A) ABSTRACT / HEADNOTE

The case concerns the authority of an Industrial Tribunal under the Industrial Disputes Act, 1947, particularly Section 11(7), to direct an employer to pay traveling and halting allowances to worker representatives during ongoing adjudication proceedings. The Punjab National Bank challenged an order issued by the Industrial Tribunal directing it to bear such costs. The Supreme Court, through a reasoned analysis, ruled that no such power existed under the statute and held that costs should be awarded judicially after the conclusion of proceedings, not in advance. The judgment critically assessed practices in Industrial Tribunals and rejected the precedent that allowed the advance payment of costs. It emphasized that discretion under Section 11(7) must align with principles of reason and justice.

Keywords: Industrial Tribunal, Discretion of Tribunal, Costs, Section 11(7) Industrial Disputes Act, Judicial Discretion, Advance Payment of Costs

B) CASE DETAILS

i) Judgement Cause Title:
Punjab National Bank Ltd. v. Sri Ram Kanwar, Industrial Tribunal, Delhi

ii) Case Number:
Civil Appeal No. 134 of 1955

iii) Judgement Date:
December 20, 1956

iv) Court:
Supreme Court of India

v) Quorum:
Bhagwati, Venkatarama Aiyar, B.P. Sinha, and S.K. Das, JJ.

vi) Author:
Justice S.K. Das

vii) Citation:
AIR 1957 SC 597; 1957 SCR 222

viii) Legal Provisions Involved:

• Industrial Disputes Act, 1947 – Section 11(7) (link)

• Code of Civil Procedure, 1908 – Section 35 (link)

ix) Judgments Overruled by the Case (if any):

• Disapproval of Certain Banking Companies v. Their Workmen, (1952) 2 LLJ 54 (link)

x) Case is Related to which Law Subjects:
Labour and Industrial Law, Civil Procedure, Judicial Discretion

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The Punjab National Bank (PNB) faced an industrial dispute regarding the absorption of Bharat Bank employees. The Industrial Tribunal appointed for adjudication, presided by Sri Ram Kanwar, passed an interim order directing PNB to pay traveling and halting allowances to worker representatives coming from different parts of India. This order was challenged by PNB, raising concerns about the Tribunal’s jurisdiction under the Industrial Disputes Act, 1947. The case questioned the extent of a Tribunal’s discretion over costs under Section 11(7), evaluating whether interim cost impositions violated principles of fairness, justice, and statutory interpretation.

D) FACTS OF THE CASE

The Government of India referred a dispute regarding the service conditions and absorption of Bharat Bank employees into Punjab National Bank to an Industrial Tribunal.
During preliminary proceedings, a federation representing PNB employees requested two orders: first, giving publicity to proceedings; second, mandating PNB to pay traveling and halting allowances to representatives from various unions.
The Tribunal conceded no direct statutory basis but relied on alleged general practices among Industrial Tribunals.
It directed PNB to bear travel costs (2nd class rail fare) plus ₹10 daily halting allowance for each representative from twelve unions.
PNB contested this order, estimating a burden of ₹2500 per hearing day.
Their challenge before the Punjab High Court failed initially, prompting special leave to appeal before the Supreme Court.

E) LEGAL ISSUES RAISED

i) Whether an Industrial Tribunal has jurisdiction under Section 11(7) of the Industrial Disputes Act, 1947, to order one party to bear costs in advance of adjudication, specifically traveling and halting expenses of worker representatives.

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The counsels for Petitioner / Appellant submitted that:

PNB argued that the Industrial Tribunal exceeded its authority by directing interim payments.
They pointed out that Section 11(7) permitted awarding costs only at the conclusion of proceedings, not during them.
The order lacked any statutory backing and rested upon an inconsistent and unrecognized practice.
They argued that advance cost awards penalized the employer irrespective of the eventual outcome, violating fairness.
They further asserted that such orders encouraged frivolous disputes, distorting the legislative intent behind the Industrial Disputes Act, 1947.
Reliance was placed upon Kirloskar Brothers Ltd. v. Their Workmen, (1952) 2 LLJ 557 (link) where similar expenses were denied.
It was emphasized that the Tribunal’s discretion under Section 11(7) must be judicial and rational, referring to Susannah Sharp v. Wakefield (1891 AC 173) for principles on judicial discretion.

G) RESPONDENT’S ARGUMENTS

i) The counsels for Respondent submitted that:

The workers’ representatives submitted that Section 11(7) endowed Tribunals with wide discretionary powers over costs.
They invoked past practices where Industrial Tribunals directed employers to bear such expenses to enable proper worker representation.
They relied heavily on Certain Banking Companies v. Their Workmen, (1952) 2 LLJ 54 (link) which recognized the Tribunal’s power to facilitate access to justice for workmen.
They argued that the compulsory nature of industrial adjudication necessitated financial support for union representatives to ensure a fair hearing.
They interpreted the concluding part of Section 11(7) to imply that costs could be awarded even during pending proceedings.

H) RELATED LEGAL PROVISIONS

i)

• Industrial Disputes Act, 1947 – Section 11(7): Discretion to award costs post-proceeding, subject to rules (link).

• Code of Civil Procedure, 1908 – Section 35: Costs discretion by Civil Courts (link).

• Order 32 Rule 4(4) CPC: Cost management for minor’s guardian (link).

I) JUDGEMENT

a. RATIO DECIDENDI

i)
The Supreme Court ruled that Section 11(7) of the Industrial Disputes Act, 1947, does not empower a Tribunal to direct advance payments of costs during pending proceedings.
Costs under the statute refer to post-proceeding awards based on the outcome, not interim burdens on a party.
The Tribunal’s discretion is judicial and must be exercised according to law and principles of fairness, not according to whim or benevolence.

b. OBITER DICTA 

i)
The Court remarked that reliance on “social justice” arguments should not lead to practices that arbitrarily penalize employers.
Industrial adjudication should balance both employer and employee interests without prejudging disputes financially.

c. GUIDELINES 

i)

• Tribunals must avoid directing advance cost payments.

• Tribunal discretion under Section 11(7) must align with judicial principles of reason, fairness, and justice.

• Industrial adjudication procedures must uphold neutrality, avoiding financial burdens until final disposition.

J) CONCLUSION & COMMENTS

The Supreme Court’s judgment in Punjab National Bank Ltd. v. Sri Ram Kanwar fortified the interpretation that judicial discretion in awarding costs must operate post-adjudication.
The decision corrected an erroneous practice among Industrial Tribunals that imposed advance financial liabilities on employers.
It reinstated balance and neutrality within industrial disputes, respecting the statutory framework.
It emphasized that principles of fairness must prevail over abstract notions of “social justice” when allocating litigation expenses.

K) REFERENCES

a. Important Cases Referred

i) Kirloskar Brothers Ltd. v. Their Workmen (1952) 2 LLJ 557 (link) [1]
ii) Certain Banking Companies v. Their Workmen (1952) 2 LLJ 54 (link) [2]
iii) Associated Cement Companies Ltd. v. Workmen (1953) 1 ICR Bom 292 (link) [3]
iv) Jeevan Textile Mills, Hyderabad v. Their Workmen (1956) 1 LLJ 423 (link) [4]
v) Susannah Sharp v. Wakefield (1891) AC 173 [5]
vi) Ex parte Snow, In Re Sherwell (1879) Weekly Notes 22 [6]

b. Important Statutes Referred

i) Industrial Disputes Act, 1947 – Section 11(7) (link) [7]
ii) Code of Civil Procedure, 1908 – Section 35 (link) [8]
iii) Order 32 Rule 4(4) CPC (link) [9]