Holding

Sub‑section (4) of section 6 of the U.P. Industrial Disputes Act, 1947 is unconstitutional and the remission order is set aside.

Summary

The appellant, a workman dismissed by his employer, obtained a favourable award from the Labour Court. Before publishing the award, the Uttar Pradesh Government exercised its power under sub‑section (4) of section 6 of the U.P. Industrial Disputes Act, 1947 to remit the award for reconsideration, without giving notice or reasons. The appellant challenged both the order and the constitutional validity of that provision. The Supreme Court held that sub‑section (4) of section 6 confers an unguided, arbitrary power on the State Government, violating Article 14 of the Constitution. Consequently, the provision was struck down and the remission order set aside, directing the Government to publish the award under section 6(3). The appeal was allowed.

Issues considered

Whether sub‑section (4) of section 6 of the U.P. Industrial Disputes Act, 1947 is constitutionally valid under Article 14.
Whether the order of the Uttar Pradesh Government remitting the Labour Court award for reconsideration under that provision is valid.

Legislation cited

Arbitration Act, 1940s. 16
General Clauses Act, 1897s. 21
Industrial Disputes Act, 1947 (Central)s. 17, s. 17-A
U.P. Industrial Disputes Act, 1947s. 11-A, s. 4-A, s. 4-B, s. 4-K, s. 6(3), s. 6(4), s. 6(5), s. 6-A(1)

Subjects

Article 14industrial disputeaward remissionU.P. Industrial Disputes Actjudicial reviewarbitrary powerlabour court

Judgment

.. 'y
B.B. RAJWANSHI
A
v.
STATE OF U.P. & ORS.

APRIL 8, 1988

[E.S. VENKATARAMIAH AND N.D. OJHA, JJ.] B
~
U. P. Industrial Disputes Act, 1947-Challenging Constitutional
validity of sub-section (4) of section 6 of-Also validity of Order of
Government of Uttar Pradesh remitting award passed by Labour Court
for reconsideration.
-~- In tllis appeal, the appellant questioned the constitutional validity c
of sub-section (4) of section 6 of the U.P. Industrial Disputes Act, 1947
('The Act') and also the validity of the order passed by the Govt. remit-
ting the award passed by the Labour Court for reconsideration by it.

The appellant was an employee of respondent No. 5. M/s. Electric D
(India) Ltd., Meerut. The services of the appellant were terminated by
the Management of the said respondent. The termination of services led
to an industrial dispute. The State Government of Uttar Pradesh under
section 4-K of the Act referred the said dispute for adjudication of the
.-vi., Labour Court, Meerut. The Labour Court passed an award and
forwarded it to the State Government. Instead of publishing the award E
in the Official Gazette, as required by sub-Section (3) of section 6 of the

- Act, the State Government passed an order under section 6(4) of the
Act, remitting the award for reconsideration. The appellant submitted
before the Labour Court that he did not want any re-consideration of
,. the award. On 7.2.1985, the Management filed an application saying
~ that the case might be iixed for hearing after two months. The appellant
opposed the application. The case was adjourned to 11.3.85 and on
F

I 1.3.85 to 26.3.85 at the further request of the management. In the
meanwhile, the management moved the State Government to transfer
the case from the Labour Court, Meerut, to another Labour Court or
the Industrial Tribunal. The State Government passed an order trans-
ferring the case to the Industrial Tribunal Meerut. Aggrieved by the G
order, remitting the award to the Labour Court and the subsequent
-~- order, transferring the case to the Industrial Tribunal, the appellant
J filed a writ petition in the High Court, challenging the above said two
orders. The High Court dismissed the writ petition iu respect of the
order made under section 6(4) of the Act, but set aside the order of
transfer. Aggrieved by the judgment of the High Court, upholding the H
469
470 SUPREME COURT REPORTS [ 1988] 3 S.C.R.
y ·~
order passed under section 6(4) of the Act, the appellant filed this appeal
A
in this Court for relief by special leave.

Allowing the appeal, the Court,

HELD: By leave of the Court, the appellant raised an additional
B ground before the Court, questioning the constitutional validity of sub-
~
section (4) of section 6 of the Act itself, and the Court first took up for
consideration the question relating to the constitutional validity of sub-
section (4) of section 6 of the Act. [4768-C]
-
The questions raised before the Labour Court were very simple
c ones. They had no effect on the national economy. They did not in any
way interfere with the principles of social justice. No grave consequ- -t--
ences would have ensued if the award had been published in the Official
Gazette and the parties, allowed to question its validity before the High
Court under Article 226 of the Constitution of India or before the
Supreme Court under Article 136 of the Constitution. The parties had
D not been given notice by the State Government to show cause why the
award should not be remitted to the Labour Court for a fresh consld-
eration. The order of the State Government also did not state why and
on what points the State Government was not satisfied with the award
and the questions on which the Labour Court was required to recon-
sider its award. [479G-H; 480A-B] ~
E
When once a decision is given by a quasi-judicial authority, it
would not be safe to confer on any executive authority the power of
review or remission in respect of the said decision without imposing any
limitation on the exercise of such power, Even when a Court is confer-
-
-~
red the power of review, such power can be exercised ordinarily under
F the well-known limitations as are found in Order 17 of the Code of Civil
Procedure. Similarly, under section 16 of the Arbitration Act, 1940, the
power to remit an award to the Arbitrator can be exercised by a
Civil Court only under the circumstances specified in that connec-
tion. Suh-section (4) of section 6 of the act imposes no such limita-
lions. [482C-D]
G
The argument of the State Government that it was open to the
State Government to seek necessary guidance from the object and con-
.
)- .
tents of the Act, and that the State Government could remit the award ;
to the Labour Court only for a reason which was germane to the statute
in question, was not of any assistance to the State Government in this
H case because even though the reason for remitting the award may be a
B.B. RAJWANSHI v. STATE OF U.P. 471
-.• ~·
reason connected with industry or labour, it can still be used arbitrarily A
to favour one party or the other. The ground for remitting the award
should be one corresponding to a ground mentioned in section 16 of the
Arbitration Act, 1940; otherwise the power is capable of serious mis-
chief. The facts in this case themselves serve as a good illustration of the
above proposition. There were only two main issues for consideration B
before the Labour Court: (1) whether the appellant was a workman,
and (2) whether his services had been validly terminated. The Labour
Court had recorded its findings on both the Issues in favour of the
appellant. From the prayers made before the Labour Court after the
case had been remitted to it, it is seen that the Management wanted to
adduce additional evidence before the Labour Court in support of its
case. It was not the case of the Management that the Labour Court had c

-·
unreasonably refused permission to the Management to adduce all its
evidence before the award was passed. It was not even a ca8' where
industrial peace was likely to be disturbed if the award had been
implemented as it was. The award would not have also affected prejudi·
. cially either national economy or social justice. In the above circumst· D
ances, It would not certainly be proper for the State Government to
make an order remitting the award. The State Government in this case
could do so because it had been entrusted with such unguided power
under section 6(4) of the Act. [482E·H; 483A-CJ

It was urged by counsel for the State Government that sub-section E
4 of section 6 of the Act needed not to be struck down but the Court
might dir.ect that the State Government should give a hearing to the

- parties before an order was passed under section 6(4), remitting the
award, and also require .the State Go.vernment to give reasons in sup·
port of its order. The Court did not think that this was an appropriate
case where the impugned provision could be upheld by reading into it
F
the requirement of issuing notice to the parties and the requirement of
giving reasons for its orders. The provisions could not be upheld in the
absence of necessary statutory guidelines for the exercise of the power
conferred by it, having regard to the fact that the proceeding before the
Labour Court or the Industrial Tribunal is in the nature of quasi·
judicial proceeding where parties have adequate opportunity to state
G
their respective cases, to lead evidence and make all their submissions.
It is significant that the corresponding Act which is in force in the other
parts of India, i.e., the Industrial Dispute Act, 1947 (Central) Act XIV
of 1947) does not contain any provision corresponding to section 6(4) of
the Act, and the absence of such a provision in the Central Act has not
led.to any serious inconvenience to the general public. [483D·FI H
472 SUPREME COURT REPORTS [1988) 3 S.C.R.

A The Management could not derive much assistance from the deci-
sion of this Court in the Sirs ilk Ltd. & Ors v. Government of Andhra
Pradesh & Anr., [1964) 2 SCR 448 as in this case there was no settle-
ment arrived at between the appellant and the Management, which
made the publication of the award unnecessary. [484H; 48SF]
B
There was one other good reason for taking the view that without
any guidelines it will not be appropriate to confer power on the State
Government to nullify virtually the effect of an award by exercising its
power under section 6(4) of the Act. The Act applies not merely to
disputes arising between private management and labour unions and
the workmen employed by them but also to industries owned by the
•
c State Government and their workmen. In the cases where the Govern-
ment is the owner of the industry, it would be inappropriate to confer
uncontrolled and unguided power on the State Government itself to
i-
remit the award passed on the industrial disputes arising in such
indnstries for there is every chance of the power being exercised
D arbitrarily in snch cases. The danger of entrusting unguided and uncon-
trolled power to remit an award for reconsideration of the Labour
Court or Industrial Tribunal can very well he perceived, particularly
where the award has gone against the State Government in a dispute
arising out of an industry owned by it. The sub-section (4) of section 6 of r
the Act, which is so widely worded is, therefore, likely to result in grave
injustice 'to a party in whose favour an award is made as the said
E provisions can be used to reopen the whole case. The Court did not
agree with the view expressed by the High Court of Allahabad in V. E.
Thamas & Ors. v. State of Uttar Pradesh & Ors., [1978] Allahabad Law
Journal 1118, in which the validity of sub-section (4) of section 6 of the
Act had been upheld. [48SF-H; 486G-H; 487C-D I
-
F
Taking into consideration all the aspects of the case, including the
object with which the Act was enacted, the Court felt that sub-section
(4) of section 6 of the Act was violative of Article 14 of the Constitution
of India as it conferred unguided and uncontrolled powers on the State
Government. The Court declared sub-section (4) of section 6 of the Act
G as unconstitutional and struck it down. It followed that t'!e order passed
by the State Government, remitting the case for reconsideration hy the
Labour Court was also liable to be set aside. The State Government was
directed to'. publish the award under section 6(3) of the Act. On pub-
lication of· the award, it was open to any of the parties aggrieved
by the award to resort to such remedies as might be available to it in
H law. [487H; 488A·CJ
'
B.B. RAJWANSHI v. STATE OF U.P. IVENKATARAMIAH, J.I 473

Messrs. Dwarka Prasad Laxmi Narain v. The State of Uttar
A
Pradesh and two others, [1954] S.C.R. 803; State of Bihar v. D.N.
Ganguly & Ors., [19591 SCR 1191; Sirsilk Ltd. & Ors. v. Government
of Andhra Pradesh & Anr., [1964] 2 SCR 448; P. Sambamurthy & Ors.
v. State of Andhra Pradesh & Anr., [1987] l S.C.C. 362 and Star Paper
Mills Mazdoor Sangh & Ors. v. Star Paper Mills Ltd., Saharanpur &
Ors., [19741 Allahabad Law Journal 71, referred to. B

V.E. Thamas & Ors. v. State of Uttar Pradesh and Ors., [19781
Allahabad Law Journal 1118, disapproved.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 864
of 1987.
c
... From the Judgment and Order dated 23.5.1986 of the Allahabad
High Court in C.M.W.P. No. 13975 of 1985.

M.K. Ramamurthi and A.K. Sangal for the Appellant.
D
Anil Dev Singh, G.B. Pai, O.P. Sharma, Mrs. Shobha Dikshit,
R.C. Gubrela, K.R. Gupta and R.K. Sharma for the Respondents.

The Judgment of the Court was delivered by

VENKATARAMIAH, J. The appellant has questioned in this E
appeal by special leave the constitutional validity of sub-section (4) of

- section 6 of the U.P. Industrial Disputes, Act, 1947 {hereinafter refer-
red to as 'the Act') and also the validity of the Order dated December
5, 1984 passed by the Government of Uttar Pradesh remitting an
award passed by the Labour Court, Meerut for reconsideration by it.
F
The appellant was an employee of the Management, M/s.
Electra {India) Ltd., Meerut-Respondent No. 5 in the above appeal.
The services of the appellant were terminated by the Management by
its Order dated April 4, 1977 and the said termination led to an indust-
rial dispute. The State Government by its Order dated May 5, 1979
made under section 4-K of the Act referred the said dispute for adjudi- G
cation to the Labour Court, Meerut. The question which was referred
to the Labour Court read as follows:

"Whether the termination/removal from work of the
employee Shri B.P. Rajwanshi by the employers by their
Order dated 4.4.1977 is justified and/or legal? If not, to H
474 \ SUPREME COURT REPORTS [ 1988] 3 S.C.R.

what benefits/damages is the concerned employee entitled
to and with what other details?" ·

On the basis of the pleadings filed by the parties, ~.,,.. f61hwing
·issues were framed by t~e Labour Court: '

B 1. Was Shri B.B. Rajwanshi not a workman as defined in {
the U.P. Industrial Disputes Act? If so has this court jurisdiction '\
· to try this case?

. 2. Did Shri B.B. Rajwanshi not make efforts to minimis)
the losses due to unemployment? •
c . 3. To what relief, ifany, is Shri B.B. Rajwanshi entitled?·

4. Has Shri B.B. Rajwanshi been retrenched? If so, how
does it affect the case?

D '
After recording the evidence adduced by the parties and hearing
the arguments the Labour Court held, (i) that the appellant was a
workman.as defined in the Act, (ii) that the termination of the services
of the appellant was illegal and (iii) that the appellant was entitled to
be reinstated in his post with continuity of service and also to the
payment of backwages and other benefits. The Labour Court accord-
E ingly passed an award on August 2, 1984 and forwarded it to the State
Government. Instead of publishing the award in the Official Gazette,
as required by sub-section (3) of section 6 of the Act, the State Govern-
ment passed an Order dated December 5, 1984 under section 6(4) of
the Act which read as follows:

F "GOVERNMENT OF UTIAR PRADESH
LABOUR ANUBHAG-I

No.-5277 (ST) 36-1-84
/
Lucknow, Dated 5 December, 1984.
G •••••••
BY ORDER

In the matter of dispute between Messrs Electra
(India ) Ltd., Meerut and their workman Shri B.B.
H Rajwanshi, No. Adjudication 46n9 and the Award given
B.B. RAJWANSHI v. STATE OF U.P. [VENKATARAMIAH, J.[ 475

by the Labour Court, Meerut, the Governor is pleased to A
· remitit for reconsideration under sub-section (4) of section
6 d the U .P. Industrial Disputes Act;l947.

Sd/-
(Subnash Chandra Dahukhandi)

> Joint Secretary."

After the matter was remitted to the Labour Court as per the
B

order of the Government of Uttar Pradesh, extracted above, the
·[appellant appeared before.the Labour Court on 9.l.1985 arid submit-
ted_through his counsel that he did not want any reconsideration of the
award. On 7.2.1985 on behalf of the Management an application was
filed in which inter alia it was stated that the Management wanted to . C
produce some more records in the case to show that the appellant
never worked as a workman, that the Executive Director of the Man-
agement, namely, Arnn Kumar Jain had remained busy in connection
with the obtaining of the ticket of Congress (I) Party for Vidhan Sabha
from 30. U.1984 to 5.2.1985, that the Management wanted to summon D
some more witnesses to give evidence on the question that the appel-
lant was not a workman and that the case might be fixed for hearing
after two months. The appellant opposed the said application for
adducing additional evidence filed on behalf of the Management. The
~ case was adjourned to 11.3.1985. Again on 11.3.1985 the Management
moved for further adjournment of the case. The case was then E
adjourned to 26.3.1985. In the meanwhile the Management also
moved the State Government to transfer the case from the file of the
Labour Court, Meerut to another Labour Court or Industrial Tribunal
on the ground that the Labour Court was biased against the Manage-
>.:t . ment. The State Government promptly passed an Order dated
16.8.1985 transfeiring the case from the Labour Court, Meerut to the F
/ Industrial Tribunal, Meerut. Aggrieved by the order remitting the
award to the Labour Court and the subsequent order transferring the
case from the Labour Court, Meerut to the Industrial Tribunal,
Meerut, which had the inevitable result of delaying the proceedings
which had gone on for six years by then and which exposed the appel-
lant to the risk of losing the benefit of the award itself, the appellant G
'i filed a writ petition on the file of the High Court of Allahabad in Civil
·.Miscellaneous Writ Petition No. 13975 of 1985 questioning the Order
dated December 5, 1984 passed under section 6(4) of the Act and the
Order dated August 16, 1985 transferring the case from the Labour
Court, Meerut to the Industrial Tribunal, Meerut. The High Court by
its Judgment dated May 23, 1986 dismissed the Writ Petition filed in H
476 SUPREME COURT REPORTS [1988) 3 S.C.R..
y
respect of the order made under section 6(4) of the Act, but set aside
the order of transfer passed by the State Government. Aggrieved by
the judgment of the High Court upholding the order passed under
section 6(4) of the Act, the appellant has filed this appeal by special
leave.

H
It -may be stated anhis stage that the appellant has by the leave
of the Court raised an additional ground before this Court question-
ing the constitutional validity of sub-section (4) of section 6 of the Act
itself. We have heard counsel for both the parties on the said question.

We shall first take up for consideration the question relating to
c the consitutional validity of sub-section (4) of section 6 of the Act. The
provisions of the Act are enacted for achieving more or less the very
same object with which the Industrial Disputes Act, 1947 (Central Act
XIV of 1947) has been enacted. The Act is passed with the object of
making provision for preventing strikes and lock-outs, and for the
D settlement of industrial disputes and other incidental matters. Under
section 4-A of the Act the State Government is authorised to establish
Labour Courts. A person shall not be qualified to be appointed as
Presiding Officer of a Labour Court unless he has, for a period of not
less than three years, been a District Judge or an Additional District
Judge; or he has held the Office of the Chairman or any other member
E of the Labour Appellate Tribunal constituted under the Industrial
Disputes (Appellate Tribunal) Act, 1950, or of any Tribunal, for a
period of not less than two years; or he has been a Presiding Officer of
a Labour Court constituted under any Provincial Act or State Act for a
period of not less than five years; or he has held any judicial office in
India for not less than seven years; or he is enrolled in the list prepared
F under section 4-D of the Act. Under Section 4-B, the Act confers
power on the State Government to establish Industrial Tribunals. A
person shall not be qualified for being appointed as the Presiding
Officer of a Tribunal unless he is or has been a Judge of a High Court;
or he has, for a period of not less than three years, been a District
Judge or an Additional District Judge; or he has held the Office of the
G Chairman or any other member of the Labour Appellate Tribunal
constituted under the Industrial Disputes (Appellate Tribunal) Act,
1950, for a period of not less than two years or of any Tribunal con-
,.. .
stituted under the U.P. Industrial Disputes Act, 1947, for a period of
not less than five years; or he is enrolled in the list prepared in accord-
ance with section 4-D of the Act. Section 4-K of the Act provides that
H where the State Government is of opinion that any industrial dispute
B.B. RAJWANSHI v. STATE OF U.P. [VENKATARAMIAH, J.[ 477

exists or is apprehended, it may at any time by order in writing refer A
the dispute or any matter appearing to be connected with, or relevant
to, the dispute to a Labour Court if the matter of industrial dispute is
one of those contained in the First Schedule or the Second Schedule
for adjudication. It provides further that where the dispute relates to
any matter specified in the Second Schedule and is not likely to affect B
more than one hundred workmen, the State Government may, if it so
thinks fit, make the reference to a Labour Court. Section 6 of the Act
which is relevant for our purpose reads thus:
- "6. Awards and action to be taken thereon (I)
Where an industrial dispute has been referred to a Labour
Court or Tribunal for adjudication, it shall hold its pro- C
ceedings expeditiously and shall as soon as it is practicable
- on the conclusion thereof, submit its award to the State
Government.

(2) The award of a Labour Court or Tribunal shall be D
in writing and shall be signed by its Presiding Officer.

(2-A) An award in an industrial dispute relating to
the discharge or dismissal of a workman may direct the
setting aside of the discharge or dismissal and reinstate-
ment of the workman on such terms and conditions if any, E
as the authority making the award may think fit, or grant-
ing such other relief to the workman, including the sub-

- stitution of any lesser punishment for discharge or dismis-
sal, as the circumstances of the case may require.

(3) Subject to the provisions of sub-section (4) every F
arbitration award and the award of a Labour Court or Tri-
'·- bunal, shall, within a period of thirty days from the date of
its receipt by the State Government be published in such
manner as the State Government thinks fit.

(4) The State Government may before publication of G_
an award of a Labour Court or Tribunal under sub-section
' (3), remit the award for reconsideration of the adjudicating
I~. authority, and that authority shall, after reconsideration,
submit its award to the State Government, and the State
Government shall publish the award in the manner pro-
vided in sub-section (3). H
478 SUPREME COURT REPORTS [ 1988] 3 S.C.R.

(5) Subject to the provision of Section 6-A, an award
A
published under sub-section (3) shall be final and shall not
be called in question in any court in any manner whatc
soever.

(6) A Labour Court, Tribunal or Arbitrator may
B either of its own motion or on the application of any party )- ,
to the dispute, correct any clerical or arithmetical mistakes
in the award, or errors arising therein from any accidental
slip or omission; whenever any correction is made as
afornsaid, a copy of the order shall be sent to the State
Government and the provision of this Act; relating to the
c publication of an award shall mutatis mutandis apply ._.1.. _
thereto." l
On a reference of an industrial dispute to a Labour Court or a
Tribunal for adjudication, the Labour Court or Tribunal is directed to
conclude its proceedings expeditiously and to submit its award to the
D State Government. The award of the Labour Court or the Tribunal is
required to be in writing and signed by its Presiding Officer. Sub-
. section (3) of section 6 of the Act provides that subject to the provi-
sions of sub-section (4) every award of a Labour Court or Tribunal,
shall, within a period of thirty days from the date of its receipt by the
·State Government be published in such manner as the State Govem-
E men! thinks fit. That means that unless the State Government passes
an order under section 6(4) of the Act, the State Government is bound
to publish the award of a Labour Court or an Industrial Tribunal as
required by sub-section (3) of section 6 of the Act. Sub-section (4) of
section 6 of the Act, the validity of which is questioned before us
-
empowers the State Government to remit the award for reconsidera-
F tion of. the adjudicating authority before its publication and that
authority shall after reconsideration submit its award to the State Gov-
ernment. The.reafter the State Government is required to publish the
award in the manner provided in sub-section (3) of section 6 of the
Act. Sub-section (4) of section 6 of the Act does not require the State
Government to hear the parties before passing an order remitting the
G award for reconsideration of the adjudicating authority. It does not
require the State Government to give reasons for remitting the award.
It does not also require the State Government to inform the adjudicat-
ing authority the specific points on which the adjudicating authority
has to reconsider the award. The said sub-section also does not impose
any restriction on the scope and nature of the p~oceeding that has to
H · take place before the Labour Court or the Industrial Tribunal after the
B.B. RAJWANSHI v. STATE OF U.P. [VENKATARAMJAH, J.J 479

award is remitted to it by the State Government. In a given case it may
be open to the Labour Court or the Industrial Tribunal to permit the
A
parties to file fresh pleadings and to adduce additional evidence and
also to rehear the parties. On such reconsideration it is open to the
Labour Court or the Industrial Tribunal to recall the award already
passed by it and to pass a fresh award and submit it to the State
Government. Thus it is seen that the effect of an order passed by the B
State Government under section 6(4) of the Act can be in a given case
a total annulment of the award submitted by the Labour Court or the
- Industrial Tribunal originally under sub-section (1) of section 6 of the
Act. Sub-section (4) of section 6 of the Act also does not contain any
guidelines regarding the circumstances in which the State Government
--~ can exercise its power under that sub-section. Section 6-A(l)'()f the
Act provides that if the State Government is of the opinion that it will c
' be inexpedient on public grounds affecting national or State economy
or social justice to give effect to the whole or any part of the award, the
State Government may, by notification in the official Gazette declare
that the award shall not become enforceable on the expiry of the said
period of thirty days from the date of its publication under section 6(3) D
of the Act. A similar provision is contained in section 17-A of the
Industrial Disputes Act, 1947 (Central Act No. XIV of 1947) which
provides that if the appropriate Government is of opinion, in any case
where the award has been given by a Labour Court or Tribunal in
relation to an industrial dispute to which it is a party, that it will be
inexpedient on public grounds affecting national economy or social E
justice to give effect to the whole or any part of the award, the
appropriate Government may by notification in the Official Gazette
declare that the award shall not become enforceable on the expiry of
the said period of thirty days from the date of its publication under

''4
'
section 17-A of the Central Act. Even those restrictions placed on the
exercise of power under section 6-A(l) of the Act and under section F
17-A of the Central Act are not to be found in section 6(4) of the Act.

.,' In the case before us the questions which were raised before the
Labour Court were very simple ones. They had no effect on the
national economy. The questions did not in any way interfere with the
principles of social justice. No grave consequences would have ensued G
if the award had been published in the Official Gazette and the parties
had been allowed to question its validity before the High Court under
Article 226 of the Constitution of India or before the Supreme Court
under Article 136 of the Constitution of India. The parties were not
given notice by the State Government to show cause why the award
should not be remitted to the Labour Court again for fresh considera· H
480 SUPREME COURT REPORTS [19881 3 S.C.R.

A tion. In fact, the appellant had not been even informed about the
contents of the award before the Government passed its order under
section 6(4) of the Act. The order of the State Government also does
not state why and on what points the State Government was not
satisfied with the award and the questions on which the Labour Court
was required to reconsider its award.
B
It is urged on behalf of the appellant that the wide and arbitrary
power conferred on the State Government under section 6(4) of the
Act without any guidelines is liable to be misused and, therefore, it is
liable to be struck down on the ground that it is violative of Article 14
of the Constitution of India. It is further stated that there was no
-
C justification to confer such unlimited and uncanalised power on the
State Government, particularly, when the award is one passed by the
adjudicating authorities presided over by men with judicial experience
as provided in sub-section (3) of seCtion 4-A or sub-section (3) of
section 4-B of the Act and that it is always open to the parties
aggrieved by the award to question it before the High Court or the
D Supreme Court, as the case may be.

Reliance is placed on the decision of this Court in Messrs
Dwarka Prasad Laxmi Narain v. The State of Uttar Pradesh and two
Others, [1954 I S.C.R. 803 in which it is stated that a law or order which
confers arbitrary or uncontrolled power upon the executive must be
E held to be unreasonable. In that case the validity of clause 4(3) of the
Uttar Pradesh Coal Control Order, 1953 which conferred absolute
power on the licensing authority to grant or refuse to grant, renew or
refuse to renew, suspend, revoke, cancel or modify any licence under
....;
that Order came up for consideration. Dealing with the said question
Mukherjea, J., as he then was, on behalf of the Constitution Bench of
F this Court observed at pages 8U-814 thus:

"The more formidable objection has been taken on
behalf of the petitioners against clause 4(3) of the Control
Order which relates to the granting and refusing of licen-
ces. The licensing authority has been given absolute power
G to grant or refuse to grant, renew or refuse to renew,
suspend, revoke, cancel or modify any licence under this
Order and the only thing he has to do is to record reasons
for the action he takes. Not only so, the power could be
exercised by any person to whom the State Coal Controller
may choose to delegate the same, and the choice can be
H made in favour of any and every person. It seems to us 'that
B.B. RAJWANSHI v. STATE OF U.P. [VENKATARAMIAH, {[ 481

r such provision cannot be held to be reasonable. Nci rules
have been framed and no directions given on these matters
A
to regulate or guide the discretion of the licensing officer.
Practically the Order commits to the unrestrained will of a
single individual the power to grant, withhold or cancel
licences in any way he chooses and there is nothing in the
Order which could ensure a proper execution of the power B
or operate as a check upon injustice that might result from
improper execution of the same. Mr. Umrigar contends
that a sufficient safeguard has been provided against any
abuse of power by reason of the fact that the licensing
authority has got to record reasons for what he does. This
safeguard in our opinion is hardly effective; for there is no
c
·-t higher authority prescribed in the Ordet who could
examine the propriety of these reaons and revise or review
the decision of the subordinate officer. The reasons, there·
fore, which are required to be recorded are only for the
personal or subjective satisfaction of the licensing authority
and not for furnishing any remedy to the aggrieved person. D
It was pointed out and with perfect propriety by Mr Justice
Mathews in the well·known American case of Yick Wo. v.
Hopkins, 118 U.S. 356 at 373 that the action or non-action
of officers placed in such position may proceed from enmity
or prejudice, from partisan zeal or animosity, from favouri-
~.J tism and other improper influences and motives which are E
easy of concealment and difficult to be detected and
exposed, and consequently the injustice capable of being
wrought under cover of such unrestricted power becomes
apparent to every man, without the necessity of detailed
investigation. In our opinion, the provision of clause 4(3) of
-~ the Uttar Pradesh Coal Control Order must be held to be
void as imposing an unreasonable restriction upon the free·
F

' dam of trade and business guaranteed under Article 19( l)(g)
of the Constitution and not coming within the protection
afforded by clause (6) of the Article."

(underlining by us) G

.~ It is no doubt true that in the above case the Court held that
clause 4(3) of the Uttar Pradesh Coal Control Order, 1953 was invalid
and was violative of Article 19(1)(g) of the Constitution of India. The
observations made thejlein also apply with equal force to an objection
raised to its validity on the ground that it violated Article 14 of the H
482 SUPREME COURT REPORTS I 1988] 3 S.C.R.

A Constitution of India. In the case before us the State Government is
not required to record its reasons for remitting the award to the
Labour Court or the Industrial Tribunal and the parties were at a loss
to know why the State Government had remitted the award for recon-
sideration by the Labour Court. 'The power to remit the award may
also be delegated to any other person or authority by the State Gov-
B ernment, if it so directs, by a notification issued under section 11-A of
the Act.

When once a decision is given by a quasi-judicial authority it
would not be safe to confer on any executive authority the power of
review or of remission, in respect of the said decision without imposing
-
C any limitation on the exercise of such power. Even when a Court is
conferred the power of review such power can be exercised ordinarily
under the well-known limitations as are found in Order 47 of the Code
of Civil Procedure. Similarly under section 16 of the Arbitration Act,
1940 the power to remit an award to the Arbitrator can be exercised by
a Civil Court only under the circumstances specified in that connec-
D tion. Sub-section (4) of section 6 of the Act with which we are con-
cerned imposes no such limitations.

It is, however, argued on behalf of the State Government that it
was open to the State Government to seek necessary guidance from
the object and the contents of the Act and that the State Government
E could remit the award to the Labour Court only for a reason which was
germane to the statute in question. It is no doubt true that in some
decisions of this Court it has been held that even though a particular
provision which confers discretion on the executive does not specifi-
cally state the circumstances in which such discretion can be exercised,
the executive can seek the necessary guidance while exercising such
F discretion from the statute under which the discretion is conferred on
it. This argument, however, is not of any assistance to the State Gov-
ernment in this case because even though the reason for remitting the
award may be a reason connected with industry or Jabour it can still be
used arbitrarily to favour one party or the other. The ground for remit-
ting the award should be one corresponding to a ground mentioned in
G section 16 of the Arbitration Act, 1940; otherwise the power is capable
of serious mischief. The facts of the case before us themselves serve as
a good illustration of the above proposition. As mentioned earlier, >-•
there were only two main issues which arose for consideration before
the Labour Court; (1) whether the appellant was a workman; and (2)
whether his services had been validly terminated. After recording the
H entire evidence adduced by both the parties, the Labour Court had
B.B. RAJWANSHI v. STATE OF U.P. [VENKATARAMIAH, J.J 483

recorded its findings on both the issues in favour of the appellant. A
From the prayers made by the Management before the Labour Court
after the case was remitted to it, it is seen that the Management wanted
to adduce additional evidence before the Labour Court in support of
its case. It was not the case of the Management that the Labour Court
had unreasonably refused permission to the Management to adduce all
its evidence or that it was prevented by any other sufficient cause from B
adducing all its evidence before the award was passed. This was not
even a case where the industrial peace was likely to be disturbed if the
award had been implemented as it was. The award would not have also
affected prejudicially either the national economy or social justice. In
the above circumstances would it be proper for the State Government
to make an order remitting the award? Certainly not. In the instant
case the State Government could do so because it had been entrusted
c
with such unguided power under section 6(4) of the Act.

It was urged by the learned counsel for the State Government
that sub-section (4) of section 6 of the Act need not be struck down but
the Court may, however, direct that the State Government should give D
a hearing to the parties before an order is passed under section 6(4) of
the Act remitting the award and also require the State Government to
give reasons in support of its order. We do not think that this is an
appropriate case where the impugned provision can be upheld by read-
'"' ...I
!(
ing into it the requirement of issuing notice to the parties and the
requirement of giving reasons for its orders. The provision cannot be E
upheld in the absence of necessary statutory guidelines for the exercise
of the power conferred by it having regard to the fact that the proceed-
)
- ing before the Labour Court or the Industrial Tribunal is in the nature
of quasi-judicial proceeding where parties have adequate opportunity
to state their respective cases, to lead evidence and make all their
submissions. It is significant that the corresponding Act which is in F
force in the other parts oflndia, i.e., the Industrial Disputes Act, 1947
(Central Act XIV of 1947) does not contain any provision correspond-
ing to section 6(4) of the Act and the absence of such provision in the
Central Act has not led to any serious inconvenience to the general
public.
G
At this stage we may refer to the decision of this Court in the
State of Bihar v. D.N. Ganguly & Others, [1959] S.C.R. 1191 in which
this Court declined to recognise the existence of the power in the
appropriate Government to cancel or supersede a reference made
under the provision of section 10(1) of the Industrial Disputes Act,
1947 (Central Act XIV of 1947) in respect of an industrial dispute H
484 SUPREME COURT REPORTS I1988] 3 S.C.R.

A pending adjudication by the Tribunal constituted foF thai purpose
notwithstanding section 21 of the General Clause Act, 1897.·In that
case Gajendragadkar, J., as he then was, speaking for the Court
observed at Pages 1204-1205 thus:

"Apart from these provisions of the Act, on general
B principles it seems rather difficult to accept the argument
that the appropriate government should have an implied
power to cancel its own order made under s. 10(1). If on
the representation made by the employer or his workmen
the appropriate government considers the matter fully and
reaches the conclusion that an industrial dispute exists or is
-
apprehended and then makes the reference under s. 10(1),
c there appears to be no reason or principle to support the
contention that it has an implied power to cancel its order
and put an end to the reference proceedings initiated by
itself. In dealing with this question it is important to bear in
+
mind that power to cancel its order made under s. 10(1),
D which the appellant claims, is an absolute power; it is not as
if the power to cancel implies the obligation to make
another reference in respect of the dispute in question; it is
not as if the exercise of the power is subject to the condi-
tion that reasons for cancellation of the order should be set
out. If the power claimed by the appellant is conceded to
E the appropriate government it would be open to the
appropriate government to terminate the proceedings
before the tribunal at any stage and not to refer the indust-
rial dispute to any other industrial tribunal at all. The dis-
cretion given to the appropriate government under s. 10(1)
in the matter of referring industrial disputes to industrial
-
F tribunals is very wide; but it seems the power to cancel
which is claimed is wider still; and it is claimed by implica-
tion on the strenth of s. 21 of the General Clauses Act. We
have no hesitation in holding that the rule of construction
enunciated bys. 21 of the General Clauses Act in so far as
it refers to the power of rescinding or cancelling the origi-
G nal order cannot be invoked in respect of the provisions of
s. 10(1) of the Industrial Disputes Act,"

The Management cannot derive much assistance from the deci-
sion of this Court in the Sirsilk Ltd. and Others v. Government of
· Andhra Pradesh & Another, [1964) 2 S.C.R. 448. The facts of that case
H were these. Industrial disputes having arisen between the appellants
r B.B. RAJWANSHI v. STATE OF U.P. [VENKATARAMIAH, J.) 485

therein and their workman the disputes were referred for ad judica-
A
tion. After the Tribunal forwarded its awards to the Government the
parties in each dispute came to settlement. Thereafter a letter was sent
to the Government requesting it to withhold the publication of the
~ awards. The Government replied that under section 17 of the lndust-
..( rial _Disputes Act, 1947 it was mandatory for the Government to pub-
lish the awarc)s and they would not withhold publication. Thereupon B
writ petitions were filed before the High Court under Article 226 of
the Constitution of India praying that the Government might be
directed to withhold the publication. The High Court held that since
the provisions of section 17 of the Central Act were mandatory it was
--~ not open to the High Court to issue writs as prayed for and rejected the
! - petitions. It is against the said judgment of the High Court the said
appeals were filed before this Court. This Court held that it was clear c
from a combined reading of section 17 and section 17A of the Industrial
Disputes Act, 1947 (Central Act XIV of 1947) that the intention
behind section 17(1) of the Industrial Disputes Act, 1947 was that a
duty was cast on Government to publish the award within thirty days
of its receipt and the provision for its publication was mandatory and D
not merely directory. When an agreement had been arrived at between
the parties, though not in the course of conciliation proceedings, i
' became a settlement as per the definition under section 2(p) and sec-
-·....J tion 18(1) of that Act laid down that such a settlement would be
binding on all the parties to it. This Court in order to resolve the
conflict between the effect of section 2(p) of that Act and of section E
18(1) of that Act held that the only solution was to withhold the award
from the publication and that such a course did not in any way affect
the mandatory nature of the provisions under section 17 of that Act. In
~ "; I the case before us there was no settlement arrived at between the
~· --T appellant and the Management which made the publication of the
award unnecessary. F
There is one other good reasons for taking the view that without
any guidelines it would not be appropriate to confer power on the
State Government to nullify virtually the effect of an award by exercis-
ing its power under section 6(4) of the Act. The Act applies not merely
to disputes arising between private managements and labour unions
and the workmen employed by them but also to industries owned by G
the State Government and their workmen. In those cases where the
Government is the owner of the industry it would be inappropriate to
confer uncontrolled and unguided power on the State Government
itself to remit the award passed on industrial disputes arising in such
industries for there is every chance of the power being exercised
H
arbitrarily in such cases.
486 SUPREME COURT REPORTS [1988] 3 S.C.R. "(

In this connection it is useful to refer to the following observa-
A
tions made by a Constitution Bench of this Court in P. Sambamurthy
and Others v. State of Andhra Pradesh and Another, [1987] 1 S.C.C.
362 in which the validity of clause (5) of Article 371-D of the Constitu-
tion of India which conferred power on the Government of A.ndhra
Pradesh to modify or annul any order passed by the Administrative
B Tribunal constituted under that article, arose for consideration. While
striking down clause (5) of Article 371-D of the Constitution of India,
this Court observed thus:

"It is obvious from what we have stated above that

c
this power of modifying or annulling an order of the
Administrative Tribunal conferred on the State Govern-
ment under the proviso to clause (5) is violative of the rule
-+-
of law which is clearly a basic and essential feature of the
Constitution. It is a basic principle of the rule of law that
the exercise of power by the executive or any other author-
ity must not only be conditioned by the Constitution but
D must also be in accordance with law and the power of judi-
cial review is con:'erred by the Constitution with a view to
ensuring that the Jaw is observed and there is compliance
with the requirement of Jaw on the part of the executive
and other authoritie,. It is through the power of judicial
review conferred on an independent institutional authority
E such as the High Court that the rule of law is maintained
and every organ of the State is kept within the limits of the
law. Now if the exercise of the power of judicial review can
be set at naught by the State Government by overriding the
decision given against it, it would sound the death-knell of
the rule of Jaw. The rule of Jaw would cease to have any
F meaning because then it would be open to the State Gov-
ernment to defy the law and yet to get away with it. The
proviso to clause (5) of Article 371-D is therefore clearly
violative of the basic structure doctrine."

Even though the decision of the Labour Court or the Industrial
G Tribunal in the present case cannot be equated with the decision of the
Administrative Tribunal constituted under Article 371-D of the Con-
stitution of India in all respects, the danger of entrusting unguided and
uncontrolled. power to remit an award for reconsideration of the
Labour Court or Industrial Tribunal can very well be perceived
particularly where the award has gone against the State Government in
H a dispute arising out of an industry owned by it.
8.8. RAJWANSHI v. STATE OF U.P. [VENKATARAMIAH, J.J 487

The scope of the jurisdiction and the power of the Labour Court
A
while exercising the power of reconsideration in respect of an award
remitted to it bas been interpreted to be equivalent to the jurisdiction
and power which it exercises in regard to the adjudication of a referred
dispute by a Division Bench of the High Court of Allahabad in Star
Paper Mills Mazdoor Sangh and Others v. Star Paper Mills Limited,
Saharanpur and Others, [1974] Allahabad Law Journal 71. In the said B
decision the Allahabad High Court has held that the Labour Court is
free to adopt such procedure as it thinks fit in the circumstances of the
case and if the circumstances of the case are such that the Labour
Court is satisfied that further evidence should be adduced it bas jurisd-
iction to record it and that the Labour Court is not confined to the
evidence alreacjy on record. Sub-section (4) of section 6 of the Act,
which is so widely worded is therefore likely to result in grave injustice
c
to a party in whose favour an award is made as the said provisions can
be used to reopen the whole case.

Our attention is drawn by the learned counsel of the State Gov-
ernment to another decision of the High Court of Allahabad in V. E. D
Thamas and Others v. State of Uttar Pradesh and Others, [1978] Al-
lahabad Law Journal 1118 in which the validity of sub-section (4) of
section 6 of the Act has been upheld. The High Court of Allahabad in
that decision has taken the view that section 6(4) of the Act does not
confer unguided and unfettered power on the State Government in the
matter of remitting the award for reconsideration. We have gone E
through that decision carefully. We find that the High Court has not
taken into account while upholding section 6(4) of the Act all the
matters which we have taken into consideration in this case. The High
Court has proceeded to uphold the validity of section 6(4) principally
on the ground that the provisions of the Act which are designed to
ensure social justice to industrial workers supplied the necessary gui- F
dance and that the power of remission of award does not have the
effect of disturbing the findings recorded by the Labour Court or the
Industrial Tribunal in the course of the award. We have earlier stated
how it is not sufficient to rely merely upon the object of the Act to
uphold the provisions of section 6(4) of the Act. We have also shown
that on the case being remitted to the Labour Court it is open to the G
Labour Court to set aside the findings already recorded by it and to
rewrite the award. In the circumstances we do not agree with the view
expressed by the High Court of Allahabad on the above question.

Taking into consideration all aspects of the case including the
object with which the Act is enacted we feel that sub-section (4) of H
488 SUPREME COURT REPORTS !1988] 3 S.C.R. ""(

A section 6 of the Act, is violative of Article 14 of the Constitution of
India as it confers unguided and uncontrolled powers on the State
Government. We, therefore, declare sub-section (4) of section 6 of the
Act as unconstitutional. We accordingly strike it down. It follows the
Order passed by the State Government on December 5, 1984 remitting
B the case for reconsideration by the Labour Court is also liable to be set ~
aside. It is accordingly set aside. The State Government shall now
proceed to publish the award under section 6(3) of the Act. On the t
publication of the said award it is open to any of the parties aggrieved J
by it to resort to such remepies as may be available to it in law. ·

The appeal is accordingly allowed. There will be no order as to I_
C costs. -,

S.L. Appeal allowed.