Holding

The Tribunal possessed ancillary powers to set aside an ex‑parte award on showing of sufficient cause and was not functus officio until the award became enforceable under s.17‑A.

Summary

The Central Government referred an industrial dispute between Grindlays Bank Ltd. and its workmen to the Central Government Industrial Tribunal under s.10 of the Industrial Disputes Act, 1947. After several adjournments, the Tribunal refused a further adjournment on 9 December 1976 and passed an ex‑parte award, relying on the bank’s manager’s statement that certain respondents were not its employees. The affected workers applied on 19 January 1977, showing sufficient cause for their absence, and the Tribunal set aside the award on 12 April 1977. Grindlays Bank challenged this order, arguing that the Tribunal had become functus officio after 30 days from the award’s publication and that the power to set aside the award amounted to a review, which it did not possess. The Supreme Court held that the Tribunal, by virtue of ancillary powers under s.11 of the Act and Rules 22 and 24(b) of the Industrial Disputes (Central) Rules, 1957, could set aside an ex‑parte award when sufficient cause is shown, and that its jurisdiction persisted until the award became enforceable under s.17‑A. Consequently, the appeal was dismissed with costs.

Issues considered

Whether the Industrial Tribunal had jurisdiction to set aside an ex‑parte award, even when the award was based on evidence.
Whether the Tribunal became functus officio after the expiry of 30 days from the award’s publication under s.17‑A, thereby losing jurisdiction to entertain a setting‑aside application.
Whether the setting aside of an ex‑parte award amounts to a review of the award on merits or is merely a procedural correction.

Legislation cited

Code of Civil Procedure, 1908s. Order IX Rule 13, s. Order XVII
Industrial Disputes Act, 1947s. 10, s. 11, s. 17, s. 17-A, s. 20, s. 7A
Industrial Disputes (Central) Rules, 1957s. Rule 22, s. Rule 24(b)

Subjects

ex parte awardindustrial tribunaljurisdictionfunctus officioreviewstatutory constructionancillary powersIndustrial Disputes Actsetting aside awardnatural justice

Judgment

' 341

GRINDLAYS BANK LTD. A
v.
CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL AND
ORS.

December 12, 1980 B
[Y. V. CHANDRACHUD, C. J. AND A. P. SEN, J.J

Powers of the Industrial Tribunal to set aside an ex-parte award passed un
merits--Whether such an ex parte award passed on nierits, when sought to be
set aside by an application showing sufficient cause amounts to seeking review-
.. Point of time at lVhich jurisdiction of the Tribunal begins, for setting aside the
ex parte award-Rule of statutory construction-Industrial Disputel Act, 1957,
c
sections 11, 17, 17-A and 20 part Ill of the Industrial Dispute (Central) Rulea,
1957, 01ders IX and XVII of the Civil Procedure Code.

Dismissing the appeal, the Court

HELD : ( 1) It is a well-kno,vn rule of statutory construction that a Tribu-
nal or body should be considered to be endowed with such ancillary or inci-
D
dental powers as are necessary to discharge its functions effectively for the
purpose of doing justice between the parties. In a case of this nature, the
Tribunal should be considered as invested with such incidental or ancillary
• powers unless there is any indication in the statute to the contrary. The \Vords
"shall foJlow such procedure as the arbitrator or other authority may think
fit" in sub-section (1) of section 11 of the Industrial Disputes Act are of the
widest amplitude and confer ample power upon the Tribune.I and other autho-
E
rities to devise such procedure as the. justice of the case demands. The discre-
tion thus conferred on these authorities to determine the procedure as they may
think fir, however, is subject to the rules made by the 'appropriate Government'
in this behalf. Nevertheless, all these authorities being quasi-judicial in nature
objectively determining matters referred to them, have to exercise their discre-
tion in a judicial manner, without caprice, and according to the genl.'.:ral princi-
F
ples of law and rules of natural justice. [344 E-F, H, 345A, C, Fl

(2) \\1iere a party is prevented from appearing at the hearing due to a
sufficient cause and is faced with an ex parte award, it is as if the party is
visited with an award without a notice of the proceedings. Where the Tribunal
proceeds to make an award without notice to a party, the award is nothing but
a nullity. In such circumstances, the Tribunal has not only the power but nlso
the dury to set aside the ex parte award and to direct the matter to be heard G
afresh. Further, Rules 22 and 24(b) of the Industrial Disputes (Central)
Rules, 1957 make it clear that the Tribunal was competent to entertain an
application to set aside an ex parte award. [346 C-E]

(3) Merely becduse the ex parte award was based on the staten1ent of the
manager of the appellant, the order setting aside the ex parte award, in fact,
does nor amount to review. The expression "review" is used in two distinct H
senses, namely, (i) a procedural review which is either inherent or implied in
a court or Tribunal to set aside a palpably erroneous order p0ssed under a
• 6---57 SCI/81
342 SUPREME COURT REPORTS [1981] 2 S.C.R.
'
A misapprehension by it, and (ii) a review on merits when the error sought to be
corrected is one of law and is appClrent on the face of the record. When a
review is sought due to a procedural defect, the inadvertent error committed •
by the Tribunal must be. corrected ex debito justitiae to prevent the abuse of its
process, and such power inheres in every court or Tribunal. [347 B-C, E-G]

Narsfii Thakershi v. Pradvumansinghji, A.l.R. [1970] SC 1273, distinguished.
B
(4) The Tribunal had not become functus officio and, therefore, had the
jurisdiction to set aside the ex parte award. To contend that the Central Go-
vernment alone could t1et aside the ex parte a·ward is not correct. Under
section 17-A an award becomes enforceable on the expiry of 30 dais from
the date of its publication under section 17. The proceedings \Vith regard
to a reference under section 10 of the Act are, therefore, not deemed to be
•C concluded until the expiry of 30 days from the publication of the award.
Til1 then the Tribunal retains jurisdiction over the dispute referred to it for
adjudication and upto that date it has the po\.ver to entertain an appli-
cation in connection with such dispute. That stage is not reached till the award
becomes enforceable under section 17-A. [347 G, 348 A-Bl
(5) The jurisdiction of the Trib_unal had to be seen on the date of the
applic~tion made to 'it and not the date on which it passed the impugned order.
D There is no finality attached to an ex parte award because it is always subject
to its being set aside on sufficient cause being shown. The Tribunal had the
power ro deal with an application properly made before it for setting aside the
ex parte award and pass suitable orders. [348 D-E]

CNIL APPELLATE JURISDICTION : Civil Appeal No. 2355 of
E 1979.
Appeal by Special Leave from the Judgment and Order dated
25-7-1979 of the Calcutta High Court in Appeal No. 3/1978.
G.B. Pai, Mrs. Rashmi Dhariwal, Miss Bina Gupta, Mr. Praveen
Kumar and J.R. Das for the Appellant.
F Amlan Ghosh for Respondents 3-4.
The Judgment of the Court was delivered by ,4
SEN, J. This is an appeal by special leave from a judgment of the
Calcutta High Court, by which it refrained from interfering with an ~
order of the Central Government Industrial Tribunal, Calcutta, consti-
G tuted under s. 7A of the Industrial Disputes Act, 1947, setting aside
an ex parte award made by it. , \
The facts giving rise to the appeal are these : The Government of
India, Ministry of Labour by an order dated July 26, 1975 referred
an industrial dispute existing between the employers in relation to the
H Grindlays Bank Ltd., Calcutta and their workmen, to the Central
Government Industrial Tribunal in exercise of its powers under s. 10
of the Industrial Disputes Act, 1947 for adjudication. By a notice
I GRINDLAYS BANK V. CENTRAL GOVT. INDUSTRIAL TRIBUNAL 343
(Sen, J.)
dated March 6, 1976 the Tribunal fixed peremptory hearing of the A
• reference for May 28, 1976, but the hearing was adjourned from time
to time on one ground or other. Eventually, the hearing of the refe-
rence was fixed for December 9, 1976. On December 9, 1976
counsel appearing on behalf of respondent No. 3, the Commercial
establishments Employees Association, representing respondents Nos.
B
5 to 17, sought an adjournment on the ground that the General Secre-
tary of the Association had suffered a breavement as his father had
died on Nevember 25, 1976, and, therefore, he had to leave to per-
form the shradhha ceremony falling on Decemb'r 9, 1976. In support
of his prayer for adjournment, the counsel produced a telegram, but
the Tribunal refused to grant any further adjournment and proceeded c
to make an ex parte award. On the basis of the statement recorded
by the manager of the appellant, the Tribunal held that the respon-
dents Nos. 5 to 17 were employed as drivers by the officers of the
• appellant and were not the employees of the appellant and, therefore,
they were not entitled to the benefits enjoyed by the drivers employed
by the appellant. On January 19, 1977, respondent No. 3, acting for D
respondents Nos. 5 to 17 applied for setting aside the ex parte award
on the ground that they were prevented by sufficient cause from ap-
pearing when the reference was called on for hearing on December
9, 1976. The Tribunal by its order dated April 12, 1977 set aside
the ex parte award on being satisfied that there was sufficient cause
within the meaning of 0. IX, r. 13 of the Code of Civil procedure, E
1908. The appellant challenged the order passed by the Tribunal
setting aside the ex parte award but the High Court d~clined to
interfere.

Two questions arise in the appeal, namely (1) whether the Tribunal
had any jurisdiction to set aside the ex parte award, particularly when F
it was based on evidence, and (2) whether the Tribunal became
functus officio on the expiry of the 30 days from the date of publication
of the ex parte award under s. 17, by reason of sub-s. (3) of s. 20
• I and, therefore, had no jurisdiction to set aside the award and the Cent-
ral Government alone had the power under sub-s. (1) of s. 17-A to
set it aside. G
• It is contended that neither the Act nor the rules framed there-
under confer llllY powers upon the Tribunal to set aside an ex parte
award. It is urged that the award .although ex parte, was an adjudi-
cation on merits as it was based on the evidence led by the appellant,
and, therefore, the application made by respondent No. 3 was in H
reality an application for review and not a mere application for setting
aside an ex parte award. A distinction is sought to be drawn between
•
344 SUPREME COURT REPORTS [1Y8 lj 2 S.C.R. •
A an application for review and an application for setting aside an ex
parte award based on evidence. The cohtention is that if there is •
no evidence led before the Tribunal, there may be power to set aside
an ex parte award, but if the award is based on evidence, the setting
aside of the award cannot but virtually amount to a review.
B In dealing with these contentions, it must be borne in mind that
the Industrial Disputes Act, 1947 is a piece of legislation calculated
to ensure social justice to both employers and the employees and ad-
vance progress of industry by bringing harmony and cordial relations
between the parties. In other words, the purpose of the Act is to
settle disputes between workmen and employers which if not
c settled, would result in strikes or lockouts and entail dislocation of
work, essential to the life of the community. The scheme of the Act
shows that it aims at settlement of all industrial disputes arising bet-
ween the capital and labour by peaceful methods and through the
machinery of concili&tion, arbitration and if necessary, by approach-
ing the Tribunal constituted under the Act. It, therefore, endeavours
D to resolve the competing claims of employers and employees by find-
ing a solution which is just and fair to both the parties.
We are of the opinion that the Tribunal had the power to pass the
•
impugned order if it thought fit in the interest of justice. It is true
that there is no express provision in the Act or the rules framed there-
E under giving the Tribunal jurisdiction to do so. But it is a well-known
rule of statutory construction that a Tnbunal or body should be
considered to be endowed with such ancillary or incidental powers as
are necessary to discharge its functigns effectively for the purpose of
doing justice between the parties. In a case of this nature, we are
of the view that the Tribunal should be considered as invested wit.Ii
F such incidental or ancillary powers unless there is any indication in
the statute to the contrary. We do not find any such statutory pro-
hibition. On the other hand, there are indications to the contrary.
-.·
'

Sub-section ( 1) of s. 11 of the Act, as substituted by s. 9 of the
Industrial Disputes (Amendment & Miscellaneous Provisions) Act,
' -
G 1956 is in these tenns :
"11. (1) Subject to any rules that may be made in this
behalf, an arbitrator, a Board, Court, Labour Court, Tribu-
nal or National Tribunal shall follow such procedure as the
arbitrator or other authority concerned may think fit."
•
e The words 'shall follow such procedure as the arbitrator or other au-
thority may think fit' are of the widest amplitude and confer ample
power upon the Tribunal and other authorities to devise such proce-
I GRINPLAYS BANK V. CENTRAL GOVT. INDUSTRIAL TRIBUNAL 345
(Sen, !.)
dure as the justice of the case demands. Under els. (a) to (c) of A
sul>-s. (3) of s. 11, the Tribunal and other authorities have the same
• powers as are vested in civil courts under the Code of Civil Proce-
dure, 1908, of (a) enforcing the attendance of any person and examin-
ing him on oath, (b) compelling the production of documents and
material objects, and (c) issuing commissions for the examination of
witnesses. Under cl. (d) thereof, the Tribunal or such other authori- B
ties have also the same powers as are vested in civil courts under the
Code of Civil Procedure, 1908 in respect of such other nyatters as
may be prescribed. Although the Tribunal or other authorities speci-
fied in s. 11 are not courts but they have the trappings of a court.
and they exercise quasi-judicial functions. c
The object of giving such wide powers is to mitigate the rigout
of the technicalities of the law, for achieving the object of effective
investigation and settlement of industrial disputes, and thus assuring
industrial peace and harmony. The discretion thus conferred on
these authorities to determine the procedure as they may think fit, D
however, is subject to the rules made by the 'appropriate Government'
in this behalf. Part III of the Industrial Disputes (Central) Rules,
1957 makes rU!es in this behalf. Rules 9 to 30 are the relevant rules
• regulating procedure. State Governments too have made their own
corresponding rules. Except to the extent specified in sub-s. (3) oi
s. 11 of the Act and the rU!es framed thereunder, the provisions of E
the Code of Civil Procedure, 1908 are not applicable to proceedings
before the authorities mentioned in sub-s. (1). The provisions of
the Evidence Act, in their strict sense, likewise do not apply to procee-
dings before the authorities. Nevertheless, all these authorities being
quai;i-judicial in ooture objectively determining rnatters referred to
F
them, have to exercise their discretion in a judicial manner, without
caprice, and according to the general principles of law and rules of
natural justice.

Rule 22 of the Industrial Disputes (Central Rules), 1957 framed
by the Central Govermnent in exercise of its powers under s. 38 of the G
Act, provides :

"22. If without sufficient cause being shown, any party
to proceedings before a Board, Court, Labour Court, Tribu-
nal, National Tribunal or arbitrator fails to attend or to be
represented, the Board, Court, L>abour Court, Tribunal, H
National Tribunal or arbitrator may procred, as if the party
had duly attended or had been represented."
346 SUPREME COURT REPORTS [1981] 2 s.c.R.

A Rule 24 (b) provides that the Tribunal or other body shall have
the power of a civil court under the Code of Civil Procedure, 1908 in •
the matter of grant of adjournments. It runs thus :
"24. In addition to the powers conferred by the Act,
Boards, Courts, Labour Courts, Tribunals and National
8 Tribunals shall have the same powers as are vested in a
civil court under the Code of Civil Procedure, 1908, when
trying a suit, in respect of the following matters, namely;
(a)
(b) granting adjournment;"
c When sub-s. ( 1) of s. 11 expressly and in clear terms confers
power upon the Tribunal to regulate its own procedure, it must neces-
sarily be endowed with all powers which bring about an adjudication
(
of an existing industrial dispute, after affording all the parties an op-
portuuity of a hearing. We are inclined to the view that where a
party is prevented from appearing at the hearing due to a sufficient
D cause, and is faced with an ex parte award, it is as if the party is
visited with an award without a notice of the proceedings. It is need-
less to stress that where the Tribunal proceeds to make an award
without notice to a party, the award is nothing but a nullity. In •
such circumstances, the Tribunal has not only the power but also the
duty to set aside the ex parte award and to direct the matter to be
E
heard a.fresh.
The language of r. 22 unequivocally makes the jurisdiction of the
Tribunal to render an ex parte award conditional upon the fulfilment
of its requirements. If there is no sufficient cause for the absence
of a party, the Tribunal undoubtedly has jurisdiction to proceed ex
F parte. But if there was sufficient cause shown which prevented !I
party from appearing, then under the terms of r. 22, the Tribunal . --::.;·
will have had no jurisdiction to proceed and consequently, it must
necessarily have power to set aside the ex parte award. · In other
words, there is power to proceed ex parte, but this power is subject
to the fulfilment of the condition laid down in r. 22. The power to
G
proceed ex parte under r. 22 carries with it the power to enquire
whether or not there was sufficient cause for the absence of a party
at the hearing.
Under r. 24(b) a Tribunal or other body has the powers of i>
civil court under 0. XVII of the Code of Civil Procedure, relating to the •
H grant of adjournments. Under 0. XVII, r. 1, a civil court has the
discretion to grant or refuse an adjournment. Where it refuses to
adjourn the bearing of a suit, it may proceed either under O. XVII,
, GRINDLAYS BANK V. CENTRAL GOVT. INDUSTRIAL TRIBUNAL 347
(Sen, J.)
A
r. 2 or r. 3. When it decldes to proceed under 0. XVII, r. 2, it may
proceed to dispose of the suit in one of the modes directed in that
behalf by 0. IX, or to make such other order as it thinks fit. As a
new.;sary corollary, when the Tribunal or other body refuses to adjourn
the hearing, it ll)llY proceed ex parte. Iu a case in which the Tribunal
or other body makes an ex parte award, the provisions of 0. IX, r. 13 B
of the Code are clearly attracted. It h;>gically follows that the Tribu-
nal was competent to entertain an application to set aside an ex parte
award.
We are unable to appreciate the contention that merely because
the ex parte award was based on the statement of the manager of the
appellant, the order setting aside the ex parte award, in fact, amount.> c
to review. The decision in Narshi Thakershi v. Pradyumansinghji(I)
is distinguishable. It is an authority for the proposition that the power
of review is not an inherent power, it must be conferred either speci-
fically or by necessary implication. Sub-sections (1) and (3) of s.
11 of the Act themselves make a distinction between procedure and D
powers of the Tribunal under the Act. While the procedure i~ left
to be devised by the Tribunal to suit carrying out its functions under
the Act, the powers of civil conrt conferred upon it are clearly defined .
• The question whether a party must be heard before it is proceeded
against is one of procedure and not of power in the sense in which
the words are used in s. 11. The answer to the question is; there- E
fore, to be found in sulrs. ( 1) of s. 11 and not in sub-s. (3) of s. 11.
Furthermore, different considerations arise on review. The expres-
sion 'review' is used in two distinct senses, namely ( 1) a procedural
review which is either inherent or implied in a court or Tribunal to
set aside a palpably erroneous order passed under a misapprehension
by it, and (2) a review on merits when the error sought to be correc- F
ted is one of law and is apparent on the face of the record. It is in
the latter sense that the Conrt in Narshi Thakershi's case held that
no review lies on merits unless a status specifically provides for it.
• Obviously when a review is sought due to a procedural defect, the
inadvertent error committed by the Tribunal must be corrected ex
debito justitiae to prevent the abuse of its process, and such power G
I inheres in every court or Tribunal.
The contention that the Tribunal had become functus officio and
therefore, had no jurisdiction to set aside the ex parte award and that
the Central Goverrunent alone could set it aside, does not commend
to us. Sub-section (3) of s. 20 of the Act provides that the proceed- H
ings before the Tribunal would be deemed to continue till the date on
(1) AI.R. [1970] SC 1273.
348 SUPREME COURT REPORTS [1981] 2 s.C.R- \

A which the award becomes enforceable under s. 17A. Under s. 17A
of the Act, an award becomes enforceable on the expiry of 30 days •
from the date of its publication under s. 17. The proceedings with
regard to a reference under s. 10 of the Act are, therefore, not deem-
ed to be concluded until the expiry of 30 days from the publication
of the award. Till then the Tribunal retains jurisdiction over the
B dispute referred to it for adjudirotion and upto that date it has the
power to entertain an application in connection with such dispute.
That stage is not reached till the award becomes enforceable under
s. 17A. In the instant .case, the Tribunal made the ex parte award on
December 9, 1976. That award was published by the Centr:;il Gov-
ernment in the Gazette of India dated December 25, 1976. The appli-
c cation for setting aside the ex parte award was filed by respondent
No. 3, acting on behalf of respondents Nos. 5 to n on January 19,
1977 i.e., before the expiry of 30 days of its publication and was, (
therefore, rightly entertained by the Tribunal. It had jurisdiction to
entertain it and decide it on merits. It was, however, urged that on
D April 12, 1977 the date on which the impugned order was passed.
the Tribunal had in any event become functus officio. We cannot accede
to this argument. The jurisdiction of the Tribunal had to be seen
on the date of the applirotion made to it and not the date on which
it passed the impugned order. There is no finality attached to an
ex parte award because it is always S\lbject to its being set aside on
E sufficient rouse being shown. The Tribunal had the power to deaI
with an application properly made before it for setting aside the ex
parte award and pass suitable orders.
The result, therefore, is that the appeal must fail and is dismissed
with costs throughout.

V.D.K. Appeal dismissed. ~·