly, the workman had made good the amount. ( 12 ) IN the circumstances of the case, parties to bear their own costs. --- *** --- .