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PETITIONER:

GRINDLAYS BANK LTD.

Vs.

RESPONDENT:

CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL AND ORS.

DATE OF JUDGMENT12/12/1980

BENCH:

SEN, A.P. (J)

BENCH:

SEN, A.P. (J)

CHANDRACHUD, Y.V. ((CJ)

CITATION:

1981 AIR 606 1981 SCR (2) 341

CITATOR INFO :

F 1985 SC 294 (6,7)

ACT:

Powers of the Industrial Tribunal to set aside an ex-

parte award passed on merits-Whether such an ex parte award

passed on merits, when sought to be set aside by an

application showing sufficient cause amounts to seeking

review-Point of time at which jurisdiction of the Tribunal

begins, for setting aside the ex parte award-Rule of

statutory construction Industrial Disputes Act 1957,

sections 11,17, 17-A and 20 part III of the Industrial

Dispute (Central) Rules, 1957, Orders IX and XVII of the

Civil Procedure Code.

HEADNOTE:

Dismissing the appeal, the Court

^

HELD: (1) It is a well-known rule of statutory

construction that a Tribunal or body should be considered to

be endowed with such ancillary or incidental powers as are

necessary to discharge its functions effectively for the

purpose of doing justice between the parties. In a case of

this nature, the Tribunal should be considered as invested

with such incidental or ancillary powers unless there is any

indication in the statute to the contrary. The words "shall

follow such procedure as the arbitrator or other authority

may think fit" in sub-section (1) of section 11 of the

Industrial Disputes Act are of the widest amplitude and

confer ample power upon the Tribunal and other authorities

to devise such procedure as the justice of the case demands.

The discretion thus conferred on these authorities to

determine the procedure as they may think fit, however, is

subject to the rules made by the 'appropriate Government' in

this behalf. Nevertheless, all these authorities being

quasi-judicial in nature objectively determining matters

referred to them, have to exercise their discretion in a

judicial manner, without caprice, and according to the

general principles of law and rules of natural justice. [344

E-F, H, 345A, C, F]

(2) Where a party is prevented from appearing at the

hearing due to a sufficient cause and is faced with an ex

parte award, it is as if the party is visited with an award

without a notice of the proceedings. Where the Tribunal

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proceeds to make an award without notice to a party, the

award is nothing but a nullity. In such circumstances, the

Tribunal has not only the power but also the duty to set

aside the ex parte award and to direct the matter to be

heard afresh. Further, Rules 22 and 24(b) of the Industrial

Disputes (Central) Rules, 1957 make it clear that the

Tribunal was competent to entertain an application to set

aside an ex parte award. [346 C-E]

(3) Merely because the ex parte award was based on the

statement of the manager of the appellant, the order setting

aside the ex parte award, in fact, does not amount to

review. The expression "review" is used in two distinct

senses, namely, (i) a procedural review which is either

inherent or implied in a court or Tribunal to set aside a

palpably erroneous order passed under a

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misapprehension by it, and (ii) a review on merits when the

error sought to be corrected is one of law and is apparent

on the face of the record. When a review is sought due to a

procedural defect, the inadvertent error committed by the

Tribunal must be corrected ex debito justitiae to prevent

the abuse of its process, and such power inheres in every

court or Tribunal. [347 B-C, E-G]

Narshi Thakershi v. Pradvumansinghji, A.I.R. [1970] SC

1273, distinguished.

(4) The Tribunal had not become functus officio and,

therefore, had the jurisdiction to set aside the ex parte

award. To contend that the Central Government alone could

set aside the ex parte award is not correct. Under section

17-A an award becomes enforceable on the expiry of 30 days

from the date of its publication under section 17. The

proceedings with regard to a reference under section 10 of

the Act are, therefore, not deemed to be concluded until the

expiry of 30 days from the publication of the award. Till

then the Tribunal retains jurisdiction over the dispute

referred to it for adjudication and upto that date it has

the power to entertain an application in connection with

such dispute. That stage is not reached till the award

becomes enforceable under section 17-A. [347 G, 348 A-B]

(5) The jurisdiction of the Tribunal had to be seen on

the date of the application made to it and not the date on

which it passed the impugned order. There is no finality

attached to an ex parte award because it is always subject

to its being set aside on sufficient cause being shown. The

Tribunal had the power to deal with an application properly

made before it for setting aside the ex parte award and pass

suitable orders. [348 D-E]

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2355 of

1979.

Appeal by Special Leave from the Judgment and Order

dated 25-7-1979 of the Calcutta High Court in Appeal No.

3/1978.

G.B. Pai, Mrs. Rashmi Dhariwal, Miss Bina Gupta, Mr.

Praveen Kumar and J.R. Das for the Appellant.

Amlan Ghosh for Respondents 3-4.

The Judgment of the Court was delivered by

SEN, J. This is an appeal by special leave from a

judgment of the Calcutta High Court, by which it refrained

from interfering with an order of the Central Government

Industrial Tribunal, Calcutta, constituted under s. 7A of

the Industrial Disputes Act, 1947, setting aside an ex parte

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award made by it.

The facts giving rise to the appeal are these: The

Government of India, Ministry of Labour by an order dated

July 26, 1975 referred an industrial dispute existing

between the employers in relation to the Grindlays Bank

Ltd., Calcutta and their workmen, to the Central Government

Industrial Tribunal in exercise of its powers under s. 10 of

the Industrial Disputes Act, 1947 for adjudication. By a

notice

343

dated March 6, 1976 the Tribunal fixed peremptory hearing of

the reference for May 28, 1976, but the hearing was

adjourned from time to time on one ground or other.

Eventually, the hearing of the reference was fixed for

December 9, 1976. On December 9, 1976 counsel appearing on

behalf of respondent No. 3, the Commercial establishments

Employees Association, representing respondents Nos. 5 to

17, sought an adjournment on the ground that the General

Secretary of the Association had suffered a bereavement as

his father had died on November 25, 1976, and, therefore, he

had to leave to perform the shradhha ceremony falling on

December 9, 1976. In support of his prayer for adjournment,

the counsel produced a telegram, but the Tribunal refused to

grant any further adjournment and proceeded to make an ex

parte award. On the basis of the statement recorded by the

manager of the appellant, the Tribunal held that the

respondents Nos. 5 to 17 were employed as drivers by the

officers of the appellant and were not the employees of the

appellant and, therefore, they were not entitled to the

benefits enjoyed by the drivers employed by the appellant.

On January 19, 1977, respondent No. 3, acting for

respondents Nos. 5 to 17 applied for setting aside the ex

parte award on the ground that they were prevented by

sufficient cause from appearing when the reference was

called on for hearing on December 9, 1976. The Tribunal by

its order dated April 12, 1977 set aside the ex parte award

on being satisfied that there was sufficient cause within

the meaning of O. IX, r. 13 of the Code of Civil procedure,

1908. The appellant challenged the order passed by the

Tribunal setting aside the ex parte award but the High Court

declined to interfere.

Two questions arise in the appeal, namely (1) whether

the Tribunal had any jurisdiction to set aside the ex parte

award, particularly when it was based on evidence, and (2)

whether the Tribunal became functus officio on the expiry of

the 30 days from the date of publication of the ex parte

award under s. 17, by reason of sub-s. (3) of s. 20 and,

therefore, had no jurisdiction to set aside the award and

the Central Government alone had the power under sub-s. (1)

of s. 17-A to set it aside.

It is contended that neither the Act nor the rules

framed there under confer any powers upon the Tribunal to

set aside an ex parte award. It is urged that the award

although ex parte, was an adjudication on merits as it was

based on the evidence led by the appellant, and, therefore,

the application made by respondent No. 3 was in reality an

application for review and not a mere application for

setting aside an ex parte award. A distinction is sought to

be drawn between

344

an application for review and an application for setting

aside an ex parte award based on evidence. The contention is

that if there is no evidence led before the Tribunal, there

may be power to set aside an ex parte award, but if the

award is based on evidence, the setting aside of the award

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cannot but virtually amount to a review.

In dealing with these contentions, it must be borne in

mind that the Industrial Disputes Act, 1947 is a piece of

legislation calculated to ensure social justice to both

employers and the employees and advance progress of industry

by bringing harmony and cordial relations between the

parties. In other words, the purpose of the Act is to settle

disputes between workmen and employers which if not settled,

would result in strikes or lockouts and entail dislocation

of work, essential to the life of the community. The scheme

of the Act shows that it aims at settlement of all

industrial disputes arising between the capital and labour

by peaceful methods and through the machinery of

conciliation, arbitration and if necessary, by approaching

the Tribunal constituted under the Act. It, therefore,

endeavours to resolve the competing claims of employers and

employees by finding a solution which is just and fair to

both the parties.

We are of the opinion that the Tribunal had the power

to pass the impugned order if it thought fit in the interest

of justice. It is true that there is no express provision in

the Act or the rules framed thereunder giving the Tribunal

jurisdiction to do so. But it is a well-known rule of

statutory construction that a Tribunal or body should be

considered to be endowed with such ancillary or incidental

powers as are necessary to discharge its functions

effectively for the purpose of doing justice between the

parties. In a case of this nature, we are of the view that

the Tribunal should be considered as invested with such

incidental or ancillary powers unless there is any

indication in the statute to the contrary. We do not find

any such statutory prohibition. On the other hand, there are

indications to the contrary.

Sub-section (1) of s. 11 of the Act, as substituted by

s. 9 of the Industrial Disputes (Amendment & Miscellaneous

Provisions) Act, 1956 is in these terms:

"11. (1) Subject to any rules that may be made in

this behalf, an arbitrator, a Board, Court, Labour

Court, Tribunal or National Tribunal shall follow such

procedure as the arbitrator or other authority

concerned may think fit."

The words 'shall follow such procedure as the arbitrator or

other authority may think fit' are of the widest amplitude

and confer ample power upon the Tribunal and other

authorities to devise such proce-

345

dure as the justice of the case demands. Under cls. (a) to

(c) of sub-s. (3) of s. 11, the Tribunal and other

authorities have the same powers as are vested in civil

courts under the Code of Civil Procedure, 1908, of (a)

enforcing the attendance of any person and examining him on

oath, (b) compelling the production of documents and

material objects, and (c) issuing commissions for the

examination of witnesses. Under cl. (d) thereof, the

Tribunal or such other authorities have also the same powers

as are vested in civil courts under the Code of Civil

Procedure, 1908 in respect of such other matters as may be

prescribed. Although the Tribunal or other authorities

specified in s. 11 are not courts but they have the

trappings of a court and they exercise quasi-judicial

functions.

The object of giving such wide powers is to mitigate

the rigour of the technicalities of the law, for achieving

the object of effective investigation and settlement of

industrial disputes, and thus assuring industrial peace and

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harmony. The discretion thus conferred on these authorities

to determine the procedure as they may think fit, however,

is subject to the rules made by the 'appropriate Government'

in this behalf. Part III of the Industrial Disputes

(Central) Rules, 1957 makes rules in this behalf. Rules 9 to

30 are the relevant rules regulating procedure. State

Governments too have made their own corresponding rules.

Except to the extent specified in sub-s.(3) of s. 11 of the

Act and the rules framed thereunder, the provisions of the

Code of Civil Procedure, 1908 are not applicable to

proceedings before the authorities mentioned in sub-s.(1).

The provisions of the Evidence Act, in their strict sense,

likewise do not apply to proceedings before the authorities.

Nevertheless, all these authorities being quasi-judicial in

nature objectively determining matters referred to them,

have to exercise their discretion in a judicial manner,

without caprice, and according to the general principles of

law and rules of natural justice.

Rule 22 of the Industrial Disputes (Central Rules),

1957 framed by the Central Government in exercise of its

powers under s. 38 of the Act, provides:

"22. If without sufficient cause being shown, any

party to proceedings before a Board, Court, Labour

Court, Tribunal, National Tribunal or arbitrator fails

to attend or to be represented, the Board, Court,

Labour Court, Tribunal, National Tribunal or arbitrator

may proceed, as if the party had duly attended or had

been represented."

346

Rule 24(b) provides that the Tribunal or other body shall

have the power of a civil court under the Code of Civil

Procedure, 1908 in the matter of grant of adjournments. It

runs thus:

"24. In addition to the powers conferred by the

Act, Boards, Courts, Labour Courts, Tribunals and

National Tribunals shall have the same powers as are

vested in a civil court under the Code of Civil

Procedure, 1908, when trying a suit, in respect of the

following matters, namely;

(a) ......................

(b) granting adjournment;"

When sub-s. (1) of s. 11 expressly and in clear terms

confers power upon the Tribunal to regulate its own

procedure, it must necessarily be endowed with all powers

which bring about an adjudication of an existing industrial

dispute, after affording all the parties an opportunity of a

hearing. We are inclined to the view that where a party is

prevented from appearing at the hearing due to a sufficient

cause, and is faced with an ex parte award, it is as if the

party is visited with an award without a notice of the

proceedings. It is needless to stress that where the

Tribunal proceeds to make an award without notice to a

party, the award is nothing but a nullity. In such

circumstances, the Tribunal has not only the power but also

the duty to set aside the ex parte award and to direct the

matter to be heard afresh.

The language of r. 22 unequivocally makes the

jurisdiction of the Tribunal to render an ex parte award

conditional upon the fulfilment of its requirements. If

there is no sufficient cause for the absence of a party, the

Tribunal undoubtedly has jurisdiction to proceed ex parte.

But if there was sufficient cause shown which prevented a

party from appearing, then under the terms of r. 22, the

Tribunal will have had no jurisdiction to proceed and

consequently, it must necessarily have power to set aside

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the ex parte award. In other words, there is power to

proceed ex parte, but this power is subject to the

fulfilment of the condition laid down in r. 22. The power to

proceed ex parte under r. 22 carries with it the power to

enquire whether or not there was sufficient cause for the

absence of a party at the hearing.

Under r. 24(b) a Tribunal or other body has the powers

of a civil court under O. XVII of the Code of Civil

Procedure, relating to the grant of adjournments. Under O.

XVII, r. 1, a civil court has the discretion to grant or

refuse an adjournment. Where it refuses to adjourn the

hearing of a suit, it may proceed either under O. XVII,

347

r. 2 or r. 3. When it decides to proceed under O. XVII, r.

2, it may proceed to dispose of the suit in one of the modes

directed in that behalf by O. IX, or to make such other

order as it thinks fit. As a necessary corollary, when the

Tribunal or other body refuses to adjourn the hearing, it

may proceed ex parte. In a case in which the Tribunal or

other body makes an ex parte award, the provisions of O. IX,

r. 13 of the Code are clearly attracted. It logically

follows that the Tribunal was competent to entertain an

application to set aside an ex parte award.

We are unable to appreciate the contention that merely

because the ex parte award was based on the statement of the

manager of the appellant, the order setting aside the ex

parte award, in fact, amounts to review. The decision in

Narshi Thakershi v. Pradyumansinghji is distinguishable. It

is an authority for the proposition that the power of review

is not an inherent power, it must be conferred either

specifically or by necessary implication. Sub-sections (1)

and (3) of s. 11 of the Act themselves make a distinction

between procedure and powers of the Tribunal under the Act.

While the procedure is left to be devised by the Tribunal to

suit carrying out its functions under the Act, the powers of

civil court conferred upon it are clearly defined. The

question whether a party must be heard before it is

proceeded against is one of procedure and not of power in

the sense in which the words are used in s. 11. The answer

to the question is, therefore, to be found in sub-s. (1) of

s. 11 and not in sub-s. (3) of s. 11. Furthermore, different

considerations arise on review. The expression 'review' is

used in two distinct senses, namely (1) a procedural review

which is either inherent or implied in a court or Tribunal

to set aside a palpably erroneous order passed under a

misapprehension by it, and (2) a review on merits when the

error sought to be corrected is one of law and is apparent

on the face of the record. It is in the latter sense that

the Court in Narshi Thakershi's case held that no review

lies on merits unless a status specifically provides for it.

Obviously when a review is sought due to a procedural

defect, the inadvertent error committed by the Tribunal must

be corrected ex debito justitiae to prevent the abuse of its

process, and such power inheres in every court or Tribunal.

The contention that the Tribunal had become functus

officio and therefore, had no jurisdiction to set aside the

ex parte award and that the Central Government alone could

set it aside, does not commend to us. Sub-section (3) of s.

20 of the Act provides that the proceedings before the

Tribunal would be deemed to continue till the date on

348

which the award becomes enforceable under s. 17A. Under s.

17A of the Act, an award becomes enforceable on the expiry

of 30 days from the date of its publication under s. 17. The

proceedings with regard to a reference under s. 10 of the

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Act are, therefore, not deemed to be concluded until the

expiry of 30 days from the publication of the award. Till

then the Tribunal retains jurisdiction over the dispute

referred to it for adjudication and upto that date it has

the power to entertain an application in connection with

such dispute. That stage is not reached till the award

becomes enforceable under s. 17A. In the instant case, the

Tribunal made the ex parte award on December 9, 1976. That

award was published by the Central Government in the Gazette

of India dated December 25, 1976. The application for

setting aside the ex parte award was filed by respondent No.

3, acting on behalf of respondents Nos. 5 to 17 on January

19, 1977 i.e., before the expiry of 30 days of its

publication and was, therefore, rightly entertained by the

Tribunal. It had jurisdiction to entertain it and decide it

on merits. It was, however, urged that on April 12, 1977 the

date on which the impugned order was passed the Tribunal had

in any event become functus officio. We cannot accede to

this argument. The jurisdiction of the Tribunal had to be

seen on the date of the application made to it and not the

date on which it passed the impugned order. There is no

finality attached to an ex parte award because it is always

subject to its being set aside on sufficient cause being

shown. The Tribunal had the power to deal with an

application properly made before it for setting aside the ex

parte award and pass suitable orders.

The result, therefore, is that the appeal must fail and

is dismissed with costs throughout.

V.D.K. Appeal dismissed.

349