# STATE OF BOMBAY v. K. P. KRISHNAN Ar-.D OTHERS

- **Citation:** [1961] 1 S.C.R. 227
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Bench:** B. P. Sinha, J. L. Kapur, P. B. Gajendragadkar, K. SuBB<). RAo, K. N. Wanchoo
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-bombay-v-k-p-krishnan-ar-d-others-2163
- **Pages:** 21

## Headnote

Industrial Dispute -
Failure of conciliation -
Appropriate
Government's power of reference~Order of refusal-Ilea.sons, if must
be germane to the issue-Classification-Bonus-Industrial Disputes Act, r947 (r4 of r947), ss. r2(5), ro(r).
Section r2(5) of the Industrial Disputes Act, r947, properly
construed, does not by itself confer the power on the appropriate
Government to make a reference.
That power is really contained in s. ro(r) of the Act.
In deciding whether it should or
should not make a reference under s. 12(5) of the Act the appropriate Government need not base its decision solely on the report
of the conciliation officer, but is free to take into consideration
all other relevant facts and circumstances under s. ro(r), and
where it refused to make a reference it must record and communicate its reasons therefor to the parties concerned.
Such
reasons, however, must be germane, and not extraneous or irrelevant, to the dispute.
But in exercising such wide powers as are conferred by
s. 10(1), the appropriate Government must act fairly and reasonably and not in a punitive spirit, and although considerations of
expediency may not be wholly excluded, it must not be swayed
by any extraneous considerations.
Consequently, in a case where the issues in dispute related
to a claim of classification for specified employees and additional bonus and the sole ground on which the Government refused
to refer the dispute for adjudication under s. 12(5) was that the
employees had adopted go-slow tactics during the relevant year,
although the company had nevertheless voluntarily paid three
months' bonus for that year and the report of the conciliation
officer was in favour of the employees,
Held, that the Government acted on irrelevant considerations and its decision being wholly punitive in character a clear
case for the issue of a writ of mandamus was made out.
Held, further, that since the work done by the employees
prima facie justified the claim for classification and it was in
consonance with the practice prevailing in other comparable
concerns, the misconduct of the respondents could be no ground
for refusing reference as the claim was in regard to the future
benefit to the employees.
August r8.
228
SUPilE!\!E COlJHT REPOHTS
[ 1961]
196o
The claim of bonus being also prima facic justified by the
-
profits earned <luring the relevant yrar in accorcianrr ,,·ith v.ell
St(lte 0 / Bombay ~:l'ttlcd principles of industrial adjudication, thr order of refusal
v.
"·as in the nature of a punitive action that y,.·as ''•h01ly inr.onsis-
/( P
I<1i.~li11a11 trnt with the object of the Act.
6- Other.;,
CrvIL
APPELLATE
JURISDICTION:
Civil Appeals
~OS. 37 & 38 of 1957.
Appeals from the judgment and order dated August
30, 1955, of the former Bombay High Court in Appeals
Nos. 55 and 56 of I 955, a.rising out of the judgment and
order dated June 23, 1955, of the said High Court in
Misc. Application No. 80 of 1955.
C. K. Daphtary, Solicitor.General of India, R. Ganapathy Iyer and R. H. Dhehar, for the appellant (in
C. A. No. 37 of 57) and respondent l"o. 6 (in C. A.
No. 38/57).
S. D. Vimadalal and I. N. Shroff, for the appellant
(in C. A. No. 38/57) and respondont No. 6 (in C. A.
No. 37/57.)
Rajni Patel, S. N. Andley, J.B. Dadachanji, Rameshwar Nath and P. L. Vohra, for respondents Noa. I
and 3 to 5 (in both the appeals).
S. B. Naik and K. R.·Chaudhuri, for respondent
No. 2 (in both the appeals).
1960.
August 18. The Judgment of the Court
was delivered by
Gajrnd,acadko' J.
GAJENDRAGADKAR J.-These two appeals arioe
from an industrial disputo betwcon the Firestone Tyre
and Rubber Co. of India Ltd., (hereafter called the
company) and its workmen (here!'fter called the respondents), and they raise a short and interesting
question about the construction of s. 12(5) of the
Industrial Disputes Act 14 of 194 7 (hereafter called
the Act). lt appears that the respondents addressed
four demands to the company ; they were in respect
of gratuity, holidays, classifica

## Text

_Characters 0–39,811 of 48,028. This is a partial read: ask again with offset=39811 for what follows._

' '
I
\
' 1
I S.C.R. SUPREME COURT REPORTS
227
STATE OF BOMBAY
v.
K. P. KRISHNAN Ar-.D OTHERS.
(AND CONNECTED APPEAL)
(B. P. SINHA, c. J., J. L. KAPUR,
P. B. GAJENDRAGADKAR, K. SuBB<). RAo and
K. N. WANCHOO, JJ.)
Industrial Dispute -
Failure of conciliation -
Appropriate
Government's power of reference~Order of refusal-Ilea.sons, if must
be germane to the issue-Classification-Bonus-Industrial Disputes Act, r947 (r4 of r947), ss. r2(5), ro(r).
Section r2(5) of the Industrial Disputes Act, r947, properly
construed, does not by itself confer the power on the appropriate
Government to make a reference.
That power is really contained in s. ro(r) of the Act.
In deciding whether it should or
should not make a reference under s. 12(5) of the Act the appropriate Government need not base its decision solely on the report
of the conciliation officer, but is free to take into consideration
all other relevant facts and circumstances under s. ro(r), and
where it refused to make a reference it must record and communicate its reasons therefor to the parties concerned.
Such
reasons, however, must be germane, and not extraneous or irrelevant, to the dispute.
But in exercising such wide powers as are conferred by
s. 10(1), the appropriate Government must act fairly and reasonably and not in a punitive spirit, and although considerations of
expediency may not be wholly excluded, it must not be swayed
by any extraneous considerations.
Consequently, in a case where the issues in dispute related
to a claim of classification for specified employees and additional bonus and the sole ground on which the Government refused
to refer the dispute for adjudication under s. 12(5) was that the
employees had adopted go-slow tactics during the relevant year,
although the company had nevertheless voluntarily paid three
months' bonus for that year and the report of the conciliation
officer was in favour of the employees,
Held, that the Government acted on irrelevant considerations and its decision being wholly punitive in character a clear
case for the issue of a writ of mandamus was made out.
Held, further, that since the work done by the employees
prima facie justified the claim for classification and it was in
consonance with the practice prevailing in other comparable
concerns, the misconduct of the respondents could be no ground
for refusing reference as the claim was in regard to the future
benefit to the employees.
August r8.
228
SUPilE!\!E COlJHT REPOHTS
[ 1961]
196o
The claim of bonus being also prima facic justified by the
-
profits earned <luring the relevant yrar in accorcianrr ,,·ith v.ell
St(lte 0 / Bombay ~:l'ttlcd principles of industrial adjudication, thr order of refusal
v.
"·as in the nature of a punitive action that y,.·as ''•h01ly inr.onsis-
/( P
I<1i.~li11a11 trnt with the object of the Act.
6- Other.;,
CrvIL
APPELLATE
JURISDICTION:
Civil Appeals
~OS. 37 & 38 of 1957.
Appeals from the judgment and order dated August
30, 1955, of the former Bombay High Court in Appeals
Nos. 55 and 56 of I 955, a.rising out of the judgment and
order dated June 23, 1955, of the said High Court in
Misc. Application No. 80 of 1955.
C. K. Daphtary, Solicitor.General of India, R. Ganapathy Iyer and R. H. Dhehar, for the appellant (in
C. A. No. 37 of 57) and respondent l"o. 6 (in C. A.
No. 38/57).
S. D. Vimadalal and I. N. Shroff, for the appellant
(in C. A. No. 38/57) and respondont No. 6 (in C. A.
No. 37/57.)
Rajni Patel, S. N. Andley, J.B. Dadachanji, Rameshwar Nath and P. L. Vohra, for respondents Noa. I
and 3 to 5 (in both the appeals).
S. B. Naik and K. R.·Chaudhuri, for respondent
No. 2 (in both the appeals).
1960.
August 18. The Judgment of the Court
was delivered by
Gajrnd,acadko' J.
GAJENDRAGADKAR J.-These two appeals arioe
from an industrial disputo betwcon the Firestone Tyre
and Rubber Co. of India Ltd., (hereafter called the
company) and its workmen (here!'fter called the respondents), and they raise a short and interesting
question about the construction of s. 12(5) of the
Industrial Disputes Act 14 of 194 7 (hereafter called
the Act). lt appears that the respondents addressed
four demands to the company ; they were in respect
of gratuity, holidays, classification of certain employees and for the payment of an unconditional bonus
for the financial year ended October 31, 1953. The
respondents' union also addressed t.hc Assistant Commissioner .of Labuur, Bombay, forwarding to him a
I S.C.R. SUPREME COURT REPORTS
229
copy of the said demands, and intimating to him that
ig6o
since the company had not recognised the respondents' union there was no hope of any direct negotiaState
0~.Bombay
tions between the union and the company. The K. P. J«ishnan
Assistant Commissioner of Labour, who is also the
& Others
conciliation officer, was therefore requested to commence the conciliation proceedings at an early date. Cajendragadkar ].
Soon thereafter the company declared a bonus equivalent to 1/4 of the basic earnings for the yea1 195253. The respondents then informed the company
that they were entitled to a much higher bonus having
regard to the profits made by the company during
the relevant year and that they had decided to accept
the bonus offered by the company without, prejudice
to the demand already submitted by them in that
behalf. After holding a preliminary discussion with
the parties the conciliation officer examined the four
clemands made by the respondents and admitted into
.conciliation only two of them ; they were in respect. of
the classification of certain employees a.nd the bonus
for the year 1952-53; the two remaining demands
were not.ohdmitted in conciliation. The conciliation
proceedings initiated by the conciliator, however,
proved infructuous with the result that on July 5,
1954, the conciliator made his failure report under
s. 12(4) of the Act.
In his report the conciliator has
set out the arguments urged by both the parties
before him in respect of both the items of dispute. In
regard to the rnspondents' claim for bonus the conciliator made certain suggestions to the company but
the company did not accept them, and so it became
clear that there was no possibility of reaching a
settlement on that issue.
Incidentally the conciliator
observed that it appeared to him that there was considerable substance in the case made out by the
respondents for payment of additional bonus. The conciliator also dealt with the respondents' demand for
classification and expressed his opinion that having
regard to the type and nature of the work which
was done by the workmen in question it seemed clear
that the said work was mainly of a clerical nature
and the demand that the said workmen should be
230
SCPREME COCRT REPORTS
l!961]
.
z96o
ta.ken 011 the monthly-pa.id roll appeared to be in cons
:-8
,
sona.nce with the practice prevailing iu other com1att o1
on1uay
bl
v.
para. e concerns.
The management, however, told
K. 1•. Kmhnan the concilia.t-Or that the said employees ha.d received
& Others
very liberal increments and had reached the maxi.
-
mum of their scales and so the management saw no
Gaje,.dragadk°' J. reason to accede t-0 the demand for classification. On
receipt of this report the Government of Bombay (now
the Government of Maharashtra.) considered
the
matter and ca.me to the conclusion that the dispute in
question should not be referred to a.n industrial tribunal for its adjudication.
Accordingly, a.s required by
s. 12(5) on December II, 1954, the Government communicated to the respondents the said decision and
stated that it does not propose t-0 refer the said dispute
to the tribunal under s. 12(5) "for the reason that the
workmen resorted to go slow during the year 195253 ". It is this decision of the Government refusing
to refer the dispute fo~ industrial adjudication that
has given rise to the present proceedings.
On February 18, 1955, the respondents filed in the
.Bombay High Court a petition under Art. 226 of the
Constitution praying for the issue of a. writ of manda-·
mus or· a writ in the nature of ma.ndamus or other
writ., direction or order against the State of ~faha
rashtra (hereafter ca.lied the appellant) calling upon it
to refer the said dispute for industrial adjudication
under B. 10(1) and s. 12(5) of the Act.
To this application the company was also impleaded as an opponent. This petition was heard by Tendolkar J. He
held thats. 12(5) in substance imposed an obligation
on the appellant to refer the dispute provided it was
satisfied that a case for reference had been ma.de, and
he ca.me to the conclusion that the reason given by
the appellant for refusing to make a reference was so
extraneous that the respondents were entitled t-0 a
writ of mandamus against the appellant. Accordingly
he directed that a mandamus shall issue against the
appellant to reconsider the question of ma.king or
refusing to make a reference under s. 12(5) ignoring
the fact that there was a slow-down and ta.king into
account only such reasons a.a a.re germane to the
1 S.C.R. SUPREME COURT REPORTS
231
•
question of determining whether a reference should or
r96o
should not be made.
A
h•
-
.
h
!I
II
h
State of Bombay
gainst t 1s uecis10n t e appe ant as we as t e
v.
company preferred appeals.
Chagla,
C. J., and K. P. Krishnan
Desai, J., who constitut.ed the Court of Appeal, allow-
& Othm
ed the two appeals to be consolidated, heard them
-
together and came to the conclusion that the view Gajendragadkar J.
ta;ken by Tendolkar J. was right and that the writ of
mandamus had been properly issued against the
appellant.
The appellant and the company then
applied for and obtained a certific!l<te from the High
Court and with that certificate they have come to this
Court by their two appeals Nos. 37 and 38 of 1957.
These appeals have been ordered to be consolidated
and have been heard together, and both of them raise
the question about the construction of s. 12(5) of the
Act.
Before dealing with the said question it would be
convenient to state one more relevant fact. It is
common ground that during a part of the relevant year
the respondents had adopted go-slow tactics. According
to the company the period of go-slow attitude was seven
months whereas according to the respondents it was
about five months. It is admitted that under cl. 23(c)
of the standing orders of the company wilful slowingdown in performance·of work, or abatement, or instigation thereat: amounts to misconduct, and it is not
denied that as a result of the go-slow tactics adopted by
the respondents disciplinary action was taken against
58 workmen employed by the company. The respondents' case is that despite the go-slow strategy adopted
by them for some months during the relevant year ~he
total production for the said period compares very
favourably with the production for previous years
and that the profit made by the company during the
relevant year fully justifies their claim for additional
bonus. The appellant has taken the view that because
the respondents adopted go-slow strategy during the
relevant year the industrial di3pute raised by them in
regard to bonus as well as classification was not to be
referred for adjudication under s. 12(5). It is in the
light of these facts that we have to consider whether
232
SUPRE:\IE COUHT REPORTS
[1961]
•
'960
the validity of the order passed by tho appellant refu5
-1-8
1
sing to refer the dispute for adjudication under s. 12{5)
tale 0
Ottl HlY
•
v.
· can be sustained.
·
·
K. P. Kli<hHon
Lot us first examine the scheme of the relevant
e- Others
provisions of the Act. Chapter III which eonsists of
ss. 10 and lOA dee.ls with reference of dispute to
G•1••d•«~adha• 1 Boa.rcls, Courts or Tribunals. Section 10(1) pmvides
tha.t whore the appropriate Government is of opinion
that any industrial dispute exists or is e.pprehendod,
it may at any time by order in writing refer the dispute to one or the other authority specified in els. (e.)
to (d).
This section is of basic importance in the
scheme of the Act. It shows that the main object of
the Act is to provide for cheap and expeditious machinery for tho decision of all industrial disputes by
referring them to e.djudice.tion, and thus a.void industrial conflict resulting from frequent lock-outs and
strikes.
It is with that object that reference i•' contemplated not only in regard to existing industrial
disputes but also in respect of disputes which may be
apprehended. This section confers wide and even
absolute discretion on the Government either to refer .
or to refuse to refer e.n industrial dispute as therein
provided. :\a.ture.Uy this wide discretion. has to bo
exorcised by the Government bona fide and on e. consideration of relevant and material facts. The second
proviso to s. 10(1) dee.ls with disputes relat.ing to a
public utility service, and it provides that where e.
notice undor s. 22 has been given in respect of such
e. dispute the a.pproprie.te 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 tho dispute may have commenced. It is thus
clear that in regard to cases falling under this proviso
. an obligation is imposed on the Government to refer
the dispute unless of course it is satisfied that the
notice is frivolous or vexatious or that considerations
of expediency required that a reference should not he
mado.
This proviso abo makes it clear that referenc•l
can be made even if other proceedings under the Act
1 S.C.R. SUPREME COURT REPORTS
233
ha.ve a.lrea.dy commenced in respect of the sa.me dispute. Thus, so fa.r a.s discretion of the Government stat, of Bombay
to exercise its power of referring a.u industrial dispute
v.
is concerned it is very wide under s. 10(1) but is limitK. P, K6shnan
ed under the second proviso to s. 10(1).
Section 10(2)
& Othm
dee.ls with. a ca~e where the Governm~nt has t? refer Gajrnd;;;;,dkar J.
an industrial dispute a.nd has no d1scret1on Ill the
matter. Where the parties to a.n industrial dispute
apply in the prescribed manuer either jointly or separately for a reference of the dispute between them the
Government has to refer the sa.id dispute if it is satisfied that the persons applying represent the majority
of each party. Thus, in dealing with this class of
cases the only point on which ,the Government has to
be satisfied is that the persons applying represent the
,
majorty of each party ; once that test •is satisfied
the Government has no option but to make a refer.
ence a.s required by the parties. Similarly s. lOA
deals with cases where the employer and his workmen
agree to refer the dispute to arbitration at any time
before the dispute has been referred under s. 10, and
it provides that· they may so refer it to such person or
persons as may be specified in the arbitration agreement; and s. 10A(3) requires that on receiving such
a.n arbitration agreement the Government shall, within fourteen days, publish the same in the official
Gazette. Section 10A(4) prescribes that the arbitrator
or arbitrators shall investigate the dispute and submit
the arbitration award to t_he appropriate Government; and s. 10A(5) provides that such arbitrations
a.re outside the Arbitration Act. Thus cases of voluntary reference of disputes to arbitration are outside
the scope of any discretion in the Government. That
in brief is the position of the discretionary power of
the Government to refer industrial disputes to the
appropriate authorities under the Act.
The appropriate authorities under the Act are the
conciliator, the Board, Court of Enquiry, Labour
Court, Tribunal and National Tribunal. Section 11(3)
confers on the Board, Court of Enquiry, Labour
Court, Tribunal and National Tribunal all_ the powers
JO
234
SUPREME COURT REPORTS
[ l 96 l]
1 960
as are vested in 8, civil court when trying a suit in
respect of the matters specified by els, (a) to (d),
A
Stalt of /Jo1r.ba)•
v.
concilia.tion officer, however, stands on a different
J{. P. Krishna" foot.ing,
Under H. 11(4) he is given the power to call
"- 011;;rs
for and inspect. any refovant document and has been
.
-
.
given the same powers as are vested iu civil courts in
Gar,,J•agad••r f. respect of compelling the production of documents.
Section 12 dealH with tho duties of conciliation
officers.
Under s. 12( 1) the conciliation officer may
hold conciliation proceedings in the prescribed manner
wht're an industrial dispute exiots or is apprehended.
ln regard to au industrial dispute relating to a. public
utility service, where notice under s. 22 has been gh·en,
the eouciliatiou officer shall hold conciliation proceedings in respect of it. The effoct of s. 12(1) is that,
whereas in regard to an industrial dispute not relating
to a public utility service the conciliation officer is
given the discretiOu either to hold conciliation proceedings or not, in regard to a dispute in respect ofa μublic
utility service, where notice has been given, he ha.H 110
discretion but must hold conciliation proceediugs in
regard to it.
Section 12(2) requires the conciliation
officer to investigate the dispute without delay with the
object of bringing a.bout a settlement, and dnriug the
course of his inveHtiga.tion he may examine ail matters
affecting the merits and t.lie right settlement of the
dispute and do all such thinga as hf: thinks fit for the
purpose of ind uciug the parties tu come to a fair and
amicable set,tlemont.
The duty and function of the
conciliation offic<•r is, a.s liis very name> ir>dicr.tes, to
mediate between tho parties and make an effort at
conciliation so as to persuade them to settle their disputes amicably between themselves. Jf the conciliation
officer succeeds in his mediation s. 12(3) requires him to
make a report of such settlement together with the
memorandum of the settlement signed by the parties
to the dispute. Section 18(3) provides that. a scttlem<"nt
arrived at in the eourse of coucilintion proceedings
shall be binding on the parties specified t.hercin.
Tt
would thus be seen that if the attempts made by the
conciliation officer to induce tho parties to come to a
settlement succeeds and a. settlument is signed by them
1 S.C.R. SUPREME COURT REPORTS
235
it has in substance the same binding character as an
I96°
award under s. 18(3).
Sometimes efforts at conciliad
d
h
b
f
Stat~ of Bornbay
tion o not succee eit er ecause one o the parties
v.
to the dispute refuses to co-operate or they do not agree K. P. K•i;hnan
as to the terms of settlement. In such cases the con-
&- Oehm
ciliation officer has to send his report to .the appro-
.
-
priate Government under s. 12(4). This report must Ga1endragadkar J.
set forth the steps taken by the officer 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 and
the reasons on account of which in his opinon a settlement could not be arrived at. The object of requiring
the conciliation officer to make such a full and detailed
report is to apprise the Government of all the relevant
facts including the reasons for the failure of t,he conciliation officer so that the Government ma.y be in
possession of the relevant material on which it can
decide what course to adopt under s. 12(5). In cone
struing s. 12(5), therefore, it is necessary to bear in
mind the background of the steps which the conciliation officer has taken under s. 12(1) to (4).
The conciliation officer has held conciliation proceedings, bas
investigat<Jd the matter, attempted to mediate, failed
in his effort to bring about a settlement between the
parties, and has made a full an(! detailed report in
regard to his enquiry and his conclusions as to the
reasons on account of which a settlement could not be
arrived a.t.
Section 12(5) with which we are concerned in the
present appeals provides that if, on a consideration of
the report referred to in sub-section (4), the appropriate
Government is satisfied that there is a case for reference to a Board, Labour Court, Tribunal or National
Tribunal, it may make such reference.
Where the
appropriate Govermenment does not make such a
reference it shall record and communicate to the parties concerned its reasons therefor.
This section
requires the appropriate Government to consider the
report and decide whether a case for reference has
been made out. If the Government is satisfied that a
case for reference has been made out it may make such
236
SCPREME CO"CRT REPORTS
[1961]
r96o
reference. If it is satisfied that a. ca.se for reference has
not been ma.de out it may not make such a. reference;
51" 1' of Hombay but in such a. case it she.II record and communicate to
v.
K. P. K'ish""" the parties concerned its reasons for not ma.king the
& Othm
reference which .in the context means its reasons for
-
not being satisfied that there is a case for reference.
Gaj••d,agadka' J. The High Court has held that the word "may " in the
first part of s. 12(5) must be construed to mean " shall"
having regard to the fa.ct that the power conferred on
the Government by the first pa.rt is coupled with a
duty imposed upon it by the second part. The appellant and the company both contend that this view iR
erroneous.
According to them tho requirement that
reasons shall be recorded and communicated to the
parties for not ma.king a reference does not convert
"may " into "shall" and that the discretion vesting
in the Government either to make a reference or not
to make it is as wide as it is under s. 10(1) of the Act.
Indeed their contention is that, even after receiving
the report, if the Government decides to make a reference it must a.ct under s. 10(1) for that is the only
section which confers power on the appropriate
Government to make a reference.
It is true thats. 12(5) provides that the appropriate
Government may make such reference and in that
.sense it ma.y be permissible t-0 sa.y that a. p-0wer to
make reference is conferred on the appropriate Govnnment by s. 12(5). The High Court was apparently
·inclined to take the view that in cases falling under
s. 12{5) reference can be ma.de only under s. 12(5)
,
independently of s. 10(1). In our opinion that is not
the effect of the provisions of s. 12(5). If it is held
that in cases falling under s. 12(5) reference can a.nd
should be ma.de only under s. 12{5) it would lead to
very anomalous consequences. Section 10(3) empowers
the appropriate Government by an order to prohibit
the continuance of a.ny strike or lock-out in connection
with an industrial dispute which may be in existence
on the date of the reference, but this power is confined
only to cases where industrial disputes a.re referred
under s. 10(1). It would thus be clear that if a. reference 1s ma.de only under s. 12(5) independently of
1 S.C.R.
SUPREME COURT REPORTS
237
s. 10(1) the appropriate Government may have no
r96o
Power to prohibit the continuance of a strike in conState of Bombay
nection with a dispute referred by it to the tribunal
v.
for adjudication ; and that obviously could not be the K. P. K,i,hnan
intention of the Legislature. It is significant that
& Othm
ss. 23 and 24 prohibit the commencement of strikes
. -.
and lock-outs during the pendency of proceedings there- Ga;end,agadka' J.
in specified, and so even in the case of a reference
made under s. 12(5) it would not be open to the employer to declare a Jock-out or for the workmen to go on
strike after such a reference is made ; but if a strike
has commenced or a Jock-out has been declared before
such a reference is made, there would be no power in
the appropriate Government to prohibit the continuance of such a strike or such a Jock-out.
Section 24(2)
makes it clear that the continuance of a Jock-out or
strike is deemed to be illegal only if an order prohibiting it is passed under s. 10(3). Thus the power to
maintain industrial peace during adjudication proceedings which is so essential and which in fact can be
said to be the basis of adjudication proceedings is exercisable only if a reference is made under s. 10(1). What
is true about this power is equally true about the
power conferred on the appropriate Government by
s. 10(4), (5), (6) and (7).
In other words, the material
provisions contained in sub-ss. (3) to (7) of s. 10(1)
which are an integral part of the scheme of reference
prescribed by Chapter III of the Act clearly indicate
that even if the appropriate Government may be
acting under s. 12(5) the reference must ultimately be
made under s. 10( l ).
Incidentally it is not without
significance that even in the petition made by the respondents in the present proceedings they have asked
for a writ of mandamus calling upon the appellant to
make a reference under ss. 10(1) and 12(5).
Besides, even as a matter of construction, when
s. 12(5) provides that the appropriate Government
may make such reference it does not mean that this
provision is intended to confer a power to make reference as such. That power has already been conferred
by s. 10(1); indeed s. 12(5) occurs in a Chapter dealing with the procedure, powers and duties of the
238
SUPREME COGRT REPORTS
[1961]
r~6o
authorities under the Act; and it would be legitimate
to hold thats. 12(5) which undoubtedly confers power
State of liombay
h
.
-
v.
on t e appropriate Government t•J act in the manner
K. P. r:,;,1,,,a,, specified by it, the power to ma.kc a. reference which it
c~ Othm
will exercise if it comes to the conclusion that a. case
·
---
for reference has been made must be found in s. 10(1).
Ga1rnd.agadka. 1- In other words, when s. 12(5) says that the Government may make such reference it- really means it may
make such reference tmder s. IO ( l).
Therefore it,,
would not be reason11.ble to hold that s. 12(5) by itself
and independently of s. 10(1) confors power on the
a.ppropriat.e Government to make a. reforence.
Tho next point to consider is whether, while the
appro;iri11.te Govornment acts undnr s. 12(5), it is
bound to ha.se its decision only and solely on a. consideration of the report made by the conciliation
officer under s. 12(4).
The tenor of the High Court's
judgment may seem to suggest that the only material
on which the conclusion of the appropriate Government under s. 12(5) should be based is tho said report.
ThNe is no doubt. that having regard to the background furnished by the earlier provisions of s. 12 the
appropriate Government would naturally consider the
report very carefully and treat it as furnishing the
relevant material which would enable it to decide whether a case for reference has been made or not; but the
. words of s. 12(5) do not suggest that the report is the
only mat.Prial on wbich Government must base its conclusion. It would be open to the Government to consider other relevant facts which may come to its
knowledge or which may be brought to itR notice, and
. it is in the light of a.II these relevant facts that it ha.a
to come to its decision whether a. reference should be
made or not. The problem which the Government
has to consider while acting under s. l2(5)(a.) is whether there is a. case for reference.
This expression
means that Government must first consider whether a
prima facie case for reference has been made on the
merits. If the Government com'ls to tho conclusion
that a. prima. facie case for reference has been made
then it would be open to the Government also lo consider whether there a.ro any other rolevant or material
l S.C.R. SUPREME COURT REPORTS
239
facts which would justify its refusal to make a referr96o
ence. The question as to whether a case for refer-
.
State of Bombay
ence has been made out can be answered in the light
v.
of all the relevant circumstances which would have a K. P. [{,;,1.nan
bearing on the merits of the case as well as on the inci-
& Othen
dental question as to w he th er a referenee should
. --
nevertheless be made or not. A discretion· to consider Ga1endrngadkar f ·
all relevant facts which is conferred on the Government by s. 10(1) could be exercised by the Government even in dealing with cases under s. 12(5) provided of course the said discretion is exercised bona fide,
its final decision is based on a consideration of
relevant facts and circumstances, and the second part
of s. 12(5) ·is complied with.
We have already noticed thats. 12 deals with the
conciliation proceedings in regard to all industrial disputes, whether they relate to a public utility service
or not. Section 12(1) imposes an obligation on the conciliation officer to hold conciliation proceedings in
regard to an industrial dispute in respect of public
utility service provided a notice under s. 22 has been
given. If in such a dispute the efforts at conciliation
fail and a failure report is submitted under s. 12(4)
Government may have to act under s. 12(5) and decide
whether there is a case for reference. Now, in dealing
with such a question relating to a public utility service
considerations prescribed by the second proviso to
s. 10(1) may be relevant, and Government may be
justified in refusing to make a reference if it is satisfied that the notice given is frivolous or vexatious or
that reference would be inexpedient. Just as discretion conferred on the Government under s. 10(1) can
be exercised by it in dealing with industrial disputes
in regard to non-public utility services even when
Government is acting under s. 12(5), so too the provisimrn of the second proviso can be pressed into service
by the Government when it deals with an industrial
dispute in regard to a public utility service under
s. 12(5).
It would, therefore, follow that on receiving the failure report from the conciliation officer Government
would consider the report and other relevant material
240
SUPREME COt:RT REPORTS
[1961]
i96o
a.nd decide whether . there is a. ca.se for reference.
S
, 8
1
If it is satisfied tha.t there is such a. ca.se for reference
1" 1' 0 •
0'" '"Y .
k
~
If . d
k
f
· v.
1t ma.y ma. e a. re1erence.
1t oes not ma. e a. re er.
K P. K"''"'"" ence it shall record a.nd communicate to the pa.rties
<>- 01hm
concerned its reasons therefor. The question which
. . -
a.rises a.t this sta.ge is whether the word "ma.y " used
Ga;endrnc•dk•, J. in the context mea.ns " aha.II ", or whether it means
nothing more than " may " which indicates tha.t the
discretion is in the Government either to refer or not
to refer.
It is urged for the respondent tha.t where power is
conferred on a.n authority a.nd it is coupled with. the
performance of a. duty the words conferring power
though directory must be construed a.s mandatory. As
Mr. Justice Coleridge ha.s observed in Reg. v. Tithe
Commissioners (1). "The words undoubtedly a.re only
empowering ; but it ha.s been so often decided a.s to
ha.ve become an a.xiom, tha.t, in public statute,, words
only directory, permissory or enabling may ha.ve a.
compulsory force where the thing to be done is for the
public benefit or in advancement of public justice".
The argument is that s. 12(5) makes it obligatory on
the Government to record and communicate its res.sons
for not ma.king the reference a.nd this obliga.tion shows
tha.t the power to make reference is intended to be
exercised for the benefit of the pa.rt y which raises a.n
industria.l dispute a.nd wa.nts it to be reforred to the
authority for decision. It ma.y bo tha.t the Legisla.ture
intended tha.t this requirement would a.void ca.sua.l or
capricious decisions in the ma.tter beca.use the recording a.nd communication of reasons postulates tha.t the
reasons in question must stand public exa.mina.tion
a.nd scrutiny a.nd would therefore be of such a. cha.ra.cter a.s would show tha.t the question wa.s ca.refully
a.nd properly considered by the Government; but tha.t
is not the only object in ma.king this provision. The
other object is to indicate tha.t an obligation or duty
is ca.st upon tho Government, a.nd since the power
conferred by the first pa.rt is coupled with the duty
prescribed by the second pa.rt" may " in the context
must mea.n" aha.II ". There is considerable force in
(1) (18+9) If Q.B. 159. 47+: 117 E.R. 179, 185.
1 !3.C.R. SUPREME COURT REPORTS
241
this argument. Indeed it has been accepted by the
z960
High Court and it has been held that if the Govern5
-;; b
ment is satisfied that there is a case for reference it is '"" ·~. om ay
bound to make the reference.
K. P. Krishnan
On the other hand, if the power to make reference is
& Others
ultimately to be found in s. 10(1) it would not be easy
. -·
.
to read the relevant portion of s. 12(5) as imposing an Ga;endragadkar J.
obligation on the Government to make a reference.
Section 12(5) when read withs. 10(1) would mea.n,
according to the appellant, that, even after considering the question, the Government ma.y refuse to make
a reference in a proper . case provided of course it
records and communicates its reasons for its final deci.
sion. In this connection the appellant strongly relies
on the relevant provisions of s. 13. This section <lea.ls
with the duties of Boards and is similar to s. 12 which
deals with conciliation officers.
A dispute can be
referred to a Board in the first instance under s. 10(1)
or under s. 12(5) itself. Like the conciliation officer
the lloard also endeavours to bring about a settlement
of ,the dispute. Its powers are wider than those of a
concilia~r but its function is substantially the same ;
and so if the efforts made by the Board to settle the
dispute fail it has to make a report under s. 13(3). Section 13(4) provides that if on receipt of the report
made by the Board in respect of a dispute relating to
a public utility service the appropriate Government
does not make a reference_to a Labour Court, Tribunal
or National Tribunal under s. 10, it shall record and
communicate to the parties concerned its reasons
therefor. The provisions of s. 13 considered as a
whole clearly indicate that the power to make a reference in regard to disputes referred to the Board are
undoubtedly to be found ins. 10(1). Indeed in regard
to disputes relating to non-public utility services there
is no express provision made authorising the Government to make a reference, and even s. 13( 4) deals
with a case where no reference is made in regard to a.
dispute relating to a public utility service which
means that if a reference is intended to be made it
would be under the second proviso to s. 10(1). Incidentally this fortifies the conclusion that whenever
31
242
SUPREME COURT REPORTS
[1961]
'96°
reference is made the power to make it is to be found
St~(• vf Bomba under s .. 10(1). Now, in regard to cases falling under
v. ·
Y s. 13(4) smce the reference has to be made under s. 10
K. P. Krishnan there can be no doubt tha.t the considerations relevant
· ·
,,. Others
under the eecond proviso to s. 10(1) would be relevant
-
and Government may well justify their refusal ~o
Gajendra1adhr J. make a reference on one or the other of the grounds
specified in the said proviso. Besides, in regard to disputes other than those falling under s. 13(4) if a reference has to be made, it would clearly be under s. 10(1).
This position is implicit in the scheme of s. 13. The
result, therefore, would be that in regard to a dispute
like the present it would be open to Government to
refer the said dispute under s. 12(5) to a Boa.rd, a.nd
if the Boa.rd fails to bring about a. settlement between
the parties Government would be entitled either to
refer or to refuse to refer the said dispute for industrial
adjudication under s. 10(1). There can be no doubt
that if a. reference ha.s to be ma.de in regard to a dispute referred to a. Boa.rd under s. 13 s. 10(1) would
apply, and there would be no question of importing
auy compulsion or obligation on the Government to
make a reference.
Now, if tha.t be the true position
under the relevant provisions of s. 13 it would be difficult to a.ocept the argument tha.t a. prior sta.ge when
Government is acting under s. 12(5) it is obligatory on
it to ma.ke a reference e.s contended by the respondent.
The controversy between the parties a.s to the construction of s. 12(5) is, however, only of academic
importance. On the respondents' argument, even if
it is obligatory on Government to make e. reference
provided it is satisfied that there is a. case for reference,
iu deciding whether or not e. oa.se for reference is
made Government would be entitled to consider a.II
relevant facts, a.nd if on a consideration of a.II the relevant facts it is not satisfied that there is a case for
reference it ma.y well refuse to make e. reference a.ncl
record e.nd communicate its reasons therefor. According to the a.ppelle.nt and the company also though
the discretion is with Government its refusal to make
e. reference ce.n be justified only if it records e.nd communicates its reasons therefor e.nd it a.ppea.rs that the
1 S.C.R. SUPREME COURT REPORTS
243
sa.id rea.sons are not wholly extraneous or irrelevant.
,960
In other words, though there may be a difference of
-
emphasis in the two methods of approach adopted by State of Bombay
the parties in interpreting s. 12(5) ultimately both of K. P. ~risknan
them ere a.greed that if in refusing to make a refer-
.;;, others
ence Government is influenced by reasons which are
wholly extraneous or irrelevant or which are notGaJendragadkar J.
germane then its decision may be open to challenge
in a court of law. It would thus appear that even
the appellant and the Company do not dispute that
if a consideration of all the relevant and germane
factors leads the Government to the conclusion that
there is a case for reference the Government must
refer though they emphasise that the' scope and extent of relevant consideration is very wide; in sub-·
stance the plea of the respondents that "may " must
mean "shall" in s. 12(5) leads to the same result.
Therefore both the methods of approach ultimately
lead to the same crucial enquiry : are the reasons recorded and communicated by the Government under
s. 12(5) germane and relevant or not ?
It is ,;otnmon ground that a writ of mandamus
would he against the Government if the order passed
by it under s. 10(1) is for instance contrary to the provisions of s. lO(l)(a) to (d) in the matter of selecting
tho appropriate authority ; it is also common ground
that in refusing to make a reference under s. 12(5) if
Government does not record and communicate to the
parties concerned its reasons therefor a writ of mandamus would lie. Similarly it is not disputed that if a
party can show that the refusal to refer a dispute is
not bona fide or is based on a consideration of wholly
irrelevant facts and circumstances a writ of mandamus would lie. The order passed by the Government
under s. 12(5) may be an administrative order and
the reasons recorded by it may not be justiciable in
the sense that their propriety, adequacy or satisfactory character may not be open to judicial scrutiny ;
in that sense it would be correct to say that the court
hearing a petition for mandamus is not sitting in
appeal over the decision of the Government; nevertheless ff the court is satisfied that the reasons given
244
SUPRE}!E COt;RT IiEPORTS
[I!illl]
r96o
by the Government for refusing to make a. reference
State of 801111,,.,, ~ro extra.neons a.nd n~t g?~ma.~e t~cn, the court, ca.n
v.
· issue, and would be JU'3t1tied m 1ssumg, a. writ of
1<. r. I<"'"""" ma.nda.mus even in reRpcct of such a.n a.dministrativo
,-;. Others
order.
After a.n elaborate 11.rgument on the construction of s. 12(5) wa.s addressed to us it became clear
Ga;cnd•agadka• J. that on this pa.rt of the c11.se there W!l.S no serious dis.
pute between the parties. That is why we think the
controverny as to the construction of s.