# STATE OF MADRAS v. C. P. SARATHY AND ANO'I'HER

- **Citation:** [1953] 1 S.C.R. 334
- **Court:** Supreme Court of India
- **Decided:** 1953
- **Bench:** PATANJAr;r SASTRI c.J, Mukherjea, Chandhasekhara -Aiyah, VIVIAN BosE, Ghulam Hasan Jj
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-madras-v-c-p-sarathy-and-ano-i-her-15
- **Pages:** 17

## Headnote

lnd1lstrial Disputes Act (XIV of 1947), ss. JO (1) (c), 29Refercnce to Industrial ~Tribunal-Nature of ili_spnte or partieR to
1'.t not specijied-Va,licUty of reference ancl atvard-Dema .. nds lry
Union of ernployees of several concerns-Employers of some concerns
accepting terrrf,S of thei.r employees-Reference a.s to rill co1~cerns
Vakdity.
The South Indian Cinema Employees' Association 1 a regis.
terecl trade union whose members were the employees of the 24
cinema houses operatillg in the l\1adras City including some of the
employees of the Prabhat Talkies, submitted to the Labour Commissioner a n1emorandum setting forth certain demands against
their emplo)~ers for increased \Vagas etc. a11d requestjng him to
/
settle the disputes.
The J_,abour Commissioner suggested certain
f
"minimum terms" which ,,;ere accepted by some of the companies including the Prabbat · Talkies and at a meeting of the employees of the Prabhat Talkies a resolution was ·pa.ssed to the
effect that no action be taken about the demands of the Association.
The Association clecidod to go on strike. Tbe Labour Commissioner reported to the Government, and the Government made
·a reference to an Industrial Tribunal, the material portion of which
was: "Whereas an induStrial dispute has arisen between t.he workers
and m'anagement of the Cinema Talkies in the 1'1adras City in respect of certain matters and whereas in the opinion of His _Excellency the Governo1· of l\Iadras it is necessary, to refer the said industrial dispute for adjudication: now therefore etc." The Prabbat
. ~
..
s.ci.R.
SUPREME COURT REPORTS
335
Talkies contended before the Tribunal that as there was no dis1952
pute between them and their employees they should not be included
--
in the.reference or award, but the Tribunal did not exclude them State of Madr.a~
and an award was passed, and the managing director of the
v.
Prabhat Talkies was prosecuted for non-compliance with• the 0. P. Sarathy
award:
and Another.
Held by the Full Court, (i) that the Labour Commissioner's report clearly showed that an industrial dispute existed between the
management and the employees of the cinema houses; (ii) that as
some of the workers of the Prabhat Talkies were members of the
Union, and a reference could be made even when a dispute was
apprehended, the Government had jurisdiction to make a reference even in respect of the Prabhat Talkies and the reference and
the award were binding on the Prabhat Talkies.
Held Per PA'£ANJALI SASTRI C.J., l'IIUKHERJEA, CHANDRASEKHARA AIYAE and GHULAM HASAN JJ. (BOSE J. dubitante) that
the reference to the Tribunal under s. 10 (1) of the Industrial
Disputes Act, 194 7, cannot be held to be invalid merely because
it did not specify the disputes or the parties between whom the
disputes arose. Per BOSE J.-The. order of reference must be read
with the documents which accompanied it and there was sufficient
compliance with s. 10 (1) (c) of the Industrial Disputes Act even
if the words " the dispute" in the said clause require the Govern,
ment to indicate the.nature of the dispute which the Tribunal is
required to settle. Even if it is not legally necessary to indicate
the nature of the dispute in a reference, it is desirable that that
should be done.
Per P ATANJALI SASTIU C.J., llfUKHERJEA, CHANDRASEKHARA .
AIYAR and GHULAM HASAN JJ.-Though the Government will
not be justified in making a reference under s. 10 (1) without
satisfying itself on the facts and circumstances brought to its
notice that an industrial dispute exists or is apprehended in relation to an establishment or a definite group of establishments
engaged in a particular industry and it is also desirable that the
Government should, wherever possible, indicate the nature of the
dispute in the order of reference, it must be remembered that in
making a reference under s. 10 (1) the Government is doing an
administrative act and the fact that it has to form an opinion as
to the factual existence of an industrial dispute as

## Text

195•
Darshan Singh
V,
The Stat~ of
P1iiijab.
1952
334
SUPREME COURT R~PORTS [1953)
the Sessions Court, the accused would remain on bail
on the same terms as before.
•
Appeals a.llowed.
Agent for
the appellant m Case No. 11:
Nau.nit Lal.
Agent
for the appellant
m Case No. 12:
A. D. Mathur.·
Agent for the respondent and the intervener:
G. H. Rajadhyaksha.
STATE OF MADRAS
v.
C. P. SARATHY AND ANO'I'HER.
[PATANJAr;r SASTRI c.J., MUKHERJEA,
CHANDHASEKHARA -AIYAH, VIVIAN BosE and
GHULAM HASAN JJ.J
lnd1lstrial Disputes Act (XIV of 1947), ss. JO (1) (c), 29Refercnce to Industrial ~Tribunal-Nature of ili_spnte or partieR to
1'.t not specijied-Va,licUty of reference ancl atvard-Dema .. nds lry
Union of ernployees of several concerns-Employers of some concerns
accepting terrrf,S of thei.r employees-Reference a.s to rill co1~cerns
Vakdity.
The South Indian Cinema Employees' Association 1 a regis.
terecl trade union whose members were the employees of the 24
cinema houses operatillg in the l\1adras City including some of the
employees of the Prabhat Talkies, submitted to the Labour Commissioner a n1emorandum setting forth certain demands against
their emplo)~ers for increased \Vagas etc. a11d requestjng him to
/
settle the disputes.
The J_,abour Commissioner suggested certain
f
"minimum terms" which ,,;ere accepted by some of the companies including the Prabbat · Talkies and at a meeting of the employees of the Prabhat Talkies a resolution was ·pa.ssed to the
effect that no action be taken about the demands of the Association.
The Association clecidod to go on strike. Tbe Labour Commissioner reported to the Government, and the Government made
·a reference to an Industrial Tribunal, the material portion of which
was: "Whereas an induStrial dispute has arisen between t.he workers
and m'anagement of the Cinema Talkies in the 1'1adras City in respect of certain matters and whereas in the opinion of His _Excellency the Governo1· of l\Iadras it is necessary, to refer the said industrial dispute for adjudication: now therefore etc." The Prabbat
. ~
..
s.ci.R.
SUPREME COURT REPORTS
335
Talkies contended before the Tribunal that as there was no dis1952
pute between them and their employees they should not be included
--
in the.reference or award, but the Tribunal did not exclude them State of Madr.a~
and an award was passed, and the managing director of the
v.
Prabhat Talkies was prosecuted for non-compliance with• the 0. P. Sarathy
award:
and Another.
Held by the Full Court, (i) that the Labour Commissioner's report clearly showed that an industrial dispute existed between the
management and the employees of the cinema houses; (ii) that as
some of the workers of the Prabhat Talkies were members of the
Union, and a reference could be made even when a dispute was
apprehended, the Government had jurisdiction to make a reference even in respect of the Prabhat Talkies and the reference and
the award were binding on the Prabhat Talkies.
Held Per PA'£ANJALI SASTRI C.J., l'IIUKHERJEA, CHANDRASEKHARA AIYAE and GHULAM HASAN JJ. (BOSE J. dubitante) that
the reference to the Tribunal under s. 10 (1) of the Industrial
Disputes Act, 194 7, cannot be held to be invalid merely because
it did not specify the disputes or the parties between whom the
disputes arose. Per BOSE J.-The. order of reference must be read
with the documents which accompanied it and there was sufficient
compliance with s. 10 (1) (c) of the Industrial Disputes Act even
if the words " the dispute" in the said clause require the Govern,
ment to indicate the.nature of the dispute which the Tribunal is
required to settle. Even if it is not legally necessary to indicate
the nature of the dispute in a reference, it is desirable that that
should be done.
Per P ATANJALI SASTIU C.J., llfUKHERJEA, CHANDRASEKHARA .
AIYAR and GHULAM HASAN JJ.-Though the Government will
not be justified in making a reference under s. 10 (1) without
satisfying itself on the facts and circumstances brought to its
notice that an industrial dispute exists or is apprehended in relation to an establishment or a definite group of establishments
engaged in a particular industry and it is also desirable that the
Government should, wherever possible, indicate the nature of the
dispute in the order of reference, it must be remembered that in
making a reference under s. 10 (1) the Government is doing an
administrative act and the fact that it has to form an opinion as
to the factual existence of an industrial dispute as a preliminary
step to the discharge of its function does not make it any the less
administrative in character. The Court cannot, therefore, canvass
the order of reference closely to see if there was any material
before the Government to support its conclusion, as if it was a
judicial or quasi-judicial determination. No doubt, it will be open
to a party seeking to impugn the resulting award to show that
what was referred by the Government wae not an induatrjal diapute within the meaning of the Act, and that, therefore, the Tribunal had no jurisdiction to make the award. But, if the dispute
336
SUPREME COURT REPORTS
[1953j
1952
was an industrial dispute as defined in the Act, its factual exist-
.
-
ence and the expediency of making a reference in the circumstances
Stats 0! Madras of a particular case are matters entirely for the Government to
v,
decide upon, and it will not be competent for the Court to hold the
C. P. Sarathy refe~ence bad and quash the proceedings for
-~vant of jurisdiction
and Another'. merely because there 'vas, in its opinion, no material before the
Government on 'vhich it could have come to an affirmative conclusion on those matters.
The Government must have sufficient
kno_wledge of the nature of the dispute to be satisfied that it is an
industrial dispute within the meaning of the Act, as, for instance,
that it relates to retrenchment or reinstatement. But, beyond
this no obligation can be held to lie on the Government to ascertain particulars of the disputes before inaking a reference under
s. 10 (1) or to specify them in the order.
The adjudication by the Tribunal is only an alternatiYe forn1
of settlement of the disputes on a fair and just basis having regard
to the prevailing conditions in the industry and is by no means
analogous to \Vhat an arbitrator has to do in determining ordinary
civil disputes according to the legal rights of the parties.
Ramayya Pantulu v. Kutti and Rao (Engineers) Ltd. [(1949)
1 M.f;.J. 231], India Paper Pulp Co. Ltd. v. India Paper Pulp
Workers' Union ([1949-50] F.C.R. 348), Kanda" Textiles Ltd. v.
·Industrial Tribunal, Madras [(1949) 2 M.L.J. 789] and Western
India Automobile
Association's case ([19¥.l-50]
F.C.R. 321)
referrerZ to .
. Judgment of the High Court of Madras reversed.
APPELLATE JuRISDIC1'ION: Case No. 86 of 1951.
·Appeal under article 132 (1) of the Constitution of
Iudia from the Judgment and Order dated November
15, 1950, of the High Court of Judicature at Madras
(Menon and Sayeed JJ.) in Criminal Miscellaneous
Petition No. 1278 of 1950.
V. K. T. Chari
(Advocate-General
of Madras)
(Ganapathy Iyer, with him) for the appellant.
K. S. Krishnaswarny Iyengar (K. Venkatararnani,
with him) for respondent No. 1.
1952.
December 5.
The Judgment of Patanjali
Sastri C.J., Mukherjea, Chandrasekhara Aiyar and
Ghulam Hasan JJ. was delivered by Patanjali Sastri
C.J. Vivian Bose J. delivered a separate judgment.
PATANJALI SASTHI c. J.-This is an appeal from
an order of the High Court of Judicature at Madras
quashing certain criminal proceedings instituted in
..
).
S.C.R.
SUPREME COURT REPORTS
337
the Court of the Third Presidency Magistrate, Madras,
195fl
a~ainst the fi~st respondent who .is the m~nagi~g Stats of llfadras
director of a cmema company carrymg on busmess m
v.
Madras under the name of "Prabhat Talkies."'
•
c. P. Sarathy
The proceeding arose out of a charge-sheet filed
and Anolher.
by the police against the first respondent. for an
Patanjali
offence under section 29 of the Industrial Disputes
sastri c. J.
Act, 1947 (hereinafter referre_d to· as the Act).
The
charge was that the first respondent failed to implement certain terms of an award dated 15th December,
1947, made by the Industrial Tribunal, Madras,
appointed under the Act and thereby committed a
breach of those terms which were binding on him.
The first respondent raised a preliminary objection
before the Magistrate that the la~ter had no jurisdiction to proceed with the enquiry because the award
on which the prosecution was based ·was ultra
vires and void on the ground that the reference
to the Industral Tribunal which resulted in the award
was not made by the Government in accordance with
the requirements of section 10 'of the Act.
As the
Magistrate refused to deal with ths objection as a
preliminary point, the first respondent applied to the
High Court under article 226 of the Constitution for
a writ of certiorari to quash the proceeding pending
before the Magistrate.
The application was heard in
the first instance by a single Judge who referred the
matter to a Di vision Bench in view of the important
questions involved, and it was accordingly heard and
decided by Govinda Menon and Basheer Ahmed
Sayeed JJ. who upheld the objection and quash_ed the
proceeding by their order dated 15th November, 1950.
From that order the St.ate of Madras has preferred
this appeal.
.
The second respondent, the South Indian Cinema
Employees' Association (hereinafter referred to as
the Association) is a registered trade union whose
members are employees of various cinema companies
carrying on business in the State of Madras. Among
these are the 24 cinema houses operating in the City
of Madras, iucludin~ the "Prabhat '!'alkies". Ou 8th
338
SUPREME COURT REPORTS
[195q)
195•
November, 1946, the Association submitted to the
-
Labour Commissioner of Madras, who had also been
Stat• of Madras appointed as the Conciliation Officer under the Act,
. o. P. ;arathy a 111em6rand um setting forth certain demands against
and Another. the employers for increased wages and dearness allowance, annual bonus of three months' wages, increased
Patanjali
leave facilities, provident fund, and adoption of proSostri o. J.
per procedure in imposing punishment and requesting
the Officer to settle the disputes as the employers
were unwilling to concede the demands.
After meeting the representatives of the employees and the
employers, the Labour Commissioner suggested on
28th April, 1947, certain "minimum terms" which
he invited the employers and the union officials to
accept.
'I'he managers of six cinema companies in
the City including" Prabhat Talkies" agreed to accept the terms but the managements of other companies did not intimate acceptance or non-acceptance.
It would appear that, in the meantime, a meeting was
convened on 22nd February, 1947, of the employees
of four cinema companies including "Prabhat Talkies."
Ninety-four out of 139 workers attended the meeting
and resolutions ·were pas·sed to the effect that no
action need be taken about the demands of the Association as the managements of those companies
agreed to some improvement in the matter of wages
and leave facilities and promised to look into the
workers' grievances if they were real. But as tjie terms
suggested by the r~abour Commissioner were not accepted by all ·the employers, the representatives of
the Association met that Officer on 13th May, 1947,
and reported that the Association had decided to go
on strike on any day after 20th May, 1947, if their
demands were not conceded. As the conciliation proceedings of the Labour Commissioner thus failed to
bring about a settlement of the dispute, he made a
report on 13th May, 1947, to the State Government
as required by section 12 (4) of the Act stating the
steps taken by him to effect a settlement and why
they proved unsuccessful. In that report, after men-
~ionin~ the mirv.mum terms suggested by him anq
r
S.C.R.
SUPREME COURT REPORTS
339
ten demands put forward by the
1962
enumerating the
employee~, the
follows:-
Tjabour
Commissioner stated as
/
d
State o Ma ·ras
" As the employers have not accepted even the
minimum terms suggested by me and as the employees
are restive, I apprehend that they may strike work at
any time. I therefore suggest that the above demands
made by the workers may be referred to an Industrial
1 Tribunal for adjudication. I have advised the workers
to defer further action on their notice pending the
orders of Government,"
and he concluded by suggesting the appointment of
a retired District and Sessions Judge as the sole member of the Special Industrial Tribunal " to adjudicate
on this dispute."
Thereupon the Government issued the G. 0. M. S.
No. 2227 dated 20th May, 1947, in the following
terms:
"Whereas an industrial dispute has arisen between
the workers and managements of the cinema talkies
in the Madras City in respect of certain matters ;
And whereas in the opinion of His Excellency the
Governor of Madras, it is necessary to refer the said
industrial dispute for adjudication;
Now, therefore, in exercise of the powers conferred
by section 7 (1) and (2) read with section 10 (1) ( c) of
tne Industrial Disputes Act, 1947, His Excellency the
Governor of Madras hereby constitutes an Industrial
Tribunal consisting of one person, namely, Sri Diwan
Bahadur K. S. Ramaswami Sastri, Retired District
and Sessions Judge, and directs that the· said ind us"
trial dispute be referred to that tribunal for adjudi"
cation.
The Industrial Tribunal may, in its. discretion, settle
the issues in the light of a preliminary enquiry which
it may hold for the purpose and thereafter adjudicate
on the said industrial dispute.
The Commissioner of Labour is requested to send
copies of the order to the managements of cinema.
talkies concerned,"
-
·
....
v.
0. P. Sarathy
and Another.
Patanjali
Sastri C . .1,
340
SUPREME COtJ_RT REPORTS
(1953)
'
19~'
·The Tribunal sent notices to all the 24 ci~ema
s1,;.1, of Madrds com.panies in the City and to the Association calling
v. ·
_ upon them to file sta~ements of their respective cases
c.·P. S•rathy. and to appear before it on 7th July,_1947. Pleadings
and Anolh.r·,~were accordingly filed on both sides and the Tribunal
Pat••i•l~
framed as many as 22 issues of which issue (3) is
sastri c.J. material here and runs thus:
. .
-
·· · "Is there a· dispute between the managements of the
City theatres and theirrespective employees justifying
the reference by the Government to the Industrial
•
·~--- c ·c- ·;
Tribunal for adjudication ? Whether such an objec-.
'
tion is tenable in law?" -
--
-
.: - . -
-
.
It appears -to have been claimed on behalf of some
of these · compan1es including "Prabhat ·Talkies"
that so far as they were concerned there was no dispute between -the. management and their employees
.and ther~fore they' should not be included in the
reference or the award. The Tribunal repelled this
_argument observing: _
. _ .. -. -
"That even if some of the theatres:have got a staff
contented with their lot there is a substantial dispute
in· the i~dustry taken as a whole. After I arrive at
my decision about the basic wages, increments, dearness allowance, etc. the same wil1bind the industry as
·a whole . in· the City of Madras· if ·the Government
accepts and implements i:ny award."
· ·
The Tribunal accordingly, held that· none of the
cinema companies should be "removed from the ambit · '
· of this industrial dispute and adjudication". It also
found as. a matter of fact tha.t " the· idyllic picture of
•
industrial peace and contentment "put forward by the·
first· respondent company was not justified ·by the
evidence.
Issue No. 3 was thus found ·for ·the
Association. The . Tribunal . finally passed its award
- on 15th December, 1947, which was confirmed by the
. Government on 13th February, 1948, and was declared
binding on . the workers and the managements with
effect _from 25th February, '1948, the date of its
: publication in the Fort St. George Gazette, for a
perioi! of one year fro!Il that date .. lt is alleged thi\t
.. .
-
'
. .
.
-
.
\
8.d.R.
SUPREME COURT REPORTS
341
the first respondent failed to implement certain pro1o;a
visions of the award when their implementation was
-
due and thereby committed an offence punishable Stat• of Madraa
under section 29 of the Act.
a. P. ;~rathy
No prosecution, however, was instituted till 24th and Another.
April, 1950, as, in the meanwhile, certain decisions of
the Madras High Court_ tended· to throw doubt on
Patanjali
~
Sa.atri C. J•
the validity of references made in ge_neral terms without specifying the particular disputes or the groups of
workers· and managements between whom such disputes existed, and legislation was considered necessary
to validate awards passed on such references.· Accord-·
ingly, the Industrial Disputes (Madras Amendment)
Act, 1949, was passed on 10th April, 1949, purporting to provide,.inter alia, that alt awards made by any
Industrial .Tribunal constituted before the commencement of that Act shall be deemed to be valid and shall
not be called in question in any court of .law on the
ground that the dispute . to which the award relates
was not referred to the Tribunal in accordance .with
the provisions of the Industrial Disputes Act, 1947
(section 5) .. It also··~urported to validate certain
specified awards including ''the award in the disputes
between the managements of cinema .theatres and
workers.'.' (section :6), which obviously refers to the ·
award under consideration in these proceedings. ,;
. In support of his application to the High Court
the first respondent herein raised three contentions.
First, the Government had no jurisdiction to make
the reference in question as there was no dispute between the. management and workers of "Prabhat
Talkies" and, therefore, the reference and the award
in so far as they related to the first respondent were
ultra vires and void; secondly, in any.case the notification by the Government ·purporting . to refer an
industrial dispute to the Tribunal was not competent
under the Act, inasmuch as it . did not refer to any
specific disputes as arising for adjudication and did
not mention the companies . or firms in which the
disputes are said· to ha"l'.e existed or .were appre-
• pended; and thirdly, the Madras Amendment Act was
•
-·' '-.;, "
' .
\ .
\<'
,
. 342 ··- '·. · SUPREME COURT REPORTS
[1953]
'......,_.
-
\
·13sa
unconstitutional arid void under section 107 of the
S .. ~ · .. Government of India· Act, 1935, being repugnant to
tat• o, Madra• h
· · ·
f
h · C · t
J I d
· 1 D"
t
.
- t e prov1s10ns o - t e
en ra
n ustna
ISpu es
c. P. ~arathy Act, 1947,· and also void under article 13 (1) read
and Anoth.r;. with .article 14 of the _ Constitution as being . discriminatory in character; The- learned.Judges, by
Patanjali
separate .lmt concurring judgments, , upheld. these
Sastri c. J; contentfons and issued a certificate under article 132
(1) of the Constitution as.the case raised subs~antial
questions of law regarding the interpretation of the ..
Constitution. -' As we considered that the contentions
'
. of the appellant on the first two points must prevail,
·we did ·not hear arguments .on; the_ constitutional
issue.
- · ' - . -_ ·
''Before dealing with the main contentions of the
parties,:: we may dispose of a minor point "raised by
Mr. Krishnaswami Aiyangar, for the first time before
us, namely, that the prosecution·of the first respondent for the alleged breach of some'of the terins' of the
Tribunal's award is unsustainable inasmuch as it was
instituted after the expiry of the award. In· support
of this argument learned counsel invoked the analogy
of-the cases where it has been held that a prosecution
for an offence under a temporary statute could not be
commenced, or having been commenced when the
statute was in force, could not be continued after its
expiry.
Those decisions have no application here.
The first· respondent is prosecuted for an offence·
made punishable under section 29 of the Act which·
is a permanent statute and when he committed the
.;
alleged, b~each of some of the terms of· the award;
which was . in- force at the time, he incurred. the
liability to be prosecuted under the Act .. ·- The fact
that the award subsequently expired -cannot affect ·
__ that liability.
-
•On behalf of the· appeliant, the Advocate-General
of Madras urged •that the question ·whether tliere -
existed an industrial dispute when the Government
made the reference now under consideration was an
issue ·of ·tact which the High C.ourt ought not to
have fou~d in the negative at this preliminary stage •
1
\_
-
s.c.R.
SUPREME COURT REPORTS
343
before evidence ·was recorded by the trial court.
He
195'
submit~ed, however, that, on the facts
already State of Madra3
appearing on the record, there could be no reasonable
v.
doubt that an industrial dispute did exist at "the o. P. Saralhy
relevant time.
We are inclined to agree.
The ten and A11other.
demands set f6rth in the Labour Commissioner's letter
of the 13th Mav, 1947, which were not agreed to by
Patanjali
J
Sastri 0. J.
the managements of the 24 cinema theatres in
Madras clearly constituted industrial disputes within
the meaning of the Act.
Basheer Ahmed Sayeed J.,
with whom the other learned Judge concurred,
says:
"There is nothing in the letter of the Commissioner
which would indicate that these demands made by the
South Indian Cinema Employees ' Association were
referred to the respective owners of the cinema
houses in the City of Madras as a body or to any of
them individually."
This, we think, is based on a misapprehension of
the true facts.
'1
1he demands were idBntical with those
mentioned in the Association's memorandum originally submitted on the 8th November, 1946, and they
formed the subject of discussion with the representatives of the cinema companies in the City in the
course of
the
conciliation
proceedings.
That
memorandum, which was not made part of the
record in the court below, was produced here, and
Mr. Krishnaswami Aiyangar was satisfied that the
demands referred to in that memorandum were the
same as those mentioned in the Labour Commissioner's letter of 13th May, 1947, of which all the
employers were thus fully aware.
Nor is it correct.to
say" that the disputes, if any, which might have
existed between the workmen of· the petitioner's
cinema and the petitioner himself had been settled
by the petitioner's ready and willing acceptance of
the terms suggested by the Commissioner".
The
terms accepted by the first respondent were what the
Commissioner called "the minimum terms" and
were by no means the same_ as the demands put forward by the Association, which were never accepted
344
SUPREME COURT REPORTS
(1953j
196a
by the Association.
The Commissioner's letter of the
-
13th May, 1947, made this clear.
Sta.te of Madras
.
.
.
v.
But, m truth, it was not material to consider
o. P. Sarathy whrither there was any dispute outstanding between
and Anothe.-. the first respondent and his employees when the Government made the reference on 20th May, 1947. The
PatanjaU
learned Judges appear to have assumed that the disSastri C. J,
putes referred to a Tribunal under section 10 (1) (c) of
the Act must, in order that the resulting award may be
binding on any particular industrial establishment and
its employees, have actually arisen between them.
"Analysing the order of reference of the· Madras
Government now nuder consideration," the learned
Judges observe, ".it is obvious that there is no mention of the existence of any dispute between the petitioner (the first respondent herein) and his workmen
............... In fact there was no dispute to be referred
to a Tribunal so far as this petitioner is concerned.
If, therefore, there was no jurisdiction to make any
reference, it follows that the. whole reference and the
award are both invalid and not binding on the petitioner."
This view gives no effect to the words "or
is apprehemled" in section 10 (1).
In the present
case, the Government r.eferred" an industrial dispute
between the workers and managements of cinema
talkies in Madras City in respect of certain matters."
As pointed out in the Labour Commissioner's letter
to the Government, there were 24 cinema companies
in Madras, and· the Association, which, .as a duly
registered trade union, represented their employees,
put forward the demands on behalf of the employees
of all the cinema houses in the City. Fifteen out of 43
workers of the " Prabhat Talkies " were admittedly
membeTB of the Association which thus figured as one
of the parties to the dispute. In that situation:, the
Government may have thought, without a close
examination of the conditions . in each individual
establishment, that disputes which affected the workmen collectively existed in the cinema industry in the
City and that, even if such disputes had not actually
arisen in any particular· establishment, they could,
S.C.R.
SUPREME COURT REPORTS
345
19514
having regard to their collective nature, well be apprehended as imminent iu respect of that establishment state of Madras
also. It is not denied that notices were sent by the
v.
Tribunal to all the '24 companies and they all fi1ed o. P. Sarathy
written statements of their case in answer to the a1id Another.
demands made by the Association on behalf of the
.
. . 'dl
l .
Pata1ijali
employees. In these circumstances, it is l
e to c aim
Sastri o. J.
that the Government had no jurisdiction to make the
reference and that the award was not binding on the
respondent's organisation.
'l'he latter was clearly
bound by the award under section 18 of the Act.
It was next contended that the reference was not
competent as it was too vague and general in its terms
containing no specification of the dispute.& or of the
parties between whom the disputes arose. Stress was
laid on the definite article in clause (c) and it.was said
that the Government should crystallise the disputes
before referring them to a Tribunal under section 10
(1) of the Act.
Failure to do so vitiated the
proceedings and the resulting award. In upholding
this objection, Govinda Menon J., who dealt with it in
greater detail in bis judgment, said, "Secondly, it is
contended t bat the reference does not specify the dispute at all.
"What is stated in the reference is that
an industrial dispute has arisen between the workers
a.nd the management of the cinema talkies in the City
of Madras in respect of certain matters. Awards based
on similar references have been the subject of consideration in this Court recently. In Ramayya Pantulu
v. Kutty and Rao (En,qineers) Ltd.(1) Horwill and Rajagopalan JJ. bad to consider an award based on similar
references without specifying what the dispute was."
After referring to the decision of the Federal Court
in India Paper Pulp Co. Ltd. v. India Paper Pulp
Workers' Union( 2 ), and pointing out that though the
judgment of the Federal Court was delivered on 30th
' March, 1949, it was not referred to by the High Court
in Kandan Textile Ltd. , v. Industrial Tribunal, Madras(3), which was decided on '26th August, 1949, the
learned Judge expressed the view that " the trend qf
(1) (1949) I M.L.J. 231.
(3) (1949) 2 M.L.J. 78~.
!•J ~1949.50) F.C.R. HS,
.
. .
346
SUPREME COURT REPORTS
[1953)
1952
decisions of this Court exemplified in the cases res
-1
d
!erred to by me above has not been overruled by their
tate 0 Ma ras L
h'
h
F a
1 c
,
v.
ords 1ps oft e
e era
ourt.' Basheer Ahmed
o. P. Sarathy Sayeed J., however, sought to distinguish the deciand Anoth"" sion of the F_ederal Court on the facts of that case,
remarking" that a reading of the order of reference
'Patanjati
that was the subject-matter of th.e Federal Court deciSasfri 0 · J. sion conveys a clear idea as to a definite dispute, its
.1.
nature and existence and the parties between whom
the dispute existed." It is, however, clear from the
order of reference which is fully extracted in the
judgment that it did not mention what the particular
dispute wa·s, and it was in repelling the objection
based on that omission that Kania C.J. said:
"'fhe sec'tion does not require that the particular
dispute should be mentioned in the order; it is sufficient if the existence of a dispute and the fact that
the dispute is referred to the Tribunal are clear from
the order. To that extent the order does not appear
to be defective. Section 10 of the Act, however, requires
a reference of the "dispute to the 'l'ribunal. The Court
has to read the order as a whole and determine
whether in effect the order makes such a reference.''
This is, however, not to say that the Government
will be justified in making a reference under section
10 (1) without satisfying itself on the facts and circumstances brought to its notice that an industrial
dispute exists or is apprehended in relation to an
establishment or a definite group of establisliments
engaged in a particular industry, and it is also desirable that the G.overnment should, wherever possible,
indicate the nature of the dispute in the order of
reference. But, it must be remembered that in making a
referen0e under section 10(1) the Government is doing
an administrative act and the fact that it has to form
an opinion as to the factual existence of an industrial
dispute as a preliminary step to the discharge of its
function does not make it any the less administrative
in character.
The Court cannot, therefore, canvass
the orqer of reference closel,r to 'see if ~here was any
-
·S.C.R.
SUPREME COUR'f REPORTS
347
material before the Government to support its conclu19':1
sion, as if it was a judicial or quasi-judicial determi- St t -1 ,,. d
.
N
d
b 't
'llb
k"
aao ,,,aras
nation.
o · ou t, i
w1
e open to a party see mg
v
to impugn the resulting award to show that what Was C. P. Sarathy
referred by the Government was not an industrial and Another.
dispute within the meaning of the Act, and that,
therefore, the. 'fribunal
had
no jurisdiction to
·Patanjali
Sastri C. J.
make the award.
But, if the dispute was an industrial dispute as defined in
the Act, its factual
existence and the expediency of making a reference
in the circumstances of a particular case are matters
entirely for the Government to decide upon, and it
will not be competent for the Court to hold the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no
material before the Government on whicli it could
have come to an affirmative conclusion on those
matters. The observations in some of the decisions
in Madras do not appear to have kept this distinction
in view.
Moreover, it may not always be possible for the
Government, on the material pla.ced before it, to
particularise the dispute in its order of reference, for
situations might conceivably arise where public interest requires that a strike or a lock-out either existing
or imminent should be ended or averted without delay,
which, under the scheme of the Act,. could be.done
only after the dispute giving rise to it has been referred to a Board or a Tribunal (vide sections 10(3)
and 23). In such cases the Government must have
the power, in order to maintain industrial peace and
production, to set in motion the machinery of settlement with its sanctions and prohibitions without
stopping to enquire what specific points the contending parties are quarrelling about, and it would seriously detract from the usefulness of the statutory
machinery to construe section 10 (1) as denying such
power to the Government. We find nothing in the
language of tha.t provision to compel such construction.
The Government must, of course, have suffi9ient knowledge of the n..ature 9£ the dispute to ~(}
~~
.
348
SUPREME COURT REPORTS
[191i3]
1952
satisfied that it is an industrial dispute within the
State of M dra meaning of the Act, as, for instance, that it relates to
v. a
'retrenchment or reinstatement.
But, beyond this no
c. P. Sarathy obtigation can be held to lie on th(l Government to
and Another. ascertain particulars of the disputes before making a
reference under section 10 (1) or to specify them in
Patanjali
the order.
.
Sa.~tri C. J.
This conclusion derives further support from clause
(a) of section 10 (1) which provides in the same
language for a reference of the dispute to a Board for
pronioting a settlement. A Board is part of. the
conciliation machinery provided by the Act, and it
cannot be said that it is necessary to specify the dispute in referring it to such a body which only
mediates between the parties who must, of course,
. know what they are disputing about. If a reference
without particularising the disputes is ·beyond cavil
nuder clause (a), why should it be incompetent
under clause (c)? No doubt, the Tribunal adjudicates,
whereas the Board only mediates.
But the ailjudication by the Tribunal is only an alternative forni of
settlement of the disputes on a fair and just basis
having regard to the. prevailing conditions in the
industry and is by no means analogous to what an
arbitrator has to do in determining ordinary civil
disputes according to the legal rights of the parties.
Indeed, this notion that a reference to a Tribunal
under the Act must specify the particular disputes
appears to have.been derived from the analogy of an
ordinary arbitration.
For instance in Ramayya
Pantulu
v.
Kutty
&
Rao
(Engineers) Ltd.(')
it is observed "that if a dispute is to be referred to a
Tribunal the nature of the dispute must be set out
just as it would if a reference were made to an
arbitrator in a civil dispute.
The Tribunal like any
other arbitrator can give an award on a reference
only if the points of reference are clearly placed before it."
The analogy is somewhat misleading. The
scope of adjudication by a Tribunal under the Act is
much wider as pointed out in the Western India
(1)(1949) I M. L. J, 231.
8.0.R.
SUPREME COURT REPORTS
349
Automobile Association's case (1), and it would involve
1962
no hardship if the reference al~o is ~ade in wider State of Madras
terms provided, of course, the dispute is one· of the
v .•
kind described in section 2(k) and the parties between a. P. Sarath~
whom such dispute has actually -arisen or is appreand Another.
bended in the view of the Government are indicated
·
either individual!~ or collectively with reasonable
Patanjali
Sa&tri Q. J.
clearness.
The rules framed under the Act provide
for the Tribunal calling for statements of their respective cases from the parties and the disputes would
thus get crystallised before the Tribunal proceeds to
make its award. _On the other hand, it is significant
that there is no procedure provided in the Act or in
the.rules for .the Government ascertaining the particulars of the disputes from the parties before referring them to a Tribunal .under ~ection 10(1).
In veiw of the increasing complexity of modern life
and the interdependence of the various sectors of a
planned national economy, it is obviously in the interest of the public that labour disputes should be peacefully and quickly settled within the frame-work of the
Act rather than by resort to methods of direct action
which are only too well calculated to disturb the
public peace and order and diminish production in
the country, and courts should not be astute to discover formal defects and technical flaws to overthrow
such settlements,
In the result we set aside the order of the High
Court and dismiss the first respondent's petition.
BosE J.- I agree but would have preferred to rest
my decision on the ground that in this case there was
sufficient compliance with the terms of &ection 10(1)
( c) of the Act even on the first respondent's interpretation of it, namely that the words, "the dispute"
require Government to indicate the nature of the
dispute which the Tribunal is required to settle. I
say this because, in my judgment, we must read the
order of the 20th May, 1947, along with the documents which accompani!:lcl ~t. l also agree tha~ O!l(I
•
350
SUPREME COURT REPORTS
(1953)
1952
must not be ovel'-technical, but had it not been for the
State of Jlfadras fact that the point is now settled by the decision in
v.
the India Paper Pulp Company's case(') I would have
c. P. Sarath11 been inclined to consider that an indication of the
and Anolhor. nature of the dispute, either in the order itse If or in
the papers accompanying it, was n~cessary. However,
Patanjali
Sastri c. J. that is now settled and I have no desire to go behind
the decisipn but I would like to say that even if it is
not legally necessary to indicate the nature of the
dispute, it is, in my opinion, desirable that that should
be done.
Appeal allowed.
Agent for the appellant: G. H. Raiadhyaksha.
Agent for respondent No. 1 : S. Subramanian.