Lal Baboo Sharma and Others vs Union of India (UOI) and Others

Shiv Narayan Dhingra, J.—By this writ petition, the petitioner has challenged the validity of award dated 30th September, 1995 passed by

the Labour Court-IX, Delhi whereby the Labour Court observed that the real dispute whether the closure of the respondent establishment was

genuine or not OR it was an illegal lock-out as alleged by workmen, was not referred to it. Since no reference was made by the appropriate

Government about closure, this dispute could not be adjudicated and the dispute of termination of workman referred, actually did not arise.

Briefly the facts are that the petitioners were working with the respondent as workmen. The petitioners claimed that they were refused duty on

22nd July, 1982 on the ground that the management had declared a lock out and thereafter petitioners were not taken on duty at any time.

However, in the written statement the respondent took the stand that the Tailoring Department where, the petitioners and some other workmen

were employed was closed down w.e.f. 3.9.1980 and all the workmen were directed to collect their dues mentioned in the closure notice but the

workmen did not collect their dues. The workmen claimed that it was a case of illegal lock out and not a case of closure. The dispute was referred

to the Labour court in the following terms:

Whether the termination of services of workmen S/Sh. Lal Babu Sharma, Lal Chand and Bharati Kumar is illegal and unjustified, and if so, to what

relief are they entitled and what directions are necessary in this respect?

The Labour Court after considering the stand of the parties framed following issues:

As in terms of reference.

Whether the termination of the services of the workmen due to the closure of the Tailoring Department is justified?

The management was proceeded ex-parte and the evidence of workmen was recorded. After considering the evidence of the workmen, the

Labour Court came to the conclusion that the real dispute between the parties was whether the closure of the establishment as declared by the

respondent was bonafide closure or not. There was no individual termination of the services of any of the workmen but the dispute referred was in

respect of termination of service. The Labour Court observed that the appropriate Government failed to take into account the real facts and

referred the wrong dispute. It should have referred a dispute whether there was genuine closure or an illegal lock out. The appropriate Government

itself could not have reached a final decision on the question whether it was a lock out or closure since it was a matter to be adjudicated by the

industrial adjudicator, but it did not refer this dispute for adjudication and simply referred a dispute about termination of service of the petitioner.

Since, there was no termination and the petitioner had become jobless due to closure of the establishment, the dispute could not be adjudicated.

The petitioner has challenged the validity of award on the ground that the Labour court was not powerless in deciding whether the unit had been

really closed down or the management had resorted to an illegal lock out. The Tribunal should have decided this controversy and then passed an

award.

It is settled law that the Tribunal is bound by the reference. The Tribunal can adjudicate only the dispute referred and it cannot adjudicate a

dispute which is not referred and is beyond the scope of reference. It can, however, decide the questions going to the root of its jurisdiction like

whether there was an employer-employee relationship, whether it had territorial jurisdiction or not, whether the claimant was a ''workman'' or not,

whether the management was an ''industry'' or not etc. but it cannot decide a question which is not incidental to the dispute referred. In the present

case, the dispute referred to the Tribunal was about the termination of services of the petitioner. No dispute either about closure of the

establishment or about lock out was referred to the Tribunal. The Tribunal of its own could not have taken upon the jurisdiction to decide whether

there was illegal lock out declared by the management, as claimed by the workman, or it was a closure of the establishment as claimed by the

management. The Tribunal rightly came to the conclusion that the appropriate Government did not refer the correct dispute and referred a dispute

which was not there.

In AIR 1979 SC 1356 Pottery Mazdoor Panchayat v. The Perfect Pottery Co. Ltd. and Anr., Supreme Court ruled:

Having heard a closely thought out argument made by Mr. Gupta on behalf of the appellant, we are of the opinion that the High Court is right in its

view on the first question. The very terms of the references show that the point of dispute between the parties was not the fact of the closure of its

business by the respondent but the propriety and justification of the respondent''s decision to close down the business. That is why the references

were expressed to say whether the proposed closure of the business was proper and justified. In other words, by the references the Tribunals

were not called upon by the Government to adjudicate upon the question as to whether there was in fact a closure of business or whether under

the pretence of closing the business the workers were locked out by the management. The references being limited to the narrow question as to

whether the closure was proper and justified, the Tribunals by the very terms of references, had no jurisdiction to go behind the fact of closure and

inquire into the question whether the business was in fact closed down by the management.

In 1982 LAB. I.C. 1309 ITDC, New Delhi v. Delhi Administration, Delhi and Ors. a full bench of this Court observed:

It is settled law that the jurisdiction of the Labour Court/Industrial Tribunal in industrial disputes is limited to the points specifically referred for its

adjudication and the matters incidental thereto and it is not permissible to go beyond the terms of the reference. An Industrial Adjudicator

constituted under the Act is not vested with any inherent power of jurisdiction. It exercises such jurisdiction and power only upon and under order

of reference limited to its terms. It cannot travel beyond the terms of reference except for ancillary matters. Making of an order of reference is

undoubtedly an administrative function, but even that is amendable to judicial review in the proceedings under Article 226 under certain facts and

circumstances. An order of reference is open to judicial review if it is shown that the appropriate Government has not applied its mind to the

material before it or has not taken into consideration certain vital facts which it ought to have taken into consideration. The whole of the

correspondence between the management and the Labour Commissioner, the Union of the workmen and the Labour Commissioner and the

notices displayed by the management (the substance of which has been reproduced above) were before the Secretary (Labour), Delhi

Administration when it passed the order of reference dated April 27, 1981. We are of the view that the existence of lock-out itself being the real

dispute between the management and its workmen, the term of reference proceeds on the assumption that there was lock-out with effect from

January 1, 1981. There is a very thin line of distinction between closure and a lock out. The decision would depend on several factors which had

to be investigated before reaching a final conclusion. The intention and premeditation of the decision is one such factor. The impact of the Act of

violence alleged by the management, the special nature of the business, the possibility to carry on the business, the safety and security of the

customers are other relevant factors. All these had to be found as a fact to arrive at a decision whether it was closure or lock-out. There is no

material whether the appropriate Government considered these vital factors in coming to the conclusion. We were shown the original file by Shri

Lokur, the learned Counsel for the Delhi Administration in which the decision for making reference under Sections 10(1)(d) and 12(5) of the Act

and case for prohibition of the lock-out u/s 10(3) was considered simultaneously though the order was passed one after the other. The order u/s

10(3) records the satisfaction that a lock out had been declared from January 2, 1981 and was still continuing by the management. The real dispute

between the parties was whether there was at all a lock-out or whether there was violence by the workmen and for that reason there was

suspension of the working of the restaurant with effect from January 2, 1981 and whether the closure of the restaurant from February 18, 1981

was proper and for that reason the termination of the services of the workmen was justified and legal. The appropriate Government has failed to

take into consideration the entire set of circumstances brought out by the management in the two notices displayed and the replies furnished to the

Delhi Administration to come to the conclusion whether it was a lock-out or closure. Whether in fact there was a closure or lock-out is the real

dispute which can more appropriately be determined in industrial adjudication. The facts and circumstances brought before us can, in no

circumstances, lead to the conclusion that the stand was frivolous. The order u/s 10(3) says that he appropriate Government was satisfied that a

lock-out had been declared from January 2, 1981 and was continuing. The affidavit in this Court says that the plea of the management that there

was closure and not lock-out is frivolous. The appropriate Government could not reach a final decision on the question whether it was lock-out or

closure, because that would normally lie within the jurisdiction of the Industrial Tribunal. The Industrial Tribunal cannot go into that question as the

real dispute has not been made the subject matter of the order of reference. The very basis of the order of reference is the period of lock-out with

effect from January 1, 1981 for a dispute regarding the entitlement of wages. It would not be open to the management to contend that the

foundation of the dispute mentioned in the order of reference was not existing. The management would be debarred to contend that the true nature

of the dispute was something different than that contained in the order of reference. Counsel for the respondents made a concession during the

hearing that the dispute whether it was a closure or a lock-out could be investigated by the Industrial Tribunal and no objection would be raised

that it was not within the scope of reference. Such a course could not be adopted. It may be open to the Industrial Tribunal to find out the exact

nature of the dispute from the pleadings of the parties and other material. But the Industrial Tribunal could not enlarge the scope of the jurisdiction

on concession and decide that there was a closure and no lock-out. That would be deciding the foundation of the dispute mentioned in the order of

reference. Such a jurisdiction is not vested in the Industrial Tribunal. We are, Therefore, of the opinion that the order of reference has to be

quashed as the real dispute has not been referred. It will be open to the Delhi Administration to make another order of reference in the light of the

material before it construed in accordance with the observations made by this Court.

In view of my foregoing discussion, I find no force in the writ petition. The writ petition is hereby dismissed. However, the petitioners are at

liberty to approach the Government for reference of correct dispute.