Delhi High Court
Dolly International vs Workmen C/O All India Gen. Mazd on 4 April, 2006
Author: Gita Mittal
Bench: Gita Mittal
JUDGMENT Gita Mittal, J.
1. Mr. Harvinder Singh, Advocate accepts notice and submits that the petitioner's challenge to the award dated 7th June, 2002 is based on the principal contention that the petitioner was deliberately not served with any notices from the industrial adjudicator. Therefore, the entire proceedings before the labour court and the award is in violation of principles of natural justice and without jurisdiction. It is also pointed out that the record of the labour court has been called for which would enable the court to take a view in the matter. For these reasons an order under Section 17B of the Industrial Disputes Act, 1947 ought not to be passed in favor of the respondents.
2. Reliance is placed on the pronouncement of the Madras High Court reported at 1992 II LLJ 201 Godrej and Boyce Manufacturing Co. Ltd. Madras v. Principal Labour Court, Madras and Anr. to contend that in the special facts and circumstances of a given case, the court ought not to pass an order directing payment of wages to workman under Section 17B of the Industrial Disputes Act, 1947.
3. Learned Counsel for the respondent has vehemently opposed the same and has submitted that the objections on the merits of the matter cannot be taken in consideration while contesting an application under Section 17B of the Industrial Disputes Act, 1947. It has been contended that the workmen are employed and have an industrial award directing their reinstatement. As such the prayer made in the applications deserves to be granted.
4. I have given my considered though to the rival contentions. In the instant case, the illegality is glaring on the face of the record inasmuch as the respondent/workman had reflected two addresses of the management on the statement of claim filed by it. One of these addresses, is stated to have never been the address of the management. There is no dispute to this position. No efforts was made to serve the management at both the addresses. The only notice in the proceeding sent to the management, was to the address which the petitioner has stated was never its address. The industrial adjudicator has completely overlooked this aspect of the matter while directing ex-parte proceedings. The same is therefore in glaring contravention of the principles of natural justice rendering the Award illegal and completely without jurisdiction. In these circumstances, the issue raised in the writ petition goes to the very root of the jurisdiction of adjudication before the industrial adjudicator and for this reason the writ petition is taken up for hearing Along with the present applications.
5. In a pronouncement of the High Court of Judicature at Madras reported in 1992 II LLJ 201 Godrej and Boyce Manufacturing Co. Ltd. Madras v. Principal Labour Court, Madras and Anr. the court held that any challenge to the award on the ground that it is without jurisdiction or is otherwise a nullity alone will not be sufficient to suspend the operation of Section 17B of the Act. The final adjudication in a case where the award is without jurisdiction or is otherwise a nullity shall ordinarily meet the ends of justice. A workman who shall be waiting for the implementation of the award during the pendency of the proceedings, shall receive only the wages at the rate last paid for period of pendency of the proceedings in the court. It is not a burden of any serious consequence upon the employer, but it will be a deprivation of a sort which may cause havoc to the workman and his family. However, the power to make a final order includes the power to make an interim order and that power will extend to suspending the liability of the employer under Section 17B of the Act and accordingly, the right of the workman to receive wages pendentelite. But this will be possible only in the rarest of rare cases as, otherwise, it would defeat the very purpose for which the section has been introduced in the Act. The court also noticed that there shall be any number of employers/managements, shall successfully contrive petitions and the proceedings challenging the award on some such ground as the award being without jurisdiction or a nullity and that courts cannot afford to be manipulated and allow the employer management to use the interim order as a weapon to avoid such statutory liability. Some error of fact or even some error of law alone will not thus be enough to avoid the liability of the management under Section 17B. If, however, the error is such that it goes to the root of the jurisdiction of the tribunal and the court has got sufficient materials to ignore the effect of Section 17B of the Act, only in such a circumstance may the court decline to order payment of wages pendentelite.
6. To the same effect is the pronouncement of a Division Bench of the Jharkhand High Court reported at 2001 (90) FLR 67 Employer, The Management of Central Mine Planning and Design Institute Ltd. v. Union of India and Ors. where the court held thus:
9. We are respectful agreement with the view expressed and the ratio laid down by the Full Bench of Madras High Court in Godrej and Boyce (supra). Similarly in Dena Bank, (supra) their Lordships of the Supreme Court asserted once again the fact that basic power still originates from Article 226 of the Constitution. On a consideration of all the relevant aspects of the matter, therefore, our view is that Section 17B of the Act does not take away the unfettered power and plenary jurisdiction of the High Court conferred upon it under Article 226 of the Constitution and that Section 17B of the Act has to be read with Article 226 of the Constitution. We are of the view, therefore, that whenever a writ petitioner challenges an award passed by a Labour Court or an Industrial Tribunal and raises contentions concerning the very basic jurisdictional aspects of the Award or brings to the notice of the Court some patent error of law apparent on the face of the award and thus satisfies the Court, prima facie, with reference to the merits of the aforesaid contentions (duly supported by the material on record) that the Labour Court or the Industrial Tribunal erred in passing the Award (award can thus be termed as a perversity or nullity in the eye of law) merely because Section 17B is there on the Statute Book, there is no mandatory requirement that even in such cases where the High Court, prima facie, is satisfied about such illegality in the Award, it must pass an order directing the writ petitioner to pay wages last drawn to the respondent during the pendency of the proceedings in the High Court. We have thus no hesitation in saying that there can be cases where despite Section 17B being there on the Statute Book the High Court can decline to grant relief paying wages last drawn to a person. At the same time we must hasten to add that cases where the High Court may decline to pass an order under Section 17B of the Act, have to be the rarest of the rare. Granting relief under Section 17B of the Act and passing orders directing payment of wages last drawn, is generally the rule; refusing to grant relief under Section 17B an exception, as it would be in the rarest of the rare cases. The cases may be only those where an award is challenged on the basic issue of jurisdictional error or errors apparent on the face of the Award. One instance of jurisdictional error can be about the absence of the relationship of workman and the employer between the parties. If the writ petitioner challenging the Award before the High Court genuinely, bona fide, seriously and gravely raises the question of absence of this relationship and the High Court is satisfied, prima facie, in full measure with a reference to such contentions of the writ petitioner, which have to be duly supported by the material on record and the High Court comes to a prima facie conclusion that indeed very serious and grave doubts do exist with respect to the question of such relationship between the parties, it can refuse to pass an order under Section 17B of the Act, thus declining to issue a direction to the writ petitioner to pay wages last drawn to the respondent. Since the satisfaction of the High Court on this score has to be prima facie very clear, it goes without saying that while declining to grant relief under Section 17B of the Act, we are required to act with utmost circumspection.
7. In the instant case, it has been found as discussed in detail hereafter that no notice was issued to the petitioner and the entire proceedings before the industrial adjudicator are therefore, rendered completely illegal and without jurisdiction. For these reasons, applying the principles laid down in the judgment of High Court of Judicature at Madras reported in 1992 II LLJ 201 Godrej and Boyce Manufacturing Co. Ltd. Madras v. Principal Labour Court, Madras and Anr. and the pronouncement of a Division Bench of the Jharkhand High Court reported at 2001 (90) FLR 67 Employer, The Management of Central Mine Planning and Design Institute Ltd. v. Union of India and Ors. the respondents/workmen in the instant case, cannot be granted any relief in these applications which are hereby dismissed.
W.P. (C) 20183/2005
1. Counsel for the respondent submits that the counter affidavit which was filed could not be traced out in the Registry. Consequently he has got a copy thereof duly attested and has handed over the same in court. Learned Counsel for the petitioner submits that no rejoinder thereto is necessary as he relies on the record of the labour court. It is submitted by both parties that the issue raised in the matter is narrow and urgent and that the writ petition be taken up for final hearing. Accordingly, with the consent of both parties, the writ petition is taken up for hearing.
2. This writ petition has been filed assailing an industrial award dated 7th June, 2002 in favor of the seven respondents, each one of whom made a claim that they were employed by the petitioner and that their services were wrongfully terminated by the management on 27th June, 1998 in compliance of the statutory provisions. The workman contended that the termination of their services were illegal and made a complaint in this behalf to the labour authorities.
3. The petitioner has impugned the award passed by the industrial tribunal on the ground that without ensuring that the petitioner was served with the notice from the labour court, the industrial adjudicator directed ex-parte proceedings and proceeded to pass the award against the petitioner directing reinstatement into service of the respondents with 50% of the last drawn wages with effect from 27th June, 1998 in their favor. In this behalf, it has been pointed out that the respondents had caused a complaint dated 29th June, 1998 to be sent by the All India General Mazdoor Trade Union to the petitioner wherein the address of the petitioner was clearly shown as 67-68, Rampuri, Kalkaji Opposite Valmiki Mandir, New Delhi-110019 and it had been unequivocally stated on behalf of the workman that they were employed at this establishment. This notice was exhibited before the labour court as Exhibit WW1/1 in the evidence produced by the workman. It is noteworthy that this was only address of the management reflected on behalf of the workman.
4. The labour inspector is stated to have submitted a report dated 7th June, 1998 which has been relied upon by the workmen. This report was exhibited by the respondents before the industrial adjudicator as Exhibit WW1/1. In this report, the inspector had also stated that he had inspected the establishment of the petitioner at 67-78, Rampuri, Kalkaji and a report against the management was given.
5. The labour inspector thereafter issued a letter dated 19th August, 1998 informing the All India General Mazdoor Trade Union to the effect that M/s Dolly International, 67-68, Rampuri, Kalkaji was inspected on 13th August, 1998 but the establishment had refused to open the door. The labour inspector had informed that even a police report in this behalf was lodged.
6. Before the authorities, the complaint made by the workman commenced by issuance of a demand letter which was dated 27th June, 1998 wherein the typed address of the respondent is shown at Rampuri, Kalkaji, while, it appears, later in handwriting, another address has been inserted.
7. The grievance made by the workman was referred for adjudication by the appropriate government by an order dated 8th January, 1999 on the following terms:
Whether the services of S/Sh. Javed, Tabiz, Alim Hussain, Rahim, Alamgiri, Murtaza, Mustafa, Anzar, Irfaan, Abrar Ahmed, Mukhtar, Lal Bahadur, Anil Kumar and Raj Kumar have been terminated illegally and/or unjustifiably and if so, to what relief are they entitled and what directions are necessary in this respect?
It is necessary to note that in the order of reference, two addresses of M/s Dolly International were clearly reflected being (i) M/s Dolly International, 67-68, Ram Puri Kalkaji, Opp. Balmiki Mandir, New Delhi-19 (ii) M/s Dolly International, H. No. 1083 A/10, Govindpuri, IIIrd Floor, New Delhi-19.
8. Upon receipt of the order of reference, the labour court directed issuance of notice to the workman by its order dated 14th January, 1999. Thereafter, the labour court directed notice to be issued to the petitioner for 3rd August, 1999. On the next date of hearing, the court directed notice to issued to the management by registered AD cover for 16th December, 1999.
9. From a perusal of the record received from the labour court, it appears that only one registered cover was filed by the workmen before the labour court wherein the address of the petitioner was reflected as 'H. No. 1083 A/10, Govind Puri, New Delhi'. On this registered cover, a noting by the postal authorities of refusal of receipt of the notice by the addressee finds mentioned. That only one registered cover was filed is evidenced by the fact that there is only one postal receipt of dispatch forth coming on the record of the industrial adjudicator. It therefore appears that notice was not sent to the other address which was reflected in the order of reference or in the statement of claim filed by the respondent/workman.
10. Based on the report on this registered cover, on 16th December, 1999, the labour court recorded that the summons to the management sent by registered AD was refused. The report of refusal was accepted and the service was deemed sufficient. As none was present on behalf of management, it was proceeded ex-parte.
11. The matter thereafter proceeded to the evidence of the workmen. Six of the workmen filed identical affidavits wherein they all deposed that they were employed at the establishment of the management at "67-68, Rampuri, Kalkaji, Opposite Valmiki Mandir, New Delhi". These workmen appeared in support of their claims and also proved their affidavits on record.
12. On 11th April, 2001 after hearing arguments, the matter was reserved for award. However, on 4th May, 2001, it was noticed that one of the workman had not appeared in the witness box to prove his case. Therefore, the court directed notice to issue to him to both the parties, that is "to the authorised representative of the workman and management" for 3rd August, 2001. This order, to the extent that it directed notice to issue to the management was never complied with. No notice to the petitioner was issued pursuant to the order dated 4th May, 2001. Perusal of the record shows that only one notice was sent by ordinary process to the workman.
13. On 3rd August, 2001, without at all ascertaining as to whether the management had been served or not, the labour court noticed that the management was already proceeded ex-parte and that none was present. Thereafter, the statement of the 7th workman was examined on 21st March, 2002 and the matter was posted for further arguments.
14. On 21st May, 2002, the arguments were heard and the matter was reserved for award which was finally passed on 7th June, 2002 answering the industrial reference in favor of the workmen. Aggrieved thereby, the petitioner has filed the present writ petition.
15. The grounds on which the challenge has been laid in the present petition relate to first principles of procedure in industrial adjudication. However, these have a vital bearing in the matter inasmuch as failure to comply with them results in contravention of valuable rights of a party concerned and entitled to a fair hearing in industrial adjudication. The effect is fair reaching and the inevitable consequence is miscarriage of justice. As the present case is not the only case where an industrial award has been challenged on grounds of insufficiency of notice and want of service, it becomes necessary to examine the matter in some detail.
16. So far as service of notice is concerned, it would be useful to examine the applicable statutory provisions and the rules in respect thereof. In this behalf, for the purposes of convenience, Section 11 of the Industrial Disputes Act, 1947 and the relevant provisions of the Industrial Disputes (Central) Rules, 1957 applicable to industrial adjudication in Delhi are reproduced in extenso hereafter:
11. Procedure and power of conciliation officers, Boards, Courts, and Tribunals. - [(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 procedures as the arbitrator or other authority concerned may think fit.] (2) A conciliation officer or a member of a Board, [or Court or the presiding officer of a Labour Court, Tribunal, or National Tribunal] may for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, esnter the premises occupied by any establishment to which the dispute relates.
(3) Every Board, Court, [Labour Court, Tribunal and Natinal Tribunal] shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit, in respect of the following matters, namely:
(a) enforcing the attendance of any person and exmining him on oath;
(b) compelling the production of documents and material objects;
(c) issuing commissions for the examination of witnesses;
(d) in respect of such other matters as may be prescribed, and every inquiry or investigation by a Board, Court, [Labour Court, Tribunal or National Tribunal] shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code (45 of 1860).
(4) A conciliation officer [may enforce the attendance of any person for the purpose of examination of such person or call for] and inspect any document which he has ground for considering to be relevant to the industrial dispute [or to be necessary for the purpose of verifying the implementation of any award or carrying out any other duty imposed on him under this Act, and for the aforesaid purposes, the conciliation officer shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), [in respect of enforcing the attendance of any person and examining him or of compelling the production of documents]].
[(5) A Court, Labour Court, Tribunal or National Tribunal may, if it so thinks fit, appoint one or more persons having special knowledge of the matter under consideration as an assessor or assessors to advise it in the proceeding before it.
(6) All conciliation officers, members of a Board or Court and the presiding officers of a Labour Court, Tribunal or National Tribunal shall be deemed to be public servants within the meaning of Section 21 of the Indian Penal Code (45 of 1860).
(7) Subject to any rules made under this Act, the costs of, and incidental to, any proceeding before a Labour Court, Tribunal or National Tribunal shall be in the discretion of that Labour Court, tribunal or National Tribunal and the Labour Court, Tribunal or National Tribunal, as the case may be, shall have full power to determine by and to whom and to what extent and subject to what conditions, if any, such costs are to be paid, and to give all necessary directions for the purposes aforesaid and such costs may, on application made to the appropriate Government by the person entitled, be recovered by that Government in the same manner as an arrear of land revenue.] [(8) Every [Labour Court, Tribunal or National Tribunal] shall be deemed to be Civil Court for the purpose of [Sections 345, 346 and 348 of the Code of Criminal Procedure, 1973 (2 of 1974)].
17. So far as the Industrial Disputes (Central) Rules, 1957 are concerned, Rules 10B, 18, 20, 21, 22, 23 require a consideration and read thus:
10B. Proceeding before the Labour Court, Tribunal or National Tribunal. - (I) While referring an industrial dispute for adjudication to a Labour Court, Tribunal or National Tribunal, the Central Government shall direct the party raising the dispute to file a statement of claim complete with relevant documents, list of reliance and witnesses with the Labour Court, Tribunal or National Tribunal within fifteen days of the receipt of the order of reference and also forward a copy of such statement to each one of the opposite parties involved in the dispute.
(2). The Labour Court, Tribunal or National Tribunal after ascertaining that copies of statement of claim are furnished to the other side by party raising the dispute shall fix the first hearing on a date not beyond one month from the date of receipt of the order of reference and the opposite party or parties shall file their written statement together with documents, list of reliance and witnesses within a period of 15 days from the date of first bearing and simultaneously forward a copy thereof to the other party.
(9). In case any party defaults or fails to appear at any stage the Labour Court, Tribunal or National Tribunal, as the case may be, may proceed with the reference ex-parte and decide the reference appliction in the absence of the defaulting party:
Provided that the Labour Court, Tribunal or National Tribunal, as the case may be, may on the application of either party filed before the submission of the award revoke the order that the case shall proceed ex-parte, if it is satisfied that the absence of the party was on justifiable grounds.
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18. Service of summons or notice - Subject to the provisions contained in Rule 20, any notice, summons, process or order issued by a Board, Court, Labour Court, Tribunal, National Tribunal, or an Arbitrator empowered to issue such notice, summons, process or order, may be served either personally or by registered post.
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20. Manner of service in the case of numerous persons as parties to a dispute - (1) Where there are numerous persons as parties to any proceedings before a Board, Court, Labour Court, Tribunal or National Tribunal or an Arbitrator and such persons are members of any trade union or association, the service of notice on the Secretary, or where there is no Secretary, on the principal officer, of the trade union or association shall be deemed to be service on such persons.
(2) Where there are numerous persons as parties to any proceeding before a Board, Court, Labour Court, Tribunal or National Tribunal or an Arbitrator and such persons are not members of any trade union or association, the Board, Court, Labour Court, Tribunal, National Tribunal or Arbitrator, as the case may be, shall, where personal service is not practicable, cause the service of any notice to be made by affixing the same at or near the main entrance of the establishment concerned.
(3) A notice served in the manner specified in Sub-rule (2) shall also be considered as sufficient in the case of such workmen as cannot be ascertained and found.
21. Procedure at the first sitting - At the first sitting of a Board, Court, Labour Court, Tribunal or National Tribunal, the Chairman or the Presiding Officer, as the case may be, shall call upon the parties in such order as he may think fit to state their case.
22. Board, Court, Labour Court, Tribunal, National Tribunal or Arbitrator may proceed ex parte - If without sufficient cause being shown, any party to proceeding 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.
23. Power of entry and inspection - A Board, or Court, or any member thereof, or a conciliation officer, a Labour Court, Tribunal or National Tribunal, or any person authorised in writing by the Board, Court, Labour Court, Tribunal or National Tribunal in this behalf may, for the purposes of any conciliation, investigation, enquiry or adjudication entrusted to the conciliation officer, Board, Court, Labour Court, Tribunal or National Tribunal under the Act, at any time between the hours of sunrise and sunset and in the case of a person authorised in writing by a Board, Court, Labour Court, Tribunal or National Tribunal after he has given reasonable notice enter any building, factory, workshop, or other place or premises whatsoever, and inspect the same or any work, machinery, appliance or article therein or interrogate any person therein in respect of anything situated therein or any matter relevant to the subject-matter of the conciliation, investigation, enquiry or adjudication.
(Emphasis furnished)
18. As per the legislative scheme, it is therefore incumbent upon the appropriate government to direct the party raising the dispute to file the statement of claim complete with relevant documents, list of witnesses of the labour court, tribunal or the national tribunal within fifteen days of the receipt of the order of reference and also to forward a copy of such statement to each one of the opposite parties involved in the dispute under Rule 10B of the aforenoticed rule.
Upon receipt of the order of reference, the industrial adjudicator is required to ascertain that the copies of the statement of claim are furnished to the other side by the party raising the dispute and to fix the hearing on a date in one month from the date of receipt of the reference. The time within which the opposite party is required to file its written statement is also statutorily fixed. The period of fifteen days is prescribed for filing of the written statement together with the documents, list of witnesses from the date of first hearing. The opposite party is required to forward a copy thereof to the other party.
19. In case the industrial adjudicator finds that the party raising the dispute though directed, did not forward copy of the statement of claim to the opposite party, it is required to give all directions to the concerned party to furnish the copy of the statement to the opposite party. The rule provides that in such a contingency, the industrial adjudicator shall extend the time limit for filing its statement under Sub-rule 1 or the written statement under Sub-rule 2 as additional period of fifteen days.
20. So far as service of summons or notices is concerned, the rules provides that notice, summons or process or order may be served either personally or by registered post. Where there are numerous persons who have been arrayed as party to the dispute, the rules permit service by affixation at or near main entrance of the concerned establishment.
21. The instant case raises a fundamental issue as to what would be the proper procedure to be adopted where the management is reflected as maintaining more than one address. Undoubtedly, unless anything to the contrary is stated on record by the workman, it would be necessary for the industrial adjudicator to effect service at both the addresses which have been shown in the order of reference. This would ensure that the party which is shown as being available at two addresses, cannot at a later stage a petition that it was never served at the correct address. For the same reason, it will obviate the possibility of a workman arraying a management at a wrong address and procuring an incorrect report of service at such address.
22. I find that even the requirement of Section 10B(i) and (iii) has not been complied with in the instant case. Though the order of reference dated 8th January, 1999 contains a direction to the workman to file a statement of his claim complete with the list of documents and list of witnesses, there does not appear to have been any compliance of the same by the workman concerned. There is no proof of forwarding of copy of such statement to the petitioner i.e. the opposite party involved in the dispute.
The industrial adjudicator has made no effort to ascertain as to whether the copies of the statement of claim were furnished to the petitioner before fixing a hearing after the receipt of the order of reference. The provisions of Rule 10b(iii) have been apparently given a complete go bye and no direction has been issued to the workman to furnish copy of the statement to the petitioner which would also have had the effect of notifying the petitioner with regard to the pendency of the dispute.
23. So far as service of the notices are concerned, two addresses for service of the management were given by the workmen in the statement of claim which were also mentioned in the order of reference. The order dated 14th January, 1999 was passed after the receipt of the order of reference and only directed that the workmen be served. The notices were issued to the workmen only through the process server but no notice was issued by registered AD post. On the other hand, notices were issued to the management by the order dated 3rd August, 1999 only by registered AD post and not through ordinary process.
24. Before the labour court, both the order of reference and the statement of claim filed by the workmen made a reference to the two addresses of the management. There was nothing on record to enable the labour court to arrive at a conclusion as to which was the correct or complete address or whether either of the addresses was the only address of the management. The record of the labour court shows that only one registered envelop was sent which was addressed to the second address reflected in the order of reference i.e. H. No. 1083, A/10, Govind Puri, IIIrd Floor, New Delhi. No notice was sent to the other address which was reflected in the order of reference in the statement of claim. The second handwritten address which was reflected as the address of the management as inserted in handwriting in the union's complaint dated 29th June, 1998 is alleged to be the address of the labour/union. Furthermore, the labour inspector had also given only one address as the place of his visit and inspection. The labour inspector who had addressed the letter dated 19th August, 1998 had also stated that he had visited the establishment of the management at 67-68, Rampuri. Therefore, in these circumstances, the industrial adjudicator could not have sent notices to only one address of the management.
25. Perhaps much time could have been saved in the adjudication even if the second order which was passed by the industrial adjudicator on 4th July, 2001 was correctly complied with. The labour court had directed the matter to be posted afresh after it had been reserved for award for recording of the statement of one of the workmen. The labour court had specifically directed notice to issue to both parties. Yet again, no notice was sent to the management and it was simply noticed on the next date that the management was ex-parte.
26. All the seven workmen filed affidavits before the labour court wherein they stated that they were employed at the establishment of the petitioner at 67-68, Rampuri, Kalkaji, Opposite Valmiki Mandir, New Delhi. There was no reference even in their evidence to any establishment of the petitioner at H. No. 1083 A/10, Govind Puri, 3rd Floor, New Delhi.
27. Having regard to the facts and circumstances of the present case, there is no dispute that the order of reference dated 8th January, 2001 and that the workman had reflected two addresses of the management in its statement of claim also reflected two addresses. Perusal of the record of the labour court shows that without there being any reason for the same, notice has been addressed to only one address of the petitioner. Even as per the deposition of the workman, the address to which the notice was sent was not the address of the petitioner. The workman had clearly stated that they were employed at the establishment at the other address only. There is no explanation whatsoever from the side of the workmen or from the record of the court as to why no notice was sent to the other address.
28. In these circumstances, I find force in the submission of the petitioner that the petitioner never had any establishment at H. No. 1083, A/10, Govind Puri, 3rd Floor, New Delhi and that such address was given deliberately and malafide by the workmen in order to procure an incorrect report of service on the court notices to enable ex-parte adjudication on its complaint.
29. Before this court, it has been stated by the petitioner that the respondents are not its employees and have no connection whatsoever with the petitioner. This submission relates to the merits of the controversy which is not being gone into in the present petition. The petitioner has submitted that it is carrying on its export business of leather garments from the premises at 149/A Exporter Enclave, Devli Village, New Delhi-110062.
The petitioner has submitted that it came to know about the passing of the ex-parte award by the labour court when one of the workman sent a letter by ordinary process to the Devli address of the petitioner. The petitioner thereupon moved an application for setting aside of the ex-parte award which was dated 7th June, 2004. On account of the principles of law laid down by the Apex Court in M/s Sangham Tape Co. v. Hansraj 2004 (103) FLR 699, the application was not entertained. The present writ petition is therefore impugning the order dated 16th December, 1999 whereby the petitioner was proceeded ex-parte and the award dated 7th June, 2002 before this court.
30. At this stage, I may appropriately advert to the observations of the Apex Court in 1981 Lab. Industrial Cases 155 Grindlays Bank Ltd. v. The Central Government Industrial Tribunal and Ors. wherein the court held that where a party is prevented from appearing at the hearing issued to a sufficient cause and is faced with an ex-parte award, it is as if the party has an award without notice of the proceedings. The Supreme Court further observed that it was not required to be stressed that where the tribunal proceeds to make an award without notice to a party, the award is nothing but in nullity. I may notice that such observations were made by the Apex Court while considering the powers of the industrial tribunal to set aside an ex-parte award. The apex Court was of the view that the tribunal has not only the power to do so but has a duty to set aside an ex-parte award in such circumstances. In this behalf the court held thus:
6. 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 there under giving the Tribunal jurisdiction to dos order. 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.
10. When Sub-section (1) of Section 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.
31. The parameters within which the industrial adjudication could set aside an ex-parte award were restricted by the judgment of the Apex Court referred in Sangham Tape Co. v. Hansraj 2004 (103) FLR 699. In this case, the Supreme Court held thus:
6. An industrial adjudication is governed by the provisions of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act' and the rules framed there under. The rules framed under the Act may provide for applicability of the provisions of the Code of Civil Procedure. Once the provisions of the Code of Civil Procedure are made applicable to the industrial adjudication, indisputably the provisions of Order IX, Rule 13 thereof would be attracted. But unlike an ordinary Civil Court, the Industrial Tribunals and the Labour Courts ave limited jurisdiction in that behalf. An award made by an industrial court becomes enforceable under Section 17A of the Act on the expiry of 30 days from the date of its publication. Once the award becomes enforceable, the Industrial Tribunal and/or Labour Court becomes functus officio.
7. This Court in Grindlays Bank Ltd. v. Central Government Industrial Tribunal and Ors. (1980) Supp SCC 420) held that the Tribunal does not become functus officio provided an application for setting aside the award is filed within thirty days of publication of award having regard to the provisions contained in Section 11 of the Act and Rules 22 and 24 of the Industrial Disputes (Central) Rules, 1957 stating:
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 Section 20 of the Act provides that the proceedings before the Tribunal would be deemed to continue till the date on which the award becomes enforceable under Section 17A. Under Section 17A of the Act, 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 up to 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 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 3, acting on behalf of respondents 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....
8. The said decision is, therefore, an authority for the proposition that while an Industrial Court will have jurisdiction to set aside an ex parte award but having regard to the provision contained in Section 17A of the Act, an application therefore must be filed before the expiry of 30 days from the publication thereof. Till then Tribunal retains jurisdiction over the dispute referred to it for adjudication and only up to that date, it has the power to entertain an application in connection with such dispute.
32. The labour courts and the Industrial Tribunals are required to function within the provisions of the Industrial Disputes Act, 1947 and the Central Rules framed there under.
Rule 10B(9) provides that in case any party defaults or fails to appear at any stage, the industrial adjudicator may proceed with the reference ex parte and decide the reference application in the absence of the defaulting party.
Thus, a deeming fiction is created by Rule 22 to the effect that the industrial adjudicator is empowered to proceed against a party which fails to attend or to be represented before it without sufficient cause being shown, as if the party had duly attended or had been represented. Thus, the intendment of Rule 10B(9) and Rule 22 is clear that if any party without sufficient cause, defaults, the reference can be decided in its absence. The proviso to Sub-rule 9 of Rule 10B empowers the industrial adjudicator to set aside the direction to proceed ex parte if the industrial adjudicator is satisfied that the absence of the other party was on justifiable grounds.
33. However, even in the present case, the question which remains to be answered is as to the manner in which the industrial adjudicator is to proceed once ex-parte proceedings have been directed by it. The Labour Court, even if it was justified in proceeding ex parte, has no jurisdiction to grant relief without determining or adjudicating upon the merits of the dispute referred to it. The adjudication has to be made upon the merits of the reference.
In 1964 I LLJ 607 (Allahabad) entitled Har Prasad Engineering Workshop, Allahabad v. State of U.P. and Ors. it was held that an ex parte decision of the labour court which does not determine the industrial dispute referred to it is not an award within the meaning of Section 2(c) of the statute.
34. The rule which empowers the industrial adjudicator to proceed ex-parte upon the default and absence of a party without sufficient cause does not enable it either to do away with the enquiry or straightway decide an award without recording finding on the merits of the dispute. The appropriate government while making the reference under Section 10 of the Industrial Disputes Act, 1947 confers jurisdiction on the industrial adjudicator to adjudicate on the dispute referred to it. The order of reference sets into motion the adjudication proceedings which cannot be stopped otherwise than by passing of an award. As per Section 20(3) of the Industrial Disputes Act, 1947, proceedings before the labour court or tribunal shall be deemed to have commenced on the date of the reference of the dispute for all adjudication and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under Section 17A of the statute. Thus, in the event of failure of a workman to appear, the industrial adjudicator does not have the jurisdiction to refuse to adjudicate on the dispute and to dismiss the dispute for non-prosecution. It is required by statute to make an award and forward the same to an appropriate government.
35. In this behalf, useful reference can be made to the pronouncement of the High Court of Kerala reported at 1977 I LLJ 182 entitled F.A.C.T. Employees Association, Cochin v. F.A.C.T. Ltd. and Ors. wherein the court held thus:
10. xxxxx xxxxx xxxxx Rule 22, as the heading (see Craies on Statute Law, 7th Edn., P. 207, on "heading" as a guide to interpretation), indicates, empowers the Tribunal to proceed ex parte if a party, without good cause, fails to attend the proceedings. The absence of such a party shall not hinder or affect the progress of the proceedings. Rule 23, as the heading again indicates, enables the Tribunal to set aside an ex parte decision if sufficient cause is shown by the party for its absence. A decision includes an award which, as defined under Section 2(b), "means an interim or a final determination of any industrial dispute or of any question relating thereto". If power to proceed ex parte, i.e., in the absence of a party - as if the party was present, was not specifically conferred by Rule 22, the Tribunal would be incompetent to make an award on merits without hearing all the parties. Rule 22 not only authorizes the Tribunal to proceed in the absence of a party, but it also creates a fiction which enables the Tribunal to presume that all the parties are present before it, although in fact it is not true, and thus make an ex parte award. Rule 22 is a deeming provision which enable the Tribunal to imagine a state of affairs which is untrue.
xxxxx xxxxx xxxxx
12. The Tribunal may imagine that the absentee is present, and having done so, it may give full effect to its imagination and carry it to its logical conclusion. The Tribunal has to bear in mind the purposes for which the fiction is created and has to give effect to them. Obviously the intention of Rule 22 is to enable the Tribunal to imagine that a person is present, although he is in fact absent; and to further imagine that, although present, he is unwilling to adduce evidence or argue his case. The Tribunal then has of necessity to pass an award on the basis of the evidence placed before it by the party that in fact participated in the proceedings. This is the object of the fiction expressed by the words "as if he had duty attended".
13. In the present case the Tribunal had no alternative but to pass an award on the basis of the evidence and arguments of the management. Of course, this does not mean that the Tribunal could have shut its eyes to be intrinsic character of such evidence and blindly put its imprimature to it. It had to apply its mind like any other judicial officer who examines evidence and hears arguments before forming conclusions. The Tribunal had to focus its judicial mind on the merits of the points in dispute, impartially, dispassionately and objectively.
36. The spirit and intendment of the provisions permitting ex-parte proceedings appears to be that the absence of the party should not be permitted to hinder or effectuate the progress of the proceedings. In order to effectuate the intention of the legislature, the industrial adjudicator has to imagine as if the person is present before it, but is unwilling to adduce evidence or to press his case. It is then of necessity that the adjudicator has to pass an order on the basis of the evidence placed before it by the other party who, in fact, participates in the proceeding. Such intention of the legislature is to be found in the use of the words "as if he had duly attended".
37. In 1997 I LLJ 923 entitled Tamil Nadu Housing Board, Madras v. The Presiding Officer, II Additional Labour Court, Madras and Anr., it was held that even though the management may remain absent, the labour court was required to consider and give reasons for passing the award in favor of the workman. If no reasons were given, not even the facts of the case stated, the award could not be considered to be a speaking order and as such, was not sustainable.
38. Adjudication presupposes application of mind. Judicial application of mind of the industrial adjudicator was required as failure to exercise such jurisdiction causes great and incalculable harm to the parties and also to the administration of justice. Prior to forming of judicial conclusions and passing of the award, the evidence which has been led by the party which is present has to be scrutinized. In the F.A.C.T. Employees' Association, Cochin case (supra), 1977 (1) LLJ 182, Kerala, it was held by the Court that the adjudicator could not have shut his eyes to the intrinsic character of such evidence produced by the party present and blindly put its imprimatur to it. It has to apply its mind like any other judicial officer who examines the evidence and hears arguments before forming conclusions. In other words, the adjudicator has to focus his judicial mind on the merits of the points in dispute, impartially, dispassionately and objectively. The industrial adjudicator is required to take into account the pleadings of the parties and such evidence as has been produced by the other party before it and come to a judicial conclusion, giving its reasons for the same Ref : 1997 I LLJ 923 entitled Tamil Nadu Housing Board, Madras v. The Presiding Officer, II Additional Labour Court, Madras and Anr.
Therefore, the proceedings before the industrial adjudicator must show that there was adequate material before the adjudicator in support of the claim laid by the claimants and that the industrial adjudicator has applied mind to it.
39. The issues raised in the instant case can be examined from yet another angle. In case the adjudicator had applied judicial mind to the proceedings, these defects in the proceedings would have been brought to its notice instantaneously and it could have corrected the errors which have resulted.
40. The workmen had given two addresses of the management and had claimed employment with the present petitioner. Thus, the workmen were required to prove the fact that they were employed in the establishment where they were claiming. This would have required them to give evidence as to the place of their deployment and enabled the industrial adjudicator to proceed in accordance with law.
41. Before this court, it has also been contended on behalf of the respondents/workmen that the workmen are not responsible for issuance of notices and that two registered covers were actually filed by the workmen. It is submitted that the workmen do not know as to why no notice has been sent to the other address.
42. Such a stand is taken not only in this case but in several other cases in this court. It has been pointed out that rules which apply to industrial adjudication mandate that the claimant is not required to file any court fee at the time of filing of the claim or on account of process fee. However, registered cover envelopes are supplied by the party at whose instance notices or summons are being issued. In my view, even though it is not necessary to file the process fee, however some kind of index even in the form of an index form or process fee form must accompany the registered AD covers filed by the party so that there is some record with regard to the number of the postal registered covers have actually been placed on court record for issuance of court process. There must also be a complete record with regard to the issuance of the notice and the receipt after service in respect of the registered AD covers and the notices/summons which are sent by ordinary process. The statute has conferred a discretion on the industrial adjudicator with regard to issuance of the process which could be served either personally or by registered covers. In order to obviate the assertions as have been made in the present case, it may be advisable to attempt service by both modes prior to a direction for proceeding ex-parte against the other side.
43. The contours of the procedural jurisdiction of the Industrial Tribunals are not limited by any water tight compartments. The principle which applies to these proceedings is that the procedure adopted should ensure a fair treatment to the parties without strict adherence to the Code of Civil Procedure or the Evidence Act. Discretion is given to the adjudicators to evolve and proceed and to follow their own procedures which is aimed at mitigating the rigors of technicalities of the procedural law for ensuring expeditious investigation and settlement of industrial disputes. Thus, the provisions of the law and the rules have to be read keeping in view their practicability and not in a pedantic manner. Service of notice enables the party to gain knowledge about the proceedings and their pendency. The entire purpose of issuance of a notice would be defeated if the party arrayed before the industrial adjudicator does not gain knowledge of the pendency of the proceedings.
Thus, if a workman in employment, who has raised an industrial dispute, is present at his place of employment and himself receives the notice from the labour courts through process servers or the registered A.D. covers from the postman when they reached the premises of the management. He himself signs the acknowledgment resulting in a 'served' report by the process server or the postman. It would thereby appear as if notice has been served upon the party. However, the issuance and service of notice is rendered ineffectual as the claimant/workman does not inform the management about the pendency of the industrial dispute and merely throws away the notices and the registered covers received from the labour courts. Thereby, while the industrial adjudicator will have been persuaded to hold that the management was not present despite service, the reality would be that the management would not have been aware of the pendency of the proceedings or the issuance of the notice.
44. It is therefore imperative that the industrial adjudicator should require particulars of the person or authority upon whom notice has been served also to be disclosed. Service of notice has to be in real terms and not lip service as if it were merely a technical requirement. In the event of the other side being a statutory authority, company or a firm, the industrial adjudicators should insist on service on an appropriate authority. In the event of a slightest doubt, interest of justice would merit that fresh, proper and effective steps be taken for service of the notices before the ex parte proceedings are directed. The industrial adjudicators also ought to require disclosure of the full details and addresses of the persons concerned upon whom service has been effected or has to be effected.
45. Before parting with the case, it is necessary duty to observe the non-compliance of Rule 10B with Rule 1, 2 and 3 by the labour court. Undoubtedly, if the procedure laid down by the rules which are statutory in nature was followed, much delay could be obviated and the opposite party receiving the copy of the claim would be ensured. So far as the rules are concerned, it was observed by the Apex Court in 1991 Lab. Industrial Cases 155 that wide powers have been given to the industrial adjudicators in the rules with the object of mitigating the rigour of technicalities of law, for achieving the object of effective adjudication and thus assuring industrial peace and harmony. The apex court has observed on several occasions that the proceedings before the industrial adjudicators being quasi-judicial in nature, are required to objectively determine the matter referred to them and have to exercise their discretion in a judicial manner, without caprice, and according to the general principles of law and rules of natural justice. Certainly the mandate of Rule 10B of the industrial dispute (Central) Rules, 1957 is in furtherance of these principles which have been highlighted by the apex court and are essential for the complete and effective adjudication of the dispute and for rendering complete justice between the parties and requires to be complied with.
46. Upon a close examination of the available record and in the light of the foregoing discussion, I have no manner of doubt that the address of the petitioner effected at H. No. 1083 A/10, Govind Puri, 3rd Floor, New Delhi-19 was never its address and that no notice was sent to the petitioner at its actual or correct addresses.
47. Undoubtedly, the petitioner has been proceeded ex-parte without even attempting to effect service on it and an ex parte award has been passed without granting any opportunity to the petitioner to file its defense or lead its evidence. In these circumstances, I have no manner of doubt that the writ petition deserves to be allowed. The order dated 16th December, 1999 and the award dated 7th June, 2002 have been passed after denying the petitioner opportunity to contest the proceedings and therefore are in violation of the applicable law and principles of natural justice and cannot therefore be sustained. The order dated 16th December, 1999 and the award dated 7th June, 2002 are accordingly hereby set aside and quashed. The matter is remanded for fresh adjudication to the labour court No. IX, Karkardooma Courts, Delhi. The parties shall appear before the Labour Court on 1st May, 2006 for appropriate directions. The petitioners shall file its written statement on the said date.
48. At this stage, a request is made by learned Counsel for the respondents that the services of the respondents were allegedly terminated in 1998 on account of the delay in adjudication and grave injustice would result to them. In view of this request, it is expected that the industrial adjudicator shall proceed in the matter expeditiously and shall make efforts to complete the adjudication within a period of one year.
The writ petition is allowed in the above terms. There shall be no orders as to costs.
The lower court record shall be returned forthwith by the Registry.
Having regard to the issues raised before this Court arising in several cases and effecting two important aspects of industrial adjudication, it is directed that copy of this order be circulated to the industrial courts and tribunals and the Secretary (Labour) of the Government of NCT of Delhi.