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Judgment
J. M. Panchal, J.—By means of filing this appeal under Clause 15 of the Letters Patent, the appellant-workman has challenged judgment
dated March 9, 1999 rendered by the learned single Judge, in Special Civil Application No. 9424 of 1998, by which Award dated August 19,
1998 passed by the Labour Court, Ahmedabad directing the respondent to reinstate the appellant in service with back wages, is set aside on the
ground that the reference to the Labour Court by the State Government was incompetent.
The respondent is a Co-operative Society registered under the Gujarat Co-operative Societies Act, 1961. It transacts the business of banking
and is a banking company within the meaning of Section 5(c) of the Banking Regulations Act, 1949 and Section 2(bb) of the Industrial Disputes
Act, 1947. The respondent has its Branches all over the State of Gujarat and also the Regional Branch at Dadra and Nagar Haveli (Silvassa),
which is a Union Territory.
The appellant was working as a Clerk with the respondent-Bank. He was suspended from service on October 16, 1995 for the misconduct of
subverting the discipline of the Bank. Ultimately, after holding inquiry he was dismissed from service by an order dated August 9, 1997. He raised
an industrial dispute and the State Government acting as an appropriate Government referred the dispute regarding reinstatement of the appellant in
service, for adjudication to Presiding Officer, Labour Court, Ahmedabad. In the written statement filed by the respondent, an objection was raised
to the effect that the State Government had no jurisdiction to refer industrial dispute between the Bank and its employees in view of the provisions
of the Industrial Disputes (Banking and Insurance Companies) Act, 1949, and therefore, the reference should be dismissed. The Labour Court
raised necessary issues for determination and held that as 2(p) settlement dated September 16, 1999 was approved by the Labour Commissioner
and as the respondent had prolonged the proceedings pending before Conciliation Officer and had not approached the competent authority with
clean hands, the reference was not liable to be dismissed on the ground that the State Government had no jurisdiction to refer the dispute to the
Labour Court. The Labour Court on merits found that the misconduct alleged against the appellant was not proved. Therefore, the Labour Court
by award dated August 19, 1998 directed the respondent to reinstate the appellant in service with back wages. That award was challenged by the
respondent before the High Court in Special Civil Application No. 9424 of 1998. As observed earlier, the learned single Judge has by the
impugned judgment set aside the award of the Labour Court on the ground that the reference of the dispute to the Labour Court by the State
Government was incompetent, giving rise to the present appeal.
Mr. N. R. Sahani, learned Counsel for the appellant submitted that the Labour Court, Ahmedabad, which is competent to receive reference
from the State Government as well as Central Government and is set up under the Industrial Disputes Act, 1947, has adjudicated the dispute in
favour of the appellant, and therefore, the award passed by the Labour Court should not have been set aside on the ground that the reference of
the dispute by the State Government was without jurisdiction. It was pleaded that the respondent-Bank is having only one Branch in Union
Territory of Dadra and Nagar Haveli, and therefore, the Stale Government was competent to make reference of dispute for its adjudication to the
Labour Court. It was claimed that a proposal to divide the respondent-Bank in three separate divisions is pending and if the proposal goes
through, Central Government would not be competent to make reference of dispute to the Labour Court, and therefore, in such circumstances the
award should not have been set aside by the learned single Judge. An additional ground, which was neither raised before the learned single Judge,
nor raised in the memorandum of appeal, was raised by the learned Counsel for the appellant to the effect that as banking licence is not obtained
by the respondent, it could not be regarded as ''banking company'', and therefore, reference of dispute made by the State Government was valid.
Lastly, it was contended that during the pendency of petition before the learned single Judge, the respondent had not complied with the provisions
of Section 17B of the Industrial Disputes Act, 1947, and therefore, appropriate direction should be given to the respondent to pay wages to the
appellant as provided by Section 17Bof the said Act. In support of his submissions, learned Counsel placed reliance on the decision rendered in
Indian Oil Corporation Ltd. Vs. Mahendrabhai R. Patel and Another, .
Mr. D. R. Dave, learned Counsel for the respondent urged that the respondent has also a regional Branch at Dadra and Nagar Haveli, which is
a Union Territory and as it fulfills the requirements of ''banking company'' as defined in the Industrial Disputes Act, the State Government was
precluded from referring the dispute for adjudication to the Labour Court, and the reference at the instance of only Central Government was
competent in view of the provisions of Section 4 of the Industrial Disputes (Banking and Insurance Companies) Act, 1949. The learned Counsel
emphasised that the award based on an incompetent reference is a nullity, and therefore, the learned single Judge was justified in setting aside the
award which was passed by the Labour Court in favour of the appellant. It was pointed out by the learned Counsel for the respondent-Bank that
an application dated June 17, 1970 was submitted by the respondent to obtain banking licence which is granted by the Reserve Bank by an order
dated October 13, 1999 and as the respondent was formed as a State Industrial Co-operative Bank on amalgamation of two co-operative banks,
the prohibition contained in clause (b) of sub-section (1) of Section 56 of the Banking Regulations Act, 1949, is not applicable in view of the
provisions of Section 56(o)(2), Proviso (ii) of the said Act, and therefore, State Government was not competent to refer the dispute for its
adjudication to the Labour Court.
We have considered the submissions advanced at the Bar and the documents forming part of the petition. In order to resolve the dispute raised
in the appeal, it would be relevant to notice certain provisions of the Industrial Disputes Act, 1947 and other relevant statutes. Section 2(a) of the
Industrial Disputes Act, 1947 defines ''appropriate Government'' and reads as under :-
2(a): ''appropriate Government'' means :-
(i) in relation to any Industrial Disputes concerning any industry carried on by or under the authority of the Central Government or by a railway
company or concerning any such controlled industry as may be specified in this by the Central Government or in relation to an Industrial Dispute
concerning a Dock Labour Board established u/s 5A of the Dock Workers (Regulation of Employment) Act, 1948 (IX of 1948), or the Industrial
Finance Corporation of India established u/s 3 of the Industrial Finance Corporation Act, 1948 (XV of 1948), or the Employees'' State Insurance
Corporation established u/s 3 of the Employees'' State Insurance Act, 1948 (XXXIV of 1948), or the Board of Trustees constituted u/s 3A of the
Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 (XLVI of 1948), or the Central Board of Trustees and the State Boards of
Trustees constituted u/s 5A and Section 5B respectively of the Employees'' Provident Fund and Miscellaneous Provisions Act, 1952 (XIX of
1952), or the ""Indian Airlines"" and ""Air India"" Corporations established u/s 3 of the Air Corporations Act, 1953 (XXVII of 1953), or the Life
Insurance Corporation of India established u/s 3 of the Life Insurance Corporation Act, 1956 (XXXI of 1956), or the Oil and Natural Gas
Commission established u/s 3 of the Oil and Natural Gas Commission Act, 1959 (XLIII of 1959) or the Deposit Insurance and Credit Guarantee
Corporation established u/s 3 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (XLVII of 1961), or the Central
Warehousing Corporation established u/s 3 of the Warehousing Corporations Act, 1962 (LVIII of 1962), or the Unit Trust of India established u/s
3 of the Unit Trust of India Act, 1963 (LII of 1963), or the Food Corporation of India established u/s 3, or a Board of Management established
for two or more contiguous States u/s 16 of the Food Corporations Act, 1964 (XXXVII of 1964), or the International Airports Authority of India
constituted u/s 3 of the International Airports Authority of India Act, 1971 (XLIII of 1971), or a Regional Rural Bank established under Sec, 3 of
the Regional Rural Bank Act, 1976 (XXI of 1976), or the Export Credit and Guarantee Corporation Limited or the Industral Reconstruction Bank
of India, or the Banking Service Commission esmblished, u/s 3 of the Banking Service Commission Act, 1975 or a banking or an insurance
company, a mine, an oil field a Cantonment Board, or a major port, the Central Government, and
(ii) in relation to any other Industrial Dispute, the State Government;
Section 5(c) of the Banking Regulations Act, 1949 also defines the phrase ""Banking Company"" to mean any Company which transacts the
business of banking in India. A bare reading of the above quoted provisions makes it evident that a bank which transacts business of banking is a
''banking company'' within the meaning of Section 2(bb) of the Industrial Disputes Act, 1947 provided it has branches or other establishment in
more than one State. As noted earlier, the respondent has its branches all over the State of Gujarat and also a regional Branch at Dadra and Nagar
Haveli, which is a Union Territory. A Division Bench of this High Court had occasion to consider the question whether the respondent which is
having one of its regional branches at Dadra and Nagar Haveli (Silvassa), is governed by the Bombay Industrial Relations Act, 1946. The Division
Bench in Special Civil Application No. 249 of 1982 decided on April 22, 1990 noted that the proviso to sub-section (3) of Section 2 of the
Bombay Industrial Relation Act provides that the said Act will not apply to any Banking Company as defined in Section 6 of the Banking
Companies Act, 1949 having branches or other establishments in more than one State. The Division Bench noted the admitted fact that one of
regional branches of the respondent is located at Dadra and Nagar Haveli, which is a Union Territory and proceeded to consider the contention
raised that Dadra and Nagar Haveli being Union Territory should not be considered to be a ''State''. The said contention was negatived by the
Division Bench holding that Dadra and Nagar Haveli is a ''State'' within the meaning of Proviso to Section 2(3) of the Bombay Industrial Relations
Act read with provisions of Section 3(58) of the General Clauses Act, 1897. Thus, the question whether the respondent is a Banking Company
having its branches in more than one State, is no more res Integra and we hold that the respondent is a Banking Company having its branches in
more than one State. Section 2(aa) of the Industrial Disputes Act, inter-alia, provides that in relation to any industrial disputes concerning any
industry carried on by a banking or insurance company, the Central Government is the appropriate Government. As the dispute between the
appellant and the respondent is a dispute between a banking company and its employee, reference of dispute could have been made only by the
Central Government in view of provisions of Section 10 of the Industrial Disputes Act, 1947. At this stage, it would be relevant to notice the
provisions of Section 4 of the Industrial Disputes (Banking and Insurance Companies) Act, 1949. Section 4 of the said Act reads as follows :-
Prohibition of reference by Stale Government of certain industrial disputes for adjudication, inquiry or settlement :
Notwithstanding anything contained in any other law, it shall not be competent for a State Government or any officer or authority subordinate to
such Government to refer an industrial dispute concerning any banking or insurance company, or any matter relating to such disputes, to any
tribunal or other authority for adjudication, inquiry or settlement.
A bare reading of the above-referred to provision makes it manifest that it is not competent for the State Government or any officer or authority
subordinate to State Government, to refer an industrial dispute concerning any banking company or any matter relating to such dispute, to any
tribunal or other authority for adjudication, inquiry or settlement, notwithstanding anything contained in any other law. The prohibition mentioned in
Section 4 of the said Act is absolute and does not admit of any exception. A conjoint reading of Sees. 2(aa), 2(bb) and 10 of the Industrial
Disputes Act, 1947 read with Section 5(c) of the Banking Regulation Act, 1949 and Section 4 of the Industrial Disputes (Banking and Insurance
Companies) Act, 1949 makes it abundantly clear that the dispute between the appellant and the respondent could not have been referred for its
adjudication to the Labour Court by the State Government and the reference itself was void ab-initio. It is needless to point out that the award
based on an incompetent reference is a nullity, and therefore, in our view, the learned single Judge was justified in setting aside the same.
The contention that no prejudice having been caused to the respondent, award rendered in favour of the respondent should not have been set
aside by the learned single Judge, has no merits. The scheme as envisaged under the Industrial Disputes Act is such that adjudication of a dispute
referred by the Central Government can be made only by the Industrial Tribunal and not by any other forum. Thus, the forum which gets
jurisdiction to adjudicate the dispute also changes when the reference of the same is made by the Central Government. The prejudice is inherent in
a reference which is made by an incompetent authority, and therefore, it is difficult to uphold award rendered by the Labour Court in favour of the
appellant on the ground that no prejudice is caused to the respondent.
The argument that the respondent has not obtained banking licence u/s 22 of the Banking Regulation Act, 1949, and therefore, cannot be
regarded as ''banking company'', has also no substance. The relevant documents produced by the learned Counsel for the respondent-Bank
indicate that the respondent had made an application dated June 17, 1970 for obtaining banking licence and the same was granted by the Reserve
Bank of India vide order dated October 13, 1999. It is further to be noted that Saurashtra Small Industries Co-operative Bank Ltd. Rajkot, which
is registered under the Co-operative Societies Act as applicable to the Saurashtra State and the Southern Gujarat Co-operative Bank Ltd. Surat
registered under the Bombay Co-operative Societies Act, had decided to amalgamate themselves and form the State Industrial Co-operative
Bank. As a result of the said decision, the above-referred to two Co-operative Banks were amalgamated and the Gujarat Industrial Cooperative
Bank Ltd., which is respondent in the appeal was formed. This is quite evident from the order dated May 21, 1970 passed by the Registrar, Co-
operative Societies, Gujarat State, Ahmedabad u/s 17 of the Gujarat Co-operative Societies Act, 1961. Section 56 of the Banking Regulation
Act, 1949 provides that the provisions of this Act, as in force for the time-being, shall apply to or in relation to Co-operative Societies as they
apply to or in relation to Banking Companies subject to modification indicated therein. The provisions of Sec, 56(o)(2), Proviso (ii) stipulate that a
co-operative bank which has come into existence as a result of the amalgamation of two or more cooperative societies carrying on banking
business is not precluded from carrying on banking business until it is granted a licence or is by a notice in writing notified by the Reserve Bank of
India that licence cannot be granted to it. Therefore, till the grant of licence, the respondent was entitled to carry on banking business and was a
banking company within the provisions of The Banking Regulation Act, 1949. In view of this position, it is difficult to agree with the submission
made by the learned Counsel for the appellant that as the respondent had no valid banking licence, it should not be regarded as ''banking
company,'' and reference at the instance of the State Government should be treated as competent.
The contention that in view of Section 17B of the Industrial Disputes Act, 1947, the respondent should be directed to pay wages for the
period during which the petition was pending in the High Court, cannot be accepted, as the reference of the dispute by the State Government is
found to be totally without jurisdiction. Moreover, though Civil Application claiming wages in terms of Section 17B of the Industrial Disputes Act,
1947 was filed, but it appears that no orders were obtained on the said application at the relevant time. Having regard to the facts of the case, we
are of the opinion that in view of the decision of the learned single Judge, which we are inclined to uphold in this appeal, now the respondent
cannot be called upon to pay wages for the interregnum period to the appellant u/s 17B of the Act. As we find no substance in the appeal, the
appeal is liable to be dismissed. However, it is clarified that if any dispute is raised by the appellant, the same shall be taken up in conciliation
without any avoidable delay and shall be decided in accordance with law.
For the foregoing reasons, the appeal fails and is dismissed with no orders as to costs.
At this stage, learned Counsel for the appellant prays to stay the operation of the judgment delivered by us in this appeal to approach higher
forum. We have upheld the judgment of the learned single Judge after considering the provisions of relevant statute. Having regard to the facts of
the case, we are of the opinion that prayer to stay the operation of the judgment delivered by us does not deserve to be granted. Hence, the said
prayer is rejected.
Appeal dismissed.