Management of Premier Mills Ltd. vs Presiding Officer, Labour Court and Others

P. Sathasivam, J.—Aggrieved by the order of the Labour Court, Coimbatore in I.A. No. 38 of 1997 in I.D. No. 319 of 1996, the

management of Premier Mills, Ltd., has filed the above writ petition.

According to the petitioner-management, they are having a Textile Mill at Pulankinar, Udumalpet Taluk, where it employs about 1000 workmen

and it has a spindle capacity of about 60,000 spindles. In 1983, the petitioner-management put up a voluntary retirement scheme, pursuant to

which, the entire labour force of the mill opted for voluntary retirement and left the service. In 1986, one R. Krishnaswamy came forward to take

the work of conversion of cops and cone into hank yarn and cone yarn, etc. Subsequently, Krishnaswamy converters handed over the

establishment to Smt.R. Mani, who was running it in the name of Sri Vinayaga Converters. Sri Vinayaga Converters was having a separate factory,

Registration, Factory Licence, Provident Fund Code No. ESI Code No., Central Excise Regisation, etc. It was also having separate Certified

Standing Orders. On September 23, 1995, the second respondent addressed a letter to the third respondent in which it was stated that the

workmen of the third respondent went on a strike from May 22, 1995, that on July 29, 1995, the Joint Commissioner of Labour, Coimbatore,

gave a letter of advice directing the striking workmen to call off the strike and report for work, that the third respondent did not provide them work

and no compensation was paid to them and the third respondent and as principal employer the petitioner should take responsibility. Since it had

nothing to do with the petitioner-management, the petitioner-management did not consider it necessary to send a reply. Even before the conciliation

proceedings, it is stated that the petitioner-management has nothing to do with the dispute between the respondent and the third respondent. By

order in G.O. No. 1030, dated November 19, 1996, the Government of Tamil Nadu referred the issue, namely, whether the closure of the

establishment of Sri Vinayaga Converters, Udumalpet Taluk with effect from June 15, 1996, is justified and what relief the workmen are entitled.

The petitioner-management was not shown as a party to the dispute and the Government order does not make any reference of the petitioner-

management at all. The dispute referred to the first respondent was numbered as I. D. No. 319 of 1996. On August 6, 1997, the second

respondent filed its claim statement alleging that the petitioner-management was the real employer, and the third respondent as only benamindar

and the petitioner-management should be made as a party to the dispute. Accordingly, the second respondent moved an application to implead the

petitioner-management as a respondent in I. D. No. 319 of 1996. The said application was numbered I.A. No. 38 of 1997. The petitioner-

management filed a counter in the said I. A. contending that in terms of Section 18(3) of the Industrial Disputes Act, 1947 (hereinafter referred to

as the Act), the petitioner-management cannot be impleaded as a party to the dispute. At the instance of the second respondent, first respondent

appointed a Commissioner and the Commissioner also submitted his report about the physical location of the third respondent vis-a-vis the

petitioner-mills. On February 3, 1998, the first respondent passed an order in I.A. No. 38 of 1997 and impleaded the petitioner-management as a

party to the dispute. The said order of the first respondent dated February 3, 1998, is vitiated by errors of law and jurisdiction and the same is

liable to be quashed, hence, the present writ petition.

I have heard Sri S.Ravindran, learned counsel for the petitioner-management and Sri D. Hariparanthaman, learned counsel for the second

respondent Labour union.

The point for consideration is whether the petitioner-management is a proper and necessary party for the dispute in I.D. No. 319 of 1996 and

whether the impugned order passed by the first respondent in I.A. No. 38 of 1997, allowing the application filed by the second respondent labour

union and impleading the petitioner-management as a party to the dispute is sustainable.

Before the Labour Court, with reference to I.A. No. 38 of 1997, no one was examined on the side of the union as well as the management.

However, Exhibits W 1 to W 18 were marked on the side of the labour union and Exhibits M 1 to M 36 were produced and marked on the side

of the management of Premier Mills.

Even in the earliest letter, dated December 4, 1995, by the Coimbatore District Mill Labour Union (affiliated with CITU) addressed to the Joint

Commissioner, Labour Department, Coimbatore-18, there is a reference to the effect that about 86 persons (both men and women) were

employed by Premier Mills during the period 1986-89. After some time, the said 86 workmen were directed to work in the winding/reeling

machines inside the premises of the petitioner-management mills. It is further clear that the area in which the workmen had worked was initially

called as Krishna Converters and later called as Sri Vinayaga Converters. Further, even in the Conciliation Failure Report, dated June 13, 1996, in

respect of management of Sri Vinayaga Converters and the workmen, the Joint Commissioner of Labour, Coimbatore, informed the

Commissioner of Labour and the Secretary to Government, Labour and Employment Department, FortSt. George, Chennai-9, there is a reference

about the employment of 86 persons initially by the Krishnaswaniy Converters and thereafter they were shifted to Premier Mills. This statement of

fact findplace in the said report. Accordingly, I am of the view that there is evidence to show that all the 86 workmen were recruited by the writ-

petitioner-mills.

Learned counsel for the petitioner-management, by drawing my attention to the reference made by the Government, would contend that the

Labour Court has no power to decide the issue other than the matter referred to it. The reference made by the Government for adjudication is as

follows:

(Vernacular matter omitted)

It is also relevant to know Sub-section(4) of Section 10 of the Act, which reads as follows:

(4) Where in an order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal under this section or in a subsequent order,

the appropriate Government has specified the points of dispute for adjudication, the Labour Court, or the Tribunal or the National Tribunal, as the

case may be, shall confine its adjudication to those points and matters incidental thereto.

The other section to be considered is Section 18 of the Act, which speaks about persons on whom settlement and awards are binding. Among

other Sub-clauses of the section, Sub-clause (b) of Sub-section(3) of Section 18 is relevant, which reads as follows:

(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal or

National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause;

I have already referred the stand of the labour union, namely, the petitioner-management and the third respondent companies are one and the

same and, according to them, for better adjudication of the dispute raised, it is but proper that the petitioner-management company may also be

impleaded as one of the parties to the dispute. Before the Labour Court, the union has furnished more facts and figures and other details how the

petitioner-management is a proper and necessary party for the disposal of the dispute. No doubt, the petitioner-company has filed a counter-

affidavit disputing all the averments made by the union. After considering the rival contentions and after persuing voluminous documents filed by

both sides, the learned Judge has concluded thus:

(Vernacular matter omitted)

In spite of the said factual conclusion arrived by the Labour Court, the learned counsel for the, petitioner-management placed certain decisions to

show that the Labour Court has committed an error in impleading the petitioner company as one of the parties to the dispute. The decisions relied

on by the learned counsel for the petitioner-management are:

(i) Hochtief Gammon Vs. Industrial Tribunal, Bhubaneshwar, Orissa and Others, .

(ii) Delhi Cloth and General Mills Co. Ltd. Vs. The Workmen and Others, .

(iii) Pottery Mazdoor Panchayat Vs. Perfect Pottery Co. Ltd. and Another, .

(iv) Rajasthan State Road Transport Corporation v. Industrial Tribunal Rajasthan, Jaipur 1999 III LLJ (Suppl) 1127.

(v) Parry''s (Cal) Employees Union v. Second Industrial Tribunal, West Bengal, Calcutta, and Ors. 1997 (4) LLN 464.

(vi) Rangaswamy and Company v. D. V. Jagdish 1992 I LLJ 133.

(vii) National Engineering Industries Ltd. Vs. State of Rajasthan and Others,

On the other hand, contending that the Labour Court is fully justified in impleading the petitioner-management as one of the parties to the dispute,

the learned counsel for the labour union has referred to the following decisions:

(i) State of Madras Vs. C.P. Sarathy and Another, .

(ii) Ganesh Das Ram Gopal Vs. The Government of the State of Uttar Pradesh and Others,

(iii) Hochtief Common v. Industrial Tribunal, Bhubaneshwar and Ors. (supra).

Though both the counsel have referred to various decisions as referred above, it is useful to refer the judgment of the Apex Court reported in

Hochtief Gammon (supra), which has been cited by both the management as well as Labour Union. After referrering Sections 10(4) and 18(3)(b)

of the Act, their Lordships have held as follows in 1964 II LLJ 460

Reverting then to the question as to the effect of the power which is implied in Section 18(3)(b), it is clear that this power cannot be exercised by

the Tribunal so as to enlarge materially the scope of the reference itself because basically the jurisdiction of the Tribunal to deal with an industrial

dispute is derived solely from the order of reference passed by the appropriate Government u/s 10(1). What the Tribunal can consider in addition

to the dispute specified in the order of reference, are only matters incidental to the said disputes and that naturally suggests certain obvious

limitations on the implied power of the Tribunal to add parties to the reference before it, purporting to exercise its implied power u/s 18(3)(b). If it

appears to the Tribunal that a party to the industrial dispute named in the order of reference does not completely or adequately represent the

interest either on the side of the employer, or on the side of the employee, it may direct that other persons should be joined who would be

necessary to represent such interest. If the employer named in a reference does not fully represent the interests of the employer as such, other

persons who are interested in the undertaking of the employer may be joined. Similarly, if the unions specified in the reference do not represent all

the employees of the undertaking, it may be open to the Tribunal to add such other unions as it may deem necessary. The test always must be, is

the addition of the party necessary to make the adjudication itself effective and enforceable? In other words, the test may well be, would the non-

joinder of the party make the arbitration proceedings ineffective and unenforceable? It is in the light of this test that the implied power of the

Tribunal to add parties must be held to be limited.

It is also relevant to refer to the conclusion of the Division Bench of this Court, reported in P.G. Brookes (supra) (which has been considered and

approved by the Supreme Court in the decision reported in Hochtief Gammon supra). The following conclusion of the Division Bench decision of

this Court is relevant 1953 II LLJ 1

The object therefore is to bring about industrial peace by settling the disputes between the employers and employees expeditiously. To enable that

object all the necessary and proper parties should be before the Tribunal. Otherwise any award that may be passed would be nugatory. With that

back ground the sections of the Act may now be scrutinised, for however, meritorious the object of the legislation might be, unless the necessary

powers to effectuate it were given under the Act, the purpose would be defeated.

As contended by the learned counsel for the petitioner, there is no section in the Act expressly empowering the Tribunal to add parties to the

proceedings. Section 11(3) restricted the application of the provisions of the CPC to the four matters mentioned in Sub-clauses (a), (b), (c) and

(d) of that section. The Tribunal is authorised to enforce the attendance of any person and examine him on oath, compel the production of

documents and material objects, issue commission for the examination of witnesses and in respect of such other matters as may be prescribed. It is

not suggested that any other matters have been prescribed. It is therefore contended that Order 1 Rule 10, Civil Procedure Code, does not apply,

therefore the Tribunal cannot add new parties. But in our view such power is necessarily implied in Section 18 of the Act. Clause (b) of Section 18

will not have any meaning unless the Tribunal has power to add parties. Under that clause an award is binding on all other parties summoned to

appear in the proceedings as parties to the dispute, unless the Board or Tribunal, as the case may be, records the opinion that they were so

summoned without proper cause. Clause (a) deals with all parties to the industrial dispute. Clause (b) refers to all other parties summoned to

appear as parties in the dispute. This necessarily implies that parties other than the original parties to an industrial dispute can be summoned as

parties to the proceedings. Such parties can be summoned at the instance of a party or suo motu by the Tribunal by issuing notice to them. The

clause also empowers the Tribunal to decide whether the parties so summoned were really proper parties. The only suggestion the learned counsel

can make is that the parties mentioned in Clause (b) are parties summoned by the Government. To put it differently according to learned counsel, if

an industrial dispute is proceeding before a Tribunal the Government may go on adding parties to dispute. This construction will obviously

introduce confusion in the proceedings and will enable the Government to interfere with the progress of the judicial process, which could not have

been the intention of the Legislature. We would therefore hold that Clause (b) by necessary implication gives power to a Tribunal to add parties.

In the light of the law laid down by the Apex Court as well as this Court and in view of the details furnished by both the labour union and the

petitioner-management as well as the particulars available in the conciliation failure report of the Joint Commissioner of Labour, Coimbatore, the

claim of the labour union against the petitioner- management can be regarded as an incidental question to be considered by the Labour Court in

terms of Sub-section (4), of Section 10 of the Act.

Though Sri Hariparanthaman has referred to certain other decisions to show that the order of reference made by the Government is only

administrative in nature and in order to give a proper finding and arrive at a conclusion, it would be open to the Labour Court/Industrial Tribunal to

consider incidental matters, I am of the view that in the light of the factual and legal position as mentioned above, it is unnecessary to refer other

decisions.

It is also useful to refer the conclusion of the Labour Court that prima facie, documents W 1 to W 7 would establish that the writ petitioner was

the real employer and in those circumstances, I am of the view that the Labour Court has correctly and rightly impleaded the petitioner-

management as a party to the dispute. As rightly contended by the learned counsel for the labour union, no prejudice will be caused to the writ

petitioner by impleading them as a party to the dispute. As a matter of fact, now the writ-petitioner can very well explain their stand before the first

respondent-Labour Court.

Apart from the merits of the order impugned, after considering the pleadings of both the parties and their respective documents, the Labour

Court has arrived at a prima facie conclusion that the petitioner herein is a proper and necessary party for the disposal of the dispute raised. If the

writ-petitioner has not been made as a party to the dispute, it cannot be decided whether the writ-petitioner is the real employer or not and it will

seriously affect the interest of workmen because the award to be passed by the Labour Court will not be binding on them. Accordingly, I hold that

the Labour Court has correctly impleaded the writ-petitioner as a party to the dispute. When the order of the Labour Court is well founded and

based on acceptable materials, it is well settled law that the same cannot be lightly interfered by this Court exercising jurisdiction under Article 226

of the Constitution of India. On this ground the writ petition is liable to be dismissed.

In the light of what is stated above, I do not find any error or infirmity in the impugned order of the Labour Court in I.A. No. 38 of 1997, in

I.D. No. 319 of 1996, dated February 3, 1998, accordingly, the writ petition fails and the same is dismissed. No costs. Consequently,

W.M.P.Nos. 6030 of 1998 and 22257 of 2000 are closed.