In re: Achila Pharmaceuticals v. . — 1993 DIGILAW 420 (CAL)

JUDGMENT Altamas Kabir, J. 1. An order passed by the Secretary, Labour Department, Government of West Bengal, on 12th April, 1993, under sub-s. (3) of s.10 of the Industrial Disputes Act, 1947, prohibiting the continuation of the lock-out declared by the petitioner company, being Annexure "O" to the writ petition, is the subject matter of challenge in this Writ application. 2. It appears that for reasons which are disputed by the respondents Nos. 6 and 7, the management of the petitioner company declared a lockout of their factory premises and Head Office on 24th April, 1989 and 8th May, 1989, respectively. This led to conciliation proceedings before the Assistant Labour Commissioner, West Bengal. On the failure of the conciliation proceedings, the dispute relating to the lock-out itself was referred for adjudication to the Third Industrial Tribunal, West Bengal, under sub-s. (1) of S. 10 of the aforesaid Act. 3. The aforesaid order dated 12th April, 1993, impugned in the writ petition, was passed during the pendency of the reference before the learned Tribunal. 4. Appearing in support of the writ petition, Mr. Partha Sarathi Sengupta urged that the impugned order was without jurisdiction and was not capable of being passed by the State Government in exercise of its powers under Sub-s. (3) of S.10 of the aforesaid Act. Referring to the language of Sub-s. (3) of S.10 of the aforesaid Act, Mr. Sengupta submitted that the powers under Sub-s. (3) could be invoked by the State Government when a lock-out was in consequence of any of the disputes referred to the Tribunal under Sub-s. (1). When, however, the dispute itself related to the justification of a lock-out declared by a company, Sub-S. (3) did not contemplate prohibition of such a lock-out. 5. Mr. Sengupta then submitted that the principles of natural justice required that before any order was passed under Sub-s. (3) of S. 10 oft the aforesaid Act, the parties should be given a hearing, since the object of making such an order was to make a workable arrangement during the pendency of a dispute before the Tribunal. 6. Referring to the provisions of s.4 of the said Act, Mr. Sengupta submitted that Conciliation Officers were wholly independent of the Government and were charged with the duty of mediating in and promoting the settlement of industrial disputes. 7. Mr. 6. Referring to the provisions of s.4 of the said Act, Mr. Sengupta submitted that Conciliation Officers were wholly independent of the Government and were charged with the duty of mediating in and promoting the settlement of industrial disputes. 7. Mr. Sengupta submitted that the Government could not be identified with the Conciliation Officers, who were independent entities under the Industrial Disputes Act, 1947. Mr. Sengupta submitted that the order passed by the State Government under s. 10(3) of the aforesaid Act, was not, therefore, dependent on the report of the Conciliation Officer. Hence, before any order could be passed under the said provisions, it was incumbent on• the State Government to give a separate hearing to the parties concerned. 8. Mr. Sengupta submitted that, in any event, since the subject matter of dispute was itself the lock-out, there could not be any interim direction in respect thereof under s. 10(3) of the aforesaid Act, before any decision was arrived at by the Tribunal regarding the validity of the lock-out. Mr. Sengupta urged that the impugned order of the State Government dated 12th April, 1993, under Sub-s. (3) of s. 10 of the aforesaid Act could not, therefore, be sustained. 9. Appearing on behalf of the Achila Pharmaceuticals Workers Union, the respondent No.7 herein, Mr. Muku1 Prasad Banerjee submitted that the provisions of Sub-s. (3) of S. 10 were only for the purpose of providing for an interim arrangement during the pendency of a dispute before the Industrial Tribunal, Mr. Banerjee submitted that it was immaterial whether the subject matter in dispute was the lock-out itself, since the language of Sub-s. (3) of s. 10 makes it clear that the appropriate Government may assume jurisdiction to pass an order prohibiting the continuance of any lock-out when an industrial dispute has been referred to a Tribunal. Mr. Banerjee submitted that the sole criteria for the State Government to exercise jurisdiction under Sub-s. (3) of S. 10 is the existence of an industrial dispute which had been referred to the Tribunal. 10. Mr. Banerjee submitted that in the present case since a dispute had been referred to the Third Industrial Tribunal, the State Government was fully entitled to pass an order prohibiting the continuance of the lockout declared by the management. 11. Mr. 10. Mr. Banerjee submitted that in the present case since a dispute had been referred to the Third Industrial Tribunal, the State Government was fully entitled to pass an order prohibiting the continuance of the lockout declared by the management. 11. Mr. Banerjee further submitted that the Industrial Disputes Act, 1947, being a beneficial statute to preserve industrial peace in the country, its provisions should be interpreted in such a fashion that an attempt is made to arrive at industrial amity instead of creating disruption in the industrial sector. Mr. Banerjee submitted that it is with such object in view that the provisions of Sub-so (3) of S.10 were enacted so that pending a dispute between the management and the workers, there was no disruption of industrial activity. 12. In support of his aforesaid contention, Mr. Banerjee firstly relied on the decision of the Supreme Court in the case of Delhi Administration vs. Workmen of Advent Cavenders and Another, reported in AIR 1978 SC at page 976. While dealing with the provisions of s. 10(3) of the Industrial Disputes Act, 1947, the Supreme Court, inter alia, held that two conditions must exist before the appropriate Government would pass an order under s. 10(3) prohibiting a lock-out. Firstly, there would have to be an industrial dispute in existence. Secondly, such dispute must have already been referred for adjudication. 13. Mr. Banerjee submitted that in this case there was an industrial dispute in existence, namely, the lock-out declared by the Management, and such dispute had already been referred to the Third Industrial Tribunal for adjudication. Accordingly, applying the principles laid down by the Supreme Court in the aforesaid case, the State Government was wholly competent to issue the order dated 12th April, 1993, under Sub-s. (3) of s. 10. 14. Mr. Banerjee then relied on another decision of the Supreme Court in the case of Hotel Hans Private Limited vs. Delhi Administration and Another, reported in 1991(62) FLR at page 411, wherein much the same sentiments have been expressed. 15. Mr. Banerjee also relied on a decision of our Court in the case of Joy Engineering Works Limited and Another vs. State of West Bengal and Ors., reported in 1990 (2) CHN at page 448, where a learned Judge of this Court had occasion to consider the constitutional validity of Sub-so (3) of S. 10 of the Industrial Disputes Act, 1947. 16. 16. In the said case also it was argued that the order under S. 10(3) was bad, inasmuch as, there would have to be an industrial dispute having a nexus with the lock-out and the lock-out would have to be "in connection with" such dispute, or, in other words, the lock-out must flow from the dispute. Mr. Banerjee pointed out that in the said case the learned Judge came to a finding that notwithstanding such objection taken, the order under s. 10(3) was valid, legal and proper. 17. The other case referred to by Mr. Banerjee was that of Gourepore Co. Ltd. & Nuddea Mills Co. Ltd., reported in 1989(2) CHN at page 115, which was a case where an order under S. 10(3) of aforesaid Act was under challenge on the ground that when the Company was incurring heavy losses, the Government could not by a fiat compel the Company to run the business. This Court negated the said contention and did not think it fit to interfere in the matter, upon holding that since the entire grievance of the Company had been referred to the Tribunal with the job of redressal of such grievance, if found genuine, the Government could legitimately asked the Company to lift the lock-out. Mr. Banerjee urged that having regard to the findings arrived at and the observations made in the above-mentioned cases, both by the Supreme Court as well as this Court, the order dated 12th April, 1993, passed by the State Government under Sub-so (3) of S. 10 of the aforesaid Act, must be held to be legal and valid. 18. Appearing on behalf of the respondent No.6, Mr. Kashi Kanta Moitra submitted that the writ petition was not maintainable, having been filed by Shri Adhir Basu in his capacity as Managing Director of the Company. Mr. Moitra submitted that there was nothing to show that the Managing Director by himself was empowered by the Board of Directors to represent the Company and to maintain a legal action on its behalf, since the other Director, namely, the respondent No.6, had not authorised Shri Basu to represent the Company in any legal action. Mr. Moitra submitted that notwithstanding the allegations made in the writ application, the respondent No. 6 continued to be a Director of the Company and the writ petition could not be maintained at the instance of Shri Adhir Basu alone. Mr. Moitra submitted that notwithstanding the allegations made in the writ application, the respondent No. 6 continued to be a Director of the Company and the writ petition could not be maintained at the instance of Shri Adhir Basu alone. 19. Mr. Moitra then submitted that the provisions of Sub-s. (3) of S. 10 did not contemplate a hearing to be given before the State Government invoked its jurisdiction under S. 10(3) in prohibiting a lock-out. Mr. Moitra submitted that, in fact, in the case of Joy Engineering (supra) this Court categorically held that no hearing was required to be given. 20. Mr. Moitra also relied on a decision of the Andhra Pradesh High Court in the case of Eonadu Press Workers Union and Another vs. the State Government of Andhra Pradesh and Another, reported in 1979 Lab. I.C. at Page 330. In the said case also it was held that before an order was passed under s. 10 (3) of the aforesaid Act, no notice was required to be given to the Management or the employees. 21. Mr. Moitra also relied on a decision of the Rajasthan High Court in the case of Alcobe Metal Workers Union vs. State of Rajasthan and Another, reported in 1981(2) SLR at Page 556, wherein the same principle was reiterated. 22. In reply to the submissions made on behalf of the respondents, Mr. Sengupta submitted that as far as the Joy Engineering case was concerned, among several issues, one of the issues referred to the learned Tribunal related to the validity of the lock-out declared by the Management. Mr. Sengupta pointed out that the order under s. 10(3) passed in the said case was held to be legal and valid in the context of the other issues referred to the Tribunal, which by themselves constituted the main grievance in consequence whereof a lock-out had been declared by the Company. Referring once again to the language of Sub-so (3) of S. 10 of the aforesaid Act, Mr. Sengupta submitted that the lock-out to be prohibited would have to be in connection with an industrial dispute referred to the Tribunal, which on a plain reading would mean that the lock-out itself could not be the industrial dispute, in which case the State Government would not be competent to prohibit the lock-out. 23. Sengupta submitted that the lock-out to be prohibited would have to be in connection with an industrial dispute referred to the Tribunal, which on a plain reading would mean that the lock-out itself could not be the industrial dispute, in which case the State Government would not be competent to prohibit the lock-out. 23. Having considered the submissions made on behalf of the respective parties, I am inclined to accept Mr. Sengupta's submissions regarding the competence of the State Government to pass an order under Sub-s. (3) of s. 10 of the Industrial Disputes Act, 1947, where the validity of the lock-out is in itself the issue referred to the learned Tribunal. The language of Sub-s. (3) to my mind makes it clear that the dispute to be referred to the Tribunal would have to be an issue independent of the issue relating to lock-out and the lock-out must be in consequence of such dispute and not the subject matter of the dispute itself. It is only then that the question of prohibition of the lock-out in connection with the dispute referred to the Tribunal would have a logical meaning. It is no doubt ture that the object of Sub-s. (3) of S. 10 is to prevent industrial unrest and disruption of industrial activity during the pendency of a dispute before the learned Tribunal, but prohibiting a lock-out declared by the Management of a Company in a case where the lock-out itself is the subject matter of dispute in reference before the Tribunal, would amount to justification by the State Government of the lock-out before the said question could be decided by the Tribunal. 24. The cases relied upon by Mr. M. P. Banerjee do not contemplate a situation such as in the present case. Even in the case of Joy Engineering (supra), the validity of the lock-out was one of several issues referred to the Tribunal and the order under Sub-s. (3) of S. 10 was perfectly justifiable in view of the other issues referred to the Tribunal. 25. The other submissions made by Mr. Sengupta on the question of natural justice and hearing to be given to the parties before an order is passed by the State Government under S. 10(3) of the above-mentioned Act, also merits consideration, since a lock-out may be declared in circumstances of which the State Government may not have any knowledge. 25. The other submissions made by Mr. Sengupta on the question of natural justice and hearing to be given to the parties before an order is passed by the State Government under S. 10(3) of the above-mentioned Act, also merits consideration, since a lock-out may be declared in circumstances of which the State Government may not have any knowledge. Since the State Government has to arrive at a decision on the basis of the materials before it, it is only fair to all the parties that the State Government should be in possession of all the facts before an order is passed under, S. 10(3) of the said Act. This can be achieved only if all the parties are given an opportunity of placing their respective cases. 26. Although, the provisions of S. 10(3) of the said Act do not contemplate any hearing to be given to the parties before an order is passed, it does not preclude the State Government from hearing the parties either. The decisions on this point are not uniform, though, it is now well-settled that the State cannot act arbitrarily and all its actions must answer to the test of reasonableness and fairness. In the absence of all the materials, both from the side of the management and the employees, a decision may be taken by the State which may not be justifiable in the circumstances. 27. In that view of the matter, although, there may not be any compulsion on the State Government to give a hearing to the parties before making an order under S. 10(3) of the above-mentioned Act, it would be to the interest of all the parties if such a hearing was given, particularly as such an order has civil consequences and its disobedience attracts penal consequences as well. 28. As far as the question of maintainability of the writ petition is concerned, I am not inclined to accept Mr. Moitra's submissions, having regard to the fact that the Company is the writ petitioner and is represented by its Managing Director, who is admittedly the Principal Officer of the company. That Shri Adhir Basu is the Managing Director of the company is not disputed by the respondent Nos. 6 and 7. Moitra's submissions, having regard to the fact that the Company is the writ petitioner and is represented by its Managing Director, who is admittedly the Principal Officer of the company. That Shri Adhir Basu is the Managing Director of the company is not disputed by the respondent Nos. 6 and 7. From the letter dated 21st October, 1991, addressed to Shri Adhir Basu by Shri Sujash Ghosh Dastidar on behalf of the respondent No.6 and another, being Annexure "K" collectively to the writ petition, it will be clear that the admitted position is that Shri Adhir Basu, as the Managing Director of the company was in management of the affairs of the Company. 29. The objection taken by Mr. Moitra is, in my view, too technical in nature and the writ petition cannot be rendered incompetent thereby. 30. Having regard to the above, the writ application must succeed and is allowed. The impugned order dated 12th April, 1993, passed by the Secretary, Labour Department, Government of West Bengal, under s. 10(3) of the Industrial Disputes Act, 1947, prohibiting the continuation of the lock-out declared by the petitioner company, is hereby quashed. 31. There will, however, be no order as to costs. 32. Let xerox copies of this judgment be made available to the learned advocates of the respective parties on the usual undertaking. Application allowed.