JUDGMENT
H. H. Kantharia, J.
1. In these four petitions under Article 226 of the Constitution, facts are common and the law points are the same and, therefore, they are being disposed of by this common judgment.
2. The petitioners, in all the writ petitions, were in the employment of the second respondent. They were charge-sheeted on 24th November, 1981, inter alia, alleging against them that they assaulted one D.T. Jadhav, second respondent’s Security Officer/Incharge, near Vasai Railway Station on 15th November, 1981 at about 6.30 p.m. The charge framed against them was ‘riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline”. The petitioners submitted their written explanations on 30th November, 1981 denying the charges levelled against them as false and fabricated and further contending that they were being victimised for their trade union activities. The petitioners were suspended pending domestic enquiries. Thereafter, domestic enquiries were held by one Namdco K. Aher. The petitioners participated in the said enquiries and were defended by one P. Ganguli, a trade union representative. The Enquiry Officer held the petitioners guilty of the charges levelled against them and relying upon his findings, the second respondent-company vide their letters dated 18th January, 1983 dismissed the petitioners with effect from 20th January, 1983. The petitioners resisted their dismissals by letters dated 23rd January, 1983 that the same were illegal and improper.
3. Thereafter, the petitioners approched the Government Labour Officer and lodged complaints with him and raised industrial disputes for their reinstatement vide letters dated 25th February, 1983 addressed to the Commissioner of Labour. The Conciliation Officer initiated conciliation proceedings but the disputes could not be settled and, therefore, failure reports were submitted. The Deputy Commissioner of Labour by his orders dated 22nd November, 1983 refused to refer the disputes relating to the petitioner’s demands for reinstatement on the ground that the references were, prima facie, not justified having regard to the merits of enquiries, nature of misconduct and punishment awarded. The said orders of the Deputy Commissioner of Labour refusing to make references under Section 10(1) read with Section 12(5) of the Industrial Disputes Act, 1947 (hereinafter referred to as “the Act”) are impugned in these four petitions.
4. Mr. Kochar, learned Advocate appearing on behalf of the petitioners, submits that the reasons advanced by the Deputy Commissioner of Labour in not making the references are no reasons in the eyes of law and if at all they can be termed as reasons, they are too inadequate to refuse references. Mr. Kochar further submits that in any event the Government cannot take upon itself to adjudicate industrial disputes which can be done only either by the Labour Court or the Industrial Tribunal. In the submission of Mr. Kochar, the powers of the Labour Court and/or Industrial Tribunal under Section 11A of the Act cannot be usurped by the Government by refusing to make references. Mr. Kochar then urges that a harmonious reading of Sections 10(1), 11A and 12(5) of the Act shows that the petitioners have a legal right to justify their demands before the Labour Court or the Industrial Tribunal as to how and why their dismissals from service were invalid, improper and incorrect in law and they cannot be deprived of this legal right by refusing to make references to the proper forum. If references are made, the Labour Court or the Industrial Tribunal could also go into the question of adequacy of the punishment qua the misconduct alleged against the petitioners, further submits Mr. Kochar.
5. Mr. Gokhale, learned Assistant Government Pleader appearing on behalf of the first respondent-State of Maharashtra, submits that the powers of the Government under Section 10(1) read with Section 12(5) of the Act are absolutely discretionary and the Government may be justified in refusing to make references for reasons to be recorded in writing after going through the entire record. Mr. Gokhale also submits that in these cases the record shows that the petitioners had indulged in violent activities of assaults and on consideration of the enquiry reports, the Deputy Commissioner of Labour was satisfied that there was no prima facie case for reference, having regard to the merits of the enquiries held against the petitioners and the nature of the misconduct and the punishment awarded to them. In the alternative, Mr. Gokhale submits that at the most this Court may refer back the matters to the Deputy Commissioner of Labour for re-considering whether references should be made or not.
6. Now, after a Conciliation Officer submits a failure report under Section 12(4) of the Act, the appropriate Government is required to consider whether a reference should or should not be made to the appropriate authority. Sub-section (5) of Section 12 of the Act provides:
“If, on consideration of the report referred to in Sub-section (4),the appropriate Government is satisfied that there is a case for reference to a Board (Labour Court, Tribunal or National Tribunal), it may make such reference. Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefor.”
It may be noted here that if the Government decides to make a reference it has to be done under Section 10(1) of the Act which provides:
“Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing –
(a) refer the dispute to a Board for promoting a settlement thereof; or
(b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry; or
(c) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court for adjudication; or
(d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the third Schedule, to a Tribunal for adjudication:
Provided that where the dispute relates to
any matter specified in the Third Schedule ;
and is not likely to affect more than one
hundred workmen, the appropriate Government may, if it so thinks fit, make the reference to a Labour Court under Clause (c):
…….. …….. …….. …….. ……..
A bare perusal of these provisions of law makes it clear that the powers vested in the Government to make a reference, are discretionary. But when the Government chooses not to make a reference it has to : record reasons for not doing so and communicate the same to the concerned parties. This is a mandatory duty of the Government.
7. In our cases, the Deputy Commissioner of Labour passed identical orders and, for convenience sake, we may quote here the impugned order appearing in Writ Petition No. 627 of 1984. It reads as under:
“In exercise of the powers conferred on me by Government vide Government notification, Industries, Energy and Labour Department No. IDA 1379/3496 (i) Lab-9, dated 20th April, 1979 issued in supersession of Government Notification, Industries and Labour Department No. IDA 1369/117365/Lab-n, dated 9th April, 1969, I have to state that I have considered the report dated 24-8-1983 submitted to me by the Conciliation Officer, under Sub-section (4) of Section 12 of the Industrial Disputes Act, 1947 (XIV of 1947), in respect of the above dispute and I am satisfied that there is no case for reference thereof under Sub-section (5) of Section 12 for the reasons that the reference is, prima facie not justified having regard to the merits of enquiry, nature of misconduct and the punishment awarded.”
A mere glance at this order shows that the Deputy Commissioner of Labour was exercising, having been invested with the powers of the appropriate Government, had to be exercised reasonably with utmost care and caution. While exercising such powers he should be slow in declining to make a reference because in doing so, he attempts to usurp the powers of the Labour Tribunal in going into the merits of the matter. He should bear in mind that it is only when the Government is of the considered opinion and comes to the conclusion that the claims preferred by the workmen were perverse or frivolous or bogus or were inordinately delayed that the Government may exercise its discretion and refuse to make a reference. All that the Deputy Commissioner of Labour here did was to peruse the failure report submitted by the Conciliation Officer under Section 12(4) of the Act. He gave no good reasons for refusing to make a reference except stating that prima facie there was no justification to make a reference, regard being had to the merits of the enquiry, nature of the misconduct and the punishment awarded. Thus, there is nothing in the impugned order to show whether the Deputy Commissioner of Labour had fully considered the matter and what exactly prevailed upon him to come to the conclusion that the dispute raised by the petitioner was not worth referring to the Labour Court or Industrial Tribunal. To say the least, the impugned order is very much cryptic and appears to have been passed mechanically without application of mind. The Deputy Commissioner of Labour should have made little more communicative order so that one could know what persuaded him to decline reference. The discretion vested in the Government in this regard has to be exercised properly and with acceptable reason s for the decision.
8. In the dispute between Nirmal Singh and State of Punjab and other (1984 II LLJ 396), the appellant was a “Branch Manager” of the Hoshiarpur Central Co-operative Bank Ltd. when he was dismissed following a fraudulent encashment of a draft. When, after conciliation, the matter went before the Labour Commissioner, he declined to make a reference stating that the employee was not a “workman”. The employee’s writ petition was dismissed in limine by the High Court and therefore he filed an appeal in the Supreme Court. The Supreme Court in that appeal held :
“The Labour Commissioner ought to have given reasons why he came to the conclusion that the appellant is not a “workman” within the meaning of Section 2(s) of the Act. He has only stated that the post held by the appellant did not fall “within the category of workman”. He has not given any reason to justify his conclusion”.
Ultimately, the Supreme Court directed the Labour Commissioner to make a reference under Section 12(5) of the Act.
9. In Workmen of Syndicate Bank, Madras v. Government of India and Anr. (1985 I LLJ 93), the management of Syndicate Bank imposed the punishment of stoppage of three increments on one of its workmen. An industrial dispute was raised by the Syndicate Bank Staff Union and the Union Government declined to refer the dispute to an Industrial Tribunal for adjudication because the charges of misconduct against the worker were proved in a duly constituted departmental enquiry and the penalty was imposed after following the required procedure. The order of the Union of India was unsuccessfully challenged before the Delhi High Court which dismissed the writ petition in limine. Hence civil appeal was filed by the workmen of Syndicate Bank, Madras in the Supreme Court, in which it was held :
“It would not be right for the Government of India to refuse to make the reference on the ground that the charges of misconduct against the worker were proved during a duly constituted departmental enquiry and penalty was imposed on the worker after following the required procedure. If such a ground were permissible managements could easily avoid a reference for adjudication and deprive the worker of the opportunity of getting the dispute referred for adjudication even if the order holding the charges of misconduct proved was unreasonable or perverse or was actuated by mala fide or even if the penalty was imposed on the worker was totally disproportionate to the proved misconduct. Easily a claim for reference can be defeated by showing that a proper enquiry as per procedure has been held. Such a situation cannot be countenanced by law”.
10. A Division Bench of this Court (Bharucha and Tipnis JJ.) while dealing with a similar point in Appeal No. 627 of 1981, arising from Writ Petition No. 451 of 1981, decided on 27th August, 1987 held :
“The appropriate Government has an extremely limited administrative discretion in deciding whether or not to make a reference. In no case whatever can it perform an adjudicatory function. It cannot go into the merits of the dispute. That is squarely the preserve of the Labour Court or Industrial Tribunal. The discretion that the Government has is confined to determining whether, as a result of making a reference, there will be industrial unrest and whether the application for reference is frivolous or grossly delayed”.
The said Division Bench was of the opinion that it was not necessary to Elaborate on precedents in support of what they had stated and quoted the Supreme Court judgment in Bombay Union of Journalists and Ors v. The State of Bombay and Anr. which says:
“……………Similarly on disputed questions of fact, the appropriate Government cannot purport to reach final conclusions, for that again would be the province of the Industrial Tribunal…………..”.
The Supreme Court then said :
“Therefore, while conceding a very limited jurisdiction to the State Government to examine patent frivolousness of the demands, it is to be understood as a rule, that adjudication of demands made by workmen should be left to the Tribunal to decide. Section 10 permits appropriate Government to determine whether dispute exists or is apprehended and then refer it for adjudication on merits”.
11. This becomes all the more necessary in view of the introduction of Section 11A by Act 45 of 1971, which reads as under:
“Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require :
Provided that in any proceedings under this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter”.
Thus, the provisions of Section 11A of the Act give powers to the Labour Courts and the Industrial Tribunals to give appropriate relief, including the award of lesser punishment, to the dismissed or discharged workman and, therefore, it is all the more incumbent upon the Government to make a reference and not take away the powers of the judicial authorities by refusing to make the same. In K.P. Kshatriya v. Khandelwal Udyog Ltd. and Ors. (1980 II LLJ 261)(1981 Lab IC 1611) a Division Bench of this Court held :
“The power conferred under Section 10 to make a reference or not, is indeed discretionary and that the Government is not bound to make a reference of any dispute because a party or a union or the employer demands such a reference. Even so, the Government is under an obligation to exercise the discretion, reasonably and by reference only to relevant considerations. One of the relevant considerations, while making or refusing to make a reference, after the introduction of Section 11A, must necessarily be that the employee is entitled to get the evidence as to the proof of his misconduct reviewed in such a reference as also the quantum of punishment, even if the misconduct is held to have been proved. In other words, the circumstances that the disciplinary authority or the appellate authority over the same has applied its mind to the evidence on record and had bona fide come to some conclusion as to the proof of misconduct and the quantum of punishment by itself is not sufficient to refuse to make reference”.
It was further held :
“In the altered legal situation, the Government has to consider prima facie whether there is anything in the evidence which may goad or persuade the Labour Court or the Industrial Tribunal to change its opinion as to the conclusion of misconduct or the quantum of punishment therefor. The Government may refuse to make a reference if in their prima facie opinion the right of getting evidence reviewed already recorded and the right of getting reviewed the quantum of punishment awarded, is bound to be of no practical use in a particular case.” 12. Mr. Gokhale drew my attention to a judgment of the Supreme Court in Ram Avtar Sharma and Ors. v. State of Haryana and Anr. wherein it was held that since Section 10 of the Industrial Disputes Act required the Government to be satisfied that an industrial dispute existed or was apprehended, it would permit the Government “to determine prima facie whether an industrial dispute exists or the claim is frivolous or bogus or put forth for extraneous and irrelevant reasons not for justice or industrial peace and harmony.” There is no dispute about this position in law that the powers vested in the Government under Section 10(1) read with Section 12(5) of the Act are discretionary and the Government may refuse to make a reference if prima facie the Government is satisfied that a party in raising a dispute did it for frivolous and bogus reasons or for extraneous and irrelevant considerations rather than for justice or industrial peace and harmony. There is nothing in the impugned order passed by the Deputy Commissioner of Labour, in our case, to show that the claims of the petitioner were frivolous or bogus or were put forth for extraneous and irrelevant reasons and not for justice or industrial peace and harmony. Therefore, the authority cited by Mr. Gokhale does not help him.
13. Mr. Gokhale submits that the above judgment of the Supreme Court was referred to and relied upon by a Division Bench of this Court (Bharucha and Tipnis, JJ.) in Appeal No. 662 of 1984, arising from Writ Petition No. 912 of 1984, decided on 23rd July, 1987. The facts and circumstances obtaining in the case before the division Bench are distinguishable. In that case, while refusing to make a reference, the Deputy Commissioner of Labour gave four reasons as under :-
“I am satisfied that there is no case for reference thereof under Sub-section (5) of Section 12 for the reasons that (1) the workmen were involved in serious acts of misconducts, like assault, etc.; (2) the attempts of the employer to hold regular enquiry against them were frustrated by the workmen themselves, either by giving threats to the witness or by obstructing the process of enquiry; (3) the action of the employer in terminating the services of these workmen is as per Standing Orders which appears to be bona fide and there is nothing to indicate any mala fide, vindictiveness or victimisation; and (4) I do not find it expedient to refer the dispute to adjudication as the same will not be conducive to industrial peace.”
It is in such facts and circumstances of that case that the Division Bench was of the opinion that it was not expedient to refer the dispute for adjudication and there were no justifiable reasons to intervene in the matter under Article 226 of the Constitution. As stated earlier, the Deputy Commissioner of Labour in our case did not assign any good, acceptable reasons for refusing to make a reference, hence, this judgment of the Division Bench is also of no avail to Mr. Gokhale.
14. Regarding the submission of Mr. Gokhale that if I am not to uphold the impugned orders of the Deputy Commissioner of Labour, I may direct the Government to re-consider the matters, I am not able to persuade myself to agree with Mr. Gokhale in view of the law laid down by the Supreme Court in Sankari Cement Alai Thozhilalar Munnetra Sangam v. Government of Tamil Nadu and Management of India Cements Ltd. v. S.C.A.T. (1983 I LLJ 460), Nirmal Singh v. State of Punjab and Ors. (1984 II LLJ 396) (1984 Lab IC 1312), The M.P. Irrigation Karmachari Sangh v. The State of Madhya Pradesh and Anr. (1985 I LLJ 519) (1985 Lab IC 932) and this Court in Rohinton P. Daruwalla v. Dy. Commissioner of Labour (Conciliation). Bombay (1985 I CLR 126) and Krishna Babu Ghadigaonkar and etc. v. State of Maharashtra and other (1986 Lab IC 1664) directing the State Government to make reference to the appropriate authority or forum under Section 12(5) of the Act. Similarly, the Gujarat High Court in Suresh Shantarm Joshi v. Regional Manager, Bank of Maharashtra, Baroda (1985 I Lab LJ 487) had directed the Central Government to make such a reference.
15. In the result, all the four petitions succeed and the same are allowed. The impugned orders passed by Deputy Commissioner of Labour refusing to make references in all the four matters are quashed and set aside. I direct the first respondent-State of Maharashtra to refer the disputes raised by the four petitioners to appropriate Labour Courts or Industrial Tribunals under Section 10(1) read with Section 12(5)of the Act for proper adjudication within two weeks of the receipt of the writs.
