Holding

The appropriate Government’s power under section 10(1) of the Industrial Disputes Act is administrative and does not permit it to adjudicate the merits of the dispute; it must refer the dispute to an industrial tribunal.

Summary

The Telco Convoy Drivers Mazdoor Sangh, representing about 900 convoy drivers of Tata Engineering & Locomotive Co., demanded permanent status and facilities, asserting that the drivers were workmen of the company. The Deputy Labour Commissioner, relying on a 1973 Law Department opinion that no master‑servant relationship existed, refused to refer the dispute to an industrial tribunal under section 10(1) of the Industrial Disputes Act, 1947. After two dismissals of writ petitions by the Patna High Court, the Supreme Court examined whether the appropriate Government could decide the merits of the dispute—specifically, whether the drivers were workmen—while exercising its power under section 10(1). The Court held that the Government’s function under this provision is purely administrative; it may form an opinion on the existence of an industrial dispute but cannot adjudicate the dispute’s merits. Consequently, the Government’s refusal amounted to an unlawful adjudication, and the Court directed the State of Bihar to refer the matter to an appropriate industrial tribunal. The appeal was allowed, setting aside the High Court’s judgment.

Issues considered

Whether the appropriate Government, while exercising power under section 10(1) of the Industrial Disputes Act, 1947, can delve into the merits of an industrial dispute and decide if the parties are workmen.
Whether forming an opinion on the existence or apprehension of an industrial dispute is permissible for the Government under section 10(1).
Whether the refusal to make a reference on the ground that the convoy drivers are not workmen is a valid exercise of the Government’s power.

Legislation cited

Industrial Disputes Act, 1947s. 10(1), s. 12(5), s. 2(k)

Subjects

industrial disputesection 10(1)reference to industrial tribunalappropriate governmentadministrative functionadjudication of meritsworkmen definitionmaster‑servant relationship

Judgment

TELCO CONVOY DRIVERS MAZDOOR SANGH & ANR.
A
v. -~
STATE OF BIHAR & ORS.

APRIL 28, 1989

B [MURARI MOHON DUTT AND T.K. THOMMEN, JJ.)

Industrial Disputes Act, 1947: Sections JO and 12-Jndustrial
Dispute--Appropriate Government-Power to make a reference~
y
Nature of-Whether includes power to delve into merits of dispute- 1

c
Formation of opinion by Government-Whether dispute 'Exists or is
Apprehended'-Whether same thing as to adjudicate the dispute on its
merits-Court-When can direct the Government to make a reference.
-
The appellant-Telco Convoy Drivers Mazdoor Sangh, represen-
ted to the Tata Engineering & Locomotive Co. Lid. (TELCO) demand-
'r
ing that all convoy drivers should be given permanent status and
D facilities that are available lo the permanent employees of TELCO. The
Deputy Labour Commissioner refused lo make a reference under
section 10(1) of the Industrial Disputes Act, 1947 because of the opinion
of the Law Department that there was no relationship of master and
servant between TELCO and the convoy drivers.

E The appellant-Sangh filed a writ petition in the High Court pray-
ing for a writ of mandamus commanding the State llf Bihar lo refer the
+-·
dispute under section lO(l) of the Act. The High Court dismissed the
petition but granted liberty to the appellant-Sangh to reagitate the
•
matter before the appropriate Government.

F On a further representation also the Deputy Labour Commis-
sinner refnsed to make a reference under section 10(1) of the Act. '-'(
Again, the appellant-Sangh moved a writ petition in the High Court
which summarily dismissed the petition holding that the appellants had )...
failed to satisfy that they were employed by the TELCO. Hence this
appeal by Special leave. After the conclusion of the hearing, the Court
G being of the view that the Government should be given one more chance
to consider the question of making a reference, kept the appeal pending
and directed the Government to reconsider the question of referring the .,....-
dispute. Upon reconsideration also the Government refused to make a
reference under section 10(1) of the Act. On the question: whether an
appropriate Government exercising power to make a reference under
H section 10(1) of the Industrial Disputes Act, 1947 can delve into the
802
•
DRIVERS MAZDOOR SANGH v. STATE OF BIHAR 803
I

__) merits of the dispute and adjudicate upon the dispute itself.
A
Allowing the appeal and setting aside the judgment of the High
Court,

HELD: 1. In considering the question of making a reference
'j under section IO( I), the Government is entitled to form an opinion as to B
' lwhether an industrial dispute "exists or is apprehended". The forma-
rtion of opinion as to whether an industrial dispute "exists or is
apprehended" is not the same thing as to adjudicate the dispute itself on
- its merits. [807 A]

2. While exercising power under section 10(1) of the Act, the
function of the appropriate Government is an administrative function c
and not a judicial or quasi-judicial function, and in performing this
administrative function the Government cannot delve into the merits of
the dispute and take upon itself the determination of the tis, which
would certainly be in excess of the power conferred on it by section 10 of
the Act. [S07F] D

Ram Avtar Sharma v. State of Haryana, [1985] 3 S.C.R. 686;
M.I'. Irrigation Karamchari Sangh v. The State of M.P., [1985] 2
S.C.R. 1019 and Shambhu Nath Goyal v. Bank of Baroda, Jullundhur,
[197S] 2 S.C.R. 793 applied.
E
2.1 In the instant case, the dispute is as to whether the convoy
drivers are employees or workmen, of TELCO, that is to say, whether
there is relationship of employer and employees between TELCO and
the convoy drivers, the same cannot be decided by the Government in
',. exercise of its administrative function under section 10(1) of the Act.
Therefore, the State Government was not justified in adjudicating the F
~ said dispute. [807B, 807H, SOSA]

3. There may b~ exceptional cases in which the State Govern-
ment may come to a conclusion that the demands are either perverse
or frivolous and do not merit a reference. But the Government should
~--{ be very slow to attempt an examination of the demand with a view G
to declining reference and Courts will always be vigilant whenever
the Government attempts to usnrp the powers of the Tribunal for
adjudication of valid disputes, and that to allow the Government to
do so would be to render section IO and section 12(5) of the Act
nugatory. [SOMA-Cl '
H
804 SUPREME COURT REPORTS [1989] 2 S.C.R.

A M.P. Irrigation Karamchari Sangh v. The Staie of M.P., [19S5] 2 ~-
S.C.R. 1019 applied.

4. In the instant case, in view of the fact that the Government has
persistently declined to make a reference and even after reconsideration
has adjudicated the dispute itself, the dispute should be adjudicated by
B the Industrial Tribunal. [SOSE] Y,
The State of Bihar is directed to make a reference of the disput~
raised by the Telco Convoy Drivers Mazdoor Sangh to an appropriate
Industrial Tribunal under section 10(1) oftbe Act. [SOSH, S09A] -

C Sankari Cement Alai Thozhilalar Munnetra Sangam v. Govern-
ment of Tamilnadu, [19S3] 1 L.L.J. 460; Ram Avtar Sharma v. State of Y
Haryana, [19S5] 3 S.C.R. 6S6; M.P. Irrigation Karamchari Sangh v.
The State of M.P., [19S5] 2 S.C.R. 1019 and Nirmal Singh v. State of
Punjab, [19S4] 2 L.L.J. 396; applied.

D CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2534
of 1989.

From the Judgment and Order dated 15.1.1988 of the High -1--
Court in C.W.J.C. No. 1852of 1987.

E G.B. Pai, S.K. Sinha for the Appellants.

Shanti Bhushan, S. Sukumaran, D.N. Misra, S.B. Upadhyay and
B.B. Singh for the Respondents.

The Judgment of the Court was delivered by
f
DUTT, J. Special leave is granted. Heard learned Counsel for
the parties. ~--

The appellants, Telco Convoy Drivers Mazdoor Sangh,
Jamshedpur, and another, have preferred this appeal against the judg-
G ment of the Patna High Court whereby the High Court dismissed the
writ petition of the appellants challenging the order of the State
of Bihar refusing to make a reference of the disputes raised by the
appellants to the Industrial Tribunal under section 10 of the Industrial
Disputes Act, 1947, hereinafter referred to as "the Act".

H The appellant-Sangh represents about 900 convoy drivers. By a
DRIVERS MAZDOOR SANGH v. STATE OF BIHAR (DUTT, J.] 805
~·
letter of demand dated October 16, 1986 addressed to the General
A
Manager of the Tata Engineering & Locomotive Co. Ltd., Jamshed-
pur (for short "TELCO"), the Sangh demanded that permanent status
should be given by the management to all the convoy drivers, and that
they should also be given all the facilities as are available to the perma-
nent employees of TELCO on the dates of their appointment. The said
demand proceeds on the basis that the convoy drivers are all workmen B
-'f ~f TELCO. The dispute that has been raised in the said letter of
1 demand is principally whether the convoy drivers are workmen and/or

- employees of TELCO or not. In other words, whether there is rela-
tionship of employer and employees between TELCO and the convoy
drivers.
c
The Deputy Labour Commissioner by his letter dated February
'--( 26, 1979 informed the appellant-Sangh that in view of the opinion of
the Law Department of the year 1973 to the effect that there was no
relationship of master and servant between TELCO and the convoy
drivers, the demands of the convoy drivers did not come within the
purview of the Act and, accordingly, it was not possible to take any D
action in regard to the dispute of convoy drivers under the Act. The
appellant-Sangh being aggrieved by the said refusal to make a refer-
ence under section 10(1) of the Act, moved before the Ranchi Bench
--t of the Patna High Court a writ petition praying for a writ of mandamus
commanding the State of Bihar to refer the dispute under section 10(1)
of the Act. A learned Single Judge of the High Court, who heard the E
writ petition, took the view that the letter of the Deputy Labour Com-
missioner only referred to the Law Department's opinion of the year
1973 without indicating in what context and under what circumstances,
h'e rejected the demand for a reference. In that view of the matter, the
,'l'c learned Judge granted liberty to the Sangh to reagitate the mater
before the appropriate Government and expressed the hope that the J'
appropriate Government would consider the matter in a proper pers-
--1 pective in the light of the documents and the materials that would be
placed by the Sangh, in accordance with faw. The writ petition was
dismissed subject, however, to the observation and direction men-
tioned above.
-.; G
Pursuant to the liberty granted by the High Court, the Sangh
made a representation to the Government for a reference of the dis-
pute under section 10(1) of the Act. The Deputy Labour Commis-
sioner, Jamshedpur, by his letter dated November 6, 1986 gave the
same reply and refused to make a reference'.
H
806 SUPREME COURT REPORTS [1989] 2 S.C.R.

Again, the appellant-Sangh moved a writ petition before the /'-·
High Court and, as stated already, the High Court summarily dismis-
sed the same holding that tl\e appellants had failed to prima facie
satisfy that they were employed either by TELCO or by the Telco
Contractors' Association. Hence this appeal.

B It has been urged by Mr. Pai, learned Counsel appearing on
behalf of the appellants, that the Government exceeded its jurisdiction, ¥-
in purporting to decide the dispute raised by the appellant-Sangh i~

-
the said letter of demand. Counsel submits that in the facts and
circumstances of the case, the Government should have made a refer-
ence to the Industrial Tribunal under section 10(1) of the Act for the
C adjudication of the dispute of the convoy drivers and should not have
embarked upon the task of deciding the dispute on its merits through
the Deputy Labour Commissioner.

On the other hand, it has been vehemently urged by Mr. Shanti
Bhusan, learned Counsel appearing on benalf of TELCO, that the
D Government has the jurisdiction to consider whether any industrial
dispute exists or not and, in considering the same, as the Government
found that the convoy drivers were not even workmen of TELCO or,
in other words, there had been no relationship of master and servants
between TELCO and the convoy drivers, the Government refused to
make a reference of the dispute under section 10(1) of the Act. It is
+
E submitted that the refusal by the Government to make a reference was
perfectly within its jurisdiction inasmuch as, in the opinion of the
Government, there was no existence of any industrial dispute.

After conclusion of the hearing, we took the view that the
Government should be given one more chance to consider the ques-
F tion of making a reference and, accordingly, we by our order dated
March 30, 1989 directed the Government to reconsider the question of
referring the dispute raised by the convoy drivers to the Industrial
Tribunal under section 10 of the Act, keeping the appeal pending
before us.

13 The learned Counsel, appearing on behalf of the Government,
has produced before us an order dated April 13, 1989 of the Govern-
ment whereby the Government has, upon a reconsideration of the
matter, refused to make a reference under section 10( l) of the Act. In
refusing to make a reference, the Government has adjudicated the
dispute on its merits.
DRIVERS MAZDOOR SANGH v. STATE OF BIHAR {DUTT, J.] 807

-~ It is true that in considering the question of making a reference
A
under section 10(1), the Government is entitled to form an opinion as
to whether an industrial dispute "exists or is apprehended", as urged
by Mr. Shanti Bhusan. The formation of opinion as to whether an
industrial dispute "exists or is apprehended" is not the same thing as to
adjudicate the dispute itself on its merits. In the instant case, as
already stated, the dispute is as to whether the convoy drivers are B
_,- \employees or workmen of TELCO, that is to say, whether there is
,rrclationship of employer and employees between TELCO and the
convoy drivers. In considering the question whether a refen, ~

- should be made or not, the Deputy Labour Commissioner and/or the
Government have held that the convoy 5frivers are not workmen and,
accordingly, no reference can be made. Thus, the dispute has been
c
decided by the Government which is, undoubtedly, not permissible.

It is, however, submitted on behalf of TELCO that unless there
is relationship of employer and employees or' in other words, unless
those who are raising the disputes are workmen, there cannot be any D
existence of industrial dispute within the meaning of the term as
defined in section 2(k) of the Act. It is urged that in order to form an
opinion as to whether an industrial dispute exists or is apprehended,
one of the factors that has to be considered by the Government is
whether the persons who are raising the disputes are workmen or not
within the meaning of the definition as contained in section 2(k) of the
Act . E

•
Attractive though the contention is, we regret, we are unable to
accept the same. It is now well settled that, while exercising power
.•.
~·
under section 10( 1) of the Act, the function of the appropriate
Government is an administrative function and not a judicial or quasi- F
judicial function, and that in performing this administrative function
the Government cannot delve into the merits of the dispute and take
upon itself the determination of the lis, which would certainly be in
excess of the power conferred on it by section 10 of the Act. See Ram
Avtar Sharma v. State of Haryana, [1985) 3 SCR 686; M.P. Irrigation
Karamchari Sangh v. The State of M.P., [1985) 2 SCR 1019 and G
Shambhu Nath Goyal v. Bank of Baroda, Jullundur, [1978) 2 SCR 793.

Applying the principle laid down by this Court in the above
decisions, there can be no doubt that the Government was not justified
in deciding the dispute. Where, as in the instant case, the dispute is H,
808 SUPREME COURT REPORTS [1989] 2 S.C.R.

A whether the person raising the dispute are workmen or not, the same ~
cannot be decided by the Government in exercise of its administrative
function under section 10(1) of the Act. As has been held in M.P.
Irrigation Karamchari Sangh's case (supra), there may be exceptional
cases in which the State Government may, on a proper examination of
the demand, come to a conclusion that the demands are either
B perverse or frivolous and do not merit a reference. Further, the
Government should be very slo»: to attempt an examination of the
demand with a view to declining reference .and Courts will always ~
vigilant whenever the Government attempts to usurp the powers of the '

c
Tribunal for adjudication of valid disputes, and that to allow the
Government to do so would be to render section 10 and section 12(5)
of the Act nugatory.
-
We are, therefore, of the view that the State Government, which "f'
is the appropriate Government, was not justified in adjudicating the
dispute, namely, whether the convoy drivers are workmen or emp-
D loyees of TELCO or not and, accordingly, the impugned orders of the
Deputy Labour Commissioner acting on behalf of the Government
and that of the Government itself cannot be sustained.

It has been already stated that we had given one more chance to
the Government to reconsider the matter and the Government after
reconsideration has come to the same conclusion that the convoy
+-
E
drivers are not workmen of TELCO thereby adjudicating the dispute
itself. After having considered the facts and circumstances of the case
and having given our best consideration in the matter, we are of the
view that the dispute should be adjudicated by the Industrial Tribunal
and, as the Government has persistently declined to make a reference
F under section 10(1) of the Act, we think we should direct the Govern-
ment to make such a reference. In several instances this Court had to
direct the Government to make a reference under section 10( 1) when
the Government had declined to make such a reference and this Court
was of the view that such a reference should have been made. See
Sankari Cement Alai Thozhilalar Munnetra Sangam v. Government of
G Tamilnadu, [1983] 1 LLJ 460; Ram Avtar Sharma v. State of Haryana,
[1985] 3 SCR 686; M.P. Irrigation Karamchari Sangh v. The State of
M.P. [1985] 2 SCR 1019 and Nirmal Singh v. State of Punjab, [1984] 2
LLJ 396.

In the circumstances, we direct the State of Bihar to make a
H reference under section 10( 1) of the Act of the dispute raised by the
DRIVERS MAZDOOR SANGH v. STATE OF BIHAR [DUTT, J.] 809

-~ Telco Convoy Drivers Mazdoor Sangh by its letter dated October 16, A
· 1986 addressed to the General Manager TELCO (Annexure R-4/ 1 to
the Special Leave Petition), to an appropriate Industrial Tribunal
within one month from today.

The appeal is allowed and the judgment of the High Court and
the impugned orders are set aside. There will, however, be no order as B
-1 ~~costs.
'T.N.A. Appeal allowed.

-