P L D 1959 Supreme Court (Pak (PLP)

B. A. Siddiky, Advocate‑General East Pakistan, (T. H. Khan, Advocate Supreme Court, with him), instructed by Shahabuddin Ahmad, Attorney for Respondent No.

2. Respondent No. 3: Not represented. Civil Appeal No. 15‑D of 1959. Md. Fazlur Rahman, Advocate Supreme Court, (M. J. Jaffar, Advocate High Court with him, under Order IV, rule 5, Supreme Court Rules, 1956), instructed by Naimuddin Ahmad, Attorney for Appellant. Amjad Hussain, Advocate Supreme Court, instructed by A. N. M. Nasiruddin, Attorney for Respondent No.

1. B. A. Siddiky, Advocate‑General East Pakistan, (T. H. Khan, Advocate Supreme Court with him), instructed by Shahabuddin Ahmad, Attorney for Respondent No.

2. Respondent No. 3: Not represented. Dates of hearing: 1st and 2nd June 1959. CORNELIUS. J.‑These two Civil Appeals Nos. 14‑D and 15‑D of 1959 raise a common question for decision and may conveniently be decided by means of a single judgment. Both are brought before the Court by special leave. In Civil Appeal No. 14‑D of 1959 the appellant is the Pakistan Match Company Limited and the first respondent is the Pakistan Match Factory Workers Union, two other respondents being (1) The Province of East Pakistan and (2) Mr. Awal, who had been appointed Industrial Tribunal to adjudicate between the principal parties under the Industrial Disputes Act, 1947. In Civil Appeal No. 15‑D, the appellant is again the Pakistan Match Company Limited, but the first respondent is the Pakistan Match Company and M. M. Isphani Limited Employees Association, Khulna. The other respondents are the same as in the other appeal. The common question for decision in these two appeals is whether the reference by the Provincial Government to the Industrial Tribunal in each of these cases was a valid reference within the contemplation of the Industrial Disputes Act. The facts may be briefly stated. In Civil Appeal No. 14‑D, the reference was made on the 6th July, 1957, which was also the date on which a Conciliation Officer who had intervened in a dispute between the Company and the employees in question involving only a single question, vie., the payment of an emergency allowance of Rs. 15 p.m., had reported to the Govern ment that the conciliation had failed, that the situation was un satisfactory and a strike was likely, and therefore an immediate reference to a Tribunal was suggested. It may be mentioned that the emergency allowance had been agreed upon between the parties in the course of an earlier dispute on the 15th July 1956, but had been abruptly stopped on the 1st June 1957 by the employers. The reference made to Mr. Awal commences with the statement below: ‑ " Whereas a general Industrial Dispute has arisen between the management of Pakistan Match Co. Ltd., Khulna and their workers as represented by Pakistan Match Factory Workers' Union", and goes on to say that " It is expedient that the said dispute be referred to a Tribunal constituted under the Industrial Disputes Act, 1947" and finally declares that the Governor is pleased to refer the dispute to Mr. A. Awal". Mr. Awal obtained a written statement from the workers of their demands, and the workers took the opportunity of mentioning that on the 11th July, 1956, an agreement had been reached between themselves and the company for payment of one month's bonus for the year 1956, that the question had been raised as to bonus for future years, but had been left undecided, and therefore a dispute had arisen as to the fixation of bonus, and they put forward a demand for three months' wages per year by way of bonus. Additionally, they brought out the 1956 agreement regarding emergency allowance and stating the facts, they finally formulated their demands as being confined to (1) payment of bonus and (2) payment of emergency allowance. The reply of the Company was that one month's wages had already been allowed to the workers in the current year 1957 by way of Eid advance, and this amount would be adjusted against such bonus as might be declared for the year 1956. At the same time the Company denied that the question of a bonus was an "industrial dispute" which had been referred to the Tribunal and accordingly repudiated the jurisdiction of the Tribunal to go into the matter. They stated the facts regarding the emergency allowance from their point of view. The Tribunal does not appear to have examined as a preliminary question, the conten tion regarding its jurisdiction to enter into the question of bonus, but held in its ultimate award that the question of bonus "remained as a dispute . . . . . . although, it is not mentioned in the report of the Conciliation Officer". In Civil Appeal No. 15‑D of 1959, on the 6th July 1957, the Conciliation Officer reported that a dispute had arisen between the company and its employees belonging to the Pakistan Match Company and M. M. Isphani Limited Employees Association, regarding certain new pay scales which the Company had declared that they would introduce for their employees as from the 1st May 1957. The employees had refused to accept the new pay scales, and the Conciliation Officer had intervened in the dispute, but without success. He suggested an immediate reference to a Tribunal. Again the Government acted with very great expedition; the same day, viz., the 6th July 1957, they made a similar order as in the other case, namely, they declared that "a general Industrial Dispute" had arisen and it was expedient that the said dispute be referred to a Tribunal, and therefore it was referred to Mr. A. Awal. In this case, when the parties appeared before the Tribunal, and were allowed an opportunity of stating their cases in writing, the Employees Association made even better use of the opportunity afforded by the Government's vagueness in defining the dispute which was referred. They declared that the Government had made "an open reference of all the disputes existing" and this was done "in view of habitual adamancy" of the Company. They then proceeded to formulate 14 separate demands, two of which had reference to the matters which had come before the Conciliation Officer, viz., a demand that the old employees should be paid upon the old scales and that the new scales should be optional. The other demands were for increased dearness, house and con veyance allowances, for three months' pay as bonus, for cheap rations, for immediate payment of overtime arrears, for free medical treatment to the members of the families of the employees, for the introduction of a provident fund and a service book system, for the grant of leave each year, for a rest room for night shift workers, and for the provision of uniform, family quarters and leave for peons and drivers. Again, the Company protested against the extension of the scope of the dispute. They insisted that the Tribunal was restricted to adjudicate upon those items which were the subject- matter of the conciliation proceedings, and that the Tribunal had no jurisdiction to intervene in or adjudicate upon any other demands. In this case also, the challenge to the Tribunal's jurisdiction was not dealt with immediately, as it should have been, but in his award; Mr. Awal adopted the principle that he was authorised to adjudicate as to every dispute between the parties which was in existence at the time of the reference, and he found that this condition was satisfied in respect of the introduction of new pay scales as well as in regard to the demand for increased dearness allowance and house allowance. The awards made by the Tribunal in each case may also be briefly noticed. In the first case, after declaring that to allow "three months" wages as claimed by the Union will be suicidal to the very industry itself" and that he was keeping in view the difficulties facing the Company in the conduct of its business, he proceeded to award the workers one month's wages as bonus for the years 1955 and 1956 remarking that the papers for the year 1957 were "not in evidence, and so I am not in a position to declare anything for that year". A dangerous misconception clearly appears in the last‑quoted sentence; the Tribunal appears to have been suffering from the belief that the declaration of a bonus was his function. It is, in fact, a function belonging exclusively and entirely to the Company. As regards the dearness allowance, he declared that the workers would get it at the old rate from the month of June 1957. In the second case, the Tribunal held that the Company could not enforce the new scales of pay against the wishes of the old employees. As regards the dearness and house allowance, he declared that dearness allowance at 20% and house allowance at 10% should be given to all employees who preferred to receive the old scales of pay, but not to those who accepted the new scales. In each case special leave was given by this Court to appeal, inter alia, on the ground that the Tribunal had enlarged unduly the scope of the enquiry beyond the dispute mentioned in the Conciliation Officer's report, and after hearing counsel on the two sides we are clearly of the opinion that the assumption of jurisdiction by the Tribunal to examine and adjudicate upon the two matters decided in the first case and the four matters decided in the second case was ultra vires the powers of the Tribunal in the absence of any indication, much less a statement, of any dis pute referred to the Tribunal in either of the two orders of reference. We consider that upon a true construction of the relevant provisions in the Industrial Disputes Act, there is no escape from the conclusion that, in order to clothe a Tribunal with juris diction to examine and adjudicate upon any difference or dispute arising under the Act, it must be clearly established that such difference or dispute has been duly referred to such Tribunal, as required by the Act. The expression "industrial dispute" in the Act means "any dispute or difference between employers and employees" and we find it impossible to include within the meaning of the expression "dispute or difference" any matter of controvercy as to the existence of which the referring authority is not actually aware at the time of making a reference, that it is being submitted to a quasi‑judicial authority for a definitive decision. For, as will appear from section 15 of the Act, once an industrial dispute has been referred to a Tribunal for adjudication and the Tribunal has made its award, there is a duty imposed upon the referring Government that it "shall by order in writing declare the award to be binding". There is one, and only one, mode by which the Government may escape this obligation. That is a case where it is of the opinion that on public grounds, it would be inexpedient to give effect to the award in whole or in part, whereupon it must lay the matter before the Legislature together with its reasons, and must abide by a decision of the Legislature declared by a resolution. The process is clearly complex and cumbersome, besides affording no assurance that the Government's view will prevail, however absurd or injurious or uncalled for the award may be. There fore, it is a natural and proper inference that before making al reference to a Tribunal, the Government should know what is the precise matter in dispute upon which it proposes to invite a binding adjudication by the Tribunal. Bearing in mind the responsibilities which fall upon the Government once the award is made, it is reasonable to infer that no part of the award should come as a surprise to the Government in the sense that it constitutes an adjudication upon a dispute or difference as to which the Government was not aware at the time of the making of the reference that it was being referred for such adjudication. The public interest is deeply involved in every such matter and no Government acting in a responsible way would wish to confer power upon a Tribunal, by the making of an award within its competence, to tie the hands of the Government as to important matters affecting the development of an industry on one side, the welfare of the workers on the other side, and ‑behind both these matters, the larger public interest, unless such a decision was consciously invited by the Government. It is impossible to suppose that when the Government itself is not aware of the existence of a particular dispute between certain employers and their employees, it can ever be thought to have referred such a dispute consciously to a Tribunal. It follows that an adjudication upon such a dispute cannot oblige the Government to declare the adjudication to be binding. In the present cases, the facts are perfectly plain, on the 6th July 1957, in each case, the Conciliation Officer reported the existence of a single difference or dispute between the parties, and on that very day the Government chose to refer "a‑general Industrial Dispute" to the Tribunal. It is reasonable to infer in view of the lack of any appreciable interval of time between the receiving of the Conciliation Officer's report, and the action taken by the Government, that that action was founded upon the information conveyed by the Conciliation Officer. It is therefore difficult to understand why the Government chose to employ the expression "general Industrial Dispute" in the order of reference. This provided an opening for the Tribunal inasmuch as he allowed the Unions to put forward as many demands as they pleased, and applied a principle of its own extraction, namely, the fact of existence of an unsettled dispute upon any point, as the test by which his jurisdiction to enter into any such dispute was to be determined. It is quite impossible to avoid the conclusion that in each of these cases the points of difference or dispute, which the Tribunal had purported to adjudicate upon were referred to the Tribunal by the Tribunal itself, and not by the Provincial Government at all. The mere fact that the Government has not opposed the adjudications upon this ground is not sufficient, in the context of the provisions of the Act, to provide any ground of validity for the actions of the Tribunal. Such a proceeding is not contemplated at all by the Industrial Disputes Act, 1947. It is only too plain from the principal section relating to the reference of disputes, viz., section 10 that there is nothing automatic or mechanical about such a reference, but each dispute as it comes to the notice of the Government has to be appreciated by that Government in all its aspects for the formation of the opinion necessary under section 10, viz., firstly, whether the Government should interfere at all, and thereafter whether it would be best to refer the controversy "to a Board for promoting a settlement" or to refer any matter constituting a part of the subject‑matter of the controversy "to a Court for enquiry", or "to refer the dispute to a tribunal for adjudication". The exercise of discretion by the Government in this respect is subject to one qualification, namely, that where the parties apply jointly or separately and the persons applying "represent the majority of each party", there the Government shall act in accordance with the application, and refer the matter to a Board or a Court or a Tribunal, as desired by the parties. That is not the case here, and consequently the duty of the Provincial Government was clear, namely, to ascertain the dispute, to consider whether interference by the Government was advisable, and thereafter to decide in its discretion, whether in all the circumstances the best course would be to refer the matter to a Board for settlement or to ask a Court to enquire into any matter pertaining to the subject‑matter of the controversy, or to have the dispute adjudicated upon by a Tribunal. Upon the facts as they were presented to the Government in these two cases, the proper course would appear to have been, in case the Government was satisfied that reference to a Tribunal for adjudication was the best method of obtaining a solution, to state the dispute in clear terms, and to make a reference of the dispute to a Tribunal. The impression conveyed by the two orders of reference made in these cases is that the Government consciously refused to perform its duty on these lines, and instead decided to appoint a Tribunal to decide all such matters as might be in controversy between the parties. The Tribunal implemented this intention by inviting the parties to present written statements from which it proceeded to ascertain what were the existing unsettled items of dispute between them, which it then proceeded to refer to itself for adjudication and eventually made two awards which form the subject of the present appeals. Such a proceeding is in our view unauthorised by the Act, and constitutes a perversion of the provisions of the Act of which the consequence may 'well, be extremely serious .in certain cases: Thus, if a Tribunal were; appointed in the terms employed by the Government in these cases, he might constitute himself a permanent arbitrator of all disputes arising between the employers and the employees, by referring disputes between them to himself for adjudication as they arise in the course of his proceedings, making interim awards from time to time. If each of these awards were made within the statutory period viz., three months from the date upon which the Tribunal chose to refer the dispute to himself, it would appear that no fault could be found with any of them in the light of any provisions of the Act which relate to matters subsequent to the making of the reference. It seems to us to be perfectly clear that such a perversion of procedure and abuse of power cannot be tolerated and the correction must therefore be applied at the very outset i.e., by insisting that the Tribunal shall not examine an dispute unless that dispute has been referred to it by the Government. Failure on the part of a Government to make a reference in respect of specified disputes, leading to such an abuse of the provisions of the Act, is a clear dereliction of duty, involving violation of express provisions of the Act, sufficient to render the reference illegal and void. Learned counsel appearing for the Government as well as for the employees' Unions, which stand to benefit by the awards made by the Tribunal, have not attempted to support the action of the Government or the Tribunal by reference to the provisions of the Act itself, but have desired that this Court should take into consideration, certain arguments which have prevailed in cases of somewhat similar character coming before the Federal Court of India and later the Supreme Court of India. The first case referred is the India Paper Pulp Co., Ltd., (A I R 1949 F C, 148) case, and reliance is placed upon the following passage in the judgment of Kania, C. J.: ‑ "The section does not require that the particular dispute should be mentioned in the order. It is sufficient that the existence of a dispute and the fact that the dispute is referred to the Tribunal is clear from the order". The second case is that of C. P. Sarathy (A I R 1953 S C 53) where it was observed that the Court cannot canvass the order of reference closely to see if there was any matter before the Government to support its conclusion as to the factual existence of an industrial dispute, and in support of the conclusion that definition of the dispute referred, in the order of reference, was not a requisite of law, mention was made of cases where the "public interest" might require immediate stoppage of a strike or lock‑out, which could only be ordered after reference of the dispute to a Board or Tribunal, and the Government should therefore have the power to set in motion the machinery of settlement "without stopping to enquire what specific points the contending parties are quarelling about". A caution was expressed at the same time that the Government must, "of course, have sufficient knowledge of the nature of the dispute to be satisfied that it is an industrial dispute". An analogy was then drawn between reference to a Board, which does not require specification of the dispute referred, and reference to a Tribunal, although the learned Chief Justice (Patanjali Sastri) expressed himself as being conscious that a Board merely mediates while a Tribunal adjudicates. Yet, he thought that the status of a Tribunal was not analogous to that of an arbitrator in ordinary civil dispute who is confined as to his enquiry, by the terms of the submission. The learned Chief Justice thought that an adjudication by a Tribunal was "only an alternative form of settlement of the disputes on a fair and just basis". He referred to the Rules under the Industrial Disputes Act, which require that upon appearance of the parties before the Tribunal, they should be required to state their cases, and opined that by this method, the disputes "would get crystalised before the Tribunal proceeds to make its award". In the result the opinion expressed by the learned Judge was that beyond being satisfied that there was a dispute between the parties, and that in its nature, the dispute was an industrial dispute, no obligation can be held to lie on the Government to ascertain particulars of the dispute before making a reference under section 10 (1) or to specify them in the order. These conclusions of a Court of ultimate jurisdiction in a country where the Industrial Disputes Act, 1947, is in force in practically the same form as in Pakistan must necessarily be treated with respect and examined with anxious care. They are in many respects and directly contrary to the opinions which we have expressed in the earlier part of the judgment. Reference to the Rules does not, in our opinion, serve to support the final conclusion, for the Rules do not permit the Tribunal to allow the parties to make a statement of their demands, but only to state their cases in regard to a dispute which has already been referred to him of which he is properly seized. The Tribunal is not empowered to receive plaints or complaints in the manner of a Court. His jurisdiction is. confined to the treatment of a dispute referred to him, and when the Rules speak of the parties being allowed to "state their case at the commencement of the pro ceeding before the Tribunal, we apprehend that they can mean no more than this that with reference to the dispute, the parties may make a full statement of their respective stand points so that the nature of the controversy may be made to appear fully and exactly. It is undoubtedly true that there may be occasions when the public interest requires that quick action should be taken to prevent a strike or lock‑out. Such an action by a Government is necessarily of a serious nature, since it may operate unequally between the parties so as to place one or the other at a dis advantage, and, in any case, where relations between employers and employees in any sizeable unit of industry have reached the point when a strike or lock‑out becomes imminent, and Govern mental action becomes necessary, it is surely not too much to expect of that Government that it will inform itself of the nature of the controversy between the parties. Therefore, should it come under the compulsion of taking immediate steps to prevent a strike or lock‑out, it cannot but be already equipped with that amount of knowledge which is necessary for specifying in the order of reference, what the dispute between the parties is. We cannot conceive that a Government in such a situation can ever be supposed to act blindly or without adequate information. And if a Government did indeed act in such a manner, we should find it difficult to make the assumption that it acted in the "public interest". As to the attempted analogy between reference to a Board for solution and a reference to a Tribunal for adjudication, we find it impossible and here we speak with all due respect, to see the slightest point of similarity in the relevant sense between these two modes by which a solution of a controversy of the relevant kind may be sought. A very large point of difference has already been indicated earlier in this judgment, namely, that an adjudication by a Tribunal per se obliges the Government to declare it to be binding, and the Government can only avoid the obligation by undertaking the trouble and embarrassment of a reference to its own Legislature, as to whose decision it can never be certain, and which would probably find material for strong criticism of the Government, should it have made a reference in such a way as to leave the disputes between the parties to be ascertained for the first time by the Tribunal. Moreover, a reference to a Board for mediation can rarely, if ever, be made in the same circumstances as necessitate a reference to a Tribunal, and a comparison between the method of application of the two modes may therefore be apt to mislead. Having regard to the binding nature of an award by an arbitrator, there would seem to be a greater possibility of similarity with the procedure of a Tribunal, in the procedural provisions applicable to arbitrators, than in those governing the functions of a mediating Board. Accordingly, we are satisfied that upon a proper construction of the relevant provisions in the Industrial Disputes Act, reference such as those made in the present cases are not competent within the meaning of section 10 (1) of the Act, and upon the facts of the cases we are satisfied that in each case the Tribunal has adjudicated upon points of dispute, which it has referred to itself, an action which was entirely beyond any powers that may vest in a Tribunal under the Act. For these reasons, we allow these appeals and quash entirely the proceedings in these two cases, but in the circumstances we make no order as to costs in either case. A. H. Appeals allowed.