V.P. Sharma vs Polc-X & Ors.
1999 Latest Caselaw 967 Del

ORDER

A.K. Sikri, J.

1. The petitioner had raised industrial dispute challenging his termination, which was referred for adjudication to the Labour Court. On 26.3.97 ex-parte Award was passed. As per the order sheet of the Labour Court the petitioner did not appear on that date. Petitioner moved an application for setting aside of the said Award, which was dismissed side order dated 27.1.98 on the ground that the Award had been published on 16.6.97 and the application for setting aside the said Award was filed on 23.3.97 which was after 30 days of the publication of the Award and, therefore. Labour Court had become functus officio. Petitioner has filed this petition challenging order dates 27.1.98 and has also prayed for quashing of ex-parte Award dated 26.3.97.

2. To complete the narration of facts, it may be mentioned that after the receipt of the reference order, Labour Court fixed the date of hearing 11.1.96 when the petitioner filed his statement of claim and notice was issued to the management. From 11.1.96 to 26.3.97 the case came up for hearing on 4 dates and the order-sheet of these dates is reproduced below:

"11.1.96

Workmen present in person. Statement of claim filed. Notice be issued to management for 11.7.96.

11.6.97

Workman in person. None for the management filed notice to management for 19.11.97.

19.11.96

The L.P.O. is on leave today. Present workman in person none for the management served. Issue notice to management for 26.3.97.

26.3.97

Present none. Proceedings are reserved for award. Award passed. File be consigned to record room".

The perusal of the order sheet would show that the workman had filed the statement of claim. However, management had not been served so far. On 26.3.98 since petitioner did not attend the case. Award was passed against him, which was published on 16.6.97.

3. The petitioner filed application for setting-aside of the aforesaid Award on 23.3.97 in which he stated that he had been attending the proceedings in person on all the dates. Even on 26.3.97 he reached the Court. However, he states that his wife had acute attack of Asthma and he had to rush to hospital in the morning and, therefore, he could reach the court on 26.3.97 only at 2.30 P.M. and he wrongly noted from the Cause List the next date as 19.9.97 and presumed that matter stands adjourned to that date. As it transpired later the date of 19.9.97 was in fact in some other case which was noted by him by mistake. In this case the award had been reserved. On 19.9.97 when the petitioner appeared before the Court he could not find the case and on further enquiry he came to know that ex-parte Award had already been passed on 26.3.97. He submitted that his non-appear-ance on 26.3.97 was due to aforesaid reason beyond his control and prayed for setting-aside of the Award. This application, as noticed above, was dismissed by order dated 27.1.98 as not maintainable by passing short order and the same is reproduced below :

Order

"On the receipt of the reference notice was sent to the workmen and statement of claim was filed on behalf of workmen on 11.1.96. But on 26.3.97 none appeared on behalf of workman and ultimately an ex-parte award was made on 26.3.97 which was duly published on 16.6.97. Now this application is moved for setting aside ex-parte award on 23.9.97. Only point for consideration is whether the application 30 days from the date of publication of the Award. It is settled law that under Section 17-A of the act an award becomes enforceable after expiry at 30 days from the date of its publication under Section 17 of the I.D. Acts, have after the expiry of 30 days this court becomes functus officio. Reference has been placed on 1978 (II) LIJ 462. The reference has also been placed on a decision of Hon'ble High Court of Delhi in the case as well as in the case . Similar view was also taken by the Hon'ble Madras High Court in case reported as 1996 (I) LLN 279 (Madras). Hence the application under reference is not maintainable and same is accordingly dismissed".

Announced Date:27.1.98

4. Ms. Sunita Bhardwaj appearing for the petitioner made two fold submissions:

1. Labour Court does not become functus officio after the expiry of 30 days from the date of publication of the Award and in the Impugned Award. Labour Court has wrongly interpreted the judgment of Supreme Court in the case of Grindlays Bank Ltd. Vs. The Central Government Industrial Tribunal and Other's .

2. It is submitted in the alternative that in any case the non- appearance of the petitioner on 26.3.97 was bona fide and due to sufficient cause and, therefore, ex-parte Award be set-aside by this Court in this writ petition.

5. Insofar first contention of the petitioner is concerned, it raises interesting question of law about the correct interpretation of the judgment of Supreme Court in the case of Grindlays Bank (supra), namely, whether the said case decides that 30 days after the publication of the Award Labour Court Industrial Tribunal under the Industrial Disputes Act become functus officio and cannot entertain the application for setting-aside of the said ex-parte Award. If made,30 days after the publication of the exparte Award?.

6. To appreciate what is the ratio laid down by the Supreme Court in the said case, it would be advantageous to first notice the facts of the said case. In that case the Government of India had made reference dated 26.7.95 referring Industrial Disputes Act existing between Grindlays Bank Ltd. and their workman for adjudication by Central Government Industrial Tribunal (CGIT). Dates were fixed from time to time by the CGIT. On December 9,1976 one of the dates when the matter was fixed for hearing, counsel appearing on behalf of the Employees Association sought an adjournment on the ground that General Secretary of the Association had suffered a bereavement as his father died on 25.11.76 and, therefore, he had to learn to perform the "Shradh Ceremony" falling on December 9, 1976. However, Tribunal refused to grant adjournment and proceeded to make ex-parte Award. On January 19, 1977 Employees Association applied for setting aside ex-parte Award on the ground that they were prevented by sufficient cause from appearing when the matter was listed on December 9, 1976. By Order dated April 12, 1977 Tribunal set-aside the ex-parte Award on being satisfied that there was sufficient cause within the meaning of Order IX Rule 13 of Code of Civil Procedure, 1908. Bank challenged the said order before the High Court which declined to interfere and it is in these circumstances Bank filed Appeal by Special Leave to Supreme Court. After noticing the aforesaid facts Supreme Court formulated following two questions for consideration:

"(1) whether the Tribunal had any jurisdiction to set aside the ex-parte award, particularly when it was based on evidence, and

(2) whether the Tribunal became functus officio on the expiry of 30 days from the date of publication of the ex-parte award under Section 17, by reason of sub-section (3) of Section 20 and therefore, had jurisdiction to set aside the award and the Central Government alone had the power under sub-section (1) of Section 17-A to set it aside".

7. Answering the first question, the Supreme Court decided that Tribunal had the jurisdiction to set-aside ex-parte Award. In support of its conclusion, Supreme Court observed that Industrial Disputes Act, 1947 was a piece of legislation calculation to ensure social justice to both employers and the employees and advance progress of industry by bringing harmony and cordial relations between the parties. In other wards, the purpose of the Act were to settle dispute between workman and the employer which, if not settled, would result in strikes or lock outs and entail dislocation of work essential to the life of the community. It noted that it was a well known rule of statutory construction that a Tribunal or body should be considered to be endowed with such ancillary or incidental powers as are necessary to discharge its functions effectively for the purpose of doing justice between the parties. In case of its nature, Tribunal should be considered as invested with such incidental or ancillary powers unless there is any indication in the statute to the contrary. The Court further noticed that it did not find any such statutory prohibition and on the contrary there were indications to the effect that Tribunal was vested with the powers to set aside ex-parte Award. Coming to this conclusion it relied upon Section 11(1) of the Industrial Disputes Act as well as Rules 9 to 30 of the Industrial Disputes (Central Rules) 1957 with specific reference to Rules 22 and 24 which are reproduced below :

"Rule 22"

"If without sufficient cause being shown, any party to proceedings before a Board, Court, Labour Court, Tribunal, National Tribunal or arbitrator fails to attend or to be represented, the Board, Court, Labour Court, Tribunal, National Tribunal or arbitrator may proceed, as if the party had duly attended or had been represented".

"Rule 24"

In addition to the powers conferred by the Act, Boards, Courts, Labour Courts, Tribunals, and National Tribunals shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908, when trying a suit. In respect of the following matters, namely:

What is the effect of Section 11(1) and Rules 22 and 24 was stated by Supreme Court in clear and unambiguous terms and I cannot do better but to quote the relevant portion of the judgment which reads as under :-

"When sub-section (1) of Section 11 expressly and in clear terms confers power upon the Tribunal to regulate 11 own procedure, it must necessarily be endowed with all powers which bring about an adjudication or an existing Industrial Dispute, after affording all the parties an opportunity of 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 and the power but also the duty to set aside the ex-parte award and to direct the matter to be heard afresh.

The language of R. 22 unequivocally makes the jurisdiction of the Tribunal to render an ex-parte award, conditional upon the fulfillment of its requirements. If there is no sufficient cause for the absence of a party, the Tribunal undoubtedly has jurisdiction to proceed ex-parte. But if there was sufficient cause shown which prevented a party from appearing then under the terms of R.22 the Tribunal will have had no jurisdiction to proceed and consequently, it must necessarily have power to set aside the exparte award. In other words, there is power to proceed ex- parte, but this power is subject to the fulfillment of the condition laid down in R. 22. the power to proceed ex parte under R.22 carries with it the power to enquire whether or not there was sufficient cause for the absence of a party at the hearing.

Under R.24 (b) a Tribunal or other body has the powers of a Civil Court under O.XVII of the Code of Civil Procedure, relating to the grant of adjournments. Under O.XVII, R1, a civil court has the discretion to grant or refuse an adjournment. When it refuses to adjourn the hearing of a suit, it may proceed either under O. XVII, R. 2 or R. 3. When it decides to proceed under O. XVII, R. 2, it may proceed to dispose of the suit in one of the modes directed in that behalf by O. IX, or to make such other order as it thinks fit. As a necessary corollary, when the Tribunal or other body refuses to adjourn the hearing, it may proceed ex parte. In a case in which the Tribunal or other body makes an ex parte award the provisions of O. IX, R. 13 of the Code are clearly attracted. It logically follows that the Tribunal was competent to entertain an application to set aside an ex parte award".

Thereafter, Supreme Court proceeded to decide the second question and repelled the contention of the appellant-bank that Tribunal had become functus officio. In deciding so, Supreme Court went on to observe as under:

"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 S. 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 Tribunals retain jurisdiction over the dispute referred to it for adjudication and upto 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. In the instant case, the Tribunal made the ex parte award on December 9, 1976. That award was published by the Central Government in the Gazette of India dated December 25, 1976. The application for setting aside the ex parte award was filed by respondent No. 3. acting on behalf of respondents Nos.5 to 17 on January 19, 1977 i.e, before the expiry of 30 days of its publication and was, therefore, rightly entertained by the Tribunal. It had jurisdiction to entertain it and decide it on merits. It was, however, urged that on April 12, 1977 the date on which the impugned order was passed, the Tribunal had in any event become functus officio. We cannot accede to this argument. The jurisdiction of the Tribunal had to be seen on the date of the application made to it and not the date on which it passed the impunged order. There is no finality attached to an ex parte award because it is always subject to its being set aside on sufficient cause being shown. The Tribunal had the power to deal with an application properly made before it for setting aside the ex parte award and pass suitable orders.

8. In deciding first question, Supreme Court unequivocally held that when a party is prevented from appearing in court because of sufficient cause and ex parte award is passed then such award should be treated as one which is passed without notice to the party and where notice is not given, award is nullity. It implied that ex parte award should be treated as nullity once sufficient cause is shown for non-appearance. There is no difficulty in understanding this ratio laid down by Supreme Court while deciding first question.

9. However, while deciding the second question and holding that Tribunal does not become functus officio, reference was made to Section 17A of the Industrial Disputes Act, as per which Award become enforceable on the expiry of 30 days from the date of its publication under Section 17 and it was observed that till then the Tribunal retains the jurisdiction over the dispute referred to it for adjudication and upto that date it has power to entertain the application in connection with such dispute. I may quote these observations again:

"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 Tribunals retain jurisdiction over the dispute referred to it for adjudication and upto that date it has the power to entertain an application in connection with such dispute".

10. However, these observations have raised certain doubts as to whether Tribunal becomes functus officio if the application is made 30 days after the publication of the Award. It may be stated that there is no specific observation to this effect in the aforesaid judgment. On the contrary at the end of aforesaid para, as noticed above with emphasis supplied by me, Supreme Court has again observed that there is no finality attached to an ex parte award because it is always subject to its being set-aside, on sufficient cause being shown.

11. In two cases, division Benches of this Court have decided, interpreting the ratio of Grindlays Bank (supra), that the Labour Court becomes functus offici on the expiry of 30 days of publication of Award. First case is Jagdamba Auto Industries Vs. Kamal Yadav and second case to Anil Sood and Others Vs. S.K. Sarvaria and Others .

12. In may point out at this stage that not long after the judgment of Grindlays Bank (supra), the Supreme Court had occasion to consider and interpret the ratio of the said case in the judgment delivered in Satnam Verma Vs. Union of India . In that case also the Labour Court as well as High Court had rejected the application of the appellant refusing to set-aside the ex-parte Award and accordingly appellant had appealed to Supreme Court. The Supreme Court while allowing the appeal of the appellant and holding that Labour Court had the power to consider the application of the appellant to set aside ex parte Award, explained the Grindlays Bank case in the following manner :

"In the case of Grindlays Bank Ltd., the specific contention canvassed was whether where an ex parte award is made and published in the Official Gazette, the Industrial Tribunal has the jurisdiction to entertain the application for setting it aside if sufficient cause is shown for absence of appearance on the date on which an ex parte award was made and it was answered in the affirmative. This Court referred to Rule 22 and Rule 24(b) of the Industrial Disputes (Central) Rules, 1957 and held that the Industrial Tribunal had the power to pass an order setting aside the ex parte order. In reaching this conclusion, the court observed that if the Tribunal has the power to proceed ex parte as provided by R. 22, it should be considered to be endowed with such ancillary or incidental powers as are necessary to discharge its functions effectively for the purpose of doing justice between the parties. The Court then proceeded to examine the scheme of the relevant rules and observed that R. 22 unequivocally confers jurisdiction on the Tribunal to proceed ex parte. The Tribunal can proceed ex parte if no sufficient cause for absence of a party is shown. This power was interpreted to comprehend that if sufficient cause was shown which prevented a party from appearing, then in the terms of R. 22, the Tribunal will have had no jurisdiction to proceed ex parte and consequently, it must necessarily have power to set aside the ex parte award. The Court in terms observed that the power to proceed ex parte is subject to the fulfillment of the condition laid down in R.22 and therefore it carried with it the power to enquire whether or not there was sufficient cause for the absence of a party at the hearing. The Court then referred to R. 24(b) and held that where the Tribunal or other body makes an ex parte award, the provisions of Or. IX, r.13 of the Code of Civil Procedure are clerly attracted and if logically follows that the Tribunal was competent to entertain an application to set aside an ex parte award. The Court then proceeded to examine the contention that once an award is published in the Official Gazette, be it an ex parte one does the Tribunal become functus officio and therefore, will have no jurisdiction to set aside the ex parte award and that as contended before us the appropriate Government along could set it aside and rejected it holding that no finality is attached to an ex parte award because it is always subject to its being set aside on sufficient cause being shown. The Court held that the Tribunal had the power to deal with an application properly made before it for setting aside the ex parte award and pass suitable orders. We have extensively referred to this decision because it effectively answers all the limbs of the contention canvassed before us and which unfortunately, found favour with the Labour Court and the High Court".

13. After explaining the ratio of the Grindlays Bank case in the aforesaid manner, Supreme Court went on to observe as under :

"It must follow as a necessary corollary that the Labour Court as well the High Court denied to itself the jurisdiction vested in it to entertain an application for setting aside an ex parte award and reached an erroneous conclusion."

14. Perhaps Satnam Verma clarifies what Grindlays Bank decides. It is established Principle of Law that interpretation given by Supreme Court about an earlier case in a later case is also binding precedent.

15. Single Bench of Madras High Court in the case of Special Officer, Salem Co-operative Printing Ltd. Vs. Labour Court, Salem and another 1998 (1) L.L.N. 651 has considered the ratio of Satnam Verma case and quoted para-7 of the said judgment to point out that no finality is attached to an ex-parte Award because it was always subject to its being set aside on sufficient cause being shown and Tribunal had power to deal with the application properly made before it for setting-aside of ex-parte Award and pass suitable orders.

16. Coming back to the aforementioned judgment of Division Bench of this Court, it may be seen that in brief judgment in the case of Jagdamba Auto (supra), this court has referred to Grindlays Bank but the case of Satnam Verma has not been referred to. However, in the case of Anil Sood (supra) there is a mention to the judgment of Satnam Verma (supra) which is noticed while referring to the arguments of the counsel but there is no discussion about the same in the judgment.

17. However, as mentioned above in these two cases, Division Benches of this Court have taken the view that Labour Court becomes functus officio on the expiry of 30 days of publication of Award. It may be mentioned that in Grindlays Bank as well as Satnam Verma cases, the applicants have filed the applications within 30 days of the publication of the Award. Presumably this factor weighed with this Court in the aforesaid judgments to take the aforesaid view.

18. However, one may be immediately confronted with certain important questions.

19. Does that mean that even when applicant is able to show sufficient cause for non-appearance and such ex-parte award is nullity, applicant is precluded to knock the doors of Labour Court only because 30 days have expired since the publication of the Award? Tribunal, which is otherwise empowered to set aside ex-parte award now becomes helpless to remedy such a situation and to do justice? What would be the situation when sufficient cause was such which prevented applicant to approach the court within 30 days of publication of award? Facts of this very case precisely demonstrate the same.

20. Be as it may, since the aforesaid two judgments of this court which are of Division Benches bind me and forbid me to take contrary view, I leave the matter at that only. However, I am informed that the same very question is pending before Supreme Court for determination.

21. Now I proceed to decide the second contention of the petitioner. Let me deal with the facts of this case first. I have no hesitation in concluding that the petitioner had sufficient cause for non-appearance when the matter was called on 26.3.1997 and reserved for ex-parte award. In fact petitioner reached the court also on that very date but belatedly. Had he shown his appearance to the court, it probably may not have proceeded to pass the ex-parte award. But under bona-fide mistake that the case stood adjourned to 19.9.1997, petitioner noted down that date and left the court. It may be pointed out that the counsel for the respondents during the arguments did not seriously challenge the fact that the non-appearance of the petitioner on 26.3.97 amounted to sufficient cause. Even in the counter-affidavit, this aspect is not at all replied and relying upon the judgment of Grindlays Bank it is only contended that the Labour Court has become functus officio.

22. Thus, as the petitioner in this case is able to show sufficient cause for non-appearance before the Labour Court on 26-3-1997, in exercise of my powers under Article 226 of the Constitution of India. I set-aside the ex-parte Award dated 26.3.97. such an award is nullity. Therefore, even if I presume that Labour Court had become functus officio, petitioner cannot be rendered remediless. Courts cannot be helpless to the extent that even an award which is nullity, they have no right or power to set it aside. This court under Article 226 can definitely exercise such power. Way back in 1955, the Supreme Court while dealing with the legality of ex-parte order passed by Election Tribunal explained the powers of High Court under Article 226 of the Constitution. It was done in the case of Sangram Singh Vs. Election Tribunal Kotah and following is what Supreme Court decided:

"11. It was urged that, that cannot be so in election matters because of S. 105. Representation of the People Act of 1951 (Act 43 of 1951), a section which was not considered in the earlier case. It runs thus".

"Every order of the Tribunal made under this Act shall be final and conclusive".

It was argued that neither the High Court nor the Supreme Court can itself transgress the law in trying to set right what it considers is an error of law on the part of the Court or Tribunal whose records are under consideration.

It was submitted that the legislature intended the decision of these tribunals to be final on all matters, whether of fact or of law accordingly, they decide and lay down what the law is, for in that sphere their decisions are absolute, as absolute as the decisions of the Supreme Court in its own sphere. Therefore, it was said, the only question that is left open for examination under Article 226 in the case of an Election Tribunal is whether it acted within the scope of its jurisdiction.

But this, also, is no longer open to question. The point has been decided by three Constitution Benches of this Court. In (S) (A) the effect of S.105, Representation of the People Act was not considered but the Court laid down in generally terms that the jurisdiction under Article 226 having been conferred by the Constitution limitations cannot be placed on it except and 242. Section 105 was, however considered in Durga Shankar Mehta, Vs. Raghuraj Singh, (B) and it was held that section cannot cut down or affect the overriding powers of this Court under Article 136. The same rule was applied to Art. 226 in 'Raj Krishna Bose Vs. Binod Kanungo'. (C) and it was decided that S.105 cannot take away or whittle down the powers of the High Court under Art. 226. Following those decisions we hold that the jurisdiction of the High Court under Art. 226 is not taken away on curtailed by S. 105.

13. The jurisdiction which Arts. 226 and 136 confer entitles the High Courts and this Court to examine the decisions of all Tribunals to see whether they have acted illegally. That jurisdiction cannot be taken away by a legislative device that purports to confer power on a tribunal to act illegally by enacting a statute that its illegal acts shall become legal the moment the tribunal chooses to say they are legal. The legality of an act or conclusion is something that exists outside and apart from the decision of an inferior tribunal.

It is a part of the law of the land which cannot be finally determined or altered by any tribunal of limited jurisdiction. The High Courts and the Supreme Court alone can determine what the law of the land is 'vis a vis' all other courts and tribunals and they alone can pronounce with authority and finality on what is legal and what is not. All that an inferior tribunal can do is to reach a inferior tribunal can do is to reach a tentative conclusion which is subject to review under Arts. 226 and 136. Therefore, the jurisdiction of the High Courts under Art. 226 with that of the Supreme Court above them remains to its fullest extent despite sec. 105".

23. After discussing the scope & power of Articles 226 and 136 of the Constitution of India, the Supreme Court interpreted the provisions of Order XIII CPC holding that its interpretation has to be in consonance with Principles of Natural Justice. Following observations contain the words of wisdom:

"16. Now a code of procedure must be regarded as such. It is procedure, something designed to facilitate justice and further its ends: not a penal enactment for punishment and penalties; not a thing designed to trip people up. Too technical a construction of sections that leaves no room for reasonable elasticity of interpretation should therefore be guarded against (provided always that justice is done to `both' sides) lest the very means designed for the furtherance of justice be used to frustrate it.

17. Next, there must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them. Of course, there must be exceptions and where they are clearly defined they must be given effect to. But taken by and large, and subject to that proviso, our laws of procedure should be construed, wherever that is reasonably possible, in the light of that principle.

24. Accordingly, rule is made absolute. Impunged Award dated 26.3.97 is set-aside. The matter is remanded back to the Labour Court for adjudication on merits. Parties are directed to appear before the Labour Court on 4th November, 1999. Since considerable time has elapsed after the passing of ex-parte Award, it is expected that Labour Court would decide the dispute expeditiously. No orders as to costs.