Dismissed

The Engineering Mazdoor Sabha Representing Workmen Employed Under the Hind Cycles Ltd. and Another v. the Hind Cycles Ltd., Bombay

Supreme Court18 Oct 19621962 INSC 292 · [1963] SUPP. 1 S.C.R. 6251962 INSC 292

Case brief

AI extract

What is this about?

Voluntary industrial arbitrators under s. 10A of the Industrial Disputes Act were held not to be Tribunals under Article 136, as their adjudicatory power derives from party agreement, not State judicial power; appeals against their awards are incompetent and were dismissed.

What did the court decide?

Preliminary objection upheld; appeals dismissed as incompetent under Article 136; costs awarded to respondents in C.A. No. 204 of 1962, no order on costs in C.A. Nos. 182 and 183 of 1962.

What the court decided

The Engineering Mazdoor Sabha Representing… — Labour and Industrial Disputes | Supreme Court (1963)

¶1

1962

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I S.C.R. SUPREME COURT REPORTS 625

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THE ENGINEERING MAZDOOR SABHA REPRESENTING WORKMEN EMPLOYED UNDER THE HIND CYCLES LTD. AND

Octolllr, 18

ANOTHER

THE HIND CYCLES LTD., BOMBAY

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(And Connected Appeal)

¶9

(B. P. SINHA, c. J., P. B. GAJENDRAGADKAR,

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K. N. WANCHOO, K. C. DAfl GUPTA and

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J. c. SHAH, JJ.)

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Industrial Dispute-Reference to arbitration by "!l"'ement of parties-Arbitration award--Appeal by special leave-Competence-Industrial Disputes Act, 1947( 14 of 1947). ss. 10,IOA,18-0onstitution of India, Art. 136.

¶13

The dispute between the respondent company and its workmen was voluntarily referred to arbitration by their agreement dated December 3, 1959, under s. JOA of the Industrial Disputes Act, 1947. Section IOA(2) prescribed the form of agreement which required that the parties should state that they had agreed to refer the subsisting industrial dispute to the arbitration of the persons tu be named in the form. Section 18(2) provided that the arbitration award shall be binding on the parties to the agreement. The arbitrator named by the parties entered upon the reference on December 14, 1959, and pronounced his award on April 8, 1960. The appellants seeking to challenge the validity of the award applied for and obtained special leave to appeaJ to the Supreme Court against the decision of the arbitrator. The respondent pleaded that the appeal was not competent because the arbitrator was not a tribunal under Art. l 36 of the Constitution of India.

¶14

HeU, that the decision of an arbitrator to 'vhom industrial disputes are voluntarily referred under s. lOA of the Industrial Disputes /\ct, 1947, is quasi-judicial in character and amounts t.o a dete~mination or or_der under Art. 136(1) of the Constltut1on of India, but the arbitrator is not a tribunal within the meaning of that Article because the State has not invested hhn with_ its inherent judicial _power and the power of adjud1cat10n which he exercises is denved by him from the agreement of the parties. Consequently, an appeal against the decision of an arbitrator under s. JOA of the Act does not lie under Art. 136 of the Constitution.

¶15

626 SUPREME COURT REPORTS (1963] SUPP.

¶16

1962

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1962 Bharat Bank Ltd., Delhi v. Employees of the Bharat Bank Ltd., Delhi, [1950] S.C.R. 459, Province of Bombayv. Ku.salda. l11g:~ng Ma;:door Sabha 8. Advani & Others, [1950] S. C.R. 621 and Durga 8hankar v. Mehta v. 1'hakur Raghuraj Singh, [1955] l S. C.R. 267, relied Hind C.vcles ltd., on, Bombay

¶18

8emblc, Art. 22G of the Constitution of India under which a writ of certiorari can be issued in an appropriate case is wider than Art. 136 because the power conferred on the High Court to issue certain writs is not conditioned or limited by the requirement that the said writs can be issued only against the orders of courts or tribunals.

¶19

CrvIL APPELLATE JURISDICTION : Civil Appeals Nos. 182 and 183 of 1962.

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Appeal by special leave from the Award dated April 8, 1960, of the Arbitrator, Bombay. Civil Appeal No. 204 of 1962 .

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.;\ppeal by special leave from the Award dated August 27, 1961, of the Arbitrator, Coimbatore.

¶22

K. T. Sule and K. R. Ohvudhri, for the appellants (in G.A. Nos. 182 and 183 of 1962).

¶23

0. K. Daphtary, SoUcitor-General of India, S. K. Bose and Sardar Bahadur, for the respondent (in C. A. Nos. 182 and 183of1962).

¶24

G. B~ Pai, J.B. Dadaclumji, 0. 0. Mathur and Ravinder Narain, for the appellant (in C.A. No. 204 of 1962).

¶25

A. 8. R. Ohriri, JY!. K. Ramamurthi, R. K. Garg, D. P. Singh and 8. 0. Agarwala, for the respondents (in C. A. No. 204 of 1962).

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October 18. The Judgment of the Court was delivered by

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Gajlndragadkar, J,

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GAJENDRAGADKAR, J.-These three appeals have been placed for hearing together because the respective respondents in the said appeals have raised the same preliminary objection against their competence. Civil Appeals Nos. 182 and 183/1962 have

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1 S.0.R. SUPREME COURT REPORTS

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627

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l96f

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been filed against the award pronounced by Mr. D.V. Vyas on April 8, 1960, in a dispute between the appellants, the Engineering Mazdoor Sabha & another, and the respondent The Hind Cycles Limited, Bombay. This dispute was voluntarily referred to Mr. Vyas under s. IOA of the Industrial Disputes Act, 1947 (No. 14 of 1947) (hereinafter called the Act), by the parties by their agreell)ent .of December 3, 1959. The Arbitrator entered upon the reference on December 14, 1959, and pronounced his award on April 8, 1960. By their appeals, the appellants have challenged the validity and the propriety of the said award on several grounds and the appeals have been brought to this Court by special leave. The respondent contends that the arbitrator whose award is challenged was not a Tribunal under Art. 136 of the Constitution and so, an appeal by special leave is not competent.

¶33

EngiTl(ering Mar..doo Sob.ha v. Hind Cycles Ltd., Bombay

¶34

Gajendragadkar, J,

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Civil Appeal No. 204/1962 has been filed by the appellant, the Anglo-American Direct Tea Trading Co. Ltd., against the respondents, its workmen, and by its appeal, the appellant seeks to challenge the validity and the correctness of the a ward pronounced by Dr. T. V. Sivanandam to whom the dispute between the parties was voluntarily referred under s. IOA of the Act. The award was pronounced on August 27, 1961, and by special leave the appellant has come to this Court. The respondents urge that the appeal is incompetent because the arbitrator is not a Tribunal under Art. 136 of the Constitution. That is how the question which arises for our decision on these preliminary objections is whether an arbitrator to whom parties have voluntarily referred their disputes for arbitration is a Tribunal under Art. 136.

¶36

Article 136(1) provides that notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or

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1962

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628 SUPREME COURT REPORTS [1963] SUPP.

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i'!ngine1;ing Mazdoor Sabha v. Hind 0_.,e/~J Ltd., Bombay Gajendr9gudkar, J.

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order in any cause or matter passed or made by any court or tribunal in the territory of India. Sub-article (2) excludes from the scope of sub-Art. (1) any judgment, determination, sentence or order passed or made by any court or tribunal constituted by or under any law relating to the Armed Forces. It is clear that Art. 136(1) confers very wide powers on this Court and as such, its provisions have to be liberally construed. The constitution-makers thought it necessary to clothe this Court with very wide powers to deal with all orders and adjudications made by Courts and Tribunals in the territory -of India in order to ensure fair administration of justice in this country. It is significant that whereas Arts. 133(1) and 134 (1) provide for apPeals to this Court against judgments, decrees or final orders passed by the High Courts, no such limitation is prescribed by Art. 136(1). All Courts and all Tribunals in the territory of India except those in cl. (2) are subject to the appellate jurisdiction of this Court under Art. 136(1). It is also clear that whereas the appellate jurisdiction of this Court under Arts. 133(1) and 134(1) can be invoked only against final orders, no such limitation is imposed by Art. 136( 1 ). In other words, the appellate jurisdiction of this Court under this latter provision can be exercised even against an interlocutory order or decision. Causes or matters covered by Art. 136( 1) are all causes and matters that are brought for adjudication before Courts or Tribunals. The sweep of this provision is thus very wide. It is true that in exercising its powers under this Article, this Court in its discretion refuses to entertain applications for special leave where it appears to the Court that interference with the orders sought to be appealed against may not be necessary in the interest of justice. But the limitations thus introduced, in practice, are the limitations imposed by the Court itself in its discretion. They are not prescribed by Art. 136(1). For invoking Art. 136 \1) .. two conditions must be satisfied. The proposed appeal must be from any

¶41

629

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1 S.C.R. SUPREME COURT REPORTS

¶43

judgment, decree, determination, sentence or order, that is to say, it must not be against a purely executive or administrative order. If the determination or order giving rise to the appeal is a judicial or quasi-judicial determination or order, the first condition ls satisfied. The second condition imposed by the Article is that the said determination or order must have been made or passed by any Court or Tribunal in the territory of India. These conditions, therefore, require that the act complained against must have the character of a judicial or quasi-judicial act and the authority whose act is complained against must be a Court or a Tribunal. Unless both the conditions are satisfied, Art. 136 (1) cannot be invoked.

¶44

1962

¶45

Entiam~Mw/MI v. Hi.J Cnlu LU., s ... ,,.,

¶46

The distinction between purely administrative or executive acts and judicial or quasi-judicial acts has been considered by this Court on several occasions. In the case of Province of Bombay v. Kusaldas s. Advani, (1) Mahajan, J., observed that the question whether an act is a judicial or a quasi-judicial one or a purely executive act depends on the terms of the particular rule and the nature, scope and effect of the particular power in exercise of which the act may be done and would, therefore, depend on the facts and circumstances of each case. Courts of law established by the State decide cases brought before themjudicially and the decisions thus recorded by them fall obviously under the category of judicial decisions. Administrative or executive bodies, on the other hand, are often called upon to reach decisions in several matters in a purely administrative or executive manner and these decisions fall clearly under the category of administrative or executive orders. Even Judges have, in certain matters, to act administratively, while administrative or executive :iuthoities may have to act quasi-judicially in dealing with some matters entrusted to their jurisdiction. Where an authority is required to act judicially either (I) [ll I. C.R. 6.'ZI.

¶47

630 SUPREME COURT REPORTS [1963) SUPP.

¶48

1962

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1962 by an express provision of the statute under which it E11gineeri_ng M<Wloor acts or by necessary implication of the .said statute, Hind Cycles. Sabha v. Ltd., the decisions ofsuch to quasi-judicial decisions. Where, an authority generally amount however, the

¶50

Bombay executive or administrative bodies are not required to Gajendragadka1, J ~ act judicially and are competent to deal with Issues referred to them administratively, their conciusions cannot be treated as quasi-judicial conclusions. No doubt, even while acting administratively, the authorities must act bonafide; but that is different from saying that they must act judicially. Bearing in mind this broad distinction between acts or orders which are judicial or quasi-judicial on the one hand, and administrative or executive acts on the other, there is no difficulty in holding that the decisions of the arbitrators to whom industrial disputes are voluntarily referred under s. lOA of the Act are quasi-judicial decisions and they amount to a determination or order under Art. 136 (1). This position is not seriously disputed before us. What is in dispute between the parties is not th.e character of the decisions against which the appeals have been filed, but it is the character of the authority which decided the disputes. The respondents contend that the arbitrators whose awards are challenged, are not Tribunals, whereas the appellants contend that they are.

¶51

Article 136(1) refers to a Tribunal in contradistinction to a Court. The expression "a Court" in the technical sense is a Tribunal constituted by the State as a part of ordinary hierarchy of courts which are invested with the State's inherent judicial powers. The Tribunal as disfmguished from the Court, exercis-:s judicial powers and decides matters brought before it judicially or quasi-judicially, but it does not constitute a court in the technical sense. The Tribunal, according to the dictionary meaning, is a seat of justice; and in the discharge of its functions, it shares some of the characteristics of the court. A domestic Tribunal appointed in departmental proceedings, for

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1 S.C.R. SUPREME COURT REPORTS 631

¶53

1962

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instance, or instituted by an industrial employer cannot claim to be a Tribunal under Art. 136(1). Purely administrative Tribunal~ are also outside the scope of the said Article. The Tribunals which are contemplated by· Art. 136(1) are clothed with some of the powers of the courts. They can compel witnesses to appear, they can administer oath, they are required to follow certain rules of procedure; the proceedings before them are required to comply with rules of natural justice, they may not be bound by the strict and technical rules of evidence, but, nevertheless, they must decide on evidence adduced before them; they may not be bound by-other technical rules of law, but their decisions must, nevertheless, be consistent with the general principles of law. In other words, they have to act judicially and reach their decisions in an objective manner and they cannot proceed purely administratively or base their conclu>ions on subjective tests or inclinations. The procedural rules which regulate the proceedings before the Tribunals and the powers conferred on them· in dealing with matters brought before them, are sometimes described as the 'trappings of a court' and in determining the question as to whether a particular body or authority is a Tribunal or not, sometimes a rough and ready test is applied by enquiring whether the said body or authority is clothed with the trappings of a court.

¶55

En gin tering Ma ,\obha v. Hind Cy&les Ltd., Bombay

¶56

In Shell Company of Australia, Ltd. v. Federal Commissioner of Taxation ('), the Privy Council had to consider whether the Board .of Review created by s. 41 of the (Federal) Income Tax Assessment Act, 1922-25, to review the decisions of the Commissioner of Taxation, was a court exercising the judicial power of the Commonwealth within the meaning of s. 71 of the Constitution of Australia; and it was held that it was not a court but was an administrative tribunal. Lord Sankey, L. C., examined the relevant provisions of the statute which created the said Board and came to the conclusion that the Board appeared to be in

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(I) [1931] A. C. 275.

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632 SUPREME COURT REPORTS [1963] SUPP.

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1962

¶60

the nature of administrative machinery to which the taxpayer can resort at his option in order to have his contentions reconsidered. He then added that an administrative tribunal may Act judicially, but still remain an administrative tribunal as distinguished from a Court, strictly so-called. JYiere externals do not make a direction to an administrative officer by an ad hoc tribunal an exercise by a court of judicial power (pp. 297-298). It is in this connection that Lord Sankey observed that the authorities are clear to show that there are tribunals with many of the trappings of a Court which, nevertheless, are not Courts in the strict sense of exercising judicial power. In that connection, His Lordship enumerated some negative propositions. He observed that a Tribunal does not become a Court. because it gives a rnal decision, or because it hears witnesses on oath, or because two or more contending parties appear before it between whom it has to decide, or because it gives decisions which affect the rights of subjects, or because there is an appeal to a Court, or because it is a body to which a matter is referred by another body (pp. 296-297). These negative propositions indicate that the features to which they refer may constitute the trappings of a Court; but the presence of the said trappings does not necessarily make the Tribunal a Court. It is in this context that the picturesque phrase 'the trappings of a Court' came to be used by the Privy Council.

¶61

Jiginuring M~door Sabha •. Hind Cycles Ltd., Bombay

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-Gajmdragadkar, J,

¶63

This question was considered by this Court in The Bharat Bank Ltd., Delhi v. Empwyees of the Bharat Bank Ltd., Delhi. (1) This decision is apposite for our purpose because the question which came to be determined was in regard to the character of the Industrial Tribunals constituted under the Act. The majority decision of this Court was that the functions and duties of the Industrial Tribunal are very much like those of a body discharging judicial functions and so, though the Tribunal is not a Court, (l) [1950] s. o. I. 5.

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l S.C.R. SUPREME COUR'F REPORTS 633

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it is nevertheless a Tribunal for the purposes of Art. 136. In GJther words; the majority decision which, in a sense, was epoch making, held that the appellate.jurisdiction of this Court under Art. 136 can be invoked ·in proper cases against awards and other orders made by Industrial Tribunals under the Act. In discussing the. question as to -charncter of the Industrial Tiibunal functioning under<tlie Act, Mahajan, J., observed that the condition precedent for bringing a tribunal within the ambit of Art. 136, is that it should be constituted by the State; and he added that a Tribunal would be outside the ambit of Art. 136 if it is not invested with any part of the judicial functions of the State but discharges purely administrative or executive duties. In the opinion of the learned Judge, Tribunals \vhich are found invested with certain functions pf a Court of Justice and have some of its trappings also would. fall within the ambit of Art. 136 and would be ,;nbject to the appellate control of this Court whenever it is found necessary to exercise that control in the interests of justice. It would thus be noti<'.ed that apart from the importance of the trappings of n Court, the basic and essential condition which makes an authority or a body a tribunal under Art. 136, is that it should be constituted by the State and sho1ild be invested with the State's inherent judicial power. Since - this test was satisfied by the Industrial Tribunals under the, Act, according to the majority decision, it was held· that the awards made l:iy the Industrial Tribunals are subject to the appellate jurisdiction of this Coilrt tinder Art. 136.

¶66

1962

¶67

Enginttrint Mazdo Sabha

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~- Hind G_pcles Ltd.• Bombay

¶69

Gafendragadkar, J

¶70

In Diirga Shankw- Ji ehth v. Thal"'1.lr Ra.ghuraj Singh('), Mukherjea, J., who delivered the unanimous opinion of. the Court observed that it was well settled by the majo,rity decision of this Court m the case of Bhumt Br111l:. Ltd. (') that the expressjon "Tribunal" as used. in Art. 136 does not .mean the s~me thmg a• "Court" but includes, within its ambit, all aajudicating bodies, . . l)) [1955] I S.C.R. 267. (2) [1950] S..0 Ji. 459.

¶71

1962

¶72

634 SUPRE.ME· COURT REPORTS [1963]SUPP.

¶73

~nginuring Mat..dOOT Sabha v.

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I Hind Cytlts l~d., I Bumbay

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IGajendragadko.1, J.

¶76

provided th~y are constituted by the State and are invested with judicial as distinguished frotti purely administrative or executive functions. Thus, there can be no doubt that.the test ~hich has to be applied in determining the character of an adjudicating body is whether the said body has been invested· by the State with its inherent judicial power. T]:iis test implies that the adjudicating body should be constituted by the State and should be invested with the State's judicial power which it is authorised to exercise. The same principle has been reiterated in Harinagar Sugar Mills Ltd. v. Shy(l>m Sunder .Thunjhunwala (').

¶77

It is nO';V necessary to examme the scheme of the relevant provisions of the Act bearing on the voluntary reference to the arbitrator, the· powers of tlle said arbitra,tor and the procedure which he is required to follow. Section IOA under which voluntary reference has been made in both the cases was added to 'the Act by Act 36 of 1956. It reads as under :-·

¶78

"IOA. (I) Where any industrial dispute exists or is.apprehended and the employer and the workmen· agree to refer the dispute. to arbitration, they may, at any time before the dispute has been referred under section 10 .to a Labour Court or Tribunal or National Tribunal, by a written agreement, refer the dispute to arbitratioh and the reference shall b.e. to such-person or persons (including the presiding officer of a Labour Court or Trib\mal or National T~ibunal) as· an .arbitrator or arbitrators ·as may be. specified iq the arbitration agreement.

¶79

(2) n arbitration agreement referred to in sub-section ( 1) shall be in such "form and s]lal! bh si&Ued by the parties thereto in sq9hmanner,as may be pesi::ribed.

¶80

(1)'[196'i!J 2 .S._C-1t· $39.

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•.

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1 S.C.R. SUPREME COURT REPORTS 635

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(3) A copy of the arbitration agreement shall be forwarded to the appropriate Government and the conciliation officer and the appropriate Government shall, within fourteen days from the date of the receipt of such copy, publish the same in the official Gazette.

¶84

1962

¶85

Engineering Mazdnor Sabha y, Hind Cycles Ltd., Bombay

¶86

Gajendragadka,. Ji_

¶87

(4) The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be.

¶88

(5) Nothing in the arbitration Act, UJ40. shall apply to arbitrations und<'r this section."

¶89

Consequent upon the addition of this section, several changes were made in the other provisions of the Act. Section 2 (b) which defines an award was amended by the addition of the wotds "it includes an arbitration award made under section JOA". In other word~, a~ a result of the amendment of the definition of the word "award", an arbitration award has now become an award for the purposes of the Act. The inclusion of the arbitration award within the meaning of s. 2 (b) has led to the application of sections 17, 17 A, 18(2), 19 (3), 21, 29, 30, 33C and 36A to the arbitration award. Under s. 17 (2), an arbitration award when published under s. 17 (1), shall be final and shall not be called in question by any C6urt in any manner whatsoever. Section 17A provides that the arbitration agreemmt shall become enforceable on tlte expiry of thirty days from the date of its publication under s. 17, and under s. 18(2), it is binding on the parties to the agreement who referred the dispute to arbitration; under s. 19(3), it shall. subject to the provisions of s. 19, remain in operation for a period of one year provided-that the appropriate Government may reduce the ·said period and fix such

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636 SUPREME COURTREPORTS[l963] SUPP.

¶91

1962 other period as it thinks fit; provided further that the Enc nmin Ma, door said period may also be extended as prescribed s:~ha under the said proviso. The other sub-sections of Hind Cycles Ltd., s. 19 would also apply to the arbitration award. Sec· Bombay tion 21 which reqmres certain matters to be kept con- G'afmtirai•d!rar, 1. fidential is applicable and so section 30 which provides for a penalty for the contravention of s. 21, also applies. Section 29 which I?rovides for penalty for breach of an award can be mvoked in respect of an arbitration award. Section 33C which provides for a speedy remedy for the recovery of money from an employer is applicable; and s. 36A can also be invok· ed for the interpretation of any provision of the arbitration award. In other words, since an arbitration award has been included in the definition of the word 'Award', these consequential changes have made the respective provisions of the Act applicable to an arbitration award.

¶92

On the other hand, there are certain provisions which do not apply to an arbitration award. Sections 23 & 24 which prohibit strikes and lock-outs, are inapplicable to the proceedings before the arbitrator to whom a reference is made under s. lOA, and that shows that the Act has treated the arbitration award and the prior proceedings in' relation to it as standing on a different basis from an award and the prior proce~dings before the Industrial Tribunals or Labour Courts. Section 20, which deals with the commence· ment and conclusion of proceedings, provides, intu alia, by sub-s. (3) that proceedings before an arbitra· tor under s. lOA shall be deemed to have commenc· ed on the date of the reference of the dispute for arbitration and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under s. 17 A. It would be noticed that just as in the case of proceedings before the Industrial Tribunal commencement of the proceedings is marked by the reference under s. 10, so the commencement of the proceedings before the arbitrator

¶93

1912

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I s.o.R. SUPREME COURT REPORTS 637

¶95

is marked by the reference made by the parties themselves, and that means the commencement of the proceedings takes place even before the appropriate Government has entered on the scene and has taken any action in pursuance of the provisions of s. 1 OA.

¶96

Rules have been framed by the Central Government and some of the State Governments under s. 38(2) {aa), and these rules make provisions for the form of arbitration agreement, the place and time of hearing, the power of the arbitrator to take evidence, the manner in which the summons should be served, the powers of the arbitrator to proceed e,c prrte, if ncces,,ary, and the power to correct mistakes in the award and such other matters. Some of these Rules (as for instance, Central Rules 7, 8, 13, 15, 16 & 18 to 28) seem to make a distinction between an arbitrator and the other authorities under the Act, whereas th Rules framed by some of the States (for instance the rules framed by the Madras State 31, 37, 38, 39, 40, 41.& 42) seem to treat the arbitrator on the same basis as the other appropriate authorities under the Act. That, shortly stated, is the position of the relevant provisions of the statute and the Rules framed thereunder. It is in the light of these provisions that we must now consider the character of the arbitrator who enters upon arbitration proceedings a~ a result of the reference made to him under s. lOA.

¶97

E'nginttring Mazdo, Sabha v. HindC,yc/eslli. Bomho-v

¶98

GajeniragUkicr,J

¶99

The learned Solicitor-General contends that such au arbitrator is no more and no better l han a private arbitrator, to whom a reference can be made by the parties under an arbitration agreement as defined by the Arbitration Act, 1940 (No. X of 1940). He argues that such an arbitrator has to act judicially, has to follow a fair procedure, take evidence, hear the parties and come to his conclusion in the light of the evidence adducer! before him; and that is all that the arbitrator to whom reference is made under s. lOA does. It may be that the arbitration award is treated as an award for certain purposes

¶100

638 SUPREME COURT REPORtS [1963]SUPP.

¶101

1962

¶102

ngi11eering .i.\1azdoo1 Sabha v. Hind Cycles Ltd., Bombay 1~iendrogadlcar 1 J.

¶103

under the Act; but the position, in law, still remains that it is an award made by an arbitrator appointed by the parties. Just as an award made by a private arbitrator becomes a decree subject to the provisions of ss. 15, 16, 17 and 30 of the Arbitration Act, and thus binds the parties, so does an award of the arbitrator under s. lOA become binding on the parties by virtue of the relevant provisions of the Act. Against an award made by a private arbitrator, no writ can issue under Art. 226; much less can an appeal lie under Art. 136. The position with regard to the award made by an arbitrator under s. IOA is no different. In support of this argument, he has relied on the decision in ll. V. D·isputes Committee of the Nationnl Joint Coundil for the Graft of Dental 'fechnicians('). On a motion for an order of cert.iorari to quash an order made by the Disputes Committee, Lord Goddard, C, J., held that the Court has no power to direct the issu~ of orders of certiorari or of prohibition addressed to an arbitrator directing that a decision by him should be quashed or that he be prohibited from proceeding in an arbitration, unless he is acting under powers conferred by statute. "There is no instance of which I know in the books" observed Lord Goddard, "where certiorari or prohibition has gone to any arbitrator, except a statutory arbitrator, and a statutory arbitrator is a person to whom, by statute, the parties must resort." The Solicitor-General suggests. that though some powers have been conferred on the arbitrator appointed under s. lOA, he cannot be treated as a statutorv arbitrator, because the parties are not compelled to g~ to any person named as such by the statute. Tht: arbitrator is an arbitrator of the parties' choice and so, he cannot be treated as a statutory arbitrator.

¶104

On the other hand, Mr. Pai has urged that it would be unreasonable to treat the present arbitrator as a private arbitrator, because s. lOA give~ statutory recognition to the appointment of the arbitrator and (I) [1953] l All. E. R. 327.

¶105

1 s.c.R. SUPREME COURT REPORTS 6~9

¶106

the consequential changes made in the Act and the statutory rules framed thereunder clearly show that he has been clothed with quasi-judicial powers and his proceedings are regulated by rules of procedure. Therefore, it would be appropriate to treat him as a statutory arbitrator and as such, a writ of certiorari would lie against his decision under Art. 226. In support· of this argument, Mr. Pai has referred us to the decision of the Court of Appeal in The King v. liJ/iectricity Commissioners Ex-parte London Electriut.ly Joint Committee Go. (1920) Ltd.(') In that case, die scheme framed by the Electricity Commissioners established bys. l of the Electricity (Supply) Act, !'919, was challenged and it was held that the impugned scheme was ultra vires, and so, a writ of prohibition was issued prohibiting the Commissioners from proceeding with the further consideration of the scheire. Dealing with the question as to whether a Writ can issue against a body like the Electricity Ci:!ommissioners constituted under the Act, Lord Atkin referred to the genesis and the history of the writs of prohibition and certiorari and held that the operation of the writs has extended to control the proceedings of bodies which do not claim to be, and would not be recognised as, Courts of Justice. Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority they are subject to the ccntrollirtg jurisdiction of the King's Bench Division exercised in these writs (p. 205). Then Lord Atkin referred"to a large number of previous decisions in which writs had been issued against different authorities statutorily entrusted with the discharge of different duties. To the same effect is the decision in the case of R. V. Northumherland Compensation Appeal Tribunal Ex-parte Shaw, (') Vide also Halsbury's Laws of England 3rd Edn,., Vol. 2, p. 62, and Vol. 11, p. 122. ·

¶107

1962 Engineering Mu;;daor Sabha v. Hi"d Cyct.. Ltd., Bomb•y

¶108

Gajendrattit/Aar, J.

¶109

(I) [192i] I K.B.D. 171, (2) (1951] 1 All. E.R. 268,

¶110

640 SUPREME COURT REPORTS [1963] SUPP.

¶111

1962

¶112

Engineering Mazdoor Sabha v. I/ind Cycles Ltd., Bombq'V

¶113

(JnjendragadJ.ar, J.

¶114

The argument, therefore, is that against ;;in award pronounced by an arbitrator appointed under s. lOA, a writ of certiorari would lie under Art. 226, and so, the arbitrator should be deemed to be a Tribunal even for the purposes of Art. 136. In our opinion, this argument is not well-founded. Art. 226 under which a writ of certiorari can be issued in an appropriate case, is, in a sense, wider than Art. 136, because the power confctTed on the High Courts to issue certain writs is not conditioned or limited by the requirement that the said writs can be issued only against the orders of Courts or Tribunals. Under Art. 226(1), an appropriate writ can be issued to any person or authority. including in appropriate cases any Government, within the territories pres· cribed. Therefore even if the arbitrator appomted under section lOA is nut a Tribunal under Art. 136 in a proper case, a writ may lie against his award under Art. 226. That is why the argument that a writ may lie against an award made by such an arbitrator does nut materially assist the appellants' case that the arbitrator in question is ;1 tribunal under Art. 136.

¶115

It may be conceded that having regard tu several provisions contained in the Act and the rules framed thereunder, an arbitrator appointed under s. lOA cannot be treated to be exactly similar tu a private arbitrator to whom a dispute has been referred under an arbitration agreement under the Arbitration Act. The arbitrator under s. JOA is clothed with certain powers, his procedure is regulated by certain rules and the award pronounced by him is given by statutory provisions a certain validity and a binding character for a specillcd period. Having regard to these provisions, it may perhaps be possible to describe such an arbitrator, as in a loose sense, a statutory arbitrator and to that extent, the argument of the learned Solicitor General may be rejected. But h fact that the arbilrator under s. JOA is not exactly

¶116

1 S.O.R. SUPREME COURT REPORTS 641

¶117

11162
E•tin~U., M11:i .. ,
.l'#A•
...
Hiai C.11111 Lti.
B,,,.q,
C.faompikor, 1.

¶118

in the same position as a private ,arbitrator does not mean that he is a tribunal under Art. 136. Even if some of the trappings of a Court are present in his case, he lacks the basic, the essential and the fundammtal requisite in that behalf because he is not invested with the State's inherent judicial power. As we will presently point out, he is appointed by the parties and the power to decide the dispute between the parties who appoint him is derived by him from the agl'Cement of the parties and from no other source. The fact that his appointment once ma~e by the parties is recognised by s. lOA and after hts appointment he is clothed with certain powers and has thus, no doubt, some of the trappings of a court, does not mean that the power of adjudication which he is exercising is derived from the State and so, the main test which this Court has evolved in determining the question about the character of an adjudicating bod¥ js not satisfied. He is not a Tribunal because the State has not invested him with its inherent judicial power and the power of adjudication which he exercises is derived by him from tlte agreement of the parties. His position, thus, may be said ro be higher than that of a private arbitrator and lower. than that of a tribunal. A statutory Tribunal is appointed under the relevant provisions of a statute which also compulsorily refers to its adjudication certain classified classes of disputes. That is the essential feature of what is properly called statutory adjudication or arbitration. That is why we thiak the argument strenuously urged before us by Mr. Pai that a writ of certiorari can lie against his award is of no assistance to tlte appellants when they contend that such an arbitrator is a Tribunal under Art. 136.

¶119

Realising this difficulty, Mr. Sule concentrated on te construction of s. lOA i!8elf and urged that on a fair and reasonable construction of s. IOA it should be held that the _arbitrtor cannot be di;tinguished from an Industnal Tribunal and is therefore, a

¶120

642 SUPREME COURT REPORTS [1963] SUPP.

¶121

1962

¶122

.l:.'nzlne1rin1 Mfl::.door SabM

¶123

v. Hind Cycles L!d., Bombay

¶124

Tribunal under Art. 136. In the Bharat Bank Ltd.(1) case it. has been held that an Industrial Tribunal is a tribunal under Art. 136 and the arbitrator is no more and no less than an Industrial Tribunal; and so, the present appeals are competent, says Mr. Sule.

¶125

G11jendragadkar, J.

¶126

That takes us to the construction of s. lOA. Section lOA enables the employer and the workmen to refer their dispute to arbitration by a written agreement before such a dispute has been referred to the Labour Court or Tribunal or National Tribunal under s. 10. If an industrial dispute exists or is apprehended, the appropriate Government may refer it for adjudication under s. 10; but before such a reference is made, it is open to the parties to agree to refer their dispute to the arbitration of a person of their choice and if they decide to adopt that course, they have to reduce their agreement to writing. Whrn the parties reduce their agreement to writing, the reference shall be to such person as may be specified in the arbitration agreement. The section is not very happily worded; but the essential features of its scheme are not in doubt. If a reference has not been made under s. 10, the parties can agree to refer their dispute to the arbitrator of their choice, the agreement is .followed by writing, the writing specifies the arbitrator or arbitrators to whom the reference is to be made and the reference shall be made accordingly to such arbitrator or arbitrators. Mr. Sule contendsand it is no doubt an ingenious argument-that the last clause of s. lOA means that after the written agreement is entered into by the parties, the reference shall be made to the person named by the agreement but it shall be made by the appropriate Government. In other words, the argument is that if the parties enter into a written agreement as to the person who should adjudicate upon their disputes, it is the Goven1ment that steps in and makes the reference to such named person. The arbitrator or arbitrators are.. (1) (I~] S. 0, ll. c.511,

¶127

i. s.Q.lt SUPREME COURT REPORTS 64g

¶128

initially named by the parties by consent; but it is when a reference is made to him or them by the appropriate Government that the arbitrator or arbitrators is ot are clothed with the authority to adjudicate, and so, it is urged that the act of reference which is the act of the appropriate Government makes the arbitrator an Industrial Tribunal and he is thereby invested with the State's inherent judicial power.

¶129

1962
Engineering M4ZdOOT
Sa&ha
v.
Hind Cycles Ltd.,
Bombav
Gajtndragadkar, J.

¶130

We do not think that the section is capable of this construction. The last clause which says that the reference shall be to such person or persons, grammatically must mean that after the written agreement is entered into specifying the person or persons, the reference shall be to such person or persons. We do not think that on the words as they stand, it is possible to introduce the Government at any stage of the operation of s. lOA \1). The said provision deals with what the parties can do and provides that if the parties agree and reduce their agreement to writing, a reference shall be to the person or persons named by such writing. The .fact that the parties can agree to refer their dispute to the Labour Court, Tribunal or National Tribunal makes no difference to the construction of the provision. Sub-section (2) prescribes the form of agreement and this form also supports. the same construction. This form requires that the parties should state that they have agreed to refer the subsisting industrial dispute to the arbitration of the persons to be named in the form. ·Then it is required that the matters in dispute should be specified and several other details indicated. The form ends with the statement that the parties agree that the majority decision of the arbitrators shall be binding on them. This form is to be signed by the respective parties and to be attested by two witnesses. In other words, there is no doubt that the form prescribed bys. lOA (2) is exactly similar to the arbitration agreement; it refers to the dispute, it names the arbitrator and it binds the parties to

¶131

644 SUPREME COURT REPORTS [1963] stJt>P.

¶132

1962 '~;-.ginurin.: Mazdoor ~'abha v. /find Cycles J,td., Bombay Gajendragadkar, J.

¶133

abide by the majority decision of the arbitrators. Thus, it is clear that what s. IOA contemplates is carried out by prescribing an appropriate form under s. IOA (2).

¶134

After the prescribed form is thus duly signed by the parties and attested, under sub-s. (3) a copy of it has to be forwarded to the appropriate Government and the conciliation officer and the appropriate Government has, within fourteen days from the date of the receipt of such copy, to publish the same in the official Gazette. The publication of the copy is in a sense, a ministerial act and the appropriate Government has no discretion in themattcr. Subsection ( 4) provides that the arbitrator shall investigate the dispute and submit his award to the appro· priate Government; and sub-s. ( 5) excludes the application of the Arbitration Act to the arbitrations provided for by s. IOA. It is thus clear that when s. 10A(4) provides· that the arbitrator shall investigate the dispute; it merely asks the arbitrator to exercise the powers which have been conferred on him by agreen:ient of the parties under s. IOA(l). There is no doubt that the appropriate Government p1ays some part in these arbitration proceedings-it publishes the agreement; it requires the arbitration award to be submitted to it; then it publishes the award; and in that sense, some of the features which characterise the proceedings before the Industrial Tribunal before an award is pronounced and which characterise the subsequent steps to be taken in res· pect of such an. award, are common to the proceeding$ before the arbitrator and the award that he may make. But the similarity of these features cannot disguise the fact that the initial and the inherent po~er to adjudicate upon the dispute is derived by the arbitrator from the parties, agreement, whereas it is derived by the Industrial Tribunal from the statutory provisions themselves. In this connection, the provisions of s. 10{2) may bt taken into consideration

¶135

1962

¶136

1 S.C.R. SUPREME COURT REPORTS 645

¶137

This clause deals with a case where the partie.s to an industrial dispute apply in the prescribed manner for a reference of their dispute to an appropriate authority, and it provides that the appropriate Government, if satisfied that the persons applying represent the majority of each party, shall make the reference accordingly. In other words, if the parties agree that a dispute pending between them should be referred for adjudication, they move the appropriate Government, and the appropriate Government is bound to make the reference accordingly. Unlike cases falling under s. 10 (1) where in the absence of an agreement between the parties it is in the discretion of tlw appropriate Government to refer or not to refer any industrial dispute for adjudication, under s. !0(2) if there is an agreement between the parties, the appropriate Government has to refer the dispute for adjudication. But the significant fact is that the reference has to be made by the appropriate Government and not by the parties, whereas under s. lOA the reference is by the parties to the arbitrator named by them and it is after the parties have named the arbitrator and entered into a written agreement in that behalf that the appropriate Government steps in to assist the further proceedings before the named arbitrator.

¶138

Engi nttring Mazdoo Sabha v. HiRd Cycles Ltd., Bombay

¶139

Gajendragadkar, ].

¶140

Section 18 (2) is also helpful in this matter. It provides that an arbitration award which has become enforceable shall be binding on the parties to the agreeement who referred the dispute to arbitration. It would be noticed that this provision mentions the parties to the agreement as the parties who have referred the dispute to arbitration and that indicates that the act of reference is not the act of the appropriate Government, but the act of the parties themselves.

¶141

Section lOA (5) may also be considered in this connection. If the reference to arbitration under s, lOA (1) had been made by the appropriate

¶142

64-6 SUPREME COURT REPORTS [1963] SUPP.

¶143

1962

¶144

Enginetring Mazdoor Sabha v. Hind CJCl~s Ltd., e.,,,bay Gajenefragadkar, J.

¶145

Government, then the Legislature could have easily used appropriate language in that behalf assimilating the arbitrator to the position of an Industrial Tribunal and in that case, it would not have been necessary to pro· vide that the Arbitration Act will not apply to arbi· trations under this section. The provisions of s. lOA (5) suggest that the proceedings contemplated by s. lOA are arbitration proceedings to which, but for sub-s. ( 5), the Arbitration Act would have applied.

¶146

On behalf of the appellants, reliance has been placed on a recent decision of the Bombay High Court in the case of the Air Gorporation8 1'Jmployee8' Union v. D. V. Vya.8 (1). In that case, the Bombay High Court has held that an arbitrator functioning under s. IOA is subject to the judicial suprrintmdence of the High Court under Art. 227 of the Constitution and, therefore, the High Court can entertain an application for a writ of certiorari in respect of the orders passed by the arbitrator. It was no doubt urged before the High Court that the arbitrator in question was not amenable to the jurisdiction of the High Court under Art. 227 because he was a private and not a statutory arbitrator; but the Court rejected the said contention and held that the proceedings before the arbitrator appointed under s. I OA had all the essential attributes of a statutory arbitration under s. 10 of the Act. From the judgment, it does not appear that the question about the construction of s. lOA was argued before the High Court or its attention was drawn to the obvious differences between the provisions of s. lOA ands. 10. Besides, the attention of the High Court was apparently not drawn to the tests laid down by this Court in dealing with the question as to when an adjudicating body or autho· rity can be deemed to be a Tribunal under Art. 136. Like Art. 136, Art. 227 also refers to courts and Tribunals and what we have said about the character of the arbitrator appointed under s. lOA by reference to the requirements of. Art. 136, may prima tacie (I) (1961) 64 Jlom. L. R. I•

¶147

l 'S.C.R. SUPREME COURT REPORTS 647

¶148

1962

¶149

apply to the requirements of Art. 227. That, however, is a matter with which we arc not directly concerned in the present appeals.

¶150

Enginuring Mo.::.JQQ1 Sabha v. Hind CycleJ LtJ., Bomba)'

¶151

Mr. Sule made a strong plea before us that if the arbitrator appointed under s. I OA was not treated as a Tribunal, it would lead to unreasonable consequences. He emphasised that the policy of the legislature in enacting section lOA was to encourage iµdustrial employers and employees to avoid bitterness by referring their disputes voluntarily to the arbitrators of their own choice, but this laudable object would be defeated if it is realised by the parties that once reference is made under s. lOA the proceedings before the arbitrator are not subject to the scrutiny of this Court under Art. I 36. It is extremi:ly anomalous, says Mr. Sule, that parties aggrieved by an award made by such an arbitrator should be denied the protection of the relevant provisions of the Arbitration Act as well as the protection of the appellate jurisdiction of this Court under Art. 136. There is some force in this· connection, It appears that in enacting section IOA the Legislature probably did not realise that the position of an arbitrator contemplated therein would become anomalous in view of the fact that he was not assimilated to the status of an Industrial Tribunal and was taken out of the provisions of the Indian Arbitration Act. That, however, is a matter for the Legislature to consider.

¶152

Gajtndragadkar, J.

¶153

In the result, the preliminary objection raised by the respondents in the appeals before us must be upheld and the appeals dismissed on the ground that they are incompetent under Article 136. The appellants to pay the costs of the respondents in C. A. No. 204 of 1962. No order as to costs in C. A. Nos. 182 & 183 of 1962.

¶154

Appeals dismissed.

The Engineering Mazdoor Sabha Representing Workmen Employed Under the Hind Cycles Ltd. and Another v. the Hind Cycles Ltd., Bombay

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The Engineering Mazdoor Sabha Representing Workmen Employed Under the Hind Cycles Ltd. and Another v. the Hind Cycles Ltd., Bombay

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