Union Bank Of India, A ... vs Union Bank Of India Employees ...
2003 Latest Caselaw 604 Bom

JUDGMENT

C.K. Thakker, C.J.

1. Admitted Mr. D.J. Bhanage, learned Counsel, appears and waives service of notice of admission on behalf of respondent No. 1. Mr. R.S. Apte, learned Counsel, appears and waives service of notice of admission on behalf of respondents No. 2 and 3. In the facts and circumstances of the case, the matter is taken up for final hearing.

2. This appeal is directed against an order dated August 30, 2002 passed by the learned Single Judge in Writ Petition No. 1479 of 1996. The said petition was filed by the 1st respondent herein being aggrieved by an order refusing to refer the matter to Industrial Tribunal for adjudication under the Industrial Disputes Act, 1947 (hereinafter referred to as "the Act"(.

3. The first respondent union is a union of employees working with the appellant bank. It raised an industrial dispute vide its letter, dated August 3, 1992 against the appellant bank challenging unilateral decision of the bank of increasing rate of interest in clear loans being given to the employees of the bank from 4% p.a. to 7.5% p.a. in the first instance and then to 16.5% p.a. with effect from April 1, 1991.

4. The Assistant Commissioner of Labour (Central), respondent No. 3 herein initiated conciliation proceedings with a view to bring about amicable settlement between the union and the bank. Since no settlement could be arrived at, he submitted a 'failure report' on September 23, 1994 to the Central Government.

5. According to the union, the 'Desk Secretary of the Government of India' rejected the prayer of the union to refer the matter for industrial adjudication by considering the merits of the demand and virtually adjudicating the dispute.

It was stated:

"It is reported that the rate of interest in respect of clear loan has been enhanced in pursuance of the directions of the Ministry of Finance, Government of India, which are binding on all banks. However, an option has been given to the employees either to be governed by the existing scheme or the revised one. As there is no change in the service conditions, the provisions of Section 9-A of the I.D. Act 1947 are not attracted in this case."

(emphasis supplied)

6. Being aggrieved by the order of the appropriate Government refusing to refer the matter for adjudication to Industrial Tribunal, the union approached this Court. The learned Single Judge, as already stated above, allowed the petition and directed the Government to refer the matter to Industrial Tribunal for adjudication.

7. The leaned Single Judge while allowing the petition observed that in refusing to refer the matter to Industrial Tribunal for adjudication, the appropriate Government entered into merits of the matter and rejected the prayer inter-alia observing that as there was no change in service conditions of employees, the provisions of Section 9-A of the Act did not get attracted.

8. The complaint of the 1st Respondent union before the learned Single Judge was that the appropriate Government has committed an error of law as well as of jurisdiction in entering into prohibited field. The order, therefore, was illegal and liable to be quashed and set aside.

9. The learned Single Judge, in our opinion, rightly relied upon a decision of the Supreme Court in M.P. Irrigation Karmachari Sangh v. State of M.P. and allowed the petition holding that the order passed by the appropriate Government was not inconsonance with law as it was not within the power of the appropriate Government to consider merits of the matter and to reject prayer to refer the matter to Industrial Tribunal. The learned Single Judge considered the facts and circumstances as also ratio laid down in M.P. Irrigation Karmachari Sangh and directed the Government to refer the matter. Even that direction could be issued in an appropriate case in exercise of powers under Article 226 of the Constitution and we see no infirmity therein.

10. In our opinion, the law on the point is well settled. In Bombay Union Journalists and Ors. v. State of Bombay and Anr., , the Supreme Court had an occasion to deal with extreme arguments on behalf of appropriate Government as also on behalf of the Union.

11. While rejecting the contention of the Union that in no case, an appropriate Government can look into merits of the matter, the Court proceeded to hold that the appropriate Government has no authority to adjudicate the dispute and usurp power of Industrial Tribunal.

12. Referring to State of Bombay v. K.P. Krishnan, , Gajendragadkar, J. (as His Lordship then was) stated:

"The decision in that case clearly shows that when the appropriate Government considers the question as to whether any industrial dispute should be referred for adjudication or not, it may consider. Prima facie 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 in question raises questions of law, the appropriate Government should not purport to reach a final decision on the said questions of law, because that would normally lie within the jurisdiction of the Industrial Tribunal. Similarly, on disputed question 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 prima facie the merits of the dispute when it decides the question as to whether its power to make a reference should be exercised under Section 10(1) read with Section 12(5), or not. If the claim made is patently frivolous, or is clearly belated, the appropriate Govt. may refuse to make a reference. Likewise, if the impact of the claim on the general relations between the employer and the employees in the region is likely to be adverse, the appropriate Government may take that into account in deciding whether a reference should be made or not. It must, therefore be held that a prima facie examination of the merits cannot be said to be foreign to the enquiry which the appropriate Govt. is entitled to make in dealing with a dispute under Section 10(1), and so, the argument that the appropriate Government exceeded its jurisdiction in expressing its prima facie view on the nature of the termination of services of appellants 2 and 3, cannot be accepted."

(emphasis supplied)

13. In M.P. Irrigation Karmachari Sangh, the Apex Court relied upon, followed and reiterated the enunciation of law in Bombay Union Journalists and Ors. The Court said:

"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. Government should be very slow to attempt an examination of the demand with a view to decline reference and courts will always be vigilant whenever the Government attempts to usurp the powers of the Tribunal for adjudication of valid disputes. To allow the Government to do so would be to render Section 10 and Section 12(5) of the Industrial Disputes Act nugatory."

(emphasis supplied)

14. The learned Counsel for the appellant, however, submitted that while allowing the petition and directing appropriate Government to make reference, certain observations were made on merits by the learned Single Judge which may be construed by the Industrial Tribunal as 'findings' recorded by this Court.

15. The Counsel drew our attention to the following observations to substantiate his argument:

"The existing custom, privilege or usage arising out of bilateral understanding between the parties which continued for years together about which there is no dispute before me, as reflected in Circular dated 17.5.1989 (page 25 of the Paper book). This can be very conveniently named as custom, concessions or privilege as covered under item 8 of Schedule IV of the Act which certainly attracts a notice of change under Section 9-A of the Act. If the Respondent bank has increased the rate of interest from 4% to 7.5% and 16.5% even purportedly acting under the Circular of the Finance Ministry it brings about a change in the item 8 of Schedule IV of the Act. It, therefore, appears that the Industrial dispute in that respect did not arise between the parties and it was, therefore, necessary for the appropriate Government to have referred the said Industrial dispute for adjudication and not to come to its own conclusion which the appropriate Government has done in the impugned order to refuse to refer the industrial dispute for adjudication."

(emphasis supplied)

16. The Counsel contended that in view of the above observations, it would be difficult for the Industrial Tribunal to come to a different conclusion. To us, the submission is well founded. In the facts and circumstances, therefore, it is clarified that all the observations made by the learned Single Judge must be considered in the light of the question raised before the learned Single Judge as there was refusal to refer the matter to Industrial Tribunal for adjudication. Keeping in mind the fact that the appropriate Government could not have entered into merits of the matter, the learned Single Judge was justified in reversing the order. All the observations made by the learned Single Judge, therefore, were for a limited purpose of setting aside the order and referring the matter to the Tribunal and they should not be considered or treated as 'findings' recorded by the Court. It is clarified that as and when the matter will come up before the Industrial Tribunal, it will be decided on its own merits without being inhibited or influenced by those observations.

17. Appeal is accordingly partly allowed. There shall be no order as to costs.