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Judgment
This petition under Article 226 raises some fundamental questions in regard to the conduct and procedure of the Wage Board established by the State Government u/s 86A of the Bombay Industrial Relations Act, 1946 ("Act" for short).
The circumstances can be briefly stated : The petitioner is a bank and a co-operative 11 society registered under the Maharashtra Cooperative Societies Act, 1960. The Respondent No. 1 is a trade union registered under the provisions of the Trade Unions Act, 1946, and is also an approved and representative union as contemplated under the provisions of the Act. The Respondent No. 2 is the President of the union and is also a Member of Parliament. He is also a member of the Wage Board constituted by the State Government under Sec. 86A of the Act. The petitioner had signed a settlement dated November 26, 1993 with the Respondent No. 1 union and had thereby revised the service conditions of the employees of the Bank. The Respondent No. 2 was a signatory to the settlement as representative of the Respondent No. 1 union.
The Respondent No. 1 union gave a fresh charter of demands by notice in form "L" under 30 Sec. 42(2) of the Act, raising various demands m behalf of the workmen. The union sent a copy of the notice of change raising charter of demands to the Conciliator concerned and other authorities. As the demands raised by the union 3c were not acceptable to the petitioner bank, the union sent the statement of the case in form "N" to the Conciliation under Sec. 54 of the Act : BY his order dated July 22, 1996, the Conciliator recorded that the dispute is incapable of being settled by conciliation. On August 13, 1996, the Respondent No. 1 union made a reference to the Wage Board u/s 86CC of the Act and by the said reference preferred a charter of demands to the Wage Board for adjudication. After receiving the reference, the Wage Board issued notices calling upon the petitioner to file its written statement. The legality and validity of the proceedings before the Wage Board is sought to be questioned by the petitioner in the present writ petition under Article 226 of the Constitution.
The petitioner Bank has challenged the proceedings before the Wage Board mainly on two grounds. Firstly, the petitioner, contends that the presence of Respondent No. 2 on the Wage Board is contrary to the settled principle of law that no man shall be a judge in his own cause ("Nemo debet esse judex in causa propria sua"). The petitioner points out that Respondent No. 2 also happens to be the President of Respondent No. 1 union who has submitted the demands to the Wage Board for adjudication. Therefore, according to the petitioner the Respondent No. 2 is disqualified from acting as a member of the Wage Board and this disqualification introduces a fatal infirmity in the constitution of the Wage Board itself. Secondly, the petitioner contends that as provided under Sec. 42, Respondent No. 1 should have offered in writing before the Conciliator to submit the dispute to arbitration under the Act. According to the petitioner, fulfilment of the said condition is a condition precedent to the maintainability of the reference. Since the union did not offer to submit the dispute to arbitration as required by Sec. 42, the reference made on August 13, 1996 is void ab initio and not maintainable.
In their affidavit in reply, the Respondents Nos. 1 and 2 have strongly refuted the contentions of the petitioner that the proceedings before the Wage Board are illegal. They have denied the allegations of bias. In their affidavit they have given the legislative background of Chapter XII-A whereby the State Government was empowered to establish Wage Board for resolving the disputes relating to wages, rationalisation, workload etc. It is pointed out that on the Wage Board equal representation is given. to both employer and employees and in addition there are independent members and a Chairman appointed by the State Government. It is contended that having regard to the scheme of Chapter XII-A which introduced a system of tripartite settlement, the application of the principle "Nemo debet esse judex in causa propria sua is clearly excluded. As far as compliance of See. 42 is concerned, it is stated that during the conciliation the approach of the petitioner''s representative was adamant and non-co-operative. From their conduct, it appeared that the bank was not in a mood of settling the matter in conciliation. Notwithstanding this, the union made several oral representations to the representative of the bank that the union is ready and willing to refer the matter for private arbitration of Shri Eknath Joshi, Advocate so that the matter could he adjudicated and decided at the earliest. However, the representative of the bank 3, straightaway rejected the offer. In view of the fact the bank was not prepared to arrive at a settlement, the union vide their letter dated July 17, 1996 requested the Conciliator to issue a failure report so as to enable the union to make a 3, reference before the Wage Board. Therefore, the Respondents Nos. 1 and 2 contend that no interference is warranted under Article 226.
The principal question which falls for consideration is whether the presence of Respondent No. 2 on the Wage Board violates the principles of natural justice ? Natural justice is said to demand not only that those whose interests may be directly affected by an act of decision should be given prior notice and an adequate opportunity to be heard, but also that the Court or Tribunal should be disinterested and impartial. The maxim nemo judex in re sua literally means that a man should not be a judge in his own cause. This is known as the rule against bias. That bias disqualifies an individual from acting as Judge flows from two principles : (1) No one should be a Judge in his own cause, and (ii) justice must not only be done but seen to be done. There is and can be no doubt about the validity of this principle and it is also a settled position of law that this principle applies not only to Judges and Magistrates but to all Tribunals and bodies which are given jurisdiction to determine judicially the rights of parties. But the respondents say that there is clear legislative intention to exclude the principles nemo judex in re sua. They say that having regard to the scheme provided under the Act, there is no scope for application for the said doctrine. In order to appreciate this plea, it will be necessary to examine the scheme of the Act in detail. Prior to the introduction of Chapter XII-A, the disputes pertaining to rationalisation of wages, workload and other incidental matters were required to be adjudicated by Industrial Courts. In course of time, Industrial Courts were flooded with large number of cases both under the Act and the Industrial Disputes Act which took considerable time to resolve them. This led to the amendment of the Act, relating to various facets. The most significant one was insertion of Chapter XII-A for establishment of Wage Boards for one or more industries. Under Sec. 30, 86A of the Act, the State Government is empowered to constitute a Wage Board for the State for one or more industries. Accordingly, in the year 1974, Wage Board for Co-operative Banking Industry was established. This Wage Board is a permanent Statutory body tripartite in nature. Under Sec. 86-B, a Wage Board consists of equal number of persons nominated by the State Government to represent employers and employees and such number of independent persons as the State Government nominates. The Chairman is appointed by the State Government. Generally, as a policy representatives of the employers and employees are appointed by the State Government in consultation with the association of employers and representative union. The Wage Board functions as a quasi-judicial authority under the Act to decide industrial disputes referred to them by the employers and representative union in the industry.
Sec. 86C of the Act confers powers on the State Government to make a reference to the Wage Board in respect of the matters enumerated therein. See. 86CC entitles an employer or a registered union which is representative of employees and which is also an approved union to refer any industrial dispute of the nature mentioned in sub-section (1) of Sec. 86C other than a dispute in respect of bonus, to a Wage Board for decision. Sec. 86E lays down the procedure before the Wage Board. All questions arising for the decision of the meeting of the Wage Board are decided by majority vote of the members present including the Chairman. In the event of equality of votes, the Chairman has a casting vote. In conducting the cases referred to the Wage Board it has to follow the same procedure as the Industrial Court as per the provisions of the Act Sec. 86J gives the power of superintendence over Wage Boards to the Industrial Court, though in terms the Section does not say so, the power is also one of judicial superintendence m addition to administrative superintendence somewhat akin to the power of High Court under Art. 227 though not as wide. Under Sec. 86G an appeal lies to the Industrial 2, Court against the order or the decision of the Wage Board, except in case of order or decision given unanimously.
In the light of the provisions of the Act it is not difficult to fathom the object behind introducing Chapter XIIIA. The object was to make industrial arbitration machinery more effective by assisting the employers and employees on the Wage Board. The Wage Board in the first 3.1 instance aims at narrowing down the differences between the parties and trying to prevent them from widening with legal squabbling. A Wage Board is a platform where the conflicting and contradictory views are sought to be harmonised with narrowest possible limit, with the presence of the Chairman with nonpartisan attitude to teach harmonious decisions. The very object of constituting a tripartite Wage Board representing the representatives of the employers and employees on the Wage Board can bring to bear on the discussions and examinations of the questions by persons having a close and intimate knowledge of the working of the industries. The Wage Board consisting of persons who are conversant with the working of the industry, leads to competent handling of the industrial disputes. An authority like tripartite Wage Board consisting equal representatives of the employers and employees and an independent Chairman ensures more acceptable decisions, which Ultimately brings industrial peace and harmony. The decisions of the Wage Board apart from being according to legal provisions and on merits are also based on the spirit of compromise. It has been pointed out that from inception of the Wage Board, the efforts of the Chairman and members of the Board have gone a long way in maintaining harmonious industrial relations in the undertakings appearing before them. Such decisions when taken unanimously are naturally and legally free from appeal to the higher Courts and when reached in this spirit have greater value in terms of collective bargaining and industrial peace than the decisions imposed on the parties by a single statutory authority like Industrial Court. The scheme introduces dual adjudication process; one is to plead their case and the other is to decide their case. This is the unique feature of this tripartite machinery.
The challenge of the petitioner will have to be examined in the light of the aforesaid statutory scheme for tripartite settlement. Incidentally, it may be mentioned that in the present Wage Board, the Chairman is Mr. Naik who is an, independent person appointed by the State Government. In addition to that, the State Government has appointed Mr. Chendarkar and Mr. Bhor as independent Members. There are four representatives of the employers including Mr. Shelke who is the President of the Co-operative Banks Association. There are four representatives of the employers including Mr. Shelke who is President of the Co-operative Banks Association. There are four representatives of the employees and one of them is the Respondent No. 2 who has been made a member of the Wage Board in his capacity as the President of the Co-operative Bank Employees'' Union.
Mr. Naphade strenuously contended that the principle "nemo judex in re sua" precludes a judge who is interested in the subject matter of a dispute from acting as a judge therein. Mr. Naphade contended that this principle applied not only to Judges but to all Tribunals and bodies which are given jurisdiction to determine judicially the rights of parties. Only exception to this rule is the doctrine of necessity which has no application to the present case as the State Government is competent to appoint any other member in place of respondent No. 2 as far as the present reference is concerned. Mr. Naphade urged that actual proof of prejudice in such case is not necessary. Even likelihood of prejudice is sufficient to hold that the Respondent No. 2 cannot act as a member in the present proceedings. He points out that respondent No. 2 is holding the post of the President of 1, Respondent No. 1 union, he is a signatory to the charter of demands submitted to the Wage Board. He, therefore, says that Respondent No. 2 cannot be a judge in his own cause. He cannot be a member of the Wage Board which is 2(going to hear the reference made by his own union viz., Respondent No. 1. Mr. Naphade brings to my notice several decisions of the English Courts as well as the Supreme Court in order to show that even if one member is shown to have 2! bias it is sufficient to vitiate the entire proceedings under the Act. Mr. Bukhari learned counsel for Respondent Nos. 1 and 2 on the other hand submits that the principles of natural justice have no application when there is a contrary 3(legislative intention. Mr. Bukhari points out that the intention behind constitution of Wage Board was to give equal representation to the employers as well as employees and try to bring about a just and fair settlement with the help of other independent members of the Board. Mr. Bukhari contends that if the legislature has enacted a scheme providing a tripartite machinery for adjudication of industrial disputes and such scheme itself contemplates participation of both the parties in the decision making process, the principle that no man can be a judge in his own cause has no application. According to Mr. Bukhari considering the overall scheme of the Act and the object with which the Wage Boards are 4, constituted by the State Government, the argument of Mr. Naphade based on supposed bias of Respondent No. 2 cannot be accepted.
The aim of rules of natural justice is to secure justice. It is well settled that these rules can operate only in areas not covered by any law validly made. In other words, they do not supplant the law of the land but supplement it. In Suresh Koshy George Vs. University of Kerala and Others, the Supreme Court observed that the rules of natural justice are not embodied rules. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances to of that case, the frame-work of the law under which the enquiry is held and the constitution of the Tribunal or body of persons appointed for that purpose. Whenever a complaint is made before a Court that some principle of natural justice has been contravened the Court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case. In Ravi S. Naik and Sanjay Bandekar Vs. Union of India and others, , the Supreme Court held that principles of natural justice have an important place in modern Administrative Law. However, while applying the principles of natural justice it must be borne in mind that "they are not immutable but flexible" and that they are not cast in a rigid 15 mould and they cannot be put in a legal straitjacket. Whether the requirements of natural justice have been complied with or not has to be considered in the context of the facts and circumstances of a particular case. In The Maharashtra State Financial Corporation Vs. M/s. Suvarna Board Mills and another, the Supreme Court held that natural justice cannot be placed in a strait-jacket; its rules are not embodied and they do vary from case to case and from one fact situation to another. All that has to be seen is that no adverse civil consequences are allowed to ensue before one is put on notice that the consequences would follow if he would not take care of the lapse, because of which the action as made known is contemplated. No particular form of notice is the demand of law. All will depend on facts and circumstances of the case.
It has been firmly established by a series Is of judgments of the Supreme Court that exclusion of principles of natural justice can be made expressly or impliedly by statutory provision (vide State of U.P. and others etc. Vs. Pradhan Sangh Kshettra Samiti and others etc., ). Thus even the principle nemo judex in re sua can be excluded by reason of an express provision or necessary 1221intendment. In this behalf it will be useful to make a reference to a decision of the Privy Council in James Edword Jeefs v. New Zealand Dairy Production and''Marketing Board, 1967 AC 551. In that case the grievance of the farmers was that the Board which was established by the Dairy Production and Marketing Board Act, 1961 in determining zoning question acted as a judge in its own cause contrary to the principles of natural justice. After referring to the observations of Blackburn (sic), J. in Mersey Docks Trustees v. Gibbs, the Privy Council observed that it is clear from the provisions of the Act of 1961 that it was the intention of the New Zealand legislature to make an exception from the general rule. It was noted that decisions on zoning area were of great importance both to farmers supplying dairy products and to the dairy companies dependent on the area of supply allotted to them. It was also 2(noted that when there is a conflict between the farmers and the factories the Board may find itself placed in an unenviable position, having accepted, the duty to act judicially and yet having a financial interest in maintaining and advancing the viability of the company to which it has advanced money. Yet in their Lordships'' view the conclusion was inescapable that Parliament intended to make an exception to the general rule. The argument of the farmers was thus rejected by the Privy Council.
Coming then to the present case we have seen that in enacting Chapter XII-A, the object of the legislature was to provide a tripartite machinery for adjudication. In that the legislature 3. has clearly contemplated a Wage Board consisting of representatives of employers as well as employees and certain independent persons. The matters referred to the Wage Board are required to be adjudicated by the members of the Board in accordance with the procedure laid down by the Act. The Wage Board consists of equal number of representatives of employer and employees and some independent members including the Chairman appointed by the State Government. Thus the scheme introduces dual adjudication process; one is to plead their case and the other to decide their case. It encourages the management and labour to decide the disputes relating to wage structure and other ancillary matters in the spirit of live and let live. The participation of both the employer and workmen in the decision making process is thus inevitable. The scheme thus clearly excludes the age old principle of "new debet esse judex in causa portia sua", when there is a clear contrary intention reflected in the legislation, it is not permissible for the Courts to read the rules of bias in the constitution of the Wage Board. Mr. Naphade strenuously contended that even though in the constitution of the members of the Board, the bias of persons representing the rival sections of the employers and employees is implicit, it should not be tolerated beyond a particular limit. Mr. Naphade urged that when it is found that a representative of the employer or the employees is directly concerned in the subject matter, he should not be allowed to act as member of the Board. I am afraid that the argument of Mr. Naphade cannot be accepted. Having considered the position that the legislature has excluded the principle of "nemo juda in re sua", its application even in limited sphere cannot be applied. In my opinion, exclusion of a member of the Wage Board on the grounds of bias will make the scheme totally unworkable. A Wage Board is constituted of the representatives from both sides viz., employer and workmen. It is supposed to adjudicate industrial 0 disputes referred to it with the assistance of independent members. When such tripartite machinery of adjudication is introduced by the legislature, it is not possible to read the principle of "nemo judex in re sua" in the provisions of the scheme.
Mr. Naphade brought to my notice the decision of the Court of Appeal in Hannam v. Bradford City Council 1970 2 All ER 690. There the question was whether three governors of the school who ordered dismissal of the teacher could sit on the subcommittee while hearing the appeal of the teacher. It was held that the three governors when acting as members of the subcommittee did not cease to be an integral part of the body whose action was being impugned, and it made no difference that they did not personally attend the meeting of the governors at which the plaintiffs employment was terminated. Mr. Naphade also brought to m notice the celebrated decision of Cooper v. Wilson 1937 2 K.B. 309. In that case the appellant, a sergeant in the Liverpool Police Force, was dismissed by the Chief Constable. The Chief Constable was present at the meeting of the Watch Committee during the deliberations on the appellant''s appeal. It was held that the proceedings before the Watch Committee were contrary to natural justice owing to the presence of the Chief Constable during the Committee''s deliberations on the appellant''s appeal. Both the decisions are clearly distinguishable as there was no contrary intention of the legislature.
The next decision relied upon by Mr. Naphade is the judgment of the Supreme Court in A.K. Kraipak and Others Vs. Union of India (UOI) and Others, . In that case the selection made by the Selection Board was held to be vitiated on account of the fact that one of the members was a candidate for selection. The Supreme Court observed that it is difficult to believe that he could have been impartial. It was held that it is sufficient if there is reasonable likelihood of bias. The real question is not whether he was biased. It is difficult to prove the state of mind of a person. Therefore what has to be seen is whether there is reasonable ground for believing that he was likely to have been biased. The next judgment relied upon by Mr. Naphade is also the judgment of the Supreme Court in Ranjit Thakur Vs. Union of India (UOI) and Others, where it was held that proceedings of Summary Court Martial are vitiated on account of officer punishing delinquent on previous occasions was sitting at Court-Martial. The Supreme Court observed that it is the essence of judgment that it is made after due observance of judicial process, that the Court, Tribunal passing it, observes at least the minimal requirements of natural justice, is composed of impartial per-,g sons acting fairly and without bias and in good faith. A judgment which is the result of bias or want of impartiality is a nullity and the trial "coram non judice". The last judgment cited by Naphade is also the judgment of the S.C. in Institute of Chartered Accountants of India Vs. L.K. Ratna and Others, . There the Supreme Court came to the conclusion that if the function of the Disciplinary Committee under Sec. 21(1) of the Chartered Accountants'' Act, 1949 was to hold an enquiry and to make a report to the council, the members of the Disciplinary Committee are disqualified from participating in the deliberations of the Council. The aforesaid decisions cited by Mr. Naphade has no application to the case at hand. Here we are dealing with an altogether different situation where there is a deliberate exclusion of principle of "nemo judex in re sua" by the legislature.
Coming then to the second limb of the argument of Mr. Naphade that there is noncompliance with the condition precedent to a reference, it is conceded by Mr. Bukhari that the offer to refer the dispute to arbitration was not given in writing. Mr. Bukhari, however, pointed out that there was an oral offer given to the bank to refer the dispute to arbitration of Mr. Eknath Joshi, Advocate. Be that as it may, In my opinion, this is hardly a ground for interfering with the reference already made to the Board. I asked Mr. Naphade whether the bank is willing to refer the dispute to arbitration. Mr. Naphade informed that the bank is not prepared to accept any arbitration. In that event, sending the matter back to the Conciliation Officer for compliance with the condition will be empty formality. The second argument of Mr. Naphade also fails.
In the result, the petition is dismissed. However in the circumstances of the case there will be no order as to costs. 40
On the oral request of Mr. Naphade, interim stay granted by this Court is continued for a period of six weeks.
C.C. expedited. AC