Case Note & Summary
The writ petition was filed by the Bombay Telephone Canteen Employees Association, a trade union, challenging the award dated 12 June 1996 passed by the Central Government Industrial Tribunal No.1, Mumbai in Reference No.CGIT-1/88 of 1993. The reference pertained to an industrial dispute raised by employees of Mahanagar Telephone Nigam Limited (MTNL), respondent No.2. The Tribunal rejected the reference on the preliminary ground that MTNL is not an 'industry' under Section 2(j) of the Industrial Disputes Act, 1947, and therefore the provisions of the Act did not apply. The Tribunal relied upon two Supreme Court judgments: Sub-Divisional Inspector of Post vs. Theyyam Joseph, (1996) 8 SCC 489, and Bombay Telephone Canteen Employees’ Assn. vs. Union of India, (1997) 6 SCC 723, which had held that the Postal and Telecom departments perform sovereign functions and are not industries. Subsequently, a two-Judge Bench of the Supreme Court in General Manager, Telecom vs. A. Srinivasa Rao, (1997) 8 SCC 767, took a contrary view. Placing reliance on the seven-Judge Bench decision in Bangalore Water Supply and Sewerage Board vs. A. Rajappa, (1978) 2 SCC 213, the Court held that the Telecom Department is an industry. The Court expressly stated that the decisions in Theyyam Joseph and Bombay Telephone Canteen Employees’ Assn. were not correct law and that judicial discipline required following the larger bench. The High Court, bound by this later pronouncement, allowed the writ petition, set aside the Tribunal's award, and remanded the matter for a decision on merits. No order as to costs was made.
Headnote
A) Labour Law - Definition of 'Industry' - Section 2(j), Industrial Disputes Act, 1947 - Applicability to Telecom Department and MTNL - The reference was rejected by the Tribunal on the ground that MTNL is not an industry, relying on earlier Supreme Court decisions in Sub-Divisional Inspector of Post vs. Theyyam Joseph, (1996) 8 SCC 489 and Bombay Telephone Canteen Employees' Assn. vs. Union of India, (1997) 6 SCC 723. However, the Supreme Court in General Manager, Telecom vs. A. Srinivasa Rao, (1997) 8 SCC 767, following the seven-Judge Bench decision in Bangalore Water Supply and Sewerage Board vs. A. Rajappa, (1978) 2 SCC 213, held that the Telecom Department of Union of India is an industry, and the decisions in Theyyam Joseph and Bombay Telephone Canteen Employees' Assn. cannot be treated as laying down correct law. Held that the impugned award is set aside and matter remanded for decision on merits. (Paras 1-3)
Issue of Consideration
Whether Mahanagar Telephone Nigam Limited is an 'industry' within the meaning of Section 2(j) of the Industrial Disputes Act, 1947.
Final Decision
The writ petition is allowed. The impugned Award dated 12 June 1996 passed in Reference No.CGIT-1/88 of 1993 is set aside. The matter is remanded to the Central Government Industrial Tribunal No.1, Mumbai for a decision on merits. No order as to costs.
Law Points
- Telecom Department/MTNL is an industry under Section 2(j)
- Industrial Disputes Act
- 1947
- Bangalore Water Supply binding precedent
- earlier decisions overruled
Case Details
2005 LawText (BOM) (03) 223
WRIT PETITION NO.2258 OF 1997
Mr. M.K. Nesari for the Petitioner, None present for the Respondents
Bombay Telephone Canteen Employees Association
Union of India, The Chief General Manager, Mahanagar Telephone Nigam Limited
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India challenging an industrial tribunal award on the ground that it erroneously held MTNL not to be an industry under the Industrial Disputes Act.
Remedy Sought
The petitioner trade union sought setting aside of the Tribunal's award and a declaration that the reference is maintainable as MTNL is an industry.
Filing Reason
The Central Government Industrial Tribunal had rejected the reference on the preliminary issue that the employer is not an industry, relying on Supreme Court decisions that later stood overruled.
Previous Decisions
Central Government Industrial Tribunal No.1, Mumbai in Reference No.CGIT-1/88 of 1993 passed award dated 12 June 1996 rejecting the reference as not maintainable.
Issues
Whether Mahanagar Telephone Nigam Limited is an 'industry' within the meaning of Section 2(j) of the Industrial Disputes Act, 1947, in light of the conflicting Supreme Court judgments.
Submissions/Arguments
The petitioner contended that the Tribunal's decision was erroneous in view of the later Supreme Court judgment in General Manager, Telecom vs. A. Srinivasa Rao which held Telecom to be an industry, overruling earlier decisions.
Ratio Decidendi
Following the Supreme Court decision in General Manager, Telecom vs. A. Srinivasa Rao, (1997) 8 SCC 767, which held that the Telecom Department is an 'industry' under Section 2(j) of the Industrial Disputes Act, 1947, and that the earlier contrary decisions in Sub-Divisional Inspector of Post vs. Theyyam Joseph and Bombay Telephone Canteen Employees' Assn. vs. Union of India are not correct law, the High Court set aside the tribunal award that had held MTNL not to be an industry. The matter was remanded for adjudication on merits.
Judgment Excerpts
A two-Judge Bench of this Court in Theyyam Joseph case held that the functions of the Postal Department are part of the sovereign functions of the State and it is, therefore, not an 'industry' within the definition of Section 2(j) of the Industrial Disputes Act, 1947. Incidentally, this decision was rendered without any reference to the seven-Judge Bench decision in Bangalore Water Supply.
It is needless to add that it is not permissible for us, or for that matter any Bench of lesser strength, to take a view contrary to that in Bangalore Water Supply or to bypass that decision so long as it holds the field.
We must, therefore, add that the decisions in Theyyam Joseph and Bombay Telephone Canteen Employees' Assn. cannot be treated as laying down the correct law.
Procedural History
The Central Government Industrial Tribunal No.1, Mumbai passed an award on 12 June 1996 in Reference No.CGIT-1/88 of 1993, rejecting the reference on the ground that MTNL is not an industry. The petitioner filed the present writ petition in 1997 challenging the award. The matter was heard and decided on 29 March 2005.
Acts & Sections
- Industrial Disputes Act, 1947: Section 2(j)
- Companies Act, 1956:
