2018 (12) TMI 307 - SC - Indian Laws

Principles of natural justice - Recall of ex-parte order after expiry of 30 days from publication of the award - Refusal of employment - whether refusal of employment to Shri Mahabir Prosad Choudhary by the management w.e.f. 02.05.2005 is justified? Held that - Tribunal was required to intimate date and time for receiving of the written statement by the company. Neither the order sheet of Tribunal indicate that any date was fixed for such service of W/S nor any intimation was sent to the company. Thus, there was a clear breach of subrule( 5) of Rule 20B, no error has been committed by High Court in taking the view that Rule 20B(5) has been violated, resulting in violation of principles of natural justice. Rule 21, which empowers the Tribunal to proceed when any party to a proceeding fails to attend. Learned counsel for the appellant is right in his submission that the plain language of Rule 21 does not indicate that it is necessary for Tribunal to issue any notice to a party before proceeding exparte. However, the expression used in Rule 21 is may proceed . Thus, on nonappearance on one day does not oblige the Tribunal to proceed exparte - But even otherwise accepting, the submission of the learned counsel for the appellant that no mandatory notice under Rule 21 was required to be issued by the Tribunal to the company, there being violation of Rule 20B(5), the High Court committed no error in setting aside the order of the Tribunal s exparte award by directing the Tribunal to proceed afresh. There is no error in the judgment of the High Court - appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Justification of refusal of employment.
2. Validity of ex-parte award by Industrial Tribunal.
3. Compliance with procedural rules (Rule 20B(5) and Rule 21 of the West Bengal Industrial Disputes Rules, 1958).
4. Tribunal's jurisdiction to recall ex-parte award after 30 days of publication.

Detailed Analysis:

1. Justification of Refusal of Employment:
The appellant, an accountant since 1986, was not allowed to work from 02.05.2005 following a change in management in 2004. The State of West Bengal referred the industrial dispute to the Fifth Industrial Tribunal to determine if the refusal of employment was justified.

2. Validity of Ex-parte Award by Industrial Tribunal:
The Industrial Tribunal issued summons to the company, which were returned with the remark “left.” Despite multiple dates set for appearance, the company did not appear, leading the Tribunal to proceed ex-parte. On 26.02.2008, the Tribunal pronounced an ex-parte award in favor of the appellant, ordering reinstatement with full back wages. The company filed an application on 02.05.2008 to recall the ex-parte award, stating they were unaware of the proceedings due to management changes and lack of proper notice.

3. Compliance with Procedural Rules:
The Tribunal acknowledged that the ex-parte award was passed in violation of principles of natural justice, as no notice under Rule 20B(5) and Rule 21 of the West Bengal Industrial Disputes Rules, 1958, was served on the company. Rule 20B(5) mandates that a copy of the written statement (W/S) be served to the concerned party within seven days. The Tribunal failed to fix a date and time for the service of the W/S and did not intimate the company, breaching Rule 20B(5). Rule 21 allows the Tribunal to proceed ex-parte if a party fails to attend without sufficient cause, but does not mandate issuing a notice before proceeding ex-parte.

4. Tribunal's Jurisdiction to Recall Ex-parte Award After 30 Days:
The appellant argued that the Tribunal became functus officio (having no further authority) after 30 days from the publication of the award, as per the judgment in Grindlays Bank Ltd. vs. Central Government Industrial Tribunal. The High Court, however, noted that the Tribunal retains jurisdiction over the dispute until the award becomes enforceable under Section 17A of the Industrial Disputes Act, 1947. This includes the power to recall an ex-parte award if sufficient cause for non-appearance is shown, even if the application is filed after 30 days of publication.

The Supreme Court affirmed the High Court's decision, stating that the Tribunal's failure to comply with Rule 20B(5) resulted in a violation of natural justice. The Tribunal's decision to reject the recall application based on being functus officio was incorrect. The High Court was right in setting aside the ex-parte award and directing the Tribunal to reconsider the issue afresh.

Conclusion:
The Supreme Court upheld the High Court's judgment, dismissing the appeal and directing the Tribunal to proceed afresh, ensuring compliance with procedural rules and principles of natural justice. The appellant's attainment of superannuation in July 2018 was noted, but it did not affect the legal findings.