Madras High Court
Krishnaveni Transports And Etc. vs Special Dy. Commr. Of Labour, Madras And ... on 29 March, 1989
Equivalent citations: AIR1990MAD29, [1990(60)FLR309], AIR 1990 MADRAS 29, (1989) 2 LABLJ 245, (1989) 2 CURLR 664, (1989) 104 MADLJ138, 1989 TLNJ 156
Author: K. Venkataswami
Bench: S. Mohan, K. Venkataswami
ORDER K. Venkataswami, J.
1. The question that has been referred to the Full Bench for its decision is whether non-publication of an arbitration agreement as required under Section 10A(3) of the Industrial Disputes Act, 1947, hereinafter called the Act and the non-publication of the eventual award as required under Section 17A of the Act is fatal to the award and therefore not enforceable.
2. In all these eases, it is common ground that the arbitration agreement itself has not been published as required under S. 10A(3) of the Act. In addition to that it is also the common ease that the eventual awards had also not been published.
3. Mr. Vijaynarayanan and Mr. M. R. Narayanaswami appearing in these cases advanced arguments requesting the Court to hold that non-publication of the arbitration agreement and the award being fatal to the award it cannot be enforced,
4. On the other hand, Mr. G. Venkalaraman of M/s. Iyer and Dolia and Mr. N.G.R. I'rasad of M/s. Row and Reddy contended that the non-publication of the arbitration agreement and the award will not render the award void and unenforceable. The requirements of publication according to them is only directory and not mandatory.
5. The counsel on both sides cited various decisions in support of their respective stands. Before expressing our opinion, we consider that it will be beneficial to note down the principles laid down in the decisions cited at the Bar.
6. The first decision cited is reported in Rarnakrishna Kulwantrai Steels (P.) Ltd. v. Their Workmen. (1977) 1 Lab LJ 382. A Full Bench of this Court was concerned in that case with a question as to the maintainability of writ petition under Art. 226 of the Constitution of India. The argument and the counter-argument advanced before the Full Bench can be advantageously set out to appreciate the decision rendered by the Full Bench in that case. It reads as follows:
"It was contended by the learned Counsel for the petitioner that the terms of settlement amounted only to as agreement to refer the dispute to arbitration within the meaning of S. 10A. Per contra, the learned Counsel for the respondents contended that the parties did not deliberately want to avail themselves of the statutory arbitration under S. 10A but agreed to refer the matter to informal arbitra-
tion outside S. 10A and this is clear from tht fact that the agreement was not in the form prescribed nor the procedure prescribed under S. 10A was followed. We arc unable to agree with the contention of the learned Counsel for the respondents. The dispute between the parlies related to the payment of bonus and, therefore, it is an industrial dispute. An industrial dispute could be resolved under the Act by a settlement in the course of conciliation proceedings under S. 12(3) or by a settlement arrived at by agreement between the parties otherwise than in the course ot conciliation proceedings or by adjudication on a reference under S. 10 or by arbitration by referring the dispute to an arbitrator as provided under S. 10A."
In the above background, it was argued before the Full Bench that the arbitration agreement entered into was one outside the purview of S. 10A and therefore the award ultimately given in that case was not amenable to the writ jurisdiction. In negativing the contention, the Full Bench observed thus:
"It is thus seen that the memorandum signed on 28-7-1986 complied with all the requirements of S. 10A(1) and (2) of the Act. We are also of the view that an agreement entered into during conciliation proceedings between the management and the workers union regarding an industrial dispute is an agreement to refer the dispute to arbitralion under S. 10A for the Act does not contemplate arbitration of an industrial dispute outside S. 10A. In the face of S. 10A(5) excluding the application of Arbitration Act, 1940 to arbitrations under S. 10A. it would be very doubtful whether private agreement in respect of industrial disputes contracting out of the statutory provisions of S. 10A would be permissible at all in law."
Ultimately, the Full Bench held that as the arbitration agreement was one under S. 10A, the award made thereunder was clearly amenable to correction under Art. 226 of the Constitution of India.
7. The next decision cited is reported in Madras Machine Toots v. Spl. Py. Commr. of Labour, (1979)2 Lab LJ 331: (1980 Lab IC 329). A Division Bench of this Court to which one of us was a parly (The Honourable The Offg. Chief Justice), while considering the question whether non-compliance with the provisions of S. 10A(3A) of the Act would render the award as invalid. It was held that the requirement under S. 10A(3A) of the Act is mandatory, and consequently on the non-compliance of the same the award would become invalid. Before the Division Bench, the Full Bench judgment referred to above Ramakrishna Kulwantrai Slecls (P.) Ltd. v. their Workmen, (1977) I Lab LJ 382, was pressed into service, in support of the argument that the requirement of S. 10A(3A) of the Act is not mandatory but only directory. The Division Bench, however, distinguished the decision of the Full Bench by holding thus (at p. 332 of Lab 1C):
"We may at once state that the question that arose before the Full Bench was whether an arbitration award rendered under S. 10A of the Act would be amenable to writ jurisdiction. Nevertheless, the effect of non-compliance of S. 10A(3) came to be considered as seen from the above extract and the Full Bench seems to suggest that the non-compliance of S. 10A(3) could not render the arbitration agreement invalid. Bound, as we are by the Full Bench, we will have to limit the scope of the judgment only to the stage of agreement and cannot extend it beyond its frontiers, in other words, to domain of award."
A Division Bench of Madhya Pradesh High Court in a decision reported in Altab-E-Jadid v. Bhopal S. P. Sangh, (1985) 1 Lab LJ 272 : (1985 Lab IC 164), had occasion to consider the scope of S. 10A(3) of the Aet. The Division Bench held that the time for publication given in S. 10A(3) of the Act is merely directory but the agreement has to be published before the award is given. This Division Bench had noticed the judgments of Full Bench as well as the Division Bench referred to above.
8. In Management of Tues Ltd. v. Commissioner of Labour,(1986) 2 Lab LJ 225 : (1986 Lab IC 1871), another Division Bench of this Court had occasion to consider the question whether non-publication of the award of the arbitrator vitiates the award. Nainar Sundaram, J., speaking for the Bench while explaining the dictum of the Full Bench decision reported in Ramkrishna Kulwantrai Steels (P.) Ltd. v. Their Workmen, (197-7) 1 Lab LJ 382, has observed as follows (at p. 1874 of Lab IC):
"It is the categorical opinion of the Full Bench that if the terms of the settlement did not settle the dispute as such, and there was only an agreement to refer the matter to arbitration, such an agreement must only be held to be an agreement to refer the dispute to arbitration under S. 10A of the Aci. It is not disputed before us by the learned Counsel for the first respondent that the agreement in the present cases substantially complies with all the requirement of S. 10A(I) and (2) of the Aet. In the Full Bench case also substantial compliance with the requirements was noted in respect of that agreement. In our view, the Full Bench ratio provides answer for the first contention put forth by the learned Counsel for the first respondent."
Regarding Ihe non-compliance of S. 10A of the Act, the Division Bench has held as follows (at p. 1876 of Lab 1C):
"We find that the learned Judge has granted reliefs only so far as the two petitioners are concerned and in the instant case, admittedly, the relevant requirements of S. 10A and S. 11A of the Act have not been complied with and the learned Judge has remitted the matter back to the file of the second respondent for him to dispose of the matter afresh and in accordance with law. It is needless to state that the second respondent will endeavour to rectify and direct the parties also, if necessary, to rectify the lacuane with regard to the compliance of the requirements of S. 10A of the Act.
9. In Remington Rand of India Ltd. v. Their Workmen, , the Supreme Court has held that a provision as to time in S. 17(1) is merely directory and not mandatory. The Supreme Court further held that if the award becomes invalid merely on the ground of publication after thirty days it may entail a reference with needless harassment to the parties.
10. In the backdrop of the case law cited before us we have to consider the question referred to us. We may at once state that we feel it unnecessary to express any opinion on the second part of the question, for, if we answer the first question in the affirmative the second question need not be answered in view of the fact that in all these eases, the arbitration agreement itself has not publish-cd. Likewise, the question whether the time prescribed for publication of agreement or the award, as the case may he, is mandatory or directory also does not arise in these eases.
11. After perusing the provisions of Sections 10A, 17 and 17A of the Act and also Rr. 26 and 27A of the Tamil Nadu Industrial Disputes Rules, 1958 read with Form D, we arc of the view that the publication of the arbitration agreement as required under S. 10A(3) of the Act is mandatory and non-compliance oft the same will vitiate the award that might ultimately be passed. The Section 10A(3) and (3A) of the Act is set out below to appreciate our reasoning:
"10A(3) A copy of the arbitration agreement shall he forwarded to the appropriate Government and the Conciliation Officer and the appropriate Government shall, within (one month) from the date of the receipt of such copy, publish the same in the Official Gazette.
(3A) Where an industrial dispute has been referred to arbitration and the appropriate Government is satisfied that the persons making the reference represent the majority of each party, the appropriate Government may. within the time referred to in sub-section (3), issue a notification in such manner as may be prescribed; and when any such notification is issued, the employers and workmen who are not parties to the arbitration agreement but are concerned in the dispute shall be given an opportunity of presenting their ease before the arbitrator or arbitrators."
Inasmuch as the award that might be passed will he binding on all the parties including those who arc not parties to the arbitration agreement, it is necessary to publish the arbitration agreement so that if there are any persons who arc not parties to the arbitration agreement they can come before the arbitrator to represent their ease and this will be possible only if the arbitration agreement is published as contemplated under S. 10A(3) of the Act. The Madhya Pradcsh High Court in the decision reported in Aftab-e-Jadid v. Bhopal S. P. Sangh, (1985) 1 Lab LJ 272 : (1985 Lab 1C 164), held us follows (at p. 166 of Lab IC):
"On a true construction of the Section, it is clear that although the first condition as regards the publication of an agreement in the Official Gazette is obligatory i.e., a sine qua non, the other requirement, namely, of its notification within one month from its receipt is only directory and not imperative. The same is the view taken in Landra Enginccring and Foundry Works v. Punjab State, 1969 Lab 1C 52 (Punj) and in Mineral Industry Association v. Union of India, . Reliance was placed on a decision of the Supreme Court in Remington Rand of India v. The Workmen, (1968) I Lab LJ 342, that the provision contained in S. 17(1) of the Industrial Disputes Act, 1947 regarding publication of award within thirty days is directory and if the publication is beyond the fixed time, the award is not invalid. However it appears that the Full Bench of the Madras High Court in R. K. Steels v. Their Workmen, (1977) I Lab LJ 382, has held that non-publication of the agreement under S. 10A(3) would not invalidate the arbitration agreement but a Division Bench of that Court in Madras M. T. Manufacturers v. Spl. Dy. Labour Commr., 1980 Lab 1C 329, explained the Full Bench decision by saying that it referred to the arbitration agreement and not to the award but non-publication of the agreement and the award would invalidate the award. However, anoher Division Bench of this Court in K. P. Singh v. S. K. Gokhale, (1970) 1 Lab LJ 125 (l969 Lab IC 725) (Madh Pra) has held that the Procedure prescribed under S. 10A(3) is mandatory. In that case, neither the arbitration agreement was published nor the award."
(Underlining ours) The other two division Bench judgments of this Court relate to the non-publication of the award and therefore not directly on the point regarding non-compliance of S. 10A(3) concerning the arbitration agreement. The learned Counsel who argued that non-publication of the arbitration agreement will not vitiate the award wanted to rely on an observation of the Full Bench decision reported in Ramakrishna Kulwantri Steels (P.) Ltd. v. Their workmen, (1977) 1 Lab LJ 382. The Full Bench while negativing the argument that the agreement in question was one outside the scope of S. 10A of the Act and therefore, a writ was not maintainable incidentally observed as follows:
"If once that is done, there is a valid arbitration agreement and non-compliance with the other provisions of S. 10A or any other provision in the Act relating to publication of the award will not invalidate or take the arbitration agreement itself outside the purview of S. 10A."
We cannot read the above extracted portions in the Full Bench judgment dehors the context and facts of the case. This Full Bench judgment has been referred to an explained by the two subsequent Division Bench judgments in the decisions reported in :
(i) Madras Machine Tools v. spl. Dy. Commr. of Labour, (1979) 2 Lab LJ 331 : (1980 Lab 1C 329); and
(ii) Management of Tucs Ltd. v. Commr. of Labour. (1986) 2 Lab LJ 225 : (1986) Lab IC 1871).
We would also like to add that the Full Bench was not concerned with the question whether the non-compliance of S. 10A(3) of the Act is mandatory or not. The Full Bench was concerned only with the nature of the agreement with reference to the jurisdiction of this Court under Art. 226 of the Constitution of India. We are of the view that the passage extracted above cannot be considered to mean that the Full Bench has held that the non-compliance of S. 10A(3) of the Act is not fatal to the award to be passed pursuant to the arbitration agreement. The proposition laid down by the Full Bench was to the effect that notwithstanding the non-compliance of the requirements of S. 10A of the Act any arbitration agreement entered into would still be an agreement under S. 10A of the Act and the matters arising out of such an agreement can be considered in proceedings under Article 226 of the Constitution of India.
12. The reliance placed by Mr. N.G.R. Prasad on the judgment of the Supreme Court in Remington Rand of India Ltd. v. Their Workmen, will be of no assistance as the point decided therein is not regarding the consequence of non-publication of arbitration agreement as required under S. 10A(3) of the Act.
13. For the foregoing reasons, we hold that the non-publication of the arbitration agreement vitiates the award and the publication of the arbitration agreement, as required under S. 10A(3) of the Act is mandatory.
14. Order accordingly.