# Dharmanand Pant v. State of Uttar Pradesh

- **Citation:** [1957] 1 S.C.R. 335
- **Court:** Supreme Court of India
- **Decided:** 1955-04-15
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dharmanand-pant-v-state-of-uttar-pradesh-1343
- **Pages:** 24

## Headnote

S.C.R.
SUPREME COURT REPORTS
335
necessary to re-examine the witnesses who have already
been examined m court unless the court thinks it
necessary.
Appeal allowed. Case remanded for retrial.
NIEMLA TEXTILE FINISHING MILLS LTD.
v.
THE 2No PUNJAB INDUSTRIAL TRIBUNAL
(with connected appeals and petitions)
rs. R. DAS C.J., BHAGWATI,
VENKATARAMA
AYYAR,
B. P. SINHA and S. K. DAs JJ.]
Industrial
Disputes
Act,
1947 (XIV of 1947)-Constitutional
1'alidity-Legislative competency-Powers of
Industrial
TribunalsWhether Legislative-The Government of India Act, 1935 (25 & 26
Geo. 5, Ch. 42), Sch. VII, List III, Entt·ies 27, 29-Constitution of
India, Arts. 14, 19 (1) (f) and (g).
The
disputes
between
the
appellants
and their
workmen
were referred to the Industrial
Tribunal for adjudication by
the
appropriate Government, under the provisions of the Industrial
Disputes
Act, 1947.
It
was
contended
for the
appellants that
the reference to the Tribunal was bad because
( l) the Act was
ultm
vires. the
Constitution
inasmuch
as
its
provisions
are
Yiobtive of the fundamental rights enshrined in Art. 14 and Art.
19 (I) ( f) and ( g) of the Constitution, (2) the Industrial Tribunals
are legislating in the guise of adjudication, and this amounts to
delegation of the powers of legislation which it was not competent
to the Central Legislature to do so, and ( 3) the definition of the
term "industry" comprises industrial
as
well
as
non-industrial
concerns and, therefore,
the Act was
not within the legislative
competence
of the
Central Legislature under Entry 29 of List Ill
of the Seventh Schedule to the
Government of India Act, 1935.
Held: (1)
The
Industrial
Disputes
Act,
1947,
1s
not
unconstitutional
and the provisions
of the Act
do not contravene
Arts. 14 and 19 (l) (£) and (g) of the Constitution.
The basic idea underlying all the provisions of the Act is the
'settlement of industrial
disputes
and the promotion
of industrial
peace
so
that
production
may
not, be
interrupted and
the
<:ommunity
in general
may
be benefited,
and
the
appropriate
Government has, therefore, a discretion
in the matter of making
the reference to one or other of the authorities under the Act and
also in the matter of carrying out the various provisions of the
Act,
including _ the curtailment or extension of the
period ot
1957
Dharmanand Pant
v.
State of Uttar
Pradesh
Govinda Almon J.
1957
January 10
336
SUPREME COURT REPORTS
[1957]
1957
op.erati~n of
the . aw~rd of the
Tribunal,
having
regard to the
Niemla Textile
ex1genc1es of the s1tuat1on
and the objects to be achieved.
Finishing Mills Ltd.
v.
The 2nd Punja6
Industrial Tribunal
.
(2) Industrial
Tribunals
while
settling
particular
industrial
disputes
refe~red to them, lay down certain general principles to
be observed in regard to the
determination of
bonus,
reinstate~
ment of dis1nissed
or discharged en1ployees and other allied topics
1nainly with the object of promoting industrial peace, but these
principles
or
rules
of
conduct,
though
they
are
applied as
precedents by the Industrial Tribunals while adjudic.iting upon
other similar industrial disputes referred
to
them, are not rules
of la\V and do not amount to legislation.
(3) The Act is not ultra vires the legislature, as the matters
included within
the
definition
of the term "industry" are vvithin
the
legislative
competence
of
the
Central
Legislature
under
Entries 27 and 29 of List lII of the Seventh Schedule to the
Government of India Act, 1935.
CIVIL APPELLATE JuR!smcTION : Civil Appeals Nos.
333-335 of 1955 and Petitions Nos. 65, 182 and 203 of
1956.
Appeals by special leave from the judgment and
order dated April 15,
1955, of the Punjab High Court
at Chandigarh in Civil Writs Nos. 131-133 of 1955 and·
Petitions under Article 32 of the Constitution of India.
for the enforcement of fundamental rights.
Veda Vyasa, Bhagirath Das and M. L. Kapur, for
the appellants.
Veda Vyasa, S. K. Kapur and
N. H. Hingorani, for
the petitioners in Petitions Nos. 65 and 182 of 1955.
Veda Vyasa

## Text

_Characters 0–39,860 of 54,371. This is a partial read: ask again with offset=39860 for what follows._

S.C.R.
SUPREME COURT REPORTS
335
necessary to re-examine the witnesses who have already
been examined m court unless the court thinks it
necessary.
Appeal allowed. Case remanded for retrial.
NIEMLA TEXTILE FINISHING MILLS LTD.
v.
THE 2No PUNJAB INDUSTRIAL TRIBUNAL
(with connected appeals and petitions)
rs. R. DAS C.J., BHAGWATI,
VENKATARAMA
AYYAR,
B. P. SINHA and S. K. DAs JJ.]
Industrial
Disputes
Act,
1947 (XIV of 1947)-Constitutional
1'alidity-Legislative competency-Powers of
Industrial
TribunalsWhether Legislative-The Government of India Act, 1935 (25 & 26
Geo. 5, Ch. 42), Sch. VII, List III, Entt·ies 27, 29-Constitution of
India, Arts. 14, 19 (1) (f) and (g).
The
disputes
between
the
appellants
and their
workmen
were referred to the Industrial
Tribunal for adjudication by
the
appropriate Government, under the provisions of the Industrial
Disputes
Act, 1947.
It
was
contended
for the
appellants that
the reference to the Tribunal was bad because
( l) the Act was
ultm
vires. the
Constitution
inasmuch
as
its
provisions
are
Yiobtive of the fundamental rights enshrined in Art. 14 and Art.
19 (I) ( f) and ( g) of the Constitution, (2) the Industrial Tribunals
are legislating in the guise of adjudication, and this amounts to
delegation of the powers of legislation which it was not competent
to the Central Legislature to do so, and ( 3) the definition of the
term "industry" comprises industrial
as
well
as
non-industrial
concerns and, therefore,
the Act was
not within the legislative
competence
of the
Central Legislature under Entry 29 of List Ill
of the Seventh Schedule to the
Government of India Act, 1935.
Held: (1)
The
Industrial
Disputes
Act,
1947,
1s
not
unconstitutional
and the provisions
of the Act
do not contravene
Arts. 14 and 19 (l) (£) and (g) of the Constitution.
The basic idea underlying all the provisions of the Act is the
'settlement of industrial
disputes
and the promotion
of industrial
peace
so
that
production
may
not, be
interrupted and
the
<:ommunity
in general
may
be benefited,
and
the
appropriate
Government has, therefore, a discretion
in the matter of making
the reference to one or other of the authorities under the Act and
also in the matter of carrying out the various provisions of the
Act,
including _ the curtailment or extension of the
period ot
1957
Dharmanand Pant
v.
State of Uttar
Pradesh
Govinda Almon J.
1957
January 10
336
SUPREME COURT REPORTS
[1957]
1957
op.erati~n of
the . aw~rd of the
Tribunal,
having
regard to the
Niemla Textile
ex1genc1es of the s1tuat1on
and the objects to be achieved.
Finishing Mills Ltd.
v.
The 2nd Punja6
Industrial Tribunal
.
(2) Industrial
Tribunals
while
settling
particular
industrial
disputes
refe~red to them, lay down certain general principles to
be observed in regard to the
determination of
bonus,
reinstate~
ment of dis1nissed
or discharged en1ployees and other allied topics
1nainly with the object of promoting industrial peace, but these
principles
or
rules
of
conduct,
though
they
are
applied as
precedents by the Industrial Tribunals while adjudic.iting upon
other similar industrial disputes referred
to
them, are not rules
of la\V and do not amount to legislation.
(3) The Act is not ultra vires the legislature, as the matters
included within
the
definition
of the term "industry" are vvithin
the
legislative
competence
of
the
Central
Legislature
under
Entries 27 and 29 of List lII of the Seventh Schedule to the
Government of India Act, 1935.
CIVIL APPELLATE JuR!smcTION : Civil Appeals Nos.
333-335 of 1955 and Petitions Nos. 65, 182 and 203 of
1956.
Appeals by special leave from the judgment and
order dated April 15,
1955, of the Punjab High Court
at Chandigarh in Civil Writs Nos. 131-133 of 1955 and·
Petitions under Article 32 of the Constitution of India.
for the enforcement of fundamental rights.
Veda Vyasa, Bhagirath Das and M. L. Kapur, for
the appellants.
Veda Vyasa, S. K. Kapur and
N. H. Hingorani, for
the petitioners in Petitions Nos. 65 and 182 of 1955.
Veda Vyasa, Bhagirath Das and B. P. Maheshwari,
for the petitioner in Petition No. 203 of 1956.
S. M. Sikri, Advocate-General of Punjab, Jindra Lal
and T. M. Sen, for respondent No. 2 in the Appeals
and respondents Nos. 1 and 2 in the Petitions.
Sadhan •Chandra Gupta, Bawa Shiv Charan
Singh
and /anardhan Sharma, for respondent No. 3 in the
appeals and in Petitions· Nos. 182· and 203 of 1956.
Porus A. Mehta and T. M. Sen, for the Intervener
in Appeal No. 333 of 1955 (Attorney-General of India
on behalf of the Union of India).
S.C.R.
SUPREME COURT REPORTS
337
Veda Vyasa, S. K. Kapur, and N. H. Hingorani, for
the lnterveners in the appeals (petitioners in Petitions
Nos. 65 and 182 of 1956).
1957. January 10. The Judgment of the Court was
delivered by
BttAGWATI J.-These
three
appeals
with
special
leave from the orders of the High Court of Punjab and
three petitions under
Art. 32
of
the Constitution
challenge the vires of the Industrial Disputes Act, 1947
(XIV of 1947), hereinafter referred to as the Act.
The appellants in the three appeals are engaged in
the
manufacture
and
production of textiles. There
were disputes between them and their workmen, and,
by two notifications each dated March 4, 1955, in
regard to the first two of them and by a notification
dated February 25,
1955, in respect of the third, the
State of Punjab, respondent No. 2, referred the said
disputes for adjudication to the 2nd Punjab Industrial
Tribunal, Amritsar, respondent No. 1, who entered
upon the said references and issued notices to the
appellants to file their written statements. The appellants in Civil Appeal No. 335 of 1955 filed their written
statement on
March
31,
1955, without prejudice to
their contentions that respondent No. 2 was not competent to refer the disputes for adjudication by respondent No. 1 and that respondent No. 1 had no jurisdiction to entertain the reference. The appellants in
Civil Appeals Nos. 333 and 334 of 1955 were called'
upon
to file
their
written statements
on
or beforeApril 23, 1955, which they did raising the same objections
as to the competency
of respondent No. 2 and
the jurisdiction of respondent No. 1.
On April 14, 1955, however, the appellants in all the
three appeals filed writ petitions in the High Court
under Art. 226 of the Constitution against, inter alia,
respondents Nos. 1 and 2 asking for writs in the nature
of prohibition restraining respondent No. 1 from proceeding with the references, writs in the nature of
certiorari directing respondent No. 1 to transmit the
records of the proceedings for being quashed and writs
in the nature of mandamus directing respondent No. 2'
43
1957
Nie:nla Textile
Finishing
Mills Ltd.
v.
The 2nd Punjab
lnduJ trial T ribuna~
1957
Niemla Textile
Finishing
Mills Ltd.
v.
The 2nd Punjab
..ifndustrial Tribunal
BhagwatiJ.
338
SUPREME COURT REPORTS
[1957]
to cancel the notifications under which the said references had been made. The grounds which were urged
in support of these applications were that their mills
were controlled industries within the definition of the
term contained in cl. ( ee) of s. 2 of the Act as amended
by s. 32 of Act LXV of 1951, that they were engaged
in the production and manufacture of textile
goods
and were a textile industry within the meaning of the
word "textiles"
as mentioned in the First Schedule
to
Industry (Development and Regulation) Act, 1951, and
had
been declared an industry of which the
Union
Government had taken control within the meaning of
the said Act, that the disputes purporting to be referred
by respondent No. 2 to respondent No. 1 were industrial disputes concerning a controlled industry specified
in this behalf by the Central Government and that,
therefore, the appropriate Government for the purposes
.of the Act so far as their mills were concerned was. the
Union Government and not respondent No. 2 and that
respondent No. 2 had no jurisdiction or authority
to
refer the existing or apprehended disputes between
them and their workmen to respondent No. 1 and the
references being invalid there was
no jurisdiction in
respondent No. l
to
entertain the said
references.
These petitions came up for hearing before a Division
Bench of the
High Court consisting of the learned
Chief Justice and Mr. Justice Kapur who dismissed the
same in limine observing that they
were
premature,
obviously meaning that respondent No. 1 could deter-
. mine the objection in regard to its jurisdiction to entertain the references and unless and until it did so the
appellants had no cause of action to file the said
petitions.
It appears that on or about April 12, 1955, a Division Bench of the said High Court consisting of the
learned
Chief Justice
and Mr. Justice
Falshaw had
admitted a writ pet1t10n
based
on the very same
· grounds and bad granted a stay of proceedings before
respondent No. 1 therein. It further appears that on
April 18,
1955,
the very same Bench which dismissed
the petitions of the appellants in limine on
April 15,
1955, admitted a writ petition filed
by
the
Saraswati
S.C.R
SUPREME COURT REPORTS
339
Sugar
Syndicate Ltd., inter alia, against respondent
No. 2 wherein, besides the grounds urged in their writ
petitions, an additional ground questioning the constitutionality of s. JO of the Act had also been urged and
ordered the stay of proceedings before the Industrial
Tribunal.
The appellants
filed
on April
18,
1955,
applications before the High Court for leave to appeal
to this Court and for stay of further proceedings before
respondent No. 1. Notices were issued by the High
Court to the respondents in those applications but stay
of further proceedings was refused.
The appellants having come to know of the order
pJssed by the Division Bench of the High Court on
April 18, 1955, on the writ petition of the Saraswati
Sugar Syndicate Ltd., filed petitions on April 19, 1955,
for review of the orders dated April 15, 1955, dismissing their writ petitions in limi1te.
In these petitions
for review the . appellants, with a view to bring their
applications within the ratio of the writ petition of the
Saraswati
Sugar
Syndicate
Ltd.,
alleged
that
their
counsel had inadvertently failed to raise the contention
that s. 10 of the Act was ultra vires the Constitution.
The High Court was prepared to issue notices to the
respondents but was
not prepared to grant the stay of
further proceedings with the result that on the request
of the counsel for the appellants
the said petitions for
review were dismissed on April 20, 1955.
On April 25, 1955, the appellants filed petitions in
this Court for special leave to appeal under Art. 136 of
the
Constitution.
In these
petitions for special leave,
they contended that s. 10 of the Act was void and infringed the fundamental right guaranteed under Art. 14
of the Constitution "being discriminatory in its ambit".
Special leave was granted to all the three appellants
by this . Court on May 2, 1955, and an order for consolidation of these appeals was made on June 1, 1955.
This plea as to the unconstitutionality of s. 10 of
the Act was elaborated by the appellants in para 12
of their statement of the case filed before us :-
"That section 10 of the Industrial Disputes Act
is also ultra vires of the Constitution of India, as it
conflicts with the provisions
of
Art.
14
of
the
1957
Niemla Textile
Finishin.I!
Mills Ltd.
v.
The '2nrl Punjab
Industrial Tribunal
Bha~wati J.
1957
,Viemla Textile
Finishing
Mills Ltd.
v.
The 2nd Punjab
Industrial Tribunal
340
SUPREME COURT REPORTS
[1957]
Constitution. The section is
discriminatory in ambir
and scope. It confers on the appropriate Government
unregulated
and arbitrary powers inasmuch as
no
rules have been made to justify differentiation between parties similarly situated and circumstanced
in
every
respect. There is
no rational basis of classification
providing
different procedures for
dealing
with the same or similar matters. The reference to a
Board under section IO (1) (c) of the Act is certainly
more
beneficial,
speedy, inexpensive and less cumbersome."
Not content with merely challenging the constitutionality of s. IO of the Act, the appellants in Civil Appeal
No. 333 . of 1955 filed in this Court on October 3, 1956,
a petition under Art. 32 of the Constitution, being
- Petition No. 203 of 1956, challenging the vires of the
whole Act on various grounds which had not been
urged in the proceedings taken by the appellants till
then. We shall not enumerate all
these grounds but
refer at the appropriate place only to those contentions which were urged before us by the learned counsel at the hearing.
A similar petition under Art. 32 of the Constitution
· had been filed by the Atlas Cycle Industries Ltd., on
September 15, 1956, being Petition No. 182 of 1956,
containing iqentical
grounds
of
attack against
the
constitutionality of rhe Act. A notification had been
issued on
April 27,
1956, by
the
State of Punjab
referring the industrial disputes
between
them and
their workmen for adjudication by the 2nd Industrial
Tribunal and they asked for a writ of certiorari quashing the said reference and writs of
mandamus and/or
prohibition directing the State of Punjab to withdraw
the
said reference
from the
Industrial Tribunal and
prohibiting the
Industrial
Tribunal
from
proceeding
with the same.
Petition No. 65 of 1956 had been filed on March 21,
1956, by
five
workmen of the Indian Sugar and
General
Engineering Corporation Ltd., carrying on an
undertaking in the name and style of
the
Saraswati
Engineering Works. A notification had been issued
by
the State of Punjab referring th~ disputes which had
S.C.R.
SUPREME COURT REPORTS
341
.arisen between them and their workmen to
the 2nd
Industrial
Tribunal and one of the matters
thus
referred for adjudication was whether the workmen
dismissed or discharged after July
15,
1955, should be
reinstated.
The
petitioners
were
temporary hands
employed
by
the Saraswati Engineering
Works in
place of the permanent
workmen who had been
dismissed or discharged after July 15, 1955, and they,
in the interests of themselves and 200 other employees
who were in the same category, apprehended that if
the Industrial Tribunal ordered the reinstatement of
the permanent workmen who had been dismissed or
discharged, they would be out of employment. They
had apparently the
support of the
Saraswati Engineering Works who were keen to retain them in their
employ and filed the petition challenging the constitutionality of the Act on identical
grounds.
Besides
thus challenging the vires of the Act, they also urged
1n their petition that the undertaking was a controlled
industry and the appropriate Government which was
.competent to make the reference was
the Union
Government and not the State of Punjab. They also
.asked for the same reliefs as in Petition No. 182 of
1956.
The
Attorney General of India asked for and
·obtained leave to intervene on behalf of the Union of
India at the hearing of the Civil Appeals Nos. 333 to
335
of
1955 and so did the
petitioners in both the
Petitions Nos.
182 of 1956 and 65 of 1956. These
petitions along with Petition No. 203 of 1956 were set
down for hearing and final disposal after the Civil
Appeals Nos. 333 to 335 of 1955 and all of them were
heard together. This common judgment will govern
the decision in all.
It may be noted at the outset that the· question as
to the various undertakings being controlled industries
and the
appropriate
Government for making the
references of the industrial disputes arising between
them and their workmen being the Union Government
and not the State of Punjab which was the very basis
of the writ petitions filed in the High Court and was
.also one of the grounds on which special leave to
1957
Niemla Textile
Finishing
Mills Ltd.
,._
The 2nd Pu11jab
Industrial Trib1111al
Bhagwati J.
1957
~Viemla Textile
Finishing
AJills Ltd.
v.
The 2nd Punjab
l11d11strial Tribunal
Bhagwati J.
342
SUPREME COURT REPORTS
(1957j
appeal had been obtained from this Court was ultimately abandoned in the course of the hearing before
us and nothing more need be said about it. The only
contention which has been urged before us in these
three special leave appeals and the three Art. 32 petitions is in regard to the vires of the Act.
In order to appreciate the grounds of attack against
the
constitutionality of the Act it
is
necessary
to
briefly survey the provisions of the Act as it stood
before
the
amendments
made
by
the
Industrial
Disputes
(Amendment and Miscellaneous
Provisions)
Act, 1956 (XXXVI of 1956). The Act was passed, as
the
preamble
shows, with
the express purpose
of
making provision for the investigation and settlement
of industrial disputes and for certain · other purposes
therein appearing.
Section 2(j)
defines
"industry"
to mean any business, trade, undertaking, manufacture
or calling of
employers
and
includes
any
calling,
service, employme11t, handicraft or industrial occupation or avocation of workmen. Section 2(k) defines a11
"industrial dispute"
to mean any dispute or difference
between
employers
and employers, or between employers and workmen, or between workmen and workmen,
which is
connected with the employment or nonemployment or the terms of employment or with the
conditions of labour, of any person. Chapter II of the
Act sets
out the authorities
under the Act and they
are (l) The Works Committee, (2) Conciliation Officers,
(3) Boards of Conciliation, (4) Courts of Enquiry, and
(5) Industrial· Tribunals. These are different authorities with different poc ers and the purposes for which
they are set up and their functions are prescribed
i'>
the Act. The Works Committee consists of reprcsentati ves
of employers
and
workmen
engaged in a
particular
establishmrnt
and
is
constituted in
the
prescribed manner in order to promote measures for
securing and
preserving amity and good
relations
between the employers and workmen and to that end
to comment upon matters of their common interest or
concern
and en<leavour
to compose
any
material
difference of opinion in respect of such matters. The
Conciliation Officers are appointed by notification by
•
S.C.R.
SUPREME COURT REPORTS
343
the appropriate Government charged with the duty of
mediating , in
and
promoting
the
settlement
of
industrial disputes. Boards of Conciliation are constituted by notification by the appropriate Government
as
occasion
arises
for
promoting the settlement of
industrial disputes. Courts of Enquiry are constituted
by
notificajon by
the appropriate
Government as
occasion arises for enquiring into any matter appearing
to be connected with or relevant to an industrial
dispute. Industrial Tribunals are constituted by the
appropriate Government for the adjudication of industrial disputes in accordance . with the provisions of the
Act. Chapter III provides for reference of disputes to
Boards,
Courts or Tribunals and the relevant portion
of s. 10 provides as under :
"10. (1) Where the appropriate Government is of
opinion
that
any industrial
dispute
exists or is
apprehended, it may at any time, by order in writing-
( a) refer the dispute
to a Board for promoting a
settlement thereof ; or
(b) refer
any matter appearing to be connected
with or relevant to the dispute to a Court
for
enqmry; or
( c) refer the dispute or any matter appearing to
be connected with, or relevant to, the dispute, to a
Tribunal for adjudication :
Provided that where the dispute relates to a public
utility service and a notice under section 22 has been
given, the appropriate
Government shall, unless it
considers that the notice
has
been frivolously or
vexatiously given or that it would be inexpedient so
to do, make a reference under this sub-section notwithstanding that any other proceedings
under this
Act in respect of the dispute may have commenced."
Chapter IV prescribes the procedure, powers and
duties of the several
authorities.
The Conciliation
Officers are enjoined for the purpose of bringing about
a settlement of a dispute, without delay to investigate
the dispute and all .matters affecting the merits and
the right settlement thereof and are also empowered
to do al.I such things as they think fit for the purpose of
inducing the parties to come to an amicable settlement
8-100 S. C. India/59.
1957
Niemla T <xlil1
Finish fog
Mill' ltd.
v.
T lu 2nd Punjab
Industrial Tribunal
Bhagwali ].
1957
Nitmla Textile
Finishing
,\tills Ltd.
v.
The 2nd Punjab
Industrial Tribunal
Bhagwati J.
344
SUPREME COURT REPORTS
(1957]
of the dispute. If a settlement of the dispute or
of any of the matters in dispute is arrived at in the
course of conciliation • proceedings, they are to send a
report thereof to the appropriate Government together
with a memorandum of the settlement signed by
the
parties to the dispute. If no such settlement is arrived
at, the Conciliation Officers have, as soon as practicable and after the close of the investigation, to send to
the appropriate Government a full
report setting forth
the proceedings and steps taken by them for ascertain-
. ing the facts and circumstances relating to the dispute
and for bringing about a settlement
thereof together
with a full statement of such facts and circumstances,
their findings thereon, the reasons on account of which ..
in
their opinion, a settlement could not be arrived at
and their recommendations
for
the
determination of
the dispute. If, on a consideration of such report the
appropriate Government is satisfied that there is
a
case for reference to a Board or Tribunal, it may make
such reference. The Boards of Conciliation to whom
a dispute may be referred under the Act are enjoined
to endeavour to bring about a settlement of the same
and for this purpose they are, in such manner as they
think fit and without delay, to investigate the dispute
and all matters affecting the merits and the right
settlement · thereof and are also empowered to do all
such things as they think fit for the purpose of inducing
the parties to come to a fair and amicable
settlement
of the dispute. If a settlement of the dispute or of
any of the matters is arrived at in the course of the
conciliation
proceedings
they
are
to
send a report
thereof to the
appropriate Government together with
a memorandum of the settlement signed by the parties
to the
dispute. If no
such 'settlement is arrived
at
they are, as soon as practicable after the close of the
investigation, to send to the appropriate
Government
a full report setting forth
the proceedings and steps
taken by them for ascertaining the facts and circumstances relating to the dispute and for bringing about a
settlement
thereof
together
with a full statement of
such facts and circumstances, their
findings
thereon,
the reasons on account of which, in their opinion, a
S.C.R.
SUPREME COURT REPORTS
345
settlement could not be arrived at and their recommendations for
the determination of the dispute. The
Courts of Enquiry are enjoined to enquire into the
matters referred
to them and report thereon to the
appropriate Government. The Industrial Tribunals to
whom an
industrial dispute
may
be
referred for
adjudication are
to
hold their proceedings expediti-
<msly
and, as soon
as practicable on the conclusion
thereof,
submit
their
award
to
the
appropriate
Government. Section
19, sub-ss.
(3),
( 4)
and
( 6)
prescribe the period of operation of awards :
"19. (3) An award shall, subject to the prov1S1ons
of this section, remain in operation for a period of one
year:
Provided
that the
appropriate Government may
reduce the said period and fix such period as it thinks fit :
Provided further that the appropriate Government
may, before the expiry of the said period, extend the
period of operation by any period not exceeding one
year at a time as it thinks fit so, however, that the
total period of operation of any award does not exceed
three years from
the date on which it came into
operation.
(4) Where the appropriate Government, whether
of its own motion or on the application of any party
bound by the award, considers
that
since
the award
was made there has been a material change in the
circumstances on which it was based,
the
appropriate
Government may refer the award or part of it to a
Tribunal for decision whether the period of operation
should not, by reason of such change, be shortened and
the decision of the Tribunal on such reference shall
subject to the provision for appeal, be final.
( 6) Notwithstanding the expiry of the period of
operation under sub-section (3), the award shall continue to be binding on the parties until a period of two
months has elapsed from the date on which notice is
given by any party or oarties intimating its
intention
to terminate the award."
Chapter V contains provisions in regard to me prohibition of strikes
and lock-outs and declares what are
illegal strikes and lock-outs for the purpose of the Act,
1957
Niemla Texlil•
FiniJhing
/\:1illJ Ud.
v.
The 2nd Punjab
Industrial Tribunal
Bhagwati ].
1957
~Viemla Textile
Fini;hing
Mills Ltd.
v.
The 2nd Punjab
ln Justrial Tribunal
Bhagwati ].
346
SUPREME COURT REPORTS
[1957]
Chapter V-A was
introduced by Act
XLIII of 1953,
and contains provisions in regard to the lay-off and
retrenchment of workmen. The other provisions of the
Act are not relevant for the purpose of this enquiry
and need not be referred to.
It follows from this survey of the relevant provisions
of the Act that the different authorities which an constituted under the Act are set up with different ·ends in
view and are invested with powers and duties necessary for
the achievement of the purposes for which
they are set up.
The
appropriate Government is
invested with a discretion to choose one or the other·
of the authorities for the purpose of investigation and
settlement of industrial disputes and whether it sets up
one authority or the other for the achievement of the
desired ends depends upon its appraisement of the situation as it obtains in a particular indnstry or establishment. The Works Committees are set up with the
object of avoiding such a clash of interest or material
differences of opinion as would otherwise lead to industrial disputes. If the measures adopted by the Works
Committees do not achieve the end in view and industrial disputes arise or are apprehended to arise betwem
the employers and the workmen, Conciliation Officers
may
be
appointed
by the
appropriate
Government
charged with the duty of mediating in and promoting
settlement of industrial disputes. If the Conciliation
Officers succeed in bringing about a settlement between
the employers and the workmen, such settlements are
to be signed by the parties to the disputes ; but if
in spite of the endeavours of the Conciliation Officers
properly directed in that behalf no settlement is arrived
at between the parties, the Conciliation Officers are to
send a full report in the manner indicated above so that
the appropriate Government may have before it complete materials in order to enable it to come to a conclusion whether there is a case for reference to a Board
or· Tribunal as the case may be. If the appropriate
Government is satisfied that there is a case for reference to a Board of Conciliation, it may constitute such
Board for promoting the settlement of the industrial diS>
pute consisting of a Chairman and 2 or 4 other. members
:S.C.R.
SUPREME COURT REPORTS
347
as it thinks fit, charged with the duty of doing all
such things as it thinks fit for the purpose of inducing
the parties
to come to a fair and amicable
settlement
of the dispute. If the Board succeeds in arriving at a
settlement, a report thereof together with a memorandum of the settlement will be sent by it to the
appropriate Government but if no such settlement is
arrived at the Board will send to the appropriate
Government a full report in the manner indicated
above including its recommendations for the determination of the dispute. It may be noted that a reference to the Board of Conciliation is but a preliminary
step for the settlement of the industrial dispute and the
-report made by it in the event of a failure to bring
about such settlement will furnish materials to the
appropriate Government to make up its mind whether
it will refer the dispute for adjudication to an Industrial Tribunal. Before, however, any such reference is
made by the appropriate Government it may set up a
Court of Enquiry for the purpose of enquiring into any
matter appearing to be connected with or relevant to
an industrial dispute. The Court of Enquiry will enquire into those matters and report thereon to the
appropriate Government within six months from the
.commencement of the enquiry. That report will furnish
materials to the
appropriate Government for finally
.determining whether the industrial dispute shall be
referred by it for adjudication to the Industrial Tribunal. It may be that the report of the Court of Enquiry discloses circumstances
under
which the appropriate Government considers that it is not necessary to
refer the industrial dispute for
adjudication
to the
Industrial Tribunal. In that event the matter will end
there
and
the
appropriate
Government may
await
further
developments
before
referring the
industrial
dispute for adjudication to the Industrial Tribunal. If,
-0n the other hand, the materials embodied in the
report of the Court of Enquiry disclose circumstances
which make it necessary for the appropriate Government to refer the industrial dispute for adjudication to
the Industrial
Tribuna~ the appropriate
Government
will constitute an Industrial Tribunal for adjudication
1957
Niemla Textilt
FiniJhing
Mills Ltd.
v.
The 2n11 Punjai
lnduJtrial T ribunsl
Bhagwati].
1957
Niemla Textile
Finishing
Mill< Ltd.
v.
The 2nd Purefab
Industrial Tribunal
Bhagwati J.
348
SUPREME COURT REPORTS
[19571
of the industrial dispute in accordance with the provisions of the Act. The Industrial Tribunal would then
adjudicate upon such dispute and submit its award to
the appropriate Government.
These
are the steps which are contemplated in the
manner indicated in
s. 10 of the Act for reference of
disputes
to
Boards, Courts or Tribunals. It is
not
necessary that all these steps should be taken seriatim
one after tqe other.
Whether one or the otht;r of the
steps should be taken by the appropriate Government
must depend upon the exigencies of the situation, the
i1Pminence of industrial strife resulting in cessation or
interruption of industrial production and breach of
industrial peace
endangering public
tranquillity and
law and order. If the matter brooks delay the appropriate Government may start conciliation proceedings
culminating in a reference
to a Board of Conciliation
and also Court of Enquiry, if need be, before a fullfledged reference ·is made to an Industrial Tribunal. If,
on the other hand, the matter brooks no delay
the
appropriate. - Government may possibly refer the dispute
to a Board of Conciliation before referring it for adjudication to an
Industrial Tribunal or may straightaway
refer it for adjudication by the Industrial Tribunal.
What step would be taken by the appropriate
Government in the matter of the industrial dispute
must, therefore, be determined by the surrounding circumstances, and the discretion vested in the appropriate Government for setting up one or the other of
the authorities for the purpose of investigation and
settlement of industrial disputes must be exercised by
it having regard to the exigencies of the situation and
the objects to be achieved. No hard and fast rule can
be laid down as to the setting up of one or the other of
the authorities for the purpose of bringing about the
desired end which is the settlement of industrial disputes and promotion of industrial peace and it is hardly
legitimate to say that such discretion as is vested in
the appropriate Government will be exercised "with an
evil eye and an unequal hand."
It is contended in the first instance that the provisions
of the Act
are violative of the fundamental
S.C.R.
SUPREME COURT REPORTS
349
rights enshrined in Art. 14 and Art. 19( 1) (f) and (g) of
the
Constitution ; that it is
open to the appropriate
Government
to
differentiate
between
the
parties
similarly
placed
and
circumstanced
in every
respect
and in the absence of any rules made in this behalf
th<:
appropriate
Government has
unregulated
and
arbitrary powers to discriminate between the parties ;
th;it there is no rational basis of classification providing, different treatment for different parties and it is
optn to the appropriate Government, in one case to
refer the industrial dispute to a Court of Enquiry, ;
and in another case to refer it to an Industrial Tri- /
bunai ; and that the procedures before the Courts of
Enquiry and
b~fore the
Industrial
Tribunals
are
different, the one before the Courts of Enquiry being
less onerous and less prejudicial to the parties than
that before the Industrial Tribunals. It is submitted
that the
reports of the Courts of Enquiry are quite
innocuous whereas the awards of the Industrial Tribunals are binding on the parties and are backed up
by sanctions behind them, and in regard to the periods
of operation also, it is open to ·the appropriate Governmnlt, in one case to reduce the same to an extent
which will make them negligible in point of time
whereas -in another case/it is open to it to extend the
periods even upto three years from the dates on which
the awards
came into operation
and the
appropriate
Government may, in the exercise of its unfettered and
uncontrolled discretion,
adopt different measures in
the case of different parties so as to discriminate between them and work to the prejudice of those less
fortunately situated. It is also contended that these
discriminatory
provisions
being
inextricably
interwoven with the rest of the provisions. of the Act or
being such that the Central Legislature would not
have enacted the rest of the provisions of the Act
without including the same therein, the whole of the
Act is ultra vires the Constitution./
We are unable to accept these contentions. Having
regard to the provisions of the Act heteinbefore set
out it is clear that s. 10 is not discriminatory in its
ambit and the appropriate Government is
at liberty
1957
Kiemla Texti/1
Finishin.~
Mills Ltd.
v.
The 2nd Punjab
Industrial Tribunal
Bhagwati J.
1957
Nunda T 1xlilt
Finishitig
Mills Ltd.
'"
Tht 2nd Punjab
Industrial Tribunal
Bhagwnti].
350
SUPREME COURT REPORTS
[1957]
as and when the occasion arises to refer the industrial
disputes arising or threatening to arise between the
employers and the workmen to one or the other of the
authorities according
to the exigencies of the situation.
No two cases are alike in nature and the industrial
disputes which arise or are
apprehended to arise m
particular establishments
or undertakings require
to
be treated having regard to the situation prevailing in
the same.; There cannot be any classification and the
reference to ·one or the other of the authorities has
necessarily got to be determined in the exercise of its
best discretion by the appropriate Government. Such
discretion
is
not an unfettered or an
uncontrolled
discretion nor an unguided one because the criteria
for the exercise of such discretion are to be found
within the terms of
the
Act itself.
The
various
authorities are to be set
up with particular ends in
view
and it is the achievement of the particular ends
that guides the discretion of the appropriate Government in the matter of setting up one or the other of
them. The purpose sought to be achieved by the Act
has been well defined in the preamble to the Act.
The scope of industrial disputes/ is defined in s. 2(k) of
the Act and there are also provisions contained in the
other sections of the Act which relate to strikes and
lock-ours, lay-off and retrenchment as also the conditions of service, - etc., remaining unchanged during the
pendency of proceedings. These and analogous provisions
sufficiently
indicate
the
purpose
and scope of
the Act as also the various industrial disputes which
may arise between the employers and their workmen
which may have to be referred for settlement to the
various authorities under the Act. The achievement
of one or the other of the objects in view by such
references to the Boards of Conciliation or Courts of
Enquiry
or • Industrial/ Tribunals
must
guide
and
control the exercise of the discretion in that behalf by
the appropriate
Government and there
is
no
scope,
therefore,
for the
argument that
the appropriate
Government would be in a position to discriminate
between one patty and the other.
S.C.R.
SUPREME COURT REPORTS
351
Apart from the references to be thus made to the
Boards of Conciliation, Courts of Enquiry or Industrial
Tribunals, the appropriate Government is also given
the powers to prescribe the period of duration of the
award
made by the
Industrial
Tribunal. Normally
the award is to be in operation for one year from the
date of its commencement. The circumstances, however, may have changed between the date of the
reference and the date of the award and power is
thus given to the appropriate / Government to reduce
the said period and fix such period as it thinks fit.,.-
Power is also given to the appropriate Government, if
the circumstances warrant that decision, to extend the
period of operation by any period not exceeding one
year at' a time as it thinks fit before the expiry of the
normal period of one year, provided however that the
total period of operation of any award does not exceed
three years from the date on which the same came
'into operation. This power is to be exercised, if, in
the opinion of the appropriate Government, the circumstances have not so changed as to warrant the parties
to the industrial dispute to ask for a change in the terms
of the award and in that event the award may continue
to be in operation for the maximum period of three
years from the date of its commencement. The case
in which there has been a material change in the
circumstances on which the award has been based is
mentioned in s.
19( 4)
of the Act
and there the
appropriate Government, whether of its own motion
or on an application of any of the parties bound by
the award is empowered to refer the award or a part
thereof to a Tribunal if it is satisfied about such
material change in the
circumstances for a decision.
whether the period of operation should not by reason
of such change be shortened and the decision of the
Tribunal on such reference, subject to the provision for
appeal, is declared to be final. It appears therefore,
that all the various possibilities are thought of by
those who framed this legislation and wide discretion
has been given to
the appropriate Government to
either
reduce the period of operation or to extend the
same having regard to the circumstances of the case or
1957
Niemla Textile
Finisljing
Mills ltd.
v.
The 2nd Punjab
Industrial Tribunal
Bhagwali ].
1957
.Niemla T e:xtil!
Finishing
}JillJ Ltd.
v.
The 2nd Purifab
Industrial Tribunal
Bhagwati J.
352
SUPREME COURT REPORTS
[1957]
to refer the question of the reduction of the period of
operation
to an Industrial. Tribunal in case there has
been a material change in the circumstances on which
the award was based. Here also it cannot be
urged
that there is an unguided and unfettered discretion in
the matter of changing the period of operation of the
award. The appropriate
Government cannot merely
by its own volition change the period without having
reg:>rd to the circumstances of a particular case. There
is no warrant for the suggestion that such discretion
will
be
exercised
by
the
appropriate
Government
arbitrarily or capriciously or so as to prejudice the
interest of any of the parties ,concerned. The basic
idea underlying all the provisions of the Act is
th~
settlement of industrial disputes and the promotion of
industrial
peace
so
that production
may
not he
interrupted
and
the
community in general
may be
benefited.