Case Note & Summary
The case concerned an industrial dispute arising from the retrenchment of six workmen by the management of Oriental Mercantile Agency. The Government of Madras referred the dispute to the Labour Court, which by award dated June 14, 1963 held that the non-employment of the workmen was justified and they were not entitled to any relief. The workmen challenged this award by filing Writ Petition No. 209 of 1964 in the Madras High Court under Article 226 of the Constitution. A learned single Judge, Venkatadri J., by judgment dated February 20, 1967, set aside the Labour Court award, holding that the non-employment was unjustified, the management's intention was to weed out unwanted workmen, and the reasons for termination were fanciful. He remitted the matter back to the Labour Court for fresh disposal. The management filed Writ Appeal No. 113 of 1967 against this judgment. On April 4, 1967, a Division Bench of the High Court dismissed the appeal in limine with observations that the learned single Judge had not finally expressed conclusions on major questions of fact, and the Labour Court should ascertain facts carefully and apply correct industrial law principles. This order was passed without notice to the workmen and was therefore ex parte. Thereafter, the matter went back to the Labour Court, where the management sought to re-agitate all disputed issues, but the workmen objected. While the matter was pending, the workmen filed CMP No. 7125 of 1967 seeking clarification of Venkatadri J.'s judgment. By order dated June 26, 1967, the single Judge clarified that he had remitted the matter only for determining reliefs and that the Labour Court could not reopen the merits. He noted that the Labour Court was taking advantage of the fresh disposal phrase to reopen the matter. The management then filed a review application before the Division Bench, which was dismissed on July 31, 1967, on the ground that the earlier observations were prima facie in favour of the employer organisation and therefore the management could not seek review. In the welter of conflicting orders, the Labour Court took up the matter again. By its award dated May 25, 1968, it held that the powers of the High Court under Article 226 are limited to remitting a case for fresh disposal in its entirety, that the appellate court had said no final conclusions had been expressed, and that therefore the whole matter was at large. It reaffirmed the original finding that retrenchment was justified. The workmen challenged this award by filing Writ Petition No. 122 of 1969. A Division Bench of the High Court, by judgment dated July 7, 1970, quashed the Labour Court award and remitted the matter with a direction that the Labour Court should not go into merits but only determine proper reliefs. The Division Bench held that the workmen were not bound by the ex parte observations of the earlier Division Bench, and the order of Venkatadri J. was final and binding. The management appealed to the Supreme Court by special leave. The Supreme Court noted the unfortunate state of affairs caused by irreconcilable orders. It held that the order of the Division Bench in Writ Appeal No. 113 of 1967 was passed ex parte and in violation of natural justice, and could not bind the workmen; that order was set aside. It further held that the clarification order passed by the single Judge in CMP No. 7125 of 1967 was wrong because the single Judge had no jurisdiction to issue a clarification inconsistent with the appellate order; the appellate order was binding on him. The second Labour Court award dated May 25, 1968 was also set aside as it could not have been passed without considering the legality of the single Judge's judgment. Consequently, the High Court judgment dated July 7, 1970 in Writ Petition No. 122 of 1969 was set aside. The Supreme Court left in the field the first Labour Court award dated June 14, 1963 and the judgment of the single Judge in Writ Petition No. 209 of 1964. Writ Appeal No. 113 of 1967 was revived, and the High Court was directed to dispose of that appeal on merits after issuing notice to the respondents. Thus, the appeal was partly allowed, and the matter restored for fresh appellate consideration.
Headnote
A) Industrial Disputes Act - Retrenchment and Fresh Disposal - Scope of remand to Labour Court - Industrial Disputes Act, 1947 - The Labour Court first held retrenchment justified, but the High Court single judge set aside the award and remitted for fresh disposal. A Division Bench in writ appeal dismissed the appeal in limine with ex parte observations that no final conclusions had been expressed and the Labour Court should ascertain facts afresh. The second Labour Court award held the entire matter at large. Held that the ex parte appellate order was passed in violation of natural justice, could not bind the workmen, and had to be set aside; the writ appeal was revived for disposal on merits. B) Constitutional Law - Writ Jurisdiction under Article 226 - Remand powers of High Court - Constitution of India, 1950, Article 226 - The High Court while exercising writ jurisdiction quashed Labour Court awards and remitted matters with directions. The single judge's clarification after the appellate order sought to limit the remand to relief only, but the learned judge lacked jurisdiction to issue a clarification inconsistent with the appellate order. Held that the appellate order was binding on the single judge and the clarification order was wrong. C) Natural Justice - Audi Alteram Partem - Binding nature of ex parte appellate order - Constitution of India, 1950, Article 226 - An order passed by a Division Bench dismissing a writ appeal in limine without issuing notice to the respondents is ex parte and cannot bind the non-hearing party. Held that the Division Bench order dated April 4, 1967 in Writ Appeal No. 113 of 1967 was set aside as being in violation of natural justice. D) Judicial Discipline - Binding nature of appellate orders on lower courts and tribunals - Labour Court proceedings - Industrial Disputes Act, 1947 - The Labour Court could not pass an award contrary to a subsisting High Court judgment; judicial discipline requires compliance with binding decisions. Held that the second Labour Court award dated May 25, 1968 was set aside, and the High Court judgment quashing it was also set aside to enable fresh adjudication of the revived writ appeal.
Issue of Consideration
Whether the ex parte order of the Division Bench in Writ Appeal No. 113 of 1967 is binding on the workmen; Whether the learned single Judge's clarification order after appellate order was valid; Whether the Labour Court could reopen merits despite the single Judge's finding; Whether the High Court judgment quashing the second award was correct
Final Decision
Supreme Court allowed the appeal in part: set aside the Division Bench order dated April 4, 1967 in Writ Appeal No. 113 of 1967 as violation of natural justice; set aside the clarification order dated June 26, 1967 in C.M.P. No. 7125 of 1967; set aside the Labour Court award dated May 25, 1968; set aside the High Court judgment dated July 7, 1970 in Writ Petition No. 122 of 1969; revived Writ Appeal No. 113 of 1967 and directed the High Court to dispose of that appeal on merits after issuing notice to respondents; left in field the first Labour Court award dated June 14, 1963 and the single Judge's judgment dated February 20, 1967.
Law Points
- Ex parte order passed without notice violates natural justice
- appellate order binding on subordinate judge
- Labour Court cannot ignore High Court judgment
- scope of remand determined by specific order
- fresh disposal may be limited if High Court so orders
- writ appeal must be heard on merits after notice
