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TMI Blog2018 (5) TMI 2153X X X X Extracts X X X X X X X X Extracts X X X X ..... ish 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 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises for consideration in these cases. 2. It may be noted that on this question two Division Bench decisions have taken apparently conflicting views. In Sangham Tape Co. v. Hans Raj a two-Judge Bench held and observed that an application for recall of an ex parte award may be entertained by the Industrial Tribunal/Labour Court only in case it is filed before the expiry of 30 days from the date of pronouncement/publication of the award. A contrary view was taken in Radhakrishna Mani Tripathi v. L.H. Patel to which one of us (Aftab Alam, J.) was a party. 3. In both cases, that is to say, Sangham Tape Co. and Radhakrishna Mani Tripathi, the Court referred to and relied upon the earlier decisions in Grindlays Bank Ltd. v. Central Govt. Industrial Tribunal and Anil Sood v. Labour Court but read and interpreted those two decisions completely differently. 4. The conflict which has arisen as a result of the two decisions can only be resolved by a larger Bench. Let these cases be, therefore, listed before a three-Judge Bench. 4. Heard learned Counsel appearing for the parties and Mr. Shekhar Naphade, learned senior Counsel assisting the Court as Amicus Curiae. 5. The Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. 8. Section 38 provides for power to frame Rules for the purpose of giving effect to the provisions of the Act including the powers and procedure of the Courts/Tribunals. 9. Rule 10B(9), as introduced in 1984 of the Industrial Disputes (Central) Rules, 1957 (hereinafter referred to as the Central Rules ), reads as follows: 10B(9). In case any party defaults or fails to appear at any stage the Labour Court, Tribunal or National Tribunal, as the case may be, may proceed with the reference ex parte and decide the reference application in the absence of the defaulting party: Provided that the Labour Court, Tribunal or National Tribunal, as the case may be, may on the application of either party filed before the submission of the award revoke the order that the case shall proceed ex parte, if it is satisfied that the absence of the party was on justifiable grounds. 10. Rule 22 of the Central Rules also provides that the Court/Tribunal can proceed ex parte in case any party fails to attend the Court/Tribunal without sufficient cause being shown. The Rule reads as follows: 22. Board, Court, Labour Court, Tribunal, National Tribunal or Arbitrator may proceed ex parte.- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20, it has been held at paragraph-14 that: 14. The contention that the Tribunal had become functus officio and, therefore, had no jurisdiction to set aside the ex parte award and that the Central Government alone could set it aside, does not commend to us. Sub-section (3) of Section 20 of the Act provides that the proceedings before the Tribunal would be deemed to continue till the date on which the award becomes enforceable Under Section 17-A. Under Section 17-A of the Act, an award becomes enforceable on the expiry of 30 days from the date of its publication Under Section 17. The proceedings with regard to a reference Under Section 10 of the Act are, therefore, not deemed to be concluded until the expiry of 30 days from the publication of the award. Till then the Tribunal retains jurisdiction over the dispute referred to it for adjudication and up to that date it has the power to entertain an application in connection with such dispute. That stage is not reached till the award becomes enforceable Under Section 17-A....... At paragraph-6 in Grindlays (supra), it was held that the Tribunal can exercise such powers, if it thinks fit, in the interest of justice. It has also bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew exercised ex debito justitiae to prevent abuse of its process and such powers are inherent in every Court or Tribunal. 21. Paragraphs-10 to 13 read as follows: 10. When Sub-section (1) of Section 11 expressly and in clear terms confers power upon the Tribunal to regulate its own procedure, it must necessarily be endowed with all powers which bring about an adjudication of an existing industrial dispute, after affording all the parties an opportunity of a hearing. We are inclined to the view that where a party is prevented from appearing at the hearing due to a sufficient cause, and is faced with an ex parte award, it is as if the party is visited with an award without a notice of the proceedings. It is needless to stress that where the Tribunal proceeds to make an award without notice to a party, the award is nothing but a nullity. In such circumstances, the Tribunal has not only the power but also the duty to set aside the ex parte award and to direct the matter to be heard afresh. 11. The language of Rule 22 unequivocally makes the jurisdiction of the Tribunal to render an ex parte award conditional upon the fulfilment of its requirements. If there is no sufficient c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before it is proceeded against is one of procedure and not of power in the sense in which the words are used in Section 11. The answer to the question is, therefore, to be found in Sub-section (1) of Section 11 and not in Sub-section (3) of Section 11. Furthermore, different considerations arise on review. The expression review is used in the two distinct senses, namely (1) a procedural review which is either inherent or implied in a court or Tribunal to set aside a palpably erroneous order passed under a misapprehension by it, and (2) a review on merits when the error sought to be corrected is one of law and is apparent on the face of the record. It is in the latter sense that the court in Patel Narshi Thakershi case held that no review lies on merits unless a statute specifically provides for it. Obviously when a review is sought due to a procedural defect, the inadvertent error committed by the Tribunal must be corrected ex debito justitiae to prevent the abuse of its process, and such power inheres in every court or Tribunal. 22. 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 aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e civil court are clearly set out. 6. The aspect that the party against whom award is to be made due opportunity to defend has to be given is a matter of procedure and not that of power in the sense in which the language is adopted in Section 11. When matters are referred to the tribunal or court they have to be decided objectively and the tribunals/courts have to exercise their discretion in a judicial manner without arbitrariness by following the general principles of law and Rules of natural justice. 7. The power to proceed ex parte is available Under Rule 22 of the Central Rules which also includes the power to inquire whether or not there was sufficient cause for the absence of a party at the hearing, and if there is sufficient cause shown which prevented a party from appearing, then if the party is visited with an award without a notice which is a nullity and therefore the Tribunal will have no jurisdiction to proceed and consequently, it must necessarily have power to set aside the ex parte award. 8. If this be the position in law, both the High Court and the Tribunal (sic Labour Court) fell into an error in stating that the Labour Court had become functus officio a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted as follows: 12. This Court in Anil Sood did not lay down any law to the contrary. The contention raised on the part of Mr. Jain to the effect that in fact in that case an application for setting aside an award was made long after 30 days cannot be accepted for more than one reason. Firstly, a fact situation obtaining in one case cannot be said to be a precedent for another. (See Mehboob Dawood Shaikh v. State of Maharashtra). Secondly, from a perusal of the said decision, it does not appear that any date of publication of the award was mentioned therein so as to establish that even on fact, the application was made 30 days after the expiry of publication of the award. Furthermore, the said decision appears to have been rendered on concession. 26. In Jammu Tehsil v. Hakumar Singh and Ors. (2006) 12 SCC 193. following the decisions in Grindlays (supra), this Court at paragraph-5 held that In view of this Court's decision in Grindlays Bank case such jurisdiction could be exercised by the Labour Court within a limited time-frame, namely, within thirty days from the date of publication of the award. Once an award becomes enforceable in terms of Section 17-A of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 22 of the Central Rules is made explicit and clear in the Bombay Rules in the form of Sub-rule (2) of Rule 26. 28. After referring to and quoting paragraph-14 in Grindlays (supra), it was further held that: 16....From the above quotation it would appear that in Grindlays Bank the recall application was filed within thirty days from the date of publication of the award and hence, the objection raised on the basis of Section 17-A did not arise in this case. In Grindlays Bank this Court did not say that the Industrial Courts would have no jurisdiction to entertain an application for setting aside an award made after thirty days of its publication. Nevertheless, on the basis of the passage marked in italics in the above quotation Ms. Issar strongly contended that that is the true import of the judgment. 17. We are unable to accept. The position is made clear in the later decision in Anil Sood v. Labour Court. In Anil Sood interestingly the Labour Court had rejected the recall application on the very same ground that after making the award it became functus officio in the matter. The order of the Labour Court was challenged before the High Court but the High Court also too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout going into the merit of the order passed. The order passed is liable to be recalled and reviewed not because it is found to be erroneous, but because it was passed in a proceeding which was itself vitiated by an error of procedure or mistake which went to the root of the matter and invalidated the entire proceeding. In Grindlays Bank Ltd. v. Central Govt. Industrial Tribunal it was held that once it is established that the Respondents were prevented from appearing at the hearing due to sufficient cause, it followed that the matter must be reheard and decided again. 30. Therefore, all the decisions hereinabove noted by us referred to Grindlays (supra). On a close reading of paragraph-14 of Grindlays (supra), in the background of the analysis of law under paragraphs-10 to 13, it is difficult for us to comprehend that the power to set aside an ex parte award is not available to a Labour Court/Industrial Tribunal. On the principles of natural justice, and on a purposive interpretation of the scheme of the Act and Rules, we find it difficult also to discern that the ratio of the decision in Grindlays (supra), is what is stated in paragraph-14 to the extent that an application f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol) Appellate Tribunal (CEGAT), this Court went a step further to hold that there are certain inherent powers vested in every tribunal in regulating their own procedure. It held at paragraph-6 as follows: 6. If, in a given case, it is established that the Respondent was unable to appear before it for no fault of his own, the ends of justice would clearly require that the ex parte order against him should be set aside. Not to do so on the ground of lack of power would be manifest injustice. Quite apart from the inherent power that every tribunal and court constituted to do justice has in this respect, CEGAT is clothed with express power Under Rule 41 to make such order as is necessary to secure the ends of justice. CEGAT has, therefore, the power to set aside an order passed ex parte against the Respondent before it if it is found that the Respondent had, for sufficient cause, been unable to appear. 32. In case a party is in a position to show sufficient cause for its absence before the Labour Court/Tribunal when it was set ex parte, the Labour Court/Tribunal, in exercise of its ancillary or incidental powers, is competent to entertain such an application. That power canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the award has become enforceable as far as setting aside an ex parte award is concerned. It is within its powers to entertain an application as per the scheme of the Act and in terms of the Rules of natural justice. 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. 36. We may also add that when an application for setting aside an ex parte award is made at the instance of the management, the Labour Court/Tribunal has to balance equities. The appeals are hence disposed of as follows. The awards are remitted to the Labour Court for consideration as to whether there was sufficient cause for non-appearance of the management. Since the litigation has been pending for a long time, we direct the Appellants to pay an amount of Rs. 1,00,000/- in each case to the workmen by way of provisional payment. However, we make it clear that the payment is subject to the final outcome of the awards and will be adjusted appropriately. We record our deep appreciatio ..... 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