MODERN STORES CIGARETTES Vs. KRISHNADAS SHAH
LAWS(MPH)-1969-2-7
HIGH COURT OF MADHYA PRADESH
Decided on February 20,1969

MODERN STORES(CIGARETTES) Appellant
VERSUS
KRISHNADAS SHAH Respondents

JUDGEMENT

- (1.) BY this application under Articles 226 and 227 of the Constitution of India, the petitioners, the Modern Stores, Jabalpur and their Manager (hereinafter referred to as the 'management') apply for a writ of Certiorari for quashing an award of the presiding Officer, Labour Court, Jabalpur, dated 15th April 1968, which directs the re-instatement of the 9 salesmen discharged from their service and payment of back wages and allowances to them with effect from 1st January 1968, and for an appropriate writ or direction to restrain that authority, from implementing the said award.
(2.) THE relevant facts, briefly stated, are these. The Modern Stores, Jabalpur, are the sole distributors of cigarettes manufactured by the Imperial Tobacco Company, limited, under a distributing agreement dated 20th May 1967, for the Jabalpur region. For distributing cigarettes to the retail dealers, the Management employed the respondents nos. 3 to 11 as salesmen (hereinafter referred to as the 9 'salesmen' ). These 9 salesmen have formed an Union of themselves, known as the cigarettes Salesmen's Union, which is duly registered as a trade Union. Apparently, the Union started agitation for betterment of the Service conditions of its members and eventually, the Management entered into an agreement dated 16th March 1967 with the Union, laying down the terms and conditions of their employment. Among other terms, what is of significance, is Clause 4, which guarantees to them permanence of their service. It reads:. . (VERNACULAR MATTER OMMITED ). . Thereafter, the Union appears to have moved the Labour Court, Jabalpur, for fixation of minimum wages for the salesmen employed by the Management, tinder the Minimum Wages Act, (Act No. XI of 1948 ). While the proceedings were pending, the Management served a notice of termination of service, of the 9 salesmen from 1st January 1968 stating:. . (VERNACULAR MATTER OMMITED ). . After this notice of retrenchment the 9 salesmen started an agitation alleging that in reality there was a wrongful termination of their employment, as a mark of punishment for their trade Union activities. The Management, accordingly, entered into an agreement with the Union on 22nd January 1968 in Form 'c' under Rule 7 of the Madhya Pradesh Industrial Disputes Rules, 1957. In accordance therewith, the dispute as "regards the termination of service of the 9 salesmen was referred to the respondent No. 1, Shri Krishnadas Shah, Presiding Officer, Labour Court, jabalpur, for his arbitration under Section 10-A of the Industrial Disputes Act, 1947. Incidentally the agreement shows that 9 out of 11 salesmen are affected by the notice of termination. Immediately upon the reference being made, the learned Presiding Officer commenced his arbitration proceedings. The Union filed its statement of claim before the Tribunal, attributing ulterior motives to the management in terminating the services of its members, i. e. , of the 9 salesmen in question. It was alleged that these 9 salesmen were not rendered really surplus, on account of any genuine change in the method of business by the Management, but that they, in the guise of ordering retrenchment had, in fact victimised the 9 salesmen, for forming a trade Union and for agitating for the betterment of their service conditions. In other words, the Union urged that the notice of termination was a colourable exercise of the power of retrenchment which the Management ordinarily has, and was, in reality, an unfair labour practice which was lacking in good faith and the notice was, therefore, a notice of termination of services as a disciplinary action, by way of punishment. Apart from this, the Union also alleged that the mandatory requirements of section 25-F were not complied with and, therefore, the retrenchment, if any, was invalid and also that the notice of termination being in breach of the settlement arrived at between the Union and the Management was invalid. The Management however, in their written statement denied the charge of victimisation and asserted that the difference between the purchase price charged by the manufacturers and the retail selling price fixed by them was the margin of profit of the Modern Stores. Apart from this, the Management are not entitled to any discount or commission on the price for employing salesmen for distribution of cigarettes and their margin of profit was not sufficient to cover the cost of distribution. That they had, therefore, terminated the employment of the 9 salesmen on grounds of economy as they had now decided to distribute cigarettes themselves to the retailers directly, instead of through the salesmen in question and, therefore, their services had become surplus. In their supplementary statement, the Management also tried to support their order of termination on the ground of misconduct of the 9 salesmen, and furnished a statement of allegations which showed that their working had become increasingly unsatisfactory. After taking the evidence adduced by the parties, the Tribunal has by the impugned award found the retrenchment of the 9 salesmen to be illegal and has, accordingly, directed the Management to re-instate all these 9 salesmen and to pay them their back wages and allowances w. e. f. 1st January 1968.
(3.) IT is urged by the learned Counsel appearing on behalf of the Union that although the functions of an arbitrator to whom a dispute is referred under Section 10-A of the Act are of a quasi-judicial nature, the High Court should not ordinarily interfere with an Award rendered by him settling the dispute, unless there was some kind of injustice caused by his adjudication. In support of this contention, the learned counsel placed reliance on Agnani v. Badri Das, 1963-1 Lab LJ 684 (SC), and Parry's (Calcutta) Employees' Union v. Parry and Co. , 1966-1 Lab LJ 535 = (AIR 1961 Cal 31 ). We are unable to accept the contention. In Agnani's case, 1963-1 Lab LJ 684 (SC) (supra), their Lordships of the Supreme Court had reversed the decision of the Punjab High Court reported in Badri Das v. Industrial tribunal, Punjab, Patiala, 1962-1 Lab LJ 526 = (AIR 1961 Punj 515), mainly on the ground that it had exceeded in its jurisdiction under Article 226 of the constitution, in interfering with the findings of the Industrial Tribunal in regard to the construction of a resolution by which an Inquiry Committee was appointed by the Management and as regards the nature of misconduct proved against the petitioner in that case. Now, it is well settled that, only errors of jurisdiction, the wrongful assumption or non-exercise of it, or errors of law apparent on the face of the record, justify the issue of a writ of Certiorari and not on a mere error of fact which has to be demonstrated by a process of reasoning. The Punjab High Court had in that case, unwittingly assumed the jurisdiction of an appellate Court, which clearly is distinguishable from the jurisdiction of the High Courts under Article 226 of the Constitution. In Parry's case, 1966-1 Lab LJ 535 = (AIR 1961 Cal 31) (supra), H. K. Bose, C. J. and B. C. Mitra, J. , reversed the judgment of a Single Judge of the Calcutta High court because he had tried to review findings of fact or inference drawn by the industrial Tribunal in that case, from the evidence adduced before it by the parties and upon a re-appraisal of the evidence, substituted another set of findings of his own, on the merits of controversy which had to be tried and decided exclusively by the Industrial Tribunal itself. Neither of these decisions are, in our opinion, really applicable, to the present case. Recently, we had occasion to deal with this aspect in Hindustan Steel Ltd. v. Presiding Officer, Industrial Tribunal-cum-Labour Court (Central), Jabalpur. Misc. Petn. No. 153 of 1967, D/- 10-2-69 (MP), and this is what we have stated: "we would like to affirm that a writ of Certiorari can issue against an arbitrator functioning under Section 10-A of the Industrial Disputes Act. In Rex v. Disputes Committee of National Joint Council for the Craft of dental Technicians, 1953-1 All ER 327, Lord Goddard C. J. had stated: 'there is no instance of which I know in the books, where certiorari or prohibition has gone to any arbitrator except a statutory arbitrator, and a statutory arbitrator is a person to whom, by a statute, the parties must resort. ' following this dictum, there was a conflict of opinion whether an arbitrator functioning under Section 10-A of the Industrial Disputes Act, 1947, was a statutory arbitrator against which a "writ of certiorari" can issue under Article 226. That conflict has now been settled by their lordships of the Supreme Court in Engineering Mazdoor Sabha v. Hind cycle Ltd. , AIR 1963 SC 374. Having regard to the different provisions of the Industrial Disputes Act and the rules framed thereunder, their Lordships have stated that, although an arbitrator appointed under section 10-A cannot be treated to be exactly similar to a private arbitrator to whom a dispute has been referred by an arbitration agreement under the Arbitration Act, nevertheless, he is clothed with certain powers, this procedure is regulated by a set of rules and the award pronounced by him is given by statutory provisions a certain validity and a binding character for a specified period; therefore, such an arbitrator must be regarded as a statutory arbitrator. Their Lordships, accordingly held that a writ may issue for quashing his award under article 226 of the Constitution. These principles equally apply to this case. Even otherwise, the present reference of an industrial dispute for its adjudication is to the Industrial Court, which undoubtedly is a tribunal amenable to this Court's directions under Article 227 of the constitution. " We find no reason to take view of this Court's powers under Articles 226 and 227 of the Constitution in relation to adjudications and/or arbitrations under Section 10-A of the Industrial Disputes Act, 1947, different from that taken by us in this case. It would, indeed, result in a "complete failure of justice", to use the words of the learned counsel for the Union, if we did not issue a writ oi Certiorari in this case for quashing the impugned Award which is vitiated by errors apparent on the face of the record.;


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