SIRSILK LTD. V. GOVERNEMT OF ANDHRA PRADESH

AIR 1964 SC 160

FACTS OF THE CASE

An order referring certain disputes between the appellant and its workmen was made to the Industrial Tribunal, Andhra Pradesh on 06/06/1956. The Tribunal sent it awards to Government in September 1957. Under Section 17 of the Industrial Disputes Act, 14 of 1947, the award has to be published by the appropriate Government within a period of 30 days from the date of its receipt by the Government in such manner as the government thinks fit. Before, however the Government could publish the award under section 17, the parties to the dispute which had been referred for adjudication came to a settlement and on 01/10/1957, a letter was written to Government signed jointly on behalf of the employer and the employees intimating that the dispute which had been pending before court the Tribunal had been settled and a request was made to Government not to publish the award. The Government however expressed its inability to withhold the publication of the award, the view taken by the Government being that Section 17 of the Act was mandatory and the Government was bound to publish the award. Thereupon the appellants filed writ petitions before the High Court under Article 226 of the Constitution praying that the Government may be directed not to publish the award sent to it by the Industrial Tribunal.

DECISION OF HIGH COURT

The High Court held that Section 17 was mandatory and it was not open to Government to withhold publication of an award sent to it by an Industrial Tribunal. Therefore it was not open to the High Court to direct the Government not to publish the award when the law enjoined upon it to publish it. The writ petitions were therefore dismissed.

CONTENTION OF THE APPELLANT

The company and the employees argued that since the parties have arrived at a settlement which is binding under Section 18(1) of Industrial Dispute Act, the Govt. should not publish the award u/s 17(1) which is in an imposing nature on the party. The settlement which the parties have arrived at should be respected and industrial peace be maintained. The Govt. of A.P. on the other hand argued that Section 17(1) of Industrial Dispute Act makes it mandatory for the Govt. to publish the award within 30 days after receipt of award.

ISSUE

Whether section 17 was mandatory or directory or was it possible for the government to stop the publication of award?

OBSERVATIONS

1. Contention of the appellant that section 17 is directory cannot be accepted as section 17 lays down that, “Every award shall within a period of 30 days from the date of its receipt by the Appropriate Government be published in the manner as the Appropriate Government thinks fit. The use of word ‘shall’ is a pointer to section 17(1) being mandatory.”
2. When the word ‘shall’ was used in section 17(1), the intention was to give a mandate to the government to publish the award within the given time.
3. Section 18(1) of the amended Act provides that “a settlement arrived at between the parties shall be binding on the parties to the agreement.”
4. Section 18(3) provides that “an award which has become enforceable shall be binding on all parties to the dispute.”
5. There is no doubt that a settlement of the dispute between the parties themselves is to be preferred and for that we have to reconcile the mandatory character of the provision contained in section 17(1) for the publication of the award with the equally mandatory character of the binding nature of the settlement, arrived at as provided in section 18(1).
6. There is no doubt that if a dispute before a tribunal is amicably settled, the tribunal would immediately agree to make an award in term of the settlement between the parties.
7. But in the present case, the tribunal had sent its award to the government before the settlement was arrived at and there is no provision in the Act dealing with such a situation.
8. The only way in our view to resolve the possible conflict between section 18(1) and section 18(3) is to withhold the publication of the award once the government has been informed jointly by the parties that a settlement binding under section 18(1) has been arrived at.

DECISION OF THE SUPREME COURT

K.N. Wanchoo J. held that though section 17(1) is mandatory and the government is bound to publish the award received by it from an Industrial Tribunal the situation arising in a case like the present one is of an exceptional nature and requires reconciliation between section 18(1) and section 18(3), and the only way to reconcile the two provisions is to withhold the publication of the award as a binding settlement has already come into force.

The appeal was allowed and the government was directed not to publish the award, in view of the binding settlement under 18(1) of Industrial Disputes Act.

ANALYSIS OF THE JUDGEMENT

First of all let’s understand what section 17 and section 18 says-

Section 17- Publication of reports and awards-

(1) every court with any minute of dissent recorded there within, every arbitration award and every award of a labour court, Tribunal or National tribunal shall, within a period of 30 days from the date of its receipt shall be published by the appropriate Government.

Secondly, it says that the award published under sub-section (1) shall be final and shall not be called in question by any court.

Section 18- Persons on whom settlements and awards are binding-

(1) A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement.

(2) Subject to the provisions of sub-section (3), an arbitration award] which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration.

(3) A settlement arrived at in the course of conciliation proceedings under this Act [or an arbitration award in a case where a notification has been issued under sub-section (3A) of section 10A] or [an award [of a Labour Court, Tribunal or National Tribunal] which has become enforceable] shall be binding on–

(a) all parties to the industrial dispute;

(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, [arbitrator,] [Labour Court, Tribunal or National Tribunal], as the case may be, records the opinion that they were so summoned without proper cause;

(c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates;

(d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part[1].

Both of these sections were highly binding on this case until the K.N. Waanchoo J. SC gave the judgment. Section 17 was binding the government to publish the award and the parties under section 18 had settled the case before the publishing of award but after the tribunal had given the orders to government to publish the award.

Supreme Court held that a circumstance emerging in the Sirsilk case is of remarkable nature and requires compromise between S.17 & S.18 and in such a circumstance the best way to accommodate the two clashing provisions is that the government can retain the production of the award and to permit the parties to pass by their settlement. The explanation applied by the SC was that despite the fact that Section 17 and 18 are mandatory in nature, in any case, in the case, the parties have just settled their dispute by settlement, there is no dispute left to be settled by the publication of the award. The Supreme Court directed the Govt. not to publish the honor u/s 17(1) of I.D. Act. The Court has taken liberal view based on Welfare Legislation. Claim was permitted.

 

[1] The Industrial Dispute Act, 1947 (14 of 1947)

Author: Kashish Goel,
Delhi Metropolitan Education, GGSIPU 4th Year