19

LABOUR LAW-1
(INDUSTRIAL RELATIONS LAW)
Bushan Tilak Kaul*
I

INTRODUCTION

SURVEYED ARE reported decisions of the Supreme Court and the High Courts
in the industrial relations law incorporated in the three central legislations namely,
the Industrial Disputes Act, 1947, the Industrial Employment (Standing Orders)
Act, 1946 and the Trade Unions Act, 1926 during 1993. As in the previous years
it is under the Industrial Disputes Act that litigation is prolific and decisions
numerous some of which make significant contributions to the legal literature on
various areas under the Act. In Central Co-operative Consumers1 Store Ltd. v.
Labour Court, * the Supreme Court came down heavily on the practice of wasting
of public money on frivolous and unending litigation by officers of public bodies
due to their adamant behaviour. To curb this tendency and to bring accountability
in them, the court left it open to the appellate co-operative society to replenish itself
and recover the back wages ordered to be paid to the 'persecuted' employee from
the personal salary of the officers of the society who had been responsible for the
endless litigation including the officer who was responsible for terminating the
services of the employees. Litigation under the Trade Unions Act and the Industrial
Employment (Standing Orders) Act remains insignificant.
II THE INDUSTRIAL DISPUTES ACT
Appropriate government

The definition of 'appropriate government* contained in section 2(a) clearly

shows that all bodies including the companies, which can appropriately be termed
as agencies or instrumentalities of the 'central government' for the purposes of
article 12 of the Constitution, have not been treated as industries in respect of which
references can be made by the central government.2 A number of statutory bodies
have been specified in sub-clause (i) of section 2(a) in respect of which central
government is the 'appropriate government'. But there is no reference in the subclause to the companies registered under the Companies Act, 1956.
In Hindustan Machine Tools Ltd. v. Industrial Tribunal, Jaipur3 Singhvi J. of
the Rajasthan High Court opined that even though in a company registered under
the Companies Act, central government may have 100 percent share and it may
*
1
2
3

LL.M. (Del), LLM (LSE, London), Reader, Faculty of Law, University of Delhi.
(1993) Lab IC 1943 (SC).
See Bushan Tilak Kaul, XXVUIASIL 389 at 389-90 (1992).
(1993) 1 L U 1168 (Raj).

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exercise some control, financial as well as administrative, the company' s character

as a company is not altered and its separate entity as a company is not obliterated.
Holding of all shares by the central government or exercising control over the
company does not by itself mean that company is being run by or under the authority
of the central government. The judge held that Hindustan Machine Tools Ltd. a
company incorporated under the Companies Act, which has 18 factories/units all
over India including one in Ajmer(Rajasthan), is not a department of the central
government but is a separate and independent body having a legal entity in respect
of which in a dispute arising in respect of office of the company at Ajmer, the 'state
government' is the 'appropriate government' under section 2(a)(ii).
Industry

The question whether a particular activity is 'industry' is a question of fact: In

Haryana Woollen Development Corporation v. The P.O., I.T. cum-L.C.4 the
Punjab and Haryana High Court opined that the question whether a particular
activity is or is not an 'industry' cannot be raised in the High Court for the first time
because it is essentially a question of fact which can be decided only on appreciation
of the evidence with regard to the nature of activity and other connected issues.
However, on the basis of the pleadings, the High Court in this case came to the
conclusion that the corporation is 'industry' within the meaning of section 2(j)
keeping in view that it had been established with the object of working for the
development and the upliftment of the workers and weaker sections of the society,
giving them training and advancing loans so that they can have a living of their own.
State insurance and providentfund department industry: A Single Judge of the
Raj asthan High Court has held that the state insurance and provident fund department
of the state is 'industry' within the meaning of section 2(f) in relation to clerical staff
as it was carrying on welfare functions and not essential governmental functions of
the state.5
A circulating library with two employees not 'industry': A Division Bench of
the Bombay High Court6 has held that a circulating library run on the premises of
the central railways with the help of two employees for circulating magazines to
those employees of the establishment who became its members by making monthly
contributions to it but which is not run by the railway administration is not industry
within the meaning of the Act. The court observed that it was futile to suggest that
when hardly two persons are employed in a circulating library run by the employees
of the establishment, the library should be treated as industry. The element of
distribution of services calculated to statisfy human want also cannot be said to be
strictly in existence in the case of such a library.
Industrial dispute

Anything that logically falls in the definition of section 2(k) is 'industrial

dispute' irrespective of whether the subject matter thereof finds enumeration in any
of the schedules to the Act: In ICI India Ltd. v. Presiding Officer7 a Single Judge
4
5
6
7

(1993) IILU 318 (P&H).

Hemraj Gurjar v. State of Rajasthan (1993) II L U 167 (Raj).
Subash Bhaskar Gadre v. Second Labour Court (1993) ILLJ 1001 (Bom) (DB).
(1993) II L U 568 (Bom).
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of the Bombay High Court rejected the argument that jurisdiction of the adjudicatory
authorities under the Act extends no further than the enumerated matters to be found
in the second and third schedules to the Act. The second and third schedules do not
exhaust all categories of industrial disputes. A perusal of item 6 of the second
schedule and item 11 of the third schedule makes it obvious that the lists are
illustrative and open ended. Anything that logically fits in the definition of industrial
dispute in section 2(k) would be an industrial dispute irrespective of whether the
subject matter thereof finds enumeration in any of the schedules to the Act. The
court opined that it would be futile to set the clock back by arguing that pension
cannot become subject matter of service conditions of workmen merely because it
is not an enumerated subject in the second and third schedules.
Inordinate delaya legitimate ground to hold that no industrial dispute exists:
In R. Ganeshan v. Union of India8 a Single Judge of the Bombay High Court
observed that the fact that the Act does not lay down a period of limitation for raising
an industrial dispute does not mean that a dispute can be raised at any time, even after
inordinate delay and the government is bound to make a reference. Inordinate delay
can be a legitimate ground for holding that there does not exist in praesenti an
industrial dispute.
When does an industrial dispute arise: A mere demand made to the government
cannot become an industrial dispute without it being raised by the workmen with
their employer. If such a demand is made to the government it can be forwarded to
the managment and if rejected, becomes an industrial dispute. Though it is apparent
that for a dispute to exist there must be a demand by the workmen on the employer,
this demand need not be in writing, unless the matter pertains to a public utility
service, in view of the provisions of section 22. The demand need not be sent directly
to the employer, nor is it essential for it to be made expressly; it can be even implied
or constructive, eg. by way of filing an appeal for refusal of an opportunity to work
when demanded by the workmen. A demand can be made through the conciliation
officer, who can forward it to the management and seek its reaction. If the reaction
is negative and not forthcoming and the parties remain at logger-heads, a dispute
exists and a reference can be made. Whether a dispute exists has to be decided in
each case and is dependent on the facts and circumstances of that case. The crucial
time for this examination is the date of making the reference; material which comes
into existence after the reference has been made is not relevant. Only that dispute
which exists or is apprehended can be referred. If there is a different kind of demand
made before the management and the reference pertains to some other demand, then
the reference is incompetent.9
Industrial tribunal/labour court can award relieffrom a date anterior to the
date of raising of industrial dispute: In Sarva Shramik Sangh v. Indian Hume Pipe
Co. Ltd.,10 an issue of great importance that came up for consideration of the
Supreme Court pertained to the power of industrial tribunal/labour court to award
relief with effect from a date anterior to the date of raising the dispute by the labour
union. In order to appreciate the legal issue involved relevant facts are given in brief.
In Novemeber 1965 the appellant union submitted a demand to the respondent
8 (1993) LabIC 802 (Bom),
9 M/s Village Papers Pvt. Ltd. v. State ofH.P. (1993) Lab IC 99 (HP) (FB) per majority.
10 (1993) 2 SCC 386.
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for payment of dearness allowance to the daily rated workmen at the respondent
factory at the same rate as was paid to the monthly rated employees with effect from
1.1.1964. These demands were placed before the conciliation officer on 15.11.1965,
and, thereafter, before the conciliation board. The conciliation board submitted its
failure report on 15.3.1967. In April 1968 the appellant union submitted a
memorandum before the government reiterating its demand but seeking benefit
only from 15.11.1965 (demand letter sought benefit with effect from 1.1.1964). The
government referred the dispute for adjudication to the industrial tribunal in July
1968. In November 1968 the respondent company filed a writ petition in the
Bombay High Court challenging the validity of the reference. In February 1973, the
High Court passed an order setting aside the order of reference by consent "without
prejudice to the rights of the government to refer fresh dispute in respect of the same
demands according to law". On 19.3.1973 the appellant union submitted a demand
to the management claiming the very same relief with effect from 15.11.1965. On
the basis of the said demand, the government made a reference to the Industrial
Tribunal, Bombay on 26.3.1973. The tribunal made its award directing that all the
daily rated workmen be paid dearness allowance at the rate of 15 percent of the
textile rate with effect from 1.1.1968. The management unsuccessfully assailed the
validity of the award before a Single Judge of the Bombay High Court. In appeal,
a Division Bench of the High Court affirmed the award except with respect to the
date from which the relief was granted by the tribunal. The Division Bench was of
the opinion that the tribunal had no jurisdiction to award relief to the workmen with
effect from a date anterior to the date on which the dispute was raised. As the dispute
was raised on 19.3.1973, it was held that the relief could be granted only from
19.3.1973 but not from an anterior date. The correctness of this view was
challenged in special leave petition before the Supreme Court by the appellant
union.
Allowing the appeal of the union, the Supreme Court opined that neither the Act
nor the various decisions relied upon by the Division Bench of the High Court and
the respondents11 provide for any such limitation on the power of the industrial
tribunal/labour court. The court held that the industrial tribunal/labour court has
jurisdiction to grant relief from a date anterior to the date on which the dispute is
raised if it is found to be warranted by the facts and circumstances of the case.
Speaking for the court, Jeevan Reddy J observed:12
The Industrial Disputes Act does not provide for any such limitation. The
definition of the expression "industrial dispute" in clause (k) of Section 2...
does not contain any such limitation. We are unable to see on what basis can
such restriction be inferred or implied. It must be remembered that the
Industrial Tribunal/Labour Court is supposed to be a substitute forum to the
civil court. Broadly speaking, the relief which the civil court could grant in

11 Jharakhand Collieries (Pvt) Ltd. v. Central Govt. Industrial Tribunal, Dhanbad (1960) II LU
71 (SC); Workmen v. New Egerton WoollenMills(\9b9) II L U 782 (SC); Workmen v. National
Tobacco Co. of India Ltd, (Civil Appeal No. 852 of 1966, decided on 10.10.1968 (SC); Sindhu
Resettlement Corporation Ltd. v. Industrial Tribunal Gujarat (1968) 1 L U 834 (SC).
12 Swpranotel0at39L
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an industrial dispute can be granted by the Industrial Tribunal/Labour

Court. Indeed the Industrial Tribunal/Labour Court is not bound by technical
rules of procedure which bind the civil court... In such circumstances we see
no justification for holding that the Industrial Tribunalor for that matter
a Labour Courthas no jurisdiction to grant relief from a date anterior to
the date on which the dispute is raised. Take a case where the Labour Union
raises a dispute on a particular date but says that the said relief should be
granted from an anterior date. We see no reason why the Industrial Tribunal
should be held to have no power to grant relief with effect from such anterior
date if it is found to be warranted by the facts and circumstances of the case.
Here it is necessary to emphasize the distinction between the existence of
power and its exercise. It is one thing to say that the Tribunal has no power
to grant such relief and it is an altogether different thing to say that in a given
case it ought not to grant such relief. We are only emphasizing the aspect of
power. Whether in a given case relief should be granted with effect from a
date anterior to the date of raising the dispute is a matter for the Tribunal to
decide in the facts and circumstances of that case.
It is also pertinent to mention here that the earlier order of the High Court did
not say that the 'fresh dispute' that may be raised should claim the same benefit only
from the date of raising of fresh dispute. The High Court in its earlier order had said
that the respondent government was free to refer fresh dispute in respect of the same
demands according to law. The words 'same demands' meant that the union could
raise the very same demands from 1965 onwards. It was, therefore, perfectly open
to the union to raise a demand subsequent to the said order claiming the benefit with
effect from a date anterior to the date of raising demand.
Lay-off

In Hope Textile Ltd. v. State of Madhya Pradesh,u the company declared layoff on 6.6.1986 in one of the units and on 7.6.1986 it moved an application before
the appropriate government for grant of permission under section 25M to declare
lay-off in the company on account of financial stringency because the government
was not allowing the management to develop its land and sell it. A Division Bench
of the Madhya Pradesh High Court held that besides the fact that the reasons given
by the management cannot be termed as a cause for which lay-off could be declared,
the management had clearly contravened section 25M by declaring lay-off without
seeking permission for the same.
Conditions under section 25N(1) are independent of each other but must be fulfilled to make
retrenchment valid.

The provisions of section 25N(1) dealing with conditions precedent to

retrenchment of workmen in establishments covered by section 25K are "well cut
out, chiselled and laid down."14 The conditions as per clauses (a) and (b) of section

13 (1993) 1 LU 603 (MP (DB).

14 A. P. Patel v. Gujarat State Machine Tools Corporation Ltd. (1993) II LLJ 519 (Guj) (DB).
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25N(1) are independent of each other but must be fulfilled to make retrenchment
valid, legal and effective. The working of clause (b) has got to be done by resort to
sub-sections (2) to (8). An employer is not obliged to give notice under section
25N(l)(a) before making an application for permission to make retrenchment as
retrenchment may or may not happen even if permission as per clause (b) is
accorded. But there should not be a conflict or divergence between the reasons set
forth in the notice and the reasons set forth in the application. In other words, the
reasons for retrenchment in the notice under section 25N(1) and the application for
seeking permission of the appropriate government under section 25N(2) should be
the same and not different. In view of the legal position that section 25N(1 )(a) is not
a condition precedent for according permission under sub-clause (b) but is a
condition precedent for retrenchment as such, the Gujarat High Court has opined
that sub-clause (a) of section 25N(1) cannot be read in section 25N(3).15
An award can be challenged in a High Court only under article 227 of the Constitution.

A Division Bench of the Gujarat High Court16 opined that an award of an

industrial tribunal or labour court can be challenged in a High Court only under
article 227. The management had challenged under articles 226 and 227 an award
passed by the tribunal in terms of settlement alleging that the tribunal did not accept
the settlement arrived at between the parties in toto while the award itself was in
terms of the settlement. The industrial tribunal had accepted the settlement except
the pay scales prescribed in it for some employees and had fixed revised pay scales
in case of those employees. The High Court considered the petition only under
article 227 and quashed the award of the tribunal to the extent it did not accept the
pay scales fixed for those employees under the settlement.
Settlement

Settlement to be accepted in toto for the purpose of making it an award: The

Gujarat High Court has opined17 that it was not possible to scan the settlement in bits
and pieces and hold some parts good and the others bad. The court ruled that when
any trade union enters into a settlement with the employer, the presumption that it
has acted in the best interests of its members cannot just be ignored more so in the
absence of attribution of any oblique motives behind it. Mere allegaiton in that
behalf cannot be sufficient. The court ordered acceptance of the settlement in toto
for the purpose of making it an award.
Terms of private contract ofemployment/settlement when against public policy:
In N.P. Mathai v. Federal Bank Ltd.18 the Kerala High Court has held that the term
in the contract of private employment between the employer and its employees

15 Ibid
16 Gandhidham Nagarpalika, Adipur (Kutch) v. R.C. Israni (1993) 1 LU 432 (Guj); (The court
approved the view taken by an earlier Division Bench of the court in Jashubhai Hiralal Gandhi
v. Competent Authority and Deputy Collector, Ahmedabad( 1990) 2 Guj LH 609.
17 Ibid.
18 (1993)LablC1539(Ker);alsoseeMd.AMur/?^^
Lab IC 1400 for legal position in public law contracts, see Bushan Tilak Kaul XXVIIASIL 417
at 424 (1991).
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empowering the employer to terminate the services of a permanent employee

without holding any enquiry in certain circumstances by giving reasonable notice
or pay in lieu of notice as unenforceable being opposed to public policy under
section 23 of the Contract Act, 1872 and any action taken under the clause as invalid.
Considering the nature of contract and the disparate and disproportionate bargaining
power of the parties, the court described such a term as 'hire and fire rule'.
Terms in a settlement that management will not resort to retrenchment except
after obtaining consent of the union is unfair and against public policy: InMumbai
Mazdoor Sabha v. S.A. Patil, Member, Industrial Tribunal, Bombay^ a Single
Judge of the Bombay High Court has ruled that the terms in a settlement between
the employer and the trade union wherein it was provided that the employer would
not resort to any retrenchment or termination of service or discharge of workman
during currency of the settlement except after obtaining consent of the union as
unfair, unreasonable and opposed to the provisions of section 25J and also opposed
to public policy under sections 23 and 27 of the Contract Act. Dhanuka J held that
the proviso to section 25J is the only exception carved out by the legislature so as
to permit the parties to contract out and stipulate special terms concerning the
subject dealt with under chapters VA and VB. In all other respects, provisions of
chapters VA and VB alone govern the parties and no private contract is permissible.
The judge held that the clause in question could be construed as a provision
providing for more favourable benefit in favour of the workmen within the meaning
of section 25J as such but purported to impose a ban on the right of the employer
to lay-off or retrench a workman in accordance with law without obtaining prior
consent of the union. The terms of the settlement in question was not only held to
be inconsistent with the scheme, object and contents of chapters VA and VB but also
having exceeded the permissible limits within which the parties could exercise
freedom of contract under the proviso to section 25J(l).
A settlement otherwise than in the course of conciliation proeedings binds only
the workmen who are members of the union signing the settlement: A Single Judge
of the Bombay High Court20 has held that in a situation covered by section 18(1) it
is only the workmen who are members of the unions signing the settlement who
would be bound by the terms of the settlement during its operative period. If in the
concerned industrial establishment there are workmen who are not members of such
a union, whether they are members of any other union or not, the settlement would
not bind them. The judge opined that with regard to industrial matters which form
the subject matter of such a settlement, such workmen would be free to raise an
industrial dispute and such dispute, if raised, could be validly referred for adjudication.
This case, like other similar cases reported earlier21, shows the deficiency in the law
in enforcing collective agreements entered into with the majority or recognised
union. Instead of following the principle of representative status of majority union
to bind all workers by the settlement, the courts have gone by the literal meaning
of section 18(1) to hold that agreements de hors conciliation bind only the parties
19 (1993) Lab IC 2283 (Bom).
20 ICILtd. CAFI Division v. Smt. N.A. Kadam (1993) Lab IC 1498 (Bom).
21 Tata Chemicals v. The Workmen, AIR (\91S) SC 828; General Manager Security Paper Mill v.
R.S Sharma (1986) 11<LJ 432 (SC); also see Z.M. Shahid Siddiqi "Principle of Majority Union",
28 JILI232 (1986).
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to the agreement By adopting a literal construction, the courts have impeded the
growth of collective bargaining as an effective institution of dispute resolution
Unfair labour practice

In Government of Tamil Nadu v Tamil Nadu Race Course General Employees

Union22, a Division Bench of the Madras High Court has held that the management
had indulged in methods amounting to unfair labour practice when the committee
of management had issued directions to the custodian to allot workload in such a
way that race course employees should not claim permanency in the department
The court held that it is settled law that to employ workmen as casuals and continue
them as such for years with the object of depriving them of the status and privileges
of permanent workman is unfair labour practice Acceptance of the condition by the
employees that their work could be stopped at any time without notice or any such
similar condition cannot provide 'escape' to the state to avoid the mandate to
equality in article 14
Workman

Employee performing work of 'salesman' is 'workman' It is now well settled

that the test to be applied to decide whether an employee is a 'workman' within the
meaning of the Act is to take into account his basic or primary duties and the
dominant purpose of his employment An incidental performance of supervisory
duties or mere designation as supervisor will not impress his employment with the
character of supervisory capacity The focus has to be on the nature of his duties 23
A Single Judge of the Bombay High Court24 has held that the definition of
'workman' in section 2(s) covered the case of the employee who, though designated
as 'sales representative', mainly performed duties ot salesmen and in doing so he
not only did some clerical work but also the work of repairing radios etc
Practicing lawyer engaged on a retainership basis is not 'workman' A
company which had engaged a practising lawyer on a fixed monthly amount to look
after the company's interests before the conciliation officer and the labour court
could not be said to have master-servant relationship with the lawyer 25 The Punjab
and Haryana High Court opined that the relationship between the parties depicted
it to be a contract for service than a contract of service As there was no master and
servant relationship between the parties, the lawyer could not be said to be a
'workman' or even a part-time 'workman' within the meaning of section2()
Works committee

Representatives ofemployees are to be nominated in works committee under the

central rules Section 3 provides that in a works committee the number of
representatives of workmen shall not be less than the number of representatives of
employers In part VII (rules 38 to 57) of the Industrial Disputes (Central) Rules,
1957, elaborate provisions for the constitution of works committee, election of
22
23
24
25

(1993) 1 LLJ977(Mad)
J Phillips v The Labour Court Hyderabad (1993) Lab IC 1455 (AP)
Promer Sales Pvt Ltd v Manohar Sondhur (1993) II LLJ 997 (Bom)
Indian Sulphac id Industries Ltd v Labour Court Rohtak (1993) 1 LU 496 (P&H)
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representatives of workmen, their term of office, dissolution of such committee etc.

have been made. According to rule 40 representatives of the employer are to be
nominated by the employer. In fact nomination is the only mode in which
representatives of employers are brought on the works committee.26
Representatives of workmen on works committee to be elected under the central
rules:A Division Bench of the Madhya Pradesh High Court27 has opined that the
central rules do not contemplate nomination of the representatives of the workers
in a works committee in any situation whatsoever; not even in a situation where a
trade union has majority of workers as its members and nomination of representatives
of workmen has been made in consultation with the said union. The representatives
of the workmen on the works committee are to be always elected. The manner of
election may vary but there has to be an election. Rule 42 provides that the
representatives of workmen are to be elected in two groups namely, from amongst
the members of registered trade unions and from amongst those who are not
members of the registered trade union or unions. But if in an establishment the
majority of workers are in one union, then no division in two groups is necessary.
In that situation representatives of workmen will be elected in a single group without
any kind of division.
Reference and related issues

Continuous services of one year within the meaning of section 25-B by

'workman' not a condition to be fulfilled for raising an industrial dispute or for
making a reference under section 10: Every person employed in 'industry' whose
case is covered by section 2(s) is a 'workman' irrespective of the fact whether he
is employed as casual, temporary, probationer or on permanent basis. The question
of his having worked for 240 days in twelve calendar months is relevant only for
claiming benefits under the Act accruing on the basis of continuous service within
the meaning of section 25-B. But it certainly is not a condition to be fulfilled for
raising an industrial dispute as such. A Single Judge of the Calcutta High Court has
held that the government had erred in law in refusing to refer the dispute of nonemployment of an employee on the ground that he was not qualified to raise the
dispute under the Act because he had not put in 240 days service.28 The question
whether a person is a 'workman' or whether he is qualified to raise an industrial
dispute has to be adjudicated by the labour court/industrial tribunal and not by the
government.
Government cannot usurp thefunctions ofindustrial adjudication while deciding
whether to make reference or not: While exercising the power of making or refusing
reference, the government may consider prima facie whether the claim is frivolous,
bogus, mala fide or put forth for extraneous and irrelevant reasons and not for
industrial peace etc. but an adjudication on merits of the case by the government
would amount to usurping the functions of labour court/industrial tribunal which is

26 Bangali Raje v. Union of India (1993) Lab IC 812 (MP) (DB).

27 Ibid.
28 Kerala Private Motor and Mechemcal Workers Federation v. State of Kerala (1993) 1 LLJ 401
(Ker).
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not permissible under law. In Indian Oxygen Employees Union v. State of Tamil
Nadu,29 the government refused to refer the dispute relating to termination of
service of the workman on the ground that his services had been terminated by the
employer in terms of the standing order which provided for automatic termination
by reason of unauthorised absence from duty The Supreme Court directed the
government to reconsider the matter on merits
Section IIA and related issues-misconduct * Refusal to work on a new machine
requiring intensive practical training for its operation, if bona fide, cannot be said
to constitute misconduct or insubordination of refusing to obey the lawful and
reasonable orders of the superior.30 When admittedly there were other operators
who had also refused to carry out the orders of their superiors to work on new
machines without practical training, the management's decision to pick and choose
the petitioners for disciplinary action of extreme penalty of discharge from service
for acts which were not misconduct was held as an act of victimisation. The judge
observed that the punishment imposed was so disproportionate to the charge
levelled that it shook the judicial conscience *
Labour court justified in refusing permission to adduce evidence when no plea
raised that order of termination wasfor misconduct Management cannot be heard
to complain that the labour court did not give it an opportunity to justify the
termination on merits by adducing evidence that the employee had committed
misconduct relating to embazzlement of funds when in the written statement before
the labour court, it had taken the stand that the order of termination was in
accordance with the terms and conditions of appointment and no plea was raised that
the order of termination was for any misconduct31
Principle ofrelation back: In a case where a departmental enquiry is commenced
against a delinquent employee but is, thereafter, abandoned due to the fault of the
management, any order of dismissal passed by the employer against the delinquent
employee, if found sustainable in law subsequently by industrial tribunal/labour
court on the basis of evidence produced before it, will not relate back to the date of
dismissal. But if it is found that the management was not at all to blame or it was
the delinquent employee who was at fault which had led to the abandonment of the
enquiry, then the doctrine of relating back will apply and the order of dismissal will
relate back to the date when such order was passed.32 In the instant case there were
indications, though not clinching, that the petitioner delinquent was behind the
incidents, such as mysterious death of the representative of the management in the
disciplinary proceedings whose body was found on the railway track, assault on the
inquiry officer, letters and telephone calls threatening officers of the management
to abandon the enquiry. Aggarwal J of the Bombay High Court opined that having
regard to all the facts and circumstances of the case, the theory of 'relation back'
applied with all force and the petitioner employee would not be entitled to the wages
during the interegnum, le from the date of the order of dismissal and the award
29 (1993) Supp (1) SCC 610
30 Association of Chemical Workers v BD Borude (Arbitrator) (1993) Lab IC 711 (Bom)
31 Gaur Brahaman Vidya Parcharni Sabha v Industrial Tnbunal-cum-Labour Court (1993) 11 LLJ
500 (P&H) (DB)
32 SatishM Naikv NP Murgah( 1993) Lab IC 2550 (Bom), also see BasuDeba Das v MR Bhope
(1993) Lab IC 1677 (Bom)
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passed by the labour court which had, on evidence produced by the management
before it, found that the dismissal order was justified and proper.
Functions of the conciliation officer

The conciliation proceedings under the Act occupy a prominent place in the
dispute resolving mechanism. The conciliation officer has a solemn statutory duty
to conciliate. If as a result of his endeavour, a fair settlement is arrived at, he shall
send a report enclosing a signed copy of the memorandum of settlement. Where no
settlement is arrived at, he is bound to send a failure report to the appropriate
government. A conciliation officer should possess the necessary work culture for
undertaking the strenuous course of peace making.33 Sometimes he may fail; he
cannot be blamed for that. But he cannot omit to submit failure report under section
12 if the conciliation proceedings fail. The omission on his part to do so amounts
to an abdication of the statutory duty.
The Bombay High Court34 has held that omission to submit failure report after
20 meetings between the management and representatives of union was culpable,
if not motivated. The court held that in such a circumstance mandamus could be
issued to the unwilling officer to discharge the statutory duties under section 12(4)
to forward his failure report to the government in the interest of preserving industrial
peace and to protect the interest of workers. The court considered it unfortunate that
in a state like Maharashtra, which is known for its industrial activities, there has not
been an effective overviewing of the functioning of the various conciliation officers
who appear to be having an impression in their minds that they are the ultimate
arbitrators of industrial disputes. The court considered it expedient and highly
desirable that they ought to be "disabused of those erroneous impressions." It
opined that State of Maharashtra would do well to undertake an evaluation in
relation to the adequacy of the personnel in the labour department for a meaningful
implementation of the labour laws as was undertaken by the State of Kerala. The
court also opined that the central government should occasionally review the
working of various enactments, the Industrial Disputes Act included, and the
working of section 12 thereof, important as it is.
Section 25FF and related issues

In N.T.C. (South Maharashtra) Ltd. v. Rashtriya Mill Mazdoor Sangh?5 a

common question of law that arose in a batch of special leave petitions before the
Supreme Court was whether the workmen had ceased to be workmen of the textile
mills and, therefore, of the National Textile Corporation Ltd. (NTC) after the
management of the mills was taken over by NTC under the Textile Undertakings
(Taking over of Management) Act, 1983 (Act). Both, the labour court while
granting interim relief and the High Court of Bombay, when confirming the same,
took the view that they continued to be the workmen of the mills and, therefore, of

33 All India Bombay Tyres International Employees'Federation v. CB. Dinagre (1993) Lab IC 817
at 820.
34 Ibid.
35 (1993)1 SCC 217.
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NTC. This common question of law having great bearing on the rights of the
workmen arose in the backdrop of the facts given in brief.
In January 1982 the workmen of all textile mills in Bombay went on strike. The
strike was declared illegal in February 1982. The Act came into operation in
October 1983. Under the provisions of this Act, management of 13 mills was taken
over by NTC on February 10,1984. In all 54,338 employees were working in these
mills on the date of strike but on the date of take-over, there were only 40,039 left.
NTC admitted before the Supreme Court that it had paid gratuity to 10,002 of them
who had voluntarily resigned at the time of take over and it took over only 20,394
workmen leaving 9,643 without employment.
The NTC raised two-fold arguments before the court. Firstly, section 25FF in
effect terminated the contract of employ ment of the workmen on account of transfer
of management of the textile mills to NTC and all that the workmen were entitled
to was the notice and compensation from the textile mills in accordance with the
provisions of section 25F as if the workmen were retrenched. Secondly, the contract
of employment with workers came to an end with the coming into force of the Act
and on the date of the take-over there was no subsisting contract of employment
between NTC and the workmen. NTC had power, both implicit and explicit, under
the Act to choose which of the employees and how many of them they could take
over. In pith and substance, the case of NTC was that the workmen could not remain
in service in continuance of contract of employment after the transfer, and in any
case not with NTC and hence, there was no obligation of NTC to continue their
services after the take-over of management.
The court observed that there is nothing to indicate in section 25FF that it puts
an end to the contract of employment on the transfer of the ownership of the
undertaking to the new employer. The section only provides for compensation to
the workmen if such transfer aliunde results in the termination of contract of
employment. Whether the transfer results in the termination of contract of employment
or not, will depend upon either the terms of the agreement of transfer or on the
provisions of the law which effect the transfer. However, the proviso to section 25FF
makes it clear as to when the transfer will have no effect on the contract of
employment and the workman will not be entitled to the notice and the deemed
retrenchment compensation under section 25F. The court opined that the three
conditions envisaged in the aforesaid proviso under which the workman becomes
ineligible to the notice and 'deemed retrenchment compensation' further make it
abundantly clear that by itself neither section 25FF nor the transfer of undertaking
as such, puts an end to the contract of employment. In fact, the section envisages the
continuation of employment and makes provision for the compensation only if the
transfer results in the termination of the contract of employment.
One of the principal objects of the Act was to protect the interests of workmen
who were already employed in the textile mills. Consistent with the object, the Act
nowhere referred to the termination of thecontract of service of workmen. Rejecting
the contention of NTC that contract of employment of workers came to an end with
the coming into force of the Act, Sawant J observed:36

36 Id. at 225.

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The legislature has taken precaution to abolish only certain contracts and
provide for the vacation of the offices of only those persons who were in
charge of the management. That was as it should have been, since, as the
preamble of the Act shows, the legislation had become necessary because
there was mismanagement ... and the person who was in charge of the
management had, therefore, necessarily to go if the mills were to be reorganised and rehabilitated both to protect the interests of the workmen
employed as well as to augment the production and distribution of the cloth
at fair prices to subserve the interests of the general public.
It is important to state here that section 13 of the Act, on the contrary, made it
clear that the contract of employment of workmen did not end on take-over but could
only be terminated by the custodian if he was of the opinion that it was unduly
onerous. However, while terminating the contract, he had to give one month's
notice in writing or salary or wages, as the case was for one month in lieu of notice.
The court observed that section 13 was consistent with the object of this Act and the
provisions of the Industrial Disputes Act. Since neither the custodian nor NTC, who
stepped into his shoes, had at any time put an end to the contract of employment of
any of the workmen involved in the dispute pursuant to the provisions of the Act,
it could not be said that the workmen had ceased to be the workmen of the mills and
hence NTC, The court expressed its surprise that NTC should have taken the stand
that workmen had not continued in the employment in view of the fact that it had
accepted resignation of 10,002 workers who had resigned voluntarily and paid them
gratuity. If the workmen had not continued in employment, there was no question
of accepting their resignation and paying them gratuity.
Employer justified in making statutory tax deduction from one month's wages under section
33(2)0)

In S. Ganapathy v. Air India31 an interesting issue that came up for consideration

of the Supreme Court was whether in computing the amount of one month's wages,
to be paid under section 33(2)(fc), the employer is justified in reducing the amount
by statutory tax deduction. In this case the appellants suffered disciplinary proceedings
for some misconduct and having been found guilty, were awarded penalties of
removal or dismissal by the respondent. The appellants were, at the material time,
stationed at Calcutta. It seems that some proceedings, unconnected with the
misconduct, in which the appellants were concerned, were pending before the
National Industrial Tribunal, Bombay. The respondent-corporation applied to the
National Industrial Tribunal by means of separate approval applications under
section 33(2)(fc) to have its action approved. In terms of the said provision it paid
to the appellants one month's wages, reducing it by a sum of Rs. 10/- to Rs. 15/as deductions on account of monthly payment on tax on employment, imposed on
salary or wage earners, under the provisions of the West Bengal State Tax on
Professions, Trades, Callings and Employment Act, 1979. The approval sought by
the management was opposed by the appellants before the tribunal on the ground
that they had not been paid one month's wages in terms of the mandatory provisions
37 (1993) 3 SCC 429
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of section 33(2)(b) as there was short payments by Rs. 10/- to Rs. 15/- on account
of tax deduction made by the corporation. Sustaining the objection of the appellants,
the tribunal rejected approval applications on this score alone and not on merits. The
Bombay High Court remanded the matter to the tribunal for decision on merits
taking the view that the tribunal was in error in refusing approval on the ground of
the suggested short payment and hence breach of section 33(2)(b). Aggrieved by the
decision of the Bombay High Court, the workmen filed special leave petitions in the
Supreme Court. The case of the workmen before the Supreme Court was that one
month's wage statutorily required to be paid in terms of section 33(2)(b) is a
payment which does not partake of the character of salary or wages in view of the
fact that employer and employee relationship is snapped by the order of dismissal
or removal already passed and served on the employee and hence the deduction of
tax at the snapped source renders the payment or deposit of one month's wage
deficient, contravening the mandatory provisions of section 33(2)(b).
The court opined that although the inclusions and exclusions in the definition
of wages in section 2(rr) of the Act does not refer to tax dues, "But it goes without
saying if there is a statutory compulsion to deduct, that compulsion would have an
intrusive role to play, getting a proper fitment, as the law may warrant its effect,
section 33(2)(b) apart."38 Holding that the respondent corporation was justified in
reducing that amount by statutory tax deduction in computing the amount of one
month's wages to be paid, Punchhi J observed:39
Thus on principle and precept we go on to hold that when an order of
discharge or dismissal of a workman is incomplete and inchoate until its
approval is obtained from the Tribunal, there is no effective termination of
the relationship of the employer and the employee. Not only (sic even) in a
limited way that relationship is snapped factually and one month's wage is
given to the employee to soften the rigour of his factual unemployment, but
the content and character of the wage would extendedly tend to remain the
same so far as subjection to statutory tax deduction is concerned, being
remuneration paid as understood in section 2(rr)... on the supposition that
the terms of employment, expressed or implied, were fulfilled and the same
was due as wages payable to the workman in respect of his employment, or
of work done in such employment, even though he was not put to work.
Labour court has no jurisdiction to entertain claim for wages during lockout period under section
33C(2)

Does labour court have jurisdiction to entertain claim for wages during the
period of lockout under section 33C(2) was the short but important legal issue
before a Single Judge of the Bombay High Court.40 In this case the labour court
placing reliance on the decision of the Supreme Court in Bank of India v. T.S.

38 Id. at 433,
39 Id. at 438.
40 Siemens Ltd., Thane v. Ganjanan Vithal Konde (1993) 1 LU 635 (Bom); also see Jagannath
Bhagwandas Srivastava v. Harish Thadani(\993) Lab 1 C 2508 (Bom).
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Kelawala41 took the view that, whether lockout was legal or illegal, by,analogy, the
reasoning of the said judgment would apply and that workman would be entitled to
wages inasmuch as they had given unconditional undertaking that they will
maintain discipline and production as usuaL The labour court held that in view of
the unconditional undertaking given as required by the employer, the workmen had
established that they had an existing right to claim wages for the period of lockout.
Reversing the decision of the labour court, the Bombay High Court held that labour
court has no jurisdiction to entertain claim for wages during a period of lockout
under section 33C(2) as there was no right to claim wages for the period of lockout
or strike unless the inter se rights and liabilities had been declared by an adjudicatory
process by the competent industrial tribunal. The court opined that despite the
expression 'strike wages' and 'lockout wages' used frequently in industrial
adjudication, the amount payable during an illegal and/or unjustified strike/lockout
does not amount to 'wages' within the meaning of the expression as defined in
section 2(rr). On the question as to whether the labour court was right in drawing
analogy from the Bank of India case the High Court opined that the Supreme Court
in that case was not dealing with a situation of lockout at all and it is a trite principle
of law that a j udgment is an authority for what it decides or what may be deducible
logically thereform. The High Court held that it was, therefore, wrong to say that
the judgment in the Bank ofIndia case was running counter to or overruled the legal
position as indicated in Management of Kairbetta Estate*1 and The Statesman
case.43
In Jagannath Bhagwandas Shrivastava v. Harish Thadani,44 a Single Judge of
the Bombay High Court held that where there is a controversy in regard to the very
fact whether the person concerned was in employment or not, the question of
computing the relief under section 33C(2) did not arise as it postulates the existence
of relationship of employer and workman and the entitlement of a workman to
certain benefits.
Right of representationsection 36X2)

Under section 36( 1 )(a) 'workman' can be represented in any of the proceedings
under the Act by any member of the executive or 'other office bearers' of the
registered trade union of which he is a member. But under section 36(2)(a), in case
of an employer, the employer can only be represented by an 'officer' of an
association of employers of which he is a member. In Bharat Petroleum Corporation
Ltd. v. C.G. Industrial Tribunal,45 the petitioner corporation challenged in a writ
petition an order of the industrial tribunal holding that the executive committee
members of the Employers Association of India (of which the petitioner corporation
was a member) were not 'officers* of the said association within the meaning of
section 36(2)(a) and, therefore, could not represent the management in the reference

41
42
43
44
45

(1990) II LLJ 39 (SC).

Kairbetta Estate v. Rajamanickam (1960) II LU 275 (SC).
The Statesman Ltd. v. Their Workmen (1976) 1 L U 484 (SC)
Supra note 40.
(1993) II LU 608 (Cal); also see M/s Punjabi Ghasitaram Hatwai Karachiwala v. Sahadeo
Shivram Pawar (1993) Lab IC 2449 (Bom).
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proceedings before it. A Division Bench of the Calcutta High Court opined that on
a plain reading of section 36( 1) and (2), the legislature did not intend to include the
expression 'any member of the executive committee9 as in the case of workman
within the expression 'officer of the Association' used in sub-section (2). The
legislature has in its wisdom taken away therightof the employer to be represented
by any member of the executive committee but reserved therightof the workman
to be represented by the executive committee members. The High Court upheld the
view of the industrial tribunal that president, vice president, secretary etc. who work
as functionaries and execute policy decisions of any association can be regarded as
'officers' but a member of the executive committee cannot be held to be an 'officer'
of such association unless the articles or memorandum of employers association
enjoin that all the executive committee members or any of them can work as a
functionary and execute policy decisions.
Industrial Disputes Act and the State Shops and Commercial Establishment Acts not repugnant

There is no repugnancy between the Industrial Disputes Act and the Rajasthan
Shops and Commercial Establishment Act, 1947 even though both the legislations
are covered by entry 22 of the concurrent list in the seventh schedule of the
Constitution.46 While the two legislations occupy the same field, there is room for
both the statutes operating without coming into collision with each other and,
therefore, no repugnancy can arise. The Industrial Disputes Act, the central
legislation, is not intended to be exhaustive on the subject so as to cover the entire
field. The state legislatures are free to enact in the samefieldproviding for additional
matters. While remedies for the 'workman' already exist under the Industrial
Disputes Act, no remedy under the Act exists for those employees who do not
correspond to the description of 'workman' under the Act. For them new remedies
have been created under the Shops Act. While those who correspond to the
description of 'workman' under the Industrial Disputes Act, have a choice to choose
the forum either under that Act or under the Shops Act, those who do not correspond
to the description of * workman' under the Industrial Disputes Act but are nonetheless
covered by the definition of 'employee' under the Shops Act have to be content with
the remedy available only under the Shops Act.47
Ill

THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT

Certified standing orders must conform to the principles of natural justice and articles 14 and 21.

Can an employer strike off the name of his employee from the rolls for
unauthorised absence without hearing him on the plea that under the certified
standing orders he is deemed to have lost his lien on the job by absentingfromduty
continuously for more than eight days? In D.K. Yadav v. JM.A. Industries Ltd.,4*
the Supreme Court has held that the impugned action of the management in striking
46 G.Af, Lake Palace Hotel, Udaipur v. Ranjit Singh (1993) II LU 1098 (Raj) (DB).
47 Nirchiliyav.ManagementofSafireTheatreMadras(\99\)\UJ\U($CyM^
Kaul XXVIIASIL 417 at 417-418 (1991).
48 (1993) 3 SCC 259; clause 13(2)(iv) of the standing orders on which reliance was placed by the
management in support of its action read thus:
"If a workman remains absent without sanctioned leave or beyond the period of leave originally
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off the name of the employee from the rolls for unauthorised absence, which
constituted misconduct, without complying with the principles of natural justice
was not justified. The court ruled that it is settled law that certified standing orders
have statutory force but they do not expressly exclude the application of the
principles of natural justice. Particular statute or statutory rules or orders having
statutory force may exclude the application of principles of natural justice expressly
or by necessary implication.49 In other respects the principles of natural justice
would apply unless the employer justifies its exclusion by citing special and
exceptional exigencies. The court opined that an order involving civil consequences
must be consistent with the principle of natural justice and must be right, fair and
just to answer the requirement of article 14. Holding that an order of termination of
service of an employee visits him with civil consequences, K.Ramaswamy J held:50
It is thus well-settled law that right to life enshrined under Article 21.. .would
include right to livelihood. The order of termination of the service of an
employee/workman visits with civil consequences of jeopardising not only
his/her livelihood but also career and livelihood of dependants. Therefore,
before taking any action putting an end to the tenure of an employee/
workman fair play requires that areasonable opportunity to put forth his case
is given and domestic inquiry conducted complying with the principles of
natural justice. In D.T.C. v. D.T.C. Mazdoor Congress the Constitution
Bench, per majority, held that termination of the service of a workman
giving one month's notice or pay in lieu thereof without inquiry offended
Article 14. The order terminating the service of the employee was set aside.
In view of the above, the court held that principles of natural justice had to be
read into the standing order relied upon by the management in support of its action,
otherwise it would become arbitrary, unjust, unfair and violative of article 14.
Accordingly the impugned action was held to be violative of the principles of
natural justice as no opportunity was given to the workman to explain his case and
no enquiry was held. The court ordered reinstatement of the workman with 50
percent of back wages.
Limitation for filing appeal under the Act

Section 6 provides that an appeal to the appellate authority against the order of
the certifying officer has to be filed 'within 30 days from the date on which copies
are sent'. In Badarpur Power Engineers Association v. Deputy Chief Labour
granted or subsequently extended, he shall lose his Hen on his appointment unless:
a) he returns within 8 calendar days of the commencement of the absence of the expiry of leave
originally granted or subsequently extended as the case may be; and
b) explains to the satisfaction of the manager/management the reason of his absence or his inability
to return on the expiry of leave, as the case may be. The workman not reporting for duty within
8 calendar days as mentioned above, shall be deemed to have automatically abandoned the services
and lost his lien on his appointment His name shall be struck off from the muster-rolls in such an
eventually'*.
49 The Industrial Disputes Act makes exceptions for the application of principles of natural justice
by necessary implication in specific provisions like sections 25F, 25FF and 25FFF.
50 Supra note 1 at 270.
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Commissioner,51 a Division Bench of the Delhi High Court held that the date of
despatch was to be excluded for the purpose of computing the period of limitation
of 30 days under section 6 in view of clear language of section 9( 1) of the General
Clauses Act, 1897 which provides that when in any central Act the word used is
'from', then, the first day in the series of days shall be excluded.
Right to legal representation

Is a delinquent employee entitled to be represented by an off] ce bearer of another

trade union, who is not a member of either a recognised union or non-recognised
union functioning within the undertaking in which he is employed in view of
statutory limitations contained in section 22(a) of the Maharashtra Recognition of
Trade Unions and Prevention of Unfair Labour Practices Act, 1971 and the certified
standing order? A three-judge Bench of the Supreme Court answered the question
in the negative in Crescent Dyes and Chemicals Ltd. v. Ram Naresh Tripathi52
without taking notice of the earlier decisions of the court53 on the subject. In this
case, the respondent workman was chargesheeted for misconduct and a domestic
enquiry was ordered against him. He requested the enquiry officer that he be
allowed to be defended by one Talraja, who was office bearer of the Bombay
Mazdoor Union, of which the respondent workman was a member. The inquiry
officer turned down the request on the ground that Talraja was not a member of the
recognised or unrecognised union functioning in the employer's establishment
which alone were permitted to represent an employee under the Act and the standing
orders. Ahmadi J upheld the view of the enquiry officer thus :54
[T]he right to be represented through counsel or agent can be restricted,
controlled or regulated by statute, rules, regulations or Standing Orders. A
delinquent has no right to be represented through counsel or agent unless the
law specifically confers such a right. The requirement of the rule of natural
justice insofar as the delinquent's right of hearing is concerned, cannot and
does not extend to a right to be represented through counsel or agent. In the
instant case the delinquent's right of representation was regulated by the
Standing Orders which permitted a clerk or a workman working with him
in the same department to represent him and this right stood expanded on
Sections 21 and 22 (ii) permitting representation through an officer, staffmember or a member of the union, albeit on being authorised by the State
Government The object and purpose of such provisions is to ensure that the
domestic enquiry is completed with despatch and is not prolonged endlessly.
Secondly, when the person defending the delinquent is from the department

51 (1993)ILU991(Del)(DB).
52 (1993) 2 SCC 115.
53 Board of Trustees of the Port of Bombay v. D.R. Nadkarni, AIR 1983 SC 109; see S.N, Singh
"Adnunistrative Law", XIX ASIL 482 at 505 (1983); Bhagat Ram v. State ofH.R, AIR 1983 SC
454; J.K. Aggarwal v. Haryana Seeds Development Corporation Ltd., AIR 1991 SC 1221.
54 Supra note 52 at 129; The judgereliedon tr^ judgments of the court handed down between 1960
and 1965 in Kalindiv. Tata Locomotive and Engineering Co. (1960) 3 SCR 407; Brooke Bond
India(P) Ltd. v. Subba Raman (1961) 2 L U 417 and Dunlop Rubber Co. v. Workmen (1965) 2
SCR 139.
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or establishment in which the delinquent is working he would be well

conversant with the working of that department and the relevant rules and
would, therefore, be able to render satisfactory service to the delinquent.
Thirdly, not only would the entire proceedings be completed quickly but
also inexpensively. It is, therefore, not correct to contend that the Standing
Order or Section 22(ii) of the Act conflicts with the principles of natural
justice.
In view of the above legal position, the Supreme Court upheld the dismissal
order passed against the respondent on the basis of ex parte domestic enquiry. It is
submitted that the decision of the court in Crescent Dyes & Chemicals Ltd. needs
to be recognised in the light of the decision of the court in Board of Trustees, Port
of Bombay v. Dilip Kumar and other later decisions56 of the court which, it seems
have not been brought to the notice of the court. It is settled law that an authoritative
law laid down after considering all the relevant provisions and the previous
precedents, is no longer open to be recanvassed on new grounds or reasons that may
be put forth in its support unless the court deemed appropriate to refer it to a large
Bench in the larger public interest to advance the cause of justice.57 Every new
discovery or argumentative novelty cannot undo or compel reconsideration of a
binding precedent.58
IV THE TRADE UNIONS ACT, 1926
Suit for perpetual injunction against unfair labour practices not barred by section 18(1)

A Single Judge of the Punjab and Haryana High Court59 has held that a suit for
perpetual injunction restraining the workman from indulging in unfair labour
practice was not barred under section 18(1). A civil court is justified in restraining
the workman from holding any meeting, demostration, sitting in dharna in and
around the premises of the company and within a reasonable radius from the
premises of the company and also from interfering or obstructing the right of the
company, its staff, visitors etc. and also from damaging the building and entry of
other workers. The court held that such a restraint did not curtail the just trade union
activities of the workers and could not be construed as unjust. The workers were
at liberty to carry on legitimate trade union activities peacefully.
Unregistered trade union can neither raise an industrial dispute nor file a writ petition

A Division Bench of the Bombay High Court60 has held that an unregistered
trade union not being a juristic person is not competent to file a writ petition. The
court further held that an unregistered trade union is incompetent to raise an
industrial dispute on behalf of the employees. If it cannot raise an industrial dispute,
55
56
57
58
59

Supra note 52.

Supra note 53.
Supra note 48 at 266.
Ambika Prasad Mishra v. State of U.P. (1980) 3 SCC 719.
Ram Singh v. M/s Ashoka Iron Foundry (1993) 1 L U 987 (P&H); also see, Engineering Projects
Pvt Ltd. v. Engineering Project Ltd. Employees Union (1986) Lab IC 1266 (Del).
60 National Organisation ofBank Workers Federation of Trade Unions v. Union ofIndia (1993) II
L U 537 (Bom).
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it has also no locus standi to seek the privilege of negotiating the demands which
is the privilege of only duly registered trade union or group of workers under the
Industrial Disputes Act.
Recognition and related issues

In International Airports Authority of India Workers' Union v. International

Airports Authority ofIndia?1 the Supreme Court had to deal with a dispute between
two rival unions for recognition as the majority union. To adjust equities between
the rival unions, the court directed the management to holdfreshelections by secret
ballot for purposes of recognition within the time-frame prescribed by the court. The
election was ordered to be held under the supervision of the management after due
intimation to both the unions. So long as the elections were not held, the union which
had been recognised earlier was to continue as the recognised union.
Cancellation of registration when bad in law

In Tata Electric Companies Officer Guild v. Registrar of Trade Unions,62 the

registrar of trade unions issued a notice under section 10(b) calling upon the
petitioner to show cause as to why the registration of the petitioner union should not
be cancelled for failure to submit annual returns as per law. The petitioner replied
stating that due to misunderstanding about the accounting year, the annual returns
for the period ending 31.3.1991 were filed and not the period ending 31.12.1991
along with the certificate of auditor. This explanation was followed by communication
in June 1992 along with annual returns ending 31.12.1991. After a long gap of six
months, the registrar passed the order of cancellation of registration on the sole
ground that the explanation given by the trade union was not satisfactory. A
Division Bench of the Bombay High Court held that the order of the registrar was
not only contrary to provisions of section 10 but the reasons given for cancellation
were vague. The court observed:63
The scheme of Section 10 is thatfor cancelling the registration of trade union
for contravention of any provision of the Act, the contravention must be
wilful and after notice from registrar and two months previous notice
specifying the ground of proposed cancellation must have been issued. It
does not appear that these requirements of the provisions have been
complied with before passing the impugned order.

61 (1993) Suppl (1) S C C 229.

62 (1993) Lab IC 1849.
63 Id. at 1850.
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