Holding

An order under Section 10 of the Industrial Disputes Act is an administrative order; the Government's subjective satisfaction that the employee is not a workman suffices, and a mandamus directing a reference is impermissible.

Summary

Ajit Kumar Barat, a Joint Secretary of the Indian Tea Association, was dismissed for refusing a transfer. He sought relief under Section 12 of the Industrial Disputes Act, 1947, and a failure report recommended that the dispute over whether he was a "workman" be referred to an industrial tribunal. The West Bengal Government refused to make a reference, stating that Barat was part of management and not a workman, and the High Court directed the Government to refer the matter. On appeal, the Supreme Court held that an order under Section 10(1) of the Act is an administrative act based on the Government's subjective satisfaction and is not subject to detailed judicial scrutiny. The Court found that the Government had correctly considered the employee's salary, allowances and duties before concluding he was not a workman, and therefore the High Court's mandamus was erroneous. Consequently, the appeal was allowed and the High Court's order set aside.

Issues considered

Whether the appropriate Government can refuse to make a reference under Section 10 of the Industrial Disputes Act on the ground that the employee is not a workman.
Whether an order made by the Government under Section 10(1) is an administrative order immune from detailed judicial review.
Whether a writ of mandamus can be issued to compel the Government to make such a reference.

Legislation cited

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

Subjects

Industrial Disputes Actworkman definitionSection 10 referenceadministrative ordermandamuslabour lawsubjective satisfactionjudicial review

Judgment

THE SECRETARY, INDIAN TEA ASSOCIATION A
v.
AJIT KUMAR BARAT AND ORS.

FEBRUARY 14, 2000

(G.T. NA.."lAVATI AND S.N. PHUKAN, JJ.] B

Labour Laws :

Industrial Disputes Act, 1947-Section JO r/w. s.12(5)(1)-R.efer-
ence-Subjective satisfaction of appropriate Government-Scope-Refusal to
refer the mattei--Powers of Court to interfere.
c
Respondent 1 employed as Joint Secretary of appellant Association,
was dismissed from service for disobeying an order of transfer. Concilia·
tion proceedings u/s. 12 of the Industrial Disputes Act, 1947 were held and
a failure report was submitted, recommending a reference. The Govern· D
ment regretted its inability to make a reference as respondent 1 was not a
wor!unan. In wdt proceedings filed by respondent, Single Judge of the
High Court directed the appropriate Government to make a reference as
to whether respondent 1 was a workman. Hence this appeal.

The appellant submitted that while discharging its function u/s. E
10(1) of the Act, Government was performing an administrative act, there-
fore, court could not hold that the refusal to refer the matter was bad.

Allowing the appeal, this Court

HELD : 1.1. The appropriate Government would not be justified in F
making a reference under Section 10 of the Industrial Disputes Act, 1947,
without satisfying itself on the fact and circumstances brought to its notice
that an industrial dispute exists or apprehended and if such a reference
is made it is desirable wherever possible, for the government to indicate
the nature of dispute in the order of reference. (791-G] G
1.2. The order of the appropriate Government making a reference
under Section 10 of the Act is an administrative order and not a judicial
or quasi-judicial one and the court, therefore, cannot canvass the order of
the reference closely to see if there was any material before the Government
to support its conclusion, as if it was a judicial or quasi-judicial order; an H
787
788 SUPREME COURT REPORTS (200011 S.C.R.

A order made by the appropriate government under Section 10 of the Act
being an administrative order no lis is involved, as such an order is made
on the subjective satisfaction of the Government; if it appears from the
reasons given that the appropriate government took into account any
consideration irrelevant or foreign material, court may in a given case
B consider the case for a writ of mandamus. It would, however, be open to a
party to show that what was referred by the Government was not an
industrial dispute within the meaning of the Act. [791-H; 792-A-D]

1.3. Before malting a reference under Section 10 of the Act, the ap-
propriate Government has to form an opinion whether an employee is a
C workman and thereafter has to consider as to whether an industrial dispute
exists or is apprehended. In the present appeal the State Government rightly
approached the question whether respondent l was a workman. Unless this
condition is satisfied no reference can be made. [793-E-F]

1.4. While deciding the question whether respondent 1 was a workman,
D it took into cm1sideration the salary and allowances of respondent 1 drawn
at the relevant time and also the nature of work. Respondent 1 was function-
ing as a Joint Secretary at the relevant time and his duties were to deal with
all legal matters nnd court proceedings, labour and land laws and publica-
tions. Respondent 1 had power to sanction expenses incurred in litigation by
E the appellant. The State Government rightly formed the opinion that
respondent 1 was not a workman. [793-H; 794-A-B]

1.5. Respondent 1 had not been able to show that while passing the
above administrative order, State Government took into consider:ition any
irrelevant or foreign matter. TI1e above administrative order was passed
F by the State Government after taking into consideration material available
on record and therefore, it could not be faulted. [794-C-D]

State of Mad. v. C.P. Sarathy & Anr., (1953] 4 SCR 334; Prem Kakkar
v. State of Haryana & Anr., [1976] 3 SCR 1010; Sultan Singh v. State of
G Haryana & Anr., [1996] 2 sec 66, relied on.

Abad Dairy Dudh Vitram Kendara Sanchalak Manda/ v. Abad Dairy
& Ors., (1993) III LW (Suppl.) 1993, distinguished.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1041 of
H 2000.
)'

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SECl'. INDIAN TEA ASSOCIATION v. AJIT KUMAR BARAT [PHl:KAN, J.] 789

From the Judgment and Order dated 17.3.99 of the Calcutta High A
Court in A.F.O. No. 510 of 1998.

Dipankar Gupta, Avijit Choudhary, A.K. Dhar, Ms. Sangeeta Man-
dal and Ms. Varsha Chaudhary for the Appellant.

Ajit K. Barat, Caveator-in-person for the Respondent. B
Ms. A. Subhashini for the Respondent in Nos. 2, 3, 5.

The Judgment of the Court was delivered by

PHUKAN, J. Leave granted. c
This appeal is directed against the judgment and Order dated 17th
March, 1999 of the Calcutta High Court in appellate jurisdiction whereby
order of the learned single Judge dated 24th July, 1998 passed in W.P. No.
155 of 1998 was affirmed. The learned single Judge directed the State
Government to make reference under Industrial Disputes Act, 1947. D
Briefly stated facts are as follows :

Respondent No. 1 was employed as Joint Secretary of India Tea
Association - appellant. On 27th November, 1995, respondent No. 1 was
dismissed from service for disobeying an order of transfer. He complained E
of his dismissal to Labour Commissioner, Government of West Bengal.
Conciliation proceedings under Section 12 of the Industrial Disputes Act,
1947 (for short the Act) were held and appellant submitted its comments
stating that respondent No. 1 was not a workman. A failure report dated
2nd July, 1997 was submitted by the Joint Labour Commissioner recom- p
mending a reference, as according to him, the question whether respondent
No. 1 was a workman required adjudication. The Government did not act,
therefore, respondent No. 1 moved Calcutta High Court. The High Court
directt:d the Government to take a decision under Section 12(5) of the Act
within the time fixed. By order dated 14th July, 1998 the Government
communicated its decision in writing wherein it regretted its inability to G
make a reference as respondent No. 1 was not a workman. Again respon-
dent No. 1 moved the High Court against the said order of State Govern-
ment. The learned single Judge directed the appropriate Government to
make a reference as to whether the respondent No. 1 was a workman. The
appeal filed by the appellant was dismissed by the impugned judgment and H
790 St:PREME COURT REPORTS [2000] 1 S.C.R.
A the State Government was directed to make an appropriate reference,
keeping in view the nature of the dispute raised by respondent No. l.
Hence this appeal.

Mr. Dipankar Gupta, learned counsel for tht: appellant relying on
the decision of this Court in State of Madras v. C.P. Sarathy and Anr., (1953)
B 4 SCR 334 has urged that while discharging its function under Section 10(1)
of the Act, Government was performing an administrative act, therefore,
Court could not have come lo the finding that the refusal to refer the matter
was bad. We quote below the relevant paragraph of the judgement :

c "This is, however, not to say that the Government will be justified
in making a reforence under Section 10(1) without satisfying itself
on the facts and circumstances brought to its notice that an
industrial dispute exists or is apprehended in relation to an estab-
lishment or a definite group of establishments engaged in a par-
D ticular industry. and it is also desirable that the Government
should, wherever possible, indicate the nature of the dispute in the
order of reference. But, it must be remembered that in making a
reference under section 10(1) the Government is doing an ad-
ministrative act and the fact that it has to form opinion as to the
factual existence of an industrial dispute as a preliminary step to
E the discharge of its function does not make it any the less ad-
ministrative in cuaracter. The Court cannot therefore, canvass the
order of reference closely to see if there was any material before
the Government to support its conclusion, as if it was a judicial or
qua51-judic1al determination. No doubt, it will be open to a party
F seeking to impugn th..: resulting award to show that what was
referred by the Government was not an industrial dispute within
the meaning of the Act, and that, therefore, the Tribunal had, no
jurisdiction to make the award. But, if the dispute was an industrial
dispute as defmed in the Act, its factual existence and the ex-
pediency of making a reference in the circumstances of a particular
G case are matters entirely for the Government to decide upon, and
it will not be competent for the Court to hold the reference bad
and quash the proceedings for want of jurisdiction merely because
there was, in its opinion, no material before the Government on
which it could have come to an affirmative conclusion on those
H matters."
SECY.J:-;DIANTEAASSOCIATIONv. AJITKCMARBARAT[PHUKAN,J.) 791

We may also rder to the decision of this Court in Prem Kakar v. State A
of Haryana and Anr., (1976) 3 SCR 1010. In that case a question arose
whether an employee was a workman. The Government informed the
workman that his case was not covered by the definition of the term
"workman" under the Act, therefore, refused to make a reference. The
workman approached the High Court for writ of mandamus which was
B
dismissed. This Court was approached and the appeal was dismissed. In
appeal it was contended before this Court that the question whethtr an
employee was a workman is a disputed question of facts and law and,
thtrefore, could only be decided by Labour Court on a reference and not
by the State Government while exercising its powers under Section 12(5)
of the Act, which was rejected. The Court also held that the order of the c
Government acting under Section 10(1) read with Section 12(5) of the Act
passed after subjective satisfaction is an administrative order and not a
judicial or a quasi-judicial one. It was also held that in entertaining a writ
of mandamus against such an order the Court does not sit in appeal and
is not entitled to consider the propriety ot the satisfactory character of the D
reasons. However, if it appears from the reasons given in the order that
the appropriate government has taken into account any consideration
which is irrelevant or foreign, then the court may in a given case consider
the case of writ of mandamus.

In Sultan Singh v. State of Haryana & Anr., [1996] 2 SCC 66, this E
Court held that an order issued under Section 10 of the Act is an ad-
ministrative order and the Government is entitled to go into the question
whether industrial dispute exists or is apprehended and it will be only a
subjective satisfaction on the basis ol material on record and being an
admini~trative order no !is is involved.
F
The law on the point may briefly be summarized as follows :

1. The appropriate Government would not be justified in making a
reference under Section 10 of the Act without satisfying itself on the facts
and circumstances brought to its notice that an industrial dispute exists or G
apprehended and if such a reference is made it is desirable wherever
possible, for the government to indicate the nature of dispute in the order
of reference;

2. The order of the appropriate Government making a reference
under Section 10 of the Act is an administrative order and not a judicial H
792 SUPREME COURT REPORTS [2CC0] 1 S.C.R.
A or quasi-judicial one and court, therefore, cannot canvass the order of the
reference closely to see if there was any material before the Government
to support its conclusion, as if it was a judicial or quasi judicial order;

3. An order made by the appropriatt: government under Section 10
of the Act being an administrative order no lis is involved, as such an order
B is made on the subjective satisfaction of the Government;

4. If it appears from the reasons given that the appropriate govern-
ment took into account any consideration irrelevant or foreign material,
the court may in a given case wnsider the case for a writ of mandamus
and;
c
5. It would, however, be open to a party to show that what was
referred by the Government was not an industrial dispute within the
meaning of the Act;

We extract below the order of the State Government, which is
D
speaking one :

"I am directed to say that in terms of the Hon'ble High Court's
order dated 24.11.1997 in Writ Petition No. 22878 (w) of 1997 in
the case of Shri Ajit Kumar Barat Versus State of West Bengal
E Government has examined the matter in details.

After examination, it reveals that you were first appointed as
Assistant Secretary in the Indian Tea Association and subsequently
promoted to the post of Joint Secretary. Besides the ha~ic pay you
are given child allowance h<mse rent subsidy, Furnishing allowance,
F House maintenance allowance, Transport subsidy, reimbursement
of Fuel and Electricity charges, Entertainment expenses, reimbur-
sement of servant's wages, monthly club subscription, Leave Travel
Allowance and reimbursement of Hospitality Expenses, Yours
duties also included power of sanction of expenses on behalf of
Indian Tea Association.
G
So your pay and perquisites and the status enjoyed by you in the
Organisation and also the power of sanction of expenses suggest
that you were a part of the management. Hence you cannot be'
treated as a workman within tlie purview of the Industrial Disputes
H Act.
'
/

SECY.INDIANTEAASSOCIATIONv. AJITKl 1MARBARAT[PHUKAN,J.] 793

Government, therefore, regrets its inability to refer your dispute A
to any Industrial Tribunal/Court under Section 12(5) of the In-
dustrial Disputes Act, 1947."

The appropriate Government would be justified in making a refer-
ence under Section 10 of the Act, if it is satisfied on the facts and
circumstances brought to its notice that an industrial dispute exists or is B
apprehended and "industrial dispute" as per clause (k) of Section 2 of that
Act means, inter alia a dispute or difference between employees and
employers, or between employers and workmen. Clause (s) of Section 2 of
the Act defines "workman" but does not include any such person -
c
(i) .......... .

(ii) ......... ..

(iii) who is employed mainly in a managerial or administrative
capacity; or D

(iv) who, being employed in a supervisory capacity, draws wages
exceeding one thousand six hundred rupees per mensem or exercise, either
by the nature of the duties attached to the office or by reason of the powers
vested in him, functions mainly of a managerial nature.
E
Before making a reference under Section 10 of the Act the ap-
propriate Government has to form an opinion whether an employee is a
workman and thereafter has to consider as to whether an industrial dispute
exists or is apprehended.
F
In the present appeal we find that the State Government rightly
approached the question whether respondent No. 1 was a workman. Unless
this condition is satisfied no reference can be made.

From the order of the State Government we fmd that while deciding
the question whether respondent No. 1 was a workman, it took into G
consideration the salary and allowances of respondent No. 1 drawn at the
relevant time and also the nature of work. Respondent No. 1 who has
appeared in person did not dispute the salary and allowances etc. as
indicated in the order of the Government but urged that his responsibilities
were neither supervisory nor managerial in nature. H
794 SUPREME COURT REPORTS [2000] 1 S.C.R .

.A Mr. Gupta, learned senior counsel appearing for the appellant has
drawn our attention to the circular dated 30th March 1994 issued by the
appellant-association. This circular indicates duties. of respondent No. 1
who was functioning as a Joint Secretary at the relevant time and we find
his duties were to deal with all legal matters and proceedings, labour and
B land laws and publications (Labour legislations Labour welfare). We also
find from the records that respondent No. l had powt:r to sanction expen-
ses incurred in litigation by the appdlant. On the above matt:rials on record
the State Government rightly formed the opinion that respondi.:nt No. 1
was not a workman.

C Respondent No. 1 has not been ablt to show that while passing the
above administrative order, State Government took into consideration any
irrelevant or foreign matter. We, therefore, hold that the above administra-
tive order was passed by the State Government after taking into considera-
tion material available on record and it could not be faulted.

D Mr. Barat has urged that the question whether he was a workman is
a disputed question of fact and i:an be decided only by the Industrial
Tribunal and not by the Stat..: Governmtnt. In this connt:ction, he has
placed rdiance on a decision of this court in Abdul Dairy Dudh Vitran
Kendra Sanchalak Manda/ v.Abad Dairy & Ors., ( 1993) III LU Suppl. 1993.
E This Court observt:d as follows:

"Having regard to tht: facts and voluminous t:videnct: sought to be
adduced by both parties, the question whether the appellants are
workmen n:quires detailed investigation of facts. The issue re-
quires detailed examination and can be satisfactorily adjudicatt:d
F upon only by a Tribunal."

Thus it appears in that case the question required detailed investiga-
tion in view of voluminous eVIdence sought to be adduced but it is not so
in the case in hand. Therefore, the above decision is not relevant for our
G purpose. The ratio laid down by this Court in Prem Kumar (Supra)
squarely covers this appeal as it does not appear from the order that the
State Government took into consideration any im:levant or fon:ign
material.

Drawing out attention to the advertisc::ment issm:d by the appcllant-
H association calling for application for the post of Assistant Secretary Mr.
SECY. INDIAN TEA ASSOCIATION v. AJIT KUMARBARAT (PHUKAN, J.) 795

Barat has urged that this advertisement would show the nature of the work A
to be performed. In our opinion this advertisement could not help respon-
dent No. 1 inasmuch as it was for the post of Assistant Secretary to which
post respondent No. 1 was initially appointed but subsequently he was
promoted to the post of Joint Secretary. That apart we are coµcerned with
actual duties performed by respondent No. 1 at the time of his dismissal
from service which we have already indicated and were also taken into
B
account by the State Government.

Mr. Barat has further contended that his letter filed before the
Conciliation Officer was not considered by the State Government. We may
state here that the records were not placed by the State Government before C
the High Court but were made available by Ms. A. Subhashini before this
Court. From the record we find that in the failure report the Conciliation
Officer has indicated all the contentions raised by respondent No. 1 in his
letter. Therefore, this contention has no force.

For the reasons stated above we hold that both the appellate court D
and the learned single Judge of the High Court erred in law in issuing a
mandamus directing the State Government to make an appropriate refer-
ence, therefore, the judgment of the learned single Judge passed in writ
petition No. 155 of 1998 and the judgment of the appellate court are hereby
set aside.
E
In the result we find merit in the present appeal and accordingly it
is allowed. Considering the facts and circumstances of the case we direct
the parties to bear their own costs. ·

R.A. Appeal allowed.

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