# MAHABIR JUTE MILLS LTD. GORAKHPUR v. SlllBBAN LAL SAXENA AND ORS

- **Citation:** [1976] 1 S.C.R. 168
- **Court:** Supreme Court of India
- **Decided:** 1975-07-30
- **Bench:** A. N. Ray C. J, K. K. Matiiew, V. R. Krishna Iyer, S. M. Fazal Ali
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mahabir-jute-mills-ltd-gorakhpur-v-slllbban-lal-saxena-and-ors-6481
- **Pages:** 12

## Headnote

U.P. Industrial Disputes Act, 1941-Sec. 3-Whether Government while
deciding whether a dispute should be rejeJ'f1ed for adjudication entitled to rely
upon the secret rrport sent by the conciliation of]icer--Whether a11 admn. order
of the Governn1ent should be a s;,:eaking order-Principles of natural justicefVhether court ca11 direct Governn'1enr how to exercise its discr£ti411-Dclay in
i}isposal of labour matters.
The appellant employs about 1000 workmen. In the year 1955 all tho !000
workmen were dismissed by the appellant after holding certain enquiries.
Out
of the 1000 \Vorkmen 200 workmen apologised and they were reinstated. The
remaining 800 workmen were, hcwever, not reinstated.
The workmen
Union
invoked jurisdiction of the Regional Conciliation Officer under clause 4(1) of the
Government Nctification dated 14-7-1954 passed under sec. 3 of the U.P. Industrial Disputes Act, 1947. A Conciliation Board consisting of the Additional
Reg:.Onal Conciliation Officer as the Chairman and one representative each of the
1-fanagement and Labour as members was constituted.
Before· the Conciliation
Board, no settlement could be arrived at. The members of the Conciliation
Board se.nt their reports to the Labour Commissioner which were placed before
the Government. The Additional Rgional Conciliation Officer who
was the
Chairman of the Board sent a secret report to the Labour Commissioner recommending that the allegations made by the workers against the management \vere
baseless and should not be entertained. The Government by its
order dated
28-2-1956 refused to make a reference to the lndustrial Tribunal on the ground
that it was not expedient to do so. The workn;ien filed a Writ Petition in 1958 for
quashing the order of the Government dated 28-2-1956 and for directing a fresh
reference. The learned Single Judge allowed the Writ Petition in October, 1963.
The Appellate Bench of the High Court dismissed the appeal of the management
in 1972. The Writ Petition was pending in the High Court for 14 years. The
]earned Single Judge set aside the order of the Government on the following
grounds
~
(1) The (iovernment relied on the secret report sent by the
~i\dditicnal
Regional Conciliation Officer.
(2) The order of the Government was not a ·speaking order.
The Division Bench held that the order need not be a speaking order. Rules
of natural justice \Vould apply to administrative proceedings. It is not necessary
that the administrative orders should be speaking orders unless the Statute specifically enjoins such a requirement. It is desirable that such orders should contain
reasons when they decide matters affecting the rights of parties.
The D~vision
Bench set aside the order of the Government refusing to make a reference on
the following grounds :
(1} The Government took intc consideration the Secret report which had
seriously prejudiced and coloured its decision.
(2) The Additional Regional Conciliation Officer should have shown the
secret report to other members of the Conciliation Hoard in accordance with the principles of natural justice.
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MAHABIR JUTE MILLS V. S. L. SAXENA
169
The Government order was passed purely on the secret report sent
by the AddiEonal Regional Conciliation Officer as also the report of
the Labour Commissioner.
Pursuant to the judgment of the HE.gh Court, the State Government made a
reference in the year 1973.
Allowing the appeal by certificate,
B
l-IELD : ( 1) The administrative decisions are not genera11y required to be
accompanied by statement of reasons. In a diverse Society such as ours, the
Government has to work through several administrative agencies wh:.Ch have got
a very vi1ide sphere and if every administrative order is required to give reasons
it will bring the Governmental machinery to a stand-still. [172F-G}
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2. There is no reliable material on record to show that the Government order
was passed n1ainly on the secret report of the Additional Regional Conciliation
Office

## Text

168
MAHABIR JUTE MILLS LTD. GORAKHPUR
v.
SlllBBAN LAL SAXENA AND ORS.
July 30, 1975
[A. N. RAY C. J., K. K. MATIIEW, V. R. KRISHNA IYER AND
S. M. FAZAL ALI, JJ.J
U.P. Industrial Disputes Act, 1941-Sec. 3-Whether Government while
deciding whether a dispute should be rejeJ'f1ed for adjudication entitled to rely
upon the secret rrport sent by the conciliation of]icer--Whether a11 admn. order
of the Governn1ent should be a s;,:eaking order-Principles of natural justicefVhether court ca11 direct Governn'1enr how to exercise its discr£ti411-Dclay in
i}isposal of labour matters.
The appellant employs about 1000 workmen. In the year 1955 all tho !000
workmen were dismissed by the appellant after holding certain enquiries.
Out
of the 1000 \Vorkmen 200 workmen apologised and they were reinstated. The
remaining 800 workmen were, hcwever, not reinstated.
The workmen
Union
invoked jurisdiction of the Regional Conciliation Officer under clause 4(1) of the
Government Nctification dated 14-7-1954 passed under sec. 3 of the U.P. Industrial Disputes Act, 1947. A Conciliation Board consisting of the Additional
Reg:.Onal Conciliation Officer as the Chairman and one representative each of the
1-fanagement and Labour as members was constituted.
Before· the Conciliation
Board, no settlement could be arrived at. The members of the Conciliation
Board se.nt their reports to the Labour Commissioner which were placed before
the Government. The Additional Rgional Conciliation Officer who
was the
Chairman of the Board sent a secret report to the Labour Commissioner recommending that the allegations made by the workers against the management \vere
baseless and should not be entertained. The Government by its
order dated
28-2-1956 refused to make a reference to the lndustrial Tribunal on the ground
that it was not expedient to do so. The workn;ien filed a Writ Petition in 1958 for
quashing the order of the Government dated 28-2-1956 and for directing a fresh
reference. The learned Single Judge allowed the Writ Petition in October, 1963.
The Appellate Bench of the High Court dismissed the appeal of the management
in 1972. The Writ Petition was pending in the High Court for 14 years. The
]earned Single Judge set aside the order of the Government on the following
grounds
~
(1) The (iovernment relied on the secret report sent by the
~i\dditicnal
Regional Conciliation Officer.
(2) The order of the Government was not a ·speaking order.
The Division Bench held that the order need not be a speaking order. Rules
of natural justice \Vould apply to administrative proceedings. It is not necessary
that the administrative orders should be speaking orders unless the Statute specifically enjoins such a requirement. It is desirable that such orders should contain
reasons when they decide matters affecting the rights of parties.
The D~vision
Bench set aside the order of the Government refusing to make a reference on
the following grounds :
(1} The Government took intc consideration the Secret report which had
seriously prejudiced and coloured its decision.
(2) The Additional Regional Conciliation Officer should have shown the
secret report to other members of the Conciliation Hoard in accordance with the principles of natural justice.
A
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MAHABIR JUTE MILLS V. S. L. SAXENA
169
The Government order was passed purely on the secret report sent
by the AddiEonal Regional Conciliation Officer as also the report of
the Labour Commissioner.
Pursuant to the judgment of the HE.gh Court, the State Government made a
reference in the year 1973.
Allowing the appeal by certificate,
B
l-IELD : ( 1) The administrative decisions are not genera11y required to be
accompanied by statement of reasons. In a diverse Society such as ours, the
Government has to work through several administrative agencies wh:.Ch have got
a very vi1ide sphere and if every administrative order is required to give reasons
it will bring the Governmental machinery to a stand-still. [172F-G}
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2. There is no reliable material on record to show that the Government order
was passed n1ainly on the secret report of the Additional Regional Conciliation
Officer or of the Labour Commissioner. In the counter affidavit filed on behalf
of Government it was specifically stated that in the opinion of the Government
it was not expedient to refer th..! dispute to the adjudication after the matter was •
fully considered by the Government.
Under section 4K of the U.r. Industrial
Disputes Act, the Government has w1.de discretion to act under certain circumstances. If the Government on the basis of the material before it comes to
the conclusion that no .real dispute existed and it was not expedient to n1ake a
reference one can hardly find fault with the order of the Government.
There
was no reason for excluding the secret report submitted by the Additional Regional Conciliation Officer at all. [173E-H; 174E-G]
3. Before the Additional Regional Conciliation Officer made his report all the
n1les of natural justice were fully complied with. The parties were given bearing, their points of view were fully considered and, in fact, the representatives of
the management and that of the hibour were the members of the Board. There
is no provision for submitting the report by Chairman and members of the Board
to each other. The principles of natural justice are very essential but they have
got their own limits and cannot be stretched too far. A. K. Kraipak's case dis ...
tinguished. In the present case, all the indicia of the principles of natural jUstice
were present. [l 76B-E; 177 A, DJ
4. Even if the High Court thought that the impugned order of the Government sufiered from any legal infirmi.ty all that it could have done was to ask the
Government to reconsider it but it had no jurisdiction to direct the Government
how to act and how to exercise its statutory discretion which was conferred on
the Government by section 4K of the U.P. Industrial Disputes Act. There was
absolutely no \Varrant for the H:,gh Court in prohibiting the Government from
considering the secret report of the Additional Regional Conciliation Officer or
that of the Labour Colil_missioner. [l 78B-D]
5. The order of the High Court is not legally sustainable and 1nust be
quashed. [l 78D)
6. The reference made by the Government in the year 1973 was not in exercise of its independent decision but was mainly because of the directions given in
the High Court judgment. If the order of the High Court is quashed it will undoubtedly materially affect the decision of the Government in n1ak.ing a reference to the Industrial Tribunal. Had the Government made a reference uninfluenced by the High Court's direct!.on the situation would have been different.
Any scbsequent proceedings which come into existence as a result of the High
Court order would fall to the ground as a logical corollary of the setting aside
of the High Court judgment. [179A-BJ
[1. We would like to make' it clear that the Government h"" ample discretion
to make a reference to the Industrial Tribunal under sec. 4K of the U.P.
Industrial Disputes Act if it •O thinks fit.
Even if a reference was refused by
17 0
SUPREME COURT REPORTS
[1976) 1 S.C.R.
the Government that will not debar the Government from making a reference
Aat a later time if it is satisfied that under the changed circumstances the
reference is necessary, [179D-Fl
2. The Court is constrained to observe that labour matters should have
been given top urgency ctnd should not have been allowed to prolong for such
a long period in the High Court, otherwise, inordinate delay results in a
situation causing embarrassment both to the court and to the parties.
It is
very necessary that such matters should be disposed of by the High Court
n·
within a year of the presentation of the petition. [172A-C]
CML APPELLATE JURISDICTION : Civil Appeal No. 781 of 1973.
From the judgment and order dated the May 8, 1972 of the Allaha-
'Ji
bad High Court in Special Appeal No. 914/1963.
S. V. Gupte, A. K. Sen, E. C. Agarwala and Promod Swarup, for
C
the appellant.
K. R. Chowdhuri and S. L. Sethia, for respondents 1 and 2.
G. N. Dikshit and 0. P. Rana, for respondents 3 and 4.
The Judgment of the CourJ was delivered by
FAzAL Au, J. This is an appeal by the management of M/s Mahabir Jute Mills situated at Gorakhpur by a certificate granted by the
High Court of Allahabad under Art. 133 of the Constitution of India.
, M/s Mahabir Jute Mills Ltd. was formed some time in the year 1946
and soon thereafter when Shibban Lal Saxena one of the respondents
was elected as President of the Labour Union of the Mill disputes arose
between the workers and the Company as a result of which Shibban Lal
Saxena sent notice to the management on December 31, 1946 threatening a general strike. Thereafter several disputes arose between the
parties which were some times settled, sometimes re-opened and in
this appeal we are not concerned with those matters. In the previous
disputes the order of the management retrenching some workers was
upheld by the Regional Conciliation Officer and against that Shibban
Lal Saxena served a notice of strike listing 18 demands and calling upon
the management to reinstate the retrenched workers and pay them
bonus. This notice was given on March 31, 1954. On April 16, 1954
a total strike was launched and Shibbari Lal Saxena left for China.
During his absence it appears that the management arrived at some
sort of settlement with the working President of the Union and the
dispute for the time being was resolved on July II, 1954. Shibbanlal
Saxena, however, returned from China and with his re-entry into the
Union matters assumed serious proportions and the disputes reached a
high pitch. Mr. Saxena is alleged to have excited the workers and
wanted to re-open the agreement reached between the management and
the working President of the Union on July 11, 1954. He also started
an agitation and the workers responded to the go-slow call given by
Mr. Saxena as a result of which the production of the Company came
down from 500 cuts to 300 cuts resulting in huge losses to the Company as alleged by th~ management. It is further alleged that Mr.
Saxena had delivered a number of infiamatory speeches as a result of
which the management charge-sheeted two workers for wilful jamming
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MAHABIR JUTE MILLS v. s. L. 'SAXENA (Fazal Ali, J.)
17 l
of bobbins in the Spinning Section as a result of which the spinning work
came to a stop. On January 4, 1955 the management held an inquiry
against the two workers and three other workers who appeared to be in
sympathy with them were also charge-sheeted for their stay-in-strike.
Th!s strike continued right upto January 13, 1955 in spite of the efforts
of the management to arrive at a settlement. This was followed by a
charge-sheet which was served by the management on various workers·
on February 5, 1955. Mr. Saxena protested to the management saying.
that the charge-sheets were absolutely baseless. A notice was put on
the main gate of the Mill on February 22, 1955 informing that an inquiry would be held on February 25, 1955 and after inquiry which the
respondents described as a mere farce a large number of workers were
served dismissal notices. It appears that out of 1000 workers all of
them had been dismissed from service but 200 workers who apologised
were reinstated and. taken back. In view of these developments the
Union invoked jurisdiction of the Regional Conciliation Officer under
clause 4(1) of the Government Notification dated July 14, 1954 passed
under s. 3 of the U.P. Industrial Disputes Act, 1947. A Conciliation
Board consisting of the Additional Regional Conciliation Officer as the·
Chairman and Shibban Lal Saxena and Shri Arora representing the·
labour and the management respectively as members was constituted.
The Conciliation Board heard the case but unfortunately no settlement
could be arrived at. Consequently the reports of the members of the
Board forwarded to the Labour Commissioner were placed before theGovernment. Mr. P. C. Kulshreshtha the Additional Regional Conci"
liation Officer and Chairman of the Board sent a secret report to the
Labour Commissioner recommending that the allegations made by the
workers against the management were baseless and should not be entertained. After considering the reports, the Government of U.P. by its
order dated February 28, 1956 refused to make a reference to the Industrial Tribunal on the ground it was not expedient to do so. There was
some controversy before the Single Judge of the High Court on the
question as to when the order of the Government was received by the
workers and the Hinh Court accepted the plea of the workers that there
was sufficient delay in communicating the order of the Government to
the workers as a result of which a writ petition was filed before the High·
Court after a year and a half. Bnt the High Court found that the petitioners were not guilty of latches. This matter is a closed issue and
need not detain us .
A writ petition was eventually filed on May 15, 1958 for quashing
the order of the Government dated February 28, 195 6 and for directing a fresh reference. The writ petition was allowed by the order of
the Single Judge dated October 7, 1963. Thereafter the management
went up in special appeal to the Division Bench of the Allahabad High
Court which decided the appeal on May 8, 1972 and quashed the order
of the Government and directed it to reconsider the same in the light of
the observations made by the High Court. It would thus appear that
this writ petition was pending in the High Conrt for as i;nany as fourteen years with the result that a strange situation has developed to-day.
By the time the appeal has been heard by this Conrt more than seventeen years have elapsed when the impugned order of the Government
172
SUPREME COURT REPORTS
(1976] 1 S.C.R,
was passd and almost twenty years after the management liad dismissed
A
800 workers. It is said that the management after dismissal of the old
workers had appointed new workers who had by now put in about
twenty years of service. We are constrained to observe that labour
matters should have been given top urgency and should not have been
- allowed to be prolonged for such a long period in the High Court,
otherwise the inordinate delay results in a situation causing embarrassment both to the Court and to the parties. It is, therefore, very necesB
sary and in the fitness of things that such matters should be given top
priority and should be disposed of by the High Corirt within a year of
the presentation of tJie petition.
The learned Single Judge while allowing the petition set aside the
order of the Government and directed the Government to make a reference to the Industrial Tribunal -after ignoriag the secret report sent
C
by the Additional Regional Conciliation Officer.
Another
reasd,1
which the Single Judge gave was that as the order of the Government
did no( state any reasons and was not a speaking order it was legally
invalid and was fit to be quashed. The Division Bench of the High
Court in appeal has not accepted, and in our opinion, rightly this part
of the order of the High Court which was set aside.
T,he Division
Bench has held that as the order of the Government was purely an
D
administrative order, unless there was any provision which required
the Government to give reasons for the order, the mme could not be
vitiated for the abse'ace of the reasons.
The High Court observed
thus :
"The function of the Government is administrative. · In
law administrative decisions are not generally required tci be
accompanied by a statement of reasons.
There is nothing
in the Industrial Disputes Act or the notification aforesoaid
requiri\1g the State Government to state its reasons in support
of its conclusion.
There was nothing particular in the present case impelling the issuance of such a direction to the
State Government."
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We find ourselves in complete agreement with the view taken by the
High Court on this point.
In a diverse society such as our's the
Governme'at has to work through several -administrative agencies which
have got a very wide sphere and if every administrative order is required to give reasons it will bring the governmental machinery to a
stand-still. It is well-settled that while the rules of natural justice
would apply to administrative proceedings, it is not necessary th'at the
G
administrative orders should be speaking orders unless
the statute
specifically e'ajoins such a requirement.
But we think it desirable
that such orders should contain reasons when they decide matters
affecting the rights of parties.
The Division Bench of the High
Court however has set aside the order of the Government refusing to
make a reference to the Industrial Tribunal and directed it to reconsider the matter on the following three grounds :
H
(1) That the Government took into consideration the
secret report which had seriously prejudiced
and
coloured its decision;
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MAHABIR JUTE MILLS v. S, L. SAXENA (Fazal Ali, /,)
I 7 3
( 2) that in accordance with the principles of
natural
justice the Regional Conciliation Officer should have
shown the secret report to the other members of the
Conciliation Board so that they may have an opportunity to rebut the S'ame; and
( 3) that the Government order was based purely on the
secret report sent by the Additiona~ Regional Conciliation Officer as also the report of the Labour Commi•
ssioner.
In the aforesaid order of the Division Bench of the Hig~ Court certain
mandatory directions have been given to the Government to ignore the
secret report as also the report of the Labour Commissioner and to
consider the reports of the other members of the Conciliation Board,
namely, Shibban Lal Saxena and Mr. Arora. The Divisi<>n Bench of
the High Court has, however, granted the certificate of fitness by its
order doated April 9, 1973 .
Coming to the first ground which weighed with the High Court rn
setting aside the order of the Government ~efusing to make a reference
to the Industrial Tribunal it seems to us that the High Court has proceeded on a complete misconception of the real position and on a
premise which is wrong on a point of fact.
Having perused the materials placed before us, we fuid that there is no reliable material on the
record at all to show that the Government order referred to above was
based mainly on the secret report of the Additional Regional Conciliation Officer or of the Labour Commissioner. 1he order does not say
so : it only recites that the reference to the Industrial Tribunal was
refused because the Government did not think it e:tpC!!ient to make a
reference. The High Court, however, completely overlooked the specific averment made in the counter-affidavit filed by' the Government before the High Court which is at p.32 of Volume II of the Paper Book.
In poaragraph-29 of this counter-affidavit; while rebutting the allegations
made by the petitioner it was stated thus :
"That with respect to the contents of para 38 of the said
Affidavit it is stated that the opinion of the Government that
it was not expedient to refer the dispute to adjudication was
formed after the matter was fully considered by the State
Government.
The report of the Labour Commissioner subnlltted through his letter No. 7241/I-CR-CB-5(147)/1955,
dated 22nd October, 1955, was also before the Department
concerned.
A true copy of the said letter of the Labour
Commissioner is annexure III to this affidavit.
"The Government took the decision after considering the
said report and other surrounding circumstances. It is denied
that there was any discrimination against the petitioner Union.
Each case was duly considered on its merits and only those
cases were dropped which i>n the opinion of the Government
H
were not fit for reference."
This averment which has not been proved to be false nmnifestly shows
that the Government before making the impugned ordet had considered
SUPREME COURT REPORTS
[1976] 1 s.c.R.
·all the aspects including the report of the Chairman and the members of
Jhe Conciliation Board, the Labour Commissioner and other surroundi:ug circumstances.
In these circumstances the finding of the Division
Bench of the High Court that the order of the Government was based
.merely on the secret report of the Chairman or that of the Labour
Commissioner is not sustainable.
We fail to understand on what basis
the High Court has presumed that the Government acted solely on the
secret re1;ort of the Regional Conciliation Officer.
Under s. 4·K of the U.P. Industrial Disputes Act the statute confers the power on the Government to refer any industrial dispute if it
is of the opinion that such a dispute exists or that any matter is con-
. nected with, or relevant to, the dispute. The Section runs as follows :
"Where the State Government is of opinion that a!,1y 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."
·:This section, therefore, gives a wide discretion to the State Government
to act under certain circumstances. If the Government on the basis
-. of the materials before it, comes to the conclusion that no real dispute existed and it was 11ot expedient .to make a reference one can
har'dlv find fault with the order of the Oovernment passed under
s. 4 K of the U.P. Industrial Disputes Act.
There can be no doubt
that while the secret report of the Additional Regional Conciliation
Officer and the report of the Labour Commissioner, like other circumstances. had to be considered by the Government in
making
its overall assessment of the situation, there was no reason for ex-
- eluding the secret report submitted by
the
Additional
Regional
Conciliation Officer at all.
In these circumstances the first ground
on which the Division Bench has set aside the Government order
in refusin~ to refer the matter to the Industrial Tribunal is not legallv sound and cannot be sustained.
As regards the second ground, the main contention of Mr. Gupte
learned counsel for the appellant has been that the High Court was
in error in applying the principles of natural justice to a matter like
this, and submitted that the case_s relied upon by the Single Judge
of the High Court re!(arding the application of the
principles
of
natural iustice to administrative proceedings cannot be invoked in
the facts and circumstances of this case. To begin with we have to
· -examine the ambit and scope of the Conciliation Board and the
procedure adopted by it by virtue of the provisions contained in the
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MAHABIR JUTE MILLS v. s. L. SAXENA (Fazal Ali, J.)
17 5
notification issued by the Government under s. 3 of the U.P. Industrial Disputes Act.
The relevant portion of the
notification
runs
thus :
"5. Functions of Boards al1:1 submission of Memorandum or Report.
( 1) Upon reference of a dispute to the Conciliation
Board under clause 4 it shall be its duty to endeavour to
bring about a settlement of the dispute, and for this purpose the Board shall, in such manner as it thinks fit, and
without delay, investigate the dispute and all matters affecting the merits and just settlement thereof, and may do all
such things as it thinks fit for the purpose of. inducing the
parties to come to an amicable settlement.
(2) In any case where the Conciliation Board is successful in bringing about ah amicable settlement between the parties it shall prepare a memorandum stating the terms of settlement arrived at and the Chairman shall send copies thereof to the State Government. the Laboll; Clommissioner,
U.P and the parties concerned.
( 3) Where no amicable settlement can be reached on
one or more than d.1e issue, the Chairman shall, within seven
davs ( excludinl( holidays but not annual vacations observed by courts subordinate to the High Court) of the close
of the proceedinl!;s, send _to the State Government and the
Labour Commissioner,
a full report setting forth the
steps taken by the Board for ascertaining the facts and
circumstances relatinl( to the dispute
and
for
bringing
about an amicable settlement thereof.
(4) The memorandum unl:ler sub-clause (2)
or the
report under sub-clause (3) shall be
submitted by
the
Chairman within thirty days (excluding holidays but not
annual vacations observed by courts subordinate
to
the
High Court) of the date on which the reference was made
to the Board.
Provided that the State Government may extenl:I the said
period from time to time.
(5) The memorandum under sub-clause
(2) or the
report under sub-clause (3) shall be signed by the Chairman and such members as may be present :
Provided that the memorandum under sub-clause (2)
shall also be signed by the parties to the rlispute;
Provided that nothing in this clause shall be deemed to
prevent any member of the Board from submitting a dissenting report."
176
SUPREME COURT REPORTS
[1976] 1 S.C.R.
A perusal of this notification would clearly show that the jurisdiction
of the Conciliation Board is very limited.
The
procedure prescribed for the Board does not involve any adjudicatory process but
is purely of an exploratory nature and what the Board has to do is
to make an effort to bring about an amicable settlement between the
management and the workers, and if it fails to do so it has to send
a detailed report to the .Government. That is the limited area with•
in which the Board has to function.
Nevertheless it is not disputed
in this case that the Conciliation Board had held a full investigation
in the matter, heard the parties and framed 'as many as 33 issues
after ,2oing into the matter and then the Chairman and the members
sent their reports.
Thus before making the reports, all the rules of
natural justice were fully com_plied with : the parties were given
· hearing, their points of view were fully considered and in fact the
representatives of the mana,2ement and· that of the labour were the
members of the Boar<J..
There is no provision in the notification
or in the U.P. Industrial Disputes Act which enjoins that the report
submitted by the Chairman or any other members should be shown
to one another.
This also does not appear to be necessary.
The
High Court seems to think that because the Chairman did not show
his secret report to the other members of the Board, this has resulted
in the violation of the principles of natural justice. We are, however, unable to agree with thi~ line of reasoning.
The principles of
natural justice are no doubt very essential but they have got their
own limits and cannot be .stretched too far.
We would now like to deal with some of the cases which have
been referred to in the judgment of the High Court and which are
also relied upon by Mr. Chowklhri, counsel for the respondents. In
the first place reliance was placed on A. K. Kraipak and Ors. etc.
v. Union of India and Ors. (1) where this Court observed
as
follows :
"The aim of the rules of natural justice is to
secure
justice or to put it negatively to prevent miscarriage of
justice.
These rules can operate only Pil areas not covered
by any law validly made.
In other words they do not
supplant the law of the land but supplement it. ... if the
uuruose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should
be made inapplicable to administrative enquiries.
Often
times it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial enquiries."
This Court, however, took care to point out as follows :
"What particular rule of natnraJ juatice should apply
to a given case must depend to a great extent on the facts
and circumstances of that case. the framework of the law
under which the enquiry is held and the constitution of
the Tribunal or body of persolis appointed for that purpose,
Whenever a complaint is made before a court that
(!) [1970] l S.C.R. 457.
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MAHABIR JUTE MILLS v; s. L. SAXENA· (Fazal Ali, !.)
17-7
some principles of natural justice _had been contmvened the
court has to decid~ whether the observance of that rule was
necessary for a jtwt decision on the facts of that case."
The facts in Kraipak's case (supra) are quite different from the
facts in the present case. In Kraipak' s case the main grievance of
the oetitioner was that in the Selection Board which was constituted
for recommendmg the promotion of the State Officers to the Indian
Forest &rv1cc Cadre the Chief Conservator of Forests was also a.
member of the Board, although he himself was also a candidate
for promotion to the Inili.an Forest Service· Cadre. Thus what happened was that the Chief Conservator of Forests acted as a Judge
in his own cause.
This was undoubtedly a gross violation of the
principles of natural justice, because the very person who stood as
a candidate also sat in tile Selection Board which had to dec1Je his
own future as that of hi~ rivals,
Such is, however, not the case
here. The Conciliation Board had completed its proceedings and the
stage at which, according to the High Court, the rules of natural
justice had to be applied was the stage of submitting the report.
Full hearing was given to the parties concerned. Thus all the indicia
of the principles of natural justice were present on the facts of the
present case. In these circumstances we are satisfied· that at Kmipak' s
case could not be called into aid in support of the reasons given
by the High Court.
The procedure adopted in Kr<Upak's case was
obviously so abhorrent to the notions of justice and fair-play that
rules of natural justice were at once attracted.
Reliance was also placed on Union .of India v. Col. J. N. Sinha
and Anr.(') where also it was pointed out by this Court:
"Whether the exercise of a power conferred should be
made in accordance with any of the principles of natural
justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the puroose for which it is conferred and the effect
of the exercise of that power."
In the present case we have already pointed out that neither clause
( 5) of the notification referred to above, nor s. 3 of the U.P. Industrial Disputes Act contairi~d any provision which required that the
members of the Conciliation Board were to show their reports fo
one another. AU that was required was that they should send their
reports to the Government through the Labour Commissioner. This
was undoubtedly done.
Vf_e are, therefore, unable to see any infraction of fhe rules of natural iustice in fhe present case.
Reliance was Jaso placed on the decision of this· Court in State
of Orissa v. Dr. (Miss) Binapani Dei and Ors.('). This ca•e also
does not appear to be of anv assistance to the respondents: because
in that case fhe entire procedure of inquiry held was ·in violaticin of
the rules of natural justice,
That, however; is not
the position
here.
(1) (1971] IS. C. R.791.
13-L714 SupCJ/75
(2) [1967] 2 'S. C. R. 625.
178
Sl'PREMJ! COURT Jl.EPORTS
[1976} 1 S,C.R.
It was then contended by Mr. Gupte that after quashing the order
of the Government refusing to make a reference and asking it to reconsider the same it was not open to the High Court to have given
peremptory directions so as to circumscribe the statutory jurisdiction of
the Government under s. 4-K of the U.P. Industrial Disputes.Act.
In
our opi.1ion this contention is well-founded and must prevail.
Even
if the High Court thought that the impugned order of the Government
'u!J'ercd from any legal infirmity all that it could have done was
to
have asked the Government to reconsider it but it had no jurisdiction
lo direct the Government how to act •and how to exercise its stalutor)
discretion which was conferred on it by s. 4-K of the U.P. Industrial
Disputes Act. There! was absolutely no warrant for the High Court in
prohibiting the Government from considering the secret report of the
Additional Regional Conciliation Officer or that of the Labour Commi-
;sioner.
The Government was fully entitled to consider the matter in
all its comprehensive aspects and the secret report of the Chairman of
the C<Y,1cilintion Board or that of the Labour Commissioner were undoubtedly relevant materials which the Government could have considc-red.
The High Court could not debar the Government from considering those matters nor could it compel the Government to exercise
its discrctipn in a particular manner.
Jn these circumstances we arc
satisfied that the order of the High Court is ·,10t legally sustainable ancl
must be quashed.
The other point which arises for considcralio·a is as to the
relic!'
which could be granted lo the appellant.
Mr. Guptc, counsel for the
appellant, submitted that after the judgment of the High Court the:
Government had passed another order dated February 6, 1973, by
which it. has in consonance with the directions given by the High Couf'.
made a reference to the h1tlustrial Tribunal.
It was submitted th'Jc
it was not 'Jt all proper for the Government to have revived a dead
issue after more than twenty years and further as the order of the
Guvcrnment was based on the order of the High Court, if the order or
the High Court was qU'ashed the order of the Government making
a reference to the Industrial Tribunal would fall automatically.
We
find ourselves in agreement with tho learned coun~~I for the appellant.
There C\lll be no doubt that the order of the Government dated February 6, 1973 is undoubtedly based on the order passed by the Division
Hench of the High Court.
This is proved by a letter written by Mr.
Vishnu Prakash Up Sachiv (Deputy Secretary), U.P. Government, t" •
the Manager of the appellant Mills.
The. relcva,il portion of the letter
after being translated in English runs thus :
"I am directed to say that their Lordships of the High
Court in their Judgment in Special Appeal No. 1963/915
State Vs. Shri Shiban Lal Saxena (M/s. Mahabir Jute Mills
Sabjanwa) have ordered that the Government aftN taking
the dis~nting reports from both the parties should consider
on the question whether the aforesaid dispute should be
referred for adjudication.
Therefore you arc requested that within 10 days from the
dale ·~f the receipt of this letter to send your dissenting reA
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:V!AHABIR JUTE MILLS '" s. L. SAXENA (Faz.al A/i, J.)
179
port and whether further you want to say 011 your behalf to
the Government.
A perusal of this letter clearly shows that the Government did
not
exercise its independent decisioa under s. 4-K of the U.P. Industrial
Disputes Act but was guided mainly by the judgment of the High Court
and the directions given in Special Appeal flied in the High Court.
IE
the order of the High Court is quashed, then it will undoubtedly materially affect the decision of the Government in making a reference to
the Industrial Tribu.ial.
Had the Government made the
reference
uninlluenccd by the High Court's directions the legal situation would
have been different.
The learned counsel for the respondents submitted that no prayer
was made by the appellant for quashing the order of the Government
for making a refere'ace to the Industrial Tribunal. It wa>, however,
not necessary for the appellant to make such a prayer because if the
High Court's order is quashed, then any subsequ~nt proceeding which
comes into existence as a result of the High Court's order would fall
to the ground as a logical corollary of our finding.
The ]C'arned counsel
for the respondents after due consideratio'.1 submitted that he would
have no objection if the Government order for making a. refe_rcnce is
quashed provided the Government's discretion to make afresh reference
to the Industrial Tribunal on the dispute is not fettered.
We would.·
however, like to make it clear that the Govcrnme'at has •ample discretion to make a reference to the Industrial Tribunal under s. 4-K of
the U.P. Industrial Disputes Act if it so thinks fit.
This Court in
Western India Match Company Ltd. v. Western India
Match
Co.
Workers Union and Others( 1) clearly held that even if a rcfereacc was
refused by the Government tlmt will not debar the Government from
making a reference at a later time if it is satisfied that in tlic changed
circumstances a reference is necessary.
For the reasons given above, we allow the appeal, quash the order
of the High Court dated April 9, 1973 a"1d us a ccmsequencc of this we
also set aside the order of the Government dated February 6,
1973
for making a reference to the Industrial Tribunal. In the peculiar
circumstances of t11is case, however. we make no order as to
costs
1hro.ughout.
:l'.H.P.
Appeal 11//o""'d.
·U) [1970) 3 S.C.R. 370.