JUDGMENT Gita Mittal, J.
1. These writ petitions raise similar questions of fact and law and as such are being taken up for disposal together. The petitioner No. 1 in these writ petitions are sons of deceased employees of the respondent No. 1 who expired while in service. These petitioners are seeking appointment on compassionate basis in terms of a scheme for providing such employment to dependents of employees who died in harness which was introduced by the respondent No. 1 since 1979. The respondent No. 1 has refused to give such employment to the petitioners No. 1. The issue was agitated by these petitioners before the conciliation officer under the Industrial Disputes Act, 1947 who gave a report of failure of conciliation to the appropriate authority.
2. Vide a letter dated 7th November, 2002, the respondent No. 2 refused to refer the issue raised by Shri Sanjay Kumar, petitioner No. 1 in W.P.(C) No. 1925/2003 for adjudication to the Industrial Adjudicator for the reason that :- The claim made by All India Industrial Finance Corporation Employees Association for providing compassionate appointment to the dependents of employees died in harness was considered by the management of IFCI Ltd. and the claims were not found to be justified for providing employment under the scheme in force. It is also noted that the financial assistance offered under the Disability and Financial Assistance Scheme was not accepted by 5 of the families. The scheme is a benevolent one for the welfare of the needy persons and each case has to be considered in its own merit and appointment under the scheme cannot be claimed as a matter of right. In the circumstance, the dispute raised on this account is found to be not maintainable.
The communications to Shri Rakesh Kumar, petitioner in Writ Petition(Civil) 3151/2003 and to Shri Vivek Kumar, petitioner in Writ Petition(Civil) 2128/2003 are also dated 7th November, 2002 and are in identical terms.
3. The petitioners are aggrieved by the refusal to grant appointment to them on compassionate basis by the respondent No. 1 and by the action of the respondent No. 2 in refusing to refer the matter for adjudication to the industrial adjudicator. The letters dated 7th November, 2002 have been assailed by way of the writ petitions on the following grounds :-
(i) the decision taken by the respondent No. 2 amounts to an adjudication on the merits of the claim made by the petitioner which is beyond the scope of consideration by the appropriate government under Section 10 of the Industrial Disputes Act, 1947.
(ii) the purported ground for refusal to appoint the petitioners on compassionate basis on the plea that the respondent No. 1 had set up an alternative scheme of financial assistance in lieu of compassionate appointment is wholly misconceived. The respondent No. 1 cannot avoid its responsibility to give effect to the scheme of compassionate appointment dated 1st January, 1979 which was notified and implemented by it for the last several decades inasmuch as the scheme arises out of a settlement with the industrial workers and as such the respondent No. 1 has no jurisdiction and authority to unilaterally vary the term thereof.
(iii) The respondent No. 1 has adopted a clever device to avoid the appointment on compassionate basis. There is no denial to the fact that the work for the class IV posts, to which the petitioners are seeking employment, exists and is of perennial nature. The respondent No. 1 however has resorted to a device of outsourcing the work merely to avoid their responsibility to give appointment to the petitioners on compassionate basis.
(iv) Large number of employees of the respondent No. 1 have sought voluntary retirement under a voluntary retirement scheme of the respondent No. 1. It is stated that as on 1st January, 2000, 162 employees who were in class IV cadre and between 2000-2003, 64 class IV staff had opted for and retired under the voluntary retirement scheme introduced by the IFCI management. It is further submitted that out of the remaining staff members in class IV, ten employees were promoted to class III cadre and others either retired or died. On the date of filing of the rejoinder by the petitioners in October, 2004, it was stated that there are only 73 employees in the class IV cadre of the respondent No. 1 and as such sufficient number of vacancies are available for appointing the petitioners.
(v) It is submitted that the respondent No. 1 is placing reliance on the Basu Committee recommendation for staff reduction for the self imposed ban on engaging class IV employees. According to the committee report, only 15% to 20% reduction in staff strength was recommended. However from the above noticed figures, 38% of the class IV staff had taken voluntary retirement service. In this view of the matter, the petitioners were entitled to appointment on compassionate ground in the class IV cadre where posts were actually available. The petitioners submit that there is no abolition to any existing post in the respondent No. 1.
(vi). The petitioners have also contended that existence of a financial assistance scheme cannot render otiose another scheme for appointment of needy dependents of employees on compassionate basis who died in harness.
4. The respondent No. 1, on the other hand, has vehemently disputed the entitlement of the petitioners to appointment on compassionate basis. The principal submission has been that the scheme for providing appointment on compassionate grounds to needy dependents of its employees who died in harness was stated to have been introduced with effect from 1st January, 1979 by the management of the respondent No. 1 and compassionate appointments had been made in terms thereof. This scheme was considered necessary because at the time when the scheme came into existence, employees of the respondent No. 1 were not covered by any pension scheme and as a result, the death of an employee in harness caused immediate hardship to dependent members of his family. In these circumstances, after judging each case on its merits, appoints were made in the class III and IV cadre of dependent members of the deceased employee who are eligible and fulfillled the criteria for compassionate appointments.
5. Ms. Anuradha Dutt, learned counsel for respondent No. 1 contends that the benefits of this scheme could not be availed in case of every employee who died in harness for several reasons including old age or illiteracy of his spouse and further that such appointments were not in the best interest of the respondent No. 1. Therefore, after a detailed consideration, the respondent No. 1 came out with the scheme for financial assistance in lieu of compassionate appointment. This scheme was titled as the 'Disability and Financial Assistance Scheme' in the year 1985. The financial assistance which was offered under this scheme was payable per month for a period of 15 years or till the normal age of superannuation of the deceased employee, whichever is earlier and at present the maximum is to the extent of Rs. 4,000/- per month. As per the scheme formulated in the year 1990, other measures to provide immediate succour to families/dependents of the deceased employee including compassionate gratuity are also in place. Under this scheme, the family of the deceased employee is entitled to compassionate gratuity which is equivalent to one months pay for every completed year of service or part thereof in excess of six months subject to minimum of two months pay and allowances drawn by the deceased employee at the time of his death subject to a maximum of Rs. 15,000/-
6. The board of directors of the respondent No. 1 is stated to have passed a resolution in March, 1999 reviewing the position regarding compassionate appointment. Keeping in view the changes in the organisation's working and business environment, it decided not to make any compassionate appointment. The respondent company had implemented a voluntary retirement scheme for class III and IV staff in February 2000 and January, 2001 and further in October, 2003 and February, 2004 to reduce staff strength in these cadres which positions have not been filled up. In fact no appointment at all has been made to the class III and IV staff after 1996. These actions are based on a report and recommendation by an independent forum of consultants which had been appointed to review the man power situation of the respondent company.
7. It has been held by the Apex Court that grant of appointment on compassionate basis is an exception to regular appointment and is intended to mitigate the immediate financial crisis upon the demise of the employee which would ensure to the family of a deceased person.
8. It is further submitted that in the year 1994, long after the scheme for appointment on compassionate basis came into vogue, the respondent No. 1 introduced a 'pension scheme' for the welfare of its employees. Under this scheme in the event of death of an employee who has opted for pension, his wife/dependent children are able to draw family pension from the respondent company. This family pension is payable at a higher rate for a period of seven years or till the deceased employee would have attained the age of 65 years, whichever is earlier, and on the normal rate thereafter.
9. The dependent family members of a deceased employee are additionally paid compassionate gratuity and offered financial assistance under the Disability and Financial Assistance Scheme.
10. So far as Sanjay Kumar Rana petitioner in writ petition(civil) 1925/2002 is concerned, his father late Sh. C.L. Rana was working as a sweeper in the Calcutta Regional Office of the respondent No. 1. He died on duty due to fall of a fire fighting concrete platform on him on 15th May, 2000 and his mother applied for appointment in class IV on compassionate basis seeking appointment for the petitioner. The petitioner has been sending reminders through his mother.
11. The respondent No. 1 has pointed out in its counter affidavit that late Shri C.L. Rana was succeeded by his widow Smt. Tasmani Devi. The widow of the deceased employee has availed the financial assistance under the IFCI Disability and Financial Assistance Scheme. It has been pointed out that under this scheme, she is receiving a sum of Rs. 4,000/- per month and in addition, she is also getting pension of Rs. 4,527/-
12. The respondent No. 1 points out that Vivek Kumar, petitioner in Writ Petition(Civil) 2128/2003 was the son of Shri Bhagwan Das who was employed a an industrial financial assistant at the Delhi registered office of respondent No. 1. He died on 19th November , 1998 at the age of 50 years and his widow submitted an application for appointment on compassionate basis. The respondent No. 1 expressed inability to make appointment on compassionate basis but offered financial assistance under the IFCI Disability and Financial Assistance Scheme which was not availed by her. This assistance was to the tune of Rs. 4,000/- per month. Apart from this offer, the widow is getting family pension of Rs. 5021/- per month. These assertions of fact made by the respondent No. 1 in its counter affidavit have not been disputed. The respondent has also submitted that in addition thereto, the other payments noticed hereinabove would have been received by the families of the deceased employees.
13. So far as Shri Rakesh Kumar petitioner in writ petition(civil) 3151/2003 is concerned, his father late Sh. Pratap Singh was employed as a Subedar, Grade I in the head office of the respondent No. 1. He died of haemorrhage and paralysis on 18th April, 1997 at the age of 54 years. The widow of the late Shri Pratap Singh submitted an application for appointment of Sh. Rakesh Kumar, the petitioner No. 1 in W.P.(C) No. 3151/2003 in the class III cadre on compassionate basis. Reminders for this appointment have been sent however the same has not been granted on the aforestated reasons.
14. The respondent No. 1 in answer has submitted that distress to the family of the deceased employee late Shri Pratap Singh on account of his demise was mitigated by the fact that his widow Smt. Phoolwati is getting family pension of Rs. 4,947/- per month which has been paid to her up to 18th April, 2004 and thereafter at the rate of Rs. 2,473/- per month. It has further been submitted by the respondent No. 1 on affidavit that Smt. Phoolwati was offered financial assistance under the IFCI Disability and Financial Assistance Scheme which was not availed by her. According to the respondent No. 1, the financial benefit to which she was entitled under this scheme would have been to the tune of Rs. 2500/- per month.
15. The principles which govern consideration of an application for appointment on compassionate basis are well settled. In entitled Municipal Corporation of Delhi v. Vir Mohd., it has been held that the object of appointment of a dependant of a deceased employee who died in harness is to relieve unexpected and immediate hardship and distress caused to a family on account of sudden demise of such earning member. Compassionate appointment runs counter to the general rule of appointments on merit guaranteed to a citizen and while effecting such appointment the management is required to keep in mind the family income and assets of the members of the family of the deceased employee. It is also significant that the deceased employee expired shortly before he would have otherwise superannuated. This court in MCD v. Vir Mohd. (supra) attached weight to the fact that an overwhelming section of our society does not even receive minimum wages and therefore the concept of penury should be strictly construed against a person whose family has some income. In this case, it was noticed that discounting an elder brother's salary, the funds and income which were available to the mother of the petitioner and the family owning land in Bihar would place the petitioner, if not in the middle income bricket, well above the poverty line.
16. In entitled Punjab National Bank and Ors v. Ashwani Kumar Taneja, the Apex Court was called upon to consider the issue as to whether retiral benefits are to be taken into consideration while dealing with a prayer for compassionate appointment. Adverting to the applicable scheme as was applicable to the employer, the court held that the amounts paid towards family pension, gratuity, employees/employers contribution to provident fund, compensation paid by the employer or its welfare fund, proceeds of the LIC policy, income of family through other sources, employment of other family members, family liability were all relevant considerations while considering an application for such appointment.
17. In General Manager(DandPB) and Ors. v. Kunti Tiwari and Anr. , it was held by the Apex Court that perennial benefits received and other movable and immovable property possessed by the family of the deceased employee shows that its financial condition was not penurious. This criterion was recommended by the Indian Bank Association and adopted by the appellant bank to consider eligibility for effecting appointments on compassionate basis. The court held that it could not have been said that the family of the deceased employee had been left in penury or without any means of livelihood and such consideration could not have been diluted to one of 'not very well to do'.
18. The courts have reiterated the principles laid down in earlier judgments in the pronouncements reported at LIC v. Asha Ambedkar; Umesh Kr. Nagpal v. State of Haryana, Balbir Kaur v. Steel Authority of India. The pronouncement of this court in 2001 (93) DLT 692 Bimla Devi v. DVB and Shiv Prasad v. The Directorate Of Education, Govt. Of NCT of Delhi also lay down the applicable law. In Balbir Kaur's case, it was held that existences of a scheme of financial assistance would have no bearing on the application for compassionate appointment.
19. The application of the petitioners could have been rejected if they fell within the prohibitions laid down in the scheme of the employer and by these judicial pronouncements. In the instant case, the respondent No. 1 has set up a plea of having abandoned the scheme of appointment on compassionate basis. The obvious and necessary consequence is non-consideration of the applications of the petitioners by respondent No. 1.
20. At this stage, the respondent No. 1 has submitted that the cleaning and maintenance of the head office premises of respondent No. 1 is specialized work inasmuch as the office is located in an ultra modern multistorey building of 21 floors including two basements. For this reason, these entire operations have been outsourced to a specialized agency having skilled manpower to perform such functions. The respondent No. 1 submits that it is a financial organisation with no practical knowhow or facility to undertake such cleaning functions.
21. The further submission is that its functioning has been fully examined by the Labour Commissioner(Central) Delhi in November, 1999 who has not found any irregularity by the respondent company in respect of any provision of the Contract Labour(Regulations and Abolition) Act, 1970. The respondent No. 1 also submits that the Ministry of Labour was fully apprised of all facts and circumstances and the application of these provisions to the premises of the petitioner. The respondent No. 1 submits that it is submitting all annual returns to the office of the Labour Commissioner giving the full details of the working of the contractor and its labour. The respondent No. 1 is thus rendering yet another justification for giving up the scheme for appointment on compassionate basis. This is not for this court to consider in these proceedings.
22. The respondent No. 1 has vehemently defended its action submitting that its actions ensure social justice and it has been fair to the employees.
23. In view of the aforestated conclusion,it becomes necessary to notice respective submissions of both parties on the challenge to the order dated 7th November, 2002 which has been passed by the respondent No. 2 refusing to refer the disputes raised by the petitioners for adjudication to the industrial adjudicator. The validity of this order has to be tested on the touchstone of the scope of discretion conferred on the appropriate government under Section 10 of the Industrial Disputes Act, 1947
24. This issue arose for consideration before the Apex Court on several occasions. In its judgments State of Madras v. C.P. Sarathy and State of Bombay v. K.P. Krishnan. The Apex Court held that the order of the government under Section 10(1) read with Section 12(5) of the Act is an administrative order and not a judicial one.
25. In the judgment of the Apex Court reported in 1960 (2) LLJ 592 entitled State of Bombay v. K.P. Krishnan and Ors., it was held by the Apex Court that when the appropriate government considers the question as to whether any industrial dispute should be referred for adjudication or not, it may consider primafacie the merits of the dispute and take into account other relevant considerations which would help it to decide whether making a reference would be expedient or not. It is true that if the dispute raises questions of law, the appropriate government should not purport to reach a final decision on the questions of law because that would normally lie within the jurisdiction of the industrial tribunal. Similarly, on disputed questions of fact, the appropriate government cannot purport to reach final conclusions, for that again would be the province of the industrial tribunal. But it would not be possible to accept the plea that the appropriate government is precluded from considering even primafacie the merits of the dispute when it decides the question as to manner in which it must exercise its discretion under Section 10(1) read with Section 12(5) of the Industrial Disputes Act, 1947. If the claim made is patently frivolous, or is clearly belated, the appropriate government may refuse to make a reference. Likewise if the impact of the claim on the general relations between the employer and the employee in the region is likely to be adversely effected, the appropriate government may decide that a reference for adjudication ought not to be made. It must therefore be held that merely because a primafacie examination of the merit was carried out, it cannot be said to be that the appropriate Government has exceeded its jurisdiction in making the inquiry which the appropriate government is entitled to make in dealing with the dispute under Section 10(1).
26. This judgment was relied upon by the Apex Court in Bombay Union of Journalists and Ors v. State of Bombay where the court held thus that while entertaining an application for a writ of mandamus against an order made by the appropriate government under Section 10(1) read with Section 12(5) of the enactment, the court does not sit in appeal over the order and is not entitled to consider the purport or the satisfactory character of the reasons given by the Government. If it appears that the reasons given show that the government took into account irrelevant or foreign considerations, only then, the court may in a given case consider issuance of a writ of mandamus.
27. The court further observed that in entertaining an application for a writ of mandamus against an order made by appropriate government under Section 10(1) read with Section 12(5), the court is not sitting in appeal over the order and is not entitled to consider the purported or the satisfactory character of the reasons given by the government. It would be idle to suggest that in giving reasons to a party for refusing to make a reference under Section 12(5), the appropriate government has to write an elaborate order indicating exhaustively all the reasons that weighed in its mind in refusing to make a reference. It is no doubt desirable that a party concerned should be told clearly and precisely the reasons why no reference is made, because the object of Section 12(5) appears to be to require government to state its reasons for refusing to make a reference, so that the reasons should stand before accruing. But that does not mean that a party challenging the validity of the government decision not to make a reference can require the court in writ proceedings to examine the purport or the correctness of the said reasons. If it appears that the reasons given for consideration were irrelevant or extraneous or if the action of the appropriate government is malafide, a party would be entitled to assail such order and be justified in its claim for issuance of a writ of mandamus.
28. In Workman of Syndicate Bank, Madras v. Government of India, 1985 (51) FLR 131, the Apex Court was called upon to consider the legality of an order passed by the Central Government to refuse to make a reference on the ground that the charges of misconduct against a worker were proved in a duly constituted departmental inquiry. It was held by the court that such a situation cannot be countenance by law inasmuch as, if such ground was permissible to avoid reference, managements could easily avoid a reference for adjudication and deprive the workman of the opportunity of getting a dispute referred to the industrial adjudicator even if the penalty imposed upon the workman were unreasonable or perverse or disproportionate or the proceedings against the workman or actuated by malafide. 29. In Nirmal Singh v. State of Punjab and Ors. 1984 (2) LLJ 396, a branch manager of a bank challenged his dismissal order and made a complaint to the state government under the Industrial Disputes Act, 1947. The state labour commissioner exercising powers of the state government, declined to refer the issues raised by the appellant for adjudication under the Industrial Disputes Act on the ground that the appellant was not a workman. The writ petition impugning this decision of the labour commissioner was dismissed in liming by the High Court. The Apex Court was of the view that the labour commissioner had merely stated his conclusion without giving any reasons as to why he arrived at the conclusion that the appellant was not a 'workman' within the meaning of Section 2(s) of the Industrial Disputes Act, 1947. Observing that the matter would therefore require to be remanded to the labour commissioner asking him to state his reasons for this conclusion would entail delay. Therefore the Apex Court directed the labour commissioner to whom the state government had delegated his powers under Section 12 of the Industrial Disputes Act, 1947 to make a reference of the question as to whether the dismissal of the appellant was legal and justified. It is to be noticed that at one stage, the court had examined the question as to whether it should decide the issue as to whether the appellant was a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947. However, this is a question of fact and it was found by the apex court that the question could not be decided on the basis of the stray material which was before the Court.
30. In the Syndicate Bank's case, the Apex Court observed that it would have directed the Government of India to reconsider the question of making reference of the industrial dispute for adjudication without taking into account the irrelevant ground which has prevailed with it in declining to make a reference. Time bound directions to make a reference was issued by the Apex Court.
31. In entitled Prakash v. State of Haryana and Anr., the Apex Court found that the Government had given reasons for finding that the petitioner was not a workman and hence reference was declined. In view of the reasons given, the Apex Court declined to interfere in the matter.
32. In 1989 SCC LandS 465 Telco Convey Drivers Mazdoor Sangh and Anr v. State of Bihar, the law was succinctly laid down by the Apex Court in the following terms :-
12. It is however, submitted on behalf of TELCO that unless there is relationship of employer and employees or, in other words, unless those who are raising the disputes are workmen, there cannot be any existence of industrial dispute within the meaning of the term as defined in Section 2(k) of the Act.
It is urged that in order to form an opinion as to whether an industrial dispute exists or is apprehended, one of the factors that has to be considered by the government is whether the meaning of the definition as contained in Section 2(k) of the Act.
13. Attractive though the contention is, we regret, we are unable to accept the same. It is not well settled that, while exercising power under Section 10(1) of the Act, the function of the appropriate government is an administrative function and not a judicial or quasi-judicial function, and that in performing this administrative function the government cannot delve into the merits of the dispute and take upon itself the determination of the lis, which would certainly be in excess of the power conferred on it by Section 10 of the Act. See Ram Avtar Sharma v. State of Haryana ; M.P. Irrigation Karamchari Sangh v. State of M.P. ; Shambhu Nath Goyal v. Bank of Baroda, Jullundur.
14. Applying the principle laid down by this Court in the above decisions, there can be no doubt that the government was not justified in deciding the dispute. Where, as in the instant case, the dispute is whether the persons raising the dispute are workmen or not, the same cannot be decided by the government in exercise of its administrative function under Section 10(1) of the Act. As has been held in M.P. Irrigation Karamchari Sangh case, there may be exceptional cases in which the State Government may, on a proper examination of the demand, come to a conclusion that the demands are either perverse or frivolous and do not merit a reference. Further, the government should be very slow to attempt an examination of the demand with a view to declining reference and courts will always be vigilant whenever the government attempts to usurp the powers of the Tribunal for adjudication of valid disputes, and that to allow the government to do so would be to render Section 10 and Section 12(5) of the Act nugatory.
33. On several occasions the Apex Court has considered the issue of appropriate directions which ought to be made in such cases wherein an order refusing to make a reference under Section 10 or Section 12(5) of the Industrial Disputes Act, 1947 has been impugned. In this regard, in the Telco case(supra) the Apex Court observed thus :-
16. It has been already stated that we had given one more chance to the government to reconsider the matter and the government after reconsideration has come to the same conclusion that the convoy drivers are not workmen of TELCO thereby adjudicating the dispute itself. After having considered the facts and circumstances of the case and having given our best consideration in the matter, we are of the view that the dispute should be adjudicated by the Industrial Tribunal and, as the government has persistently declined to make a reference under Section 10(1) of the Act, we think we should direct the government to make such a reference. In several instances this Court had to direct the government to make a reference under Section 10(1) when the government had declined to make such a reference and this Court was of the view that such a reference should have been made. See Sankari Cement Alai Thozhilalar Munnetra Sangam v. Government of Tamil Nadu; Ram Avtar Sharma v. State of Haryana; M.P. Irrigation Karamchari Sangh v. State of M.P.; Nirmal Singh v. State of Punjab.
The Apex Court had thus considered it appropriate to direct the government to make a reference of the dispute raised by the workman to the appropriate industrial tribunal/court within one month of the judgment.
34. In Sultan Singh v. State of Haryana, , the Apex Court held that an order under Section 10 of the Industrial Disputes Act is an administrative order and the government is entitled to go into the question whether an industrial dispute exists or is apprehended and it will be only a subjective satisfaction on the basis of material on record and, being an administrative order, no lis is involved.
35. The principle requisites for making a reference under Section 10 of the Industrial Disputes Act, 1947 and the law applicable thereto has been thus stated in entitled Secretary, Indian Tea Association v. Ajit Kumar Bharat and Ors. :-
7. The law on the point may briefly be summarized as follows:- 1. The appropriate Government would not be justified in making a reference under Section 10 of the Act without satisfying itself on the facts and circumstances brought to its notice that an industrial dispute exists or is apprehended and if such a reference is made it is desirable wherever possible, for the Government to indicate the nature of dispute in the order of reference.
2. The order of the appropriate Government making a reference under Section 10 of the Act is an administrative order and not a judicial or quasi- judicial one and the court, therefore, cannot canvass the order of the reference closely to see if there was any material before the Government to support its conclusion, as if it was a judicial or quasi-judicial order.
3. An order made by the appropriate Government under Section 10 of the Act being an administrative order no lis is involved, as such an order is made on the subjective satisfaction of the Government.
4. If it appears from the reasons given that the appropriate Government took into account any consideration irrelevant or foreign material, the court may in a given case consider the case for a writ of mandamus.
5. It would, however, be open to a party to show that what was referred by the Government was not an industrial dispute within the meaning of the Act.
36. In Ram Avtar Sharma and Ors v. State of Haryana while examining the issue relating to the scope of the government's power to make or refuse to make a reference under Section 10 of Industrial Disputes Act, the court observed thus :-
5. The first question to be posed is whether while exercising the power conferred by Section 10 to refer an industrial dispute to a Tribunal for adjudication, the appropriate Government is discharging an administrative function or a quasi-judicial function. This is no more res integra. In State of Madras v. C.P. Sarathy a Constitution Bench of this Court observed as under: But, it must be remembered that in making a reference under Section 10(1) the Government is doing an administrative act and the fact that it has to form an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any the less administrative in character. The Court cannot, therefore, canvass the order of reference closely to see if there was any material before the Government to support its conclusion, as if it was a judicial or quasi-judicial determination. Explanation the ratio of the decision in Sarathy case, in Western India Match Co. Ltd. v. Western India Match Co. Workers Union it was observed as under : (SCC p. 231, para 9) In the State of Madras v. C.P. Sarathy this Court held on construction of Section 10(1) of the Central Act that the function of the appropriate Government thereu7nder is an administrative function. It was so held presumably because the Government cannot go into the merits of the dispute, its function being only to refer such a dispute for adjudication so that the industrial relations between the employer and his employees may not continue to remain disturbed and the dispute may be resolved through a judicial process as speedily as possible.
After referring to the earlier decisions on the subject in Shambhu Nath Goyal v. Bank of Baroda, Jullundur it was held that in making an administrative act and the fact that it has to form an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any the less administrative that while exercising power of making a reference under Section 10(1), the appropriate Government performs an administrative act and not a judicial or quasi-judicial act.
6. The view that while exercising power under Section 10(1), the Government performs administrative function can be supported by an alternative line of reasoning. Assuming that making or refusing to make a reference under Section 10(1) is a quasi-judicial function, there is bound to be a conflict of jurisdiction if the reference is ultimately made. A quasi-judicial function is to some extent an adjudicatory function in a lis between two contending parties.
The Government as an umpire, assuming that it is performing a quasi-judicial function when it proceeds to make a reference, would imply that the quasi- judicial determination of lis prima facie shows that one who raised the dispute has established merits of the dispute. The inference necessarily follows from the assumption that the function performed under Section 10(1) is a quasi- judicial function. Now by exercising power under Section 10, a reference is made to a Tribunal for adjudication and the Tribunal comes to the conclusion that there was no merit in the dispute, prima facie a conflict of jurisdiction may emerge. Therefore the view that while exercising power under Section 10(1) the function performed by the appropriate Government is an administrative function and not a judicial or quasi-judicial function is beyond the pale of controversy.
7. Now if the Government performs an administrative act while either making or refusing to make a reference under Section 10(1), it cannot delve into the merits of the dispute and take upon itself the determination of lis. That would certainly be in excess of the power conferred by Section 10. Section 10 requires the appropriate Government to be satisfied that an industrial dispute exists or is apprehended. This may permit the appropriate Government to determine prima facie whether an industrial dispute exists or the claim is frivolous or bogus or put forth for extraneous and irrelevant reasons not for justice or industrial peace and harmony. Every administrative determination must be based on grounds relevant and germane to the exercise of power. If the administrative determination is based on the irrelevant, extraneous or grounds not germane to the exercise of power it is liable to be questioned in exercise of the power of judicial review. In State of Bombay v. K.P. Krishnan it was held that a writ of mandamus would lie against the Government if the order passed by it under Section 10(1) is based or induced by reasons as given by the Government are extraneous, irrelevant and not germane to the determination. In such a situation the court would be justified in issuing a writ of mandamus even in respect of an administrative order. Maybe, the Court may not issue writ of mandamus, directing the Government to make a reference but the Court can after examining the reasons given by the appropriate Government for refusing to make a reference come to a conclusion that they are irrelevant, extraneous or not germane to the determination and then can direct the Government to reconsider the matter. This legal position appears to be beyond the pale of controversy.
37. An issue as to whether a particular person is a workman or not fell for consideration before the Supreme Court in Sharat Kumar v. Government of NCT of Delhi and Ors., . The court held that this issue has to be determined on the basis of types of duties of the employee and not merely on the designation held in the past. It was held that the question requires examination of factual matters for which material, including the oral evidence, has to be considered. It was therefore held that the appropriate government exercising administrative jurisdiction under Section 10(1) read with Section 12(5) of the Industrial Disputes Act, 1947 for the limited purpose of determining whether the dispute was an industrial dispute within Section 2(k) could not claim the power to adjudicate upon such a question and could not merely on the basis of discretion of the employer, hold that he was not a workman. Such a question should be decided by the industrial tribunal or the labour court on the basis of material produced by the parties. 38. In the case of Bombay Union of Journalists (supra) and in M.P. Association Karamchari Sangh v. State of M.P., it has been held that a competent government has a very limited jurisdiction to examine patent frivolousness of the demand and it is to be understood that, as a rule, adjudication of the demand made by the workman has to be left to the tribunal to decide.
39. I have noticed hereinabove the assertions of the petitioners had made their claim seeking appointment on compassionate basis. The determination of all the issues raised required examination of factual matters for which material, including oral evidence, was required to be considered. In such a matter, the respondent could not abrogate to itself the power to adjudicate on the issues and hold that that the respondent No. 1 was justified in disallowing the application for providing employment on compassionate basis under the scheme in vogue. The petitioners claimed eligibility and entitlement for appointment under the scheme for grant of appointment of the dependents of the deceased employee of the respondent No. 2, on compassionate basis to any member of the family. Size of the family, assets and liabilities of the family and other relevant considerations were all questions of fact which required evidence.
Such a matter, it is well settled, should be decided by the Industrial Tribunal or the labour court on the basis of the material to be placed before it by the parties.
40. In the instant case, an issue was also raised as to whether the respondent No. 2 can justifiably deny engagement to employees on the basis of a resolution of the board of directors vis-a-vis the claim put up by the petitioners based on the Scheme which has been in vogue since 1979. In such a case, determination of the issues raised would not be possible at a stage when the respondent No. 2 is exercising administrative jurisdiction vested in it for the limited purpose of satisfying itself whether the dispute raised is an industrial dispute within the meaning of Section 2(k) or the Act or not.
41. Applications had been filed on behalf of the petitioner No. 1 in each of the writ petitions seeking appointment on compassionate basis. The petitioners were all agitating that they were entitled to consideration for appointment on compassionate basis under the scheme of the respondent No. 1 of 1979. It was also asserted that the respondents had no right to avoid the scheme which was based on a settlement between the workers and the management. As the petitioners were being denied such consideration, the Union of the workers had sought a reference of the issues raised by the workmen for adjudication by an industrial adjudicator. The circumstances in which the widows of the deceased employees refused the benefits under the Disability and Financial Assistance Scheme were not before the appropriate government. There is no material even before this court as to what were the circumstances in which the benefits under the financial assistance scheme were not accepted. Whether the same was on account of the pendency of the applications seeking compassionate appointment of the respondent No. 1 or whether it was on grounds of insufficiency of the benefits or whether it was on account of an impression in the minds of the widows that acceptance of this scheme would defeat their claim for compassionate appointment of the petitioner No. 1 under the scheme of 1979 for such appointment, was not before the appropriate government i.e. the respondent No. 2 nor is it before this court. There is no material with regard to the size of the family or the number of dependents which was left by the deceased employee. As noticed above, the Apex Court has emphasised that the financial status of the family and its assets are a valid consideration for grant or rejection of an application seeking compassionate appointment. There was no such material before the respondent No. 2.
42. In the instant case, the respondent No. 1 has set up a plea of it being over staffed as one of the reasons for not making appointments on compassionate basis. The petitioners have made detailed submissions with regard to the staff position after the respondents effectuated the voluntary retirement scheme. The merits of the plea taken up by the respondent No. 1 and the effect of the factual submissions made by the petitioners is something which has to be established and considered by an industrial adjudicator. In any case, no such material was before the respondent No. 2. I also find that the respondent No. 1 had stated that having implemented the pension scheme and the disability and financial assistance scheme, it was not effecting any appointment on compassionate basis. In this view of the matter, it would appear that the respondent No. 1 would not have considered the applications on behalf of the petitioner No. 1 in these three matters. The effect thereof would also deserved to be considered in an appropriate adjudication. The respondent No. 1 has admittedly given a go-by to the scheme for compassionate appointment which was in vogue since 1979, the petitioners have contended that the same was a result of negotiations and a settlement with the workmen. Therefore, an issue arises as to whether the respondent No. 1 could have legally given a go bye to such a scheme arising out of an industrial settlement by a resolution of the board of directors or replace such settlement by the pension scheme and the financial assistance scheme.
According to the petitioners this was not open to the respondent No. 1. Therefore, the validity of the action of the respondent No. 1 and the consequences thereof require to be considered.
43. In this background, the other issues which have been noticed in para 3 hereinabove, which have been raised at the instance of the petitioner deserved to be considered before a finding can be arrived at as to whether the petitioners deserved consideration of their applications or not. The respondent No. 2 has held that the IFCI Limited has considered the claims of the petitioners and has found them not justified. This is opposed to the stand of the IFCI whereby it has been contended that it is not considering applications for compassionate appointment in view of its pension scheme, the Disability and Financial Assistance Scheme and the report of the Basu Committee whereby it has been recommended that it should reduce its work force.
It is aggrieved by the non-consideration of its applications that the petitioners have sought reference of the disputes. Consequently, it has to be held that the order dated 7th November, 2002 is based on no material whatsoever and is contrary to the record.
44. It is also noteworthy that the reasons for rejection of the application for appointment on compassionate basis urged before this court to the extent of the self imposed ban on employment is not the reason mentioned in the impugned order dated 7th November, 2002. However, the offer for financial assistance under the Disability and Financial Assistance Scheme, reasons for its acceptance or non-acceptance; effect of the non-acceptance thereof are the issues which require material to be placed before the adjudicating authority for arriving at a conclusion as to the impact thereof on the application seeking appointment on compassionate basis. The petitioners had raised the industrial dispute as their claims were not granted by the respondent No. 2 and they had sought adjudication by the industrial adjudicator.
45. In view of the settled principles of law noticed hereinabove, the reasons given by the respondent No. 2 in passing the order or refusal to refer the disputes for adjudication as contained in the order dated 7th November, 2002 are at the face of the order unsustainable. No reasons have been given in respect of the petitioners. Perusal of the same shows that there does not appear to have been any consideration of the claims of the individual applications.
46. For the aforestated reasons the decision of the respondent No. 1 in declining to make the reference deserves to be set aside. So far as prayer (b) in the writ petition is concerned, the same is allowed. The impugned communications all dated 7th November, 2002 in all three writ petitions are hereby set aside and quashed.
47. Having setting aside these orders, the matter would require to be remanded back to the respondent No. 2 for fresh consideration and making the reference. However the instant case relates to application seeking employment on compassionate basis. I have noticed hereinabove, the fact that the employee of the respondent No. 1 in W.P.(C) No. 2128/2003 expired on 19th November, 1998; in writ petition(civil) 1925/2003 expired on the 15th May, 2000 and the employee in W.P.(C) No. 3151/2003 Rakesh Kumar v. IFCI had died on 19th April, 1997. The requests for appointment on compassionate basis of the petitioner No. 1 in all three matters are pending since then.
48. In 1999 LLR 1020 Municipal Employees Union v. Secretary(Labour) and Anr., it was held that the definition of industrial dispute is wide enough to cover a dispute raised by the employee workman in regard to non-employment of others who may not be his workman at the material time. The beneficiary of a claim need not be workman of the employer at the time of raising the dispute.
This court placed reliance of a judgment rendered in Civil Writ 2640/1997 Delhi Municipal Workers Union(Regd.) v. the Management of MCD and Ors. which related to appointment on compassionate basis of the person whose relative has died in harness. Therefore, it is clear that an industrial reference at the instance of a person seeking appointment on compassionate basis is maintainable.
49. In the light of the aforenoticed position in law and the factual position, in my view, the present case is a fit case for issuance of a writ of mandamus. The respondent No. 2 had taken a decision refusing to refer the dispute for adjudication which has been set aside. Accordingly a direction is issued to the respondent No. 2 to make reference of the disputes raised by the petitioners for adjudication within a period of four weeks from the date of receipt of copy of this judgment.
There is however no order as to costs.