Somasundaram., J
1. The 1st petitioner is a company incorporated under the Companies Act and having its registered office at Calcutta. It has manufacturing units in several places including Tamil Nadu. They are engaged in the manufacture of metal containers, collapsible tubes, paper packages, plastic moulded goods etc. It is the case of the petitioners that they are incurring heavy losses for several years. They have therefore, applied for the relief under the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as S.I.C.A.) on May 27, 1988 the company has been declared as a sick industry. Further proceedings relating to the framing of a scheme is pending with the Board for Industrial and Financial Reconstruction. With effect from December 20, 1987 the Madras Factory suspended its operation in view of the cumulative loss reaching the figure of Rs. 90.20 Crores till March 31, 1987. On the assurance given by the workers and on the advice of the Commissioner of Labour, the Unit was restarted in April 1989. The primary conditions on which the unit was restarted were, (1) there will be a20% cut in wages and in salaries including D.A, of the workers and the staff; (2) 50% of the emoluments so deducted shall be paid after three years from 1992-93 and the balance of fifty per cent on a subsequent date; (3) that the workers and the staff will co-operate in maintaining the production level as per the advice of the Commissioner of Labour dated April 22, 1989 and the agreement dated January 12, 1991 before the Special Deputy Commissioner of Labour. There is controversy as to which of the parties did not comply with the assurances leading to a confrontation which led to the eventual suspension of the operation of the factory by the management from October 11, 1992 onwards. The Board for Industrial and Financial Reconstruction (hereinafter referred to as B.I.F.R.) held its meeting on November 23, 1992 and the Board had called for various proposals and adjourned the hearing. Both the State Government as well as the representatives of the workmen were heard by the Board. On December 18, 1992 the conciliation talks before the labour authorities failed and the Government passed two Government Orders, viz., G.O. (D) No. 1274 and G.O.(D) No. 1275, Labour and Employment Department, dated December 18, 1992. By G.O. (D) No. 1274 the dispute between the management and workmen was referred for adjudication before the Industrial Tribunal Madras. The dispute referred to the Industrial Tribunal for adjudication under Section 10(1)(d) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act) is as follows'
'Whether the action of the management in continuing the deferment of wages beyond March 31, 1992 is justified? If not, to give appropriate directions.'
By G.O. (D) No. 1275, the Government passed an order under Section 10(B) read with Section 10(3) of the Act prohibiting the continuance of lock-out by the management. The said G.O. (D) No. 1275 dated December 18, 1992 reads as follows:
'Whereas the Government by Government Order first read above, have referred the issue relating to deferment of wages to the workers beyond March 31, 1992 raised by the work-ers by the management of Metal Box India Limited, Madras 81, for adjudication by the Industrial Tribunal, Madras.
And whereas the Government are of the opinion that for the purpose of maintaining employment and industrial peace in the aforesaid management and pending adjudication of the reference by the Industrial Tribunal, it is necessary to make an order.
Now, therefore, in exercise of the powers conferred by Section 10-B read with Section 10(3) of the Industrial Disputes Act, 1947 the Governor of Tamil Nadu hereby makes the following.
Order Pending adjudication of the industrial disputes by the Industrial Tribunal, Madras, the Government prohibit the continuance of suspension of operation of the factory by the Management and they are directed to restart the Unit.'
The petitioner filed W.P. 226/93 for the issue of a writ of certiorari to quash the G.O. (D) No. 1275, Labour and Employment Department, dated December 18, 1992. The petitioner also filed another W.P. 7656/94 for the issue of a writ of certiorari to quash the G.O.(D) No. 1274, Labour and Employment Department, dated December 18, 1992. Subsequently on February 23, 1994, the Government passed G.O.(D) No. 203, Labour and Employment Department, deleting Section 10-B from G.O.(D) No. 1275, Labour and Employment Department dated December 18, 1992. Again on February 24, 1994 the Government passed an order cancelling G.O. (D) No. 203. On the same day the Government passed G.O. (D) No. 208 Labour and Employment Department, which purports to amend G.O. (D) No. 1275 Labour and Employment Department, dated December 18, 1992. as follows:
'the words 'Section 10(B) read with' occurring in paragraph 3 of the above said notification and the words, Section 10(B), wherever occurring in the said Government Order shall be deleted'.
2. Writ Petition No. 226 of 1993 Mr. P. Chidambaram, the learned Senior Counsel appearing for the petitioner in Writ Petition No. 226 of 1993 submitted that G.O.(D) No. 1275 dated December 18, 1992 challenged in Writ Petition No. 226 of 1993 is illegal and liable to be quashed on the following grounds:
1. The impugned Government Order passed under Section 10(3) of the Act is without jurisdiction because, Section 10(3) requires that the lock-out or strike should be connected with the disputes referred to Industrial Tribunal for adjudication under Section 10(1) and in the present case, the lock-out, the continuance of which is prohibited by the impugned Government Order is not connected with the dispute referred to the Industrial Tribunal for adjudication and that the lock-out in the present case was due to the financial difficulties and the sheer inability of the management to run the unit.
2. When there are several disputes between the management and the workmen, it is not: open to the Government, to refer only one of the disputes relating to deferment of wages beyond March 31, 1992 to the Industrial Tribunal for adjudication under Section 10(1) of the Act and pass an order under Section 10(3), prohibiting the continuance of the lockout, without referring all other issues relating to the lockout also to the Industrial Tribunal for adjudication.
3. The power under Section 10(3) of the Act cannot be invoked in the case of a sick industry governed by the provisions of S.I.C.A. The State Government has no jurisdiction to pass an order under Section 10(3) of the Act when the viability of the company and the working of the company is pending before B.I.F.R. The provisions of S.I.C.A. will prevail over all other enactments including the Industrial Disputes Act.
4. The impugned G.O. (D) No. 1275, Labour and Employment Department, dated December 18, 1992 under Section 10(3) of the Act is passed in violation of the principles of natural justice since, the petitioners were nei-ther heard nor given an opportunity to make their representations before the authority.
5. The impugned Government Order is invalid because, it is not a speaking order and that it does not contain reasons, that the impugned order passed under Section 10(3) of the Act is a quasi judicial order and that there should be an application of mind before the order under Section 10(3) is passed. To find out whether there is an application of mind, the order passed under Section 10(3) must contain reasons. It is all the more so where no appeal is provided against the order passed under Section 10(3) of the Act.
3. Mr. V. Prakash, the learned counsel for respondents 2 and 3 submitted that the lockout declared in the present case is connected with the dispute referred to the Industrial Tribunal for adjudication in G.O. (D) No. 1274, Labour and Employment Department, dated December 18, 1992 and the order in G.O. (D) No. 1275 passed under Section 10(3) of the Act prohibiting the continuance of the lockout is valid. The learned counsel for respondents 2/3 also contended that the management never raised the plea that it was making a number of demands, that when there are number of disputes between the management and workmen, the Government cannot after referring only one dispute for adjudication under 10(1) pass an order under Section 10(3) of the Act. According to the learned counsel for respondents 2 and 3, the contention of the petitioners that the Government after referring only one of the issues connected with lock out, out of several disputes between the management and the workmen, cannot pass an order under Section 10(3) prohibiting the continuance of lockout is an after thought. Mr. Prakash further contended that the power of the Government to pass an order under Section 10(3) is an adjunct to the power under Section 10(1) of the Act, which is an administrative power and for the exercise of such administrative power under Section 10(3) the principle of natural justice is impliedly excluded and therefore, it cannot be contended on behalf of the management that the impugned order passed under Section 10(3) of the act is invalid on the ground that the management was not heard nor was it given an opportunity to state their case,before the impugned order under Section 10(3) was passed and that it is not a speaking order. The further contention of Mr. Prakash is that the Industrial Disputes Act and S.I.C.A. can harmoniously co- exist and therefore, the principle that special law will override general law will have no application to the facts of the present case. In the alternative, the learned counsel submitted that in so far as disputes between employer and employee is concerned the Industrial Disputes Act contains the special law, whereas S.I.C.A. contains the special law, and therefore the provisions of the Act will prevail over S.I.C.A.
4. In the light of the rival contentions of the counsel for the parties, the following points arise for consideration in Writ Petition 226 of 1993.
1. Whether the suspension of work or lockout ordered by the petitioners by the notice dated October 10, 1992 in respect of their factory at Madras is connected with the disputes referred to the Industrial Tribunal for adjudication in G.O. (D) No. 1274, Labour and Employment Department dated December 18, 1992.
2. When there are several disputes or issues between the management and the workmen in the present case, connected with lockout or suspension of work at the Madras factory of the petitioners ordered by the petitioners by the notice dated October 10, 1992 can the Government by referring only one of the issues relating to the deferment of wages beyond March 31, 1992 and without referring the other issues connected with the lockout for adjudication under Section 10(1) of the Act, pass an order under Section 10(3) in G.O. (D) No. 1275, Labour and Employment Department, dated December 18, 1992, prohibiting the continuance of lockout and whether the said G.O. (D) No. 1275, dated December 18, 1992 is valid?
3. Whether the provisions of S.I.C.A. will prevail over all other enactments including the Industrial Disputes Act and whether the Government has power to pass an order under Section 10(3) of the Act in the case of a sickindustry governed by the provisions of S.I.C.A.?
4. Whether the impugned Government order is invalid on the ground that it is violative of the principles of natural justice, as the petitioners were neither heard nor were given an opportunity to make their representations before the impugned Government order was passed.?
5. Whether the impugned order is invalid on the ground that it is not speaking order?
Point No. 1
5. The contention of Mr. P. Chidambaram, learned Senior Counsel for the petitioners is that the lockout ordered by the management in the present case, has no connection with the dispute referred to the Industrial Tribunal for adjudication in G.O.(D) No. 1274, Labour and Employment Department dated December 18, 1992 and therefore, the impugned Government Order G.O.(D) No. 1275, Labour and Employment Department, dated December 18, 1992 prohibiting the continuance of the lockout is without jurisdiction, invalid and liable to be set aside. Section 10(3) of the Act runs as follows:
'10(3) Where an industrial dispute has been referred to a Board, Labour Court, Tribunal or National Tribunal under this section, the appropriate Government may by order prohibit the continuance of any strike or lockout in connection with such dispute which may be in existence on the date of the reference.
The three ingredients of Section 10(3) of the Act are the following
1. There must be a dispute between the management and workmen which has been referred to the Industrial Tribunal for adjudication under Section 10(3) of the Act,
2. There must be a strike or lock-out in existence on the date of reference of the dispute for adjudication, and
3. Such strike or lock-out-must be in connection with such dispute referred to the Industrial Tribunal for adjudication.
If all the three ingredients of Section 10(3) of the Act referred to above are satisfied in a given case, the Government may by order passed un der that section prohibit the continuance of the strike or lock-out as the case may be. The con tention of the learned Senior Counsel for the petitioner is that though the first two ingredients of Section 10(3) are satisfied in the present case,the third ingredient is not present in this case to enable the Government to pass the order in G.O.(D) No, 1275 dated December 18, 1992 prohibiting the continuance of the lock-out. We are unable to accept the above submission of the learned Senior Counsel for the petitioner, The dispute referred to the Industrial Tribunal for adjudication is :
'whether the action of the management in continuing the deferment of wages beyond March 31, 1992 is justified? If not, to give appropriate directions.'
As seen from the notice dated October 10, 1992 issued by the petitioners, several reasons are given for suspending the operations at their factory at Madras, such as financial constraints, low production, strike notice issued by the Union, Union's unfair labour practice, etc. The said notice dated October 10, 1992 issued by the petitioners suspending the operations at the Madras factory reads thus:
'Suspension of Operations at Madras Factory'
1. You are aware of the financial constraints under which Madras factory operation was suspended on December 20, 1987. Subsequently the present management of Mr. Vinod Krishna took the initiative with involvement of the Labour Department and with the help of Tamil Nadu Government, the Madras Factory opened on April 24, 1989. It was expected that unions also will join and cooperate with the management. Contrary to that the unions were agitating on one or the other issues right from the beginning and thefactory could never experience smooth operations during the past over three years.
2. After series of discussions between unions and management, Special Deputy Labour Commissioner could bring up an agreement, as embodied in the abstract of January 12, 1991 advice signed by both the parties. Despite financial constraints, management alone unilaterally honoured the settlement and gave ad hoc increases of salary by 3 and half percent from May 1990 and another increase of one and half percent in June 1991 even though the sales level of 3000 sitas was not achieved. But the unions have failed to accept and implement their portion and the new incentive scheme has not been able to be introduced.
3. Specially over the last few months the unions have stepped up their agitational approaches, started illegal direct Actions engaged in gheraos obstructed despatches to customers and even the export despatches, obstructed movement of vended components, machines to other units and decorated materials. They threatened customers, representatives, their transporters and obstructed their supplies from Madras Unit. As a result customers' orders on Madras factory started falling down from last 8 months. Now over and above that unions gave 14 days strike notice dated August 19, 1992 and agitated the workers. Strike on September 7, 1992, man handling of management staff, beating of canteen contractor causing hospitalisation and all such extreme activities with stopping of movement of machines to customers, to other units and decorated material etc., has brought down the customers orders on Madras factory to further reduction of 50% and collection from customers has drastically gone down. As a consequence it is not possible to continue operations at Madras factory any longer.
4. Madras factory has been showing losses in virtually all months from April 1992, even on PBID basis. Due to the vitiation of environment with all anti-production and destructive activities stated above, the production has nose-dived to about 40% during the month of September 1992. The average production per month being2000 sitas during 1991/92, has fallen down to a dismissal of 750 sitas during September 1992. The management is not in a position to keep injecting funds any more to absorb the losses. Under the circumstances having exhausted all avenues, no appropriate solution have emerged and as 20% deferment is in line with January 1991 abstract cum advice singed by unions and management and also in consonance with what in consonance other employees are talking in the Company, the management is no longer in a position to continue to run the Tondiarpet Unit as a result of unions' unfair labour practices, and has therefore, decided to suspend operations of Madras Factory situated at 114, Elaiya Mudali Street, Tondiarpet, Madras - 600 081, excepting security services until further notice.
As the said suspension of operations with effect from 2.00 a.m. on October 11, 1992, is being declared for reasons beyond the control of the management, the company has no liability to and will not pay any wages/salaries to the employees during the period of suspension of operations.
Operations can only be recommenced based on the unconditional withdrawal of the strike notice; and the union entering into a singed agreement with the management on the issues left unresolved in the January 1991 agreement, including on several areas for ensuring viability of the Unit so as to be in a position to meet commitments on repayment of sales tax deferment extended by Tamil Nadu Government.
The Government can exercise the power under Section 10(3) of the Act and prohibit the continuance of a strike or lock-out only if the dispute referred to the Industrial Tribunal for adjudication has connection with such strike or lock-out as the case may be, in other words, Section 10(3) of the act requires a lock-out or strike should be connected with the dispute referred to the Industrial Tribunal for adjudication to enable the Government to pass an order prohibiting the continuance of the lock-out or strike as the case may be. A perusal of the notice dated October 10, 1992 extracted above clearly goes to show that several reasons are given by the management for suspending the operations at their Ma-dras Factory and one such reason is the deferment of wages beyond March 31, 1992. It is also clear from the notice dated October 10, 1992 that the management suspended the operations of their Madras Factory on a number of issues, such as financial constraints, low production, strike on September 7, 1992, man-handling of the officers by workmen, agitational approaches and direct actions such as gheraos, strike, etc., adopted by workmen on one or the other issue, obstruction of despatches by workmen, stopping of movements of machines to customers and to other units, the fall in customers orders, continuous loss suffered by the unit from April 1992 etc. In these circumstances, we are of the view that deferment of wages beyond March 31, 1992 or demand by workmen for restoration of the deferred wages is one of the several reasons for the lock-out and therefore, it cannot be said that the question of deferment of wages beyond March 31, 1992 referred to the Industrial Tribunal for adjudication is not at all connected with the lockout or suspension of operations at the Madras factory of the petitioners company ordered by the management on October 10, 1992 with effect from October 11, 1992. However, we will deal with the question, can the Government by referring only one of the several issues connected with the lock- out to the Industrial Tribunal for adjudication under Section 10(3) of the Act and without referring the other issues connected with the lock-out pass an order under Section 10(3) prohibiting the continuance of the lock-out at the appropriate place under point number 2. The question raised in point No. 1 is answered accordingly.
Point No.2
6. The contention of the learned Senior counsel for the petitioners with regard to this point is that in the case of multi-point lock-out as in the present case, the Government without referring all the issues connected with the lock-out to the Industrial Tribunal for adjudication under Section 10(1) and by referring only one of the issues connected with the lock-out, viz. the issue relating to the deferment of wages beyond March 31, 1992 cannot pass an order in exercise of the power under Section 10(3) of the Act prohibiting the continuance of the lock-out on other issues.In other words, according to the learned Senior Counsel for the petitioners, the notice dated October 10, 1992 issued by the management for suspension of work at their Madras factory gives various reasons for suspension of operation at the Madras factory, that the disputes between the management and workmen relate to low production, strike on September 7, 1992 manhandling of officers, Unfair Labour practices on the part of the workmen 20% deferment of wages etc., that the Government on referring only one of the issues relating to the deferment of wages beyond March 31, 1992 and without referring the other issue connected with the lock-out for adjudication cannot pass an order under Section 10(3) of the Act prohibiting the continuance of the lockout on other issues not referred for adjudication. There is merit in the above submission of the learned Senior Counsel for the petitioners. As already stated, it is clear from the notice dated October 10, 1992 that the management suspended the operations at the Madras factory on number of issues such as financial constraints, low production, strike on September 7, 1992 agitational approaches adopted by the workmen on one issue or other, the fall in the customers orders, the reduction in the collection from customers, continuous loss from April 1992, etc. and not on the only issue of deferment of 1992 wages beyond March 31, 1992. A perusal of the conciliation failure report dated December 11, 1992 submitted by the Labour Commissioner to the Government shows that the petitioners industry is declared as Sick Industry and that the package for revival of the unit submitted before the B.I.F.R. is still pending consideration and that the petitioners are experiencing critical financial crisis. The Labour Commissioner in his conciliation report dated December 11, 1992 has further stated as follows:
'The Management have not implemented the above advice dated August 18, 1992 and informed me on August 28, 1992 that it would be imperative for them to maintain the continuance of deferment at Madras unit or otherwise it would jeopardise their efforts to get any package plan agreed and approved by the financial institutions and B.I.F.R. According to the management, the workmen resorted to a strike on September 7, 1992 and due to this the company's order position from customers and the production were severely affected.
Further the management by their notice dated October 10, 1992 suspended the operations at Madras Factory on the ground that they are no longer in a position to continue to run the unit with effect from October 11, 1992 as result of unions' unfair labour practices. It was further stated by the management that the resumption of operations in the factory can only be considered on the unconditional withdrawal of the strike notice and the unions entering into signed agreement with the management on the issue unresolved.'
The notice dated October 10, 1992 suspending the operations at the Madras factory of the petitioners, the conciliation failure report dated December 11, 1992 and the other documents produced by the petitioner in the typed set of papers, clearly go to show that the suspension of operations at the Madras factory of the petitioner arose out of several disputes or issues between the management and the workmen and there were several reasons for ordering lock-out and one among them being the deferment of wages beyond March 31, 1992 and the demand for restoration of deferred wages after March 31, 1992. In such circumstances, we are of the view that the Government without referring all the issues between the management and workmen connected with lock-out and that even without referring the issue regarding the justness or otherwise of the lock-out with effect from October 11, 1992 to the Industrial Tribunal for adjudication, under Section 10(1) of the Act, Government cannot in exercise ofthe power under Section 10(3) pass an order prohibiting the continuance of the lock-out by referring only one of the issues connected with the lock-out, viz., deferment of wages after March 31, 1992 for adjudication.
7. A similar question arose for consideration before the Supreme Court in Delhi Administration v. Workmen of Edward Keventers and Anr. : (1978)IILLJ209SC that was a converse case of strike considering the power of the Government under Section 10(3) of the Act to prohibit continuance of the strike and dealing with the scope of Section 10(3) of the Act, to prohibit continuance of the strike and dealing with the scope of Section 10(3) of the Act, the Apex Court held that where several demands are raised by the workmen but some of them only are referred for adjudication, Section 10(3) cannot operate in regard to such disputes as are not referred under Section 10(1) of the Act. If the Government feels that it should prohibit a strike under Section 10(3) it must refer all the demands connected with strike for adjudication. The Apex Court observed as follows: Page 210.
'Two conditions are necessary to make Section 10(3) applicable. There must be an industrial dispute existing and such existing dispute must have been referred to a Board, Labour Court, Tribunal or National Tribunal under this section, namely, Section 10(1). Section 10(1) stands as a self-contained Code as it were so far as this subject-matter is concerned. The prohibitory power springs into existence only when such dispute has been made the subject of reference under Section 10(1). What then is such dispute the suchness of the dispute is abundantly brought out in the preceding portion of the sub-section. Clearly there must be an industrial dispute in existence. Secondly, such dispute must have been already referred for adjudication. Then, and then alone, the power to prohibit in respect of such referred dispute can be exercised.
3. There is a distinction between strikes being illegal under other section of the Act and penalties being available against such illegal strikes on the one had and strikes being contrary to Section 10(3) of the Act and liable to be proh ibited thereunder. This distinction once grasped, the baselessness of the submission on behalf of the appellant necessarily follows.
4. Shri Aggarwal pressed before us a ruling reported in Keventers Karmachari Sangh v. Lt. Governor of Delhi 197I XI LLJ 375 decided by the Delhi High Court. Although the ratio there is contrary to the same High Court's ruling which is the subject matter of the present appeal, we are obviously inclined to adopt the reasoning of the judgment under appeal. Imagine twenty good grounds of dispute being raised in a charter of demands by the workmen and the appropriate Government unilaterally and subjectively deciding against the workmen on nineteen of them and referring only one for adjudication. How can this result in the anomalous situation of the workmen being deprived of their basic right to go on strike in support of those nineteen demands. This would be productive not of industrial peace, which is the objective of the Industrial Disputes Act, but counter productive of such a purpose. If Government feels that it should prohibit a strike under Section 10(3) it must give scope for the merits of such a dispute or demand being gone into by some other adjudi-catory body by making a reference of all those demands under Section 10(1) as disputes. In regard to such disputes as are not referred under Section 10(1), Section 10(3) cannot operate. This stands to reason and justice and a demand which is suppressed by a prohibitory order and is not allowed to be ventilated for adjudication before a Tribunal will explode into industrial unrest and run contrary to the policy of industrial jurisprudence.
5. Thus, on principle and the text of the law, we are convinced that Section 10(3) comes into play when the basis of the strike is covered by Section 10(1). Reference of a dispute and prohibition of a strike on other demands is impermissible.'
8. The ratio of the decision of the Apex Curt referred above, directly applies to the facts of the present case. From the principle laid down by the Supreme Court in Delhi Administration Delhi v. Workmen of Edward Keventers and Anr. (supra) it is clear that when the Government feels that it should prohibit continuance of lock-out under Section 10(3) of the Act, it must give scope for the merits of such dispute regarding lock-out being gone into by the Industrial Tribunal by making a reference under Section 10(1) of the Act the dispute regarding lock-out and when all the issues connected with the lock-out much less the issue relating to the validity of the lockout itself is not referred to the Industrial Tribunal for adjudication under Section 10(1), Section 10(3) of the Act cannot be invoked by the Government for prohibiting the continuance of the lock-out. Applying the ratio of the decision in Delhi Administration (supra) it can be easily held that when all the issues regarding lock-out are not referred to the Industrial Tribunal for adjudication, the continuance of such lock-out cannot be prohibited by the Government in exercise of the power under Section 10(3) of the Act. In the present case, as already pointed out, the management has ordered suspension of operations at the Madras Factory on various grounds, in such circumstances, the Government by referring only one of the issue regarding lock-out to the Industrial Tribunal for adjudication under Section 10(3) of the Act, cannot prohibit the continuance of the lockout on several other issues mentioned in the notice dated October 10, 1992 and which were not referred to the the Industrial Tribunal for adjudication under Section 10(1) of the Act. In view of: the above legal and factual position present in this case, we are unable to appreciate and accept the contention of Mr. Prakash the learned counsel for respondents 2 and 3 that there is no plea that the management was making other demands and that the Government failed to refer those demands also to the Industrial Tribunal for adjudication and that the contention of the learned Senior Counsel for the petitioners based on the decision in Delhi Administration (supra) is an after thought. Equally there is no force in the contention of the learned counsel for respondents 2 and 3 that the management should make a formal demand for referring all the issues connected with the lock-out for adjudication, in view of Section 12 of the Act and the definition of Industrial Dispute under Sec. 2 of the Act. In any event, as rightly contended by the learned counsel for the petitioners, the notice dated October 10, 1992 issued by the management before ordering lock-out can be treated as an application to the Government raised various demands particularly when the notice dated October 10, 1992 is referred to and relied on by the Labour Commissioner in the conciliation failure report dated December 11, 1992.
9. Further the reason given by the Government in the impugned Government Order for prohibiting the continuance of the lock-out is not that the suspension of operations at the Madras Factory is connected with the dispute referred to the Industrial Tribunal for adjudication in G.O. (D) No. 1274 Labour and Employment Department, dated December 18, 1992 by the reason given in the impugned Government Order is that it is necessary in the opinion of the Government to make such an order prohibiting the continuance of lock-out for the purpose of maintaining employment and industrial peace in the petitioners establishment. We must point out here that 'maintaining employment industrial peace' is not a ground mentioned in Section 10(3) of the Act to enable the Government to exercise the power under Section 10(3) to pass an order prohibiting the continuance of lock-out. Maintaining employment or industrial peace in the establishment may be a ground for the Government to exercise the power under Section 10(B) of the Act and pass an order requiring any public utility service not to close or remain closed and to work and to continue to work on such terms and conditions as may be specified in the order passed under Section 16(B) of the Act. Admittedly Section 10(B) has no application to the facts of the present case as the establishment in question is not carrying on any public utility service.
10. The other contention of Mr. Prakash that the lock-out declared by the management in the present case is illegal and if the Court quashes the impugned G.O.(D) No. 1275, Labour and Employment, dated December 18, 1992, it will have the effect of restoring illegal order of lockout and therefore the petitioners are not entitled to any relief in W.P. 226 of 1993 also cannot be countenanced, because, on the basis of the materials available on record, it is not possible for us to decide in these proceedings under Article 226 of the Constitution the question whether the lock-out declared by the management by the notice dated October 10. 1992 is illegal or not. The question whether the said lock- out is legal or not has to be decided in the proceedings before the appropriate forum in the manner known to law on the basis of oral and documentary evidence to be let in such proceedings.
10(a). For all reasons stated above, we have no hesitation in holding that the impugned Government Order No. 1275, Labour and Employment Department, dated December 18, 1992 is illegal and liable to be quashed. The petitioner in Writ Petition 226 of 1993 is entitled to succeed on this ground alone. Point No. 2 is answered accordingly.
Point No.3
11. The submission of the learned Senior Counsel for the petitioner on this point is that the petitioners company has been declared as a sick industrial company within the meaning of Section 3(1)(o) of S.I.C.A. and the preparation of the Scheme under Section 17 of S.I.C.A. is pending, and that since the company has been declared as a sick industrial company, it can be governed only by the provisions of S.I.C.A. which is a special enactment made by the Parliament to deal with sick industrial companies. According to the learned Senior Counsel for the petitioner the industrial Disputes Act is a general enactment which deals with relations between labour and management and it will not apply to the petitioners company as it is governed by S.I.C.A. which is the special law, that the special law contained in S.I.C.A, over rides the Industrial Disputes Act which is a general law and therefore, the order under Section 10(3) of the Act passed by the Government prohibiting the continuance of the lock-out is illegal and liable to be set aside. We are unable to accept the above contentions of the learned Senior Counsel for the petitioners. It is seen from the preamble to S.I.C.A. that the said Act has been encated by the Parliament to make in public interest, special provisions with a view to securing the timely detection of sick and potentially sick companies owning industrial undertakings, the speedy determination by a Board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to such companies and the expeditious enforcement of the measures so determined and for matters connected therewith or incidental thereto. The Supreme Court in Navnit R. Kamani v. R.R. Kamani 1991 I LLJ 47 has explained the object of S.I.C.A. stating that the legislation had been enacted with the end in view to :
1. afford maximum protection of employment;
2. optimise the use of the funds, etc.,
3. salvaging the production assets.
4. realising the amounts due to the banks, etc; and
5. to replace the existing time-consuming and inadequate machinery by efficient machinery for expeditious determination by a body of experts.
Chapter II of S.I.C.A. comprising Sections 4 to 14 deals with establishment of Board for Industrial and Financial Reconstruction and the Appellate Authority for Industrial and Financial Reconstruction. Section 15 of the S.I.C.A. provides that when an industrial company becomes sick, the Board of directors of the Company should refer to B.I.F.R. within sixty days from the date of finalisation of the duly audited accounts of the company or within sixty days of forming the opinion that the company has become a sick industrial company. Section 16 deals with the inquiry into working of sick industrial companies. Section 17 empowers the Board to make suitable orders on completion of the inquiry under Section 16. Section 19 deals with rehabilitation of a sick industrial company by giving financial assistance and Section 19A of the Act deals with the arrangement for continuing operations of the sick industrial company during inquiry under Section 16. Section 22 deals with the suspension of legal proceedings, contracts, etc. Section 32 says that the provisions of S.I.C.A. will have overriding effect on the provisions of other Acts. The contention of the learned Senior Counsel for the petitioners is that in view of Section 32 of S.I.C.A. once when the petitioners company is declared as a sick industrial company, only B.I.F.R. can frame a scheme for running the company and the Government cannot pass an order under Section 10 of the act, the scheme of the act and the various provisions of S.I.C.A. referred above do not support the above contention of the learned Senior Counsel for the Petitioners. We must point out that Section 19A of S.I.C.A. only speaks of an interim relief for sick industrial companies during the pendency of inquiry under Section 16 and Section 22 of S.I.C.A. only deals with suspension of legal proceedings relating to winding of the industrial company or for execution, distrain or the like against any properties of the industrial company or for the appointment of a receiver in respect thereof during the pendency of an inquiry under Section 16 or the preparation of a scheme under Section 17. No. doubt, Section 32 of S.I.C.A. provides that the provisions of S.I.C.A. will have overriding effect on the similar provisions if any, provided in any other Act on the same subject. On a careful examination of the various provision of S.I.C.A. we are of the view that there is no provision in S.I.C.A. dealing with the relationship between the employer and employee and the disputes between the management and workmen. As rightly contended by the learned counsel for respondents 2 and 3 both the Acts, namely S.I.C.A. and the Industrial Disputes Act can harmoniously co-exist inasmuch as the said Acts operates in different areas and that the intendment and object of both the enactments are different. As observed by the Supreme Court in Life Insurance Corporation of India v. D.J. Bahadur and Ors. : (1981)ILLJ1SC . While examining the question as between the Industrial Disputes Act and the Life Insurance Corporation Act, which enactment is special and which is general, the peaceful co-existence of both legislations is best achieved, if that be feasible, by allowing to each its allotted field for play.
12. The next question we have to examine is as between the Industrial Disputes Act and S.I.C.A. which enactment is special and which is general. To consider this question, we have to bear in mind the scheme of the two enactments in the context of the specific controversy involved in this case between the parties. A perusal of the preamble to S.I.C.A. the scheme and the various provisions of S.I.C.A clearly goes to show that S.I.C.A does not deal with the relationship between labour and management and the particular problem of dispute between workmen and management or the investigation and adjudication of such disputes between workmen and management. S.I.C.A also does not deal with the dispute between workmen and their employer or the dispute between workman and workman. Therefore, we have no hesitation in holding that so far as industrial dispute between employer and employees is concerned whether it relates to a strike or lock-out or on the question of wages, etc. S.I.C.A. which is totally silent on workmen's disputes is a general statute and the Industrial Disputes Act is a special law which specifically deals with industrial disputes between workmen and management providing the machinery for the adjudication of such industrial disputes. As pointed out by the Supreme Court in Life Insurance Corporation of India v. D.J. Bhadur and Ors. (supra) the Industrial Disputes Act is a special statute devoted wholly to investigation and settlement of industrial disputes which provides definitionaily for the nature of industrial disputes coming within its ambit. It creates an infra-structure for investigation into solution of and adjudication upon industrial disputes. It also provides the necessary machinery for enforcement of awards and settlements. The object of the Industrial Disputes Act is the resolution of the Industrial disputes between workmen and management through specialised agency according to the procedure prescribed in the Act. Therefore with reference to industrial disputes which arise between workmen and management, it has to be held that the Industrial Disputes Act is a special law and S.I.C.A. which does not at all speak with specific reference to workmen is only a general law. However, S.I.C.A. may be a special law within its fields of operation, namely securing timely detection of sick and potentially sick companies owning industrial undertakings, the speedy determination by a Board of experts of the preventive, ameliorative, remedial and other measures which need be taken with respect to such companies and the expeditious enforcement of the measures so determined and for matters connected therewith or incidental thereto. The disputes between workmen and management are clearly beyond the orbit of and have no specific place in the scheme of S.I.C.A. and whenever there is such a dispute between employer and workmen, the provisions of Industrial Disputes Act have to be resorted to.
13. In Life Insurance Corporate of India v. D.J. Bahadur and Ors. (supra) the Supreme Court had to consider the question which of the Acts, namely, the Life Insurance Corporation Act, 1956 or the Industrial Disputes Act, 1947 is a general law and which is special law. The Apex Court considering the object and scheme of the two enactments referred above, held that in so far as industrial disputes, awards and settlements are the topic of controversy, the Industrial Disputes Act is a special law and prevail over the Life Insurance Corporation Act. While holding so the Apex Court observes thus:
'49. In determining whether a statute is a special or a general one, the focus must be on the principle subject matter plus the particular perspective. For certain purposes, an Act may be general and for certain other purposes it may be special and we cannot make distinction when dealing with finer points of law. In law, we have a cosmos of relativity, not absolutes-so-too in life. The I.D. Act is a special statute devoted wholly to investigation and settlement of industrial disputes which provides definitionally for the nature of industrial disputes coming within its ambit. It creates an infra-structure for investigation into solution of and adjudication upon industrial disputes. It also provides the necessary machinery for enforcement of awards and settlements. For alpha to omega the I.D. Act has one special mission - the resolution of industrial disputes through specialised agencies according to specialised procedures and with special reference to the weaker categories of employees coming within the definition of workmen. Therefore, with reference to industrial disputes between employers and workmen, the I.D. Act is a special statute, and the L.I.C. act does not speak at all with specific reference to workmen. On the other hand, its powers relate to the general aspects of nationalisation of management when private business are nationalised and a plurality of problems which, incidentally involve transfer of service of existing employees of insurers. The workmen quo workman and industrial disputes between workmen and the employer as such, are beyond the orbit of and have no specific or special place in the scheme of the L.I.C. Act. And whenever there was a dispute between workmen and management the I.D. Act machanism was resorted to. 50. What are we confronted with in the present case, so that I may determine as between the two enactments which is the special? The only subject which has led to this litigation and which is the bone of contention between the parties is an industrial dispute between the corporation and its workmen quo workmen. If we refuse to obfuscate by legal abracadabra and see plainly what is so obvious, the conclusion that flow, in the wake of the study I have made, is that vis-a-vis 'industrial disputes' at the termination of the settlement as between the workmen and the Corporation of the I.D. Act is a special legislation and the L.I.C. Act is a general legislation. Likewise, when compensation on nationalisation is the question, the L.I.C. Act is the special statutes. An application of the generalia maxim as expounded by English text-books and decisions leaves us in no doubt that the I.D. Act being special law. prevails over the L.I.C. Act which is but general law.
51. I am satisfied in this conclusion by citations but I content myself with a recent case where this conn taking a closely allied question came to the identical conclusion on U.P. State Electricity Board v. H.S. Jain : (1978)IILLJ399SC . The problem that arose there was as to whether the Standing Orders under the Industrial Employment (Standing Orders) Act, 1946. prevailed as against Regulations regarding the age of superannuation made by the Electricity Board under the specific power vested by Section 79(c) of the Electricity (supply) Act, 1948 which was contended to be a special law as against the Industrial Employment (Standing Orders) Act. This Court (a Bench of three Judges) speaking through Chinnappa Reddy, J., observed (supra) at 365-66.
The maxim 'Generalia Specilibus non derogant' is quite well-known. The rule flowing from the maxim has been explained in Mary Seward v. The Owner of the Veera Cruz., 1884 10 AC 50 as follows
'Now if anything be certain it is this, that where there are general words in a later Act capable of reasons and sensible application without extending them to subjects specially dealt with by earlier legislation, you are not to hold that the earlier and special legislation indirectly repealed, altered or derogated from merely by force of such general words, without any indication of a particular intention to do so.'
52. in J.K. Cotton Spinning and Weaving Mill Co. Ltd., v. State of U.P. 1981 I LLJ 540 the Court observed .
'The rule that general provisions should yield to specific provisions is not an arbitrary principle made by lawyers and Judges but springs from the common understanding of men and women that when some person gives two directions on covering a large number of matters in general and another to only some of them his intention is that these latter; directions should prevail as regards these while as regards all the rest the eariier direction should have effect, 'we have already shown that the Industrial Employment (Standing Orders) Act is a special Act dealing with a specific subject namely, with conditions of service enumerated in the Schedule of workmen in industrial establishments. It is impossible to conceive that Parliament sought to abrogate the provisions of the Industrial Employment (Standing Orders) Act embodying as they do hardwon and precious rights of workmen and prescribing as they do an elaborate procedure, including a quasi-judicial determination, by a general, incidental. provision, iike Section 79 (c) of the Electricity (supply) Act. It is obvious that Parliament did not have before it the Standing Orders Act when it passed the Electricity (supply) Act and Parliament never meant that the Standing, Orders Act should stand pro tanto repealed by Section 79 (c) of the Electricity Supply Act. We are clearly of the view that provisions of the Standing Orders Act, must prevail over Section 79(c) of the Electricity Supply Act, in, regard to mattes to which the Standing Orders Act applies.
I respectfully agree and supply the reasoning and the conclusion to the near identical situation before me and hold that the I.D. Act relates specially and specifically to industrial disputes between workmen and employers and the L.I.C. Act, like the Electricity (supply) Act, 1948, is a general statute which is silent on workmen's disputes, even though it may be a special legislation regulating the take-over of private insurance business.
53. A plausible submission was made by the appellants, which was repelled by the High Court, that the L.I.C. Act containing provisions regarding conditions of service of employees and they would be reduntant if the I.D. Act was held to prevail. This is doubly fallacious. For one thing, the provisions of Sections 11 and 49 are the usual general provisions giving a statutory corporation (like a municipality or university) power to recruit and prescribe conditions of service of its total staff- not anything special regarding 'workman'. This Court in Bangalore Water supply and Sewerage case : (1978)ILLJ349SC (7 Judges Bench) and long ago in D.N. Banerji v. P.R. Mukherjee and Ors. : [1953]4SCR302 (5 Judges Bench) has held that I.D. Act applied to workmen employed by those bodies when disputes arose. The general provision would still apply to other echelons and even to workmen if no industrial dispute was raised. Secondly, no case of redundant words arose because the corporation, like a University, employed not only workmen but others also and regulate their conditions of service, power was needed. Again, in situations where no dispute arose, power in the employer to fix the terms of employment has to be vested. This is a common provision of a general sort, not a particularised provision to canalise an industrial dispute.
14. In paragraph 54 of the above judgment, the Supreme Court observes thus:
'It is difficult for me to think that when the entire industrial field, even covering municipalties, universities, research councils and the like is regulated in the critical area of industrial disputes by the I.D. Act, Parliament would have provided an oasis for the Corporation where labour demands can be unilaterally ignored... To avoid absurdity and injustice by Judicial servitude to interpretative literality is a function of the Court and this leaves me no option but to hold that the I.D. Act holds where disputes erupt and the L.I.C. Act guides where other matters are concerned... These plural considerations lead me to the conclusion that the I.D. Act is a special statute when industrial disputes, awards and settlements are the topic of controversy, as here.
If we apply the ratio of the decision in Life Insurance Corporation of India v. D. J. Bahadur and Ors. (supra) to the facts of the present case, we have no hesitation in holding that in so far as the disputes which arise between workmen and management, whether it relates to strike or lock-out or payment of wages, etc., are concerned, the Industrial Disputes Act is a special law and must prevail over S.I.C.A. a general law intended for the purpose of securing timely detection of sick and potentially sick companies owning industrial undertakings and speedy determination by a Board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to such Companies, for all the reasons stated above, it has to be held that the Government has the power to pass the impugned order under Section 10(3) of the Act in respect of the petitioners company which is a sick industry governed by the provisions of S.I.C.A. Point Number 3 is answered accordingly.
Point Nos. 4 and 5
15. In view of our finding on merits on point No. 2 that the impugned G.O.(D) No. 1275, Labour and Employment Department, dated December 18, 1992 passed by the Government prohibiting the continuance of suspension of operations at the Madras Factory of the petitioners company is invalid and liable to be quashed on the ground that the said Government order does not satisfy the requirements of Section 10(3) of the Act and runs counter to the ratio of the decision of the Apex Court in Delhi Administration v. Workmen of Edward Keventers and Anr. (supra) and that the petitioners in Writ Petition 226 of 1993 are entitled to succeed on that ground alone, it is not necessary for us to deal with the questions raised in Point Numbers 4 and 5 which are technical in nature and also to refer to the various decisions cited by the counsel for both parties on those points.
Writ Petition No. 1656 of 1994
16. Mr, J.K. Sethi, learned counsel for the petitioners in Writ Petition 7656 of 1994 submitted in the first piace. that S.I.C.A is a special enactment dealing with sick industies and the Industrial Disputes Act is a general enactment dealing with labour, employees and management relationship , that once when the petitioners company has been declared as a sick industrial company within the meaning of S.I.C.A. it is governed only by provisions of S.I.C.A. which is a special enactment and therefore, G.O. (D) No. 1274 Labour and Employment Department, dated December 18, 1992 passed by the Government under Section 10(1)(d) of the Act referring the dispute to the Industrial Tribunal is without authority of law, in view of the overriding effect of S.I.C.A. and therefore, the said Government order is invalid and liable to be quashed. The above contention of Mr. Sethi, learned counsel for the petitioners cannot be countenanced, in view of our finding on Point No. 3 in writ Petition 226 of 1993, that the Industrial Disputes Act is a special law in so far as disputes between the management and the workmen are concerned and will prevail over S.I.C.A. While holding so, we have rejected a similar contention put forth on behalf of the petitioners in that case that the Government has no power to pass orders under Section 10(3) of the Act prohibiting the continuance of the lock-out by the management in the case of sick industrial company governed by the provisions of S.I.C.A. In view of our finding on point No. 3 in W.P. 226 of 1993 we reject the first contention of the learned counsel for the petitioners.
17. The second contention of Mr. J.K. Sethi, learned counsel for the petitioner in Writ petition 7656 of 1994 is, that the order of reference made by the Government under Section 10(1) of the Act in G.O. (D) No. 1274, Labour and Employment Department, dated December 18, 1992 is bad, because, such a reference under Section 10(1) of the Act cannot be made during the currency of a settlement. According to the learned counsel for the petitioners, the second advice of the special Deputy Commissioner of Labour dated January 12, 1991 is an extension of the first advice of the Commissioner of Labour dated April 22, 1989 in respect of 20% deferment of wages, that the representatives of the management and the union have singed the proceedings of the special Deputy Commissioner of the Labour dated January 12, 1991. Therefore, according to learned counsel for petitioners the said proceedings of the Special Deputy Commissioner of Labour, dated January 12, 1991 constitutes a binding settlement between the parties and that an order of reference cannot be passed by the Government during the currency of the second advice, dated January 12, 1991 in view of sections 18 and 19 of the Act. There is no merit in the above contention of the learned counsel for the petitioners. According to Section 2 of the Act 'settlement means a settlement arrived at in the course of conciliation proceedings......... wheresuch agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate Government and the conciliation officer. Rule 25 of the Tamil Nadu Industrial Disputes Rules, 1958 provides that the settlement arrived at in the course of conciliation proceedings or otherwise. shall be in form 'B'. Admittedly in the present case, the proceedings of the special Deputy Commissioner of Labour, Madras dated January 12, 1991 is only an advice and it is not in Form 'B' prescribed under rule 25 of the Tamil Nadu Industrial Disputes Rules, 1958. Therefore, we have no hesitation in holding that the second advice of the special Deputy Commissioner of Labour, Madras dated January 12, 1991 is not a settlement as defined in Sec, 2(p) of the Act and consequently Sections 18 and 19 of the Act have no application to the advice of the special Deputy Commissioner of Labor, Madras dated January 12, 1991. In these circumstances, we have no hesitation in rejecting the second contention of the learned counsel for the petitioners also.
18. For all the reasons stated above, we see no merit in W.P. 7656 of 1994 and it is liable to be dismissed.
19. In the result, (1) in view of our finding on point number 2 in writ Petition 226 of 1993, writ Petition No. 226 of 1993, is allowed and G.O.(D) No. 1276 Labour and Employment Department, dated December 18, 1992 as amended by G.O.(D) No. 208 Labour and Employment Department dated February 24, 1994 is quashed. (2) Writ Petition 7656 of 1994 is dismissed. However, there will be no order as to costs.