Andhra HC (Pre-Telangana)
Telugunadu Workcharged Employees ... vs Government Of India, Rep. By Its ... on 23 April, 1997
Equivalent citations: 1997(3)ALT492
Author: B. Subhashan Reddy
Bench: B. Subhashan Reddy
ORDER B. Subhashan Reddy, J.
1. This Writ Petition assails the Constitutional validity of Section 17-A of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act') and the consequent notification issued by the 2nd respondent-State Government in G.O.Ms. No. 2, Labour Department, dated 20-1-1994 in exercise of the powers Under Section 17-A(1) of the Act stating that the award dated 1-9-1993 passed in I.D. No. 349 of 1994 (sic. 1991) shall not be enforceable for the reasons stated therein. The challenge is to the vires of the Section, which is the prime argument; the second argument being the unsustainability of the reasons stated in the consequent notification as baseless and irrelevant.
2. The petitioner-Telugunadu Work-charged Employees State Federation, Nalgonda District Unit-is a Trade Union and is the District Union of Telugunadu Trade Union Council, having been registered under the Trade Unions Act. It is stated that the petitioner comprises of 1,500 members and that the petitioner-Union has been looking after the welfare of the workmen, Nagarjunasagar Project, Left Bank Canal, who are the members of the petitioner-Union.
3. When the workmen working in various projects of the State of Andhra Pradesh were removed from service, they had approached the Supreme Court by invoking Article 32 of the Constitution of India by filing W.P. No. 657 of 1987. Among the petitioners therein, there are 77 workmen, who are the members of the petitioner's Union. The Supreme Court passed interim order dated 30-7-1987 continuing their services and acting upon the same, order dated 1-9-1987 was issued by the 5th respondent reinstating 74 workmen in Miryalguda Division and they continued so upto October, 1987. For the months of September and October, 1987, they were paid wages. The workmen were being transferred very often and even the type of work was changed; as such, they approached this Court and ultimately, the matter landed in the Supreme Court by way of S.L.P. No. 16189 of 1990. The same was disposed of by the Supreme Court on 31-7-1991; by virtue of which, the matter was referred to the Labour Court at Hyderabad enabling the workmen to seek necessary relief and consequently, the entire record was remitted to the Labour Court, Hyderabad where the dispute was numbered as I.D. No. 342 of 1991 and was renumbered as I.D. No. 349 of 1991 when it was transferred to Labour Court-Ill, Hyderabad. The Labour Court, after following the procedure and conducting the enquiry by recording oral evidence and receiving documentary evidence, had passed the Award dated 1-9-1993 declaring that the workmen shall be deemed to be in employment with effect from 1-9-1987 and that they should be reinstated with back wages at the rate of 1/5th of the last drawn wage. As there was delay in publication of the Award from which date award takes effect, W.P. No. 18834 of 1993 was filed seeking a Writ of Mandamus against the 2nd respondent to publish the Award. The said writ petition was filed on 14-12-1993 and the Government Pleader had taken notice seeking time for getting instructions and in the mean while, the Award was published in G.O.Rt. No. 2761, Women's Development, Child Welfare and Labour Department, dated 23-12-1993 and in view of the same, the above Writ Petition was closed on 21-1-1994. But, a day before the same, i.e. on 20-1-1994, G.O.Ms. No. 2, Women's Development, Child Welfare and Labour Department, was issued in exercise of the powers contained Under Section 17-A (1) of the Act stating that the award so published in G.O.Rt. No. 2761, dated 23-12-1993 shall not be enforceable.
4. Mr. E. Manohar, the learned senior Counsel appearing for the petitioner, makes two-fold submission; (1) that Section 17-A of the Act is ultra vires the Constitution of India as the Government, which is the executive authority, cannot annul the order of Industrial Tribunal or Labour Court; and (ii) that when an industrial dispute is undertaken for adjudication, there cannot be any distinction between the employers be it Government or Private, and that all workmen have to be treated alike and that the judgment rendered by the independent judicial body has to be given credence and enforceability and it is mockery of the Constitution, if the executive is permitted to sit over the judgment of a judicial body, which is a separate wing of the Constitution and which enjoins the power of judicial review. The argument is on the touchstone of the constitutional Scheme as also being arbitrary and discriminatory resulting in violation of Article 14 of the Indian Constitution. As a second argument, he submits that the impugned notification is violative of principles of natural justice and that notice ought to be given to the petitioner before issuing the impugned notification and that the grounds stated are not germane and are baseless and that economy has got a restricted meaning referable to National Government and not State Government.
5. Mr. V. Venkataramanaiah, the learned Advocate General appearing for the respondents, counters the argument that the award of the Tribunal did not attain the finality as the Government has got powers Under Section 17-A of the Act to pass the orders making the award enforceable and that the Tribunal is only a Statutory Tribunal. He also argued that the Tribunal being a creature of statute and so also relief granted by the Tribunal and the reference having been made by the Government, the Government in the interests of State's economy is entitled to annul the award making it ineffective and that whenever there is a clash between the interests of the employees and the economy, the latter, which is in public interest, has to prevail. Mr. P. Innayya Reddy, the learned Standing Counsel for Central Government has adopted the above arguments.
6. The first ground being the attack regarding the Constitutional validity of the provisions contained Under Section 17-A of the Act, the same will be considered first and the necessity or otherwise of adjudication on the second contention depends upon the answer to the first contention.
7. Disputes inter se employer and workmen were hitherto covered by the Trade Disputes Act, 1929. The said statute imposed restraints on the rights of strike and lock-out in public utility services, but lacked provisions for any relief for the workmen. To overcome the said defect, during the war, Rule 81-A of Defence of India Rules were made entitling the Central Government to refer Industrial Disputes to Adjudicator and to enforce awards. The same was to lapse on 1-10-1946, but was kept alive by Emergency Powers (Continuance) Ordinance, 1946 for a further period of six months. The said legal remedy has proved useful and permanent legislation in replacement of the said rule was felt necessary and the result is the enactment of the Industrial Disputes Act, 1947 (Central Act 14 of 1947) which came into force on 1-4-1997. The same was enacted pursuant to the legislative competence by virtue of Entry-2 of List III of Schedule VII of the then Government of India Act, 1935, which, after enactment, underwent amendments 34 times. The proceedings are initiated by a reference Under Section 10 made by the Government at the instance of the Union. The resolution of dispute is firstly by settlement, if reached during conciliation, and if it fails, on the report of the same being made to the Government, the Government then considers the matters and then may make a reference to the Tribunal, be it Industrial Tribunal or Labour Court for adjudication. If it is the State Government, it is the Judicial Tribunals in the States and if it is the Central Government, it is the National Industrial Tribunal. If a settlement is arrived at, during conciliation, it will be reduced into writing and Under Section 18 of the Act, the same is binding on the parties in terms thereof. Otherwise, the Industrial Tribunal or the Labour Court, as the case may be, will follow the procedure contemplated under the Act and the Rules and after affording opportunity of adducing both oral and documentary evidence, pass an award.
8. In the absence of the legal provisions mentioned above, be it Industrial Disputes Act or the previous Rule 81 -A of Defence of India Rules or any other legislation relating thereto, it is needless to mention that the Civil Court would be entitled to adjudicate the lis inter se employer and workmen and Section 9 of C.P.C. docs not bar that remedy and decision rendered by the Civil Court, if not reversed by the appellate Court, is binding and enforceable. But, as a substitute and to make the remedy more (sic. less) cost and time-effective, provision has been made under the Act where the cumbersome civil process is dispensed with for quick dispensation of justice and even the lawyers are not permitted, unless the party-in-opposition consents and even the provisions of the Evidence Act arc not strictly made applicable and brief note of evidence can be made in a homely atmosphere, and to hand-out judgments at a quicker pace. At one point of time, appeal provision was made by enacting an amendment to the Principal Act titled "the Industrial Disputes (Appellate Tribunals) Act, 1950", but when it was felt that the same was again resulting in protraction of litigation, it was repealed by Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956. Before the Amending Act of 1956, only Industrial Tribunal was created for the purpose of adjudication of Labour Disputes. Labour Courts and National Tribunals were created under the said Amending Act, 1956. The expeditious part of the disposal of the cases, which was there hitherto before 1952 amendment is kept intact and guidelines were framed for reference to the Labour Court, Tribunal or National Tribunal.
9. By Section 12 of the said Amending Act, Sections 17 and 17-A were incorporated into the Principal Act. Section 17(1) enjoins the the appropriate Government to publish the award passed by the Labour Court or Tribunal within 30 days of the receipt of the same and Section 17(2) says that the award so published shall be final imposing a bar from the same being questioned in any Court and in any manner whatsoever; of course, subject to the provisions of Section 17-A. Under Section 17-A(1) the award is enforceable on the expiry of 30 days from the date of its publication, unless the appropriate Government i.e., the State or the Central Government, as the case may be, by a notification in the official gazette, declares that the award shall not become enforceable on the expiry of the said period of 30 days, if the same in its opinion will be inexpedient on public grounds affecting national economy or social justice. It is apt to extract both Sections 17 and 17-A of the Act.
"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 whatsoever.
17-A. 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:
Provided that -
(a) if the appropriate Government is of opinion, in any case where the award has been given by a Labour Court or Tribunal in relation to an Industrial Dispute to which it is a party; or
(b) if the Central Government is of opinion, in any case where the award has been given by a National Tribunal.
that it will be in expedient on public grounds affecting national economy or social justice to give effect to the whole or any part of the award, the appropriate Government, or, as the case may be, the Central Government may, by notification in the official gazette, declare that the award shall not become enforceable on the expiry of the said period of thirty days.
(2) Where any declaration has been made in relation to an award under the proviso to Sub-section (1), the appropriate Government or the Central Government may, within ninety days from the date of publication of the award Under Section 17, make an order rejecting or modifying the award, and shall, on the first available opportunity, lay the award together with a copy of the order before the Legislature of the State, if the order has been made by a State Government, or before Parliament, if the order has been made by the Central Government.
(3) Where any award as rejected or modified by an order made under Sub-section (2) is laid before the Legislature of a State or before Parliament, such award shall become enforceable on the expiry of fifteen days from the date on which it is so laid; and where no order under Sub-section (2) is made in pursuance of a declaration under the proviso to Sub-section (1), the award shall become enforceable on the expiry of the period of ninety days referred to in Sub-section (2).
(4) Subject to the provisions of Sub-section (1) and Sub-section (3) regarding the enforceability of an award, the award shall come into operation with effect from such date as may be specified therein, but where no date is so specified, it shall come into operation on the date when the award becomes enforceable under Sub-section (1) or Subsection (3), as the case may be.
10. In Rajasthan S.R.T. Corpn. v. Krishna Kant, , Justice B.P. Jeevan Reedy speaking for the Supreme Court has laid down broad principles regarding the jurisdiction of the Civil Court as also that of the Industrial Tribunal or Labour Court concerning the adjudication of disputes inter se employer and employee. Presiding over 3-Judge Bench which came-up by way of reference in view of differing views from the one expressed in Premier Automobiles v. K.S. Wadke , the learned Judge held that both the civil Courts and the Industrial Tribunal or Labour Courts will have jurisdiction where the reliefs are claimed on the basis of general law of contract and it is for the suitor to choose his remedy of either moving the machinery under the Act or approach the Civil Court; but, where dispute involves recognition, observance or enforcement of any of the rights or obligations created by the Act, the only remedy is to approach the forums created by the said Act. It was further held:
"The policy of law emerging from Industrial Disputes Act and its sister enactments is to provide an alternative dispute resolution mechanism to the workmen, a mechanism which is speedy, inexpensive, informal and unencumbered by the plethora of procedural laws and appeals upon appeals and revisions applicable to civil Courts. Indeed, the powers of the Courts and Tribunals under the Industrial Disputes Act are far more extensive in the sense that they can grant such relief as they think appropriate in the circumstances for putting an end to the industrial dispute."
It was held by a Constitution Bench of the Supreme Court in State of Bombay v. K.P. Krishnan, that the remedy under the Act is not a misnomer or insufficient or inadequate for the purpose of enforcement of the right orliability created under the Act.
11. Our Constitution ordained democratic form of Government. It has setup three traditional instruments for administering the State affairs, i.e., (1) Legislature, (2) Executive and (3) Judiciary. The power of legislature in our Constitution is limited in three directions-(i) power to Legislate on a subject traceable to specific entry, (ii) not to violate Part-Ill; and (iii) not also to violate the Constitutional provisions or injunction even if it does not fall under Part-Ill. In State of Bihar and Ors. v. Bihar Distillery Ltd., 1997 (1) Supreme 121 = 1997 (1) ALT 19 (D.N.) , Justice B.P. Jeevan Reddy, speaking for the Supreme Court held "the Court must recognize the fundamental nature and importance of legislative process and accord due regard and deference to it, just as the Legislature and the Executive are expected to show due regard and deference to the Judiciary. It cannot also be forgotten that our Constitution recognizes and gives effect to the concept of equality between the three wings of the State and the concept of 'checks and balances' inherent in such scheme". The purport of the said law laid down by the Supreme Court is that the Legislature, Executive and Judiciary should act within their bounds and limitations and that one wing should not encroach upon the powers of another and that so long as the Legislature and Executive act within their power and competence, the Judiciary should not interfere in their acts or actions.
12. Our Constitution vests judicial powers in the Courts and Tribunals and not in the Executive. Independent Judiciary is the essence of Constitution and that is clear from Article 50 and Chapter VI of Part VI thereof. The above are basic concepts of democracy and are, thus, basic features of Constitution. The Rule of Law envisages that administrative decisions should be subject to effective system of review by the Courts. The rule of law secures individual rights through the medium of an impartial judicial authority. Judiciary is one of the pillars of free society erected by rule of law designed to protect the individual from exercise of arbitrary power. Accordingly, the Courts of law are invested with essential attributes of this basic feature. The Constitution Bench of the Supreme Court in Chandramohan v. State of U.P., AIR 1966 SC 1987, after emphasising the important functions of the High Court, has held:
"..................But the makers of the Constitution also realised that "it is the Subordinate Judiciary in India who are brought most closely into contact with the people, and it is no less important, perhaps indeed even more important, that their independence should be placed beyond question in the case of superior Judges." Presumably to secure the independence of the judiciary from executive, the Constitution introduced a group of Articles in Chapter VI of Part VI under the heading "Subordinate Courts". But, at the time the Constitution was made, in most of the States, the magistracy was under the direct control of the executive. Indeed, it is common knowledge that in pre-independence India there was a strong agitation that the judiciary should be separated from the executive and that the agitation was based upon the assumption that unless they were separated, the independence of the judiciary at the lower levels would be a mockery. So, Article 50 of the Directive Principles of State Policy states that the State shall take steps to separate the judiciary from the executive in the public services of the States. Simply stated, it means that there shall be a separate judicial service free from the executive control."
This was reiterated by the Supreme Court in the famous case of Kesavananda Bharathi v. State of Kerala, that one of the basic structures of Constitution is separation of powers between the Legislature, the Executive and the Judiciary and the same view was further reiterated by the Supreme Court in Union of India v. Sankalchand, stating that Article 50 of Indian Constitution is the conscience of the Constitution and intends immunisation of judiciary from any form of executive control or intereference. Decisions need not be multiplied and suffice it to say that our Constitutional Scheme docs not permit any encroachment on the part of the executive over the judiciary and that the same is the basic feature of the Constitution and that in fact, the rule of law which is the basic structure of Constitution envisages that administrative decisions should be subject to effective system of review by the Courts.
13. The Courts of law do not again mean only the Courts. It also includes the Tribunals which are infused with requisite qualities for competently performing its functions consistently with basic norms of judicial process. The Constitution Bench of the Supreme Court in Bharat Bank v. Employees of Bharat Bank, , has in a majority decision held:
"The Industrial Tribunal set-up Under Section 7 of the Industrial Disputes Act, 1947 has all the necessary attributes of a Court of Justice. The fact that the Government has to make a declaration Under Section 15 (2) of the Act after the final decision of the Tribunal is not in any way inconsistent with the view that the Tribunal acts judicially. Thus, the functions and duties of the Industrial Tribunal are very much like those of a body discharging judicial functions, although it is not a Court in the technical sense of the word."
Of course, in the said case, the validity of the power of the Government to annul the award of the Tribunal did not arise for consideration, Another Constitution Bench of the Supreme Court in A.C. Companies v. P.N. Sharma, supporting the same view has held:
"Judicial functions and judicial powers are one of the essential attributes of a soverign State, and on considerations of policy, the State transfers its judicial functions and powers mainly to the Courts established by the Constitution, but that does not affect the competence of the State, by appropriate measures, to transfer a part of its judicial powers and functions to Tribunals by entrusting to them the task of adjudicating upon special matters and disputes between parties. It is really not possible or even expedient, to attempt to describe exhaustively the features which are common to the Tribunals and the Courts, and features which are distinct and separate. The basic and the fundamental feature which is common to both the Courts and the Tribunals is that they discharge judicial functions and exercise judicial powers which inherently vest in a soevereign State.".
14. As seen from the above, now it is ex facie clear that the judicial power has to be exercised by the judicial authorities only and even of it is exercised by any other authority in the course of the adjudicatory process, the same is in the nature of discharge of judicial functions of the State and that the judicial function is one of the basic features of the rule of law and Constitution.
15. In the above background, let me now consider whether the impugned provision contained in proviso to Section 17-A (1) of the Act is offensive of constitutional scheme or any of the Constitutional provisions. The award is made upon enquiry and the Industrial Tribunal or Labour Court embarks upon enquiry only on a reference being made Under Section 10 of the Act. Of course, in view of (Act 35 of 1965) the amendment incorporating Section 2-A, Industrial Dispute can be directly raised in case of dismissal, termination or retrenchment of workman. Insofar as the reference is concerned, the Government will consider as to whether it is a fit case for reference or not and if it does not choose to refer, it may not do so. It is apt to extract the legal position enunciated by Justice B.P. Jeevan Reddy in Rajasthan S.R.T. Corpn. case (1 supra).
"It is not correct to say that the remedies provided by the Industrial Disputes Act are not equally effective for the reason that access to the forum depends upon a reference being made by the appropriate Government. The power to make a reference conferred upon the Government is to be exercised to effectuate the object of the enactment and hence not unguided. The rule is to make a reference unless, of course, the dispute raised is a totally frivolous one ex facie. The power conferred is the power to refer and not the power to decide, though it may be that the Government is entitled to examine whether the dispute is ex facie frivolous, not meriting an adjudication."
But, once reference is made by the Government Under Section 10 of the Act, it can never be withdrawn or cancelled: In State of Bihar v. D.N. Ganguly, it was held by the Supreme Court that once a reference is made Under Section 10(1) of the Act, the Government becomes functus officio in so far as the reference aspect is concerned and the Industrial Tribunal or Labour Court, as the case may be, assumes jurisdiction to adjudicate the matter, it is ununderstandable and incomprehensible as to how the Government can sit in appeal over the award made by the Industrial Tribunal or Labour Court, when it is incompetent to withdraw or cancel the reference even at the initial stages. Further, the reference is made not only inter paries, but it is inter se workman and also Government and there is absolutely no distinction or difference made with regard to the reference part of it. No special circumstances are made available to the Government to deny the reference merely because the Government is the party. The considerations for making reference are the same for the party in opposition, be it private or Government. Rule of law also requires that in exercise of its governmental or quasi-governmental functions, those who are equal will be treated equally. Equal treatment postulates rational classification. In fact, it was held in Hindustan Antibiotics v. Work-men, , that there is no distinction between a Government employee or other kind of employee, be it private sector or public sector under the Act and that no distinction can be made between industries in public and private sectors vis-a-vis the service conditions of the labour and that a combined reading of Clauses (g), (j) and (s) of Section 2 of the Act indicates that the Act regulates the relationship of employer and employee irrespective of the fact that the employer is the State Government or not and that disputes between the employers and employees irrespective of the character of the employer are made the subject matter of industrial adjudication. The Supreme Court even went to the extent of saying that the Constitutional directive in Articles 39(d) and 43 will certainly be disobeyed if the State attempts to make a distinction between the same class of labourers on the ground that some of them are employed by a company financed by the Government and other by companies floated by private enterprise. But, the impugned provision, in the instant case, makes a distinction with regard to enforcement of the awards and while the awards rendered inter se the workmen and the private sector undertakings are made binding and compulsorily enforceable/reserves the power to the Government to annul the award on the ground of either national economy or public interest, if the Government is a party to the dispute and suffered the award. This is clearly violative of equality clause guaranteed under Article 14 of the Constitution of India and the impugned provision is unconstitutional on this ground.
16. The second and the foremost point for consideration is as to whether the impugned provision enabling the Government to annul the award rendered by the Industrial Tribunal or Labour Court violates the constitutional scheme or mandate in the context of violation of rule of law and basic structure of the Constitution. I may refer few important decisions on the point:
(a) In Pruthvi Cotton Mills v. Broach Borough Muni, a Constitution Bench of the Supreme Court while dealing with the Gujarat Imposition of Taxes by Municipalities (Validation) Act, 1963 SCC 283 held that for enacting validation; the legislature should have Legislative competence and also held:
"Granted legislative competence, it is not sufficient to declare merely that the decision of the Court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the Legislature does not possess or exercise. A Court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances."' In the said case lacuna pointed-out by the earlier Supreme Court Judgment in Patel Gordhandas Hargovindas v. Municipal Commissioner, Ahmedabad with regard to definition of 'rate' has been rectified by a Validation Act and as such, the said Act was upheld.
(b) In Ahmedabad Corpn. v. New S.S. & WVG Co., property tax collected by Municipal Corporation of Ahmedabad for certain years was held to be illegal by the Gujarat High Court and upheld by the Supreme Court. In order to nullify the effect of the said decision, Section 152-A was incorporated by amendment and refund of the tax collected for the said period covered by the said judgment was refused. It was struck down holding that the Legislature under Constitution have, within the prescribed limits, powers to make laws prospectively as well as retrospectively. By exercise of those powers, the Legislature can remove the basis of a decision rendered by a competent Court thereby rendering the decision ineffective. But, no Legislature in the country has power to ask the instrumentalities of the State to disobey or disregard the decision given by the Courts.
(c) In Smt. Indira Nehru Gandhi v. Raj Narain, , which arose because of setting-aside the election of late Smt. Indira Gandhi, the then Prime Minister, to the Parliament, apart from other important questions, one pertinent issue for consideration was regarding the power of the Legislature to annul a judicial decision, which was introduced by Clauses (4) and (5) of Article 329-A, which was inserted by the Constitution (39th Amendment) Act, 1975 and consequent amendment in Election Laws. It was authoritatively held by a majority judgment that it was impermissible for the Legislative body, i.e. Parliament, to annul a judicial decision without removing the basis of the judgment by an amendment. The Supreme Court held:
"The nature of the dispute raised in an election petition is such that it cannot be resolved except by judicial process, namely, by ascertaining the facts relating to the election and applying the pre-existing law; when the amending body held that the election of the appellant was valid, it could not have done so except by ascertaining the facts by judicial process and by applying the law. The result of this process would not be the enactment of constitutional law, but the passing of a judgment or sentence. The amending body, though possessed of judicial power, had no competence to exercise it, unless it passed a constitutional law enabling it to do so. If, however, the decision of the amending body to hold the election of the appellant valid was the result of the exercise of an 'irresponsible despotic discretion' governed solely by what it deemed political necessity or expediency, then, like a bill of attainder, it was a legislative judgment disposing of a particular election dispute and not the enactment of a law resulting in an amendment of the Constitution. And, even if the latter process (the Exercise of despotic discretion) could be regarded as an amendment of the Constitution, the amendment would damage or destroy an essential feature of democracy as established by the Constitution, namely, the resolution of election dispute by an authority by the exercise of judicial power by ascertaining the adjudicative fact and applying the relevant law for determining the real representative of the people. The decision of the amending body cannot be regarded as an exercise in constituent legislative validation of an election."
It was also held that the said provisions contained in Clauses (4) and (5) inserted by Constitution Amendment Act were violative of basic features of constitution; as such, they were struck down as unconstitutional. The ratio laid down by the majority judgment in Keshavananda Bharathi's case (supra) with regard to the exercise of the power by the judicial body and its immunisation from the legislative or executive control has been quoted with approval in the above case.
(d) In M.M. Pathak v. Union of India, a settlement was arrived at between the Life Insurance Corporation and its employees with regard to bonus and on that basis orders were passed by the Calcutta High Court and amount was payable. But, the same was not honoured on the ground of some instructions issued by the Central Government. The same was questioned in the High Court and a learned Judge of Calcutta High Court has allowed the writ petition directing the payment to be made. Letters Patent Appeal was filed before the Division Bench and while the same was pending, Parliament has enacted Life Insurance (Modification of Settlement) Act, 1976, the effect of which was to deprive the employees of bonus payable to them in accordance with the terms of the settlement and the consequent decision of the learned single Judge of Calcutta High Court. By this amendment of the Act, L.I.C. withdrew the appeal and refused to pay the bonus. On challenge being made before the Supreme Court questioning the constitutional validity of the said legislation, the said Amending Act was struck down.
(e) Article 371-D was introduced in the Constitution by the Constitution (32nd Amendment) Act, 1973 which came into force with effect from 1-7-1974. By virtue of the same, Administrative Tribunal was created vesting with the power of adjudication of service matters in the State by divesting the said power from the High Court, which hitherto was exercising under Article 226 of the Constitution of India. But, the order of the Tribunal was to become effective upon its confirmation by the State or on the expiry of 3 months from the date on which the order is made, whichever is earlier. It is apt to extract the said provision contained in Clause (5) as the said power is akin to the power contained under proviso to Section 17-A (1) of the Act.
"The order of the Administrative Tribunal finally disposing of any case shall become effective upon its confirmation by the State Government or on the expiry of three months from the date on which the order is made, whichever is earlier:
Provided that the State Government may, by special order made in writing and for reasons to be specified therein, modify or annul any order of the Administrative Tribunal before it becomes effective and in such a case, the order of the Administrative Tribunal shall have effect only in such modified form or be of no effect, as the case may be."
When a challenge was made to the constitution validity of the said annulling power of the Government, the Supreme Court in P. Sambamurthy v. State of A.P., AIR 1987 SC 663 held that Clause (5) of Article 371-D is violative of the rule of law which is clearly a basic and essential feature of the Constitution, that if the exercise of the power of judicial review can be set at naught by the State Government by overriding the decision given against it, it would sound the death-knell of the rule of law and the rule of law would cease to have any meaning because then it would be open to the State Government to defy the law and yet to get away with it. The proviso to Clause (5) of Article 371-D was, therefore struck down as unconstitutional.
(f) As Article 371-D of the Constitution of India was enacted only for the purpose of State of Andhra Pradesh, the Central Government felt that there should be uniform law creating Administrative Tribunals both for Central Government and State Governments for dealing with the service matters as a substitute for the issuance of writs by the High Courts in exercise of their powers contained under Articles 226 and 227 of the Constitution of India. For that purpose, Parliament has enacted Constitution (42nd Amendment) Act, 1976 inserting Art. 323-A empowering the setting-up of Tribunals and accordingly Administrative Tribunals Act (Central Act 13 of 1985) was enacted. The Constitutional validity of the same was questioned before the Supreme Court in S.P. Sampath Kumar v. Union of India, AIR 1987 SC 386. The Constitution Bench of the Supreme Court while holding that judicial review is a fundamental aspect of the basic structure of the Indian Constitution, has upheld the validity of the above provisions to set-up the Administrative Tribunals on the ground that the said Tribunals are the substitute for the powers exercised by the High Courts under Articles 226 and 227 of the Constitution of India and that the remedy provided for adjudication by the said Tribunals is effective and issued some guidelines in that regard. The said judgment was recently reconsidered by a Larger Constitution Bench of 7-Judges of the Supreme Court in L. Chandra Kumar v. Union of India, 1997 (3) SCALE 40 and held that the power of judicial review over legislative action vested in the High Courts under Article 226 of the Indian Constitution and the Supreme Court under Article 32 as an integral and essential feature of the Constitution, constituting part of its basic structure and that the power of the High Courts and the Supreme Court to test the constitutional validity of legislations can never be ousted or excluded. It was also held that the power vested in the High Courts to exercise judicial superintendence over the decisions of all Courts and Tribunals within their respective jurisdictions is also part of the basic structure of the Constitution. Nevertheless, the power of judicial review, which was vested in the Tribunals by virtue of the Administrative Tribunals Act, 1985 was retained making it compulsory to first approach the Administrative Tribunal for judicial review and only to approach the High Courts later by the parties aggrieved by the decisions rendered by the said Tribunals. Thus, it is clear that the decisions rendered by the Administrative Tribunals will be final and binding, if not challenged further and they will become final and binding even if the challenge is made to the High Court and Supreme Court, but fails.
(g) In B.B. Rajwanshi v. State of A.P., the Supreme Court has quashed Section 6(4) of the U.P. Industrial Disputes Act, 1947 which empowered the Government to annul an award passed by the Industrial Tribunal and remit the matter back for fresh consideration. Of course, the validity of Section 17-A of the Act was not a question for consideration. Quoting P. Sambamurthy's case (16 supra), the Supreme Court Judgment says "there is one other good reason for taking the view that without any guidelines, it would not be appropriate to confer power on the State Government to nullify virtually the effect of an award by exercising its power Under Section 6(4) of the Act. The Act applies not merely to disputes arising between private management and labour unions and the workmen employed by them but also to industries owned by the State Government and their workmen. In those cases where the Government is the owner of the industry, it would be inappropriate to confer uncontrolled and unguided power on the State Government itself to remit the award passed on industrial disputes arising in such industries for there is every chance of the power being exercised arbitrarily in such cases". Referring to the striking down of Clause (5) of Article 371-D of the Constitution by the Constitution Bench in the case of P. Sambamurthy v. State of A.P. (16 supra), it was held by the Supreme Court that even though the decision of the Labour Court or Industrial Tribunal in the present case cannot be equated with the decision of the Administrative Tribunal constituted under Article 371 -D of the Constitution of India in all respects, the danger of entrusting unguided and uncontrolled power to remit an award for reconsideration of the Labour Court or Industrial Tribunal can very well be perceived, particularly, where the award has gone against the State Government in a dispute arising out of an industry owned by it. After striking down the said provision contained Under Section 6(4) of the Act, the Supreme Court has directed the publication of the award, and then leaving the parties aggrieved by it to resort to such remedies, as may be available to it in law.
(h) The Constitution Bench of the Supreme Court in In the matter of: Cauvery Water Disputes Tribunal, quoting with approval Ahemdabad Corpn. case (supra), M.M. Pathak"s case (supra) and P. Sambamurthy's case (supra) has held that the Ordinance issued by Karnataka Government titled "Karnataka Cauvery basin Irrigation Protection Ordinance (1991)" as unconstitutional, as it affects the jurisdiction of the Tribunal appointed under the Central Act i.e., Inter-State Water Disputes Act. In the said case, interim order was passed by the Tribunal and the above Ordinance was issued to nullify the efffect of the same. It was held in that case after referring to the decisions of the Supreme Court:
"The principle which emerges from these authorities is that the Legislature can change the basis on which a decision is given by the Court and thus change the law in general, which will Effect a class of persons and events at large. It cannot, however, set aside an individual decision inter partes and affect their rights and liabilities alone. Such an act on the part of the Legislature amounts to exercising the judicial power of the State and to function as an appellate Court or Tribunal."
It was further held:
"..............Hence, any executive order or a legislative enactment of a State which interferes with the a judicatory process and adjudication by such Tribunal is an interference with the judicial power of the State and is, therefore, ultra vires the Constitution.
It was also held:
"The Ordinance is also against the basic tenets of the rules of law inasmuch as the State of Karnakata by issuing the Ordinance has sought to take law in its own hand and to be above the law, such an act is an invitation to the lawlessness and anarchy, inasmuch as the Ordinance is a manifestation of a desire on the part of the State to be judge in its own cause and to defy the decisions of the judicial authorities."
(i) In State of Haryana v. Karnal Co-op. Farmers' Society Ltd., , it was held: "Under our Constitution, no Legislature has the power to abrogate civil Courts' decrees or orders or judicial adjudications by merely declaring under a law made by it that such decrees or orders or adjudications are no longer valid or binding on the parties, for such power of declaration would be a judicial function which cannot be encroached upon by a Legislature and the only way by which a competent legislature can make the judicial adjudications, decrees or orders ineffective is by fundamentally altering the law on which they are based, is well settled.
It was further held:
"Thus, it becomes clear that a Legislature while has the legislative power to render ineffective the earlier judicial decisions, by removing or altering or neutralising the legal basis in the unamended law on which such decisions were founded, even retrospectively, it docs not have the power to render ineffective the earlier judicial decisions by making a law which simply declares the earlier judicial decisions as invalid or not binding for such power, if exercised would not be a legislative power, but a judicial power which cannot be encroached upon by a legislature under our Constitution."
(j) In G.C. Kanungo v. State of Orissa, a distinction was drawn between the arbitration awards made by arbitrators appointed by parties or by Courts, stating that they are not made in exercise of judicial powers of State. In contrast, it was held by the Supreme Court that Special Arbitration Tribunals on whom power to resolve dispute is not conferred by parties, but, by statute i.e., Orissa Amendment Act 17 of 1984 and the awards made by the said Special Arbitration Tribunals are made in exercise of States Judicial power and Section 41-A, as amended by Orissa Act 3 of 1992 nullifying the awards made by Special Arbitration Tribunals, was held to be unconstitutional. In this case, Cauvery Water Dispute Tribunal's case (20 supra) was quoted with approval and has held that the State Legislature by enacting 1991 Amendment Act has encroached upon the judicial power entrusted to judicial authority resulting in infringment of a basic feature of the Constitution and rule of law. It was held that as 1991 Amendment Act nullifies the Awards of Special Arbitration Tribunals made in exercise of the judicial power conferred upon them under 1984 Amendment Act, by encroaching upon the judicial power of the State, there was no option, but, to declare it as unconstitutional having regard to the well-settled and undisputed legal position that a legislature has no legislative power to render ineffective the earlier judicial decisions which simply declare the earlier judicial decisions as invalid and not binding, for, such powers, if exercised, encroach upon the judicial power of the State vested in a judicial Tribunal. The Supreme Court has further held "Moreover, where the arbitral awards sought to be nullified under the 1991 Amendment Act are those made by Special Arbitration Tribunals constituted by the State itself under 1984 Amendment Act to decide arbitral disputes to which State was a party, it cannot be permitted to undo such arbitral awards which have gone against it, by having recourse to its legislative power for grant of such permission as could result in allowing the State, if nothing else, abuse of its power of legislation."
(k) In S.R. Bhagat v. State of Mysore, the Supreme Court quoting with approval the Cauvery Water Disputes Tribunal's Case and also G.C. Kanungo v. State of Orissa's case, has struck down Section 11(2) of Karnataka State Civil Services (Regulation of Promotion, Pay and Pension) Act, 1973, which had the effect of nullifying the judgments and orders of the Courts as had become final and empowering the State to review such judgments and orders. The said provision was held to be ultra vires of the provisions of the State Legislature citing Articles 50, 245 and 246 that it is an encroachment on the judicial power of the State.
17. The above judicial precedents make it amply clear and unambiguous and they are so uniform in their pronouncements, that too authoritatively, that law should conform to the democratic pattern envisaged by the Constitution and the power which the Parliament exercises is not power to override the constitutional scheme.
18. Our constitutional scheme provides for judicial review by the constitutional authorities like the Supreme Court and the High Courts and also Courts and Tribunals created under the statutes. The learned Advocate General seeks a distinction that while the judgments rendered by the constitutional authories like the Supreme Court and the High Courts are binding and are unimpeachable by the Legislature or Executive, the judgments of the Courts and Tribunals which are the creatures of the statutes stand on a different footing and can be annulled by the provisions contained in the same statutes creating the said Courts or Tribunals. While the ambit and extent of power of the constitutional functionaries like Supreme Court and High Courts are wide enough and all-pervading, the judgments rendered by the Courts and the Tribunals, even created under the statutes, to the extent of their rights and limitations, cannot be made nugatory and redundant by any legislative or executive action and are enforceable with the same vigour and rigour as that of the decisions rendered by the Supreme Court and the High Courts. Thus, while mode of exercise of power in the case of constitutional judicial review and statutory judicial review may differ, there is no difference with regard to enforceability as, the power of the said judicial review, be it constitutional or statutory, is a basic structure of the Constitution.
19. The Constitution has assigned the Courts the function of determining as to whether the laws made by the legislature are in conformity with the provisions of the Constitution. In adjudicating the constitutional validity of the statutes, the Courts discharge an obligation which has been imposed on them by the Constitution. The Courts would be shirking their responsibility if they hesitate to declare the provisions of a statute to be unconstitutional, even though those provisions are found to be violative of constitutional scheme or the provisions. In view of what is stated supra and as I have come to the clear and unmistaken conclusion that the impugned provision encroaches upon the judicial power of the State, as it violates the basic concept of rule of law and democratic pattern envisaged by the Indian Constitution, unhesitatingly, I strike down the impugned provision as being ultra vires the Constitution and consequently the provision contained Under Section 17(2) of the Act to the extent of the words "subject to the provisions of Section 17-A" and whole of Section 17-A with sub-sections 1 to 4 thereof are non est under law. As an inevitable corollary, G.O.Ms. No. 2, Labour Department, dated 20-1-1994 is quashed as being unsustainable in view of what is held above. Now, the award which has been published in G.O.Rt. No. 2761, Women's Development, Chief Welfare and Labour Deparment, dated 23-12-1993 shall be operative and the same be implemented by respondents 3 to 5 within a period of one month from the date of receipt of a copy of this order.
20. Accordingly, the Writ Petition is allowed. No costs.