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Judgment
P. Sathasivam, J.—RAP MFRS'' Employees Welfare Union through its General Secretary, Hosur, aggrieved by the Arbitration Award
dated 24.12.2001 in Arbitration Case No. 1 of 2000 of the Deputy Commissioner of Labour, Madurai, has filed the above writ petition to quash
the same on various grounds.
Before K.P. SIVASUBRAMANIAM,J. one of the contentions of the petitioner in seeking to set aside the award is that the agreement for
reference to the Arbitrator was not published in the gazette in terms of Section 10-A(3) of the Industrial Disputes Act (hereinafter referred to as
the ""I.D. Act""). It was further contended that non-publication of the agreement as required, would render the award null and void. In support of the
above contentions, learned senior counsel for the petitioner relied on two Full Bench decisions of this Court, viz., (i) 1977 (1) LLJ 382 (R.K.
Steels v. Their Workmen); and (ii) 1989 LLJ 245 (Krishnaveni Transports v. Special Deputy Commissioner of Labour, Madras).
Before the learned Judge, it is not disputed by the respondent-Management that there was no publication of the Arbitration Agreement, as
required u/s 10-A(3) of the I.D. Act. However, it is the claim of the Management that though the award may be invalid under the I.D. Act, the
award will be enforceable as an award under Private Arbitration, for which the learned Counsel for the Management relied on the observation of a
Division Bench of this Court in 1993 (1) CLR 492 (Moorco (India) Ltd., rep. by its G.M. (Per.) v. The Government of Tamil Nadu).
4.The learned Judge, after finding that the Arbitration Agreement as entered into between the parties is traceable only u/s 10-A of the Act, the
agreement is a statutory agreement and the award passed thereon be a statutory award enforceable only in terms of the provisions of the I.D. Act,
if the award does not conform to the requirements under the Act, then the award becomes clearly invalid and unenforceable. The learned Judge
has also observed that the judgement of the two Full Benches of this Court are clear to the said effect. However, in view of the observation of the
Division Bench of this Court in 1993 (1) CLR 492 (supra), considering the two judgements of Full Bench, viz., (i) 1977 (1) LLJ 382 (R.K. Steels
v. Their Workmen); and (ii) 1989 LLJ 245 (Krishnaveni Transports v. Special Deputy Commissioner of Labour, Madras), the award which is
found to be invalid and unenforceable under the I.D. Act could be treated as an award as one under private arbitration or not, sought reference to
a Larger Bench to consider the following issue::-
Whether an award u/s 10-A of the Industrial Disputes Act which is rendered invalid due to non-compliance of the requirement u/s 10-A(3) of the
Act, could be enforced by one of the parties as an award on private arbitration under the provisions of the Arbitration Act, 1996?
It is not in dispute that the petitioner Union agreed for settlement on the basis of the decision of the Deputy Commissioner of Labour. One R.
Ramalingam, the then Deputy Commissioner of Labour, submitted the impugned award on 24.12.2001. Section 10-A of the I.D. Act speaks
Voluntary reference of disputes to arbitration. Sub-section (3) of Section 10-A of I.D. Act is relevant, which reads as under:-
10-A. Voluntary reference of disputes to arbitration-
(1)...
(2)...
(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 Gazeete.
It is clear from the above provision that copy of the arbitration agreement shall be published in the official gazette. The order of Reference shows
that there was no publication of the agreement as required u/s 10-A(3) of the I.D. Act and this is not disputed by the respondent Management.
In 1989 LLJ 245 (supra), the Full Bench of this Court had an occasion to consider the effect of non-publication of arbitration agreement. While
deciding the said issue, the Full Bench, considered the earlier Full Bench decision of this Court in 1977 (I) LLJ 382 (supra). No doubt, the issue
before the earlier Full Bench was as to the maintainability of the writ petition under Article 226 of the Constitution of India. However, in the later
Full Bench, i.e., in 1989 LLJ 245 (supra), considering the non-compliance of Section 10-A(3) of the I.D. Act, the Court held that,
After perusing the provisions of Sections 10A, 17, and 17A of the Act and Rules 26 and 27A of the Tamil Nadu Industrial Disputes Rules,
1958 read with Form D, we are of the view that the publication of the arbitration agreement as required u/s 10A(3) of the Act is mandatory and
non-compliance of the same will vitiate the award that might ultimately be passed....
They further held,
...Inasmuch as the award that might be passed will be binding on all the parties including those who are not parties to the arbitration agreement,
it is necessary to publish the arbitration agreement so that if there are any persons who are not parties to the arbitration agreement they can come
before the arbitrator to represent their case and this will be possible only if the arbitration agreement is published as contemplated u/s 10A(3) of
the Act....
After explaining the observation in 1977 (I) LLJ 382 (supra), the finding of the said Full Bench is concerned only with the nature of agreement
with reference to the jurisdiction of this Court under Article 226 of the Constitution of India and concluded that the passage extracted at page 386
of that judgement cannot be considered to mean that the Full Bench has held that the non-compliance of Section 10A(3) of the Act is not fatal to
the award to be passed pursuant to the arbitration agreement. The proposition laid down by the Full Bench was to the effect that notwithstanding
the non-compliance of the requirements of Section 10A of the Act, any arbitration agreement entered into would still be an agreement u/s 10A of
the Act and the matters arising out of such an agreement can be considered in proceedings under the Article 226 of the Constitution of India. On
going through the language used in 10A(3) of the I.D. Act, the Full Bench 1989 LLJ 245 in categorical terms concluded as under:-
we hold that the non-publication of the arbitration agreement vitiates the award and the publication of the arbitration agreement as required u/s
10A(3) of the Act is mandatory.
8.In spite of the specific conclusion of the Full Bench which is binding on all, Mr. T.V. Ramanujam, learned senior counsel for the respondent
Management, relying on an observation of the Division Bench of this Court in 1993 (1) CLR 492 (supra), contended that though the award may
not be enforceable under the provisions of the I.D. Act, the award would be enforceable as under a private arbitration under the provisions of
Arbitration Act. In this regard, it is useful to refer to Sub-section (5) of Section 10A of I.D. Act, which specifically says,
Nothing in the Arbitration Act, 1940 (10 of 1940), shall apply to arbitration under this Section.
The above provision excludes application of Arbitration Act, 1940. Though, as on date, Arbitration Act, 1940 is not in force and repelled and
Arbitration and Conciliation Act, 1996 alone is in existence, as rightly contended by Mr. V. Prakash, learned senior counsel for the petitioner,
since provisions of Sections 10, 10A and 17 of the I.D. Act are operative, absolutely there is no scope for treating the award under private
arbitration. The relevant observation of the Division Bench in 1993 (I) CLR 492 (supra) is as follows:-
The question which arose before the learned single Judge for his consideration was as to whether a writ of mandamus, as asked for, could issue.
The well-settled proposition is that the Act, as such, does not countenance and make available its machinery for arbitration outside its purview.
When there had been a non-compliance with Sub-section (3) of Section 10-A of the Act, it is not possible to characterise the decision rendered
by the second respondent as one coming within the purview of the Act. In this context, it is relevant to take notice of Sub-section (4) of Section
10-A of the Act also, and it reads as follows:
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.
Sub-section(4) of Section 10-A of the Act is inter-linked with Sub-section (3) and only on satisfaction of the mandates of Sub-section (3) of
Section 10-A, there could be an investigation into the dispute and making of the award by the arbitrator and then forwarding it to the appropriate
Government, as per Sub-section (4) thereof. Otherwise, the whole process will remain only in the realm of private arbitration falling outside the
Act. Section 17 could have reference only to publication of awards coming within the purview of the Act. Viewed from this angle, the learned
single Judge was correct in discountenancing the prayer for issuance of a writ of mandamus as asked for. The writ appeal directed against the
order of the learned single Judge deserves dismissals and accordingly we dismiss it. No costs.
9.The Division Bench having found that Sub-section (4) of Section 10A of the I.D. Act is inter-linked with Sub-section (3) and only on satisfaction
of the mandates of Sub-section (3) of Section 10-A, there could be an investigation into the dispute and making the award by the arbitrator and
then forwarding it to the appropriate Government as per Sub-section (4). Thereof, we are unable to share the view expressed by the Division
Bench that,
the whole process will remain only in the realm of private arbitration falling outside the Act....
It is not in dispute that the Arbitrator, who was Deputy Commissioner, intervened in terms of the provisions of I.D. Act, particularly Sections 10
and 10-A of the I.D. Act.
When an arbitrator was appointed and parties are permitted to solve the dispute under the statutory provisions, unless it is fully complied with
all the provisions, including the publication in the official gazette, as mandated by Sub-section (3) of Section 10-A of I.D. Act, the ultimate award
becomes unenforceable. In such circumstances, it is not enforceable and the same cannot be treated as an award even under private arbitration. As
rightly pointed out by Mr. V. Prakash, learned senior counsel for the petitioner Union, the award has to stand or fall on its own validity, being an
award under the I.D. Act and when it become unenforceable due to non-publication of the same in the official gazette, there is no scope for
enforcing it as an award under private arbitration. The arbitration agreement, as entered into between the parties, is traceable only u/s 10A of the
I.D. Act and the agreement being a statutory agreement, passed in pursuance of the provisions of the Act, whether it is enforceable or not is to be
decided only under the provisions of the I.D. Act. We reiterate that if the award fails to satisfy the requirements under the I.D. Act, then the same
becomes invalid and unenforceable. To put it clear that non-publication of the arbitration agreement in terms of Section 10-A(3) of the I.D. Act
vitiates the award and it could not be enforced by one of the parties, as an award in private arbitration under provisions of Arbitration Act, 1996.
Though it is pointed out that Sub-section (5) of Section 10A excludes Arbitration Act, 1940 and there is no such exclusion in respect of
Arbitration and Conciliation Act, 1996, it is not in dispute that Section 10-A of I.D. Act was inserted by Act 36/56 with effect from 10.03.1957
and at that time, the Arbitration and Conciliation Act, 1996 was not in existence.
Learned senior counsel for the respondent pressed into service the decision of the learned single Judge of this Court in 42 FJR 347 (Hospital
Equipments (Mfg.) Co., v. Labour Court (Mad.). Based on the factual details the learned Judge has concluded that though the parties agreed to
have their dispute decided by the Commissioner of Labour or his nominee, the other formalities of Section 10-A of I.D. Act were not complied
with, with the result, the decision given by the arbitrator is not saved by Sub-section (5) of Section 10-A of I.D. Act. The learned Judge, after
finding that the decision of the arbitrator in respect of 5 employees and Management is yet to be decided and finding that there was no legal basis
upon which the Labour Court could compute the benefits claimed by the workmen and this Court would not be justified in refusing to exercise its
jurisdiction, when the error is apparent on the face of the record, quashed the order passed by the Labour Court. On going through the factual
details, we are of the view that the said decision is not helpful to the issue before us.
Though 1990 (2) LLJ 289 (Nani Gopal Sarkar and 151 Ors. v. HEC Ltd. and Ors.) is pressed into service, factual details show that the
question whether the award is void or it is not enforceable has not been canvassed before the Supreme Court. In such circumstances, the said
decision is also not helpful to the stand of the Management.
In the light of the above discussion, we hold that an award u/s 10-A of the I.D. Act, which is rendered invalid due to non-compliance of the
requirement u/s 10-A(3) of the I.D. Act, cannot be enforced by the parties as an award in private arbitration under the provisions of Arbitration
Act, 1996. The Reference is answered accordingly.