Lal Chand and Others vs State of Haryana and Others

G.S. Singhvi, J.—The point which requires adjudication in this petition relates to the power of Labour-cum-Conciliation Officer. We have to decide whether the Labour-cum-Conciliation Officer can reject a demand raised by the workman employed in an industry.

The petitioners-Lal Chand, Karambir and Jagdish Singh were appointed in the service of M/s. Koma Engineers, Gurgaon on April 1, 1985, January 1, 1984 and February 1, 1980, respectively on different posts. Services of all the petitioners were terminated with effect from December 21, 1994 by oral orders. The petitioners filed demand notices dated January 17, 1995 before the Labour-cum-Conciliation Officer, raising industrial dispute against the termination of their services on the ground of violation of Section 25-E of the Industrial Disputes Act, 1947 (for short ''the 1947 Act'') as well as the principles of natural justice. These demand notices were, sent to Respondent No. 3. Respondent No. 2 held conciliation proceedings but finally rejected the demand notices vide Annexures P4, P5 and P6 by holding that the management has closed the establishment and the services of the petitioners had not been terminated.

The petitioners have seriously challenged the theory of closure of the establishment. It has been pleaded by them that the factory is continuously running. According to them the Sales Tax Registration has not been surrendered by the industry and its bank accounts are being operated regularly. The workmen further pleaded that the Respondent No. 3 was supplying its products to M/s. Eicher Limited and M/s. Escorts Limited, Faridabad. Similarly liners were being sent to Yamunanager and Karnal. According to the workmen, the theory of closure was innovated by the employer in order to defeat the legitimate claim of the workmen to be continued in service.

Respondent No. 2 has filed a written statement on behalf of Respondent No. 1 as also on it his own behalf. In the reply it has been stated that after the receipt of the demand notices conciliation proceedings were initiated. According to the respondents, the management has closed down the establishment with effect from December 21, 1994 due to financial crisis and this necessitated the termination of the: services of the workmen. These respondents have made reference to the decisions of the Supreme Court in Indian Hume Pipe Co. Ltd. Vs. Their Workmen, and Bombay Union of Journalists and Others Vs. The State of Bombay and Another, . In a separate written statement Respondent No. 3 has stated that closure notice was issued by the Company on December 21, 1994 and, therefore, the service of the workmen had to be terminated and the employer had complied with the relevant provisions of law while terminating the services of the petitioners.

We have heard learned counsel for the parties and in our opinion the impugned orders issued by the Labour-cum-Conciliation Officer, Gurgaon, are clearly without jurisdiction and are also patently arbitrary. Industrial Disputes Act, 1947 is a legislation enacted to make provision for investigation and settlement of industrial disputes and for certain other purposes. Section 2(cc) which has been added by Amendment Act No. 46 of 1982, defines the term "closure" and it means the permanent closing down of a place of employment or part thereof. Section 2(defines the Conciliation Officer as the one appointed under the Industrial Disputes Act, 1947 (for short ''the Act''). Section 2-A contains a legal fiction whereby dismissal, discharge, retrenchment and other acts of termination of services of individual workman has been treated as giving rise to an industrial dispute even if it may not be espoused by a union or a substantial number of workmen. Section 4 of the 1947 Act empowers the Government to appoint such number of persons as it thinks fit to be Conciliation Officers. Such Conciliation Officer can be appointed for a specified area or for specified industries in a specified area. Chapter III relates to reference of disputes to the Boards, Courts or Tribunals. Section 10(1) empowers the appropriate Government to refer the dispute to a Board or to a Court of Inquiry or to the Labour or the Industrial Tribunal. Chapter IV contains the procedure, powers and duties of various authorities constituted under the 1947 Act. Section 11 deals with the procedure and powers of Conciliation Officers, Boards, Courts and Tribunals. Sub-sections (2) and (4) of this Section relate to Conciliation Officers. Section 12 specifies the duties of the Conciliation Officers. For the purpose of this order, Section 10(1), Section 11(2)(4) and Section 12 are quoted below :--

"10. Reference of disputes to Boards, Courts or Tribunals.-

(1) 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);

Provided further that where the dispute relates to a public utility service and a notice u/s 22 has been given, the appropriate Government shall, unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make a reference under this sub-section notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced;

Provided also that where the dispute in relation to which the Central Government is the appropriate Government, it shall be competent for that Government to refer the dispute to a Labour Court or an Industrial Tribunal, as the case may be, constituted by the State Government.

Proceedure and powers of Conciliation Officers, Boards, Courts and Tribunals.-

(1) x x x x

(2) A Conciliation Officer or a member of a Board, or Court or the Presiding Officer of a Labour Court, Tribunal, or National Tribunal may for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates.

(3) x x x x

(4) A Conciliation Officer may enforce the attendance of any person for the purpose of examination of such person or call for and inspect any document which he has ground for considering to be relevant to the industrial dispute or to be necessary for the purpose of verifying the implementation of any award or carrying out any other duty imposed on him under this Act, and for the aforesaid purposes the Conciliation Officer shall have the same powers as are vested in a civil Court under the Code of Civil Procedure, 1908 (5 of 1908) in respect of enforcing the attendance of any person and examining him or of compelling the production of documents."

"12. Duties of Conciliation Officers.-

(1) Where any industrial dispute exists or is apprehended, the Conciliation Officer may or where the dispute relates to a public utility service and a notice u/s 22 has been given, shall, hold conciliation proceedings in the prescribed manner.

(2) The Conciliation Officer shall, for the purpose of bringing about a settlement of the dispute, without delay, investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.

(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the Conciliation proceedings the Conciliation Officers shall send a report thereof to the appropriate Government or an officer authorised in this behalf by the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute.

(4) If no such settlement is arrived at, the Conciliation Officer shall, as soon as practicable after the close of the investigation send to the appropriate Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof together with a full statement of such facts and circumstances, and the reasons on account of which, in his opinion, a settlement could not be arrived at.

(5) If, on a 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.

(6) A report under this Section shall be submitted within fourteen days of the commencement of the Conciliation proceedings or within such shorter period as may be fixed by the appropriate Government;

Provided that subject to the approval of the Conciliation Officer, the time for the submission of the report may be extended by such period as may be agreed upon in writing by all the parties to the dispute."

A combined reading of the above quoted provisions shows that the Conciliation Officer is under a duty to hold conciliation proceedings where any industrial dispute exists or is apprehended. For this purpose, the Conciliation Officer is empowered to investigate the dispute and all matters affecting the merits and the right settlement thereof. In case the parties arrive at a settlement, the Conciliation Officer is required to send a report thereof to the appropriate Government together with the memorandum of settlement signed by the parties to the dispute. In cases where the settlement is not reached between the parties, in terms of Section 12(4), the Conciliation Officer is required to send full report to the appropriate Government specifying therein the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof together with a full statement of those facts and circumstances and the reasons on account of which a settlement could not be arrived at. For the purpose of discharging his duties, the Conciliation Officer is empowered to enter the premises occupied by any establishment to which the dispute relates. He is also empowered to enforce attendance of any person for the purpose of examination of that person. The Conciliation Officer may also inspect any document which may be considered relevant by him. He is also empowered to exercise powers vesting in the Civil Court in respect of enforcing the attendance of any person and examining him. u/s 12(5) as well as u/s 10(1) the appropriate Government is empowered to make reference of the dispute to an appropriate Board, Labour Court, Tribunal or National Tribunal. Where the appropriate Government does not make a reference even after receipt of the report of the Conciliation Officer, it is duty-bound to record reasons and communicate the same to the parties concerned. This shows that the Conciliation Officer is not vested with any power to reject the demand raised by an employee. As a logical corollary it must be held that the Conciliation Officer does not have any power to enter into the merits of the dispute and to take a decision whether any industrial dispute exists or not. The Conciliation Officer is also not entitled to decide whether or not he should send a report to the Government. He is duty bound to send a report to the Government and it is for the Government to consider the matter and pass appropriate order u/s 12(5). Even the power of the Government to make a reference u/s 10 and Section 12(5) has become subject-matter of adjudication by the-Supreme Court as well as the High Courts and it is the consistent view that ordinarily the Government is duty-bound to make a reference and only in a case where no dispute exists or the dispute sought to be raised is totally frivolous, on the basis of which the Government can decline to make a reference. In Rajasthan State Road Transport Corporation and Another Vs. Krishna Kant and Others, the Supreme Court has made the following observations regarding the power of the Government to make a reference:--

" The power to make a reference conferred upon the Government is to be exercised to effectuate the object of the enactment and hence not unguided. The rule is to make a reference unless, of course the dispute raised is a totally frivolous one ex facie. The power conferred is the power to refer and not the power to decide, though it may be that the Government is entitled to examine whether the dispute is ex facie frivolous, not meriting any adjudication."

We are not multiplying the authorities on the subject because it is well settled that while exercising its power u/s 10(1) or Section 12(5) the Government is not empowered to decide a dispute. The Government cannot examine the merits of a case for the purpose of recording a finding whether the claim made by the workman is justified or not. The only thing which the Government is required to look into is whether there exists industrial dispute or the one is apprehended. Once the Government finds that the dispute exists or is apprehended it is duty bound to make a reference.

Our discussion on the scope of the power of the Government does not in any manner lead to an inference that the power of the Government can be exercised by the Labour-cum-Conciliation Officer as has been done in the instant case. Respondent No. 2 crossed all the limits of his jurisdiction when he passed the orders Annexures P4, P5 and P6 and declared that as per the management, the institution has been closed and if there is a dispute on closure the workman can raise dispute u/s 2 and that no dispute is made out u/s 2-A of the Act, and, therefore, the demand should be filed. In exercising the power of the Government the Labour-cum-Conciliation Officer has clearly acted without jurisdiction. The reply filed by Respondent No. 2 shows that Respondent No. 2 had taken extraordinary interest in the matter and has. presented a case which clearly shows that he is trying to help Respondent No. 3. The entire approach of Respondent No. 2 is indicative of his partisan attitude towards Respondent No. 3. His conduct in passing the orders Annexures P-4, P-5 and P-6 and then filing the reply supporting the case of Respondent No. 3 cannot but to be deprecated.

For the reasons mentioned above, the orders Annexures P-4, P-5 and P-6 are declared without jurisdiction and are hereby quashed. The petitioners who have been put to serious injury due to the arbitrary and capricious action of Respondent No. 2 shall get costs of Rs. 5,000/-. This amount shall be payable by the officer, who passed the orders Annexures P4, P-5 and P-6 while holding the post of Labour-cum-Conciliation Officer, Gurgaon. The State Government is directed to pass necessary order ''regarding the reference of the dispute to the competent Court on the premise that the parties have failed to arrive at a settlement during the course of conciliation proceedings.