# Rajiv Agrawal v. Presiding Officer Labour Court U.P.& Anr

- **Citation:** (2016) 4 ILRA 1119
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2015-04-17
- **Bench:** Surya Prakash Kesarwani
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/rajiv-agrawal-v-presiding-officer-labour-court-u-p-anr-43439
- **Pages:** 6

## Headnote

Section 4-K of the U.P. Industrial Disputes Act, 1947 - Determination of nexus between dispute
and territory - Control and supervision from Head Office outside State - Mere receipt of
1120 INDIAN LAW REPORTS ALLAHABAD SERIES
termination order within State not sufficient - Reference by State Government without
jurisdiction - Writ dismissed.

Section 4-K of the U.P. Industrial Disputes Act, 1947 - Power of reference is confined to disputes
falling within the territorial jurisdiction of the State of Uttar Pradesh - Labour Court under the Act can
adjudicate only such disputes where the State Government is the "Appropriate Government".

Appropriate Government - Test for determination - The determinative test is where the industrial
dispute has substantially arisen and which office exercised real control and supervision over the workman -
There must exist a clear nexus between the industrial dispute and the territory of the State making the
reference.

Control and Supervision from Head Office - Where:
Appointment letter issued from Head Office (Delhi),
Salary, E.P.F., leave records and personal records maintained at Head Office,
Services supervised and controlled from Head Office,
Termination order issued from Head Office,
Establishment registered outside the State,and no posting or service control existed within U.P.,
the dispute substantially arises at the place of the Head Office.

Mere receipt of termination order within State - Mere communication or receipt of termination order in
Uttar Pradesh does not confer territorial jurisdiction upon the State Government of U.P.
No possibility of multiple references - Law does not contemplate joint or simultaneous references by
different States in respect of the same industrial dispute - Accepting such contention would expose employer
to conflicting awards by different Labour Courts.

Reference without jurisdiction - Where the Government of U.P. is not the Appropriate Government, the
reference under Section 4-K of the Act is wholly without jurisdiction - Labour Court rightly declined to
adjudicate on merits.

Held:

Since the services of the petitioner were controlled and governed from Delhi and the termination order was
issued from Delhi, no part of the industrial dispute substantially arose within the State of Uttar Pradesh. The
Government of U.P. was not the Appropriate Government to make the reference under Section 4-K of the Act.
The Labour Court committed no error in holding that it lacked territorial jurisdiction.

Writ petition dismissed.

Case listed

Association of Medical representatives (M & V ) v. Industrial Tribunal, Madhya Pradesh, Indore
and others, AIR 1967 M.P. 117
Superintending Engineer v. Workmen of Machkund Hydroelectric Project and another, AIR 1960
Ori. 205
J. and J. Dechane Distributors v. State of Kerala and others, (1974) 2 LLJ-9
M/s. Lipton Ltd. and another v. Their Employees, AIR 1959 SC 676
Workmen of Shri Rangavilas Motors (P) Ltd. and another v. Shri Rangavilas Motors (P) Ltd. and
others, AIR 1967 SC 1040
4 All. Rajiv Agrawal Vs Presiding Officer Labour Court U.P.& Anr.

1121
Anglo-French Drug Co. (Eastern ) Ltd. v. Presiding Officer, Labour Court, Allahabad and others,
2004 (2) AWC 1544 (Paragraph 43 and 45)

## Text

4 All. Rajiv Agrawal Vs Presiding Officer Labour Court U.P.& Anr.

1119
 "7(3-A) If the amount of gratuity payable under sub-section (3) is not paid by the
employer within the period specified in sub-section (3), the employer shall pay, from the
date on which the gratuity becomes payable to the date on which it is paid, simple interest
at such rate, not exceeding the rate notified by the Central Government from time to time
for repayment of long-term deposits, as that government may, by notification specify:

Provided that no such interest shall be payable if the delay in the payment is due to the
fault of the employee and the employer has obtained permission in writing from the controlling
authority for the delayed payment on this ground."

18. Accordingly, we are of the opinion that the interest is required to be paid to the petitioners
by the respondents.

19. In the light of the aforesaid, the writ petition is allowed. A writ of mandamus is issued
directing the respondents to re-calculate the gratuity as per the Explanation to Section 4 (2) of the
Payment of Gratuity Act and also pay the interest as per Section 7 (3-A) of the said Act. The said
exercise shall be carried out within six weeks from the date of presentation of a certified copy of
this order.

20. No order as to costs.
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ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.04.2015

BEFORE

THE HON'BLE SURYA PRAKASH KESARWANI, J.

Writ C No.- 21277 Of 2015

Rajiv Agrawal ...Petitioner
Versus
Presiding Officer Labour Court U.P.& Anr. ...Respondents

Counsel for the Petitioner:
Ram Krishna,Rakesh Kumar Pandey,Vijay Kumar Mishra

Counsel for the Respondents:
C.S.C.

Industrial Dispute - Territorial Jurisdiction - Appropriate Government - Reference under
Section 4-K of the U.P. Industrial Disputes Act, 1947 - Determination of nexus between dispute
and territory - Control and supervision from Head Office outside State - Mere receipt of
1120 INDIAN LAW REPORTS ALLAHABAD SERIES
termination order within State not sufficient - Reference by State Government without
jurisdiction - Writ dismissed.

Section 4-K of the U.P. Industrial Disputes Act, 1947 - Power of reference is confined to disputes
falling within the territorial jurisdiction of the State of Uttar Pradesh - Labour Court under the Act can
adjudicate only such disputes where the State Government is the "Appropriate Government".

Appropriate Government - Test for determination - The determinative test is where the industrial
dispute has substantially arisen and which office exercised real control and supervision over the workman -
There must exist a clear nexus between the industrial dispute and the territory of the State making the
reference.

Control and Supervision from Head Office - Where:
Appointment letter issued from Head Office (Delhi),
Salary, E.P.F., leave records and personal records maintained at Head Office,
Services supervised and controlled from Head Office,
Termination order issued from Head Office,
Establishment registered outside the State,and no posting or service control existed within U.P.,
the dispute substantially arises at the place of the Head Office.

Mere receipt of termination order within State - Mere communication or receipt of termination order in
Uttar Pradesh does not confer territorial jurisdiction upon the State Government of U.P.
No possibility of multiple references - Law does not contemplate joint or simultaneous references by
different States in respect of the same industrial dispute - Accepting such contention would expose employer
to conflicting awards by different Labour Courts.

Reference without jurisdiction - Where the Government of U.P. is not the Appropriate Government, the
reference under Section 4-K of the Act is wholly without jurisdiction - Labour Court rightly declined to
adjudicate on merits.

Held:

Since the services of the petitioner were controlled and governed from Delhi and the termination order was
issued from Delhi, no part of the industrial dispute substantially arose within the State of Uttar Pradesh. The
Government of U.P. was not the Appropriate Government to make the reference under Section 4-K of the Act.
The Labour Court committed no error in holding that it lacked territorial jurisdiction.

Writ petition dismissed.

Case listed

Association of Medical representatives (M & V ) v. Industrial Tribunal, Madhya Pradesh, Indore
and others, AIR 1967 M.P. 117
Superintending Engineer v. Workmen of Machkund Hydroelectric Project and another, AIR 1960
Ori. 205
J. and J. Dechane Distributors v. State of Kerala and others, (1974) 2 LLJ-9
M/s. Lipton Ltd. and another v. Their Employees, AIR 1959 SC 676
Workmen of Shri Rangavilas Motors (P) Ltd. and another v. Shri Rangavilas Motors (P) Ltd. and
others, AIR 1967 SC 1040
4 All. Rajiv Agrawal Vs Presiding Officer Labour Court U.P.& Anr.

1121
Anglo-French Drug Co. (Eastern ) Ltd. v. Presiding Officer, Labour Court, Allahabad and others,
2004 (2) AWC 1544 (Paragraph 43 and 45)

(Delivered by Hon'ble Surya Prakash Kesarwani, J.)

1. Heard Sri Ram Krishna, learned counsel for the petitioner and Sri A.K.Upadhyay,
learned standing counsel for the respondent No.1.

2. Learned counsel for the petitioner submits that the impugned order dated 18.10.2014.
passed by respondent no.1 in Adjudication Case No.175 of 2012 is wholly arbitrary and illegal. He
submits that the jurisdiction of respondent no.1 is a referred jurisdiction and, therefore, the
respondent no.1 cannot travel beyond the terms of reference. Under the circumstances, the
respondent no.1 has committed a manifest error of law to hold that he lacks territorial jurisdiction
to adjudicate the dispute.

3. Learned standing counsel supports the impugned order. He submits that even no
prejudice has been caused to the petitioner, inasmuch as, the respondent no.1 has made it open to
the petitioner to raise the dispute before the competent authority/Court.

4. I have carefully considered the submissions of the learned counsel for the parties and
with their consent, this writ petition is being finally decided.

5. Briefly stated the facts of the present case are that the petitioner was appointed as a Store
Keeper in the establishment of M/s. B.S.B. K. Engineers(P) Ltd. L-8, Green Park Extension, New
Delhi, which is the Head Office and under control of which there were several working places. The
petitioner worked at several sites and lastly he was posted at the site of the said employer at
Jhalavad, Rajasthan. The service of the petitioner was terminated by the aforesaid employer by an
order dated 16.5.2001. A copy of the order was sent to the petitioner as well as Corporate Office of
the Company at Noida (U.P.).

6. In the impugned order a finding of fact have been recorded that the service of the
petitioner was controlled from the head office at New Delhi, salary was also paid to him from Delhi
Head Office, provident fund was deposited at Delhi. His leave account, salary details, personal
records, E.P.F. account and other records were maintained at Delhi Office and his services were
directly controlled by Delhi Office. The petitioner used to report directly to Sri P.S. Rathore at
Delhi Office. The establishment is registered in Delhi. The application for appointment was
submitted by the petitioner in Delhi Office and the letter of appointment was also issued by that
office. He was never posted at any place in the State of U.P.

7. On these facts the respondent no.1 came to the conclusion that no cause of action arose
within the State of Uttar Pradesh. The respondent no.1 held that he has no jurisdiction to adjudicate
the matter on merits.
1122 INDIAN LAW REPORTS ALLAHABAD SERIES
8. Section 4-K of the U.P. Industrial Disputes Act, 1947 (hereinafter referred to as the
'Act') reads as under :

"where the State Government is of opinion that any industrial dispute exists or is
apprehended, it may at any time by order in writing refer the dispute or any matter appearing to be
connected with, or relevant to, the dispute to a Labour Court if the matter of industrial dispute is
one of those contained in the First Schedule, or to a Tribunal if the matter of dispute is one
contained in the First Schedule or the Second Schedule for adjudication.

Provided that where the dispute relates to any matter specified in the Second
Schedule and is not likely to affect more than one hundred workmen, the State Government may, if
it so thinks fit, make the reference to a Labour Court."

9. Section 1(2) of the Act provides that the Act shall extend to the whole of Uttar Pradesh.

10. Thus, the labour Court under the Act, can entertain and decide matters falling within
the territorial jurisdiction of the State of U.P.

11. The employer has several sites (working place ) in different States of the country. The
workmen are controlled from the head office at Delhi. They, including the petitioner were
supervised from the Delhi Office. The salary, E.P.F. and other account etc. of the petitioner and
other workmen have been maintained and governed by the Head Office at Delhi. The letter of
appointment as well as the letter of termination of service of the petitioner have been issued from
Delhi Office. The basis of dispute, i.e., letter of termination from service dated 16.5.2011 was
issued from Delhi Office, which can only be said to be giving rise to industrial dispute and,
therefore, only the State government within the territories of which the said head office is situate
could have competence to make a reference under the relevant provisions of the Act, governing the
field of industrial dispute.Thus, the government of Uttar Pradesh is not the appropriate government.
Consequently, the reference made under the U.P. Act, was wholly without jurisdiction. Under the
circumstances, there is no infirmity in the impugned order.

12. If the contention of the learned counsel for the petitioner is accepted on the facts of the
present case, then the result would be that the States where the workmen of the respondentemployer are not even working, the government of that State may make a reference and the
employer may face conflicting awards of different labour courts situate in different States.

13. Under the circumstances, this Court is of the view that while deciding the issue of
territorial jurisdiction, labour court has to keep in mind that office of the employer is controlling the
services of the workman/workmen where the dispute has substantially arisen.

14. In the case of Association of Medical representatives (M & V ) v. Industrial
Tribunal, Madhya Pradesh, Indore and others, AIR 1967 M.P. 117 the court relied upon a
judgment of Bombay High Court in the case of Lalbhai Tricum Lal Mills Ltd. v. D.M. Vin, AIR
4 All. Rajiv Agrawal Vs Presiding Officer Labour Court U.P.& Anr.

1123
1955 Bombay 463 and held that the reference can be made by the Government in whose
jurisdiction the industry was situate and not where the employee was working.

15. In the case of Superintending Engineer v. Workmen of Machkund Hydroelectric
Project and another, AIR 1960 Ori. 205 a Division Bench of Orissa High Court examined the
similar issue and held that in such a situation where the industry is situate in other State and the
employees are working in another State, it is not possible that both the government could make a
reference nor it is possible to make a joint reference by the two States. The test that would
determine the competence of the appropriate Government, is where the industry substantially was
situate.

16. In the case of J. and J. Dechane Distributors v. State of Kerala and others, (1974) 2
LLJ-9 (supra ), a Division Bench of Kerala High Court held that there must be a nexus between the
industrial dispute and the territory of the State for making the reference. There can be only one
government which can be regarded as an Appropriate Government for the purpose of making a
reference under Section 10(1)(c) of the Central Act. Thus, the test that would determine as to which
Appropriate government has competence to make a reference, is where the dispute substantially
arose and in case his services are controlled from other State and the order giving rise to the
industrial dispute if passed from the said State, only that State will have competence to make a
reference.

17. In the case of M/s. Lipton Ltd. and another v. Their Employees, AIR 1959 SC 676,
Hon'ble Supreme Court examined the issue in a case where the industry was situated in Delhi but
the employees were working outside. They were controlled from Delhi Office; received their
salaries from Delhi Office and have been supervised from there. The matter of their leaves, transfer
etc. were also governed from Delhi. Hon'ble Supreme Court held that it is the Delhi Government,
which was Appropriate Government to make a reference to the labour court and not the
Government of the State where the workman had been working.

18. In the case of Workmen of Shri Rangavilas Motors (P) Ltd. and another v. Shri
Rangavilas Motors (P) Ltd. and others, AIR 1967 SC 1040, Hon'ble Supreme Court held that for
determining the competence of appropriate government to make a reference, the test is where the
industrial dispute arose/sponsored, i.e., the nexus between the dispute and the territory of the State
is the relevant factor. While determining the issue, the Court placed reliance upon its earlier
judgment in Indian Cable Co. Ltd. v. Its Workmen, (1962) Supp.3 SCR 589, wherein the dispute
has arisen if there is a separate establishment and the workman is working in that establishment, the
dispute woule arise at that place and in that situation, the nexus between the dispute and the
territory of the State may be relevant.

19. In the case of Anglo-French Drug Co. (Eastern ) Ltd. v. Presiding Officer, Labour
Court, Allahabad and others, 2004 (2) AWC 1544 (Paragraph 43 and 45), a Division Bench of
this Court summarised the judgment on the issue and held as under :
1124 INDIAN LAW REPORTS ALLAHABAD SERIES

"43. Thus, in view of the above, the legal position can be summarized that the law
does not envisage a joint reference by two States or reference by several States simultaneously.
There may be an establishment having its workmen working in different States of the country, if
they are controlled from the Head Office and they are supervised from there, and their salaries,
transfers, leaves etc. are being governed from that office and the order giving rise to the industrial
dispute, if passed from that office, only the State within those territories that office situate, would
have the competence to make a reference. If it is held otherwise in a given case, all States wherever
the workmen are working, would have a competence to make a reference and the employer may
face the conflicting awards of different labour courts situate in different States, therefore, while
deciding the issue, it is to be kept in mind as to which was the office controlling the services of the
workmen and where the dispute has substantially arisen. There has to be a nexus between the
industrial disputes and the territory of the State competent to make a reference to the labour court.

45. Be that as it may, as there is nothing on record to show that the services of the
respondent-employee were being controlled or he was being supervised by any office having an
office in State of U.P., it is beyond imagination to hold that the industrial dispute, i.e., termination
of the services of the respondent-employee, had substantially arisen in the State of U.P. Mere
receipt of the termination order will not confer upon the Government of U.P. to make a reference
and in the peculiar facts and circumstances of the case, it is difficult to hold that the Government of
U.P. would be an Appropriate Government and, thus, the reference itself is liable to be quashed.

20. In view of the above discussions and the law laid down by Hon'ble Supreme Court in
the above judgments, and the law laid down by the Division Bench of this Court in the case of
Anglo-French Drug Co. (Eastern ) Ltd. (supra), I do not find any infirmity in the impugned order.
The writ petition is wholly misconceived and, therefore, deserves to be dismissed.

21. In result, the writ petition fails and is hereby dismissed.
---------
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 10.03.2016

BEFORE

THE HON'BLE KARUNA NAND BAJPAYEE, J.

Criminal Misc. Bail Application No.- 41164 Of 2014

Arun Kumar ...Applicant
Versus
State Of U.P. ...Opposite Party

Counsel for the Applicant:
D.S. Parmar