Case Analysis: State of Bombay v. K.P. Krishnan & Ors., (1961) | Administrative Discretion

In the case of State of Bombay v. K.P. Krishnan & Ors. (1961), the issue revolved around the interpretation of certain provisions of the Industrial Disputes Act. Specifically, the court examined whether disputes falling under Section 12(5) could be referred to independently of Section 10(1), which pertained to the government's control over strikes.

The Supreme Court emphasized that if the appropriate Government hindered the resolution of an industrial dispute by refusing to make a reference based on irrelevant and extraneous grounds, it warranted the issuance of a writ of mandamus.

Case Title: State of Bombay v. K.P. Krishnan & Ors.

Court: Supreme Court of India

Citation: 1961 (1) SCR 227

Judges: Justice B.P. Sinha, Justice J.L. Kapur, Justice K. Subba Rao, Justice K.N. Wanchoo, Justice P.B. Gajendragadkar

Facts

The facts of the case consist of an industrial dispute that arose in the year 1952. The dispute occurred between the company which goes by the name of Firestone Tire and Rubber Co. India, and its workers. The reason for the dispute was related to the labourers having 4 demands, the demands were of unconditional bonuses, vacations, unrestricted gratuity, and the classification of some of the employees. Later, to gain approval for their demands, the workers decided to go on a slow strike. The workers also sent their aforementioned demands to the commissioner of labour at the time, the commissioner of labour at the time also happened to be the conciliation officer.

It is relevant to mention that the company’s standing orders stated that willfully abating the production of the company is to be classified as wrongdoing and misconduct, therefore, the company did not recognize the union of labourers. However, the company still agreed to pay bonuses to the labourers, which was 1/4th of the basic earnings. The labourers accepted the same, but they did not back down from the strikes, as they believed that they qualified for something much better.

Later, the conciliation officer held a preliminary meeting with the workers where two of their demands were approved, which were related to unconditional bonuses for the years 1952 to 1953, and the classification of some employees. Despite all this, the room for negotiation seemed to be nonexistent, as a result, the conciliation officer then filed a failure report under Section 12(4) of the Industrial Dispute Act, 1947 and the matter was sent to the government of Maharashtra, on December 11, 1954.

The government decided that the dispute would not be referred to the industrial tribunal as the workers went on a slow strike which purposefully slowed down the company’s production. The government’s decision was solely made on the premise of the aforementioned failure report submitted by the conciliation officer, and the standing orders of the company. The aspects of IDA were not properly taken into account.

The respondents filed in the Bombay High Court a writ petition under Article 226 of the Constitution against the government’s decision. The Bombay High Court held that the government’s order was exclusively based on the failure report submitted by the conciliation officer or maybe pertinent realities, in addition, Section 10 of IDA, 1947 was not taken into consideration either. Consequently, the government was asked to reevaluate its choice concerning the dispute. In any case, the government at that point filed an appeal against the Bombay High Court’s order, sometime later, before the Supreme Court of India.

Issues

• Whether the decision of the appropriate Government was solely and exclusively based on the report made by the conciliation officer under Section 12(4) or not?
• Whether the appropriate government can intervene in disputes under Section 10 of the IDA depends on whether such disputes fall within the scope of Section 12(5) of the IDA.
• Whether the reason given by the appropriate government in this case for refusing to refer to the industrial tribunal holds relevance or not? And was it in context with the Industrial Dispute Act, 1947?

Laws Applied 

Section 12(4) of the IDA, 1947

This section states that if the industrial dispute in question has not arrived at a settlement then the conciliation officer would be required to send a report to the appropriate government. The report shall list all the circumstances relating to the dispute along with all the steps taken to make the settlement. It shall also consist of the reasons as to why the settlement could not happen.

Section 12(5) of the IDA, 1947

Under this section, the government is given the power to refer a dispute to a Board, labour Court, Industrial Tribunal or National Tribunal at its discretion, based on the report sent to it by the conciliation officer under Section 12(4) of the IDA. Also, if the appropriate government does not make such a reference, it might record and communicate to the parties concerned its reasons.

Section 10(1) of the IDA, 1947

This section tends to empower the government to refer a dispute by order of writing it, if a dispute exists. If such is the case, then the government may anytime-

a. Refer the dispute in question to a Board to advance towards a settlement.

b. Refer any matter to a court that is relevant to the dispute in question.

c. Refer the matter relevant to the dispute in question to a labour court, if it relates to any matter mentioned in the Second Schedule.

d. Refer the matter relevant to the dispute in question to a tribunal, if it relates to any matter mentioned in the Second Schedule and Third Schedule.

Contention of Parties

Appellant's Argument (State of Maharashtra) 

State of Maharashtra claimed that the respondents opted for a go-slow strike which lasted for 7 months. It was also claimed that the strike violated the rules mentioned in the standing orders of the company, and that is why the dispute was not referred to the industrial tribunal under Section 12(5) of the IDA. It was argued that clause 23(c) of the standing orders of the company stated that willful slowing down of the production process of the company shall be regarded as misconduct on the part of the workers. Furthermore, strict action was taken against 58 of the labourers for the misconduct that is the strike.

Respondents Argument

The respondents argued that the slow strike kept going for only 5 months instead of 7, moreover, the respondents claimed that despite the slow strikes, the company generated an exceptionally favourable benefit, therefore, no production process was hampered by the workers, and their claims for unconditional bonuses and gratuity were legitimate.

Judgment

The Supreme Court held that if a dispute falls under the ambit of Section 12(5) of the IDA, then the case could be referred to an industrial tribunal by the government. One of the issues here was the interpretation of Section 10(1) of the IDA, as it empowers the government to refer a dispute to the tribunals too.

The question was whether the government could have control over referring a dispute to industrial tribunals independently of Section 10(1) or not. After a thorough examination of Section 10(1), it was concluded that Section 10(3) of the IDA also gives the government the control to forbid strikes and lockouts relating to industrial disputes, but it is only constrained to the cases that are referred under Section 10(1).

It was determined that cases cannot be referred under Section 12(5) without regard to Section 10(1) because, at that time, the government lacked the authority to prohibit strikes. 

The appeal was therefore unsuccessful and dismissed, with costs being awarded against the appellants.

Conclusion

The focal area of the Industrial Dispute Act (IDA), 1947 is to maintain a healthy and cordial relationship between the industries and their labourers. Different powers have been assigned under various sections of the IDA to industries, workmen, and even the government.

For illustration, the appropriate government has been empowered under Section 10(1) of the IDA to refer an industrial dispute, or a matter relating to an industrial dispute, to an industrial tribunal or labour court, as per its discretion. In addition to that, even conciliation officers’ powers are kept under check under Section 12(4) of the IDA, and they are required to draft and send reports in case of a dispute not coming to a settlement.

Hence, if a dispute falls within the scope of Section 12(5) of the Industrial Disputes Act (IDA), the Supreme Court's ruling dictates that it can indeed be referred to under Section 12(5).

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