# AVON SERVICES (PRODUCTION AGENCIES) PVT. LTD v. INDUSTRIAL TRIBUNAL, HARYANA FARIDABAD & ORS . •

- **Citation:** [1979] 2 S.C.R. 45
- **Court:** Supreme Court of India
- **Decided:** 1978-10-06
- **Bench:** V. R. Krishna Iyer, D. A. Desai
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/avon-services-production-agencies-pvt-ltd-v-industrial-tribunal-haryana-7612
- **Pages:** 17

## Headnote

•
Industrial Disputes Act 1947 (XIV of 1947)-S. 10(1)-Government re-
~
fused to refer dispute for adjudication-If could reconsider decision and refer
diJpute after lapse of time-Whether fresh material necessary for reconsideration
of earlier decision.
1
• •
Ss. 25F and 25 l'FF-Notice of retrenchment-Undertaking what iJ--
Closure of painting sub-section in a factory. not closure of undertaking.
C
Words and I'hrases-'At any time'-Meaning of.
The
appellant's factory ·!Vas divided into
two sections; manufacturing
5ection and packing material making section.
The packing material making
section comprised two sub-sections : manufacturing containers and painting
containers.
The appellant decided to buy containers from the market and
consequently closed down its packing material making section but continued
the painting section.
After a lapse of years, the employer served a notice
of retrenchment on the two workmen (respondents nos. 3 and 4) and another employee all of whom at that time were working in the painting
section alleging that the undertaking is closed. 'They v.·ere asked to collect
their dues under s. 25FFF of the Industrial Disputes Act, 1947.
The Trade Union of the employees submitted a number of demands one
of which related to the reinstatement of the two retrenchment workmen
with full back wages.
The Government referred all their demands to the
Industrial Tribunal but declined to refer the demand relating to reinstatement
of the two retrenched workmen.
A few months later, however, the Government referred this demand as well for adjudication.
The Tribunal held (I) that though in the first instance the Government
refused to refer the dispute it was competent to make a reference at a later
date and '(2) that the retrenchment of the workmen was invalid because the
appellant did not comply with the provision of s. 25F.
The appellant's writ petition was dismissed in limine.
In appeal to this Court it was contended that (1) the Government having
D
E
F
once declined to make a reference, had no power to make a reference in
G
respect of the same dispute at a later date unless it had some fresh or
additional material before it; and (2) since the painting undertaking was
a separate and independent undertaking, the case was governed by s. 25FFF
and not hy s, 25F .
Dismissing the appeal,
HELD : ,:1. (i) The Government does not lack .the power to make referH
ence in respect of the same industrial dispute which it once declined to
T
refer. [53G]
'
A
B
c
D
46
SUPREME COURT REPORTS
[1979] 2 S.C.R.
(ti) The- opinion which the appropriate Government is required to form
before referring a dispute to the appropriate authorit.y under s. 10(1) is about
the existence of a dispute or even if the dispute has not arisen it is appre··
bended as imminent and requires resolution in the interest of industriaJ
peace and harmony.
The power under this section, which is discretionary,
can be exercised when the Government is satisfied that an industrial dispute
exists or is apprehended.
There must be some material before the Govern·
ment forms an opinion in respect of the two relevant considerations. Moreover.
the power conferred being adminis'!.rative in nature the action of the Govern·
ment in making the reference is an administrative act.
The jurisdictional facts
on \Vhich the appropriate Government may act are the formation of opinion
that an industrial dispute exist<; or is apprehended, which is a subjective
one.
That being so the adequacy or sufficiency of the material on which
the opinion was formed is beyond the pale of judicial scrutiny.
If the Government's action is impugned by a party it would be open to such a party
to show that what was referred was not an industrial dispute and that the
tribunal had no jurisdiction to make the award.
If the dispute was an industrial dispute its factual existence and the expediency of making a reference
being n1atters entirely for the Government to decide, it wilJ not be competel:'lt
for the court to hold the

## Text

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45
AVON SERVICES (PRODUCTION AGENCIES) PVT. LTD.
A
v.
INDUSTRIAL TRIBUNAL, HARYANA FARIDABAD & ORS .
•
October 6, 1978
[V. R. KRISHNA IYER AND D. A. DESAI, JJ.]
•
Industrial Disputes Act 1947 (XIV of 1947)-S. 10(1)-Government re-
~
fused to refer dispute for adjudication-If could reconsider decision and refer
diJpute after lapse of time-Whether fresh material necessary for reconsideration
of earlier decision.
1
• •
Ss. 25F and 25 l'FF-Notice of retrenchment-Undertaking what iJ--
Closure of painting sub-section in a factory. not closure of undertaking.
C
Words and I'hrases-'At any time'-Meaning of.
The
appellant's factory ·!Vas divided into
two sections; manufacturing
5ection and packing material making section.
The packing material making
section comprised two sub-sections : manufacturing containers and painting
containers.
The appellant decided to buy containers from the market and
consequently closed down its packing material making section but continued
the painting section.
After a lapse of years, the employer served a notice
of retrenchment on the two workmen (respondents nos. 3 and 4) and another employee all of whom at that time were working in the painting
section alleging that the undertaking is closed. 'They v.·ere asked to collect
their dues under s. 25FFF of the Industrial Disputes Act, 1947.
The Trade Union of the employees submitted a number of demands one
of which related to the reinstatement of the two retrenchment workmen
with full back wages.
The Government referred all their demands to the
Industrial Tribunal but declined to refer the demand relating to reinstatement
of the two retrenched workmen.
A few months later, however, the Government referred this demand as well for adjudication.
The Tribunal held (I) that though in the first instance the Government
refused to refer the dispute it was competent to make a reference at a later
date and '(2) that the retrenchment of the workmen was invalid because the
appellant did not comply with the provision of s. 25F.
The appellant's writ petition was dismissed in limine.
In appeal to this Court it was contended that (1) the Government having
D
E
F
once declined to make a reference, had no power to make a reference in
G
respect of the same dispute at a later date unless it had some fresh or
additional material before it; and (2) since the painting undertaking was
a separate and independent undertaking, the case was governed by s. 25FFF
and not hy s, 25F .
Dismissing the appeal,
HELD : ,:1. (i) The Government does not lack .the power to make referH
ence in respect of the same industrial dispute which it once declined to
T
refer. [53G]
'
A
B
c
D
46
SUPREME COURT REPORTS
[1979] 2 S.C.R.
(ti) The- opinion which the appropriate Government is required to form
before referring a dispute to the appropriate authorit.y under s. 10(1) is about
the existence of a dispute or even if the dispute has not arisen it is appre··
bended as imminent and requires resolution in the interest of industriaJ
peace and harmony.
The power under this section, which is discretionary,
can be exercised when the Government is satisfied that an industrial dispute
exists or is apprehended.
There must be some material before the Govern·
ment forms an opinion in respect of the two relevant considerations. Moreover.
the power conferred being adminis'!.rative in nature the action of the Govern·
ment in making the reference is an administrative act.
The jurisdictional facts
on \Vhich the appropriate Government may act are the formation of opinion
that an industrial dispute exist<; or is apprehended, which is a subjective
one.
That being so the adequacy or sufficiency of the material on which
the opinion was formed is beyond the pale of judicial scrutiny.
If the Government's action is impugned by a party it would be open to such a party
to show that what was referred was not an industrial dispute and that the
tribunal had no jurisdiction to make the award.
If the dispute was an industrial dispute its factual existence and the expediency of making a reference
being n1atters entirely for the Government to decide, it wilJ not be competel:'lt
for the court to hold the reference bad merely because there was, in its
opinion, no material before the Government on which it could have come to
an affirmative conclusion on those matters. [51E-52B]
State of Madras v. C. P. Sarathy, [1953) SCR 334 referred to.
(iii) The Government does not lack the power to make the reference
in respect of the same industrial dispute which it once declined to refer. The
only requirement for taking action under s. 10(1) is that. there must be
E
some material before the Government enabling it to form an opinion that
an industrial dispute exists or is apprehended.
How and in what nw.nner or
through what machinery the Govemme11t is apprised of the dispute is hardly
relevant.
Merely because' the Government rejects a request for a reference
or declines to make a reference, it cannot be said that the dispute has ceased
to exist. An industrial dispute may nonetheless continue to remain in .existence
and if at a subsequent stage. the appropriate Government is satisfied that it is
F
desirable to 1nake a reference the Government does not lack the power to
do so nor is it precluded from making the reference on the only ground that
on an earlier occasion it had declined to make the reference.
The expression
"at any time" clearly negatives that contention. [53G, 52G, E, H, 53A.B]
G
B
Western India Match Co. Ltd. v. Western India Match Co. Workers
Union & Ors., [1970) 3 SCR 370 followed.
(iv)' Nor again is it necessary that there should be some fresh material
before the Government for reconsideration of its earlier decision.
It may re·
consider its decision on some new facts brought to its notice or for any
relevant consideration.
Such relevant consideration may include threat. to
industrial peace by the continued existence of the industrial dispute and that
a reference would at least bring the parties to the talking table.
When the
Government declined to make the reference the source of power is
neither
dried up nor exhausted.
It only indicates that the Government for the lime
being refused
to exercise
the
power but that does not denude. the
'{lower.
The . power to make a reference remains int.act.
Similarly refusal
I.
,
"
.-;--- -
• •
•
T
AVON SERVICES V, INDUSTRIAL TRIBUNAL
47
to make the reference does not tantamount to saying that the dispute stands
resolved.
On the contrary, refusal to make a reference \vould further accentuate the feelings and a threat to direct action may become imminent and
the
Government ma.y as well consider the decision to make
h.: rt:fl!rence. [53H-54A, 54B-D]
In the instant case it has not been shown that the dispute had ceased tc.
exists and the very existence of the dispute enables the Government to exercise
the power under s. 10(1). [54F]
Binny Ltd. v, Their Workn1en & Anr. f19721 3 SCR 518
refe~red
to:
(2) There is no substance in the appellant's contention that. the original
demand was some one other than the one which was referred to the Industrial
Tribunal later.
The Union had espoused the cause of two workmen and the
reference was \\1ith regard to the termination of services by retrenchment in
respect of the same two v;orkn1en.
The language or the format in which
the demand is couched is hardly decisive of the matter.
The, substance of
the n1atter, is as to what is the grievance of the
\YOrkmen.
con1pJained
of
by them, or espoused by the Union and what the Industrial Tribunal is called
upon to adjudicate.
[n this ca'-e the demand referred to the Tribunal \Vas
the same which was espoused by the Union earlier. [56F~G}
Sindhu Resettlen1ent Corporation Ltd. v. The Industrial Tribunal of
Gujarat & Ors., [1968] I SCR 515 held inapplicable.
II
c
D
(3) The tenor of the notice served on the workmen clearly indicated
that work.men \Vere rendered surplus and they \Vere retrenched.
On the admission of the appellant it was a case of retrenchment. [60E]
E
State Bank of India v. N. Sundara Money, [19761 3 SCR 160 rtt 1fi:':
Management of Hindustan Steel Ltd. v. The Workmen & Ors.,
fl9731 3 SCR 303 referred to.
(4) (i) The notice expressly stated that the workmen were retrenched
though it simultaneously stated that the action \Vas taken under s. 25FFF.
However on the facts found by Industrial Tribunal, case of closure of undertaking is not made out. [60D, FJ
(ii) The expression ·•undertaking" cannot
comprehend
a·n
in!l 1:iil<;maHy
small part of a manufacturing process.
While ascertaining the amplitude of
the expression 'undertaking· in the definition of t.he expression 'industry' th is
Court gave a restricted meaning to it.
While thus !'cading down the expression,
in the context of s. 25FFF, it must mean a separate and distinct business
or commercial or trading or industrial activity. [60G~H]
Bangalore Sewerage Board v. Rajappa. [19781 3 SCR 207. 227 referred to.
(iii) The case would squarely fall in s. 25F and not be covered by s.
25FFF, on a specious plea of closure of an undertaking.
A.s the company
had a container making section which wa<.; closed a long time back and yet
F
G
H
A
B
48
SUPREME COURT REPORTS
[1979] 2 S.C.R.
these three workmen \Vere retained, it cannot be said that the painting section was a recognised sub-section eligible for being styled as a part orf the
undertaking.
If such mini-classification is permitted it would
enable
the
employer to flout s. 25F with impunity.
These workmen appear not to have
been employed initially as painters.
They were doing some other work from
\Vhich they were brought to the painting section.
They could have as \Vell
been absorbed in some other work v.·hich they were capable of doing.
If
paint.ing was no more undertaken as one of the separate jobs, the workmen
would become surplus and they could be retrenched after paying co.mpensation
as required by s. 25F.
To style a job of a particular 'vorker doing a specific
work in the process of manufacture as. in itself an undertaking is to give
meaning t.o the expression ·undertakiing' which it hardly connotes. [61F, B-DJ
c
C!VrL APPELLATE JURISDICTION: Civil Appeal No. 634 of 1975.
Appeal by Special Leave from the Judgment
and Order dated
1-10-1974 of the Punjab and Haryana High Court in Civil Writ No.
5126 of 1974.
0. P. Malhotra, N. S. Das Behl and Sat Pal Arora for the Appella::it.
D
Madan Mohan for Respondents 3-4.
E
F
G
H
Tho Judgment of the Court was delivered by
DESAI, J. Socio-economic justice, the corner stone of industrial jurisprudence to be achieved by the process of give and take, concessions
and adjustments of cmflicting claims would hardly advance if th·~ industrial dispute involved in this appeal by special leave brought by the
appellant M/s. Avon Services (Production Agencies) Pvt. Ltd. canvassing some technical legal nicety rendering the two employees jobless
for more than seve>a years is encouraged. A brid recital of few facts
touching upon the controversy would reveal the arena of dispute. The
appellant is a Private Limited Company incorporated under the Companies Act, 1956, and is engaged in the businei;& of manufacturing Fire
Fighters Foam Compouad. It has set up two factories, one at Bombay
and the other at Ballabbgarb.
The industrial dispute which is the
subject-matter of appeal relates to Ballabhgarh factory.
According to
the appellant this factory, when commissioned in 1962, was divided into
two sections, now styled as two separate undertakings : (i) manufacturing section; and (ii) packiag material making section. The manufacturing section comprised two sub-sections, viz., the chemical section,
i.e. Foam Compound manufacturing section, and the boiler section. The
packing material section was again composed of two sub-sections, one
manufacturing containers, and the other painting of the containern.
Respondents 3 and 4 according to the appdla."lt were employed in the
painti::ig section. Around 1964 the appellant decided to buy containers
from the market and consequently closed down its packing material
AVON SERVICES v. INDUSTRIAL TRIBUNAL (Desai, J.)
49
makbg section but continued the painting sub-section. On 13th July
1971 the appellant purported to serve a notice on respondents 3 and 4
and one Mr. Ramni intimating to them that the management has decided
to close the painting section effective 13th July 1971 due to u:iavoidable
circumstances and hence the services of the three workmen would no
longer b~ required and, therefore, tky are retrenched. Even though it
is alleged that the notice was served upon the three workmen, the Tribunal found that the notice never reached respondents 3 and 4. By
the notice the workmen concerned were also informed that they should
collect their dues under section 25FFF of the Industrial Disputes Act,
1947, from the office of the Compa:iy. Since 13th July 1971 respondents 3 and 4 have been denied employment by the appellant. A Trade
Union of the employees of the appellant affiliated to Bharatiya Mazdoor
Sangh served a notice of demand, Annexnre P-1 dated 16th July 1971
inter alia calling upo:i the appdlant to reinstate ro;pondents 3 and 4 and
the u'iird workman and also to pay the full back wages.
On 19th
February 1972 as per Annexure P-2, the Secretary to the Gove=ent
of Haryana, Labour and Employment Department, intimated to the
President of the Unim that from amongst the demands contained in
Annexure P-1, Demands 2 to 9 have been reforred to Industrial Tribunal
for adjmlioation.
In respect of demand No. l relating to the reinstatement of the three workmen in the pabting section, the reference was
refused on the ground that there was uo work for painting in the factory
where thei;e two workmen were working.
This refusal to refer the
demand couoerning responde";Jts 3 and 4 has been the subject-matter of
a very serious submission on behalf of the Company that the reference
subsequently made by the Government was invalid. To proceed further
with the narrative. subsequently the Government of Haryana by its Order
dated 23rd November, 1972 referred the following dispute to the Industrial Tribunal for adjudication :
"Whether the retrenchment of Sarvashri Moha=ed Yamin
and Mohammad Yasin was justified and in order ? If not, to
what relief they are entitled?"
The Tribunal registered the reference at No. 81/72 and proceeded
to adjudicate upon the dispute.
Three issues were raised before the
Tribunal and it is necessary to set down the three issues here in order to
point out that one of the contentioru; raised at the hearbg of this appeal
was never put forth before the Tribunal.
The issues framed by the
Tribunal are :
"1. Whether the present reference is bad in law for the
reasons given in para No. 1 of the preliminary objectioa in
.the written statement?
(On management).
A
B
c
D
E
F
G
H
50
SUPREME COURT REPORTS
[1979] 2 S.C.R.
A
2. Whether the statement of claim filed on behalf of the
B
c
D
E
F
G
H
workmen is not in order ? (On ma:iagement) .
3. Whether the retrenchment of Sarvashri
Mohammed
Yamin and Mohammad Yasin was jnstified and in order ? If
not, to what relief they are entitled?"
The management, i-a support of its contention covered by issue No.
1, urged before the Tribunal that once the Government declined to make
a reference in respect of termination of service of respondents 3 and 4,
the Governme-at was not competent to refer the dispute for adjudication
at a later date. The Tribunal negatived the contention observing that
there is abundant authority in support of the proposition that
the
Government having once declined to make a reference, is not rendered
incompetent from making a reference of the same dispute at a later
date.
Issue No. 2 was also answered against the appelfant but as that
contention was not raised before us, we -aeed not go into the details of
it.
On issue No. 3, the Tribunal held that respondents 3 and 4 were
retrench•'d and the case would squarely fall under s. 25F of the Industrial Disputes Act, 1947 (for short 'the Act') and as the appellant
employer has -aot complied with the pre-condition laid down in s. 25F
(a) and (b) of the Act to wit, serving of one month's notice or wages
in lieu of such notice and payment of retrenchment compensation, the
retrenchment was bvalid. Th' Tribunal was further of the opinion
that as both the workmen have been in service for 15 years or so, they
could have h'en conveniently absorbed in some other department and,
therefore, the retrenchment was unjustified. The Tribu-aal accordingly
directed reinstatement of respondents 3 and 4 with full back wag,s.
The appellant moved the High Court of Punjab & Haryana for a
writ of certiorari but the writ petition was dismissed in limine.
Mr. 0. P. Malhotra, learned cou-asel for the appellant canvassed
two contentions before us.
He submitted that the Government having
declined to make a reference under s. 10 (1) of the Act in respect of
termination of service of respondents 3 a-ad 4 as per its order dated
19th February 1972 Ann'xure P-2, the Government was not competent
or had no power or authority to make a reference in respect of the
sa'me dispute unless the Governme-at must have come up with some
fresh or additional material which, when the validity of the reference
was challen~d, must be disclosed or it must appear on the face of the
reference itself.
Alternatively it was contended that after having declined to make a reference in respect of termination of service of respondents 3 and 4, the Government was not competent to make a reference
of an entirely different dispute touching the question of reinstatement
•
J
7
AVON SERVICES v. INDUSTRIAL TRIBUNAL (Desai,!.)
51
of respondents 3 and 4 which was a materially different dispute, from
the one raised by the Union as per its charter of demands Annexure
P-1, dated 16th July 1971 because the demand as is now referred to
th·~ Tribunal was never raised before the management and, therefore,
no such demand existed which the Government could have referred
to the Tribunal under s. 10(1) of the Act.
The second contention
was that the t>ormination of service of respondents 3 and 4 was consequent upon the closure of painting undertaking which was a separate
and independent undertaking of the appellant and the case would,
therefore, In governed by s. 25FFF and not by s. 25F as held by the
Tribunal and even if wages in lieu of notice and retrenchment compensation were not paid at the time o[ retrenchment the termination
would "JO! be invalid because the conditions for payment of wages in
lieu cf notice and retrenchment compensation are not conditions precedent when termination of service is brought about on account of
closnrc of the undertaking.
Sectio71 10 ( 1) of the Act confers pow.er
on
the
appropriate
Government to refer at any time any industrial dispute which exists or
is appreh~ndcd to the authorities mentioned in the section for adjudication.
The opinion which the appropriate Government is required
to form before referring the dispute to the appropriate authority is
about the existe"Jce of a dispute or even if the dispute has not arisen,
it is apprehended as imminent and requires resolution in the interest
of industrial peace and harmony.
Section 10(1) confers a discretionary power and this discretionary power can be exercised on bei'.ag
satisfied that an industrial dispute exists or is apprehended.
There
must be some material before the Government on the basis of which
it forms an opinion that an industrial dispute exists or is apprehe"Jded.
The power conferred on the appropriate Government is an adminis·
trative power and the action of the Government in making the reference
is an administrative act. The formation of an opinion as to the factual
existeno' of an industrial dispute as a preliminary step to the discharge
of its functio71 does not make it any the less administrative in character. Thus the jurisdictional facts on which the appropriate Government may act are the formation of an opinion that an industrial dispute
exists or is apprehended which undoubtedly is a subjective one, the
next step of making reference is an administrative act. The adequacy
or sufficiency of the material on which the opinion was formed is beyrod
the pale of judicial scrutiny. If the action of the Gov>ornment in making
the reference is impugned by a party it would be open to such a party
to show that what was referred was not an industrial dispute and that
the Tnbunal had no jurisdiction to make the Award but if the dispute
A
B
c
D
E
F
G
H
B
c
D
E
F
G
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52
SUPREME COURT REPORTS
[1979] 2 S.C.R
was an industrial dispute, its factual existence and the expediency of
making a reference in the circumstances of a particular case are matters
entirely for Government to decide upon, and it will not be competent
for the Court to hold the reference bad a':ld quash the proceedings for
want of jurisdiction merely because there was, in its opinion, no material
before Government on which it could have come to an affirmative
conclusion on those matters (see State of Madras v. C. P. Sarathy) (').
The CO':ltention, how.ever, is that once the appropriate Government
applies its mind to the question of v~ferring an industrial dispute to
the appropriate authority and declines to make a reference, it cannot
subs•;:quently change its mind and make the reference of the dispute
unless there is some fresh or additional material before it. It was said
that o':lce an industrial dispute is raised and the GoV'~rnment declines
to make a reference, the opposite party is entitled to act on
the
supposition that the dispute in question was not worth referring and
such a dispute would no more be in existence between the employee
and the concerned employer and that the Government cannot spring
a surprise by subsequently unilaterally making the reference without
any fresh or additional material bdng brought to its notice.
Section
10 (1) enables the appropriate Government to make reference of an
industrial dispute which exists or is apprehended at any time to one
of the authorities mentioned in the section. How and in what manner
or through what machinery the Government is apprised of the dispute
is hardly relevant.
Section 12 casts a duty upon the
Conciliation
Officer to hold conciliation proceedings in respect of the industrial
dispute that exists or is apprehended. It is mandatory for the Conciliation Officer to so hold the conciliation proceedi'1gs where dispute
relates to a public utility service and a strike notice has been served
under s. 22. The conciliation officer must try to promote a settlement
between the parties and either he succeeds in bringing the parties to a
settlement or fails in his attempt, he must submit a report to the appropriate Governme':lt, but this procedure for promoting settlement cannot
come in the way of the appropriate Government making a reference
even. before such a report is received. The only requirement for taking
action under s. 10(1) is that there must be some material before the
Government which will enable the appropriate Government to form
a'J. opinion that an industrial dispute exists or is apprehended.
This
is an administrative function of the Government as the expression is
nnderstood in contradistinction to judicial or quasi-judicial function.
Merely because the Government rejects a request for a reference or
declines to make a reference, it cannot be said that the industrial dis-
(I) [19531 S.C.R. 334.
•
AVON SERVICES v. INDUSTRIAL TRIBUNAL (Desai, !.)
53
pute has ceased to exist, nor could it be said to be a review of any
judicial or quasi-judicial order or determination. The industrial dispute may nonetheless continue to remain in existence and if at a subsequent stage the appropriate Government is satisfied that in the interest
of industrial peaee and for promoting industrial harmony it is desirable to make a reference, the appropriate Government does not Jack
power to do so under s. 10 (1), nor is it precluded from making the
reference cr.J. the only ground that on an earlier occasion it had declined
to make the reference. The expression "at any tinJe" is s. 10(1) will
clearly negative the contention that once the Government declines to
make a refurence the power to make a reference under s. 10(1) in
respect of the same dispute gets exhausted.
Such a construction
would denude a very vital power conferred on the Government in the
in~'rest of industrial peace and harmony and it need not be whittled
down by interpretative process.
In Western India Match Co. Ltd.,
v. Western India Match Co. Workers Union & Ors .. (')
an identical
contention was raised in respect of a reference made under s. 4(k} of
the U.P. Industrial Disputes Act which is b pari materia with s. 10(1)
of the Act. Negativing this contention this Court observed as under :
"In the light of the nature of the function of the Government and the object for which the power is conferred on it,
it would be difficult to hold that once the Government has
refused to refur, it cannot change its mind on a reconsideration of the matter either because new facts have come to light
or because it had misunderstood the existing facts or for any
other relevant consideration and decide to make the reference. But where it reconsiders its earlier decision it can make
the reference only if the dispute is an industrial one and
either exists at that stage or is apprehended and the reference
it makes must be with regard to that and no other industrial
dispute".
It follows that the Government does not lack the power to make
the refe.rence in respect of the same industrial dispute which it once
declined to refer.
But it was urged that the ratio of the decision
would show that the Government must have some fresh
material
made available to it, subsequent to its refusal to make a reference,
for the formation of a fresh opinion, for making the reference. It
is not absolutely necessary that there ought to be some fresh material
before the Government for reconsideration of its earlier decision.
The Government may reconsider its decision on account of some
new facts brought to its notice or for any other relevant considera-
('.) [1970] 3 S.C.R 370
B
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SUPREME COURT REPORTS
[1979] 2 S.C.R.
tion and such other ;relevant consideration may include the threat to
industrial peace by the continued existence of the industrial dispute
without any attempt at resolving it and that a reference would at least
bring the parties to the talking table.
A refusal of the appropriate
Government to make a reference is not indicative of an exercise of
power under s. 10(1), the exercise of the powe;r would be a positive
act of making a reference. Therefore, when the Government declines to
make a reference the source of power is neither dried up nor eY.hausted. It only indicates that the Government for the time being refused
to exercise the power but that does not denude the power.
The
power to make the reference remains intact and can be exercised if
the material and relevant considemtions for exercise of power are
available; they being the continued existence of the dispute and the
wisdom of referring it, in the larger interest of industrial peace and harmony. Refusal to make the reference does not tantamount to saying that
the dispute, if it at all existed, stands resolved. On the contrary the
refusal to make a reference not compelling the parties to come , to a
talking table or before a quasi-judicial Tribunal would further accentuate the feelings and a threat to direct action may become imminent
and the Government may as well reconsider the decision and make
the reference.
It is, therefore, not possible to accept the submission
that if the Government had on an earlier occasion declined to make
a reference unless it be shown that there was some fresh or additional
E
material before the Government the second reference would be incompetent. It has not been shown that the dispute had ceased to
exist and the very existence of the dispute enables the Government
to exercise the power under s, 10 (1) and it has been rightly exercised.
The view which we are taking is in accord with the decision of
this Court in Binny Ltd. v. Their Workmen & Anr.(') wherein it was
F
found that the Government had declined to make a reference of the
dispute on two previous occasions on the basis of which it was contended that the reference was invalid.
The contention was negatived
observing that the mere fact that on two previous occasions
the
Government had taken the view that no reference was
called for
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does not entitle the Court to conclude that there could be no cause
for a reference at a later date.
Alternatively it was contended that even if the appropriate Government has power to make a ;reference after having once declined
to
make the reference, it can only refer that industrial dispute which it
had once declined to refer and no other dispate and that in this
case the Government has referred an entirely different dispute than
(I) [19721 3 S.C.R. 518.
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AVON SERVICES v. INDUSTRIAL TRIBUNAL (Desai, J.)
55
the one raised by the Union and that in respect of the referred dispute
the demand having not been made from the employer there was no
such dispute in existence and, therefore, the reference was
invalid.
The contention in the form in which it is now canvassed
was
not
raised· before the Industrial Tribunal and even before the High Court.
However, as we find substance In the contention we would not reject
it on the technical ground that it was not raised before the Industrial
Tribunal or the High Court.
The Avon Employees Union by its notice of demand Annexure
P-1 dated 16th July 1971 requested the appellant company to consider the demands set out in the notice.
The relevant demand for the
purpose of present discussion is demand
No. l
which reads as
under :
'That our three (?) companions Mohamed Yamin and
Mohamed Yasin who had been working in the
abovementioned factory for the last 15/15 years and 8 years.
their termination of service and denying their gate-passes
are illegal and against the principle of justice, therefore,
they be reinstated to their jobs and by giving back the full
wages from the date of their termination, injustice be
ended."
The demand as hereinabove set out appears to be a translation of
a demand originally served in Hindi. The substance of the matter
is that the Union complained about the termination of service of the
two named workmen who are respondents 3 and 4 and one other
whose services were terminated by the appellant and which termination was styled as illegal and the crucial industrial dispute was
to
reinstate them with full back wages and continuity of service.
There
were seven other demands with which we are not concerned. The
appropriate Government while making the reference Annexure P-2,
informed the Union that the demands 2 to 9 have been referred to
Industrial Tribunal and in respect of demand No. 1, the Government,
while declining to make the reference, stated its reasons as under :
"There is no work for painting in the factory where these
two workmen were working."
Subsequently the appropraite Government by its order No. JD /FD
72/40688, dated 23rd November 1972, referred the following dispute
to the Industrial Tribunal for adjudication :
"Whether the retrenchment of Sarvashri Mohamad Yamin
and Mohmad Yasin was justified and i::t order ? If not, to
what relief they are entitled ?"
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SUPREME COURT REPORTS
[1979] 2 s.c.R.
The submission is that the Union espoused the cause of the aforementioned two workmen respondents 3 and 4 complaining that the
termination of their services is illegal a':ld for reinstatement, and that
demand made by the Union was not referred to the Industrial Tribunal
by the GoV>ernment and subsequent to the decision of the Gov~rnment
respondents 3 a':ld 4 did not make any demand from the employer nor
did they raise an industrial dispute with regard to termination of their
services and, therefore, the Government could not have referred an
entirely different demand in respect of respondents 3 a':ld 4 and the
referenoe is invalid. A mere comparison of the demand raised by the
Union and the demand subsequently referred to the Industrial Tribunal
would clearly ':legati"-" the contention.
The dispute arose from the
termination of services of respondents 3 and 4 and one other workman.
Retrenchment comprehends termination of service.
Termination of
service may be brought about by dismissal, discharge, removal from
service or even retrenchme':lt apart from resignation or voluntary retirement Retrenchment is defined in s. 2 ( oo) of the Act to mean termination by the employer of the service of a workman for any reason
whatsoever, otherwise than as a punishment inflicted by way of disciplbary action, but does not include termination in the manner stated
therein.
The definition clearly indicates that retrenchment is a mode
of termination of service. The Union complained about the tennination of service of respondents 3 and 4 and demanded reinstatement with
full back wages and the Government referred the dispute about termination of servioe brought about by way of retrenchment and for conseqnential relief for adjudication to the Industrial Tribunal.
Therefore, there is no substance in the contention that the original demand
was someone other than the one which is now referred to the Industrial
Tribunal. The Union had espoused the cause of two specified workmen
and one other and the reference is with regard to the termination of
service by retrenchment in respect of the same two workmen. The
language or th•e format in which the demand is couched is hardly decisive of the matter. Th•e substance of the matter is as to what was the
grievance of the workmen complained of by them or espoused by the
Union and what the Industrial Tribunal is called upon to adjudicate.
Viewed from this angle the demand referred to the Industrial Tribunal
for adjudication is the same which was espoused and raised by the
Union. Reference was made in this connection to the Sindhu Resettlement Corporation Ltd. v. The Industrial Tribunal of Gujarat & Ors. (1)
The appellant-employer in that case contended that the demand raised
before the employer was about retrenchment compensation and not
about reinstatement of the retrenched workmen and, therefore, the
(1) [1968! 1 S.C.R. 515.
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AVON SERVICES '" INDUSTRIAL TRIBUNAL (Desai, J.)
57
Government was not competent to make a reference as if the demand
was one of reinstatement.
The demand which was referred to the
Tribunal was whether Shri R. S. Ambwaney should be reinstated in
the service of Sindhu Resettlement Corporation Ltd. and hoe should
be paid his wages from 21st February 1958? After examining the
evidence this Court held that the retrenched workmen in thdr claim
put forward befom the management of the employer requested for
payment of retrenchment compensation and did not raise any dispute
for reinstatement. In this background this Court held that the only
reference which the Government could have made had to be related
to
the
payment
of
retrenchment
compensation
which
was
the only subject-matter of dispute between the appellant and the respondents and therefore, the reference to the extent of adjudication for
reinstatement was held to be incompetent.
The decision turns purely
on the facts of the case. In the case before us the Union complained
about illegal termination of service and d.,-,manded reinstatement with
back wages.
The Government subsequently made a reference about
the validity of the retrenchment and tho relief to which the workmen
would be entitled.
It is thus crystal clear that there was a demand
about reinstatement, complaining about the illegality of termination of
service and the same has been referred to the Tribunal. Therefore,
it is not possible to accept the contention that on this account the
referenre is incompetent. In this view of the matter it is not necessary
to examine the contention raised on behalf of the respondents that the
decision in Sindhu Resettlement Corporation Ltd. (Supra) ignores or
omits to take no:e of the expression "difference" used in the definition of industrial dispute in S· 2 (k) as also the power of the Government not only to refer a dispute which exists but one which is apprehended in the sense which is imminent or is likely to arise in near
future and which in order to arrest in advance threatened or likely disturbance to industrial peace and harmony and a threat to production
has to be referred to th·' Industrial Tribunal for adjudication.
The last contention is that the Tribunal was in error in holding
1
that respondents 3 and 4 were retrenched from service and,
their
case would be governed by s. 25F while in fact
the
services
of
respondents 3 and 4 were terniinated on account of closure of
the
painting undertaking of the appellant company and,
therefore,
the
case would be governed by s. 25FFF and failure to pay compensation
and notice charges simultaneously with termination of service being
not a pre-requisite, the termination would
neither be
illegal nor
invalid.
Section 25F prescribes conditions precedent to retrenchment of
~
workmen.
The conditions precedent are : (a) giving of one month's
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SUPREME COURT REPORTS
11979] 2 s.c.R.
notice in writing to the workman sought to be retrenched indicating
the reasons for retrenchment and the retrenchment can be brought
about on the expiry of the notice period or on payment of wages in
lieu of such notice for the period of notice; (b) payment of retrenchment compensation as per the formula prescribed therein.
No notice
to the workman would be necessary if the retrenchment is under an
agreement which specifies a date for the termination of service.
Section 25FFF prescribes liability of an employer to pay compensation to workmen in case of closing down of undertaking. The relevant
po(tion of s. 25FFF reads as under :
"2 SFFF. (1) Where an undertaking is closed down for
any reason whatsoever, every workman who has been in
continuous service for not less than one year in that nndertaking immediately before such closure shall, subject to the
provisions of sub-section (2), be entitled
to notice and
compensation in accordance with the provisions of section
25F, as if the workman had been retrenched :
Provided that where the undertaking is closed down on
account of unavoidable circum~ces beyond the control
of the emplbyer, the compensation to be paid to the workman under clause (b) of section 25F, shall not exceed his
average pay for three months".
A comparison of the language employed in s. 25F and s. 25FFF
(1) would bring about in bold relief the difference between
the
phraseology employed by the Legislature and its impact on the resultant rights of the workmen.
Under s. 25F a workman employed in
an industrial undertaking cannot be retrenched by the employer until
the payment is made as provided in clauses (a) and
(b). Section
25FFF ( 1) provides that the workman shall be entitled to
notice
and compensation in accordance with the provisions of s. 25F if the
undertaking is closed for any reason, as if the workman has been
retrenched.
Taking note of this difference in language, this Court in
State of Bombay & · Ors. v.
The Hospital Mazdoor Sabha
&
Ors., (1) held that the failure to comply with the provision prescribing
conditiom precedent for valid retrenchment in '· 25F renders the order
of retrenchment invalid and inoperative. Expounding this position, a
Constituiton Bench of this Court in M/s. Hatisingh Mfg. Co. Ltd. &
Anr. v. Un',!'on of Tndia & Ors.,(') held that the Legislature bas not
sought to place closure of au undertaking on the same
footin~ as
retrenchment under s. 25F. By s. 25F a prohibition against retrench-
(!) [19601 2 S.C.R. 866 at 871.
(2) [1960] 3 S.C.R. 528.
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. AVON SERVICES v.