RAMASWAMI, - (1.) THE following Judgment of the court was delivered by:
(2.) THIS appeal is brought, by special leave, against the judgment of the Bombay High court dated 6/02/1962 in Appeal No. 36 of 1960 from the order of K. K. Desai. J. in Miscellaneous Application No. 327 of 1959 filed by the appellant under Art. 226 of the Constitution of India. The appellant carried on business as a cotton textile mill prior to 1/07/1958. It had been registered as an 'Undertaking' in the cotton textile industry under the Bombay Industrial Relations Act, 1946 (Bombay Act XI of 1947), hereinafter referred to as the 'Act.' The second respondents are a representative Union of the Cotton Textile Industry in the city of Bombay and registered as such under the provisions of the Act. The second respondents gave a notice of change in connection with the method to be adopted for grant of bonus for the years 1953 to 1957. The dispute arising out of that notice was referred to arbitration of the Industrial court by a submission in writing dated 28/02/1956 under S. 66 of the Act. On 1/03/1951 an agreement was entered into between the Millowners' Association on behalf of certain cotton textile mills and the second respondents in connection with the method to be adopted for payment of bonus for these years. In accordance with that agreement the Industrial court made an award dated 13/03/1956 in terms of the said agreement. Clause 10 of the agreement provided for decision by arbitration in future in the event of difference of opinion arising between the parties regarding the determination of available surplus of profits or the quantum of bonus to he paid by the Cotton Textile Mills. The appellant was not a party to the agreement and was accordingly not bound by the agreement. The government of Bombay, however, isued a notification under S. 114 (2) of the Act which states as follows: "In cases in which a Representative Union is a party to a registered agreement, or a settlement, submission or award, the State government may, after giving the parties affected an opportunity of being heard, by notification in the Official Gazette, direct that such agreement, settlement, submission or award shall be binding upon such other employers and employees in such industry or occupation in that local area as may be specified in the notification: Provided that before giving a direction under this section the State government may, in such cases as it deems fit, make a reference to the Industrial court tor its opinion." The notification of the government is dated 31/07/1956 and reads as follows: "No. ARP-1256: Whereas the Rashtriya Mill Mazdoor Singh, Bombay, a Representative Union for the Cotton Textile Industry in the local area of Greater Bombay (hereinafter referred to as 'the Union') is a party to an award dated the 13/03/1956 made by the Industrial court in reference (IC) No. 114 of 1953. (10 No. 24 of 1954, (IC) No. 25 of 1954 and submission (IC) No. 3 of 1956 providing for the payment of bonus for the years 1952 and 1953 and the years 1954 to 1957 both inclusive to the employees of the cotton textile mills in Greater Bombay (hereinafter referred to as 'the Award'). And whereas the government of Bombay, considers that the Award should be made binding upon the employers specified in column of the schedule hereto annexed and their employees in the said Cotton Textile Industry in Greater Bombay; And whereas the said employers and the Rashtriya Mill Mazdoor Sangh. Bombay representing the said employes being the parties affected were heard as required by Ss. (2) of Section 114 of the 1452 Bombay Industrial Relations Act, 1946 (Bombay XI of 1947) (hereinafter referred to as the 'said Act'); Now therefore, in exercise of the powers conferred by Ss. (2) of Section 114 of the said Act, the government of Bombay hereby directs that the said Award shall be binding on the employers specified in column l of the Schedule hereto annexed and their employees in the matter of payment of bonus for the years specified against the said employers in column 2 of the said Schedule. JUDGEMENT_1450_AIR(SC)_1967Html1.htm
(3.) IT is admitted by the second respondents that bonus had been paid in accordance with the method contained in the agreement and the award, dated 18/03/1956 for the years 1953 and 1954. There were disputes between the appellant and the second respondents with regard to the bonus to be paid for the years 1955 and 1956. The dispute was referred to the arbitration of Sri M. D. Bhat. The arbitrator gave his award on 25/04/1958. After certain correspondence between the parties the award was filed with the Registrar, Industrial court under S. 74 (1) of the Act. As the appellant failed to carry out directions contained in the award the second respondents made an application to the Labour court-Application No. 574 of 1958 contending that the appellant had committed an illegal change under the Act by not paying to their employees bonus as directed by the award, dated 25/04/1958 and prayed for an order that the appellant should be directed to withdraw the illegal change with immediate effect. The appellant denied its liability, but the Labour court allowed the application of the second respondents by its order, dated 4/08/1959 and directed the appellant to withdraw the illegal change by complying with the directions contained in the award within one month from the date of the order. The appellant took the matter in appeal to the Industrial court, being appeal No. 226 of 1959. By its order, dated 24/10/1959, the Industrial court rejected the appeal and affirmed the order of the Labour court Thereafter, the appellant moved the Bombay High court for grant of a writ under Art. 226 of the Constitution to quash the order of the Industrial court in Appeal No. 226 of 1959. The application was dismissed by K. K. Desai, J. on 1/07/1960. The appellant took the matter in appeal under Letters Patent, but the appeal was dismissed by the Division' bench consisting of Chainani, C. J. and Tarkunde, J. on 6/02/1962. It was submitted on behalf of the appellant that the notification of the State government, dated 31/07/1956 under S. 114 (2) of the Act was the subject-matter of consideration in Prakash Cotton Mills (Private) Ltd. v. State of Bombay, 1962) 1 SCR 105: ( AIR 1961 SC 977), and it was held by this court that the notification was ultra vires of the powers conferred on the State government under S. 114 (2) of the Act and must be struck down, Mr. S. T. Desai put forward. the contention that the High court should, therefore, have quashed the order of the Industrial court by grant of a writ for an error of law apparent on the face of record. Mr. B. Sen on Dehalf of the respondents, however, said that the case of the appellant is different from that of Prakash Cotton Mills, 1962) l SCR 105:. ( AIR 1961 SC 977), supra, and the decision of this court in that case does not govern this case. We are unable to accept the argument of the respondents as correct. It was held by the majority judgment of the court in Prakash Cotton Mills case, 1962) 1 SCR 105: ( AIR 1961 SC 977), that the notification, dated 31/07/1956 was beyond the powers of the State government under S. 114 (2) of the Act, because there are three limitations on the State government's power enacted under that sub-section: (1) It is limited by the subject-matter of the agreement or settlement, submission or award sought to be extended, (2) it has to be in conformity with the Industrial Law laid down by the full bench of the Industrial court and also by any decision of this court, and (3) the State government's power to make a direction under that section is coterminus with the power of an adjudicator and the State cannot do what an adjudicator cannot do under the Act. At p. 112 of the Report, (SCR): , Wanchoo, J., speaking for the court stated as follows: "The contention on behalf of the appellant K that it would not be open to an 1453 Industrial court to grant bonus when profit was not adequate to meet all prior charges or where there was an actual loss and, therefore, when the impugned notification made it possible for grant of bonus even in these cases (for prima facie the appellant had made losses upto 1955), it directed something which even an Industrial court could not do. In consequence, it is urged that the notification inasmuch as it makes this possible is beyond the powers conferred on the State government under S. 114 (2) because it allows something to be done which even an Industrial court could not allow. Reliance in this connection is placed on the decision of this court in New Manekchowk Spinning Co. Ltd. v. Textile Labour Association 1961) 3 SCR 1: (AIR 1961 SC 867). In that case this court was considering a similar agreement relating to Ahmedabad. The Industrial court had imposed that agreement after its expiry for one year on the mills in spite of their contention that they were not bound to pay any bonus for the years in dispute in view of the law laid down by this court in The Associated Cement Companies, Ltd. v. The Workmen, 1959 SCR 925: (AIR 1959 SC 967). After examining the terms of the agreement then in dispute this court came to the conclusion that in view of the law laid down in the Associated Cement Companies' case, the Industrial court had no jurisdiction to impose that agreement on the mills. It further held that an agreement of that kind could only continue by consent of parties and could not be enforced by industrial adjudication against the will of any of the parties. The agreement in the present case directed to be enforced by the impugned notification is similar in terms and as held in The New Manekchowk's case, it could not be enforced by industrial adjudication against the will of any of the parties. The power of the State government under Section 114(2) being co-terminus with the power of an adjudicator under the Act, such an agreement cannot, therefore, be directed to be enforced against the will of the appellant even under S. 114 (2) inasmuch as by doing so the State government would be going beyond the powers conferred on it by that section. The impugned notification, therefore, must be held to be bad inasmuch as it goes beyond the powers conferred on the State -Government under S. 114 (2) and must therefore, be struck down." In our opinion, the present case falls directly within the ratio of the decision of this court in Prakash Cotton Mills case, 1962) 2 SCR 105: ( AIR 1961 SC 977), and it follows, therefore, that the award of Mr. Bhat, dated 25/04/1968 is illegal and ultra vires and the decision of the Labour Court dated 4/08/1959 and of the Industrial court, dated 24/10/1959 must be quashed by grant of a writ of certiorari.;