ENGINEERING STAFF UNION Vs. STATE OF BOMBAY

JUDGEMENT

(1.) THIS appeal raises some important questions as to the interpretation of S. 12 (5) of the Industrial Disputes Act, and we have listened to a very able argument from Mr. Phadke about the manner in which that section should be construed. It appears that the first appellant which is a union of workers who were employed in the second respondent company made certain demands on 27-3-1956 and as these demands were not accepted by the second respondent company, an application was made to the Conciliation Officer on 6-4-1956. After some preliminary discussions between May and September 1956 conciliation proceedings commenced and ultimately, as unfortunately so often happens in labour disputes, they failed. The Conciliation Officer made a report under S. 12 on 2-4-1957. On the 30th of July 1957 Government referred to adjudication certain items in the disputes. But they refused to refer certain other items and on 14-8-1957 the Government communicated to the parties the reasons for their refusal. Now, the items which the Government refused to refer were ten. They dealt with pay scales, confirmation, provident fund, additional gratuity, leave, overtime payment, uniforms, allowance, standing orders and the case of one Mr. Ferns. On receiving this intimation, the first appellant and the second appellant, who is an employee of the second respondent company, presented this petition for a writ of mandamus to compel the Government to refer these matters for adjudication. Mr. Justice K. T. Desai issued a limited Writ of Mandamus calling upon the Government to reconsider their decision with regard to the question of provident fund and sick leave. With regard to the rest of the matters, he held that it was not open to the court to interfere with the decision arrived at by the Government. It is against this decision that this appeal is preferred.

(2.) NOW, before we go to the merits of the matter, it is necessary to look at the section and to consider what is the obligation of Government under that section. The section came up for consideration in Firestone Tyre and Rubber Co. of India Ltd. v. K. P. Krishnan, 57 Bom LR 1138: (AIR 1956 Bom 273), and in that judgment we pointed out that the expression 'may' referred to in S. 12 refers to a duty imposed upon Government and that, although the Government undoubtedly had been given the power to make a reference, that power had been coupled with a duty and the duty was that if on a perusal of the report Government was satisfied that there was a case for reference, the duty imposed upon it clearly arose and the Government could not refuse to discharge that duty. We also pointed out that the next part of sub-s. (5) made it obligatory upon Government, when it did not make a reference, to record and communicate to the parties concerned its reasons therefor. We were at pains to observe that it was perfectly true that the reasons given by the Government were not justiciable in the sense that the Court would not consider the weight or value or the quality or even the adequacy of the reasons given by the Government; but we pointed out that it was equally clear that the reasons which the Government had to give under this sub-section were reasons connected with the perusal of the report and with Government not being satisfied that there1 was a case for reference. It was observed that it was because Government was not satisfied that there was a case for reference that the duty to refer did not arise and what the Legislature required was that Government must give reasons why it was not satisfied that there was a case for reference. It was under these circumstances that we came to the conclusion that the reasons must be connected with the failure on the part of the Government to be satisfied that there was no case for reference. We, therefore, decided what our power in this case was by observing that it was equally clear that if the reasons had no connection, no bearing and no relevance to this question, then they were not reasons at all contemplated by sub-s. (5) and if they were not reasons contemplated by sub-s. (5), then it would be open to the Court to ask Government to give proper reasons which the law required by sub-s. (5 ). One further observation may be noted:

(3.) NOW, this matter has been further elaborated in this case by Mr. Phadke and his first contention is that it is not open to Government to refuse to refer a matter by deciding the matter themselves. According to him, it is only in a limited class of cases that Government could exercise its powers of not referring a matter for adjudication; and he contends that to the extent that refusal to refer is connected with the merits of the dispute, it is only when ' the Government comes to the conclusion that the demands made by the workers are frivolous or they are such as no reasonable Tribunal could possibly entertain, that Government can refuse to refer the matter for adjudication. Therefore, according to Mr. Phadke, if the reason given by Government suggests that in exercising their power, they have considered the merits of the matter and have satisfied themselves that on merits the workers had no case, then they are giving a reason which is not a reason contemplated by sub-s. (5 ). Mr. Phadke uses a rather impressive expression that a distinction must be drawn between deciding a dispute and deciding whether a dispute should be referred to arbitration; and according to him the power of Government is merely to decide whether the dispute should be referred and not to decide the dispute itself. According to him, the Legislature has set up competent Tribunals to decide disputes between the workers and the employers and under sub-s. (5) of S. 12, it is not the function of the Government! to arrogate to themselves the power of industrial Tribunals. Now, in considering this matter, we must not overlook the important object of this legislation and that object is to maintain peace in industry and to bring about good and friendly relations between employers and employees. Section 12 comes into operation only after there is a failure in the conciliation proceedings and if Mr. Phadke's contention were to be accepted, the result would be obvious that however intractable the attitude taken up by the workers may be in the conciliation proceedings, when these proceedings fail by reason of that intractability, the Government was bound to refer the dispute for adjudication and it did not have the power to consider whether the offer made by the employer in the conciliation proceedings was a fair and reasonable offer or whether the demands made by the employees were unreasonable demands. To take that view of the matter would be to make the provisions of S. 12 entirely nugatory. It is true, as again pointed out by Mr. Phadke, that under the Industrial Disputes Act, the Government may itself be an employer and Mr. Phadke says that to assume that the Government has the power to go into the merits of a dispute would lead to serious prejudice being caused to the workers when the dispute is between the workers on the one hand and the Government as the employer on the other band. Now, the fallacy underlying this argument is that the "appropriate Government" referred to in S. 12 (5) is not the Government which is acting as an employer in a particular case. That Government is the executive power of the State and when the Legislature entrusts certain power to Government it does so in the hope and expectation that that power would be exercised in the interest of the people at large. When Government is functioning under S. 12 (5) it is not functioning in the interest of employers or of employees. It is functioning in the interest of industrial peace and in order to bring about a fair and equitable settlement in the dispute between the parties. Therefore, we refuse to assume that in any dispute even in a dispute to which Government as employer is a party Government would not act with that sense of duty and responsibility which the Legislature required of it. It would be improper and in our opinion contrary to the plain language of the section to cut down the power of Government in the manner suggested by Mr. Phadke. It is open to Government and indeed it may be the duty of Government to consider in each case whether conciliation has failed and whether the demands of the workers are such as required adjudication. Not only when the demands are frivolous such as reasonable people would not put forward but even if they are not justified, even if they are not appropriate in the context of the times or in the context of financial conditions, it would be open to Government not to refer the disputes to adjudication. To suggest that in any decision of Government, the 'element of decision should be absent is to make S. 12 (5) entirely nugatory. Even in the case given by Mr. Phadke, if Government were to come to the conclusion that certain demands were wholly unreasonable or frivolous, even in that conclusion there would be inevitably an element of decision. In this connection, question arises whether the only material which the Government is entitled to consider under S. 12 (5) is the report made by the Conciliation Officer. The language of the sub-section is: