1967 (2) TMI 99 - SC - Indian Laws

Summary

Issues Involved:

1. Validity of the State Government's notification under S.114(2) of the Bombay Industrial Relations Act, 1946.
2. Binding nature of the agreement and award on the appellant.
3. Appellant's liability to pay bonus as per the award.
4. Delay and acquiescence in seeking the writ.

Issue-wise Detailed Analysis:

1. Validity of the State Government's Notification under S.114(2) of the Bombay Industrial Relations Act, 1946:

The appellant contested the validity of the notification issued by the Government of Bombay on July 31, 1956, under S.114(2) of the Act, which extended the terms of an award regarding bonus payment to certain cotton textile mills, including the appellant's mill. The Supreme Court referred to its earlier decision in Prakash Cotton Mills (Private), Ltd., and others v. State of Bombay 1962 (1) LLJ 108, where it was held that the notification was ultra vires the powers conferred on the State Government under S.114(2). The Court reiterated that the notification was beyond the powers of the State Government because:

- It was limited by the subject-matter of the agreement or award.
- It had to conform to the industrial law laid down by the industrial court or the Supreme Court.
- The State Government's power was co-terminus with that of an adjudicator, and it could not do what an adjudicator could not do under the Act.

2. Binding Nature of the Agreement and Award on the Appellant:

The appellant was not a party to the agreement dated March 1, 1956, and thus was not bound by it. The Government's notification attempted to bind the appellant to the award, which the Supreme Court found to be illegal. The Court emphasized that an agreement of this nature could not be enforced by industrial adjudication against the will of any party, as established in New Maneckchowk Spinning and Weaving Company, Ltd., and others v. Textile Labour Association, Ahmedabad 1961 (1) LLJ 521.

3. Appellant's Liability to Pay Bonus as per the Award:

The dispute over the bonus for the years 1955 and 1956 was referred to arbitration, resulting in an award by Sri M. D. Bhat on April 25, 1958. The appellant failed to comply, leading to a labour court order on August 4, 1959, directing the appellant to pay the bonus. This order was upheld by the industrial court on October 24, 1959. However, the Supreme Court found that the award itself was illegal and ultra vires, as it was based on the invalid notification. Consequently, the orders of the labour court and industrial court were quashed.

4. Delay and Acquiescence in Seeking the Writ:

The respondents argued that the appellant was guilty of delay and acquiescence, having acted on the bonus agreement and not promptly contesting the jurisdiction. The Supreme Court rejected this argument, noting that the appellant contested the award soon after it was issued and pursued legal remedies promptly. The Court held that there was no negligence or laches on the appellant's part that would disentitle it to the writ. The principle of laches, as stated in Lindsay Petroleum Company v. Prosper Armstrong Hurd, was applied, emphasizing that delay must be substantial and cause prejudice to the other party.

Conclusion:

The Supreme Court set aside the judgment of the Bombay High Court dated February 6, 1962, and granted a writ of certiorari quashing the orders of the industrial court dated October 24, 1959, and the labour court dated August 4, 1959. The decision clarified that it would not prejudice any pending or future references regarding bonus disputes for the years 1955 and 1956, which should be decided according to law. The appeal was allowed without any order as to costs.