Allowed

The Management of Oriental Mercantile Agency v. the Presiding Officer & Ors.

Supreme Court10 Nov 19721972 INSC 280 · [1973] 2 S.C.R. 9321972 INSC 280

Case brief

AI extract

What is this about?

Retrenchment dispute where conflicting High Court orders left the Labour Court in a quandary over whether it could re-open the merits. The Supreme Court set aside the ex parte writ appeal order as violating natural justice, the single Judge's clarificatory order, and the subsequent Labour Court award and High Court judgment, reviving the writ appeal for decision on merits.

What the court decided

AI extract

The Management of Oriental Mercantile… — Labour and Industrial Disputes | Supreme Court (1973)

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932

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THE MANAGEMENT OF ORIENTAL MERCANTILE AGENCY

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THE PRESIDING OFFICER & ORS.

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November IO, 1972

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(H. R. :(HANNA AND Y. V. CHANDRACliUD, JJ.J

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Industrial Disputes Act-Dispute referred to Labour Court-High Court remitted back the case to Labour Court for fresh disposal-The meaning of 'fresh dispo,ar.

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Tue appellants retrenched 6 of their workmen and the dispute was referred to the LaLour Court· for adjudication. Tue Labour Court by its Award held that the non-employment of the worknwn was justified and no relief was graated to the w0rkmen. Against this award, the workmen filed a Writ Petition (No. 209 of 1964) and the learned single Judge of the High Court s.et aside the Award of the Labour Court, and held that the non-employment of tile workmen was unjustified. He remitted the matter for 'fresh disposal'. The appellants appealed against the said order by Writ Appeal No. 113 of 1967, before a Division Bench of the said High Court. The Division Bench dismissed the appeal ex·parte with the observation that the judgment of the learned single Judge amounted to a quashing of the Award, and release of the proceedings for fresh and proper determination by the Lahour Court, for carefully ascertaining rhe 'facts and applying the true principles of Industrial Law applicable to such cases of retrenchment'". The matter, therefore, went back to the Labour Court for 'fresh disposal'; but when the appcllanis attempted to reagitatc the matters in controversy, the \VOrkmen objected.

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While the matter was pending before the Labour Court, the workmen moved a petition (CMP No. 7125/67), seeking clarification of the judgment of the leacned single Judge, who by his orc~er clarified his earlier judgment by saying that he had remitted the matter to the Labour Court only for the purpose of determining what relief could be given to the retrenched employees and that the Labour Court could not reopen the matter afresh. The attention of the learned JuJge was drawn to the observation made hy the Division Bench of the High Court, but he took the view that the appeal having been dismissed by the Division Bench, his orig_inal judgment stood and that the management might, if it so chose, file a review appliet1tion before the Division Bench.

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Accordingly, the appellants filed an application for review of the order passed by the Division Bench. The Bench dismissed the revision petition with the observation that the learned single Judge had not expressed any final conclusion. Further, the order JY.lSSed by the Division Bench was prima facie in favour of the employer-organisation. Therefore.the employer-organisacion could not ask for a review of the order favourable to them.

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Thereafter, the Labour Court, by its Award dated May 25, 1968, held that the retrenchment of the workmen was justified and observed that the powers of the High Court in hearing writ petition are limited, only to remitting a case for Labour Court for fresh disposal in its entirety and that observations to the contrary are mainly obite dicta. Further, following the Appellate Court's observations, the whole matter was at large.

ORIENTAL MERCANTIL:. AGENCY, V. PRESIDING OFFICER 933 ( Ch11ndrachud, I.)

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Against this Award, the workmen filed another writ petition (No. 123· of 1969) and a Division Bench quashed the award of the Labour, Court and remitted the matter with the direction that it ought not go into the merits of the case. but dispose of the matter only in respect of proper rclie'fs to be given to the petitioner. The learned Judges took the view !hat the workmen were not bound bv the ex-parte observations made by the division bench earlier and that the order of th.e l011rned single judge must be treated as final and therefore, the Labour Court was bound to give effect to that order. The correctness of this judgment was challenged before this Court.

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HELD : (i) The order of the Division Bench passed in Writ appeal No. 113 of 1967 is set aside as being in violation of the principles of natural justice. This order cannot bind the workmen as it \vas passed ex-parte. [937 Ej

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(ii) The clarification order passed by the learned •ingle Judge in C.M.P. No. 7125 of 1967, in face of the appellate order is wrong. The learned judge had no jurisdiction to issue a clarification which was inconsistent with the view taken by the appellate Court. The appellate order was binding on the learned single Judge. [938 D]

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(iii) The second award of the Labour Court dated May 25, 1968 is also set aside as that award could not have been given without the High D Court considering the legality. of the judgment of the learned single judge. Therefore, the judgment df the High Court dated July 7, 1970, passed in writ petition No. 122 of 1969, which was filed against the second award. must also be set aside.

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(iv) What remains in the field is (a) the first awards of the Labour Court dated June 14. 1963 and (b) the judgment of the Hon'ble Single Judge heard in writ petition No. 209 of 1964. Writ appeal No: 113 of £ 1967 is revived and the High Court will dispose of that appeal on merit after issuing notice thereof to the respondents.

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C1v1L APPELLATE JURISDICTION : Civil Appeal No. 113 of 1971.

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Appeal by special leave from the judgment and order dated F July 7, 1970 of the Madras High Court in Writ Petition No. 122 of 1969.

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M. C. Chagla and S. Gopa/akrishnan, for the appellant.

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M. K. Ramamurthi, !. Ramamurthi and N. G. R. Prasad for the respondents. '

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The Judgment of the Court was delivered by

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. CHANDRACHUD, J. This is an appeal by special leave from the 3udgmcnt dated July 7, 1970 of a Division Bench of the H' gh Ccurt at Madras in Writ Petition No. 122 of 1969. quashing¹ an award dated May 25, 1968 of the first respondent, the Presidin H Officer, Labour Court, Madras. g

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. While alloing the writ petition the learned Chief Justice who delivered the Judgment of the Bench, observed that the ptition

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[1973] 2 S.C.R,

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SUPREME COURT REPORTS

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discloses ''an unfortunate state of affairs... We are in regretful agreemc,mt with that observation. It shall be our endeavour to find a solution to the unfortunate situation arising out of irreconcilable orders passed by the learned Judges of the High Court.

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Jn 1961 the appellants, Oriental Mercantile Agency, retrenched six of their workmen resulting in an industrial dispute which was referred by the.Government of Madras to the Labour Court for adjudication. The question referred to the Labour Court was whether the non-employment of the six workmen was justified and what relief they were entitled to. By its award dated June 14, 1963 the Labour Court (Shri M. S. Abdul Azeez) held that the non-employment of the workmen was justified and therefore they were not entitled to any relief.

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Against the award of the Labour Court the workmen filed writ pctit:on No. 209 of 1964 in the Madras High Court, under Article 226 of the Constitution. Setting aside the award, Venkatadri J. held by his judgment dated February 20, 1967 that the non-employment of workmen was unjustified, that the intention of the management was to weed out those whom it did not want and that the reasons given by the management fJr terminating the services of the workmen were fanciful. The learned Judge wound up his judgment in these words "I am therefore of the opinion that the conclusion of the Labour Court cannot be sustained, on the facts and circumstances of this case. Therefore the matter is remitted back to the Labour Court for fresh disposal."

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The appellants filed writ appeal No. 113 of 1967 against the judgment of the learned judge. That appeal came for hearing before Anantanarayanan CJ. and Natesan J., who by· their order dated April 4, 1967 dismissed the appeal in limine, with the following observations :

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"In advancing the arguments before us for the admission of the writ appeal, learned counsel for the employer organisation submits that on certain of the vital issues of fact, the learned Judge has already expressed conclusions, which may be ultimately prejudicial to the case which the management hoped to establish before the Labour Court. As we understand, this judgment of the learned Judge amounts to a quashing of the award, and relea<e of the proceedings for fresh and proper determination by the Labour Court, for carefully ascertaining the facts and applying the true principles of Industrial Law applicable to such cases of retrenchment. We do not understand the learned Judge to have finally expressed any conclusions on the major questions of fact, and the Labour Court need not interpret the judgment

ORIENTAL MERCANTILE AGENCY V. PRESIDING OFFICER 935 ( Chandrachud, J.)

as such. It is sufficient that the Labour Court proceeds to ascertain the facts with care, in the light of the principles stressed by the learned Judge, and in making the award it should come to conclusions on facts after a detailed analysis, and apply the real principles of Jn. dustrial Law applicable to such cases. With these observations and clarification the writ appeal is dismissed."

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Notice of the appeal was not issued to the workmen and the crder extracted above was passed without hearing them.

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The matter then went back for "fresh disposal" to the Labour Court. Relying upon the observations made in the writ appeal, c appellants contended before the Labour Court that they were entitled to re-agitate the matters in controversy. The workmen objected to that course, contending that Venkatadri J. had recorded a specific finding that the non-employment of workmen was i:njustified and that this finding was binding on the Labour Court,

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While the matter was pending before the Labour Court, the

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D workmen moved a petition in the High Court, CMP No. 7125 of 1967, seeking clarification of the judgment dated February 20, 1%7 of Venkatadri J. By an order dated June 26, 1967 the learned Judge clarified his earlier judgment by saying that he had remitted the matter to the Labour Court "only for the purpose of determining what reliefs could be given. to the employees who were retrenched from service", and that the Labour Court was trying to reopen the matter by taking advantage of the concluding portion of the judgment. in which it was said that the matter was remitted for "fresh disposal". The learned Judge observed : "I do not think the Labour Court is justified in going into this matter once again wl1en I have come to the conclusion that the reasons given for terminating the service of the employees who had put in

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F long number of years of service were fanciful and that the conclusion of the Labour Court would not be sustained. T!)e Labour Court can only decide what proper reliefs can be given to the employees who were retrenched from service". The attention of the learned Judge was drawn to the order dated April 4, 1967 passed by the Division Bench in Writ Appeal No. l ~3 c;>f 1967 but .he

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G took the view that in effect, the appeal was d1sm1ssed by the High Court and that all that was necessary was to give an opportunity to the management "to reopen the matter by filing a review" of the order passed in the Writ Appeal.

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According!y, the management filed CMP No. 8579 of 1967 for

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review of the order dated April 4. 1967 passed by the Division

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'H Bench in Writ Apoeal No. 113 of I 967. Bv its order dated July ~I. 1967 the Division Bench consisting of the same learned Judges, ( Anantanarayanan CJ. and Natesan J. ), dismissed the

[1973] 2 S.C.R.

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SUPREME COURT REPORTS

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review application. The learned Chief Justice who, on behalf of the Bench, delivered a short order said that the observation which they bad made while dismissing the Writ Appeal, to the effect that Venkatadri J. had not expressed any final conclusion and that the Labour Court need not interpret that judgment as expressing such a conclusion was "prima facie in favour o[ the employer organisation" and therefore it was difficult to appreciate how they could ask for a r .. view of that order. The learned Chief Justice further observed that on the contrary it was "for the Labour organisation, if it thinks fit, to approach us for the remedy considered appropriate".

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In the welter of these conflicting orders, the matter was taken up by the Labour Court (Shri S. Gonsalves) once again. By its· award dated May 25, 1968 the Labour Court took the view that "it is settled law 1hat the powers of a ·High Court while hearing a writ petition under Article 226 of the Const.itution of India are limited only to remitting a case 10 the lower Court for fresh disposal in i'ts .entirety and that consequently any observations made hy it while ordering such remission are mainly obiter dicta", that the appellate court had said that Venkatadri J. had not expressed any final conclusion and therefore the whole matter was at large. Re1olutely, the Labour Court stuck to the conclusion recorded by Shri M. S. Abdul Azeez in his award dated June 14, 1963 that the retrenchment of the workmen was justified.

Against that award the workmen filed a writ petition (No. 122 of 1969) · which was referred by a learned Single Judge (Ismail J.) to a Division Bench. By its judgment of July 7, 1970 the Division Bench (Veeraswami C.J. and Gokulkrishnan J.) quashed the award of the Labour Court and remitted the matter to it with a direction that it "ought not to go into the merits or the pro· pricty of the retrenchment, but dispose of th.e matter only in res· pcct of the proper relief or reliefs to be given to the petitio~ers". The learned Judge took the view that the workmen were not bound by the ex-parte observations made by the Division Bench while dismissing Writ Appeal 113 of 1967 in limine. that the order of Venkatadri J. dated February 20, 1967 must be treated as final and conclusive and therefore the Labour Court wa bound to give efiect on that order. The correctness of this judgment is challenged in thjs appeal by special leave.

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Obviously, the Labour Court found itself in a quandary. While setting aside its award, Venkatadri J. had ·recorded an unequivocal finding that the retrenchment of the workmen was unjustified. While dismissing Writ Appeal No. 113 of 1967 against the judg· ment of the learned single Judge, Anantanarayanan C.J. and Natesan J. observed that the learned Judge had passed an order of

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ORIENTAL MERCANTILE AGENCY V. PRESIDING OFFICER ( Chandrachud, J.)

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937

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A release of the proceedings for fresh and proper determination by the Labour Court and that he had not "finally expressed any conclusions on the major questions of fact, and the Labour Court need not interpret the judgment as such". In spite of this view of the appellate Court, Venkatadri J. passed the clarificatory order of June 26, 1967 protesting that the Labour Court would not be B justified in going int() the matter once again in face of the finding recorded by him that the order of retrenchment was unsustainable The Labour Court was called upon to choose between these irreconcilable orders and it exercised that choice by adopting the CC'urse commended by the Division Bench, a course which acccrdcd with its own view of the matter. It embarked upon a fresh adjudication and firmly adhered to its earlier conclusion which was c characterised by Venkatadri J. as unsupportable. But another Division Bench in a writ petition against this fresh adjudication has quashed that award. upholding in effect the judgment of Venkatadri J. and differing clearly from the order passed by Anantanarayanan C.J. and Natesan J. while dismissing writ appeal No. 113 of 1967 summarily. We have to determine the D legality of that judgment.

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It is filtile to apportion blame but in a relative assessment of conflicting opinions, it becomes necessary to say who was right and who was wrong. We have no doubt that the learned Judges who dismissed Writ Appeal 113 of 1967 were, with respect, in E error in making observations which .were calculated to prejudice the workmen without giving them an opportunity of being heard. True, that the appeal of the management was dismissed but that was only in form. In substance, the management got the relief it wanted, because it was really interested in getting over the judgment of Venkatadri J. so that the Labour Court to which the F matter was remitted could commence a fresh adjudication. The Division Bench· by its order of summary dismissal, asked the Labour Court to start from scratch, in total violation of the principles of natural justice. We are also clear that, apart from this, the Division Bench was in error in taking the view that Venkatadri J. had not expressed a final conclusion on the quesG tions arising before him. It is unfortunate that the learned Judge remitted the matter to the Labour Court for "fresh disposal", for had he, as he sought to have, specifically _directed the Labour Court to pass final orders in acc0rdance with his judgment, the unsavoury sequence of events following upon his order could have been easily avoided. That, however, is not to indicate approval H in any manner of the view taken by the Division Bench that the learned Judge had released the proceedings for a fresh determination by the Labour Court. Thus, the order of the Division Bench in Writ Appeal 113 of 1967 is unsustainable.

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[1973] 2 S.C.R •.

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SUPREME COURT REPORTS

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938

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Venkatadri J. was right that he had decidedthe dispute finally but he complicated matters by remitting the award for .a "fresh disposal". He should also have avoided, in the interests of judicial discipline, the making of a clarificatory' order. The Division Bench, in the appeal against his judgment, had placed' a certain construction on that judgment. Right or wrong, that construction was binding Qn him and he should therefore have declined lO issue a clarification of his order. He issued a clarification suggesting that the appellate court was wrong in the c0nstruction it had placed on his judgment, he took away from the Labour Court the liberty of "fresh disposal" which it ·had under the form of his order and .under the judgment of the appellate court and he even suggested in his clarificatory order that _the' management may file a review · petition .to the appellate court. That .review petition was rightly dismissed but the point of the matter is that the learned single Judge was seeking, without warrant, to exercise jurisdiction which was no longer his. .The appeilate judgment should have been allowed to hold its sway. It was open to the workmen to challenge that judgment before a proper forum:, but so long as that judgmeni was not set aside in an appropriate proceeding, it was binding on all subordinate authorities.

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Coming to the judgment of Veeraswami C.J. and Gokulakrishnan J., which is impugned in this appeal, the Labour Court cannot, in our opinion, be asked simply to work out the judgment of V~nkatadri J. That could be done only if the aµpellate court came to the conclusion that Venkatadri J. was justified in setting aside the award of the Labour Court. Unfortunately, the real point in controversy was missed in appeal on both the occasions and attention was paid to the propriety of orders passed at various stages rather than to the legality thereof. As the High Court has not tested in appeal the validity of Venkatadri J .'s judgment, it is necessary to direct that to be" done. That can be done only if, alor.g with the judgment under appeal, certain other orders and judgments are set aside.

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We set aside the order dated April 4, 1~67, passed by Anantanarayanan C.J. and Natesan J. in Writ Appeal No. 113 of 1967, as being in violation of the princjples of natural justice. That order cannot bind the workmen. We set aside the clarificatory order dated June 26, 1967 passed by Venkatadri J. in C.M.P. No. 7125 of 1967 as, in face of the appellate order, howsoever wrong. the learned Judge had no jurisdiction to issue <>: clarification which was inconsistent with the view taken by the appellate court. The appellate order was binding on the learned Judge. We set aside the award dated May 25, 1968 of the Labour Court (Shri B. Gonsalves), as that award could not have been given without the High Court considering. the lege.lity of the judgment of Ven-

ORIENTAL MERCANTILE AGENCY V. PRESIDING OF,FICER 939 ( C~andrachud, !. )

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A katadri J. Consequently, the judgment of the High Court datea July 7, 1970 in Wnt Petition No. 122 of 1969. which was filed against the award of Shri Gonsalves must also be set aside.

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What remains in the field is (i) the award of the Labour Court (Shri M. S. Abdul Azeez) dated June 14, 1963, and (ii) the judgment of Venkatadri J. dated February 20, 1967 in Writ Petition 209 of 1964. Since it is necessary in the interests of justice that the legality of Venkatadri J.'s judgment must be determined, we direct that Writ Appeal No. 113 of 1967 sh@ll be revived and that the High Court do dispose of that appeal on merits after issuing notice thereof to the respondents-the workmen. Costs c will be costs in the High Court.

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s.c.

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Appeal allowed.

The Management of Oriental Mercantile Agency v. the Presiding Officer & Ors.

Case brief

What is this about?

What the court decided

The Management of Oriental Mercantile Agency v. the Presiding Officer & Ors.

Case brief

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