STATE OF MADRAS versus C. P. SARATHY AND ANOTHER

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 the Court of the Third Presidency Magistrate, Madras, a~ainst the fi~st respondent who .is the m~nagi~g director of a cmema company carrymg on busmess m Madras under the name of "Prabhat Talkies."' •

pp. 336–337

The proceeding arose out of a charge-sheet filed by the police against the first respondent. for an offence under section 29 of the Industrial Disputes 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.

p. 337

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. .

p. 337

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 November, 1946, the Association submitted to the Labour Commissioner of Madras, who had also been appointed as the Conciliation Officer under the Act, a 111em6rand um setting forth certain demands against the employers for increased wages and dearness allowance, annual bonus of three months' wages, increased leave facilities, provident fund, and adoption of proper 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 enumerating the ten demands put forward by the employee~, the Tjabour Commissioner stated as follows:-

pp. 337–339

" 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 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."

p. 339

Thereupon the Government issued the G. 0. M. S. No. 2227 dated 20th May, 1947, in the following terms:

p. 339

"Whereas an industrial dispute has arisen between the workers and managements of the cinema talkies in the Madras City in respect of certain matters ;

p. 339

And whereas in the opinion of His Excellency the Governor of Madras, it is necessary to refer the said industrial dispute for adjudication;

p. 339

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.

p. 339

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.

p. 339

The Commissioner of Labour is requested to send copies of the order to the managements of cinema. talkies concerned," - · ....

p. 339

·The Tribunal sent notices to all the 24 ci~ema com.panies in the City and to the Association calling upon them to file sta~ements of their respective cases

p. 340

and to appear before it on 7th July,_1947. Pleadings Anolh.r·,~were accordingly filed on both sides and the Tribunal framed as many as 22 issues of which issue (3) is 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 Tribunal for adjudication ? Whether such an objec-. tion is tenable in law?" - - .: - . - -

p. 340

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: _ . _ .. -. -

p. 340

"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." · ·

p. 340

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 . . the first respondent failed to implement certain provisions of the award when their implementation was due and thereby committed an offence punishable under section 29 of the Act.

pp. 340–341

No prosecution, however, was instituted till 24th April, 1950, as, in the meanwhile, certain decisions of the Madras High Court_ tended· to throw doubt on 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

p. 341

disputes are said· to ha"l'.e existed or .were appre- • pended; and thirdly, the Madras Amendment Act was unconstitutional arid void under section 107 of the Government of India· Act, 1935, being repugnant to

pp. 341–342

h · · · f h · C · t J I d · 1 D" t - t e prov1s10ns o - t e en ra n ustna ISpu es Act, 1947,· and also void under article 13 (1) read with .article 14 of the _ Constitution as being . discriminatory in character; The- learned.Judges, by separate .lmt concurring judgments, , upheld. these 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 • before evidence ·was recorded by the trial court. He submit~ed, however, that, on the facts already appearing on the record, there could be no reasonable doubt that an industrial dispute did exist at "the relevant time. We are inclined to agree. The ten demands set f6rth in the Labour Commissioner's letter of the 13th Mav, 1947, which were not agreed to by 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:

pp. 342–343

"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."

p. 343

This, we think, is based on a misapprehension of the true facts. he 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 by the Association. The Commissioner's letter of the 13th May, 1947, made this clear.

pp. 343–344

But, m truth, it was not material to consider whrither there was any dispute outstanding between the first respondent and his employees when the Government made the reference on 20th May, 1947. The learned Judges appear to have assumed that the disputes 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, having regard to their collective nature, well be apprehended as imminent iu respect of that establishment also. It is not denied that notices were sent by the Tribunal to all the '24 companies and they all fi1ed written statements of their case in answer to the demands made by the Association on behalf of the

pp. 344–345

. . . 'dl l . employees. In these circumstances, it is e to c aim 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.

p. 345

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.( 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( 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

p. 345

78~. !•J ~1949.50)

p. 345

decisions of this Court exemplified in the cases re- !erred to by me above has not been overruled by their L h' h F a 1 c ,

p. 346

ords 1ps oft e e era ourt.' Basheer Ahmed Sayeed J., however, sought to distinguish the decision of the F_ederal Court on the facts of that case, remarking" that a reading of the order of reference that was the subject-matter of th.e Federal Court decision conveys a clear idea as to a definite dispute, its 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:

p. 346

"'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.''

p. 346

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 material before the Government to support its conclusion, as if it was a judicial or quasi-judicial determi-

pp. 346–347

. N d b 't 'llb k" nation. o · ou t, w1 e open to a party see mg to impugn the resulting award to show that what Was referred by the Government was not an industrial dispute within the meaning of the Act, and that, therefore, the. 'fribunal had no jurisdiction to 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.

p. 347

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 suffi- 9ient knowledge of the n..ature 9£ the dispute to ~(} ~~ . 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 obtigation can be held to lie on th(l Government to ascertain particulars of the disputes before making a reference under section 10 (1) or to specify them in the order. .

pp. 347–348

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 Automobile Association's case (1), and it would involve no hardship if the reference al~o is ~ade in wider terms provided, of course, the dispute is one· of the kind described in section 2(k) and the parties between whom such dispute has actually -arisen or is apprebended in the view of the Government are indicated either individual!~ or collectively with reasonable 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).

pp. 348–349

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,

p. 349

In the result we set aside the order of the High Court and dismiss the first respondent's petition.

p. 349

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~ must not be ovel'-technical, but had it not been for fact that the point is now settled by the decision in the India Paper Pulp Company's case(') I would have been inclined to consider that an indication of nature of the dispute, either in the order itse If the papers accompanying it, was n~cessary. However, that is now settled and I have no desire to go the decisipn but I would like to say that even if not legally necessary to indicate the nature dispute, it is, in my opinion, desirable that that be done.

pp. 349–350

Appeal allowed. Agent for the appellant: G. H. Raiadhyaksha. Agent for respondent No. 1 : S. Subramanian.

p. 350