2018 (5) TMI 2153 - SC - Indian Laws

Functus Officio of Industrial Tribunal/Labour Court after Enforcement of Arbitral Award - whether the Industrial Tribunal/Labour Court is functus officio after the award has become enforceable, and is thus, prevented from considering an application for setting aside an ex parte award? - HELD THAT - Under the statutory scheme, the Labour Court/Tribunal is empowered to follow its own procedure as it thinks fit, meaning thereby, a procedure which is fit and proper for the settlement of the industrial dispute and for maintaining industrial peace. If a party fails to attend the Court/Tribunal without showing sufficient cause, the Court/Tribunal can proceed ex parte and pass an ex parte award. The award, ex parte or otherwise, has to be sent to the appropriate Government as soon as it is made and the appropriate Government has to publish it within 30 days of its receipt. The award thus published becomes enforceable after a period of 30 days of its publication - In case of an ex parte award, whether the Court/Tribunal can set aside the same after 30 days of its publication, is the question to be considered. That an ex parte award can be set aside in case the Court/Tribunal is approached within 30 days of its publication Under Section 17 of the Act, is no more res Integra. In Grindlays Bank Ltd. v. Central Government Industrial Tribunal and Ors. 1980 (12) TMI 181 - SUPREME COURT , it has been held that Tribunal can exercise such powers, if it thinks fit, in the interest of justice. It has also been held that the Tribunal is endowed with such incidental or ancillary powers as are necessary to discharge its functions effectively for the purpose of doing justice between the parties, unless there is any express indication in the statute to the contrary. The Court has unambiguously held that it is the power and duty of the Tribunal exercising its ancillary and incidental powers to set aside an award which is a nullity. In that process, the Tribunal is governed by the principles of Order IX Rule 13 of the Code of Civil Procedure. However, apparently, on facts, the Court came to the conclusion that the power to set aside an ex parte award remained only till the award had become enforceable Under Section 17A, viz., before the expiry of 30 days from the date of its publication Under Section 17. Merely because an award has become enforceable, does not necessarily mean that it has become binding. For an award to become binding, it should be passed in compliance with the principles of natural justice. An award passed denying an opportunity of hearing when there was a sufficient cause for non-appearance can be challenged on the ground of it being nullity. An award which is a nullity cannot be and shall not be a binding award - It needs to be restated that the Industrial Disputes Act, 1947 is a welfare legislation intended to maintain industrial peace. In that view of the matter, certain powers to do justice have to be conceded to the Labour Court/Tribunal, whether we call it ancillary, incidental or inherent. The awards are remitted to the Labour Court for consideration as to whether there was sufficient cause for non-appearance of the management - application disposed off.

Summary

Issues Involved:
- Whether the Industrial Tribunal/Labour Court becomes functus officio after the award becomes enforceable, preventing it from considering an application to set aside an ex parte award.

Issue-wise Detailed Analysis:

1. Functus Officio and Ex Parte Awards:
The primary issue is whether the Industrial Tribunal/Labour Court loses its jurisdiction (functus officio) after an award becomes enforceable, thereby preventing it from setting aside an ex parte award. This question arose due to conflicting views in previous decisions: Sangham Tape Co. v. Hans Raj and Radhakrishna Mani Tripathi v. L.H. Patel and Anr.

2. Statutory Framework:
The Industrial Disputes Act, 1947, under Section 11(1), allows the Labour Court/Tribunal to follow any procedure it deems fit. Sections 17(1) and 17A state that an award becomes enforceable 30 days after its publication. Section 20(3) deems proceedings concluded on the date the award becomes enforceable. Rule 10B(9) of the Industrial Disputes (Central) Rules, 1957, allows for setting aside an ex parte order if an application is made before the award's submission.

3. Precedent Analysis:
In Grindlays Bank Ltd. v. Central Govt. Industrial Tribunal, it was held that the Tribunal retains jurisdiction until the award becomes enforceable and can entertain applications to set aside ex parte awards within this period. The Tribunal has the power to regulate its procedure and ensure justice, including setting aside ex parte awards if a party shows sufficient cause for absence.

4. Judicial Interpretation:
The judgment emphasized that the Tribunal has quasi-judicial functions and must exercise discretion judicially, adhering to natural justice principles. An award passed without sufficient cause for non-appearance is a nullity, and the Tribunal has the power and duty to set it aside.

5. Conflict Resolution:
The conflicting views in Sangham Tape Co. and Radhakrishna Mani Tripathi were addressed. The former held that the Tribunal's power to set aside an ex parte award is limited to 30 days post-publication, while the latter suggested the Tribunal retains this power beyond 30 days if sufficient cause is shown.

6. Inherent Powers and Natural Justice:
The Court reiterated that Tribunals have inherent powers to rectify procedural errors to prevent injustice. This includes setting aside ex parte awards if a party was prevented from appearing due to sufficient cause. Such powers are necessary to ensure compliance with natural justice and prevent nullity awards from being enforced.

7. Practical Implications:
The Court directed that applications to set aside ex parte awards should be considered on their merits, focusing on whether there was sufficient cause for non-appearance. The Tribunal is not functus officio after the award becomes enforceable in this context. The decision balances procedural fairness with the need to maintain industrial peace.

8. Conclusion and Directions:
The appeals were disposed of with the direction to remit the awards to the Labour Court for reconsideration of the non-appearance cause. A provisional payment to the workmen was ordered, subject to the final award outcome. The judgment acknowledges the Tribunal's role in ensuring justice and maintaining industrial harmony.

This comprehensive analysis ensures that the Tribunal's powers are aligned with the principles of natural justice, allowing for procedural rectifications even after an award becomes enforceable.