Allowed

Kanga and Co. v. State of Maharashtra and 4 Ors.

Bombay HC13 Oct 2006WP/2451/2006

Case brief

AI extract

What is this about?

The High Court quashed an order of reference to adjudication made by the appropriate Government. It held the Government passed the order mechanically without applying mind to whether a prima facie industrial dispute existed between the petitioner firm and the driver, as no evidence of employment was present.

What did the court decide?

The order passed by the appropriate Government making a reference to adjudication on 10th August 2006 was quashed and set aside.

Kanga and Co. Vs State of Maharashtra and 4 Ors. — Labour and Industrial Disputes | Bombay HC (2006)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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O.O.C.J.

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WRIT PETITION NO. 2451 OF 2006

Kanga and Company.

...Petitioner.

V/s.

State of Maharashtra & Ors.

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... Respondents.

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Mr. S.K. Talsania, Senior Advocate with Avinash Jalisatgi i/b Thakore Jariwala and Associates for the Petitioner.

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Dr. Virendra V. Tulzapurkar with Soumya Srikrishna i/b. Shaunak Satpute and Company for Respondent Nos.5.

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Mr. V.P. Vaidya, Amicus Curiae.

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CORAM : DR. D.Y. CHANDRACHUD,J.

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13TH OCTOBER, 2006.

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P.C. :

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Rule, by Consent of Counsel returnable forthwith. Counsel appearing on behalf of the Respondents waive

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service. By consent of Counsel and at their request taken

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up for hearing and final disposal.

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2.	The Pe	titioner i	s a partnership firm of Advocates
and	Solicitors,	con	sisting of fourteen	partners.		The	4th
Respondent	was	engag	ed as a driver in	1991:	ac	cording	to
the	Petitioner,	the	4th Respondent was	engaged	by	the	5th
Respondent	in	his	personal capacity.	The	Petitioner		has
further	averred	that	the 4th Res	pondent	was		driving
vehicles	belonging	to	the 5th Respond	ent	and	to	the

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members	of his	family and his salary as well as	other
benefits	were d	etermined and paid by the 5th	Respondent.
There	was, acc	ording to the Petitioner no	employer
employee	relations	hip or any privity of contract	between
the Pet	itioner and	the 4th Respondent. The 4th	Respondent
is a	lleged to	have taken a loan of Rs.20,000/- fro	m the
5th	Respondent,	in connection with which, a	promissory
note	was ex	ecuted on 27th March 2002 acknowledging	that
the	5th Res	pondent was his employer and authorising	the
employer	to ded	uct an amount of Rs.1,000/- per mo	nth from
his	salary.	The Petitioner has stated before the	Court
that	the Firm	employs about 64 employees	besides
Advocates,	Solicitors	and Associates; that the	firm
maintains	statutory	records such as Wage Registers	and
that	all emplo	yees of the firm, since many years,	have
been	members	of the Mumbai Mazdoor Sabha, a trade	union
registered	under	the Trade Unions Act, 1926.	The
Petitioner	has av	erred that settlements or agreement	s have
been	entered in	to by the said Union in respect	of the
general	conditions	of service of the employees. The	4th
Respondent	was	never, it has been stated, a member	of the
Mumbai	Mazdoor	Sabha nor has he obtained the bene	fit of

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any settlement signed between the Petitioner and the said

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Union.

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the 4th Respondent had driven the car into a road divider railing. The 4th Respondent moved the Conciliation Officer and a notice was issued to the Petitioner on 18th October 2004. In his demand, made before the Conciliation Officer, the 4th Respondent claimed to be an employee of the Firm. It may be noted that the notice of demand dated 13th August 2004 is addressed to the Firm describing it as a proprietory concern of the 5th Respondent. By a letter dated 10th December 2004, the Petitioner placed on record its response in the conciliation proceedings and recorded that the 4th Respondent had failed to furnish any documentary evidence whatsoever to substantiate his allegation that he was in the employment of the Firm. The letter recorded that the 4th Respondent was engaged personally by the 5th Respondent who is a partner of the firm as a driver and that he was only driving the personal vehicle of the 5th Respondent. A reference was made to the fact that the 4th Respondent had borrowed some money which he had failed to pay. The Petitioner recorded that the 4th Respondent had not produced any salary statement, a letter of appointment or provident fund statement. There was according to the Petitioner no documentary evidence showing that the fourth Respondent was a member of the Mumbai mazdoor Sabha which is a recognized union of the employees of the Firm. 4. The Conciliation Officer submitted his report under Section 12(4) of the Industrial Disputes Act, 1947 on 14th

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March		2005.	The	reafter,	the	Deputy	Commissioner	of Labour
by	an	order	dated	10th	August	2006	referred the	dispute to

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adjudication in exercise of powers conferred by Section

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12(5) of the Industrial Disputes Act, 1947.

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These proceedings have been instituted inter-alia

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in order to challenge the order of reference made under

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Section 12(4), to adjudication.

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On behalf of the Petitioner it has been submitted

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that the po	wer of the appropriate Gov	ernment	to		refer	a
dispute to adj	udication must be exe	rcised	up	o	n	due
application of	mind to the question as	to		w	hether	an
industrial dispute	exists or is appreh	ended.			In	the
present case	it was submitted that the	4th	R	es	pondent	has
not produced	any evidence or material	to	indicat	e	tha	t he
was an empl	oyee of the Petitioner.	S	ome		of	the
circumstances to	which a reference has	been	made		in	the
letter dated 2nd	December 2004 of the	Petiti	oner		have	been
placed before	the Court for consideration	and	it		has	been
urged that the	name of the 4th Respond	ent i	s no	t		brought
on the Wag	e Register, muster or any		statuto	ry		records
maintained by th	e Firm in the ordinary	cou	rse	o	f	business.
In these circumst	ances, it was submitted	that	the		orde	r of
reference that	has been passed	by	the		Ap	propriate

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Government was passed mechanically without application of

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mind and should be quashed and set aside.

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7.		Notice was i	ssued in t	he Petition o	n 4th Octob	er
2006	for	hearing	an	d final	disposal,	at the	stage	of
admission.		The	4th	Respondent	appeare	d in	person.	In
order	to	enable	the	Court	to be	assisted,	Shri	V.P.

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Vaidya, Counsel practising in this Court was appointed as

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amicus curiae.

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8.	The power of the appropriate Gov	ernment to make	a
reference	under Section 12(5)	of the	Industrial	Disputes
Act,	1947 arises upon a	report	submitted by	the
Conciliation	Officer under	Section	12(4).	Under
sub-Section	1 of Section 12,	the Co	nciliation Officer	is
obligated	to hold conciliation	pr	oceedings where	an
Industrial	Dispute exists or	is	apprehended.	Under
sub-Section	2 of Section 12	the Con	ciliation Officer	has
to e	ndeavour to bring about	a settle	ment of the	dispute
and if	any settlement is arr	ived at,	a memorandum	of
settlement	together with the	report ther	eon is to	be
submitted	to the appropriate	Governm	ent under su	b-Section
3.	In the event that no	settlement	is arrived at	, a
report	is to be submitted	to the	Appropriate Go	vernment
under	Sub-Section 4 of Sect	ion 12.	The Co	nciliation
Officer	has to state what s	teps were	taken by him	for
ascertaining	the circumstances a	nd facts	relating to	the
dispute	and for bringing about	a settle	ment thereof.	In
other	words, an enquiry by	the Con	ciliation Officer	into

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the f	acts and	circ	umstances	relating			to the	dispute
meaning	thereby,	the	Industrial	Dispute		is	necessit	ated by
the	provisions	of	Section	12 of	the		Industrial	Disputes
Act,	1947.	Pro	ceedings	before	the		Conciliation	Officer
are	in fact	initiated	upon	an In	dustrial		dispute	being in
existence	or	being	ap	prehended.			The	Appropriate
Government	is	empow	ered to	mak	e	a	referen	ce to
adjudication	if on	a	considera	tion of	t	he	record	submitted
under	sub-Section	4	of Se	ction 12,	it		is satisfied	that

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there is a case for a reference inter-alia to the Labour

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Court or Tribunal.

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9.	The	Jurisdiction	of the	Appropria	te governme	nt
under	Section	12(5)	came	up	for the	consideration	of	the
Supreme	Court	in St	ate of	Bomb	ay V/s.	K.P.	Krishnan	AIR
1960	Supreme	Court	1223	Mr.	Just	ice P.B.	Gajendr	agadkar
(as	the	learned	Chief	Justice	then	was), speaking	for	a

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Bench of five Hon’ble Judges of the Supreme Court held

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thus :-

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"	There is	no doubt that having regard to the
backgrou	nd furn	ished by the earlier provisions
of	Section	12 the appropriate Government would
naturally	c	onsider 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 Section 12(5) do not
suggest	that	the report is the only material
on	which	Government must base its conclusion.
It w	ould be	open to the Government to consider
other	relevant	facts which may come to its
notice,	and	it is in the light of all these
relevant	facts	that it has to come to its
decision	whether	a reference should be made or
not.	The	problem which the Government has to

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consider while acting under Section 12(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 comes to the conclusion that a
prima facie case for reference has been made
then it would be open to the Government also
to consider whether there are any other
relevant or material facts which would justify
its refusal to make a reference. The question
as to whether a case for reference has been
made out can be answered in the light of all
the relevant circumstances which would have a
bearing on the merits of a case as well as on
the incidental question as to whether a
reference should nevertheless be made or not.
A discretion to consider all relevant facts
which is conferred on the government by
Section 10(1) could be exercised by the
Government even in dealing with cases under
Section 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 Section 12(5) is complied
with."

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10.		The duty	of the appr	opriate Government	there	fore,
as	the	Supreme	Court	holds,	is	to		con	sider	the
Conciliati	on	report	caref	ully and	treat	it	a	s	furn	ishing
relevant	ma	terial	which	would enab	le	the		govern	ment	to
decide	whet	her a	case	for making	a	refer	ence	is	made	out.
It	is	open	to the	Government	to	consi	der	other	r	elevant
facts	which	may	come	to its knowl	edge	and	whic	h	may	be
brought	to	its	notice.	The Gov	ernm	ent	has		to	decide
whether	a	prima	facie	case for a	re	ference	is	ma	de out	on
merits	and	then	to	consider whet	her	any	ot	her	relevant	or
material		facts	would	justify a		referenc	e	to	adjudi	cation.
Undoubte	dly,	at	the	stage when	t	he	approp	riate	Gove	rnment
decides	whethe	r to	refer	the matte	r	to	adjud	icatio	n, it	is
neither	appro	priate	nor	proper for		the		Gover	nment	to

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launch	into a	detailed	evalu	ation		of	the	merits of the
claim.	However,	this	does	no	t	pre	clude	the Government
from	considering	prima	facie	as		to	whet	her an Industrial
Dispute	exists	or is	appreh	ended	.		On	the contrary, the
law	laid down	by the	Supre	me		Court	shou	ld warrant a prima
facie	consideration.	The	same	vi	e	w	which	was expressed in
K.P.Krish	nan’s case	was	r	eiterat	e	d	in	the subsequent
Judgment	of t	he Sup	reme			Court	in	M.P. Irrigation

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Karmachari Sangh V/s. State of M.P. AIR 1985 S.C. 860

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where the Supreme Court held thus :-

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" Th	erefore,	while	conced	ing a		very limited
jurisdiction	to	the		State		Government to
examine	patent	frivolous	ness	of	the	demands,
it is	to be	under	stood	as	a	rule, that
adjudication	of dem	ands	made	by		workmen should
be left	to the	Tribunal	to	decide.		Section 10
permits	appropriate		gover	nment	to	determine

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whether dispute ‘exists or is apprehended’ and then refer it for adjudication on merits."

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Finally, it would be necessary to advert to the

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Judgment	in Nati	onal	Engine	ering	Indust	ries V/s.		State of
Rajasthan	(2000)	1	Suprem	e	Court	Cases	371.	While
considering	the		ambit	of	the	jurisdiction	under	Article
226 of	the	Co	nstitution	of	India,	where	there	is an

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allegation that there was no industrial dispute and none

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was apprehended, the Supreme Court observed thus :-

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" It	will	be thus seen	that the	High Cou	rt has
jurisdiction	to	entertain	a Writ	petition	when
there	is	an allegation	that	there is	no
industrial		dispute and	none	apprehended	which
could	be	the subject-m	atter of	reference	for
adjudication		to the	Industrial	Tribunal	under
Section	10	of the Act.	Here	it is a	question
of	jurisdic	tion of	the Ind	ustrial	Tribunal,
which	could	be examined	by the	High Court	in

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its writ	jurisdicti	on.	it	is	the exi	stence of
the	Industrial	Tr	ibunal	(sic	dispute)	which
would power to	clothe make	the the	appropria referen	te ce	Government and the	with Industrial
Tribunal	to	adjudicate	it.	If	there	is no
industrial	dispute	in	exis	tence	or	apprehended
the appropriate any reference."	Government la	cks power to	make

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During the course of the hearing of these

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proceedings	, it has	been submitted	before	the	Court	that
the	Petitioner has	64 employees and		the	workmen	have
joined	the Mumbai	Mazdoor Sabha	with	wh	ich sett	lements
under	the Industrial	Disputes Act,	1947	have	been	entered
into	from time to	time. It has	been	subm	itted that	the
4th	Respondent was	an employee of	the	5th	Respondent,	who
is a	Partner, in	his personal	cap	acity;	the	4th
Respondent	was engag	ed as a driver	to	drive	the p	ersonal
vehicles	of the 5t	h Respondent	and	that	even	the
promissory	note execu	ted by the		4th	Respondent	for
repayment	of the	sum of Rs.20,000	/- a	ffirms	this	factual
position.	During	the course of th	e h	earing	the Court	has
enquired	with the	learned Amicus	Curiae	as	to	whether
there	is material	available with the	4th		Respondent	to
atleast	prima facie	show the rela	tionship	of	employer	and
employee	with the	Petitioner. On	the	instr	uctions of	the
4th	Respondent, the	Court has been	inf	ormed	that there	is
no su	ch material.	No the salary	slip	iss	ued by	the
Petitioner	or any	material to indic	ate	that	the P	etitioner
has	engaged the	4th Respondent as	a	driver	is pr	oduced.
The	Petitioner had	in fact placed	the	releva	nt facts	in
the	course of	conciliation proceedin	gs	inter-alia	in	its

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letter	dated	10th D	ecember 2004. The app	ropriate
Government	was	under	an obligation by virtue of	the
provisions	of	sub-Section	5 of Section 12 to apply	its
mind	carefully	to the	question as to whether prima	facie,
an	industrial	dispute	exists between the Petitioner	and
the 5th	Respo	ndent.	On the facts as they stand it	is
impossible	to	come to	the conclusion that any in	dustrial
dispute	exists	or	is apprehended between the Pe	titioner
and	the 4th	Respondent.	There is absolutely no	material
to indicat	e that	the 4th	Respondent was an employee of	the
Petitioner.	Th	e order	passed by the app	ropriate
Government	makin	g a	reference under Section 12(5)	was
passed	mechanicall	y witho	ut any application of	mind
whatsoever	to	the ques	tion as to whether a prima	facie
case for	reference	has bee	n made out. The order passed	by
the	appropriate	Govern	ment is hence unsustainable.	The
jurisdiction	of	the Co	urt under Article 226 of	the
Constitution	of	India	in such matters is indeed	limited
and	as the	Supreme	Court observed in National Engi	neering
Industries,	the	limited	nature of the jurisdiction is	to
examine	whether	a dispu	te exists or is apprehended;	and
whether	the	reference	has been made after gov	ernment
applied	its min	d to	the case. It is clear that	the
present where	case the in	falls terference	within an exceptional class of of this Court under Article 226	cases of