Industrial Disputes Act, 1947: ss. 16, 17 and 17A – Ex-parte award – Power to recall, by the Industrial Tribunal/Labour Court after it becomes enforceable – Held: Industrial tribunal/labour court is not functus officio after the award has become enforceable, as far as setting aside an ex parte award is concerned – It is within its powers to entertain an application as per the scheme of the Act and in terms of the rules of natural justice – Merely because an award has become enforceable, does not necessarily mean that it has become binding – For an award to become binding, it should be passed in compliance with the principles of natural justice – Furthermore, in case a party is in a position to show sufficient cause for its absence before the Labour Court/Tribunal when it was set ex parte, the Labour Court/Tribunal, in exercise of its ancillary or incidental powers, is competent to entertain such an application – That power cannot be circumscribed by the principle of functus officio.
Disposing of the appeals, the Court
HELD: 1.1 Under Section 17(1) of the Industrial Disputes Act, 1947, an award shall be published by the appropriate Government within 30 days of its receipt. Under Section 17(2), the award becomes final subject to Section 17A. Under Section 17A, an award becomes enforceable on the expiry of 30 days from the date of its publication under Section 17. Under the statutory scheme, the labour court/tibunal is empowered to follow its own procedure as it thinks fit, meaning thereby, a procedure which is fit and proper for the settlement of the industrial dispute and for maintaining industrial peace. If a party fails to attend the court/tribunal without showing sufficient cause, the court/tribunal can proceed ex parte and pass an ex parte award. The award, ex parte or otherwise, has to be sent to the appropriate Government as soon as it is made and the appropriate Government has to publish it within 30 days of its receipt. The award thus, published becomes enforceable after a period of 30 days of its publication. Furthermore, an ex parte award can be set aside in case the court/tribunal is approached within 30 days of its publication under Section 17 of the Act, is no more res integra. [Para 7, 12, 14] [382-F-G; 383-C-D; 384-F-G; 385-A]
1.2 On a close reading of Grindlays case in the background of the analysis of law, it is difficult to comprehend that the power to set aside an ex parte award is not available to a Labour Court/Industrial Tribunal. On the principles of natural justice, and on a purposive interpretation of the scheme of the Act and Rules, it is difficult also to discern that the ratio of the decision in Grindlays case, is what is stated to the extent that an application for setting aside an ex parte award has to be filed within 30 days of publication of the award. On the contrary, the ratio in Grindlays case is that the tribunal can exercise its ancillary and incidental powers, on the broader principles contained under Order IX Rule 13 of the CPC. No doubt, the Limitation Act, 1963 is not applicable to the labour court/tribunal. [Para 30] [394-GH; 395-A]
1.3 In case a party is in a position to show sufficient cause for its absence before the labour court/ tribunal when it was set ex parte, the labour court/tribunal, in exercise of its ancillary or incidental powers, is competent to entertain such an application. That power cannot be circumscribed by limitation. What is the sufficient cause and whether its jurisdiction is invoked within a reasonable time should be left to the judicious discretion of the labour court/tribunal. [Para 32] [396-D-E]
1.4 It is a matter of natural justice that any party to the judicial proceedings should get an opportunity of being heard, and if such an opportunity has been denied for want of sufficient reason, the labour court/tribunal which denied such an opportunity, being satisfied of the sufficient cause and within a reasonable time, should be in a position to set right its own procedure. Otherwise as held in Grindlays case, an award which may be a nullity will have to be technically enforced. It is difficult to comprehend such a situation under law. [Para 33] [396-E-F]
1.5 Merely because an award has become enforceable, does not necessarily mean that it has become binding. For an award to become binding, it should be passed in compliance with the principles of natural justice. An award passed denying an opportunity of hearing when there was a sufficient cause for nonappearance can be challenged on the ground of it being nullity. An award which is a nullity cannot be and shall not be a binding award. In case a party is able to show sufficient cause within a reasonable time for its non-appearance in the labour court/tribunal when it was set ex parte, the labour court/tribunal is bound to consider such an application and the application cannot be rejected on the ground that it was filed after the award had become enforceable. The labour court/tribunal is not functus officio after the award has become enforceable as far as setting aside an ex parte award is concerned. It is within its powers to entertain an application as per the scheme of the Act and in terms of the rules of natural justice. The Industrial Disputes Act, 1947 is a welfare legislation intended to maintain industrial peace. In that view of the matter, certain powers to do justice have to be conceded to the labour court/tribunal, whether it is called ancillary, incidental or inherent. [Para 35] [397-B-E]
1.6 When an application for setting aside an ex parte award is made at the instance of the management, the labour court/tribunal has to balance equities. The awards are remitted to the labour court for consideration as to whether there was sufficient cause for non- appearance of the management. Since the litigation has been pending for a long time, the appellants are directed to pay an amount of Rs.1,00,000/- in each case to the workmen by way of provisional payment. However, the payment is subject to the final outcome of the aw ards and would be adjusted appropriately. [Para 36] [397-F-G]
Grindlays Bank Ltd. v. Central Government Industrial Tribunal and others [1981] SCR 341 : (1980) Suppl. SCC 420 – relied on.
Kapra Mazdoor Ekta Union v. Birla Cotton Spinning and Weaving Mills Ltd. and Another [2005] 2 SCR
888 : (2005) 13 SCC 777 – distinguished.
Anil Sood v. Presiding Officer, Labour Court II (2001)
10 SCC 534; Jammu Tehsil v. Hakumar Singh and others (2006) 12 SCC 193; M.P. Steel Corporation v. Commissioner of Central Excise (2015) 7 SCC 58; Nityananda, M. Joshi and others v. Life Insurance Corporation of India and others (1969) 2 SCC 199; Union of India and another v. Paras Laminates (P) Ltd (1990) 4 SCC 453; J. K. Synthetics Ltd v. Collector of Central Excise [1996] 5 Suppl. SCR 295 : (1996)
6 SCC 92; Sangham Tape Co. v. Hans Raj
[2004] 4 Suppl. SCR 728 : (2005) 9 SCC 331; and Radhakrishna Mani Tripathi v. L. H Patel and another [2008] 16 SCR 490 : (2009) 2 SCC 81; Haryana Suraj Malting Limited v. Phool Chand (2012) 8 SCC 579 referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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