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CASE NO.:

Appeal (civil) 3475 of 2003

PETITIONER:

Kapra Mazdoor Ekta Union

RESPONDENT:

Management of M/s. Birla Cotton Spinning and Weaving Mills Ltd. & Anr.

DATE OF JUDGMENT: 16/03/2005

BENCH:

N. SANTOSH HEGDE,B.P. SINGH & S.B. SINHA

JUDGMENT:

J U D G M E N T

B.P. SINGH, J.

The appellant Kapra Mazdoor Ekta Union has preferred

this appeal by special leave which is directed against the

judgment and order of the High Court of Delhi at New Delhi in

Civil Writ Petition No. 2084 of 1990 dated August 31, 2001

whereby the writ petition preferred by the respondent-

Management of M/s. Birla Cotton Spinning and Weaving Mills

Limited was allowed and the order dated February 19, 1990

passed by the Presiding Officer, Industrial Tribunal No. II,

Delhi was quashed. By the said order the Industrial Tribunal

had in effect recalled its Award of June 12, 1987 and framed an

additional issue to be tried by the Tribunal. The High Court

held that the Award dated June 12, 1987 had effectively

terminated the industrial dispute referred to the Tribunal by the

appropriate Government on December 13, 1982.

With a view to appreciate the submissions urged before us

it would be necessary to notice the factual background in which

these questions have arisen.

The appellant-Union is one of the eight Unions representing

the workers employed in the respondent-Company. In the year 1982

on account of closure of some looms of the Weaving Section of the

Mill disputes arose between the workmen and the Management of

the respondent-Company. The appropriate Government in exercise

of its powers conferred by Section 10(1)(d) and 12(5) of the

Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act')

referred the said disputes to the Industrial Tribunal, Delhi vide

Notification dated December 13, 1982. The reference was in the

following terms :-

"1. Whether the action of the Management in refusing

duties to a large number of workers is illegal

and/or unjustified, and if so, what directions are

necessary in this regard?

2. Whether the Management is justified in closing

down a large number of looms in the mill and if

not to what relief the affected workers are entitled

and what further directions are necessary in this

respect?"

While the reference was pending before the Industrial

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Tribunal, a settlement is purported to have been arrived at between

the respondent-Management and its workmen. According to the

Management this settlement was reached in the course of

conciliation proceedings with the assistance and concurrence of the

Conciliation Officer, namely the Deputy Labour Commissioner-

cum-Conciliation Officer, Delhi M. Basai. It is the case of the

respondent-Management that after reference of the dispute further

disputes arose between the Management and the Workmen and a

notice of strike was served on the Management and some more

demands were raised. The notice of strike was served on February

14, 1983 and the Management on April 4, 1983 gave notice under

Section 25FFA of the Industrial Disputes Act for closing the

undertaking relating to the Weaving Mill on account of labour

trouble resulting in huge financial losses. It is the case of the

respondent-Management that in these circumstances conciliation

proceedings commenced and after great and sustained efforts, a

settlement was arrived at between the Management and its Workmen

in the course of conciliation proceedings. The settlement has been

reduced into writing, and it is not disputed that the same has been

signed by representatives of the Management as well as the

representatives of two Workers' Union as also by the Deputy Labour

Commissioner-cum-Conciliation Officer, M. Basai.

In view of the settlement reached between the parties, an

application was moved before the Industrial Tribunal which was

seized of the disputes, which were the subject matter of the reference

made on December 13, 1982, with a prayer that in view of the

settlement reached between the parties the Industrial Tribunal may

be pleased to give its award in terms of the conciliation settlement

dated May 17, 1983. One of the terms of the settlement was to the

effect that both the parties will present a petition before the

Industrial Tribunal, Delhi with a request to accept the terms of the

settlement as fair and reasonable and to give its award in terms of

the settlement in the disputes pending before it pursuant to the

reference made on December 13, 1982.

The application made by the Management for passing an

award in terms of the settlement dated May 17, 1983 was opposed

by the appellant-Union on various grounds. It was submitted by the

appellant-Union that only two of the Unions had signed the

settlement who represented a very insignificant number of workmen.

The settlement was a private settlement and the workers who were

not members of those two Unions were not bound by the settlement.

It was further submitted that in May, 1983, when the settlement is

said to have been arrived at, no conciliation proceedings were

pending before the Conciliation Officer and, therefore, the

Conciliation Officer had no power or justification to record such a

settlement, particularly during the pendency of the earlier reference.

It was also the case of the appellant-Union that the settlement did

not settle the disputes which had been referred to the Tribunal for

adjudication. The settlement was unfair and unjust to the workmen

and, therefore, not acceptable to the appellant-Union.

The appellant-Union filed a writ petition before the High

Court of Delhi at New Delhi contending that the settlement dated

May 17, 1983 was not a conciliation settlement binding upon all the

workmen. The writ petition was dismissed by the High Court by its

order dated January 3, 1986. The matter was brought before this

Court in Special Leave Petition (Civil) No. 1526 of 1985 which was

also dismissed by this Court on August 5, 1986 with the following

observations :-

" We have heard learned counsel for the parties. We

do not see any reason why we should entertain this

Special Leave Petition at this stage. It is conceded that

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the settlement between the employer and certain trade

Unions has been filed before the Industrial Tribunal to

which a reference of this dispute was made and a

settlement was filed before the Tribunal three years ago.

It is for the Industrial Tribunal to dispose of the question

whether the settlement is valid and binding between the

employer and the workmen. It is only after the Industrial

Tribunal has disposed of the matter that this Court may

look into it. While we dismiss the Special Leave

Petition, we may observe that the Industrial Tribunal

should dispose of the question as to the validity and

binding nature of the settlement as expeditiously as

possible. Having regard to the lapse of time which has

taken place we trust that the Industrial Tribunal will be

able to adjudicate on the matter within three months from

today."

In the light of the order of this Court the Industrial Tribunal

heard the parties and passed an Award on June 12, 1987. The

Award is a detailed reasoned Award. The Tribunal took note of the

background in which the disputes had arisen and the reference made

to it. It rejected the argument of the appellant-Union that once a

reference is made, the Labour Department of the appropriate

Government becomes functus officio in the matter. After

considering to the decisions of this Court in State of Bihar vs. D.N.

Ganguly & Ors. : 1959 1 SCR 1191 ; Sirsilk Limited vs.

Government of Andhra Pradesh and another : AIR 1964 SC 160

and Paraga Tools Ltd. vs. Mazdoor Sabha : 1975(I) LLJ 210 it

concluded that merely because a dispute had been referred to the

Industrial Tribunal for adjudication, it did not prevent the

Conciliation Officer from playing his role when other disputes arose

between the parties and the industrial peace was disturbed. It

noticed the fact that in the instant case a notice of strike was given

on February 14, 1983 and a notice of closure of a part of the

undertaking on April 4, 1983. The workers were disturbed and the

atmosphere was surcharged. In this background if the Conciliation

Officer intervened in an attempt to bring about a settlement, it

cannot be contended that he had no jurisdiction to do so. In fact the

Labour Department was not only justified but legally competent and

compelled to set the conciliation proceedings in motion so as to

restore industrial peace.

Having found that the settlement was brought about in the

course of conciliation proceedings, the Tribunal considered the

terms of settlement and recorded the following conclusion :-

" I have carefully gone through the terms of the

settlement. These are not only well bargained but quite

detailed and very sound in the circumstances obtaining.

It's various items made provision for meeting all the

relevant problems of relief and rehabilitation of the

affected workers because of the closure of weaving

section of the mill and envisages an expert technical body

for deciding on the possibility and extent of the revival of

weaving work in the Mill, under the time bound

schedule. I find the settlement fair and just."

The Tribunal, therefore, concluded that the settlement of May

17, 1983 was a settlement reached between the Workmen and the

Management in the course of conciliation proceedings and hence

binding on all the workers of the respondent-Company. It proceeded

to decide the reference declaring that the disputes stood settled as

between the parties by a valid and binding settlement dated May 17,

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1983 and thus the reference had been rendered redundant. There

was no dispute surviving and no purpose was left in making the

terms of a valid and binding settlement of 1983 as a part of the

award, as all the agreed terms should stood executed and

implemented. The order of the Industrial Tribunal making the

Award is of June 12, 1987. The said Award was duly published by

the appropriate Government in the Gazette on August 10, 1987.

On September 7, 1987 the appellant-Union filed an

application before the Industrial Tribunal to the effect that the only

question which had been argued before the Tribunal was in relation

to the power and jurisdiction of the Conciliation Officer to record

settlement between the parties during the pendency of the disputes.

The question as to whether the settlement was fair and just, and

should be accepted by the Tribunal, was not argued since that

required evidence. It was, therefore, understood that the said

question will be decided later on in case the Tribunal held that the

Conciliation Officer had jurisdiction to record the settlement. Under

some misconception the Tribunal had determined the terms of the

settlement to be fair and just and had passed an Award on June 12,

1987. It was, therefore, prayed that the appellant-Union be given an

opportunity to establish that the settlement was neither just nor fair.

For this purpose the Award may be recalled and the appellant-Union

be given an opportunity to establish that the settlement is unjust and

unfair, adversely affecting a large number of workmen. It was

prayed that the Award may be recalled which was in fact an ex-parte

Award, and the question of fairness of the settlement be decided

after providing an opportunity to the parties to produce evidence.

This application filed by the appellant-Union was strongly

opposed by the respondent-Management, but the successor Presiding

Officer of Industrial Tribunal No.II, Delhi allowed the application.

It observed that a perusal of the order dated June 12, 1987 showed

that the then Tribunal did not make a single observation as to

whether the settlement dated May 17, 1983 was just and fair. No

issue was framed nor any evidence was recorded on that point. No

argument was advanced and no finding was given by his learned

predecessor on this point. Relying upon the judgment of this Court

in Satnam Verma vs. Union of India : 1984 (supp) SCC 712 and

Grindlays Bank Ltd. vs. Central Government Industrial Tribunal

and others : 1980 (Supp) SCC 420 it was held that where the

Tribunal proceeds to make an Award without notice to a party, the

Award is a nullity and, therefore, the Tribunal has not only the

power but also the duty to set aside such an ex-parte Award. It was

held that in the instant case no arguments were advanced and no

finding was given as to whether the settlement was just and fair. In

view of its finding that the Tribunal has power to review its Award

even if the same is published in the Gazette, the Tribunal proceeded

to exercise its power to review its earlier order dated June 12, 1987.

It further framed an additional issue which is as follows:-

"Whether the settlement dated 17.5.1983 is just and fair

and if so, is it not binding on the parties?"

It further directed that only arguments shall be heard since there was

no need to record evidence on this point. Accordingly by its order

of February 19, 1990 the Industrial Tribunal decided to review its

earlier order and framed an additional issue as to whether the

settlement was just and fair.

The Management-respondent herein preferred a writ petition

before the High Court of Delhi at New Delhi and sought quashing of

the order dated February 19, 1990 passed by Industrial Tribunal No.

II, Delhi, and for declaration that the Award dated June 12, 1987

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earlier made by the Tribunal effectively terminated the reference

pending before it. The High Court by its impugned judgment and

order allowed the writ petition and granted the reliefs prayed for.

The judgment and order of the High Court has been impugned

before us in this appeal.

The core question which arises for consideration is whether

the Industrial Tribunal was justified in recalling the earlier Award

made on June 12, 1987 and in framing an additional issue for

adjudication by the Tribunal. According to the appellant the recall

of the order was fully justified in the facts of the case, while the

respondents contend to the contrary. Two issues arise for our

consideration while considering the legality and propriety of the

Tribunal in recalling its earlier Award. Firstly - whether the

Tribunal had jurisdiction to recall its earlier order which amounted

virtually to a review of its earlier order; and secondly - whether the

Tribunal had no jurisdiction to entertain the application for recall as

it had become functus offico. The High Court answered the first

question in favour of the respondent-Management and the second in

favour of the appellant.

We shall first take up the second question namely \026 whether

the Tribunal was functus offico having earlier made an Award which

was published by the appropriate Government. It is not in dispute

that the Award was made on June 12, 1987 and was published in the

Gazette on August 10, 1987. The application for recall was made on

September 7, 1987. Under sub-section (1) of Section 17A of the Act

an Award becomes enforceable on the expiry of 30 days from the

date of its publication under Section 17 of the Act. Thus the Award

would have become enforceable with effect from September 9,

1987. However, the application for recalling the Award was made

on September 7, 1987 i.e. 2 days before the Award would have

become enforceable in terms of sub-section (1) of Section 17A of

the Act. The High Court rightly took the view that since the

application for recall of the order was made before the Award had

become enforceable, the Tribunal had not become fuctus offico and

had jurisdiction to entertain the application for recall. This view

also find supports from the judgment of this Court in Grindlays

Bank Ltd. vs. Central Government Industrial Tribunal and others

(supra). This Court after noticing the provisions of sub-section (3)

of Section 20 of the Act which provides that the proceedings before

the Tribunal would be deemed to continue till the date on which the

Award become enforceable under Section 17A, held that till the

Award becomes enforceable the Tribunal retains jurisdiction over

the dispute referred to it for adjudication, and up to that date it has

the power to entertain the application in connection with such

dispute. 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. The judgment in Grindlays Bank Ltd. vs. Central

Government Industrial Tribunal and others (supra) has been

reiterated by this Court in Satnam Verma vs. Union of India

(supra), J.K. Synthetics Ltd. vs. Collector of Central Excise : (1996)

6 SCC 92 and M.P. Electricity Board vs. Hariram etc. : JT 2004

(8) SC 98.

In the instant case as well we find that as on September 7,

1987 the Award had not become enforceable and, therefore, on that

date the Tribunal had jurisdiction over the disputes referred to it for

adjudication. Consequently it had the power to entertain an

application in connection with such dispute. The order of recall

passed by the Tribunal on February 19, 1990, therefore, cannot be

assailed on the ground that the Tribunal had become fuctus offico.

The question still remains whether the Tribunal had

jurisdiction to recall its earlier Award dated June 12, 1987. The

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High Court was of the view that in the absence of an express

provision in the Act conferring upon the Tribunal the power of

review the Tribunal could not review its earlier Award. The High

Court has relied upon the judgments of this Court in Dr. (Smt.)

Kuntesh Gupta vs. Management of Hindu Kanya Maha Vidyalaya,

Sitapur (U.P.) and others : (1987) 4 SCC 525 and Patel Narshi

Thakershi and others vs. Pradyumansinghji Arjunsingji : AIR 1970

SC 1273 wherein this Court has clearly held that the power of

review is not an inherent power and must be conferred by law either

expressly or by necessary implication. The appellant sought to get

over this legal hurdle by relying upon the judgment of this Court in

Grindlays Bank Ltd. vs. Central Government Industrial Tribunal

and others (supra). In that case the Tribunal made an ex-parte

Award. Respondents 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. The

Tribunal set aside the ex-parte Award on being satisfied that there

was sufficient cause within the meaning of Order 9 Rule 13 of the

Code of Civil Procedure and accordingly set aside the ex-parte

Award. That order was upheld by the High Court and thereafter in

appeal by this Court.

It was, therefore, submitted before us relying upon Grindlays

Bank Ltd. vs. Central Government Industrial Tribunal and others

(supra) that even in the absence of an express power of review, the

Tribunal had the power to review its order if some illegality was

pointed out. The submission must be rejected as misconceived. The

submission does not take notice of the difference between a

procedural review and a review on merits. This Court in Grindlays

Bank Ltd. vs. Central Government Industrial Tribunal and others

(supra) clearly highlighted this distinction when it observed :-

"Furthermore, different considerations arise on

review. The expression 'review' is used in the 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 mis-apprehension 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 Patel Narshi Thakershi case held that no review

lies on merits unless a statute 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 debita

justitiae to prevent the abuse of its process, and

such power inheres in every court or Tribunal".

Applying these principles it is apparent that where a Court or

quasi judicial authority having jurisdiction to adjudicate on merit

proceeds to do so, its judgment or order can be reviewed on merit

only if the Court or the quasi judicial authority is vested with power

of review by express provision or by necessary implication. The

procedural review belongs to a different category. In such a review,

the Court or quasi judicial authority having jurisdiction to adjudicate

proceeds to do so, but in doing so commits a procedural illegality

which goes to the root of the matter and invalidates the proceeding

itself, and consequently the order passed therein. Cases where a

decision is rendered by the Court or quasi judicial authority without

notice to the opposite party or under a mistaken impression that the

notice had been served upon the opposite party, or where a matter is

taken up for hearing and decision on a date other than the date fixed

for its hearing, are some illustrative cases in which the power of

procedural review may be invoked. In such a case the party seeking

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review or recall of the order does not have to substantiate the ground

that the order passed suffers from an error apparent on the face of

the record or any other ground which may justify a review. He has

to establish that the procedure followed by the Court or the quasi

judicial authority suffered from such illegality that it vitiated the

proceeding and invalidated the order made therein, inasmuch the

opposite party concerned was not heard for no fault of his, or that

the matter was heard and decided on a date other than the one fixed

for hearing of the matter which he could not attend for no fault of

his. In such cases, therefore, the matter has to be re-heard in

accordance with law without going into the merit of the order

passed. The order passed is liable to be recalled and reviewed not

because it is found to be erroneous, but because it was passed in a

proceeding which was itself vitiated by an error of procedure or

mistake which went to the root of the matter and invalidated the

entire proceeding. In Grindlays Bank Ltd. vs. Central Government

Industrial Tribunal and others (supra), it was held that once it is

established that the respondents were prevented from appearing at

the hearing due to sufficient cause, it followed that the matter must

be re-heard and decided again.

The facts of the instant case are quite different. The recall of

the Award of the Tribunal was sought not on the ground that in

passing the Award the Tribunal had committed any procedural

illegality or mistake of the nature which vitiated the proceeding

itself and consequently the Award, but on the ground that some

mattes which ought to have been considered by the Tribunal were

not duly considered. Apparently the recall or review sought was not

a procedural review, but a review on merits. Such a review was not

permissible in the absence of a provision in the Act conferring the

power of review on the Tribunal either expressly or by necessary

implication.

Learned counsel for the appellant then sought to argue that

there was no conciliation proceeding in progress when the alleged

settlement is said to have been reached on May 17, 1983. The

submission ignores the findings of fact recorded by the Tribunal in

its order dated June 12, 1987 that while the reference was pending

before the Tribunal certain events took place which compelled the

Deputy Labour Commissioner-cum-Conciliation Officer to

intervene. As noticed earlier a notice of strike was served on the

Management on February 14, 1983 by one of the Unions. On the

other hand the Management gave notice on April 4, 1983 under

Section 25 FFFA of the Act for closing part of the undertaking

related to the weaving section. These facts leave no manner of

doubt that there was labour unrest coupled with the fear of strike and

closure. The settlement itself recites the fact that there were series

of bipartite and tripartite meetings between the representatives of the

Management and the Unions in view of the labour unrest and threat

of closing down the operation of the weaving department. Meetings

were also held in the office of the Chief Labour Commissioner with

a view to resolve the dispute and a meeting was thereafter held on

May 17, 1983 in the office of Shri K. Saran, Joint Chief Labour

Commissioner (Central) where the representatives of the

Management and the Unions participated alongwith the officers of

the Labour Depatment which ultimately resulted in a settlement. All

these facts establish beyond doubt that there was labour unrest and

the Conciliation Officer intervened in the matter and made attempts

to bring about a settlement. The submission, therefore, that no

conciliation proceeding was in progress when the settlement was

arrived at, must be rejected.

Learned counsel for the appellant then submitted that the

settlement was not arrived at with the assistance and concurrence of

the Conciliation Officer. It was submitted, relying upon the decision

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of this Court in : The Bata Shoe Co. (P) Ltd. vs. D.N. Ganguly and

others : AIR 1961 SC 1158 that a settlement which is made binding

under Section 18(3) of the Act on the ground that it is arrived at in

the course of conciliation proceedings is a settlement arrived at with

the assistance and concurrence of the Conciliation Officer. Such a

settlement brought about while conciliation proceedings are

pending, are made binding on all parties under Section 18 of the Act.

Reliance was placed on the judgment of this Court in Workmen of

M/s. Delhi Cloth and General Mills Ltd. vs. The Management of

M/s. Delhi Cloth and General Mills Ltd. : (1969) 3 SCC 302.

Learned counsel for the respondents did not dispute the legal

position as it emerges from these two judgments. It was submitted

that the facts of this case clearly establish that the Conciliation

Officer intervened when there was considerable labour unrest and

brought the parties to the negotiating table. Several meetings were

held, some of them in the chambers of higher officials of the Labour

Department, and ultimately a settlement was worked out. This is

quite apparent from the fact that the terms of settlement has also

been signed by the Conciliation Officer, apart from the

representatives of the Management and representatives of the two

workers' Union. We entertain no doubt that the settlement was

brought about in the course of conciliation proceedings with the

assistance and concurrence of the Conciliation Officer.

It was also urged before us by the learned counsel for the

appellant that the Tribunal ought to have considered, while passing

an Award on June 12, 1987, that the settlement was just and fair and

protected the interest of the workmen. The recall of the order was

sought on the ground that this aspect of the matter had not been

considered when an Award was made in terms of the settlement.

This was precisely the ground on which the Tribunal entertained the

application for recall and allowed it by order dated February 19,

1990. The Tribunal in our view proceeded on a factually incorrect

assumption. The High Court has found that the Tribunal while

making an Award in terms of the settlement has in clear terms

recorded its satisfaction in paragraph 25 of its order (which we have

quoted earlier in the judgment) that the settlement was fair and just.

We entirely agree with the High Court.

It was lastly submitted that the settlement did not resolve the

disputes which were subject matter of reference made to the

Tribunal. The submission again proceeds on a misreading of the

settlement. It is no doubt true that the disputes referred to the

Tribunal mainly arose on account of the Management closing down

a large number of looms which necessitated a curtailment of the

work force on account of which the Management refused to give

work to a large number of workers. We find that Clause 3.2 of the

settlement in terms deals with the dispute relating to the weaving

department and other allied departments. This submission,

therefore, has no force.

In the result we find no merit in this appeal and the same is

accordingly dismissed, but with no order as to costs.