Bombay High Court
Tata Memorial Hospital Workers Union & ... vs Madhukar S. Wani & Ors. on 18 November, 1997
Equivalent citations: [1998(79)FLR225]
JUDGMENT V.H. Bhairavia, J.
1. This appeal is directed against the order dated 18th April, 1996, passed by the Respondent No. 1, cancelling the registration of the Appellant Trade Union registered under the Trade Union Act, 1926.
2. In exercise of the power vested under Section 10(b) of the Act, the Registrar of Trade Unions cancelled the registration of the appellant-Tata Memorial Hospital Workers' Union. The said order is challenged. It is alleged that it is a mala fide action taken with a view to show favour to the respondents rival union leaders.
3. Heard Mr. Singh, learned Counsel for the appellants and Mr. Sanjay Singhavi, learned counsel for the respondents.
4. It has been contended by Mr. Singh, learned Counsel for the appellants that the impugned order passed by the respondent No. 1 is without jurisdiction in as much as a judicial proceeding is already pending on the self same allegations, which has formed the basis of the cancellation of the registration of the appellant. It is further contended that the learned Registrar had issued a consent certificate and the respondents had filed an application being (ICTU) No. 1 of 1993 which is pending and therefore, the notice issued by the Registrar is wholly without jurisdiction and ought to be quashed and set aside.
5. It is alleged that Respondent No. 2 approached the Registrar by a false complaint dated 10th February, 1993 and claimed that the affairs of the appellant were not being conducted in a proper manner and got a consent certificate issued under the provisions of section 28(1-A) of the Act and filed an application (ICTU) No.1 of 1993 in the Industrial Court complaining therein that the appellant had violated the provisions of the Act relating to the Accounts, periodical returns and Audit returns. The appellant had filed their reply along with relevant documents and the said proceedings is pending before the Industrial Court. Therefore, the alleged violation of the provisions of the aforesaid Act has already formed the subject matter of the dispute pending before the court of law and cannot form the subject matter of another proceeding.
6. It is submitted that cancellation of registration of the appellant-union has also been resorted to for certain irregularities and violation of the provisions of the said Act relating to the delay in filing the Annual returns and thus the Registrar has usurped the functions of the Industrial Court and passed the impugned order. It is further submitted that the complaint of Respondent No. 2 Mr. Naik has formed the basis of both the proceedings viz., before the Registrar and also the Industrial Court and therefore, the impugned order passed is without jurisdiction and deserves to be set aside on this ground. It is also stated that Respondent No. 2 Mr. Basavaraj Naik and the other respondents are no longer the members of the appetlant-union and have formed a separate splinter trade union. It is stated that Registrar has failed to consider the various contentions raised by the appellants in their replies to the various notices. The delay in filing the annual returns of the year 1991-92 is very negligible. It is further stated that delay in respect of filing Annual Returns for subsequent years was entailed by circumstances beyond the control of the documents were in possession of the Investigation Officer for investigating the allegations forming the subject matter of Application (ICTU) No. 1 of 1993. The appellants have explained the aforesaid facts in detail in their reply dated 10th April, 1997 to the 2nd Show Cause Notice. It is stated that Section 10(b) of the Act, makes it clear that the violation of the provisions of the aforesaid Act should be wilful and also after the notice is issued by the Registrar to the trade union. In the present case, the delay in filing the annual returns if any, is neither wilful nor after the notice has been issued by the Registrar. Hence, lapses if any, does not call for the extreme step of effecting the appellants and cancelling their registration. In the present case, no violation of any provision of the Act is brought out. It is submitted that perusal of the show cause notice and the impugned order reveal that the cancellation is resorted to for violation of Section 21 of the said Act and Regulation 18(A) of the Mumbai Trade Union Regulations. Section 21 deals with rights of minor members and regulation 18(A) of the aforesaid regulations with the maintenance of the registers. The allegations in the notices do not pertain to the provisions for which the registration has been cancelled. This establishes that the Registrar has acted with total non-application of mind. The Registrar has invoked the same provisions when he cancelled the registration of the appellant by his earlier order dated 28th March, 1994. The earlier order of cancellation had been withdrawn. The Registrar has once again invoked the same inapplicable provisions which reflects the total non-application of mind. The cancellation of registration has been done mechanically.
7. It is submitted by the learned counsel for the appellants that the Registrar has proceeded on the misconception that no explanation was submitted on or before the stipulated period and also on 16th April, 1997 when in fact the same was submitted on 10th April, 1996 and has been duly acknowledged. It is submitted that in the reply, the appellants have categorically stated that the remarks of the Auditor had also been complied with. It is further submitted that the Respondent No. 1 has failed to realize that the negligible delay in filing the Annual returns by a trade union does not entail the cancellation of the registration. Even the failure to file annual returns cannot be visited with the penalty of cancellation of the registration of the Union. Section 31 of the Trade Unions Act clearly lays down the penalty for failure to file Annual returns and which definitely does not mean cancellation of the registration.
8. Mr. Sanjay Singhavi, learned counsel for the respondents submitted that on 4.2.93 the appellants had filed returns for the year 1991 and the Auditor alongwith the returns submitted his remarks stating therein that the appellants could not vouch the receipts for the legal fees paid to the lawyers. It was advised to devise a proper internal control in the areas of payments made and the recipient of the payment should not be the same person authorising the payment. It was also advised to get the approval of the committee for significant expenses incurred occasionally time to time in its behalf. It is further stated that the Respondents Nos. 2 to 5 have made a complaint against the office bearers of the appellants-Union on 10.2.93 and sought a consent certificate from the Respondent No. 1 under Section 28(1-A) of the Trade Unions Act, 1926. However, the appellants did not attend the proceedings before the Respondent No. 1 though duly served. Thereafter, on 12.4.93, the Respondent No. 1 granted consent to the Respondents Nos. 2 to 5 to take appropriate proceedings against the appellants.
9. It is contended that the impugned order refers to section 21 of the Trade Unions Act, 1926 read with Rule 18A of the Trade Union Regulations which have no application in the present case. The applicable provisions are section 28 of the Trade Unions Act, 1926 read with Rule 17 of the Trade Union Regulations, which will not vitiate the order. It is well settled that if the exercise of power can be traced to a legitimate sources, the fact that the same was purported to have been exercised under a different power does not vitiate the exercise of the power in question. It has been further contended that the appellants had full knowledge of what they were expected to meet since the first notice dated 8th June 1993 had clearly referred to the correct provisions and their replies also show that they know the substance of the respondent No. 1's queries and hence the order should be read as having been passed for wilfully contravening the provisions of Section 28 read with Rule 17 of the Bombay Trade Union Regulations. It is further submitted that the impugned order, by its nature, being an administrative order, is not required to have reasons. Further, since the replies of the appellants to the various notices did not contain any explanations on the points upon which an explanation was called for, the only reason that could be given was that the replies were irrelevant and unsatisfactory. It has been further contended that the issue before the Industrial Court was whether the officers of the appellants must be ousted from their posts or not. The Industrial Court is not required to give a finding on whether the appellants have wilfully contravened any provision of the act after notice or not. Merely because both proceedings may bear upon the auditors report of 1991, it does not mean that the respondent No. 1 was barred from proceeding either on the principle of subjudices on any other analogous principle. It is further submitted that merely because the wrong provisions of law have been quoted, it is not sufficient to make the conclusion that the impugned order was passed without application of mind especially when the impugned order clearly and specifically recounts the whole history of the matter in detail.
10. It is submitted that provision of a fine for delay in filing returns cannot operate to curtail the generality of section 10 which empowers Respondent No. 1 to withdraw or cancel the registration of the Union. It is further submitted that the main contravention committed by the appellant consisted not of the delay in filing returns but of its failure to provide any explanation as regards the financial irregularities pointed out in the auditors report for 1991.
11. Having, heard the contentions of the learned counsel for the parties, in my opinion, the order dated 18th April, 1996, passed under Section 10(b) of the Act, cancelling the registration of the Trade Union, is bad-in-law and therefore, it is illegal and deserves to be quashed and set aside. It reveals from the record that it is a matter of disputed allegations against the appellant-Union which was referred to the Industrial Tribunal and the notice issued under Section 10(b) of the Act is also on the same allegations, seeking explanation, which in my view, is not permissible under the law and therefore, on that count also, the notice and the subsequent order dated 18th April, 1966. cancelling the registration of the appellant-union, is required to be quashed and set aside. Further, the extreme penalty of cancellation of registration of the majority Trade Union for the alleged default or irregularities, alleged to have been committed, is not proportionate under the Act. The Respondent No. 1 has taken illegal decision by cancelling the registration of the Trade Union which is unjustified. Therefore, the order requires to be set aside.
12. In the result, appeal is allowed. The order dated 18th April, 1996, passed by the Respondent No. 1 is set aside. The respondent No. 1 is directed to restore the registration forthwith. It is declared that the appellant-Union was validly in existence prior to filing of the case.