Orient Paper Mills and anr. Vs. State of Orissa - Court Judgment

G.B. Pattnaik, J.

1. Petitioner No. 1 is a Company and petitioner No. 2 is its Vice-President and a shareholder. Petitioner No. 1. Company is a manufacturer of paper and paper-board and the paper industry was included in the First Schedule of the Industrial Disputes Act, 1947 (hereinafter referred to as the 'Act') as a public utility service by notification dated 13-7-1965 issued by the Government of Orissa in accordance with Section 2(n)(vi) of the Act. The Government of Orissa has been declaring the petitioner's industry to be a public utility service for a period of six months under each notification, the last such notification having been issued on 5-12-1991. The said notification has been annexed as Annexure-1. Before the expiry of the six months period, the petitioner made an application for a further declaration on 13-5-1392. The said application has been annexed as Annexu;e-2. The petitioner also requested the Labour Commissioner, Orissa, for making a recommendation in favour of the petitioner. The State Government in the Labour Deptt. called upon the Labour Commissioner by letter dated 17th June. 1992, annexed as Annexure-3, to submit a report on the labour situation which may warrant such declaration in respect of the petitioner's paper mills. The petitioner also wrote a letter to the Labour Commissioner indicating therein that the industry has always the risk of explosion in case there is abrupt stoppage of plants/equipments/installations and in view of public emergency and public interest, necessary declaration be made declaring the industry as a public utility service. The Assistant Labour Commissioner, Orissa, by his letter dated 26th of June. 1992, annexed as Annexure-6, to the Labour Commissioner, Orissa, recommended that the Labour Commissioner should move the Government to declare the Orient Paper Mills as a public utility service. While making such recommendation, the said Assistant Labour Commissioner indicated that the Orient Paper Mills is a major industry and labour unrest always creeps up in the industry. The labour situation though is peaceful, yet apprehension of unrest causing disruption in operational process may likely to affect adversely on production at any moment and, therefore, necessary declaration should be made. The Government, however, rejected the petitioner's application by letter dated 3-3-1993 annexed as Annexre-7, on the ground that the management is responsible for the continuing industrial unrest and, therefore, the petitioner has approached this Court assailing the aforesaid order of refusal passed by the State Government. It may be noticed at this stage that as the opposite party had not dispo- sed of the application of the petitioner, the petitioner had aporoached this Court earlier in O J.C. No 883 of 1993 and that application was disposed of on 11-2-1993 requiring the opposite party to pass final order and in accordance with the said direction, the impugned order under Annexure-7 has been passed.

2. Mr. Govind Das, the learned Senior Counsel appealing for the petitioners, raises the following contentions in assailing the order of the State Government refusing to issue the necessary declaration in favour of the petitioner :

(i) The impugned order is vitiated as it has not considered the most germane and relevant material which is the recommendation of the Assistant Labour Commissioner dated 26th of June, 1992 and such non-consideration vitiates the ultimate decision ;

(ii) Under Section 2(n)(vi) of the Industrial Disputes Act, the satisfaction of the State Government with regard to the existence of public emergency or public interest is the pre-condition for issuing a declaration in respect of any industry as a public utility service But the said satisfaction is an objective one and not an arbitrary, capricious or whimsical. The impugned order refusing to issue the declaration does not indicate any such objective satisfaction to have been arrived at and consequently, the order is bad in law ; and

(iii) The conclusion of the State Government that the management is mainly responsible for continuing industrial unrest is factually incorrect and non-existent and is also not a germano consideration for arriving at a finding as to the existence or non-existence of public emergency and public interest and, therefore, the order is vitiated.

The learned Additional Government Advocate, however, repelling the contentions raised by Mr. Das for the petitioners urges that though the order of the Government refusing to issue the declaration in favour of the petitioner does not indicate the detailed grounds on which the Government came to the conclusion that there does not exist any public emergency and public interest, yet the counter affidavit indicates the non-existence of the public interest and the said satisfaction of the Government being based on objective datas as indicated in the counter affidavit, the same cannot be interfered with by this Court in a writ of certiorary. He further contends that the impugned order passed by the State Government is an administrative order and until it is held to be mala fide, the same cannot be interfered with. Lastly, he urges that no error on the face of the order having been noticed, the High Court will not interfere with the decision of the Government.

3. In view of the rival submissions made at the Bar the first question that arises for consideration is whether the order of the State Government can be said to be a purely administrative order immune from interference in a writ of certiorari. The answer 1o this question must be in the negative. The power of the State Government to issue or not to issue a declaration in respect of any industry as a public utility service is derived from the provisions contained in Section 2(n)(vi) of the Industrial Disputes Act. The said power has to be exercised if the conditions precedent mentioned in the provision are fulfilled, the said conditions precedent being an existence of public emergency or existence of a public interest and the State Government must be satisfied about such existence of public emergency or public interest The satisfaction of the State Government Under Section 2(n)(vi) must be objective and cannot be subjective, arbitrary or whimsical. In that view of the matter, if the satisfaction is reached on matters irrelevant for consideration under v. 2 (n) (vi) or if the satisfaction is reached not on any objective datas, then that satisfaction has to be interfered with by the High Court in a writ of certiorari. Consequently, we are unable to accept the contention of the Seamed Addl. Government Advocate that the order in question is a purely administrative order immune from scrutiny by this Court.

4. The next question that arises for consideration is whether the satisfaction of the State Government and the consequential order emanating from the State Government under Annexure-7 must be held to be vitiated for non-consideration of the recommendation of the Assistant Labour Commissioner, In this context, it must be borne in mind that there is no dispute that 'paper' has been specified in the first schedule by the appropriate Government and the petitioner not by manufacturing paper is an 'industry' within the meaning of Section 2(i) of the Act and entitled to be declared as a public utility service, provided the appropriate Government is satisfied that public emergency or public interest requires to make such declaration. The Assistant Labour Commissioner who is an officer of the Labour Department in the field had made a positive recommendation in favour of the petitioner indicating therein that the Orient Paper Mills being a major industry, and labour unrest having always creeped up and disruption of operational process would adversely affect the production and manufacture of paper at any moment and, therefore, the said Orient Paper Mills should be declared as a public utility service. Non-consideration of the aforesaid material by the appropriate Government in arriving at the satisfaction vitiates the satisfaction as well as the ultimate order passed on such satisfaction. There cannot be any manner of doubt that if an authority derives a satisfaction with regard to the existence or non-existence of public emergency or public interest by ignoring the most vital document from consideration, then it would be the plainest duty of the High Court in a writ of certiorari to set aside the said satisfaction and conclusion of the authority. In this view of the matter, we unhesitatingly accept the submission of Mr. Das for the petitioners on this score and hold that the order of the State Government under Annexure-7 is vitiated on account of non-consideration of the recommendation of the Assistant Labour Commissioner in Annexure-6.

5. Coming to the second contention of Mr. Das, the learned counsel for the petitioners, it would be appropriate for us to extract Section 2(n)(vi) of the Industrial Disputes Act :

'2. Definitions-In this Act, unless there is anything repugnent in the subject or context ;

xx xx xx

(n) 'public utility service' means

xx xx xx

(vi) any industry specified in the First Schedule which the appropriate Government may, if satisfied that public emergency or public interest so requires, by notification in the Official Gazette, declare to be a public utility service for the purposes of this Act, for such period at may be specified in the notification :Provided that the period so specified shall not, in the first instance, exceed six months but may, by a like notification, be extended from time to time, by any period not exceeding six months, at any one time, if in the opinion of the appropriate Government, public emergency or public interest requires such extension.'

Though the Act was enacted providing the machinery and procedure for quick investigation and settlement of industrial disputes and the provisions of the Act are beneficial legislations for the workmen, but in the larger interest of the society certain provisions have bean engrafted in the said Act containing certain powers on the appropriate Government in case of public utility services. Once the appropriate Government on consideration declares a particular industry to be a public utility service, then certain liability accrues under the statute. Though such a discretionary power has been conferred upon the State Government and on such a declaration being made some rights of the workmen are curtailed, but bearing in mind the existence of public emergency or public Interest, such power has been conferred on the appropriate Government. The said power, therefore, has to be exercised bona fide and or being satisfied about the existence of public emergency or public interest. If the State Government comes to any conclusion on the basis of its satisfaction which is not arrived at on objective datas, then the satisfaction itself gets vitiated and the order becomes vulnerable. On examining the impugned order of refusal passed by the State Government under Annexure-7, we do not find with regard to the objective datas on the basis of which a ,Government could arrive at the satisfaction that public emergency or public interest does not require to declare the petitioner's industry to be a public utility service. It is in this connection to be borne in mind that the petitioner's industry has been obtaining such declaration as a public utility service for several years until the last declaration was issued on 6-12-1991 for a period of six months. In this view of the matter, the satisfaction of the State Government having been reached not on any objective datas, and, in fact, the State Govern- ment not having recorded any finding that there does not exist any public interest or public emergency, the exercise of power Under Section 22(n)(vi) of the Act is vitiated and, therefore, the order under Annexme-7 cannot be sustained.

6. So far as the last contention of Mr. Das is concerned, the learned counsel places reliance on the decision of the Industrial Tribunal in I.D. Case No. 7 of 1983 as well as the letter of the District Labour Officer dated 25-10-1991, annexed as Annexure-8, and also the decision of the Sub-Collector, Jharsuguda, dated 17-7-1992, annexed as Annexure-9, to establish that the conclusion of the State Government that the management is responsible for industrial unrest is factually in- correct and is belied by the aforesaid documents. Undoubtedly, the aforesaid documents support Mr. Das's contention to a great extent, but we need not express any final opinion on the same, as in view of our conclusions on the other contentions, the impugned order of the State Government cannot be sustained.

7. In the premises, as aforesaid, we quash the order of the State Government to apply its mind to the actual materials on record and pass appropriate orders bearing in mind the observations made by us in. this judgment. The writ application is thus allowed. There will, how ever be no order as to costs.

B.N. Dash, J.

8. I agree.