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TMI Blog1960 (8) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... nion and the company. The Assistant Commissioner of Labour, who is also the conciliation officer, was therefore requested to commence the conciliation proceedings at an early date. Soon thereafter the company declared a bonus equivalent to 1/4 of the basic earnings for the year 1952-53. The respondents then informed the company that they were entitled to a much higher bonus having regard to the profits made by the company during the relevant year and that they had decided to accept the bonus offered by the company without prejudice to the demand already submitted by them in that behalf. After holding a preliminary discussion with the parties the conciliation officer examined the four demands made by the respondents and admitted into conciliation only two of them; they were in respect of the classification of certain employees and the bonus for the year 1952-53; the two remaining demands were not admitted in conciliation. The conciliation proceedings initiated by the conciliator, however, proved infructuous with the result that on July 5, 1954, the conciliator made his failure report under s. 12(4) of the Act. In his report the conciliator has set out the arguments urged by both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to refer the dispute provided it was satisfied that a case for reference had been made, and he came to the conclusion that the reason given by the appellant for refusing to make a reference was so extraneous that the respondents were entitled to a writ of mandamus against the appellant. Accordingly he directed that a mandamus shall issue against the appellant to reconsider the question of making or refusing to make a reference under s. 12(5) ignoring the fact that there was a slow-down and taking into account only such reasons as are germane to the question of determining whether a reference should or should not be made. 3. Against this decision the appellant as well as the company preferred appeals. Chagla, C.J., and Desai, J., who constituted the Court of Appeal, allowed the two appeals to be consolidated, heard them together and came to the conclusion that the view taken by Tendolkar J. was right and that the writ of mandamus had been properly issued against the appellant. The appellant and the company then applied for and obtained a certificate from the High Court and with that certificate they have come to this Court by their two appeals Nos. 37 and 38 of 1957. These app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject that reference is contemplated not only in regard to existing industrial disputes but also in respect of disputes which may be apprehended. This section confers wide and even absolute discretion on the Government either to refer or to refuse to refer an industrial dispute as therein provided. Naturally this wide discretion has to be exercised by the Government bona fide and on a consideration of relevant and material facts. The second proviso to s. 10(1) deals with disputes relating to a public utility service, and it provides that where a notice under s. 2 has been given in respect of such a dispute the appropriate Government shall, unless it consider that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make a reference under this sub-section notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced. It is thus clear that in regard to cases falling under this proviso an obligation is imposed on the Government to refer the dispute unless of course it is satisfied that the notice is frivolous or vexatious or that considerations of expediency required that a reference should not be ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent footing. Under s. 11(4) he is given the power to call for and inspect any relevant document and has been given the same powers as are vested in civil courts in respect of compelling the production of documents. 7. Section 12 deals with the duties of conciliation officers. Under s. 12(1) the conciliation officer may hold conciliation proceedings in the prescribed manner where an industrial dispute exists or is apprehended. In regard to an industrial dispute relating to a public utility service, where notice under s. 22 has been given, the conciliation officer shall hold conciliation proceedings in respect of it. The effect of s. 12(1) is that, whereas in regard to an industrial dispute not relating to a public utility service the conciliation officer is given the discretion either to hold conciliation proceedings or not, in regard to a dispute in respect of a public utility service, where notice has been given, he has no discretion but must hold conciliation proceedings in regard to it. Section 12(2) requires the conciliation officer to investigate the dispute without delay with the object of bringing about a settlement, and during the course of his investigation he may exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of which a settlement could not be arrived at. 8. Section 12(5) with which we are concerned in the present appeals provides that if, on a consideration of the report referred to in sub-section (4), the appropriate Government is satisfied that there is a case for reference to a Board, Labour Court, Tribunal or National Tribunal, it may make such reference. Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefore. This section requires the appropriate Government to consider the report and decide whether a case for reference has been made out. If the Government is satisfied that a case for reference has been made out it may make such reference. If it is satisfied that a case for reference has not been made out it may not make such a reference; but in such a case it shall record and communicate to the parties concerned its reasons for not making the reference which in the context means its reasons for not being satisfied that there is a case for reference. The High Court has held that the word may in the first part of s. 12(5) must be construed to mean shall having regard to the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here would be no power in the appropriate Government to prohibit the continuance of such a strike or such a lock-out. Section 24(2) makes it clear that the continuance of a lock-out or strike is deemed to be illegal only if an order prohibiting it is passed under s. 10(3). Thus the power to maintain industrial peace during adjudication proceedings which is so essential and which in fact can be said to be the basis of adjudication proceedings is exercisable only if a reference is made under s. 10(1). What is true about this power is equally true about the power conferred on the appropriate Government by s. 10(4), (5), (6) and (7). In other words, the material provisions contained in sub-ss. (3) to (7) of S. 10(1) which are an integral part of the scheme of reference prescribed by Chapter III of the Act clearly indicate that even if the appropriate Government may be acting under s. 12(5) the reference must ultimately be made under s. 10(1). Incidentally it is not without significance that even in the petition made by the respondents in the present proceedings they have asked for a writ of mandamus calling upon the appellant to make a reference under Sections 10(1) and 12(5). 10. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a prima facie case for reference has been made then it would be open to the Government also to consider whether there are any other relevant or material facts which would justify its refusal to make a reference. The question as to whether a case for reference has been made out can be answered in the light of all the relevant circumstances which would have a bearing on the merits of the case as well as on the incidental question as to whether a reference should nevertheless be made or not. A discretion to consider all relevant facts which is conferred on the Government by s. 10(1) could be exercised by the Government even in dealing with cases under s. 12(5) provided of course the said discretion is exercised bona fide, its final decision is based on a consideration of relevant facts and circumstances, and the second part of s. 12(5) is complied with. 12. We have already noticed that s. 12 deals with the conciliation proceedings in regard to all industrial disputes, whether they relate to a public utility service or not. Section 12(1) imposes an obligation on the conciliation officer to hold conciliation proceedings in regard to an industrial dispute in respect of public uti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to make reference is intended to be exercised for the benefit of the party which raises an industrial dispute and wants it to be referred to the authority for decision. It may be that the Legislature intended that this requirement would avoid casual or capricious decisions in the matter because the recording and communication of reasons postulates that the reasons in question must stand public examination and scrutiny and would therefore be of such a character as would show that the question was carefully and properly considered by the Government; but that is not the only object in making this provision. The other object is to indicate that an obligation or duty is cast upon the Government, and since the power conferred by the first part is coupled with the duty prescribed by the second party may in the context must mean shall . There is considerable force in this argument. Indeed it has been accepted by the High Court and it has been held that if the Government is satisfied that there is a case for reference it is bound to make the reference. 15. On the other hand, if the power to make reference is ultimately to be found in s. 10(1) it would not be easy to read the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made, it would clearly be under s. 10(1). This position is implicit in the scheme of s. 13. The result, therefore, would be that in regard to a dispute like the present it would be open to Government to refer the said dispute under s. 12(5) to a Board, and if the Board fails to bring about a settlement between the parties Government would be entitled either to refer or to refuse to refer the said dispute for industrial adjudication under s. 10(1). There can be no doubt that if a reference has to be made in regard to a dispute referred to a Board under s. 13 s. 10(1) would apply, and there would be no question of importing any compulsion or obligation on the Government to make a reference. Now, if that be the true position under the relevant provisions of s. 13 it would be difficult to accept the argument that a prior stage when Government is acting under s. 12(5) it is obligatory on it to make a reference as contended by the respondent. 16. The controversy between the parties as to the construction of s. 12(5) is, however, only of academic importance. On the respondents' argument, even if it is obligatory on Government to make a reference provided it is satisfied that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e justifiable in the sense that their propriety, adequacy or satisfactory character may not be open to judicial scrutiny; in that sense it would be correct to say that the court hearing a petition for mandamus is not sitting in appeal over the decision of the Government; nevertheless if the court is satisfied that the reasons given by the Government for refusing to make a reference are extraneous and not germane then the court can issue, and would be justified in issuing, a writ of mandamus even in respect of such an administrative order. After an elaborate argument on the construction of s. 12(5) was addressed to us it became clear that on this part of the case there was no serious dispute between the parties. That is why we think the controversy as to the construction of s. 12(5) is of no more than academic importance. 18. That takes us to the real point of dispute between the parties, and that is whether the reason given by the appellant in the present case for refusing to make a reference is germane or not. The High Court has held that it is wholly extraneous and it has issued a writ of mandamus against the appellant. We have already seen that the only reason given by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or not it should exercise its power to make a reference it would not be open to the Government to introduce and rely upon wholly irrelevant or extraneous considerations under the guise of expediency. It may for instance be open to the Government in considering the question of expediency to enquire whether the dispute raises a claim which is very stale, or which is opposed to the provisions of the Act, or is inconsistent with any agreement between the parties, and if the Government comes to the conclusion that the dispute suffers from infirmities of this character, it may refuse to make the reference. But even in dealing with the question as to whether it would be expedient or not to make the reference Government must not act in a punitive spirit but must consider the question fairly and reasonably and take into account only relevant facts and circumstances. In exercising its power under s. 10(1) it would not be legitimate for the Government for instance to say that it does not like the appearance, behaviour or manner of the secretary of the union, or even that it disapproves of the political affiliation of the union, which has sponsored the dispute. Such considerations would be wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profits of the employer the employees are entitled to claim a share in the said profits, and so any punitive action taken by the Government by refusing to refer for adjudication an industrial dispute for bonus would, in our opinion, be wholly inconsistent with the object of the Act. If the Government had given some relevant reasons which were based on, or were the consequence of, the misconduct to which reference is made it might have been another matter. Under these circumstances we are unable to hold that the High Court was in error in coming to the conclusion that the impugned decision of the Government is wholly punitive in character and must in the circumstances be treated as based on a consideration which is not germane and is extraneous. It is clear that the Act has been passed in order to make provision for the investigation and settlement of industrial disputes, and if it appears that in cases falling under s. 12(5) the investigation and settlement of any industrial dispute is prevented by the appropriate Government by refusing to make a reference on grounds which are wholly irrelevant and extraneous a case for the issue of a writ of mandamus is clearly established. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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