Madras High Court
The Workmen Represented By vs The Tamil Nadu Housing Board on 21 June, 2002
Author: P. Sathasivam
Bench: P. Sathasivam
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 21/06/2002
Coram
The Hon'ble Mr. Justice P. SATHASIVAM
Writ Petition No. 2749 of 1993 and Writ Petition No. 1131 of 1997
and
W.M.P.No. 1906 of 1997
W.P.No. 2749/1993
The Workmen represented by
Tamil Nadu Housing Board
Diploma Engineer's Union,
represented by its Secretary
K. Sabanayagam.
.. Petitioner.
Vs.
1. The Tamil Nadu Housing Board,
represented by its Secretary,
Anna Salai, Madras-35.
2. The Tamil Nadu Housing Board
Engineers Progressive Union,
475, Anna Salai, Nandanam, Madras-35. .. Respondents.
W.P.No. 1131 of 1997
The Management of Tamil Nadu
Housing Board,
Anna Salai, Madras.
.. Petitioner.
Vs.
1. The General Secretary,
Tamil Nadu Housing Board
Employees Progressive Union,
475, Anna Salai, Nandanam,
Madras-35.
2. Tamil Nadu Housing Board
Diploma Engineer's Union,
243, Ganesh Colony, K.H.Colony,
Ayanavaram, Madras-23.
3. Industrial Tribunal, Madras.
.. Respondents.
Petitions under Article 226 of the Constitution of India, for issuance of writ
of Mandamus and writ of Certiorarified Mandamus respectively, as stated
therein.
For petitioner in both W.Ps. : Mr. G. Venkataraman
for M/s Aiyar and Dolia.
For respondents in both W.Ps : Mr. D.Veerasekaran
for Respondents 1 and 2.
:COMMON ORDER
Since both the writ petitions relate to the same subject-matter, they are being disposed of by the following common order. In W.P.No. 2749 of 93, the workmen represented by Tamil Nadu Housing Board Diploma Engineers' Union through its Secretary K. Sabanayagam seeks to issue a Writ of Mandamus, directing the respondents to pay the balance of 11 2/3 per cent Bonus to their employees for the accounting year 1982-83.
2. In Writ Petition No. 1131/97, aggrieved by the order in M.A.351/94 in I.D.28/86 of the Industrial Tribunal, Madras dated 29 -11-95, the Tamil Nadu Housing Board challenges the same on various grounds and for direction to the third respondent to restore their petition to set aside the ex parte award passed in I.D.28/86 dated 25-11 -89.
3. The case of the workmen is briefly stated hereunder:
The respondent is a Housing Board and an Industry as defined under Section 2 (J) of the Industrial Disputes Act. The Industrial Dispute was raised for payment of 20 per cent bonus to all the eligible employees of the Board for the accounting years ended on 31-3-83 (1982-83) and on 31-3-84 (1983-84). The same was referred for adjudication by the Government of Tamil Nadu and the said reference was taken up as I.D.No. 28 of 86 on the file of the Industrial Tribunal, Madras. By award dated 25-11-89 (published in the Tamil Nadu Gazette dated 10-12-89) has held that the respondent Board is liable to pay bonus to its employees as per the provisions of the Payment of Bonus Act at 20 per cent for each of the said two years. For the said 2 years, namely, 1982-83 and 1983-84, the employees of the Board were paid a minimum bonus of 8 1/3 per cent, but they have not paid the balance 11 2/3 per cent. Having no other effective remedy, the workmen through its Union has filed W.P.No. 2749 of 93.
4. The case of the Management of the Tamil Nadu Housing Board is briefly stated hereunder. The Industrial Tribunal has passed an award dated 25-11-89 after setting the Housing Board ex parte. In the proceedings before the Industrial Tribunal, a detailed counter affidavit has already been filed contending that the Housing Board is functioning on no gain and no loss basis and no profit motive is involved and there is ample justification for exempting the Housing Board from the payment of bonus under the Bonus Act and the Board will not come within the purview of the Industrial Disputes Act. When the proceedings before the Industrial Tribunal was pending, the services of the Legal Adviser who was entrusted with the above matter, was dispensed with with effect from 14-3-89 and after the change of counsel, the previous legal adviser has not handed over the bundle relating to the above matter to the petitioner Housing Board and as such the petitioner Board was not aware of the subsequent hearing dates. When the Union filed W.P.No.2749/93 for a Mandamus to implement the award in I.D.28/86 and when a notice from this Court was received on 14-12 -93, the Housing Board came to know about the fact that an ex parte award was already passed by the Tribunal; accordingly immediate steps were taken and the matter was entrusted to the present Legal Adviser and he also filed necessary petition on 24-12-93 before the Industrial Tribunal for setting aside the ex parte order. Under the circumstances, there was a delay of 1490 days. The Industrial Tribunal without considering the facts and circumstances referred by the Board, dismissed the petition to condone the delay by order dated 29-11-95, which is the subject matter in W.P.No. 1131/97. In view of the dismissal of their petition to condone the delay, the Housing Board is put to much hardship and inconvenience.
5. In the light of the above pleadings, I have heard Mr. G. Venkataraman, learned counsel for the workmen and Mr. G. Veerasekaran for respondents 1 and 2-Tamil Nadu Housing Board.
6. The following points are to be considered in these writ petitions:
(i) Whether the conclusion of the Tribunal that it had lost its jurisdiction over the dispute in I.D.28/86 after the expiry of 3 0 days from the date of publication of award in the Gazette dated 10-12-89 is correct, and whether the Tribunal has become functus officio in respect of the said proceedings?
(ii) Whether the Tamil Nadu Housing Board has sufficient cause for condonation of delay of 1490 days in filing application to set aside the ex parte award?
7. Tamil Nadu Housing Board Employees' Progressive Union (not a petitioner in both Writ Petitions) has raised an Industrial Dispute for payment of 20 per cent Bonus to all the eligible employees of the Board for the accounting years ended on 31-3-1983 (1982-83) and on 31-3-1984 (1983-84). On reference by the Government of Tamil Nadu, the same was taken on file by the Industrial Tribunal at Madras as I.D.No.28/86. In that application, the workmen have prayed for 2 0 per cent Bonus for the two accounting years with 24 per cent interest and cost. The records produced show that the Tamil Nadu Housing Board has filed their counter statement on 29-1-87 disputing the claim made by the workmen. Pending enquiry, the Tamil Nadu Housing Board Diploma Engineers' Union, petitioner in W.P.2749/93 was impleaded as per the order of the Tribunal in M.A.No.34/87 dated 3-4-87. It is further seen that after several adjournments, when the dispute was taken up for enquiry, the Union by its General Secretary and his counsel alone were present and in the absence of any representation on behalf of the Housing Board, B. Sabanayagam, General Secretary of the Union No.II was examined as WW1 and through him Exs. W-1 to W-4 were marked. Since there was no representation on behalf of the Progressive Union and the Housing Board, the Tribunal passed an award holding that the employees are entitled to 20 per cent Bonus for the years 1982-8 3 and 1983-84 together with interest of 24 per cent as prayed for with costs. The said award is dated 25-11-89 and the same was published on 20th December, 1989. The Housing Board filed a petition in M.A. No. 351/94 praying for condonation of delay of 1490 days in filing petition to set aside the ex parte award dated 25-11-89. In the affidavit filed in support of their application, it is mainly contended that the award of the Industrial Tribunal dated 25-11-89 was not at all communicated to the Housing Board by their counsel and that there was a change of counsel. It is also stated that the question whether the Housing Board is an industry and comes under the purview of the Industrial Disputes Act or not is pending before the Supreme Court of India and the same is yet to be decided. It is further stated that if the Board is compelled to pay Bonus, to the employees, as per the ex parte Award, then the Board will be put to irreparable loss and heavy damages. Before the Industrial Tribunal, the Union has filed a counter affidavit highlighting that the Industrial Tribunal has acted in accordance with law and no sufficient cause was shown by the Board for its failure to attend the Court on various dates to which the Industrial Dispute was posted. The Tribunal has acted strictly in accordance with Rule 48 (1) of the Tamil Nadu Industrial Disputes Rules, 1 958 (in short "the Rules"). As per Rule 48 (2), the Board ought to have filed the application for setting aside the award dated 25-11-89 within 15 days from 25-11-89. The award was published in the Tamil Nadu Government Gazette dated 10-12-89. The Board ought to have filed the application at least within 15 days from the date of award. Even otherwise the writ petition, viz., W.P.No.15697/90 filed by the Union for directing the Tamil Nadu Housing Board to pay statutory minimum Bonus of 8 1/3 per cent for the year ended 31-3-90, in the affidavit filed in support of the writ petition, the Union has referred to the ex parte award of the Tribunal granting 20 per cent bonus. Accordingly, the Board cannot plead ignorance. Further, it is stated that after publication in the Gazette on 10-12-89, the Industrial Tribunal has become functus officio and the petition filed by the Board is not maintainable in law.
8. The Industrial Tribunal, after holding that after publication of the award in the Gazette, it has become functus officio in respect of the proceedings in I.D.28/86 and that there is no proper explanation for the delay of 1490 days, dismissed the said petition.
9. In order to consider the above aspect, now I shall refer the relevant provisions from the Act and the Rules.
"Section 17. Publication of reports and awards.- (1) Every report of a Board or Court together with any minute of dissent recorded therewith, every arbitration award and every award of a Labour Court, Tribunal or National Tribunal shall, within a period of thirty days from the date of its receipt by the appropriate Government, be published in such manner as the appropriate Government thinks fit.
(2) Subject to the provisions of section 17-A, the award published under sub-section (1) shall be final and shall not be called in question by any Court in any manner whatsover.
Section 17A. Commencement of the award.- (1) An award ( including an arbitration award) shall become enforceable on the expiry of thirty days from the date of its publication under section 17:
Rule 48. Ex-parte proceedings.- (1) If, without showing sufficient cause any party to proceedings before a Board, Court, Labour Court, Tribunal or Arbitration fails to attend or to be represented, the Board, Court, Labour Court, Tribunal or the Arbitrator may proceed as if the party had duly attended or had been represented.
(2) The Board, Court, Labour Court, or Tribunal or an Arbitrator may, for sufficient cause, set aside, after notice to the opposite party, the ex-parte decision either wholly or in part, on an application made within 15 days of the ex-parte decision;
Provided that an application may be admitted after the said period of 15 days, if the applicant satisfies the Board, Court, Labour Court or Tribunal or Arbitrator, as the case may be, that he had sufficient cause fror not preferring the application within that period.
(3) An application under sub-rule (2) shall be supported by an affidavit."
10. It is clear from sub-section (1) of Section 17 of the Act that it is incumbent on the part of the Government that on receipt of the award of the Labour Court or Tribunal, the same to be published in their official gazette within a period of 30 days. Once it is published in terms of sub-section (1) of Section 17, the award shall be final and shall not be called in question by any Court in any manner. Section 17A says that the award shall become enforceable on the expiry of 30 days from the date of its publication under Section 17 subject to certain conditions mentioned therein. None of the conditions referred to in Section 17A exists in this case. If that is so, the award became enforceable on 09-01-1990. While construing the very same provisions, namely, Sections 17 (1) and (2), 17A of the Act and Rule 48 (2) of the Rules, Shivaraj Patil, J (as he then was) in G. Ramalingam v. The Presiding Officer, Addl. Labour Court, Madras, reported in 1995 Tamil Nadu Law Notes Journal 235 has held that when the award became enforceable, the Labour Court/Industrial Tribunal had become functus officio inasmuch as even the ex parte award could not be called in question before them for setting aside the same. In arriving such a conclusion, the learned Judge relied on the decision of the Apex Court in Grindlays Bank v. Central Government Industrial Tribunal and others, reported in 1981 (1) LLJ 327 : AIR 1981 SC
606. No doubt, as per sub-rule (2) of Rule 48, the Board, Labour Court or Tribunal may, for sufficient cause, set aside the ex parte decision after notice to the opposite party on an application made within 15 days of the ex parte decision, provided that an application may be admitted after the said period of 15 days, if the applicant satisfies the Board, Labour Court or Tribunal as the case may be, that he had sufficient cause for not preferring the application within that period. Here again, considering the language used, the Hon'ble Judge has observed that, "this rule (Rule 48 (2) does not advance the case of the petitioner to state that such an application for condonation of delay can be filed even after the award was published in the official gazette and became enforceable." The learned Judge has also held that the application has to be filed under Rule 48 (2) of the Rules before the award became enforceable under Section 17-A of the Act.
11. Mr. G. Venkatraman, learned counsel for the Union heavily relied on the judgment of the learned Judge reported in 1995 T.L.N.J. 235 (cited supra). I have already referred to the fact that Shivaraj Patil, J. (as he then was) has based h is conclusion in the light of the decision of the Supreme Court in Grindlays Bank case (198 1 (1) LLJ 327): AIR 1981 SC 606. The very same provisions of the Industrial Disputes Act, 1947 and Industrial Disputes (Punjab) Rules, 19 58 came up for consideration before the Supreme Court in the subsequent decision i.e., in Satnam Verma v. Union of India, reported in A.I.R. 1985 Supreme Court 294. In this decision, Their Lordships considered Rules 22 and 24 of the Industrial Disputes (Punjab) Rules which are in pari materia with Rules 22 and 24 (b) of the Industrial Disputes (Central) Rules, 1957 and also considered the earlier decision of Grindlays Bank case extentio. The appellant in that case (Satnam Verma's case) was employed as a Conductor by the Chandigarh Transport Undertaking. Against the termination of his service, an industrial dispute was referred to the Labour Court for adjudication and it was numbered as Reference No.55 of 1981. On receipt of notice of the reference, the workman and the employer both filed their respective statements. The reference came up for hearing on February 23, 1982 and when it was called out neither the appellant nor his representative one Shri M.L. Gupta was present. The Labour Court directed the matter to be heard ex parte. After making that order, the Labour Court proceeded to observe that as no evidence has been led by the appellant, there is nothing to show that the termination of service was illegal or invalid, and concluded that the appellant was therefore, not entitled to any relief. Thereafter, an application was moved by the appellant for recalling the order disposing of the reference ex parte. The said application was resisted by the employer stating that as the award has already been published in the Gazette there is no provision for recalling the award made ex parte nor restoring the case to file. The Labour Court held that once the award was published in the Gazette, the Labour Court has no jurisdiction to recall the award or to set aside the ex parte award and to restore the case to file. The appellant moved the High Court under Article 226 of the Constitution. The Division Bench of the High Court confirmed the view taken by the Labour Court and dismissed the writ petition in limine; hence the conductor has preferred an appeal to the Supreme Court by special leave. Before the Supreme Court, the earlier decision in Grindlays Bank was cited. After referring to the factual details, the entire discussion and the conclusion arrived at therein, Their Lordships have concluded as follows: (para 7 and 8) "7. In the case of Grindlays Bank Ltd., the specific contention canvassed was whether where an ex parte award is made and published in the Official Gazette, the Industrial Tribunal has the jurisdiction to entertain the application for setting it aside if sufficient cause is shown for absence of appearance on the date on which an ex parte award was made and it was answered in the affirmative. This Court referred to Rule 22 and Rule 24 (b) of the Industrial Disputes (Central) Rules, 1957 and held that the Industrial Tribunal had the power to pass an order setting aside the ex parte order. In reaching this conclusion, the court observed that if the Tribunal has the power to proceed ex parte as provided by Rule 22, it 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. The Court then proceeded to examine the scheme of the relevant rules and observed that Rule 22 unequivocally confers jurisdiction on the Tribunal to proceed ex parte. The Tribunal can proceed ex parte if no sufficient cause for absence of a party is shown. This power was interpreted to comprehend that if sufficient cause was shown which prevented a party from appearing, then in the terms of Rule 22, the tribunal will have had no jurisdiction to proceed ex parte and consequently, it must necessarily have power to set aside the ex parte award. The Court in terms observed that the power to proceed ex parte is subject to the fulfilment of the condition laid down in Rule 22 and therefore it carried with it the power to enquire whether or not there was sufficient cause for the absence of a party at the hearing. The Court then referred to Rule 24(b) and held that where the Tribunal or other body makes an ex parte award, the provisions of Order IX, Rule 13 of the Code of Civil Procedure are clearly attracted and it logically follows that the Tribunal was competent to entertain an application to set aside an ex parte award. The Court then proceeded to examine the contention that once an award is published in the Official Gazette, be it an ex parte one, does the Tribunal become functus officio and therefore, will have no jurisdiction to set aside the ex parte award and that as contended before us the appropriate Government alone could set it aside and rejected it holding that no finality is attached to an ex parte award because it is always subject to its being set aside on sufficient cause being shown. The Court held that the Tribunal had the power to deal with an application properly made before it for setting aside the ex parte award and pass suitable orders. We have extensively referred to this decision because it effectively answers all the limbs of the contention canvassed before us and which unfortunately, found favour with the Labour Court and the High Court.
8. It needs hardly to be pointed out that Rule 22 and Rule 24(b) of Industrial Disputes (Central) Rules, 1957 are in pari materia with Rules 22 and 24 of the Industrial Disputes (Punjab) Rules, 1958 which are applicable to the facts of the present case. Therefore, the decision of this Court would mutatis mutandis apply in the matter of interpretation of the Punjab Rules. It must follow as a necessary corollary that the Labour Court as well the High Court denied to itself the jurisdiction vested in it to entertain an application for setting aside an ex parte award and reached an erroneous conclusion."
12. Similar view has been expressed by the Supreme Court in the latest decision, in Anil Sood v. P.O. Labour Court II, reported in 2001 (1) LLJ 1113. I have also verified that Rules 22 and 24 of Industrial Disputes (Punjab) Rules and Rules 22 and 24 (b) of Industrial Disputes (Central) Rules, 1957 are in pari materia with Rule 48 (2) of the Tamil Nadu Industrial Disputes Rules, 1958 (in short " the Rules"). It is clear from the later decision of the Supreme Court i.e., Satnam Verma's case that where an ex parte award has been made and published in the official gazette, the Industrial Tribunal has the jurisdiction to entertain the application for setting it aside if sufficient cause is shown for absence of appearance on the date on which the award was made. It is further clear that it is not correct to say that the Industrial Tribunal has become functus officio. In other words, even after publication of the award in the official gazette, in the light of Rule 48 (2) of the Rules referred to above, the Labour Court or Industrial Tribunal has jurisdiction to consider the application filed to set aside the ex parte award if sufficient cause is shown for absence of appearance on the date on which the award was made. Inasmuch as the decision in Grindlays Bank (AIR 1981 SC 606) has been considered, referred and explained in the subsequent decision, namely, Satnam Verma's case (AIR 1985 S.C. 294), I am of the view that the reliance placed on the earlier decision of this Court reported in 1995 T.L.N.J. 235 (cited supra) cannot be accepted. Accordingly I hold that where an ex parte award has been made and published in the gazette, even after publication, if sufficient cause is shown, a duty is cast on the Labour Court/Industrial Tribunal to consider the application for setting aside the ex parte award. This being the conclusion, the order of the Industrial Tribunal dated 25-11-95 in M.A.No. 3 51/94 cannot be sustained.
13. Regarding the second contention, admittedly the Housing Board has filed an application in M.A.No. 351/94 in I.D.No. 28/86 with a delay of 1490 days to set aside the ex parte order. I have already referred to Rule 48 (2) of the Rules. As per that provision, if an application is made within 15 days of the ex party decision and sufficient cause is shown, the Labour Court or Tribunal may after notice to the opposite party, set aside the ex parte decision either wholly or in part. As per the proviso to the said Rule, an application may be admitted after the said period of 15 days, if the applicant satisfies the Labour Court or Tribunal that he had sufficient cause for preferring the application within that period. In the affidavit filed in support of the above application, it is stated that the award was not communicated to the Board by their counsel and that there was a change of counsel. It is also stated that the question whether the Housing Board comes under the purview of "Industrial Disputes Act" is pending with the Supreme Court of India. No doubt, it is pointed out that regarding entitlement or application of the Payment of Bonus Act to the Housing Board, the matter has been concluded by the Supreme Court in State of Tamil Nadu v. Sabanayagam K. and others, reported in 1998-I-LLJ 16. Regarding the fact that the award of the Industrial Tribunal was not communicated to the Board, in the counter affidavit filed before the Tribunal, it is stated that even in the affidavit filed by the Union in W.P.No. 15697 of 1990 seeking direction to the Housing Board to pay statutory minimum bonus of 8 1/3 per cent for the year ending 31-3-1990, the details regarding the ex parte award of the Tribunal has been referred to. It is also brought to my notice that in the afore-said writ petition, notice was sent to the Housing Board and the Board was aware of the averments made in the affidavit. However, it is not explained that having obtained ex parte award for 20 per cent bonus with interest at 24 per cent with cost, why both the Unions have not taken steps to execute the ex parte award. It is not correct to contend that each day of delay has to be explained. The Tamil Nadu Housing Board is an organ of the Government. Though there is long delay, it is seen that the proceedings were not intimated by their counsel. It is also stated that frequent change of counsel was one of the reason for not taking prompt steps in challenging the ex parte award. Inasmuch as that there is no need to explain each day of delay, I am satisfied that Housing Board had sufficient reason for not filing the petition to set aside the ex parte award in time. In the light of the fact that even though Housing Board had filed counter statement disputing the claim of the Progressive Union, the same was not considered by the Tribunal, I am of the view that Housing Board may be given an opportunity to contest the claim on merits. I am conscious of the fact that Writ Petition No. 1131/97 is against the order of the Industrial Tribunal in M.A.No. 351/94 dated 29-11-95 filed by the Housing Board to condone the delay. Now I have held that the Housing Board had shown sufficient cause for the delay. In the normal circumstance, the matter has to be remitted to the Industrial Tribunal with a direction to number the other application filed by the Housing Board to set aside the ex parte award. Since the Industrial Dispute has been raised in 1986 and an ex parte award was passed on 25 -11-89 and in view of my conclusion that the Industrial Tribunal failed to consider the defence pleaded in the counter statement filed by the Board disputing the claim of the Union, and also of the fact that in a matter relating to Bonus, it requires more authenticated statements from both sides, I am of the view that in order to shorten the litigation and to render substantial justice to both parties, I set aside the ex parte award passed in I.D.No. 28/86 dated 25-11-89. I am also justified in passing such an order due to the reason that all along the employees were being paid only minimum Bonus of 8 1/3 per cent that too, on direction by this Court then and there. There are other two reasons also, namely, (1) The Tribunal has not considered the counter statement filed by the Housing Board. The Courts have taken a view that even if respondents were absent, it is incumbent on the Labour Court/Industrial Tribunal to consider the defence taken by them. (2) The Tribunal even without ascertaining the reason for claiming interest at the rate of 24 per cent, has granted the same on mere asking for.
14. In the light of what is stated above, I set aside the order made in M.A.No. 351/94 dated 25-11-95 as well as the ex parte award passed in I.D.No. 28/86 dated 25-11-89 on the file of Industrial Tribunal, Madras. The Industrial Tribunal is directed to restore I.D.No.28/86 on its file, issue notice to both parties and dispose of the same afresh after affording sufficient opportunity to both parties. Inasmuch as the Industrial Dispute is of the year 1986, the Industrial Tribunal is further directed to dispose of the same within a period of six months from the date of receipt of a copy of this order. Net result, Writ Petition No. 2749/93 is dismissed, whereas Writ Petition No. 1131/97 is allowed. No costs. Consequently, W.M.P.No. 1906/97 is closed.
Index: Yes Internet: Yes.
Note to Office: Communicate this order to the Industrial Tribunal, Madras within one week from to-day along with records, if any.
R.B. To
1. The Tamil Nadu Housing Board, represented by its Secretary, Anna Salai, Madras-35.
2. The Tamil Nadu Housing Board Engineers Progressive Union, 475, Anna Salai, Nandanam, Madras-35.
3. The Industrial Tribunal, Madras.
P. SATHASIVAM, J.
Common Order in W.P.Nos.2749/93 and 1131/97 and WMP.1906/97.
Dt:21-6-2002