M/s. Armeet Tools and Equipments Pvt. Ltd., Faridabad vs K.C. Ganesh and another

Sukhdev Singh Kang, J.—In this writ petition under Articles 226/227 of the Constitution of India, Messrs Armeet Tools and Equipment. Private Limited, petitioner, has challenged the ex parte award dated August 22, 1980, of Labour Court, Faridabad, holding the termination of services of workman K.C Ganesh, respondent to this writ petition, as unjustified, reinstating him with full back-wages and continuity of service and its orders dated November 19, 1981, refusing to set aside the ex parte award.

Messrs Armeet Tools and Equipment, Private Limited, the petitioner, is a private Limited Company, incorporated under the Indian Companies Act with its Head Office at 19, R. N. Mukherjee Road, Calcutta-I. The petitioner-company has its manufacturing activities situated at 12/5, Milestone. Mathura Road, Faridabad. The petitioner-company had employed Shri K.C. Ganesh, respondent No. 1, as an Accountant. It is the petitioner''s case that respondent No. 1 started his own business at Ambala with effect from December 14, 1976, and he stopped attending to his normal duties. The case of respondent No. 1, however, is that his services had been terminated by the petitioner company without passing any formal orders. He was not allowed to join duties after that date.

Respondent No. 1 filed a demand notice u/s 2-A of the Industrial Disputes Act, 1947 (for short ''the Act'') Conciliation proceedings were taken up by the Conciliation Officer but they did not succeed. The Government of Haryana vide orders dated. June 19, 1980. passed u/s 10(i)(c) of the Act, referred the dispute between the petitioner-company and respondent No. 1 for adjudication. The term of reference was:

Whether the termination of services of Shri K. C. Ganesh was justified and in order ? If not, to what relief is he entitled ?

Shri 1. P. Chaudhary, the then Presiding Officer. Labour Court, Faridabad, issued notice to the parties A registered notice was sent to respondent No. 1. However, since the petitioner-company was based in Faridabad itself, notices were sent to it through Amar Singh, court peon. No registered notices were sent to the petitioner-company for July 22, 1980. Respondent No 1, the workman, appeared on that date in, court. However, nobody appeared on behalf of the petitioner-company. Amar Singh, court-peon, reported that he went to the premises of the company. He met a steno-typist and a chowkidar of the company there. He wanted to serve the notice of the case on them, but they refused to accept the notice. On July 22, 1980, the case was called but since none appeared for the petitioner, the learned Presiding Officer ordered that proceedings be taken against the petitionar ex parte. He adjourned the case to July 30, 1980, for recording ex parte evidence of the petitioner. On that date, the workman appeared and made his statement and produced certain documents. Taking into account that statement and the documents, Shri Chaudhary, the learned presiding officer, believed the unrebutted statement of the workman and held that termination of his services was unjustified and not in order. The workman was to be re-in stated with full back-wages and continuity in service. This award is dated August 22 1980. The petitioner-company came to know about this ex parte award from the office of the Labour Officer, Faridabad on September 25, 1980. On its instructions, its counsel inspected the file. The petitioner-company filed an application for setting aside the ex parte award on October 9, 1980. By this time, Shri Hari Singh Kaushik had taken over as Presiding Officer of the Labour Court. This application was resisted by the respondents.

It was argued by Shri K C. Ganesh, workman, that the management was fully aware of the pendency of reference proceedings before the Labour Court. The petitioner had joined the conciliation proceedings before the Conciliation Officer. It had received a copy of the reference made by the government u/s 10 (1) (c) of the Act in respect of the industrial dispute. Respondent No. 1 under directions of the court had sent a copy of his statement of claim to the petitioner-company in advance through registered cover which was received by the management. It was clearly mentioned in the statement of claim that the next date of hearing in the case before the Labour Court was July 22, 1980. The Court peon had tried to serve summons on stenotyoist and peon of the company. They intentionally refused to accept the summons. So, the ex parte award should not be set aside. The Labour Court rejected the application vide orders dated November 19, 1981. Aggrieved, the petitioner has filed the present writ petition.

Respondent No. 1, has contested the writ petition primarily on the grounds, which he had raised before the Labour Court in reply to the application for setting aside the award and reproduced above.

The Punjab Government in exercise of the powers u/s 38 of the Act formulated the Industrial Disputes (Punjab) Rules, 1958 (hereinafter called ''the Rules'') laying down among others the procedure for the adjudication of the industrial disputes by the board of conciliation; courts of inquiry, labour courts and industrial tribunals. These are applicable to the state of Haryana also.

Rule 10-B of the Rules prescribed the detailed procedure for the adjudication of the industrial disputes. Sub rule (3) of rule 10-B lays down that the Labour Court shall ordinarily fix the date for the first hearing of the dispute within six weeks of the date, on which it was referred for adjudication. Rule 13 of the Rules provides that the sittings of a Labour court shall be held at such times and places as the presiding officer may fix and the presiding officer shall inform the parties of the same in such manner as he thinks fit. It is clear from these provisions that on receipt of a reference from the Government, the presiding officer of a Labour Court has to fix a date for the hearing of the dispute which shall ordinarily be within six months from the receipt of the reference. The presiding officer shall also inform the parties of the date and place of hearing of the case. Rule 17 of the Rules lays down the form of the summons. Rule 18 of the Rules lays down that subject to the provisions of Rule 20, any notice, summons, process or order, issued by the labour court may be served either personally or by registered post. Rule 20 deals with the manner of service in case of numerous persons or parties to a dispute. It is clear from the perusal of these rules that even though the parties to the dispute have been supplied with the copies of the reference made by the government to the labour court, the labour court has to fix a date for the hearing of the dispute and has to inform the parties of that date. Summonses in respect thereof have to be served either personally or by registered post. The information supplied by one of the parties to the dispute to his adversaries cannot be treated to be a service of the summons by the court.

The petitioner company is a corporation. It has been incorporated under the provisions of the Indian Companies Act. Under Order XXIX, rule 2 of the Civil Procedure Code, the service of summons against a corporation may be effected, subject to any statutory provisions regulating service of process on the Secretary or on any Director or other Principal Officer of the Corporation or by leaving the summons or sending them by post addressed to the Corporation at the registered office or if there is no registered office then at the place where the Corporation carries on business These provisions regarding service are based on salutary principles of fundamental judicial procedure. Service of court process on a Corporation can be affected only on some responsible officer of the Corporation. The Corporation cannot be served by tendering summons or notices to employees of the Corporation holding no responsible position. Such Employees cannot be termed to be agents of the company. Even if technically Order XXIX of the CPC may not be applicable to the proceedings before the Labour Court principles embodies therein have to be app lied for Service on Corporations. The Court peon should have tried to serve the summons on the Secretary or any Director or Principal Officer of the Company present in the office. If that were not possible, then the notices had to be sent by registered post. The significance for the importance of serving a party regarding the judicial proceedings pending against it cannot be over-empasized. This is a fundamental to the principles of natural. This is not a mere formality. The tendering of summons to a) Stenotypist of a limited company is not complying with the statutory rules or principles of natural justice. These officials of the company are not its agents; they hold no authority on behalf of the company to accept notice; they do not hold responsible position to act on behalf of the company. So, the procedure adopted by the process server was not in accordance with the law and the same cannot be approved. Without personal service on a Secretary, Director or Principal Officer of the company or service through registered post, the Labour Court was not justified in taking ex parte proceedings against the petitioner-company. The service of a copy of a referrence for the industrial dispute does not inform the party of the actual date of the proceedings before the Labour Court. In fact the Labour Court fixes the date after the receipt of that reference which in the very nature of things is a later date. After receipt of such a reference, it is not the duty of the parties to the litigation to go to the Labour Court off and on an to inquire about the date proceedings fixed in the case. It is the duty of every Tribunal or Court to inform the parties of the next date of the hearing in the proceedings pending against them before it. Even the information regarding that date supplied by an adversary to his opposite member is no substitute of service by the Court or Tribunal.

Shri Ganesh had argued that the petitioner-company was aware of the proceeedings before the Labour Court. In view of second proviso to rule 13, Order IX of the Code of Civil Procedure, if there was any irregularity in the service of summons, the ex parte award should not be set aside. The relevent provisions of Rule 13, Order IX, reads as under :--

"O. IX, R. 13. Setting aside decree ex parte against defendant.-- In any case in which a decree is passed ex parte against a defendant, he may apply to the Court by which the decree was passed for an order to set it aside; and if he satisfies the Court that the summons was not duly served or that he was prevented by any sufficient cause from appearing when the suit was called on for hearing, the Court shall make an order setting aside the decree as against him upon such terms as to costs, payment into Court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit:

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Provided further that no Court shall set aside a decree passed ex parte merely on the ground that there has been an irregularity in the service of summons, if it is satisfied that the defendant had notice of the date of hearing and had sufficient time to appear and answer the plaintiff''s claim.

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There is no material on the file to show that the petitioner-company had come to know about the date of hearing before the Labour Court. Furthermore, there has been no service on the petitioner-company. This proviso to rule 12 applies only to those cases where service of summons is effected on the party but there is some irregularity in service of summons. So, this provision will not be attracted in the present case.

In fairness to Shri Ganesh, a few authorities cited by him may be noticed at this stage:

In R.M.T.S.S. Dhanasekaran Vs. State Bank of India, Dindigul, , the point for determination was that even if there was no personal service on a party, but the court is satisfied that substitute service is effected on the defendant, it can be taken to be ''due service''. In the present case, no substituted service has been effected on the petitioner.

In Smt. Kamal Ray Vs. Bhagabat Singh, it was held that if a notice or summons is tendered and the party declines to accept it, it should be proved that the party was informed that the document tendered was a summons or a notice and he was made acquainted with the nature and contents thereof. This principle does not apply to the present case.

In Rameshwar Prasad and others v. The State of Bihar 1973 Lab. I.C. 31, their lordships of the Supreme Court were interpreting the provisions of section 36 of the Act, which provides for representation of the parties to the industrial dispute before the Labour Court. In that context, it was observed that publication of the notification about an industrial dispute must be held to be a constructive notice to all workers. It was not obligatory on the government to forward copies of the orders of the reference to all the unions if there were more than the one who had raised the disputes or to other workers, individually or collectively, who are not members of any union. This principle is also not attracted here because this was a case of an individual dispute.

The decision in Nawabzada Mohd. Ishaq Khan Vs. The Delhi Iron and Steel Co. Ltd., , is also not applicable. In that case," summonses were sent by registered post. They were returned with the report "refused" ex parte order were passed. In proceedings for setting aside the ex parte order, the postman had not been examined to prove his report. So, the ex parte order had been set aside.

The last case cited by Shri Ganesh is a decision of the Calcutta High Court in Nawabzada Mohd. Ishaq Khan Vs. The Delhi Iron and Steel Co. Ltd., . In that case an ex parte decree was sought to be setaside on the ground that the decree was fraudlent or void and the same was not xecutable. Relying on an earlier Division Bench decision of that Court, it was observed that mere non-service of summons is not enough to find a cause of action for setting aside a decree without proper pleadings regarding fraud.

For the foregoing reasons, I hold that the petitioner had not been properly and validly served regarding the proceedings pending before the Labour Court. It is not a case of mere irregularity in the service of summons. The summons had not been in fact served on any person, authorised to receive them. There is no material on the file to hold that the petititioner-company knew about the date of the proceedings before the Labour Court. The mere knowledge of or participation in the conciliation proceedings or the receipt of the copy of a reference and publication of the reference in the official gazette is not sufficient to ascribe knowledge of the date of the proceedings to the petitioner. The provisions of the second proviso to Order IX, Rule 13. Civil Procedure Code, are not attracted.

Consequently, ex parte award dated August 22, 1980 and the order dated November 19, 1981, of the Labour Courts rejecting the application for setting aside the ex parte award are not sustainable, in law. The writ petition is allowed and the award and the order are set aside. The case is remitted back to the Labour Court for deciding it afresh after giving full opportunity to the parties to prove their case

The parties have been directed to appear before the Labour Court on April 20, 1985. Since the matter has become very old, the Labour Court shall take special steps to decide the industrial dispute expeditiously.