ORDER
Bopanna, J.
1. This Writ Petition completes the triology of cases between the Petitioner/Union and the Cement Manufacturers' Association (the 2nd respondent herein) and the Indian National Cement and Allied Workers Federation (the 4th respondent herein). The petitioner had approached this Court earlier in the year 1978 in Writ Petition No. 7008 of 1981. But, this Court did not grant the reliefs prayed for since the petitioner had approached this Court at a belated stage. The petitioner approached this Court again in Writ Petition No. 6346 of 1982 challenging the validity of the Notification made by the Central Government under Section 10A(3A) of the Industrial Disputes Act, 1947 (in short the Act) as also the award made by the Arbitrators chosen by the 2nd respondent and the 4th respondent respectively on the demands raised by the 4th respondent. This Court by its Order dated 6-7-1984 quashed the Notification impugned therein and issued a Writ in the nature of mandamus to the Central Government to consider the Charter of Demands raised by the petitioner and take a decision as to the expediency of referring the same to adjudication under the Act. This Court also made it clear in the said order that the award made by the arbitrators under the impugned Notification in that petition would not be binding on the petitioner, but only on the workmen represented by the 4th respondent/Federation. This order is now pending in appeal before the Division Bench, W.A. No. 1480 of 1984 and respondent No. 2 has obtained an order of stay from the Division Bench. The circumstances under which the earlier Writ Petitions were filed may be briefly stated :
2. It is not in dispute that the petitioner/Union is affiliated to the All India Trade Union Congress (AITUC) which represents the workmen of several industries in India in the organised sector. Likewise the 4th respondent is affiliated to Indian National Trade Union Congress (INTUC) which also represents a large number of workmen in various industries in India in the organised sector. Though, primarily the object of both the petitioner and the 4th respondent is the betterment of the working conditions of the workmen employed in the organised sector, ideologically there appears to be some differences of opinion between them as to how these objects should be achieved in the larger interests of the workmen in this Country. By going through the material on record in the earlier Writ Petitions, it could be said that one time during the period 1977-78 the petitioner appeared to have the majority of workers employed in the Cement Industry as its members. But, thereafter, the 4th respondent stalked its claim as the representative Union of the workmen employed in the Cement industry and on the basis of its claim a Notification was issued referring the dispute raised by the 4th respondent for voluntary arbitration in the manner prescribed under Section 10A(1) of the Act, The Notification referring the demands to Arbitration was made by the Central Government some time in the year 1978 and that Notification was challenged by the petitioner in the second Writ Petition filed by it.
3. The award made by the Arbitrators in the reference under Section 10A(1) of the Act came to an end by notices of termination by petitioner and Respondent-4. Thereafter both petitioner and the 4th respondent submitted their respective charter of demands to the 2nd respondent. Both these demands were not accepted by the employer, i.e. the 2nd respondent, and, therefore, both these Unions gave strike notices as required under Section 22 of the Act, since it was obligatory to give such notices to the 2nd respondent in view of the fact that Cement Industry is a 'Public Utility Service' by virtue of the Notification issued by the Central Government under the relevant provisions of the Act. After the receipt of the strike notices the Conciliation Officer i.e., Regional Labour Commissioner (Central), Bangalore, admitted the matter in conciliation as he was bound to do so under the provisions of Section 12(1) of the Act. But, since similar disputes arose for conciliation in other States where other Cement Industries are located, conciliation proceedings were transferred to the Regional Labour Commissioner (Central) in Bombay. Petitioner was informed by the 2nd respondent that their charter of demands would be discussed in Bombay as is evident from the telegram dated 26-8-1985 which is produced as Annexure-N in the Writ Petition. A further telegram was sent on 15-9-1986 stating that the 2nd respondent would be willing to meet the representatives of the petitioner in Bombay. It is not in dispute that the representatives of the petitioner met the members of Industrial Relations Sub-Committee of the 2nd respondent on 18-9-1986. That was the first meeting which the petitioner's representative had with respondent No. 2 after the charter of demands was submitted on 27-6-1986, and after the strike notice was given by some of the Unions affiliated to the petitioner/Federation. In the said meeting on 19-8-1986 petitioner was informed by the 2nd respondent that they had entered into a voluntary arbitration agreement with the 4th respondent (copy of the arbitration agreement is produced as Annexure-P in the Writ Petition). Consequent on this agreement, the strike notice given by the 4th respondent was withdrawn presumably because the workmen represented by the 4th respondent were prepared for voluntary arbitration of the disputes referred to two arbitrators - one nominated by the 4th respondent and the other nominated by the 2nd respondent. These arbitrators, it should be noticed, are not independent arbitrators but persons representing the INTUC and the Cement Industry. G. Ramanujam who is nominated by the 4th respondent is admittedly the President of INTUC whereas A.L. Kapoor is one of the employers in the Cement Industry and a member of respondent-2 Association. The grievance of the petitioner is that they were taken by surprise by the sudden developments during the conciliation proceedings before the Regional Labour Commissioner (Central) Bombay in that the 2nd respondent having called upon the petitioner to meet them in Bombay for the settlement of the demands raised by the petitioner should not have entered into an Arbitration Agreement with the 4th respondent under the provisions of Section 10A(1) of the Act. Their further grievance is that these arbitrators are interested persons in that Sri Kapoor being an employer in the Cement Industry would be interested in safeguarding the interest of the employer and Sri Ramanujam being the President of the INTUC to which the 4th respondent is affiliated would be interested in safeguarding the interests of the 4th respondent who belongs to the rival political group in the trade union organisation in this Country, that the petitioner had also raised a demand for some interim, relief during the pendency of the consideration of the charter of demands raised by them and by this agreement between the 2nd respondent and the 4th respondent the claim for interim relief had been effectively scotched. According to the petitioner, such an agreement behind the back of the petitioner and without its consent is wholly opposed to the mandatory requirement of the 2nd proviso to Section 10(1) of the Act and, therefore, that agreement between the 2nd respondent and the 4th respondent being a private agreement, does not have the sanction of law and the Notification which the Union Government proposes to publish in the Official Gazette in exercise of its powers under Section 10A(3A) of the Act would be also without jurisdiction, illegal and would be detrimental to the interests of a large number of workers represented by the petitioner/Union. The petitioner has also alleged that its experience with voluntary arbitration consisting of the nominees of the 2nd respondent and the 4th respondent is not very happy since 1977, since in its view, they are not independent arbitrators who could objectively consider the disputes raised by the 4th respondent and the demands raised by the petitioner/ Union would be given a go bye by this voluntary agreement between the 2nd respondent and the 4th respondent.
4. When this petition came up before the Vacation Bench, it made an exparte interim order restraining the Central Government from publishing the Notification under Section 10A(3A) of the Act. The interim order was sought to be vacated by the 2nd respondent. But the Central Government having taken time to file objections, this Court continued the interim order till the Central Government filed its return. The Central Government has now filed its return and has sought for vacation of the interim order. Likewise, the 4th respondent who had remained unrepresented in the earlier Writ Petition has entered appearance through its Learned Counsel and filed its return seeking vacation of the interim order as also the dismissal of the Writ Petition. Since elaborate arguments were advanced by all the contesting parties on the correctness or otherwise of the interim order made by this Court, the petition itself was treated as having been posted for hearing with the consent of the Learned Counsel for the parties and by this order this Court will dispose of the main petition itself.
5. It should be noticed at this stage that the order made by this Court in the earlier Writ Petition is pending consideration before the Division Bench in Writ Appeal No. 1480 of 1984. The order of this Court is stayed by the Division Bench but the effect of that interim order does not arise for consideration for a proper appreciation of the contentions raised by the Learned Counsel for the parties since the points that arise for consideration in this petition did not arise in the earlier Writ Petition. Therefore, this Court has to make a totally different investigation into the question of law involved in this petition, specially in view of the second proviso to Section 10(f) of the Act and in view of the fact that Cement Industry is a public utility service as defined under the Act.
6. The scheme of the Act in so far as it relates to Public Utility service requires to be noticed for the purpose of considering the effect of the second proviso to Section 10(1) of the Act on Section 10A(1) read with Section 10A(3A) of the Act. Further, the provisions relating to voluntary arbitration under the Act require to be noticed in order to determine the scope of the power of the Central Government under Section 10A(A) of the Act. There is no dispute that, but for the private agreement between the 2nd respondent and the 4th respondent under Section 10A(1) of the Act, the deputes between the employers in the Cement Industry and the workmen employed by them all over India should have been, in the normal course, referred to the National Tribunal by the Central Government under Section 10A(1)(A) of the Act, since on the material on record it cannot be disputed that these disputes are of such a nature that industrial establishments situate in more than one State are likely to be interested in or affected by such disputes. Under that subsection the Central Government has the power to refer the disputes to a National Tribunal whether or not it is the appropriate Government in relation to those disputes.
7. Cement Industry being a Public Utility Service the provisions relating to Public Utility Service under the Act should be noted. The first provision is the second proviso to Section 10(1) of the Act. It reads as follows :
'10. Reference of disputes to Board, Courts or Tribunals:
(1) Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time by order in writing :
(a) refer the dispute to a Board for promoting a settlement thereof ; or
(b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry ; or
(c) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court for adjudication ; or
(d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the third Schedule, to a Tribunal for adjudication :
XX XXProvided further that where the dispute relates to a public utility service and a notice under Section 22 has been given, the appropriate Government shall, unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make a reference under this sub-section notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced.'
8. On the plain terms of the second proviso, in any dispute in relation to public utility service, the workers employed in that service have to give a notice under Section 22 of the Act to go on strike and if such a notice is given, the appropriate Government has to refer the dispute to adjudication under Section 10(1) of the Act unless it considers that the notice had been frivolously and vexatiously given or it would be inexpedient so to do and such a reference has to be made notwithstanding any other proceedings under the Act in respect of the dispute may have commenced
9. The second proviso to Section 10(1) of the Act which relates to public utility service is followed by Section 12(1) of the Act. Under this Sub-section, the Conciliation Officer where the dispute relates to public utility service and a notice of strike has been given under Section 22 of the Act, shall hold conciliation proceedings in the prescribed manner, if, in his opinion, a dispute exists or is apprehended. Under Section 20 of the Act, conciliation proceedings shall be deemed to have commenced on the date on which a notice of strike or lock-out under Section 22 of the Act is received by the Conciliation Officer or on the date of the order referring the dispute to a Board as the case may be. The notice of strike or lockout under Section 22 of the Act is controlled by the provisions of that Section. That provides that no person employed in public Utility Service shall go on strike in breach of contract.
(a) without giving to the employer notice of strike as hereinafter provided, within six weeks before striking ; or
(b) within fourteen days of giving such notice ; or
(c) before the expiry of the date of strike specified in any such notice as aforesaid ; or
(d) during the pendency of any conciliation proceedings before a conciliation Officer and seven days after the conclusion of such proceedings.
It also provides that no employer carrying on any public utility service shall lock-out any of his workmen,
(a) without giving them notice of lockout as hereinafter provided, within six weeks before locking out ; or
(b) within fourteen days of giving such notice : or
(c) before the expiry of the date of lockout specified in any such notice as aforesaid ; or
(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.
In this case there is no dispute about the notice of strike given by the petitioner and the 4th respondent to press their respective charter of demands and it is not the case of the Central Government that such notices were vexatiously or frivolously given. Under Section 24 of the Act, a strike or lock out is declared as illegal if it is commenced in contravention of Section 22 of the Act.
10. The provisions regarding voluntary adjudication and arbitration under the Act are found in Section 10(2) and 10A(1) of the Act Under Section 10(2) where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, for a reference of the dispute to a Board, Court, Labour Court, Tribunal or National Tribunal, the appropriate Government, if satisfied that the persons applying represent the majority of each party, shall make the reference accordingly. This is a voluntary act of the parties without the intervention of the Government under Section 10(1) of the Act to have the dispute adjudicated by the authorities constituted under the Act and such an adjudication is permissible if the appropriate Government is satisfied that the persons applying represent the majority of each party. Obviously, this provision will only apply to disputes of collective nature arising out of collective bargaining and not to an individual dispute like, termination, dismissal, retrenchment, etc. of a workman or workmen which comes within the scope of Section 2A of the Act. This adjudication is not arbitration. But this is voluntary reference of the dispute for adjudication by the authorities under the Act. The provision which relates to voluntary arbitration is Section 10A(1) of the Act. Under that Section the parties to the dispute could enter into an agreement to refer the dispute for arbitration at any time before the same had been referred under Section 10(1) of the Act to a Labour Court or a Tribunal or a National Tribunal. The agreement must be a written agreement and the reference will be to such person or persons (including the Presiding Officer of a Labour Court or Tribunal or National Tribunal) as an arbitrator or arbitrators as may be specified in the arbitration agreement. The difference in the language used in Section 10(2) and Section 10A(1) should be noticed at this stage. Whereas under Section 10(2) of the Act the legitimate used the words 'the parties to an industrial dispute' and the reference is to 'a Board, Court, Labour Court, Tribunal or National Tribunal', the words used under Section 10A(1) are 'employer and the workmen' and the arbitrators are 'person or persons (including the Presiding Officer or a Labour Court or Tribunal Or National Tribunal)'. Both under Sections 10(2) and 10A(1), a reference has to be made by agreement between the parties for adjudication or arbitration respectively.
11 That takes us to the next question, i.e. the powers of the arbitrators under the Act. The Arbitrator, under Section 11(1) of the Act, has the power to follow such procedure as he thinks fit. But the authorities under the Act have not only such powers of arbitrators but also additional powers under Section 11(3) of the Act as vested in a Civil Court under the Civil Procedure Code when trying a suit in respect of the following matters, viz.,
(a) enforcing the attendance of any person and examining him on oath ;
(b) compelling the production of documents and material objects ;
(c) issuing commissions for the examination of witnesses ;
(d) in respect of such other matters as may be prescribed.
and the proceedings before these authorities are deemed to be judicial proceedings within the meaning of Section 193 and 228 of Indian Penal Code. One more difference in the procedure prescribed for arbitration and for adjudication is found in the appointment of arbitrators and adjudicators. Under Section 7C of the Act no person shall be appointed to, or continue in, the Office of the Presiding Officer of a Labour Court, Tribunal or National Tribunal if (a) he is not an independent person ; or (b) he has attained the age of sixty-five years.'Independent person' is defined under Section 2(i). According to Section 2(i) of the Act, a person shall be deemed to be independent for the purpose of his appointment as the Chairman or other member of a Board, Court or Tribunal, if he is unconnected with the industrial dispute referred to such Board, Court or Tribunal or with any industry directly affected by such dispute. The proviso to Section 2(i) of the Act is not very material for the purpose of this case. Whereas, under Section 10A(1) arbitrator or arbitrators could be persons who are not independent, persons as in the case on hand. One more striking difference between 'arbitration' and adjudication' is found in Section 10(4) of the Act. Under that sub-section, when a reference is made to Labour Court. Tribunal or National Tribunal, those authorities shall confine their adjudication to the points of dispute mentioned in the reference and the matters incidental thereto. Whereas, in voluntary arbitration under Section 10A(1) of the Act, the powers of the arbitrator to make an award are controlled by Section 10A(4A) of the Act. He is called upon to investigate the dispute and submit to the appropriate Government the Arbitration award signed by him. The legitimate has used the word 'adjudication in Section 10A(4) of the and the words 'shall investigate' in Section 10A(4A) of the Act, If these distinguishing features on the merits of 'adjudication' and on the merits of 'arbitration' are noticed, the meaning of the second proviso to Section 10(1) of the Act becomes clear. Why did the legitimate make a specific provision regarding public utility service when a notice of strike under Section 22 of the Act is given? It is well settled that strike is a legitimate weapon in the hands of the workmen for working out their rights within the frame work of various industrial laws in the statute book. A strike would sometimes end in a resolution of the disputes between the parties either by private settlement or a settlement in the course of conciliation. If no settlement is reached, adjudication follows in the ordinary course, either by the exercise of Police power of the State under Section 10(1) of the Act or by an agreement between the parties under Section 10(2) of the Act. But, in the case of public utility service, the second proviso prescribes a definite procedure, when a strike notice is given. That is because, the industry being a public utility service, public emergency or public interest would be affected by an industrial dispute in a public utility service. So when a notice of strike under Section 22 of the Act had been given, that dispute poses a graver threat to public emergency or public interest and, therefore, the legitimate provided for a special procedure making it mandatory for the Government to refer the dispute to adjudication notwithstanding that any other proceedings under this Act in respect of that dispute may have commenced. The two conditions for making this reference discretionary is that the appropriate Government considers that the notice of strike had been frivolously or vexatiously given or it is expedient so to do. It may be said now that it is not the case of the employer, the 2nd respondent, the Central Government or the 4th respondent that the notices of strike by both the petitioner and the 4th respondent were given frivolously or vexatiously. Therefore, on the plain language of the second proviso to Section 10(1) of the Act, a duty was cast on the appropriate Government and in this case the Central Government, to refer the disputes arising out of the demand made by the petitioner and the 4th respondent to adjudication by the competent authority under the Act unless it was expedient so to do. As noticed earlier, due regard being had to the nature of the disputes which would have affected the industrial establishments situated in more than one State, the appropriate course for the Central Government, for giving effect to the second proviso, was to refer the disputes to a National Tribunal. Then a question may arise about the expediency of the reference of the 2 sets of demands made by the petitioner and the 4th respondent to the same National Tribunal. That question does not pose any serious difficulty in the light of the decision of the Supreme Court in Tata Chemicals case, 1978(2) LLJ 22 -- Tata Chemicals Ltd. v. Workmen. The Supreme Court has ruled as follows in that case :
'The conclusion that a minority union can validly raise an industrial dispute gains support from Section 2(k) of the Act which does not restrict the ambit of the definition of 'industrial dispute' to a dispute between an employer and a recognised majority union but takes within its wide sweep any dispute or difference between employer and workmen including a minority union of workmen which is connected with employment or terms of employment or conditions of labour of workmen as well as the observations made by this court in Workmen v. Dharampal Premchand(Saughandhi).
17. It may also be relevant to mention in this connection that both the Counsel for the Employees, Union and the Counsel for the appellant Company admitted before the Industrial Tribunal that the aforesaid agreement that had been terminated by two months' notice (see page 39 of the Industrial Tribunal's Award. We have, therefore, no hesitation in holding that neither the Sanh was precluded from raising the demand or the dispute, nor was the Government debarred from making the reference nor was the Industrial Tribunal's competence to go into the dispute and make the award affected in any manner.'
It is also not seriously disputed and could not have been disputed that the word 'shall' in the second proviso does not confer any discretion on the Government since the legitimate having used the word 'may' in the first proviso could have used the same word in the second proviso, if it wanted to confer a discretion on the appropriate Government to refer the dispute arising in public utility service. This is also clear from the fact that under Section 12(1) of the Act, the Conciliation Officer is enjoined to hold conciliation proceedings in the prescribed manner when the dispute relates to Public Utility Service and a notice of strike under Section 22 had been given. The combined effect of the second proviso to Section 10(1) and the provisions of Section 12(1) of the Act makes it abundantly clear that the dispute regarding public utility service has to be treated differently both in regard to conciliation and in regard to resolution. This is further made clear by putting a ban on strike and lock-out, the two effective weapons in the hands of the workmen and the management respectively unless such a strike or lockout was preceded by proper notice as provided under Section 22 of the Act In my view these three sections, viz, second proviso to Section 10(1), Section 12(1) and. Section 22 of the Act should be kept in view in order to consider the interpretation and scope of Section 10A(1) of the Act and the provisions of Section 10A(3A) of the Act relating to voluntary arbitration.
12. One more difference regarding 'adjudication' by the Authorities under the Act and 'Arbitration' is found in Section 11(5) of the Act. Under the provisions of Section 11(5) of the Act, the Authorities under the Act have the power to appoint one or more persons having special knowledge of the matter under consideration as assessor or assessors to advise them in the proceeding before them ; whereas the Arbitrator has no such power. That is the reason the word 'arbitrators' is omitted in Section 11(5) of the Act. Further, an arbitrator is not a Civil Court under Section 11(8) of the Act, for the purpose of Sections 345, 346 and 348 of Cr. P.C. Additionally, arbitrators are not bound by the provisions of the Indian Arbitration Act, 1940, which controls and regulates adjudication by arbitrators in regard to every dispute of civil nature.
13. If these differences are kept in view, the meaning of the words, 'that it would be inexpedient so to do' as they appear in the second proviso to Section 10(1) of the Act becomes clear. Adjudication becomes compulsory if the Government exercises the power under Section 10(1) of the Act. It may be voluntary if the parties come to an understanding under Section 10(2) of the Act. Arbitration is also voluntary if the employer and the workmen come to an understanding under Section 10A(1) of the Act. But, in the case of Public Utility Service, when a strike notice is given, as in the instant case, the appropriate Government has no option but to refer the dispute under Section 10(1) of the Act unless it is of the view that it would be inexpedient so to do.
14. Now the submission made by the Learned Counsel for the 2nd respondent, Union Government and respondent No. 4 are that under Section 10A(3A) of the Act, the Central Government was satisfied that the 4th respondent represented the majority of the employees in that industry and, therefore, the agreement which admittedly came into existence before any reference that could have been made to the National Tribunal is valid in law and, hence, it is within the powers of the Central Government to make a Notification under Section 10(A)(3A) of the Act to give effect to that agreement, so that industrial peace could be restored forthwith by a voluntary resolution of the dispute by arbitration. According to these learned Counsel, the arbitration agreement between Respondents 2 and 4 provided the material to the Central Government to take the view that it would be inexpedient to refer the disputes of the petitioner to adjudication by the National Tribunal. The observation of the Supreme Court on the nature of power of the appropriate Government under Section 10 of the Act must be noticed at this stage. In Niemla Textile Finishing Mills Limited v. The 2nd Punjab Tribunal and Ors., AIR 1957 SC 329 the Supreme Court observed as :
'It is not necessary that all these steps should be taken seriatim one after the other Whether one or the other of the steps should be taken by the appropriate Government must depend upon exigencies of the situation, the imminence of industrial strife resulting in cessation or interruption of industrial production and breach of industrial peace endangering public tranquillity and law and order If the matter brooks delay the appropriate Government may start conciliation proceedings culminating in a reference to a Board of Conciliation and also Court of Enquiry, if need be, before a full-fledged reference is made to an Industrial Tribunal. If, on the other hand, the matter brooks no delay the appropriate Government may possibly refer the dispute to a Board of Conciliation before referring it for adjudication to an Industrial Tribunal or may straightaway refer it for adjudication by the Industrial Tribunal.
What step would be taken by the appropriate Government in the matter of the industrial dispute must, therefore, be determined by the surrounding circumstances, and the discretion vested in the appropriate Government for setting up one or the other of the authorities for the purpose of investigation and settlement of industrial disputes must be exercised by it having regard to the exigencies of the situation and the objects to be achieved. No hard and fast rule can be laid down as the setting up of one or the other of the authorities for the purpose of bringing about the desired end which is the settlement of industrial disputes and promotion of industrial peace and it is hardly legitimate to say that such discretion as is vested in the appropriate Government will be exercised 'with an evil eye and an unequal hand.'
14.1. Whether that power is amenable to judicial review was considered by the Supreme Court in Hochtief Gammon v. State of Orissa, : (1975)IILLJ418SC . The Supreme Court observed as :
'The Executive have to reach their decisions by taking into account relevant considerations. They should not refuse to consider relevant matter nor should take into account wholly irrelevant or extraneous consideration. They should not misdirect themselves on a point of law. Only such a decision will be lawful. The Courts have/power to see that the Executive acts lawfully. It is no answer to the exercise of that power to say that the Executive acted bond fide nor that they have bestowed pains taking consideration. They cannot avoid scrutiny by Courts by failing to give reasons If they give reasons and they are not good reasons, the Court can direct them to reconsider the matter in the light of relevant matters, though the propriety, adequacy or satisfactory character of those reasons may not be open to Judicial Scrutiny. Even if the Executive considers it inexpedient to exercise their powers they should state their reasons and there must be material to show that they have considered all the relevant facts.'
So the stand of the Central Government could be examined by this Court under Article 226 of the Constitution in order to satisfy itself that it was inexpedient to refer the disputes of petitioner to adjudication in view of the arbitration agreement between Respondent-2 and Respondent-4. But, it cannot be said, as contended by Mr. M. C. Narasimhan that there could not be a private arbitration of disputes arising in Public Utility Service in view of the 2nd proviso to Section 10(1) of the Act and there could be only adjudication by the National Tribunal. The words 'that it would be inexpedient so to do' will have to be given full effect while construing the second proviso and thus construed, a reference of the dispute in Public Utility Service either to a Tribunal or National Tribunal is not mandatory under the second proviso, if either of the conditions mentioned therein are present.
14.2 So the next point for consideration is whether a Notification could be made by the Central Government under Section 10A(3A) of the Act on the ground that it was satisfied that the persons making the reference to arbitration represented the majority of each party. It should be noticed that the same question came up for consideration in the earlier Writ Petition, Writ Petition No. 6346 of 1982 and this Court had taken the view that there was no material before the Central Government to satisfy itself that the workmen who entered into an agreement for arbitration represented the majority of the workmen employed in Cement Industry. But, in this case, the 4th respondent as also the Central Government have with one voice submitted that there was I enough material before Central Government to arrive at its satisfaction that the workmen seeking arbitration represented the majority of those employed in the Cement Industry. In the Statement of objections filed by the Central Government it is contended that the 4th respondent/Federation represented the majority of the workmen in the Cement Industry. It is denied that the petitioner/Union represented the majority of the workmen in the Cement Industry. According to the Central Government, as per the verification undertaken as on 31-12-1980 the final verified membership of the Trade Unions affiliated to INTUC and AITUC is 22; 36, 128 and 3,44,746 respectively. But, it has admitted that there are workmen who are affiliated to a Central Organisation called the Centre of India Trade Unions(CITU) and Bharatiya Mazdoor Sangh. As regards the conciliation proceedings held by the Regional Labour Commissioner at Bombay, the Central Government has submitted that the Regional Labour Commissioner was given instructions by the Chief Labour Commissioner, New Delhi, to handle the strike notices issued by the various unions. Accordingly, conciliation proceedings were held on 18-8-1986. The Central Government has also admitted that the Regional Labour Commissioner invited the petitioner to participate in the conciliation proceedings which were held on various dates and finally on 27-10-86. But, the conciliation proceedings proved to be futile because the management represented by the 2nd respondent took the stand that the demands as submitted by the petitioner had been referred to the Board of Arbitration and consequently there was no industrial dispute pending before them and the petitioner's federation should represent its case before the Arbitrators. In para-16 of its counter, the Central Government has averred that the Cement Industry being a public utility service the Central Government is the appropriate Government and, therefore, the Regional Labour Commissioner (Central) being the appropriate authority had held conciliation proceedings within the frame work of the Act. But it may not be necessary for the Central Government to refer the mailer to adjudication if there is mutual agreement between the parties for referring the dispute for arbitration. On the part played by the Regional Labour Commissioner, Bombay, the Central Government has submitted that on the dispute raised by the 4th respondent, the Regional Labour Commissioner, Bombay, had submitted his conciliation report under the Act to the Government of India on 18 9-1986 which was received by it on 23-9-1986. The conciliation proceedings, therefore, stand concluded in accordance With the provisions of the Act, thus the agreement dated 9-9-1986 between respondent No. 2 and Respondent No. 4 had been published in the Official Gazette in accordance with law ; that the Conciliation Officer, i.e. the Regional Labour Commissioner, Bombay, had taken all steps to expeditiously bring about a settlement by holding conciliation proceedings ; that the petitioner was invited more than once by the Regional Commissioner to present its case ; therefore, it is not correct to say that the Regional Labour Commissioner was not available for holding the conciliation proceedings ; that the Regional Labour Commissioner had already discussed the disputes with the parties and made persuasive efforts to bring about an agreement between the parties to resolve the disputes ; that it would be proper for the Government to refer the matter for arbitration to bring about an atmosphere of mutual trust among the employers and workers represented through different unions and that in the Notification to be issued under Section 10A(3A) of the Act, provision will be made for the due consideration by the arbitrators of the demands raised by the petitioner's federation.
14.3. Pursuant to the direction made by this Court, the Learned Central Government Counsel has produced the relevant records of the conciliation proceedings. The record discloses that the Regional Labour Commissioner had received the notices of strike on the charter of demands made by the workmen affiliated to AITUC and INTUC. It further discloses that the first meeting between the Regional Labour Commissioner and the Unions took place on 16-9-1986. His report for that day reads as under :
'The Unions present to-day informed that they served notices on the Cement Factories, Mines and quarries, who are members of the Cement Manufacturers Association, as well as on the factories which would come within the term of 'Mini Cement Plants'. (The Mini Plants were those who could produce to the maximum of 66,000 tonnes of cement per annum).
The representatives of workmen as well as the employers informed that they have already agreed to meet on 18th September, 1986 to discuss the charter of demands of AICWF. In view of the position I have to await the outcome Also both the parties requested that the next date of conciliation proceedings should be fixed on hearing from either parties. This was heard and allowed. Accordingly the case is adjourned '
From this noting what emerges is that the representatives of the petitioner and the 2nd respondent had agreed to meet on 18-9-1986 to discuss the charter of demands of the petitioner/ Federation. Therefore, pending the outcome of the meeting, the Regional Labour Commissioner adjourned the case to 1- 10-1986. The next noting of the Regional Labour Commissioner is dated l-10-1986. In that noting the Regional Labour Commissioner, after narrating the developments of the dispute since 27-6-1986 has observed as follows :
'The All India Cement Workers Federation (AITUC) has been demanding in the instant industrial dispute among other 'things, the
(1) Payment of interim relief at the rate of Rs. 650 with effect 1-7-1986 and
(2) The employers to agree for a bilateral negotiation in respect of charter of demands placed with them so as to have a negotiated settlement.
(Elaboration of the demands with a statement of case under Rule 10-A of the Industrial Disputes (Central) Rules, 1957 were to be received from tie All India Cement Workers Federation for which they were requested to do so.)
There was also a joint meeting held with the representatives of the Cement Manufacturers Association and the All India Cement Workers Federation (AITUC) on 18th of September, 1986, wherein, according to the representatives of the All India Cement Workers Federation it was conveyed by Cement Manufacturers Association that there was already an agreement under Section 10-A of the industrial Disputes Act, 1947 on 9th September, 1986 between Cement Manufacturers Association and Indian National Cement and Allied Workers Federation(INTUC) for appointment of Arbitration Board for reference of the Charter of Demand of the Indian National Cement and Allied Workers Federation (INTUC) and that they should also submit their ease before the same Board of Arbitrators on the issue raised in the instant 41 point charter.'
The parties who were present in the conciliation proceedings held on 1-10-1986 are :
1. Respondent-2 represented by its Joint Secretary.
2. The petitioner/Federation represented by its office bearers.
It was brought to the notice of the petitioner in that meeting' that an agreement under Section 10A of the Act between the 2nd respondent and the 4th respondent had been entered into. The petitioner protested that the above action of the 2nd respondent was not in keeping with the ethics of settling an existing industrial dispute in as much as it had already raised an industrial dispute with the employer as well as seeking intervention of the Central Government machinery through the Labour Department by its letter dated 21-7-1986. It, however, reiterated that its two demands seeking payment of Interim relief at the rate of Rs. 650/ from 1-7-1986 and bilateral discussions with the employers with a view to resolving the 41 point charter of demands be conceded as raised in its strike notice. On this submission, the second respondent through is representative brought to the notice of the Concilation Officer that they had already agreed to refer the charter of demands raised by them selves before the Board comprising of Sri G. Ramanujam and Sri A. L. Kapoor before which petitioner also should appear and represent their case for decision. The petitioner imposed certain conditions for joining the arbitration proceedings. They are:
(1) Appointment of one independent Arbitrator referring charter of demands of both the Federations.
or
(2) To take one arbitrator nominated or agreed to by the All India Cement Workers Federation and one more from Cement Manufacturers Association on the existing Panel of Board or Arbitrators.
or
(3) Refer the entire matter of the industrial dispute before the single arbitrator preferably a retired Supreme/High Court Judge.
or
(4) Refer charter of demands before the National Industrial Tribunal for adjudication.
On this proposal of the petitioner, the second respondent stated that the view expressed by the petitioner/Federation would bo discussed with the Manufacturers' Association meeting to be held on 29-9-1986 and in the meanwhile they would explore the possibility of discussing the matter with the available members in Bombay.
15. In the light of the stand taken by the 2nd respondent and the petitioner, the Conciliation Officer noted as follows :
'No meeting point could be worked out in the mutual discussions on the demands of the A. I. G. W. F. The employers representative maintained that they request and appeal to the workmen through the A. I. C. W F. to agree to represent their case before the already agreed Board of Arbitrators on similar issues of industrial disputes. However the A.I.C.W.F. reiterated their aforesaid approach.
As regards the elaboration of the Union's case in respect of two demands viz.,
(1) Payment of Interim Relief of Rs. 650/- with effect from l-7-1986 and
(2) Resumption of bilateral discussion with a view to resolve the 41 point charter of demands placed before the employers, as per the strike notice, it was requested that they should file statement of case under Rule 10-A of the Industrial Disputes (Central) Rules 1957, shortly under intimation to the employer for examination and action.'
The adjourned conciliation proceedings were resumed on 27-10-1986. By that time the petitioner had obtained an expert interim order of stay from this Court. In the meeting held on that day it was brought to the notice of the Regional Labour Commissioner by the petitioner that the Unions affiliated to other Central Trade bodies like CITU had been objecting to the reference of 14 demands raised by the 2nd respondent on the plea of effecting economics in the Cement Plants and also protesting against she appointment of arbitrators ignoring the charter of demands submitted by the petitioner and CITU. The petitioner had reiterated its demand as contained in the charter of demands served on the 2nd respondent on 27-7-1986 and maintained that those demands were not discussed by the 2nd respondent with the petitioner/ Union. It also demanded that the submissions made in the previous conciliation proceedings held on 1-10-1986 be made available to it regarding payment of interim relief at the rule of Rs. 650/- with effect from 1-7-1986 and the employers should agree for bilateral he gotiations in respect of the charter of demands placed with them so as to have a negotiated settlement. In that proceeding the 2nd-respondent submitted that being satisfied about the representative character of the 4th respondent a Joint Arbitration agreement was signed on 9-9-1986 by the 2nd respondent with the 4th respondent and accordingly all such issues including the issue of interim relief had been referred to the Board of Arbitration and the Central Government had published the agreement under Section 10A(3) of the Act. Therefore, the Unions affiliated to the petitioner could appear before the same arbitrators and make submissions before them on their case. The conciliation proceedings ended with the following note :
'The AICWF continued agitating that their demand for interim relief be considered for a solution since it was quite an independent issue and the strike notice was issued much earlier to the signing of the Arbitration Agreement on 9-9-1986 between CMA and INCAWP which is not acceptable to AICWF.
The matters being as stated above and also the AICWF having approached the Karnataka High Court in the matters and awaiting its decision, there remained little to be done at the level of conciliation
In view of the stands of the parties where workmen reiterated their den and for atleast interim relief be made available w e.f. 1-(sic)-1985 and the employer not agreeing for it, the conciliation proceedings ended in failure '
From these proceedings before the Conciliation Officer it should be noticed that only on 27-10-1986 it was brought to the notice of this Regional Labour Commissioner by the 2nd respondent that it was satisfied about the representative character of the 4th respondent.
16. The record docs not disclose any meeting the Regional Labour Commissioner had with the fourth-respondent. They also had given the strike notice and their demands were also pending consideration Before the Regional Labour Commissioner. It is rather strange that, when conciliation proceedings were mandatory in view of Section 12(1) of the Act, the Conciliation Officer had closed the conciliation proceedings without notice to the 4th respondent on the submission made by the second respondent that it had already entered into an agreement with the 4th respondent to refer the demands and counter demands to arbitration. Even in the counter filed by the 4th respondent they have not stated that they also participated in the conciliation proceedings. However, their case is that the 2nd respondent being satisfied about their representative character, had entered into an agreement with them agreeing to refer the dispute for arbitration. In para-8 of the return filed by them, they have stated as follows :
'After all, it is the satisfaction of the 2nd Respondent which matters in the matter of settling the Charter of Demands. It is because of these reasons that the 2nd Respondent entered into the Arbitration Agreement and pursued the matter with the Government of India in issuing the required Notifications and has also made its constituents participate in the Arbitration proceedings.'
The representative character of the petitioner or the 4th respondent was not debated before the Conciliation Officer. That was the proper place, when he was faced with the demands from 2 rival unions that he should have been satisfied that the 4th respondent represented a majority of the workmen in the Cement Industry. What is all the more strange is, that the Union which did not' participate in the conciliation proceedings which were mandatory entered into an agreement with the employer on the ground that the employer was satisfied with its representative character and thereby it put an end to the conciliation proceedings that the Conciliation Officer had initiated under the provisions of Section 12(1) of the Act.
17. From these undisputed facts, this Court is compel-led to come to the conclusion that the agreement between the 2nd respondent and the 4th respondent behind the back of the petitioner and without its knowledge had been manoeuvred to defeat the claims of the petitioner union. Therefore on these facts, the satisfaction of the Government of India to make a Notification was not merely subjective satisfaction but a satisfaction which should be arrived at on an objective consideration of the history of the disputes between the parties since the year 1917. The procedure for voluntary arbitration based on the representative character of the union and the employers in a given industry could not be used as an engine of oppression against a minority union or a rival union by taking advantage of the provisions of Section 10A(1A) of the Act. In my view, the manner in which the Conciliation proceedings had been conducted by the Conciliation Officer without notice to the 4th respondent and the agreement between the 2nd respondent and the 4th respondent on 6-9-1986 without notice to the Conciliation Officer and also to the petitioner would raise a serious and legitimte doubt about the bona fides of the parties to the arbitration agreement. Therefore, it is open to the petitioner to attack the said agreement as vitiated by mala fides and extraneous consideration. The petitioner is also justified in taking the contention that in the absence of its nominee on the Arbitration Board, the Arbitrators would not inspire any confidence and, therefore, the decision rendered by them would not be a satisfactory decision since both the arbitrators were interested persons interested in coming to a mutually satisfactory arrangement in regard to the demands and counter demands raised by the workers and the management.
18. However, in the course of arguments a copy of the general verification results of membership of the Central Trade Union Organisations as on 31-12-1980 was produced before this Court by the learned Standing Counsel for the Central Government. Learned Counsel for the 2nd and 4th respondents and the Standing Counsel relied on the foreword written by the Secretary to Government of India, Ministry of Labour on 17-1-1985 and the Preface written by the Chief Labour Commissioner (Central), Department of Labour, Ministry of Labour on 17-1-1985 in that document. The Secretary to Government of India has said in his foreword as follows :-
'General verification of membership of Trade Unions affiliated to Central Trade Union Organisations is an essential requirement for giving of representation to workers' organisations in the International and National Conferences, Committees, Councils, Wage Boards etc. The efficiency, impartiality and understanding with which the organisation of Chief Labour Commissioner (Central) conducted the present verification has resulted in unanimous acceptance of the results by the participating Central Trade Union Organisations, Though there are differences of views on the procedure adopted for conducting verification a consensus was arrived at on the procedure as a result of the mutual discussions of the Central Trade Union Organisations and the Government. The experience gained by the Central Trade Union Organisations, the officers of the Central Industrial Relations Machinery and the Ministry of Labour will help in evolving an improved procedure to be adopted for the next round of verification which is already on the way. The final verified results of membership showing break-up of claimed and verified membership figures of all the Central Trade Union Organisations, Organisation-wise, State-wise and Industry-wise give the overall picture of the strength of the Central Trade Union Organisations in India.
I am sure the particulars of claimed and verified membership figures of all the Central Trade Union Organisations will be of much use to the organisations as well as to other agencies.'
19. There is a serious dispute about the membership of the respective Union as shown in the comparative statement published by the Government of India. The learned Counsel Sri Narasimhan has submitted that this statement was prepared only for the purpose of giving representation to workers' organisation in the International and National Conferences, Committees, Councils, Wage Boards, etc and his Union had always taken the stand that there should be secret ballots in the verification of membership and that is the reason the AITUC and the CITU had not submitted their claims to establish the representative character of their membership and, therefore, no reliance could be placed on the figures furnished by the Government of India and that the 4th respondent in its counter does not rely on this publication of the Government of India. Its case is that the 2nd respondent was satisfied with the representative character In the counter filed by the 2nd respondent it does not depend, on this publication and so also the Central Government. Therefore, the Document produced for the first time before this Court which was not prepared for the purpose of ascertaining the representative character of the Union with a view to invoke the statutory powers under Section 10A(1) and 10A(3A) of the Act could not be made use of by this Court when there are serious allegations against the nature of arbitration proceedings sought to be imposed on the petitioners. If there had been a verification in the prescribed manner by the Central Government just before the proposed Notification under Section 10A(3A) of the Act, no further arguments would have been necessary about the satisfaction of the Central Government about the representative character of the 2nd respondent and the 4th respondent in order to invoke the provisions of Section 10A(3A) of the Act.
20. Mr. Ullal, learned Counsel for the 2nd-respondent, wanted this Court to accept every word of what is found in the aforesaid foreword and preface. The correctness of what the officials have stated in the fore word and the preface respectively cannot be doubted for a moment. But the point for consideration is whether they are relevant for the purpose of this case, since indisputably the petitioner and CITU have not pressed their claim for membership, i.e., the claim for the representative character in view of the fact that there is a serious objection to the mode of verification of membership of the various unions. In the reply statement filed by the petitioner they have submitted that one element in the verification procedure relates to cross-checking by various Central organisations involved. They have stated :
'This non-participation of the premier organisation in the country namely AITUC, renders the entire figures unreliable. In this regard the verification procedure has to be kept in view. One element in the verification procedure relates to cross-checking by the various Central organisations involved. The verifying officer has to find out dual membership / overlapping membership and from among such dual members he has to verify by personal enquiry on a sample basis the rival claims. If one of Unions boycotts the proceedings then not merely the figures of membership of the boycotting Trade Union Centres but also the figures of participating Unions would be wrong and would not correctly reflect the situation. Hence the so called verification report cannot be a basis for determining the said representative character of the Unions for the purpose on hand. Further the AICWF consist not merely of Unions affiliated to AITUC but independent Unions also. Even assuming without admitting that the said verification report has to be taken into consideration in the absence of any other material it is submitted that the figure of 27,042 as membership of INTUC/ INCAWF will not advance the cause of the Respondents. This figure hardly represents 25% of the total number of workers employed in the Cement Industry. It is very strange that the respondents-1 and 2 have not even cared to give the total figure of the number of workmen employed in the industry. In the absence of the said figure the representative character is impossible of determination. An attempt may be made to take the total employed one lakh. This figure is incorrect as that does not include the workmen employed in the Mini-Cement Plants. In the State of Karnataka there are a large number of Mini Cement Plants. Not all are members of the CMA-R2'.
21. In the light of these pleadings in the reply statement it is not possible to place any reliance on the figures furnished by the Central Government in its General Verification report prepared in 1980. In my view, the dispute being a dispute relating to Public Utility service, when there are 2 rival Unions which are pressing their respective claims for the betterment of the service conditions of the workmen employed in the Cement Industry, the Central Government should have been very circumspect before taking a decision to act under the provisions of Section 10A(3A) of the Act. It appears to me from the trend of the conciliation proceedings that these proceedings were held only to prevent any untoward incidents that would have occurred by the strike notice given by the petitioner and not for settlement of the disputes between the parties. It is well settled that it is necessary for proper conciliation proceedings to have all the parties to the dispute arrayed before the Conciliation Officer, (Nanjappa v. Hindustan Machine Tools Ltd. Karnataka, ILR 1984(2) KAR 97), Therefore, the Conciliation Officer should have issued notice to the 4th respondent also in order to discharge his mandatory duty. Records disclose and also it is not the case of the 2nd respondent and the 4th respondent that the 4th respondent had appeared before the Conciliation Officer and satisfied him about the desirability of referring the dispute for arbitration in view of the alleged representative character of both the 2nd respondent and the 4th respondent. The procedure adopted by the 2nd respondent and the 4th respondent is fraught with mischievous consequences which is recognised in the decision of the Supreme Court in Tata Chemicals, 1978(2) LLJ 22 -- Tata Chemicals Ltd. v. Workmen, In the pronouncement of the Supreme Court, the right of minority union to raise a dispute and have it adjudicated by the appropriate authority notwithstanding the settlement of other disputes raised by the recognised Union cannot be disputed. Therefore the satisfaction of the Central Government under Section 10A(3A) of the Act is not mere subjective satisfaction but an objective satisfaction on a consideration of all the facts and circumstances which resulted in the arbitration agreement between 2nd respondent and 4th respondent and such consideration could have been possible only after giving an opportunity to the petitioner of being heard on the advisability of making a notification under Section 10A(3A) of the Act.
22. Mr. Ullal, Learned Counsel for the 2nd respondent, strongly maintained that the interim order should be vacated and the petition dismissed in view of the decision of the Supreme Court in Rohtas Industries Ltd. and anr. v. Rohtas Industries Staff Union and ors., : (1976)ILLJ274SC .
I will consider this submission after I consider the other contentions raised by the Learned Counsel for the 2nd respondent. Mr. Ullal submitted that the verification procedure adopted by the Government was not attacked by the petitioner in this Writ Petition or even in the course of argument and, therefore, according to Section 114 of the Evidence Act there was a presumption in favour of the correctness of Government proceedings. Hence, it is not open to this Court to examine the material on record in order to determine whether there was satisfaction in the mind of the Government to take the view that the 4th respondent Union represented majority of the workmen engaged in the Cement Industry. He also relied on Section 28 of the Indian Trade Union Act - Forms A and D - and submitted that the petitioner having not co-operated with the Government of India in the verification of its membership, it is not open to it to challenge the correctness of the verification made by the Government of India. Further, in the pleadings also the petitioner has not taken any such contention ; that the consequences of not making the proposed Notification under Section 10A(3A) of the Act would be highly inequitable to the interest of the parties concerned and also opposed to the rule of law ; that the Central Government having said clearly in para 6 of its counter that as per the verification undertaken as on 31-12-1980 the final verified membership of the trade unions affiliated to INTUC and AITUC is 22,36,128 and 8,44,746 respectively, there is no need for this Court to embark on an enquiry as to the representative character of the 4th respondent for the purpose of satisfying itself that the power under Section 10A(3A) of the Act would be properly exercised by the Government; that in any event, the petitioner has not made out a case for issue of mandamus as prayed for since the object of the statute is to create industrial peace and industrial harmony ; that the proposed Notification under Section 10A(3A) of the Act is intended to achieve that object of the Act and this Court should not come in the way of the Central Government to achieve that object by making the proposed Notification.
To the specific question put by this Court, on the proper interpretation of the word 'satisfied' occurring in Section 10A(3A) of the Act, the Learned Counsel submitted that its meaning should be understood as 'reasonable conclusion' keeping in view the limits and jurisdiction of this Court under Article 226 of the Constitution to probe into the degree of satisfaction necessary for the proper exercise of the power under Section 10A(3A) of the Act. He also invited my attention to paras 20 and 25 of the counter filed by the Central Government and submitted that the intendment of the Act was to bring about an atmosphere of mutual trust among the employers and the workers represented through different unions and that the verification of the membership of the Union started in the year 1974 and it had been done periodically till 1980 ; that the General verification report as on 31-12-1980 furnished necessary material for the Central Government to satisfy itself about the representative character of the 4th respondent; that the principle of audi alteram pattern is not applicable to the facts and circumstances of this case since it would not be reasonable to give a personal hearing to the petitioner before the Central Government proposed to act under Section 10A(3A) of the Act ; that it is not the case of the petitioner that it if, interested in adjudication only but its grievance is that its nominee is not put on the Board of Arbitration and, therefore, the arbitration proceedings did not inspire confidence in view of the present constitution of the Board of Arbitration. According to Mr. Ullal, the primary object of the Act is to bring about industrial peace by arbitration in terms of the agreement between the parties and that must be given effect to by permitting the Central Government to exercise its power under Section 10A(3A) of the Act. He relied on the booklet published by the Ministry of Labour on Voluntary Arbitration for Settlement of Labour Disputes. The preface to that booklet by the Chairman, National Arbitration Promotion Board, reads as under ;
'The main idea in bringing out this brochure is to secure wider acceptance of Voluntary Arbitration as a means of settling industrial disputes. It explains the modus operandi of Voluntary Arbitration, the role that it plays in minimising industrial strike and the need for its increasing utilisation in the developing economy of India. It also surveys the efforts that have so far been made in promoting the philosophy of Voluntary Arbitration and pinpoints the areas where a Jot more needs to be done to make voluntary Arbitration a real, effective and living institution.'
On the specific grievance made by the petitioner about the appointment of Mr. Ramanujam and Mr. Kapur as Arbitrators, Mr. Ullal submitted that the allegations made against Mr. Ramanujam does not establish any bias against the petitioner and, therefore, there could not be any grievance about His appointment as an arbitrator.
23. I have already considered his contentions based on the verification of membership by the Central Government in paras 18 to 21 above.
The other contentions will have to be judged in the light of the decision of the Supreme Court in Hochtief Gammon, : (1975)IILLJ418SC . I have already dealt with the records maintained by the Regional Labour Commissioner (Bombay) regarding the conciliation proceedings and the conclusion of such proceedings. I have found that the arbitration agreement was only known to the parties, i.e., Respondents 2 and 4. It was not placed before the Conciliation Officer. The relevant portion of the Agreement which is produced as Annexure 'P' in the paper book reads as under :
'And whereas the parties have further agreed to request the Central Government that in view of the fact that the INCAWF represents a majority of workmen and the CMA represents all the employers in the Cement Industry, the arbitration should be on a national level covering all the Cement Units and all their workmen and that the Central Government should therefore issue notification under Section 10A(3-A) of the Industrial Disputes Act, 1974.'
There is no reference to the demands of the petitioner or to the conciliation proceedings obviously because Respondent-4 did not participate in the conciliation proceedings. The parties interested in arbitration agreed that that they represented the majority and to request the Central Government to make a Notification. The Central Government proposes to make a Notification on their request. What are the rights of a rival union in such a case Who will consider their demands Who will consider their objections to the choice of arbitrators These pertinent questions are left unanswered by the contesting respondents. The Central Government which wants to bind the petitioner with the award that may be made by the arbitrators only says that the petitioner's demands would be placed before the Arbitrators, without realising the consequences of a Notification under Section 10A(3A) of the Act. Respondent 2 and 4 have not taken such a stand. Therefore, this Court perforce has to examine the record in the light of the decision in Tata Iron and satisfy itself that the action of the Central Government in issuing the Notification is not for a collateral purpose, i.e., to shut out the demands of the petitioner and thereby helping Respondents 2 and 4 to come to mutually agreed solutions through arbitration by their own nominees.
24. Mr. Ullal nextly contended that the prayer for a mandamus to the Central Government to refer the petitioner's demand to a National Tribunal is not maintainable because this Court is not conferred with the power to direct the exercise of power in a particular manner. It is further contended that there is a prayer to issue a Writ in the nature of mandamus directing the Central Government to consider the making of a reference to the National Tribunal and such a prayer is premature because of the following sequence of dates :
Demands (Annexure C) :
27-6-1986Notice of Strike (Annexure G)
48-1986 Conciliation Notice
(Annexure H) :
7-8-1986 Final concilation
meeting :
27-10-1986 Date of Writ Petition :
30-9-1986 Court's Interim Order :
1-10-1986 Notification under
Section 10-A(3)
(Annexure R-10) :
8-10-1986 Publication of Section
10-A(3) Notification
in the Gazette of
India :18-10-1986
I fail to see how on these sequence of events the prayer for a writ in the nature of mandamus would become premature or untenable. What is published in the Official Gazette is the copy of the arbitration agreement and not a Notification under Section 10A(3A) of the Act. The arbitration proceedings would receive the sanction of law only if the Notification is made under Section 10A(3A) of the Act. Otherwise, the award of the Arbitrators would not be binding on the petitioner. Issue of that Notification is now stayed by this Court. Therefore, if the petitioner succeeds in making out a case that it should be heard by the Central Government before a Notification is issued by the Central Government, publication of the arbitration agreement in the Official Gazette would not lend any legal credence to the proceedings before the Arbitrators and those proceedings would be private arbitration proceedings binding only on the parties to that agreement and not on the petitioner and other unions which are not made parties to it.
25. As noticed earlier, the industry being a public utility service the petitioner had a corresponding right to have the dispute raised by it adjudicated by an appropriate independent Tribunal constituted under the Act. On the facts of this case, it was the National Tribunal which was competent to adjudicate the dispute. That right of the petitioner conferred by the second proviso to Section 10(1) of the Act could not be taken away or whittled down by an agreement between the 2nd respondent and the 4th respondent behind the back of the petitioner. As already noticed in the earlier part of this order, the Act contemplates adjudication of industrial disputes by authorities who are 'independent persons'. Under Section 7C of the Act no person shall be appointed to, or continue in, the office of the Presiding Officer of a Labour Court, Tribunal or National Tribunal if he is not an 'independent person' or he has not attained the age of 65 years. 'Independent person' is defined under Section 2(i) of the Act, i.e., he should be unconnected with the industrial dispute referred to the concerned authorities or with any industry directly affected by such dispute. Both Mr. Ramanujam and Mr. Kapur cannot be called as independent persons under the Act, since both are connected with the disputes and Mr. Kapur is also connected with the industry directly affected by such disputes. Therefore, the petitioner's right to a fair adjudication of its disputes is another aspect of the rule of law which has to be protected by this Court in the exercise of its extraordinary jurisdiction. Consequently, it is not right to say that the petitioner would not be aggrieved by the proposed Notification under Section 10A(3A) of the Act. In this context it must be observed that the right to a fair hearing by independent adjudicators is the bedrock of the Rule of law and this Court must always strive to protect that right and not an arbitration by persons interested in the dispute as contended by Mr Ullal. This is not to say that arbitration has no place in the scheme of the Act. To quote Martin Shapiro-COURTS-A, COMPARATIVE AND POLITICAL ANALYSIS :
'Nevertheless, societies tend to turn to arbitration in situations in which, although overarching legal norms may exist, the most salient concerns are the interests of the two parties, neither of which is assigned greater legitimacy than the other. Mediate solutions acceptable to both parties are the goal, and, as a practical matter, few arbitrators would find much employment if they did not develop a record of providing such solutions. Of course this is all the more true in 'nonbinding' arbitration in which the parties need not accept the arbitrator's resolution. In American labour law, for instance, a distinction is often made between 'rights' arbitration and 'interest' arbitration. In most labor-management contracts there are some provisions that set out with a relatively high degree of specificity the rights and duties of the two parties in relation to ore another. When a dispute under one of these provisions is submitted to arbitration, both parties expect the arbitrator to decide who was legally right rather than provide a mediate solution. The same union and company may submit other kinds of disputes not covered by such precise contract terms to the same arbitrator and expect mediate solutions.
When arbitration is in no sense binding, it merges with mediation. When arbitration is binding, both in the sense that the two parties must go to arbitration on the demand of either and must then abide by the arbitrator's holdings, it tends to merge into judicial judgment. This is particularly true in instances such as 'rights arbitration,' when the arbitrator is expected to reach a legally correct rather than a mediate solution even though the 'law' is that created by a mutually agreed contract between the parties. When arbitration is binding and dichotomous solution are expected, then the 'arbitrator' in fait becomes a kind of private judge, that is one who judges rather than mediates but does not hold the governmental office of judge. The very fact that he does not hold such an office but is chosen by the parties, rather than imposed on them preserves a greater element of consent that continues to distinguish him from the official judge '
But an arbitration without the consent of one of the disputants is repugnant to the rule of law being opposed to all sense of fair play and all notions of justice. The meaning of the word 'satisfied' must be therefore ascertained in the context in which it is used under Section 10A(3A) of the Act when the 2nd proviso to Section 10(1) comes into operation. However, it is submitted by the learned Counsel for the 4th respondent that this provision is similar to the provision to Section 18(3) of the Act under which a person who is not a party to the dispute could be summoned to appear before the authorities as a party to the dispute and the award made by the authorities would be binding on him unless he was summoned without proper cause. Section 18 is a general provision dealing with binding nature of settlements between the parties in the course of conciliation or otherwise and the binding nature of the awards including arbitration awards which have become enforceable. As noticed earlier, the scheme of the object of the Act and in relation to Public Utility Service is different from the scheme and thrust of the Act in relation to a non-public utility service. The Notification if made under Section 10A(3A) will not enable the petitioner to press its demands be ore the arbitrators. It can only present its case on the demands of Respondent-4. But all the same the petitioner would be bound by the award of the arbitrators, under Section 18(3) of the Act since the Notification under Section 10A(8A) makes them parties being concerned in the dispute though it is not their dispute but the disputes raised by Respondent-4. The petitioner cannot also contend before the Arbitrators that they were summoned without proper cause since the very object of the arbitration agreement between Respondents 2 and 4 and the proposed Notification under Section 10A(3A) is to bind the petitioner to the award of the arbitrators willynilly. Their right to go on strike is curtailed by Section 22, their right to continue the strike is curtailed by Section 10A(4A) and now their right to fair adjudication of their disputes is obliterated by an arbitration agreement between Respondents 2 and 4 with the good offices of the appropriate Government. If I were to accept the contention of the learned Counsel for Respondents 2 and 4 and recognise the secret alliance of the parties whom they represent in the interest of industrial peace, such recognition would be counter productive of industrial peace. There was no need at all, in my view, to make a definite distinction between public utility service and non public utility service in the scheme of the Act if it does not provide for any safeguards to the workmen employed in public utility service or to the employers who are not parties to the arbitration agreement. Therefore it is all the more necessary that the satisfaction under Section 10A(3A) is not dependent on the subjective satisfaction of the appropriate Government, but on an objective consideration of the representative character of the parties which could have been done, after giving an opportunity to the petitioner of being heard on the merits of its case.
26. Mr. Ullal strongly relied on para 11 of the decision of the Supreme Court in Rohtas Industries Ltd. and Anr. v. Rohtas Industries Staff Union and Ors., : (1976)ILLJ274SC . It reads as under :
'We agree that the position of an arbitrator under Section 10A of the Act (as it then stood) vis a vis Article 227 might have been different Today, however, such an arbitrator has power to bind even those who are not parties to the reference or agreement and the whole exercise under Section 10A as well as the source of the force of the award on publication derives from the statute, if is legitimate to regard such an arbitrator now as part of the methodology of the sovereign's dispensation of justice, thus falling within the rainbow of statutory tribunals amenable to judicial review. This observation made en passant by us is induced by the discussion at the bar and turns on the amendments to Section 10A and cognate provisions like Section 23, by Act XXXVI of 1964.'
What all the Supreme Court decided in that case is that the award made by the Arbitrator under Section 10A of the Act is amenable to judicial review. Rohtas did not decide the validity or otherwise of the Notification made under Section 10A(3A) of the Act in the cases of industrial disputes arising in public utility services.
He also relied on the decision of the Supreme Court in Maharashtra State Board of Secondary and Higher Secondary Education and anr. v. Paritosh Bhupesh Kurmarsheth, etc, : [1985]1SCR29 . That was a case where the validity of the regulation called Maharashtra Secondary and Higher Secondary Education Boards Regulations, 1977 [Regulation 104(3)] was attacked on the ground that it is violative of the principles of natural justice. That regulation reads as under :
'No candidate shall claim, or be entitled to revaluation of his answers or disclosure or inspection of the answer-books or other documents as these are treated by the Divisional Board as most confidential.'
The Bombay High Court observed on this rule thus :
'On the other hand, access of the student to the answer books would enable him to verify (1) if the papers are his own, and (2) supplementary answer papers are duly tagged, and (3) all answers are evaluated and (4) totals are correct and (5) marks of his practical or internal assessments are included therein and (6) and his adverse results are not due to any error or manipulations. This will at once not only make the verification process under Regn. 104(1) effective and real, but facilitate Board's exercising its powers to trace errors and malpractices and amend the result preventing frustration of the students The purpose of the Act can be served thus better by permitting inspection than by preventing it. In other words, the confidentiality, rather than serve any purpose of the Act goes to defeat it firstly by making the functioning of the system dependent entirely on the staff, and, secondly, by making process under Regns. 102(3), (4) and 104(1) ineffective for want of assistance of the examinee himself.
The Supreme Court disapproved of the view taken by the Bombay High Court with following observations :
'In making the above observations, the High Court has ignored the cardinal principle that it is not within the legitimate domain of the Court to determine whether, the purpose of a statute can be served better by adopting any policy different from what has been laid down by the legitimate or its delegate and to strike down as unreasonable a bye law (assuming for the purpose of discussion that the impugned regulation is a bye-law) merely on the ground that the policy enunciated therein does not meet with the approval of the Court in regard to its efficaciousness for implementation of the object and purposes of the Act.'
27. I am unable to understand how the regulation framed under the Maharashtra Code can come to the aid of Respondent-2 on the interpretation of Section 10A(3A) of the Act. It is well settled that the principle of audi alteram partem would come into play, as observed by the Constitution Beach of this Court in Puttappa v. State of Karnataka, 1978(1) K.L.J. 302 in cases where instrumentalities of the State are charged with the duty of discharging its functions in just manner. The Constitution Bench of this Court referred to the cases of Ridge v. Baidwin, 1964 AC 40 at 130, A.K. Kraipak v. Union of India, : [1970]1SCR457 Voyager Exportation Ltd. v. Onatrio Securities Commission, (1970) 1 OR 237, Administrative Law H.W.R.Wade 2nd Edn., page 154. Wiseman and Anr. v. Borneman and ors., 1971 AC 297 at 309 and Union of India v. P.K. Roy, : (1970)ILLJ633SC and observed :
'These decisions have no doubt brought out prominently the purpose of the application of the sacred maxim audi alteram partem. But, its application in a given case as observed by the Supreme Court in Union of India v. P.K. Roy depends upon the nature of the jurisdiction conferred on the administrative authority, upon the character of the rights of the persons affected, the scheme and policy of the statute and other relevant circumstances disclosed in the case. It is therefore necessary to examine these aspects of the matter with particular reference to the relevant provisions in the Act.'
Following this enunciation of law, a Full Bench of this Court in Management of Theatre Sanjaya v. the State and ors., ILR 1984(2) KAR 539 interpreting Section 10(1) of the Act has ruled that :
'the principle of audi alteram partem is applicable, when the Government having declined to make a reference of an Industrial Dispute under Section 10(1) of the Industrial Disputes Act for adjudication, proposes to refer such a dispute for adjudication at a subsequent stage.'
That was a case where the Full Bench had answered the above question in favour of the management. In my view the principles enunciated by the majority Judgment of the Constitution Bench are applicable with full force to the facts of this case. Though the language of Section 10A(3A) of the Act does not expressly provide for a right of hearing, by implication in view of the consequences that flow from private arbitration affecting the rights of the disputants who are not signatories to the arbitration agreement, the petitioner should be afforded an opportunity of being heard either orally or by representation before a decision is taken by the Central Government to issue a Notification under Section 10A(3A) of the Act.
The next case relied by Mr. Ullal is the decision of the Supreme Court in American Home Products Corporation v. Mac Laboratories Pvt. Ltd. and anr., : AIR1986SC137 . That decision was not rendered under the provisions of the Act, but under the provisions of Trade Marks Act. The Supreme Court in para 66 observed as follows :
'It is a well-known principle of interpretation of statutes that a construction should not be put upon a statutory provision which would lead to manifest absurdity or futility, palpable injustice, or absurd inconvenience or anomaly.'
That case is not an authority for the proper construction of Section 10A(3A) of the Act.
In Girdhari Lal & Sons v. Balbir Nath Mathur and ors., : [1986]1SCR383 , the Supreme Court while interpreting the provisions of the Delhi Rent Control Act observed as follows :
'So we see that the primary and foremost task of a Court in interpreting a statute is to ascertain the intention of the legitimate, actual or imputed. Having ascertained the intention, the Court must then strive to so interpret the statute as to promote/advance the object and purpose of the enactment. For this purpose, where necessary the Court may even depart from the rule that plain words should be interpreted according to their plain meaning. There need be no meek and mute submission to the plainness of the language. To avoid patent injustice, anomaly or absurdity or to avoid invalidation of a law, the Court would be well justified in departing from the so-called golden rule of construction so as to give effect to the object and purpose of the enactment by supplementing the written word if necessary '
This is a well settled principle. But, I fail to understand how this decision is applicable to the facts of the case. The Act does not confer any primacy to voluntary arbitration.
Mr. Ullal also relied on the decision of this Court in Karnataka Planters' Association v. State of Karnataka, : ILR1986KAR1787 on the interpretation of the proviso to Section 5(1)(b) of the Minimum Wages Act. That proviso to Section 5(1)(b) of Act did not expressly provide for a right of hearing or by implication. It is excluded since such a right by implication would defeat the very object of the Act. More over that Act provided ample safeguards against any arbitrary action of the Government. The ratio of this decision must be read in the context of the language of Section 5(1)(b) of that Act and the proviso thereto and the same cannot be made applicable to the interpretation of the relevant provisions of the Act.
In Life Insurance Corporation of India v. Escorts Ltd, and ors., : 1986(8)ECC189 the Supreme Court was concerned with the interpretation of the Foreign Exchange Regulation Act. I am unable to understand how that decision would be applicable to the facts of this case and, therefore, it does not require any serious consideration I would not have referred to these cases in detail but for the fact that the Learned Counsel pressed the same for consideration in all seriousness.
28. In my view the ratio that is applicable to the facts of this case is found in Sanjaya Theatre case, ILR 1984(2) KAR 539. I had observed as follows in that case :
'The power conferred on the Government under Section 10 is a social power to create an orderly and reasonably well functioning system of labour relations. This power coupled with the power to initiate conciliation proceedings, to prohibit strikes and lockouts, to prevent lay-offs, retrenchment and closure of industries to prevent variation in conditions of service and the other powers conferred on the Government for imposing penalties for violation of the provisions of the Act are intended to regulate, to support and to restrain power of Management and the power of organised labour. 'The words 'Management' and 'Labour' are abstractions but their real meaning is that they are not persons but activities ; the activity to plan and to regulate production and distribution, to co. ordinate capital and labour on the one hand, the activity to produce and distribute on the other. Labour too is an abstraction.' To the Federation of Chamber and Commerce or to the Employers' Federation, labour may mean the powerful politically affiliated unions like INTUC, AITUC & BMS, 'to a foreman it may denote a shop steward, to an employer it may mean men and women subject to his managerial power' or the union of workmen recognised by him for the purpose of collective bargaining (see Labour and the Law (Hamlyn Lecture Series) By Sir Otto Khan Freund, QC). Therefore, the Civil consequences of refusing to refer an industrial dispute partake of various hues and nuances which are not comparable to those arising under Common Law or under Contract. Such consequences may arise out of disputes between employer and employer, workmen and workmen, employer and workmen (see Section 2(1)(k) of the Act). These consequences immediately affect the delicate and tenuous relationship between Management and Labour in any organised industry depending on the nature of the dispute.'
These observations apply with full force when this Court is called upon to interpret the words 'it would be inexpedient so to do' in the second proviso to Section 10(1) of the Act while dealing with disputes arising in Public Utility Service. Since a Notification under 10A(A) will take away the right of the petitioner to an adjudication by independent persons under the Act, the Central Government has to give the petitioner an opportunity of being heard before it makes a Notification under Section 10A(3A) on the ground that it would be inexpedient to refer the disputes of the petitioner and Respondent-4 to a National Tribunal. The object of the Act or the right of the disputants to resort to voluntary arbitration would not be frustrated by such an opportunity. The Central Government could also consider the choice of arbitrators at that time and that is the reason the duty to act under Section 10A(3A) is a discretionary and not mandatory.
29. For these reasons, the petitioner is entitled to a direction to the Central Government to hear them before a Notification is made under Section 10A(3A) denying them the right to adjudication of their disputes by independent authorities under the Act. The other contentions of the petitioner do not require consideration since they have succeeded on the substantial point urged by their Learned Counsel. But I must observe that though I have noticed the difference in the words used in Section 10(2) and Section 10A(1) for describing the parties to the dispute, that difference is not material for the purpose of this case I must also observe that it is not necessary to go into the question whether Section 10A is a special provision or 10(1) is a general provision, or on the question relating to harmonious construction of statutes, since I am in agreement with Mr. Ullal that there could be arbitration even in respect of dispute in Public Utility Service. While coming to these conclusions I have kept in view the wise and learned observations of Justice Oliver Wendell Holmes when he was dealing with the case of freedom of speech and the right of peaceable assembly in regard to a Communist Party Member in a capitalistic society like America. What he observed is :
'If there is an any principle of the Constitution that more imperatively calls for attachment than any other it is the principle of free thought - not free thought for those who agree with us but freedom for the thought that we hate.'
[United States v. Schwimmer, 279 U.S 644, 654-655 (1929)]
The Indian Constitution offers the said protection to persons who do not toe the party line or the party ideology. That apart the Act also recognises the rights of a minority union or the union belonging to rival political group to raise a dispute and have the dispute properly adjudicated by the independent Tribunals constituted under the Act. Therefore, there is no extraordinary ground in this case why the petitioner union should be shut off completely from its participation in the adjudicatory process without being heard by the Central Government before it proposes to make the Notification under Section 10A(3A) of the Act binding the petitioner to a future award that may be made by the Arbitrators.
30. It, therefore, follows that :--
i) This petition is not pre-mature.
ii) The arbitration agreement (Annexure-P) as it stands now does not bind the petitioner.
iii) The Central Government shall hear the petitioner, Respondent-2 and Respondent-4 and the impleaded respondent and satisfy itself about the representative character of Respondent 4 before it makes a Notification under Section 10A(3A) binding the petitioner and the impleaded respondent to the arbitration award that may be made under Annexure 'P'.
iv) The Central Government shall also consider at that time whether it would be inexpedient to refer the disputes of the petitioner and Respondent-4 to adjudication by the ' National Tribunal in view of the arbitration agreement between Respondent-2 and Respondent-4. Such consideration must necessarily take into account whether the arbitration award would put an end to the disputes raised by the petitioner in the light of the decision in Tata Chemicals' case.
v) The Central Government shall also consider the choice of arbitrators as proposed by the petitioner before the Conciliation Officer, if it comes to the conclusion that it is inexpedient to refer the disputes to the National Tribunal.
vi) Since the disputes relate to Public Utility Service, it is just and necessary that the Central Government affords a personal hearing to the petitioner, Respondent-2, Respondent-4 and the impleaded respondent.
The Central Government shall comply with these directions within 6 weeks from this day.
31. The petition is partly allowed with the above directions. No costs.