A) ABSTRACT / HEADNOTE
The Supreme Court in The State of Bihar v. D. N. Ganguly & Others (1959) addressed whether the appropriate government has the power under Section 10(1) of the Industrial Disputes Act, 1947 to cancel or supersede an earlier reference to an Industrial Tribunal. The State of Bihar issued three notifications regarding disputes between Bata Shoe Company Ltd. and its workers. The first two notifications referred disputes about the dismissal of workmen to the tribunal. The third notification superseded the earlier ones, combined the disputes, and added the union as a party. The High Court quashed the third notification, holding that the government had no power to cancel the earlier references. The Supreme Court upheld this decision, ruling that neither Section 10(1) of the Industrial Disputes Act, 1947, nor Section 21 of the General Clauses Act, 1897, conferred such power upon the government. The Court emphasized the administrative nature of the government’s reference power and confirmed that once a reference is made, it is within the tribunal’s exclusive jurisdiction. The Supreme Court dismissed both appeals, clarifying the scope of the government’s authority under industrial dispute adjudications.
Keywords:
Industrial Disputes Act 1947, Government Power, Reference Cancellation, Industrial Tribunal, Administrative Act, Section 10(1), Section 21 General Clauses Act, Supreme Court of India
B) CASE DETAILS
i) Judgement Cause Title:
The State of Bihar v. D. N. Ganguly & Others
ii) Case Number:
Civil Appeals No. 358 and 359 of 1957
iii) Judgement Date:
22 August 1958
iv) Court:
Supreme Court of India
v) Quorum:
Venkatarama Aiyar J., Gajendragadkar J., A. K. Sarkar J.
vi) Author:
Justice Gajendragadkar
vii) Citation:
1959 SCR 1191
viii) Legal Provisions Involved:
Section 10(1), 10(5), 12(5), 17, 17A, 19, 20(3), 22, 23, 33 of the Industrial Disputes Act, 1947
Section 21 of the General Clauses Act, 1897
Articles 226 and 227 of the Constitution of India
ix) Judgments Overruled by the Case (if any):
Harendranath Bose v. Second Industrial Tribunal (1958) 2 LLJ 198
The Textile Workers’ Union, Amritsar v. The State of Punjab and Others, AIR 1957 Punj 255
x) Case is Related to which Law Subjects:
Industrial Law, Constitutional Law, Administrative Law
C) INTRODUCTION AND BACKGROUND OF JUDGEMENT
The conflict stemmed from industrial unrest at Bata Shoe Company Ltd., Dighaghat, Patna. Internal divisions among workers led to two competing groups: one led by Fateh Narain Singh and the other by Bari. The company faced a partial illegal strike. While one faction entered a settlement, another demanded reinstatement of dismissed workers. The Bihar Government initially referred disputes concerning dismissals of 31 and 29 workmen separately to the Industrial Tribunal through two notifications under Section 10(1) of the Industrial Disputes Act, 1947. However, influenced by subsequent representations, it superseded both earlier notifications with a third one, consolidating the disputes into a single reference. Both the employer and the concerned employees challenged this third notification before the Patna High Court under Articles 226 and 227. The High Court quashed the third notification, and the State of Bihar appealed to the Supreme Court.
D) FACTS OF THE CASE
The dispute originated when employees of Bata Shoe Co. split into rival factions. One group led by Fateh Narain Singh negotiated a settlement after a brief illegal strike, while another group led by Bari did not participate in this settlement. After conciliation efforts, the Bihar Government issued the first two notifications under Section 10(1), referring disputes about dismissals to the Industrial Tribunal. As proceedings advanced, further representations from Fateh Narain Singh led to the issuance of the third notification, which annulled the previous two references, consolidated the disputes, added the union, and referred the collective dispute back to the tribunal. The tribunal, following the government’s order, cancelled hearings of the earlier references. Aggrieved, both the employer and workmen filed writ petitions before the Patna High Court, which quashed the third notification and ordered the tribunal to continue proceedings on the original references.
E) LEGAL ISSUES RAISED
i) Whether the State Government has implied power under Section 10(1) of the Industrial Disputes Act, 1947, to cancel or supersede its earlier references during the pendency of adjudication before the tribunal?
ii) Whether Section 21 of the General Clauses Act, 1897, grants the government power to rescind such references?
F) PETITIONER/APPELLANT’S ARGUMENTS
i) The counsels for Petitioner / Appellant submitted that:
The government has inherent power to amend, supersede or cancel references issued under Section 10(1) by virtue of Section 21 of the General Clauses Act, 1897. They argued that these powers were administrative in nature and must include the incidental power to alter, vary, or rescind earlier orders for ensuring industrial harmony. The counsel emphasized that the third notification was issued bona fide, aiming to consolidate disputes and prevent conflicting decisions. They relied heavily on earlier Supreme Court decisions like Minerva Mills Ltd. v. Their Workmen, [1954] SCR 465 and Strawboard Manufacturing Co. Ltd. v. Gutta Mill Workers’ Union, [1953] SCR 439 to argue that the government retains flexibility in administering industrial references. They contended that public interest and fairness justified the supersession.
G) RESPONDENT’S ARGUMENTS
i) The counsels for Respondent submitted that:
The respondents argued that once a reference under Section 10(1) is made, the government’s role ceases. The tribunal exclusively assumes jurisdiction. Any subsequent government intervention to cancel, supersede or annul a valid reference is ultra vires. They asserted that Section 21 of the General Clauses Act, 1897 is inapplicable, as it cannot override the specific statutory framework of the Industrial Disputes Act. The respondents emphasized the statutory scheme promoting finality and stability in industrial adjudication. They also pointed out that the tribunal is empowered to incorporate any subsequent settlements into its awards, rendering government interference unnecessary. They relied on The State of Madras v. C.P. Sarathy, [1953] SCR 334 to substantiate that government actions under Section 10(1) are purely administrative.
H) RELATED LEGAL PROVISIONS
i) Industrial Disputes Act, 1947 (India Kanoon link: Industrial Disputes Act, 1947):
-
Section 10(1), 10(5), 12(5), 17, 17A, 19, 20(3), 22, 23, 33
ii) General Clauses Act, 1897 (India Kanoon link: General Clauses Act, 1897):
-
Section 21
iii) Constitution of India (India Kanoon link: Constitution of India):
-
Articles 226 and 227
I) JUDGEMENT
a. RATIO DECIDENDI
i)
The Supreme Court categorically held that Section 10(1) does not empower the government to cancel or rescind a reference once made. The Court emphasized that after the reference, the dispute falls within the exclusive jurisdiction of the tribunal under Section 20(3) of the Act. The power to refer is administrative and does not imply power to revoke. Further, the Court ruled that Section 21 of the General Clauses Act, 1897 does not apply as the statutory scheme and context of the Industrial Disputes Act exclude such implication. The Court observed that applying Section 21 would undermine the integrity of industrial adjudication and would be contrary to legislative intent.
b. OBITER DICTA
i)
The Court opined that even if parties settle disputes during tribunal proceedings, the tribunal may incorporate such settlements into its award without necessitating cancellation of the original reference. The Act prioritizes amicable settlements and industrial harmony, and the tribunal can judicially recognize settlements even in the absence of express provisions akin to Order XXIII Rule 3 of the CPC.
c. GUIDELINES
-
The government’s reference under Section 10(1) is an administrative act.
-
Once made, such reference cannot be rescinded by the government.
-
Section 21 of the General Clauses Act does not confer cancellation power where specific statutory scheme excludes it.
-
The tribunal retains jurisdiction until award becomes enforceable.
-
Settlements during pendency can be incorporated into awards by tribunals.
J) CONCLUSION & COMMENTS
The Supreme Court’s judgment in The State of Bihar v. D. N. Ganguly & Others serves as a landmark precedent delineating the contours of government authority under the Industrial Disputes Act. The Court meticulously interpreted the legislative intent, preserving the sanctity of tribunal adjudication by preventing arbitrary state interference post-reference. The judgment fortifies principles of administrative law, emphasizing statutory finality and the tribunal’s exclusive jurisdiction. It protects industrial stability by disallowing retrospective governmental alterations. Moreover, the Court’s exposition on the limited applicability of Section 21 of the General Clauses Act reaffirms judicial restraint in reading implied powers. The decision underscores the balance between administrative flexibility and judicial integrity in labor dispute resolutions.
K) REFERENCES
a. Important Cases Referred
i) Minerva Mills Ltd. v. Their Workmen, [1954] SCR 465
ii) Strawboard Manufacturing Co. Ltd. v. Gutta Mill Workers’ Union, [1953] SCR 439
iii) The State of Madras v. C. P. Sarathy, [1953] SCR 334
iv) The Textile Workers’ Union, Amritsar v. The State of Punjab, AIR 1957 Punj 255
v) Harendranath Bose v. Second Industrial Tribunal, [1958] 2 LLJ 198
vi) South Indian Estate Labour Relations Organisation v. The State of Madras, AIR 1955 Mad 45
vii) Iyyappen Mills (Private) Ltd., Trichur v. State of Travancore-Cochin, [1953] I LLJ 50
b. Important Statutes Referred
i) Industrial Disputes Act, 1947
ii) General Clauses Act, 1897
iii) Constitution of India
