Cadilia Healthcare Limited & Another vs State Of Uttarakhand & Others

Manoj K. Tiwari, J

Heard learned counsel for the parties.

This is employers' petition against the order dated 15.10.2018, whereby an industrial dispute raised by respondent no. 3 has been referred for adjudication to Labour Court, Dehradun in exercise of powers under Section 4-K of U.P. Industrial Disputes Act, 1947.

Learned counsel for the petitioners submits that the dispute has not been espoused as per law; therefore, the reference is bad. He further submits that respondent no. 3 was responsible for promotion of business, therefore, he cannot be treated as a workman. He further submits that the dispute raised by respondent no. 3 was against his transfer, which was made as per conditions of his service, therefore, the State Government erred in referring the dispute for adjudication to the Labour Court.

It is settled position in law that the power to refer a dispute for adjudication to a Labour Court/ Industrial Tribunal is administrative in nature. Adequacy or sufficiency of material based on which opinion is formed to refer the dispute is beyond the scope of judicial review.

When the appropriate Government refers a dispute for adjudication, it does not decide any question of fact or law. The only condition, which the exercise of that power should satisfy is that there should be the existence or apprehension of an industrial dispute. Once the Government is satisfied about this question, it acquires jurisdiction to refer the dispute for adjudication.

Hon'ble Supreme Court in the case of Sarva Shramik Sangh v. Indian Oil Corpn. Ltd. Reported in (2009) 11 SCC 609 has held as under:-

"30. The opening words of Section 10 of the ID Act "if any industrial dispute exists or is apprehended, the appropriate Government may" were replaced by the words "where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time" by Act 18 of 1952. The issue was thereafter again considered in Rohtas Industries Ltd. v. S.D. Agarwal. After referring to the propositions in Sarathy this Court held:

"7. ... This interpretation of Section 10(1) is based on the language of that provision as well as the purpose for which the power in question was given and the effect of a reference. That decision cannot be considered as an authority for the proposition that whenever a provision of law confers certain power on an authority on its forming a certain opinion on the basis of certain facts the courts are precluded from examining whether the relevant facts on the basis of which the opinion is said to have been formed were in fact existed." (emphasis supplied)

The amended Section 10 was considered in Western India Match Co. Ltd. v. Western India Match Co. Workers' Union. This Court, again, after referring to the observation in Sarathy that the order of the Government is an administrative function, observed thus:

"9. ... the Government cannot go into the merits of the dispute, its function being only to refer such a dispute for adjudication so that the industrial relations between the employer and his employees may not continue to remain disturbed and the dispute may be resolved through a judicial process as speedily as possible."

In State of Bombay v. K.P. Krishnan this Court referred to the scope of Section 10(1) thus:

"5. ... Section 10(1) provides that where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time by order in writing refer the dispute to one or the other authority specified in clauses (a) to (d ). This section is of basic importance in the scheme of the Act. It shows that the main object of the Act is to provide for cheap and expeditious machinery for the decision of all industrial disputes by referring them to adjudication, and thus avoid industrial conflict resulting from frequent lockouts and strikes. It is with that object that reference is contemplated not only in regard to existing industrial disputes but also in respect of disputes which may be apprehended. This section confers wide and even absolute discretion on the Government either to refer or to refuse to refer an industrial dispute as therein provided. Naturally this wide discretion has to be exercised by the Government bona fide and on a consideration of relevant and material facts."

This Court clarified that the writ court can direct the Government to reconsider whether a reference should be made or not after leaving out the relevant and extraneous considerations.

In Bombay Union of Journalists v. State of Bombay this Court once again discussed the scheme of reference and observed:

"6. ... Section 10(1) confers discretion on the appropriate Government either to refer the dispute, or not to refer it, for industrial adjudication according as it is of the opinion that it is expedient to do so or not.

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... in entertaining an application for a writ of mandamus against an order made by the appropriate Government under Section 10(1) read with Section 12(5), the court is not sitting in appeal over the order and is not entitled to consider the propriety or the satisfactory character of the reasons given by the said Government.

... It is no doubt desirable that the party concerned should be told clearly and precisely the reasons why no reference is made, because the object of Section 12(5) appears to be to require the appropriate Government to state its reasons for refusing to make a reference, so that the reasons should stand public scrutiny; but that does not mean that a party challenging the validity of the Government's decision not to make a reference can require the court in writ proceedings to examine the propriety or correctness of the said reasons."

This Court however made it clear that if the appropriate Government refuses to make a reference for irrelevant considerations, on extraneous grounds or acts mala fide, a party would be entitled to move the High Court for a writ of mandamus. This position was reiterated in Hochtief Gammon v. State of Orissa. In Hochtief Gammon this Court observed thus:

"13. The executive have to reach their decisions by taking into account relevant considerations. They should not refuse to consider relevant matter nor should they take into account wholly irrelevant or extraneous consideration. They should not misdirect themselves on a point of law. Only such a decision will be lawful. The courts have power to see that the executive acts lawfully. It is no answer to the exercise of that power to say that the executive acted bona fide nor that they have bestowed painstaking consideration. They cannot avoid scrutiny by courts by failing to give reasons. If they give reasons and they are not good reasons, the court can direct them to reconsider the matter in the light of relevant matters, though the propriety, adequacy or satisfactory character of those reasons may not be open to judicial scrutiny. Even if the executive considers it inexpedient to exercise their powers they should state their reasons and there must be material to show that they have considered all the relevant facts."

In Ram Avtar Sharma v. State of Haryana this Court considered a refusal by the Government as it found that the services of the employee were terminated only after charges against him were proved in a domestic enquiry, that this Court held that a clear case of grant of writ of mandamus was made out on the ground of the following reasoning:

"9. ... The assumption underlying the reasons assigned by the Government are that the enquiry was consistent with the rules and the Standing Orders, that it was fair and just and that there was unbiased determination and the punishment was commensurate with the gravity of the misconduct. ... The reasons given by the Government would show that the Government examined the relevant papers of enquiry and the Government was satisfied that it was legally valid and that there was sufficient and adequate evidence to hold the charges proved. It would further appear that the Government was satisfied that the enquiry was not biased against the workman and the punishment was commensurate with the gravity of the misconduct charged. All these relevant and vital aspects have to be examined by the Industrial Tribunal while adjudicating upon the reference made to it. In other words, the reasons given by the Government would tantamount to adjudication which is impermissible. That is the function of the Tribunal and the Government cannot arrogate to itself that function. Therefore if the grounds on which or the reasons for which the Government declined to make a reference under Section 10 are irrelevant, extraneous or not germane to the determination, it is well settled that the party aggrieved thereby would be entitled to move the court for a writ of mandamus. ... It is equally well settled that where the Government purports to give reasons which tantamount to adjudication and refuses to make a reference, the appropriate Government could be said to have acted on extraneous, irrelevant grounds or grounds not germane to the determination and a writ of mandamus would lie calling upon the Government to reconsider its decision."

In Telco Convoy Drivers Mazdoor Sangh v. State of Bihar this Court held that:

"... While exercising power under Section 10(1) of the Act, the function of the appropriate Government is an administrative function and not a judicial or quasijudicial function. In performing this administrative function the Government cannot delve into the merits of the dispute and take upon itself the determination of the lis, which would certainly be in excess of the power conferred on it by Section 10 of the Act. However, there may be exceptional cases in which the State Government may, on a proper examination of the demand, come to a conclusion that the demands are either perverse or frivolous and do not merit a reference. But the Government should be very slow to attempt an examination of the demand with a view to declining reference and courts will always be vigilant whenever the Government attempts to usurp the powers of the Tribunal for adjudication of valid disputes, and to allow the Government to do so would be to render Section 10 and Section 12(5) of the Act nugatory.

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Where, as in the instant case, the dispute is whether the persons raising the dispute are workmen or not, the same cannot be decided by the Government in exercise of its administrative function under Section 10(1). When the dispute was whether the convoy drivers were employees or workmen of TELCO, that is to say, whether there was relationship of employer and employees between TELCO and the convoy drivers, the Deputy Labour Commissioner and/or the State Government was not justified in holding that the convoy drivers were not workmen and accordingly, no reference could be made.

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When it is found that the dispute should be adjudicated by the Industrial Tribunal and the State Government had persistently declined to make a reference under Section 10(1) despite chances given by High Court and Supreme Court to reconsider the matter, the Court would direct the Government to make a reference of the dispute to the appropriate Industrial Tribunal."

The principles were reiterated in Sultan Singh v. State of Haryana and Indian Tea Assn. v. Ajit Kumar Barat.

Thus it can safely be concluded that a writ of mandamus would be issued to the appropriate Government to reconsider the refusal to make a reference, where (i) the refusal is on irrelevant, irrational or extraneous grounds; (ii) the refusal is a result of the appropriate Government examining the merits of the dispute and prejudging/adjudicating/determining the dispute; (iii) the refusal is mala fide or dishonest or actuated by malice; (iv) the refusal ignores the material available in the Failure Report of the Conciliation Officer or is not supported by any reason."

In view of the aforesaid legal position, there is no scope for interference with the impugned order dated 15.10.2018. While exercising power of judicial review, this Court cannot hold an enquiry as to sufficiency of material before the Competent Authority for formation of an opinion that the dispute needs to be referred to the Industrial Adjudicator. The questions raised by the petitioners can very well be looked at by the learned Labour Court. It has come on record that based on the reference order, Adjudication Case No. 33 of 2018 has been registered before learned Labour Court, Dehradun. It shall be open to the petitioners to raise all contentions before learned Labour Court.

Thus, there is no scope of interference in the matter. Accordingly, the writ petition fails and is summarily dismissed.

Let a certified copy of this order be issued within 24 hours.