J.B.MEHTA - (1.) The petitioner registered Trade Union challenges In this petition award at Annexure H dated November 18 1971 by which respondent No.1 Labour Court ( Shri D. M. Vin ) in terms held that the Reference in question was incompetent. The petitioners have in the alternative challenged the action of respondent No. 2 Panchayat by passing resolution at Annex F dated July 1 1969 by which the Sarpanch of respondent No.2 Panchayat sought to terminate the services of all the concerned 10 clerks purporting to comply with the order of reinstatement of this Court of the 10 concerned clerks on that day on the ground that such arbitrary and mala fide order must be quashed in exercise of the powers under Articles 226 and 227. Respondent No. 2 Panchayat had 10 clerks working in the Octroi Department. They were served a notice on September 25 1967 for their discharge with effect from November 1 1967 on the ground that it was more economical to collect octroi through a contractor and so the contract of collection was to be given from November 1 1967 and their services were not required. The petitioner union therefore took the matter in conciliation and respondent No. 2 Panchayat got intimation of conciliation proceedings on October 27 1967 In spite of the pendency of the said proceedings respondent No. 2 Panchayat relieved these 10 clerks from November 1 1967 The Government therefore referred this industrial dispute to the Special Labour Court of Mr. D. M. Vin. In Reference No. 16 1968 there was no plea raised that respondent No. 2 Panchayat was not an industry covered by the Act. At that time plea was taken that the Act did not apply because the Panchayat service was Government service and such a semi-Government body was not governed by the Act. That contention was negatived by the Labour Court in its award dated November 13 1968 at Annex. C. The Tribunal further held that such a change of introduction of rationalisation and reduction of posts falling under Items 10 and 11 of Schedule IV of the Industrial Disputes Act 1947 hereinafter referred to as the Act was in plain violation of sec. 9A and was therefore ineffective. It was also held that this change was during the pendency of conciliation proceedings and therefore it violated mandatory provision of sec. 33(1)-Finally it was held that no compensation was paid as required by the mandatory terms of sec. 25F(b) and the termination order of these 10 clerks violated even those provisions. The Labour Court held that it had no material at that time for coming to the conclusion that the contract of the collection of octroi was given in such way that it would amount to exploitation of labour. Therefore the Labour Court did not introduce in the award protective provisions which would prevent such exploitation of labour and did not issue directions to the Panchayat to discontinue the contract system of collecting octroi. At the same time the Labour Court recommended the Panchayat to see that the 10 clerks were absorbed in future vacancies and also to all of them awarded retrenchment compensation except in the case of Mr. Raval for two months. The petitioner Union being dissatisfied with this award filed a writ petition before this Court being Special C.A. No. 516 of 1969 claiming reinstatement for all these 10 clerks. At the hearing a settlement was arrived at and this Court on June 18 1969 passed an order as per the consent terms directing reinstatement of all these 10 clerks with continuance of service. They had to report for duty on July 1 1969 They were to be paid 66% of their wages from the date of discharge till the date of reinstatement. It was further directed that if the amount agreed as per this settlement was not paid on or before December 31 1969 the whole amount was to carry interest at 6% from November 1 1967 and necessary certificate for recovery of the amount as arrears of land revenue was to be issued. It was amazing that on that very day on which these 10 clerks reported for duty as per the consent terms of July 1 1969 the Sarpanch admits before the Labour Court in his deposition that they were merely made to sit in the office and their services were terminated as per the resolution at Annex. F of the Panchayat by offering them retrenchment compensation and one months notice pay. In the said resolution It is stated that the Panchayat had passed a resolution right from December 29 1962 to introduce collection of octroi through contractor so that economy can be effected and it would be convenient. Therefore Governments permission was obtained and contract system was introduced from November 1 1967 These octroi clerks whose services were terminated were reinstated because proper legal procedure was not followed. As their continuance in service was not economical to the Panchayat as per the resolution dated June 25 1969 they were to be retrenched under sec. 25 on payment of retrenchment compensation and notice pay and to be relieved after office hours on July 1 1969 especially as Panchayats financial position was weak and octroi was the only source of revenue and there were many pending works. Under the circumstances the Panchayat did not require the services of these 10 clerks by way of economic measure and as contract was given for octroi collection there was no work for these clerks and therefore they were retrenched. It was further stated that as regards the aforesaid amount due to them of retrenchment compensation and notice pay these clerks were directed to collect the same. They were further informed that if that amount was not collected that day the amount would be sent by cheque by registered post and Panchayat would not be responsible in that connection. After the clerks were so retrenched fresh reference was made by the State on October 16 1969 in respect of the two demands for reinstatement with back wages and with compound interest at 9% and for abolition of the contract system. It should be noted at this stage that neither in the written statement nor at any stage before the hearing any contention was raised that this activity of the municipality was not an industry. The Labour Court in its award has stated that at the time of hearing only a legal contention was raised on behalf of the Panchayat that the activity of the octroi section was not an industrial activity and therefore reference was not competent. Such a mixed question of law and facts has been sought to be decided by the Labour Court only from arguments as it treated it as a purely legal contention. The Labour Court proceeded on the assumption that the binding decision in the Nagpur Corporation Case AIR 1960 S. C. 675 stood overruled in the light of latest decisions. The Labour Court assumed from some stray sentences in the evidence of the Sarpanch even though there was no cross-examination of the concerned workmen that the octroi section was the watertight department and its workers were not transferable. Therefore on an assumption of these facts and ignoring the entire previous history and ignoring even the statutory provision in sec. 180 that the octroi collection can be farmed out the Labour Court held that this being regal function of tax collection the activity was non-industrial activity and therefore the present reference was incompetent. Fortunately the Labour Court has recorded its alternative finding on merits of the dispute. First it held that the order of termination of services of its 10 clerks was obviously malafide and that the Panchayat was going back on the consent terms and therefore its action could not be sustained. The Labour Court however surprisingly held inconsistent with its earlier award that the provisions of sec. 9A were not contravened this time as relieving of these ten clerks would not amount to reduction in the number of posts in the Panchayat. The Labour Court further held that the earlier award as it stood amended by the consent order of this Court was not in any manner contravened by the impugned action. Therefore on merits as regards demand No. 1 in view of the fact that the order was absolutely malafide the Labour Court treated it as a fit case to order reinstatement of all these 10 workmen with the compensation equivalent to the back wages which they would hove earned from the date of their discharge July 1 1969 till the date of reinstatement of service. As regards the second demand the Labour Court in view of the fact that the contract system was sought to be implemented by exploiting labour by passing such malafide arbitrary orders held that the proper course would be to issue directions to the Panchayat to discontinue the contract system from the date when the existing contract had come to an end. As however the Reference was held to be incompetent no such proposed directions were given. That is how the petitioner Union has filed the present petition challenging the aforesaid award as well as in the alternative the impugned order terminating services of the aforesaid 10 clerks.
(2.) The Sarpanch in terms in para 11 of his affidavit stated that by contract system the work of collecting octroi was handed over to the contractor but the other work was being done by the clerks already existing on the staff on the date of the settlement i e. July 1 1969 He further stated that the octroi department was in existence on that day and it was not correct to say that because the work of collecting octroi was handed over to the contractor the existence of the octroi department itself was abolished Therefore he denied that there was any breach of the earlier award as it stood modified by the order of this Court as per the consent terms. On the footing that the octroi department was the water-tight department the Sarpanch tried to support the order of the Labour Court.
(3.) Mr. Majmudar rightly challenges the award of the Labour Court - as perverse patently erroneous and on a complete misconception of law at least on five grounds : (1) That even though this attempted rationalisation was held to have been introduced on November 1 1967 in violation of sec. 9A the same Labour Court has recorded wholly inconsistent conclusion in these proceedings that there was no violation of sec. 9A at all by fresh discharge of the same 10 clerks on that very day on which they were reinstated. (2) That such a malafide device of making workers sit in the office and reducing them on the very day amounted to non-compliance with the binding terms of the award as it stood modified by the order of this Court as per the consent terms. (3) That ignoring the settled law the Labour Court had held that sec. 25F(b) was not contravened by this act. (4) That in absence of any pleading or issue and even when there was no case put to the concerned workmen when they were examined the Labour Court had no jurisdiction to make out such a new case on facts from some stray sentences in the evidence of the Sarpanch that the octroi section was watertight compartment and the workmen therein were not transferable at all. (5) That the Labour Court erroneously assumed that the binding decision in Nagpur Corporation case A.I.R. 1960 S. C. 675 was overruled and therefore it had patently erred in not giving effect to this settled law of the land.;