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Judgment
K. Raviraja Pandian and T. Raja, JJ.—Questioning the correctness of the order of the writ Court dated November 17, 2000 made in W.P.
No. 3988/1998, the present appeal is filed.
The writ Court approved the order of the Labour Court impleading the appellant u/s 18(3) of the Industrial Disputes Act for resolving the
dispute referred to the Labour Court by the Government u/s 10(1)(c) of the Industrial Disputes Act.
The necessary facts for disposal of the appeal go as follows: The appellant established a textile mill at Pulankinar, Udumalpet Taluk with spindle
capacity of 60,000 in the year 1945 with work force of thousand workman. In the year 1983, the appellant, put up a voluntary retirement scheme
pursuant to which the entire labour force opted for voluntary retirement and left the service of the appellant. The mill was defunct thereafter. In the
year 1986, the vacant premises of the mill with reeling and cone winding machines was given on lease to R. Krishnaswamy, who carried on the
process of conversion of cops and cone into hank yarn and cone yarn in the name of Krishnaswamy Converters. Subsequently, one Ms. R. Mani
carried the business in the name of Sri Vinayaga Converters with separate factory registration, factory licence, E.S.I., and E.P.F. Code Numbers
etc., having a separate standing order, which is the third respondent. The third respondent was doing conversion job for the appellant and for other
textile mills too. On May 22, 1995, the workmen of Vinayaga Converters went on strike demanding regularisation and increase in wages.
Subsequently, the strike was called off. On August 1, 1995, the third respondent declared lay-off. On September 23, 1995, the second
respondent Union complained to the third respondent Management demanding regularisation and increase in wages. On December 4, 1995, the
second respondent addressed a letter to the Joint Commissioner of Labour, Coimbatore in which it was alleged that the appellant was the principal
employer and therefore the appellant should be impleaded as a party to the dispute raised by the second respondent against the third respondent.
On December 6, 1995, the Joint Commissioner of Labour, Coimbatore forwarded the letter of the second respondent dated December 4, 1995
inviting the comments of the appellant for the proposal of impleading the appellant as a party to the dispute between the second and third
respondents. On January 6, 1996, the appellant sent a reply stating that the appellant has nothing to do with the third respondent and there was no
question of making the appellant as a party to the dispute. On June 13, 1996, the Joint Commissioner of Labour submitted his conciliation''s failure
report. Thereafter, by Order in G.O. Ms. No. 1030 dated November 19, 1995 the Government of Tamil Nadu made the following reference to
the first respondent for adjudication:
Whether the closure of the establishment of Sri Vinayaga Converters, Pulankinar, Udumalpet Taluk, Coimbatore District with effect from June 15,
1996 is justified, if not, to what relief the workmen are entitled?
The second respondent on August 6, 1997 filed its claim statement alleging that the appellant was the real employer and the third respondent was
only a benami and the appellant should be made as a party to the dispute. The second respondent also moved an application in I.A. No. 38/1997
to implead the appellant as party respondent in the dispute in I.D. No. 319/1996. The appellant filed counter. The first respondent by its order
dated February 3, 1998 impleaded the appellant as a party to the dispute, which order was confirmed when challenged by the writ Court by
reason of the impugned order.
From the facts narrated above, the only point to be decided in the case is whether the order of the Labour Court dated February 3, 1998
impleading the appellant as a party to the dispute, as confirmed by the writ Court, is correct or not?
We heard the learned counsel on either side and perused the material on record.
The reference in G.O. Ms. No. 1030 dated November 19, 1996 reads thus:
Whether the closure of the establishment of Sri Vinayaga Converters, Pulankinar, Udumalpet Taluk, Coimbatore District with effect from June 15,
1996 is justified, if not, to what relief the workmen are entitled?
From the above reference, it is clear that an Industrial Dispute has arisen between the second respondent and the third respondent. But the
question raised by the second respondent that the appellant was the real employer was before the Government and if the Government wanted to
refer it for adjudication it would have done so explicitly in the reference by exercising its power u/s 18(1)(d) of the Act. The Government, having
understood. the dispute raised by the second respondent as one between the second respondent and third respondent, referred the dispute
couched in the above manner for adjudication. From the reading of the reference, it is evident that the Government has not considered it necessary
to refer the question whether the second respondent could make a claim against the appellant while challenging the action of the third respondent
despite the second respondent having made the appellant a party in the dispute raised against the third respondent before the Joint Commissioner
of Labour. When the Government is also statutorily empowered to add to a reference any establishment, which is likely to be interested in or
affected by the dispute u/s 10(5) of the Industrial Disputes Act, the Government does not do so. In the absence of adding the appellant, in the
reference or making a reference by including the appellant as a party, the first respondent cannot enlarge the scope of the reference. It is also well
settled that the Industrial Tribunal is a Tribunal of limited jurisdiction. Its jurisdiction is to try an industrial dispute referred to it for its adjudication by
the Government by an order of reference passed u/s 10. It is not open to the Tribunal to travel materially beyond the terms of reference, determine
the scope of its power and jurisdiction from case to case, (vide Hochtief Gammon Vs. Industrial Tribunal, Bhubaneshwar, Orissa and Others, ).
Though the Writ Court has referred the judgment of the Supreme Court in the case of Hochtief Gammon v. Industrial Tribunal (supra), the
relevant issue has not been touched upon. We are of the considered view that the said judgment of the Supreme Court covers the issue on hand in
favour of the appellant. That was also a case wherein an industrial dispute in regard to the payment of bonus arose between the appellant Hochtief
Gammon and the respondent - its workmen represented by the Rourkela Workers Union, Rourkela. That dispute was referred to adjudication to
the Industrial Tribunal. The Tribunal issued notice to the parties to the reference and also to Hindustan Steel Limited, as copy of the notification of
Government of Orissa containing the order of reference has been served on Hindustan Steel Limited. Pursuant to the notice, Hindustan Steel
appeared before the Tribunal and urged that it was not concerned or interested in the dispute and should not be added as a party to the reference.
Meanwhile, the appellant - Hochtief Gammon made an application and contended that the interest of Hindustan Steel Limited and the appellant
were common in the proceedings pending before the Tribunal and the material documents which might have to be proved in the proceedings were
all with the proposed party and the enquiry in question could not be complete without the presence of the proposed party Hindustan Steel limited.
The Tribunal without considering the question of joining the Hindustan Steels as a party held that it would decide the matter later, however directed
the Hindustan Steel to remain present during the hearing of the reference on merits. The appellant not satisfied with the order, moved the Orissa
High Court by way of writ petition praying for impleadment of Hindustan Steel Limited as a party to the reference before the Tribunal. The High
Court dismissed the writ petition as premature. The appellant - Hochtief Gammon moved the Supreme Court. The Supreme Court after
considering the relevant provisions such as Sections 10 and 18 of the Industrial Disputes Act prior to and subsequent to amendment by Act No.
18/1952, has made the following exposition of law:
That takes us to the question as to whether the appellant is justified in contending that Hindustan Steel Ltd. is a necessary party to the present
proceedings before the Industrial Tribunal, and should, therefore, be added as such. Mr. Chatterjee has raised two contentions in support of his
plea that, Hindustan Steel Ltd. is a necessary party. The first contention is that if it is ultimately found that the respondent''s claim for bonus for the
relevant year is well founded, as a result of the contract between the appellant and Hindustan steel Ltd. the liability to pay the said bonus would
rest, with the said concern and not with the appellant. The appellant, according to Mr. Chatterjee, is a firm constituted only for a single venture for
undertaking the execution of the work of construction and foundation and civil engineering works at Rourkela it has been engaged by the said
concern of Hindustan Steel Ltd. as its agent and in that behalf an agreement has been executed between the parties. Mr. Chatterjee referred us to
some of the relevant clauses of this agreement in support of his plea that the liability for bonus, if established by the respondents against the
appellant, would be not the appellant''s but of Hindustan Steel Ltd. We do not propose to examine the merits of this contention, because we are
satisfied that even if Mr. Chatterjee''s contention is well founded by reference to the relevant clauses of the agreement between the parties, that
cannot make Hindustan Steel Ltd. a necessary party within the meaning of Section 18(3)(b). This contention raises an entirely different dispute
between the appellant and its alleged principal and such a dispute would be wholly foreign to the industrial dispute which has been referred to the
Tribunal for its adjudication.
The next contention raised by Mr. Chatterjee is that Hindustan Steel Ltd. is a necessary party because it is the said concern which is the employer
of the respondents and not the appellant. In other words, this contention is that though in form the appellant engaged the workmen whom the
respondent Union represents, the appellant was acting as the agent of its principal and for adjudicating upon the industrial dispute referred to the
Tribunal by the State of Orissa, it is necessary that the principal viz. Hindustan Steel Ltd. ought to be added as a party. In dealing with this
argument, it is necessarv to bear in mind the fact, that the appellant does not dispute the respondent Union''s case that the workmen were
employed by the appellant. It would have been open to the State Government to ask the Tribunal to consider who was the employer of these
workmen and in that case, the terms of reference might have been suitably framed. Where the appropriate Government desires that the question as
to who the employer is should be determined, it generally makes a reference in wide enough terms and includes as parties to the reference different
persons who are alleged to be the employers. Such a course has not been adopted in the present proceedings, and so it would not be possible to
hold that the question as to who is the employer as between the appellant and Hindustan Steel Ltd. is a question incidental to the industrial dispute
which has been referred u/s 10(1)(d). This dispute, is a substantial dispute between the appellant and Hindustan Steel Ltd. and cannot be regarded
as incidental in any sense, and also we think that even this ground is not sufficient to justify the contention that Hindustan Steel Ltd. is a necessary
party which can be added and summoned under the implied powers of the Tribunal u/s 18(3)(b).
The result is though we accept Mr. Chatterjee''s argument that Section 18(3)(b) postulates the existence of an implied power in the Tribunal to add
parties and summon them, in the present case that power cannot be exercised, because having regard to the limited nature of the implied power,
Hindustan Steel Ltd. cannot be regarded as a necessary party under the provisions of Section 18(3)(b).
The principle enunciated in the above referred case is squarely applicable to the facts of the present case. In this case also, the contention of the
second respondent is, the appellant is the real owner and the third respondent is only the appellant''s benami. It would have been open to the State
Government to ask the Tribunal to consider who was the employer of the second respondent-workmen and in that case the terms of reference
might have been suitably framed. However, such reference, has not been made. As per the Apex Court decision referred to supra, it would not be
possible to hold that the question as to who is the real employer as between the appellant and the third respondent is a question incidental to the
Industrial Dispute, which has been referred u/s 10(1)(d) that dispute is a substantial dispute between the appellant and respondents 2 and 3, and
cannot be regarded as incidental in any sense. So, we find it difficult to, accept the contention that the appellant is a necessary party and has to be
impleaded in the dispute for complete and full adjudication. Further, having regard to the nature of the dispute referred to the Labour Court, which
is extracted supra, the issue as to whether the-appellant is the real employer or not cannot be regarded as an incidental or ancillary dispute to come
within the purview of Section 18(3)(b) to implead the appellant as a party to the proceedings.
Learned counsel for the second respondent submitted that the dispute is pending for a quite long number of years. At this point of time if the
order of the Labour Court is interfered, that would prejudice the second'' respondent to have a complete and effective adjudication of the dispute.
He also pointed out that right from the day one the dispute has arisen, the stand of the second respondent Union is that it is the appellant who is the
real'' employer and the third respondent is only a benami of the appellant. It is true that the second respondent is contending that the appellant is the
real employer. But, as stated earlier, the reference is couched in a different manner. The second respondent had ample opportunity before them to
get the appropriate reference. Even immediately after the reference was made by the State Government, that would have been properly agitated.
The State Government is also vested with the power u/s 10(1)(d) of the Industrial Disputes Act to refer the dispute or any matter appearing to be
connected with, or relevant to, the dispute. That has not been done. However, this Court while exercising die power under Article 226 of the
Constitution of India could only consider whether the order agitated by it is passed in accordance with the provisions contained in the statute.
Equity and sympathy follow law only. Further, as per the decision of the Supreme Court that a question as to who is the real employer in a dispute,
cannot be regarded as incidental to the dispute referred as to whether the closure of the establishment is correct or not, but a substantive issue by
itself between the so called real employer and the workman and the benamidar. In the light of the decision of the Supreme Court, we cannot take a
different view even though we are having sympathy with the second respondent.
For the foregoing reasons and in the light of the decision of the Supreme Court referred above, we are of the view that the order of the first
respondent - Labour Court, Coimbatore dated February 3, 1998 made in I.A. No. 38/1997 in I.D. No. 319/1996 and the order of the learned
single Judge dated November 17, 2000 in W.P. No. 3988/1998 confirming the order of the Labour Court, dated February 3, 1998 have to be set
aside and accordingly they are set aside and the writ appeal is allowed. However, there is no order as to costs. Consequently, the connected CM.
P. is closed. After dictating the judgment, the learned counsel appearing for the second respondent submits that liberty may be given to the second
respondent to move the Government for appropriate relief. It is well open to the second respondent to move any forum for what ever legal relief, if
they have any.