Soni and Sons vs Industrial Tribunal and others

Mian JalaludDin, J.

(1) This is letters patent appeal against the judgment of a Single Judge of this Court in writ petition No 203 of 1971. The learned Judge has

dismissed the petition and has held that the reference made by the Government under the Industrial Disputes Act of 2005 to the Industrial Tribunal

was competent and consequently the award made by the Tribunal was valid and further that the Tribunal did not exceed its jurisdiction by going

beyond the scope of terms of reference:

(2) Briefly speaking the facts that have given rise to this appeal are as follow :

The appellant is a firm carrying on business of selling liquor at Jammu in the name of M/S Soni and Sons. The respondent No 3 Shri Banarasi Lal

Jandial was in the employment of the petitioner as Salesman cumAccounts clerk. He was drawing a salary of Rs. 175.00 per month. He made a

complaint to the Deputy Labour Commissioner who was also Conciliation Officer under the Industrial Dispute Act alleging that his services were

terminated by the appellant on August 26, 1968 in violation of Sec. 25 (C) of the Jammu and Kashmir Industrial Disputes Act of 2006 and that he

has not been paid compensation Alongwith this complaint a letter from the Secretary Trade Employees Association respondent No. 2 was also

received by the Conciliation Officer. A notice dated 2111969 was issued by the Conciliation Officer to the appellant to appear on 27th of January

1969 in his office. The stand of the appellant firm before the Conciliation Officer was that the services of the respondent No. 3 had never been

terminated and that he was absent from duty from 25th of August 1968 and therefore there was no question of paying any compensation to the

Exemployee. The Conciliation Officer did not succeed in bringing about the conciliation between the Parties and therefore he submitted his failure

report to the Government under Section 12 (4) of the Industrial Disputes Act. On receipt of the failure report of the Conciliation Officer the

Government in exercise of powers u/s 10 subsection 1 (b) of the Industrial Disputes Act referred the dispute to Respondent No. 1, the tribunal for

adjudication vide SKO29 dared 2211970. It is pertinent to mention here that the terms of reference made to the Tribunal were as follows :

(i) Claim of Shri Banarasi Lal employee for grant of compensation etc. due to him on the termination of his services by the employer ;

(ii) the legality or otherwise of the action of the management in disallowing the above mentioned claim of the employee; and

(iii) award appropriate relief to the employee in case illegality of the management's action is established.

(3) The Tribunal after holding an enquiry into the matter made an award on April 29. 1971 to the effect that the respondent No 3 should be

reinstated and should also be given back wages from 2681968 to the time he assumes charge as a salesman in the firm. He was also found entitled

to three months wages in lieu of his unavailed of leave. The Tribunal, however, observed that as the respondent No. 3 had served the Bombay

Dying for three months on the pay of Rs. 150.00 per month therefore the amount of Rs. 450.00 should be deducted from the wages allowed to

him Against the award made by the Tribunal the appellant went up in writ before this court. He inter alia contended that the reference to the

Tribunal was incompetent as there was no Industrial dispute within the meaning of the Act and that the Tribunal had acted beyond its jurisdiction by

enlarging the scope of the reference and by giving relief of reinstatement because no such relief initially had been asked for and that the question of

reinstatement and payment of back wages did not constitute one of the terms of the reference made by the Government to the Tribunal. The

learned Single Judge Syed Wasiud Din J. by his order dated 27th of March 1973 dismissed the writ petition and held that the reference was

competent as an Industrial Dispute did exist between the parties, and that a demand for meeting his claims had been made on the management by

the respondent No. 3. He also .held that the Tribunal had not gone beyond the scope of the terms of reference and that while affording relief to the

respondent No. 3 it could also make a direction for his reinstatement and also for payment of back wages.

(4) Appearing for appellant Mr. I K Kotwal has vigorously contended that there was no industrial dispute within the meaning of Section 2 (J) of

the Jammu and Kashmir Industrial Disputes Act of 2006. In order to constitute an Industrial Dispute it is necessary that there should be a demand

made on the management which must be in writing and must be specific, and there should be a refusal by the management to accede to this

demand. Moreover) the demand raised must be not by an individual but in a collective form. As no demand was made by the Respondent No. 3

on the management, nor was such a demand sponsored by the Union, therefore there was no dispute and consequently the reference was

incompetent. It is also submitted that the terms of reference were clear and specific and the Industrial Tribunal respondent No 1 could not travel

beyond the terms of reference and could not award a relief to the respondent which was not warranted by the terms of reference. The action of the

Tribunal in making an order of reinstatement of respondent No. 3 and also in awarding him the back wages was without jurisdiction. There was

nothing to show that the service of the respondent No. 3 were terminated by the appellant or that had been retrenched. The record of the case

clearly established that the respondent No 3 had voluntarily left the service of the appellant. He absented himself right from 2681968 and did not

attend the firm although he was asked many a times to come back and resume his duties Even before the Conciliation Officer respondent No. 3

refused to be reinstated. This was quite evident from the report of the Conciliation Officer. In these circumstances the respondent No 3 was not

entitled to claim any compensation much less the back wages since 26th of August 1968 It is also pointed out that the Tribunal had made a wrong

observation of the fact that the dispute between the Parties stared from the date when an amount of Rs. 100 00 was shown to have been debited

to the employee respondent No. 3 in the voucher book when the same was detected by the letter on 26th August 1968 and that this wag

contested by the employee, and further that this entry had been rubbed off from those spots in voucher book marked as 'L' and M' by the

Tribunal. This observation, it is submitted, was based on no legal evidence and was not therefore sustainable. The contention of respondent No. 3

in this behalf was belied by the very fact that in the cash book and in the ledger book no such entry of debit of Rs. 100 CO of the relevant date

existed. Without that any entry in the voucher book was meaningless. On these grounds the award, it is urged, is liable to be quashed. Learned

counsel has relied upon A. I. R. 1968 S. C. 529 and A. I. R. 1970 Delhi 60 for the proposition that there was no industrial dispute and that the

reference was incompetent.

(5) As against this Shri J. P. Singh, the learned Advocate for the respondents, while supporting the award has met the arguments of the appellant

by enunciating the proposition that the reference was competent inasmuch as the dispute who raised with the management and there was a clear

finding of the Tribunal in favour of the respondent No. 3 on this question. That finding being a finding of fact could not be disturbed in writ. This

court could not reappreciate the evidence and come to its conclusions Moreover, the dispute raised with the management though individually and

not collectively was nevertheless a dispute within the meaning of Section 2 (K) of the Industrial Disputes Act (Central) as this Act has been made

applicable to the State and the dispute was saved by the operation of Section 2 (A) of the said Act. In view of this there was no necessity that the

Union of Workmen must have made a formal demand on the management. It is further submitted that the Tribunal had also found that the services

of the respondent No. 3 were wrongly terminated by the appellant and dispite the fact that respondent No. 3 did approach the appellant for

settlement of his claims no attention was paid to that by the management. The tribunal had to grant all reliefs incidental to the principal relief and

was therefore justified in ordering the reinstatement of respondent No. 3 as also in awarding him the back wages. It is further submitted that the

findings on issues recorded by the Tribunal were essentially findings of fact and these could not therefore be interfered by this court in exercise of

its writ jurisdiction Reliance is placed on AIR 1964 Andra Pradesh 56.

(6) During the course of arguments we sent for respondent No 2 and heard the Secretary of the Union who almost reiterated the points that were

urged by the learned advocate for Respondent No. 3.

(7) Before we deal with the merits of the respective contentions of the parties it is to be borne in mind that the Extraordinary jurisdiction of issuing

certiorari by this court in such matters can be exercised only when it is found that the Tribunal has acred without or with excess of its jurisdiction,

or where the very reference is found incompetent, or where the Tribunal though competent to enter upon an inquiry has acted in flagrant disregard

of the rules of procedure or it is found that the findings recorded by the Tribunal are based an no legal evidence (vide also the observations made in

AIR 1970 S C 1335).

(8) The first important question therefore that we are called upon to decide in this appeal is whether there was an industrial dispute within the

meaning of Sec. 2 (J) of the J and K Industrial Disputes Act of 2005 and the reference made to the Tribunal was valid. Before we proceed to

opine on this question it is appropriate to mention here that ac the time when the alleged dispute is shown to have arisen when the reference was

made to the Tribunal by the Govt and when the proceedings went on before the Tribunal, it was the Jammu and Kashmir Industrial Disputes Act of

2006 that applied to the case. The Industrial Disputes Act of 1947 (Central) was made applicable to the State of Jammu and Kashmir by Act No.

51 of 1970. Therefore it is the State Act and not the Central Act that is applicable to the case before us. In the Industrial Disputes Act (Central)

Sec, 2 (A) has no doubt been inserted with a view to enable an individual workman or an employee, whose services have been terminated by the

management to raise an Industrial dispute and to take his case before a C mediation Officer or approach the Government for reference of the

dispute for its adjudication, Sec 2 (A) provides that where an employer discharges or otherwise terminates the services of an individual workman

any dispute or any difference between that workman and employer connected with the termination of the services shall be deemed to be an

Industrial Dispute, not. withstanding that no other workman or Union of Workmen is a party to the dispute. The purpose of insertion of this section

was to modify the law made by the Judicial decisions holding that an industrial dispute under the Act did not include an individual dispute which

was not in collective form sponsored by other workmen or by a Union of workmen. Now this provision of law is conspicuously absent in the State

Act which means that what was the legal position under the Indian Act prior to the insertion of Section 2 (A) is exactly the same here under the

Stare Act. In the State under the Act of 2006 ( vide Section 2 (j) a dispute in order to make it as an industrial dispute must therefore, be raised

collectively and not individually.

(9) In the instant case even if it be shown ( although that proposition is not established ) that respondent No. 3 raised a dispute with the

management it was raised only in his individual capacity and not collectively by the Union, There is nothing to show on the records that the Union

respondent No. 2 ever made any demand in writing on the management.

(10) Secondly, in order to constitute an industrial dispute it must be shown that a dispute specific in nature was raised with the management. There

must be adamant made by the workman and refused by the management If no demand is made and the matter is taken directly to the Govt. by the

workman or by a Union it cannot give rise to a dispute. Their Lordships of Supreme Court in AIR 1968 S. C 529 have broadly laid down the I

following proposition of law : ""If no dispute at all is raised by the employees with the management, any request sent by them to the Government

would only be a demand by them and not an industrial dispute between them and the employer. An industrial dispute, as defined, must be a dispute

between employers and employers, employers and workman and workman and workman. The Govt. has to come to an opinion that an industrial

dispute does exist and that opinion can only be formed on the basis that there was a dispute between the employee and the employer ''

(11) That was a case where a retrenched employee and the Union of workers confined their demand to the management to retrenchment

compensation only but no demand for reinstatement: was made with the management. It was held that the reference made by the Government

under section 10 in respect of reinstatement was incompetent, the only reference which the Government could have made, had to be related in the

payment of compensation. The Tribuual could nor grant a relief to the exworkman other than that in respect of which he had made a claim to the

management. In AIR 1970 Delhi 60 the principle enunciated is that the demand must be raised by workman first on management and when it is

rejected by the latter then an industrial dispute can be said to have arisen.

(12) In the instant case there is nothing to show that a dispute in writing was made by respondent No. 3 on the management. Even assuming for the

sake of argument that a demand was orally made by respondent No 3 on the management it is to be noticed that the only demand that was made

in words of the Tribunal was for settlement of dues of respondent No. 3, No where did respondent No. 3 urge on the appellant firm to reinstate

him.

(13) Now, in the first place, as already stated above, the demand made by the respondent No. 3 individually on the management for settling his

claims is not a demand within the meaning of Sec. 2 (J) so as to give it the legal colour of an Industrial dispute and secondly, the demand made by

the respondent No. 3 in his individual capacity was confined to the settlement of his dues. Respondent No. 1 the Tribunal has admitted in its

judgment that respondent No. 3 did not make any demand for his reinstatement and this he has attributed to the ""poor vocabulary and ignorance of

the legal rights of the respondent No. 3''. Be, as it may, it is clear even from the observations made by the Tribunal itself chat there was no demand

made by the respondent No. 3 for his reinstatement There fore, consistent with the view expressed by their Lordships of the Supreme Court the

dispute as such had not been raised and the reference was therefore not competent. This question was no doubt raised before the Tribunal but was

answered against the appellant.

(14) Now, even if by any stretch of imagination it be said that a demand was made by respondent No 3 to the appellant it was only for payment of

his dues or compensation. Therefore the enquiry had to be confined only to the demand of the respondent No. 3 to the payment of compensation

and not to reinstatement. Indeed this is what the Govt. has purported to refer to the Tribunal for adjudication. The terms of reference are quite

clear and explicit. The grounds of reference related to the claim of the respondent No. 3 for grant of compensation due to him on the termination of

his services by the employer and the consideration and decision of the question of legality or otherwise of the action of the management in

disallowing compensation to the employee. The third point referred related to the appropriate relief to be granted to the employee in case the

illegality of the action of management was established. The terms of reference fettered the powers and jurisdiction of the Tribunal in dealing with the

matter The Tribunal had to confine itself to the consideration of the question as to whether the management had terminated the services of

respondent No. 3 and the jurisdiction of the latter's claim for grant of compensation on this ground. The Tribunal bad to opine on the question

whether the management had proceeded legally or illegally in disallowing the claim of compensation to its exemployee.

(15) The third point of reference could not be disassociated from the first two and the third point was to be read subject to 1 and 2, the genesis

being the question of grant of compensation following the termination of his services. It appears that the Tribunal has travelled beyond the scope of

reference and has awarded reliefs that were not germane and relevant to the order of reference. The Tribunal could nor enlarge the scope of the

enquiry and by pass the terms of reference. It could not embark upon the question of reinstatement and payment of back wages consequent of the

reinstatement of respondent No. 3 for that was outside the terms of reference and the claim prescribed before it. In the words of their lordships of

the Supreme Court vide (AIR 1956 S. C 213) the Tribunal cannot act as a benevolent despot and base its conclusion on extraneous

consideration, ignoring the real question that arose for decision and the issue that arose out of the pleadings of the parties. In the instant case no

where, not even in their statement of claim prepared and submitted by the respondents 2 and 3 before Conciliation Officer and thereafter before

the Tribunal (vide annexures C and K to the writ petition ) was the question of reinstatement of the respondent No. 3 raised. The claim made by

respondent 3 consisted of only for grant of the following reliefs :

(1) One month's notices pay Rs. 17500

(2) Compensation for retrenchment from service from 2/54 to August 1968.

Rs. 1962,50

(3) Due leave 3 months unavailed

Rs. 175/P M. Rs. 525.00

(4) Overtime one hour for 14 years and 6 months for one hour daily to be calculated as per record.

Rs. Unspecified.

(5) Bonus for 196667 one month's pay remaining unpaid so far

Rs. 175.00

(16) In view of this Tribunal could not address itself to the question of reinstatement and consequently to the question of payment of back wages.

Legislature has very well laid down the guide lines for the Tribunal and the rule of procedure that is to be followed. These are enshrined in section

10 (4) of the Act which is to the effect that where the Government has specified the points of disputes for adjudication, the Tribunal shall confine its

adjudication, to the points of reference and matters incidental thereto. The position can well be explained by reference to the following case law:

(17) In AIR 1959 S. C. 1191 the view has been enunciated that the Industrial Tribunal can deal only with the subject matter of the reference and

for determining the scope and nature of the points referred, the order of reference itself must be looked into.

(18) In A. I. R. 1970 S. C 919 (at para) and A. I. R. 1964 S. C. 864 the principle laid down is that the Tribunal is not free to enlarge scope of

dispute referred to it, and award found beyond the scope of terms of reference is not sustainable.

(19) In 1970 L I C. 1233 it has been held that the jurisdiction of Tribunal is based upon terms of reference. He is not entitled to take a matter not

covered by reference under cover of collateral or consequential matter. The pleadings of the parties are very relevant for this purpose.

(20) In A.I R 1956 S C 231 (Supra) the rule has been laid down that a Tribunal cannot disregard the pleadings of the parties to a dispute and

reach any conclusion that it might think just and prop r. The word 'incidental' occurring in Section 10 (4) is very relevant. It means a claim which is

incidental to the principal claim.

(21) The Calcutta High Court has in A. I. R 1951 Cal. 68 propounded the view that question of compensation is not incidental to the question

whether the employee was entitled to reinstatement.

(22) In view of these clear pronouncements the Tribunal went therefore on a wrong track by giving a wide definition to the expression 'incidental'

occurring in Section 10 (4). By construing the claim for compensation as one for reinstatement also it has betrayed complete ignorance of the

correct position of law on the subject and exceeded its jurisdiction in granting reliefs of reinstatement and back wages which were never claimed

either before the conciliation officer or Govt. or for the matter of that in the statement of claims before the Tribunal This claim did not fall within the

purview of the terms of reference made by the Government.

(23) Again, it is quite significant that the Conciliation Officer in his report has made a mention of this fact that the proprietor of the firm explained

before him that the services of respondent No. 3 were never terminated rather he had left the services without any information and that he was

willing to retain his services The conciliation Officer observed that there was an offer to respondent No. 3 to resume his work but he (Banarasi Lal)

refused to join the firm due to strained relations with the appellant' This observation in the report of the Conciliation Officer made to the

Government has been skipped over by the one man Tribunal. This was an important document and should have been taken into consideration by

the respondent No. 1. When the respondent No. 3 according to the Conciliation Officer had refused to resume his duties and this was

incorporated in the report made by him to the Govt., what was therefore the justification for the Tribunal to have ordered the reinstatement of

respondent No. 3. The tribunal has also made observation with regard to the record maintained by the firm which are unwarranted and based on

no evidence. Record produced before us by the learned counsel for the appellant, which record we find in order reveals that respondent No. 3 has

remained absent from 26th of August 1968 upto 21st of Jan 1969. There is a note appended at the foot of the Register that the Respondent No. 3

refused to join the service before the Conciliation officer and thus voluntarily retired from service. This note was recorded in the attendance

Register on 121969. Now in this attendance register there are the name of other employees of the firm who have in their hand marked the

attendance and drawn the pay. Even some of them have appeared as witnesses against the firm before the Tribunal. Thus it cannot be said that the

attendance register has been fabricated. There is nothing to indicate as observed by the Tribunal that the Register has not been maintained in an

orderly and regular way and the entries made therein to inspire confidence.

(24) All what has been stated above goes to show that the respondent No 3 was not willing to resume his duties and to join the firm.

(25) During the course of arguments Mr. I K. Kotwal, however made a submission that his client was prepared to make an exgratia payment of

Rs. 2000,00 to respondent No. 3 in lieu of his past services on compassionate grounds. He submitted that his client was prepared to pay this

amount to its exemployee notwithstanding the fact that the reference was out of order, illegal and the award of the Tribunal suffered from defect to

jurisdiction and was also otherwise bad in law. The appellant will be at liberty do so.

(26) The result is that for the foregoing reasons the appeal is allowed, the judgment of the learned Single Judge is set aside and the award given by

the respondent No. 1 is hereby quashed. The appellant may, however, pay an amount of Rs. 2000,00 (Two thousand) to the respondent No. 3 or

deposit the same in the court as stated by him. In the circumstances of the case parties will bear their own costs.