Sant Ram vs M/S. Kadambari Saree Centre (P) ...
1999 Latest Caselaw 1010 Del

ORDER

A.K. Sikri, J.

1. CW. 3986/99 & CM. 7851/99

2. Rule.

3. With the consent of the parties the matter is taken up at this stage for final argument.

4. Petitioner is a workman who alleges that his services were terminated illegally by the respondents-management vide order dated 22nd November, 1994. He served demand notice dated 24th September, 1995 and 15th October, 1995 as no response was received from the respondents he lodged complaint with the Inspector and raised industrial disputes by filing claim before the Conciliation Officer. Since the conciliation proceedings ended in failure Secretary, Labour, Government of National Capital Territory of Delhi referred the matter for adjudication by Labour Court-VI vide reference order dated 19th June, 1996. The terms of reference reads as under :-

"Whether the services of Shri Sant Ram have been terminated illegally and/or unjustifiably by the management and if so, to what relief is he entitled and what directions are necessary in this respect."

5. On receipt of the reference order Labour Court issued notice to the parties to while statement of claim and reply respectively. During the proceedings the management was proceeded ex parte. Petitioner filed his evidence through affidavits dated 20th October, 1997 and 6th March, 1998.

6. It may be stated at this stage that in the replication filed by the petitioner he had, mentioned as fact, that after his services were terminated by the respondent-management and when action was initiated through Mercantile Association, Chandni Chowk, Delhi, respondent-management admitted the claimant as their workman. This averment was presumably made to assert that petitioner was workman employed by the management because in the written statement filed by the management, management had denied the relationship of employer and employee between the management and the workmen. Strangely this fact was taken into consideration by the Labour Court, in the impugned award, from altogether different angle. Labour Court presumed that there were some proceedings before the Mercantile Association and these proceedings would be treated as one under Section 10-A(1) of the Industrial Disputes Act and thus once dispute was referred to the arbitrator under Section 10-A of the Industrial Disputes Act, present reference under Section 10(i) of the Industrial Disputes Act could not be sustained. On this basis, without going into the merits of the dispute, Labour Court passed the award. Relevant portion of the award is reproduced below :-

"In the replication filed for claimant Sant Ram his case is that the management terminated his services illegally and when action was initiated through Mercantile Association Chandni Chowk, Delhi management admitted the claimant as their workmen. Management also admitted him as workman under them before Labour Inspector, claimant has not brought on record the proceedings of Mercantile Association. This Association acts as an arbitrator for the parties. Section 10A(1) of the Industrial Disputes Act is relevant provision of law in this regard. It provides as below :-

"Where any industrial dispute exists or is apprehended and the employer and the workmen agree to refer the dispute to arbitration, they may, at any time before the dispute has been referred under Section 10 to a Labour Court or Tribunal or National Tribunal by a written agreement, refer the dispute to arbitration and the reference shall be to such person or persons (including the presiding officer of a Labour Court or tribunal or National Tribunal) as an arbitrator or arbitrators as may be specified in the arbitration agreement."

7. Their Lordships Hon'ble Mr. K. Jagannatha Shetty and Hon'ble Mr. Justice A.M. Ahmade of Hon'ble Supreme Court in Karnal Leather Karamchari Sanghatan (Regd.) Vs. Liberty Footwear Company (Regd) and Others AIR 1998 Supreme Court, 247 observed as follows :-

"Sections 10 and 10-A of the act are the alternative remedies to settle an industrial dispute. An industrial dispute can either be referred u/s. 10, or the parties can enter into an arbitration agreement and refer it to arbitration under Section 10-A. But once the parties have chosen remedy U/s. 10-A, the Govt cannot refer that dispute for adjudication under Section 10. The said reference made by the Govt. under Section 10(1) cannot, therefore, be sustained."

8. From the above decision it is clear that once industrial dispute has been referred to arbitrator the reference u/s. 10-A Industrial Disputes Act, 1947 cannot be sustained.

9. In the present case, as already stated, the dispute between the parties had been referred to Mercantile Association, as it is well known the Mercantile Association acts as an arbitrator. Accordingly, I am of the considered view that present reference u/s. 10(1) of the Industrial Dispute Act, 1947 cannot be sustained, award is passed accordingly."

10. Against the aforesaid award petitioner has filed the present petition.

11. The question to be determined is as to whether the so called proceedings before the Mercantile Association, Chandni Chowk, Delhi could be treated as reference of dispute to the Mercantile Association under Section 10-A of the Industrial Disputes Act. 1947 and therefore whether in view thereof refer order dated 19th June, 1996 was barred? If there is industrial dispute existing or apprehended appropriate Government can reference the said dispute for adjudication inter alia, the Labour Court or Tribunal under Section 10-A of the Industrial Disputes Act. Section 10-A provides for alternate machinery in the form of preliminary reference of disputes to arbitration instead of reference to the Labour Court or Tribunal, etc. In order to determine the controversy it would be appropriate to reproduce Section 10-A :-

Section 10-A :

Voluntary reference of disputes to arbitration - (1) Where any industrial dispute exists or is apprehended and the employer and the workmen agree to refer the dispute to arbitration, they may, at any time before the dispute has been referred under Section 10 to a Labour Court or Tribunal or National Tribunal, by a written agreement, refer the dispute to arbitration and the reference shall be to such person or persons (including the presiding officer of a Labour Court or Tribunal or National Tribunal) as an arbitrator or arbitrators as may be specified in the arbitration agreement.

(1A) Where an arbitration agreement provides for a reference of the dispute to an even number of arbitrators, the agreement shall provide for the appointment of another person as umpire who shall enter upon the reference, if the arbitrators are equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed to be the arbitration award for the purposes of this Act.

(2) An arbitration agreement referred to in sub-section (1) shall be in such form and shall be signed by the parties thereto in such manner as may be prescribed.

(3) A copy of the arbitration agreement shall be forwarded to the appropriate Government and the conciliation officer and the appropriate Government shall, within (one month) from the date of the receipt of such copy, publish the same in the official Gazette.

(3A) Where an industrial dispute has been referred to arbitration and appropriate Government is satisfied that the persons making the reference represent the majority of each party, the appropriate Government may, within the time referred to in sub-section (3), issue a notification in such manner as may be prescribed; and when any such notification is issued, the employers and workmen who are not parties to the arbitration agreement but are concerned in the dispute, shall be given an opportunity of presenting their case before the arbitrator or arbitrators :

(4) The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be.

(4A) Where an industrial dispute has been referred to arbitration and a notification has been issued under sub-section (3A), the appropriate Government may, by order, prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference.

(5) Nothing in the Arbitration Act, 1940 (10 of 1940) shall apply to arbitrations under this section.

12. A perusal of Section 10-A(1) would show that requirement of sub-section (1) are :

The requirement of sub-section (1) are :

(i) there should be an existing or apprehended industrial dispute;

(ii) the reference to arbitration should be by a written agreement;

(iii) the reference should be made before the dispute has been referred under Sec. 10 to a Labour Court, an Industrial Tribunal or National Tribunal; and

(iv) the names of the person or persons to act as arbitrator or arbitrators must be specified in the arbitration agreement. Such persons may be Presiding Officers of Labour Courts, Tribunals or National Tribunals.

13. Thus before a dispute is referred to arbitration under Section 10-A of the Industrial Disputes Act there has to be a written agreement between the parties specifying the name of the person who is to act as arbitrator(s). Once such a agreement is arrived at, copy thereof has to be forwarded to appropriate government and the Conciliation Officer under Section 10-A(3) of the Act and then appropriate Government has to refer the dispute within one month from the date of receipt of such copy. Thereafter arbitrator is supposed to investigate the dispute and submit its arbitration award to the appropriate government and appropriate government has to publish the said award under Section 17 of the Industrial Disputes Act and once such a award is published it has the same sanctity as the award given by Labour Court/Industrial Tribunal. It is not understood how Labour Court presumed that the entire exercise as contemplated and required under Section 10-A was completed merely because after termination of petitioner-workman he had taken up the matter with Mercantile Association. The Labour Court did not even bother to know as to whether there was any arbitration agreement in writing between the parties, which was given to the appropriate government and whether any reference was made by appropriate government to Mercantile Association on the basis of the alleged agreement. It is also not examined by the Labour Court as to whether any award was passed by the Mercantile Association and whether any such award was published by the appropriate government under Section 17 of the Industrial Disputes Act. Infact no such procedure as contemplated under Section 10-A of the Industrial Disputes Act was followed at all. Merely because petitioner. in his replication made reference to some complaint before the Mercantile Association, the Labour Court jumped to the conclusion that the Mercantile Association acted as arbitrary under Section 10-A of the Industrial Disputes Act.

14. When the petition came up for preliminary hearing on 9th July, 1999 while issuing show cause notice I passed the following order :-

A perusal of Award dated 1.2.99 pronounced by the Labour Court shows that refrence made under Section 10(1) of the Industrial Disputes Act is held to be not sustainable on the ground that the dispute between the workmen and the management was allegedly referred to Mercantile Association, Chandni Chowk, Delhi. Thus according to the Award, once the matter was referred to Mercantile Association reference under Section 10(1) of the I.D. Act was not maintainable. The Labour Court has referred to Section 10-A(1) of the I.D. Act and has come to the conclusion that the reference to Mercantile Association, Chandni Chowk, Delhi was under Section 10-A of the I.D. Act Prima facie, I am of the view that the Labour Court has mis-read the provisions of Section 10-A of the I.D. Act inasmuch as the said Section stipulates the manner in which reference is to be made to the Arbitrator when both employer and workmen agree to refer the dispute to arbitration. Arbitration Agreement has to be entered into between the parties and it has to be forwarded to the appropriate Government and the Conciliation Officer and appropriate Government has to publish the same in the Official Gazette. It seems no such exercise was done in the present case. It also seems that there is no publication of reference under Section 10(A) by the appropriate Government.

Issue notice to the respondents to show cause as to why the rule nisi be not issued. A copy of this order be sent to the respondent and the order should contain a direction that the matter would be disposed of on the next date of hearing.

15. Learned counsel for the respondent states that by the position expressed in the aforesaid order concedes that the impugned award dated 1.2.1999 warrants to be set aside. The impugned award dated 1.2.1999 is set aside. The matter is remanded back to the Labour Court with direction to decide the case afresh on merits. Needless to mention, both the parties will be given opportunity to plead their respective cases. Parties to appear before Labour Court on 29.11.1999.