Holding

The Labour Court/Industrial Tribunal is not functus officio after an award becomes enforceable and may set aside an ex‑parte award upon showing sufficient cause, exercising its ancillary and incidental powers guided by natural justice.

Summary

The case concerned whether an Industrial Tribunal or Labour Court loses its jurisdiction to set aside an ex‑parte award once the award becomes enforceable under Section 17A of the Industrial Disputes Act, 1947. The appellant, Haryana Suraj Malting Ltd., sought to have an ex‑parte award against workman Phool Chand recalled, arguing that the Tribunal was functus officio after the 30‑day period post‑publication. The Supreme Court examined the statutory scheme, the rules allowing ex‑parte proceedings, and the principles of natural justice, holding that the Tribunal retains ancillary and incidental powers to entertain applications to set aside an ex‑parte award if the aggrieved party shows sufficient cause for non‑appearance, irrespective of the award’s enforceability. The Court clarified that enforceability does not make an award automatically binding if procedural fairness is lacking. Consequently, the appeals were disposed of, the awards remitted to the Labour Court for fresh consideration, and a provisional payment of Rs 1,00,000 to each workman was ordered pending final determination.

Issues considered

Whether an Industrial Tribunal/Labour Court becomes functus officio after an award becomes enforceable under Section 17A, thereby losing power to set aside an ex‑parte award.
Whether an application to set aside an ex‑parte award can be filed after the award has become enforceable, and if the 30‑day limitation is mandatory.
Whether the Tribunal possesses ancillary or inherent powers, under the Industrial Disputes Act and the Central Rules, to recall an ex‑parte award on grounds of natural justice.

Legislation cited

Code of Civil Procedure, 1908s. Order 17, s. Order IX Rule 13
Industrial Disputes Act, 1947s. 11(1), s. 16, s. 17, s. 17A, s. 20, s. 29
Industrial Disputes (Central) Rules, 1957s. Rule 10B(9), s. Rule 22, s. Rule 24
Limitation Act, 1963

Subjects

ex‑parte awardfunctus officioIndustrial TribunalLabour Courtnatural justiceancillary powersIndustrial Disputes Actsetting aside awardprocedural reviewenforceability

Judgment

[2018] 5 S.C.R. 377 377

M/S. HARYANA SURAJ MALTING LTD. A
v.
PHOOL CHAND
(Civil Appeal No. 5650 of 2018)
MAY 18, 2018 B
[KURIAN JOSEPH, MOHAN M. SHANTANAGOUDAR
AND NAVIN SINHA, JJ.]
Industrial Disputes Act, 1947: ss. 16, 17 and 17A – Ex-parte
award – Power to recall, by the Industrial Tribunal/Labour Court
C
after it becomes enforceable – Held: Industrial tribunal/labour court
is not functus officio after the award has become enforceable, as
far as setting aside an ex parte award is concerned – It is within its
powers to entertain an application as per the scheme of the Act and
in terms of the rules of natural justice – Merely because an award
has become enforceable, does not necessarily mean that it has D
become binding – For an award to become binding, it should be
passed in compliance with the principles of natural justice –
Furthermore, in case a party is in a position to show sufficient cause
for its absence before the Labour Court/Tribunal when it was set
ex parte, the Labour Court/Tribunal, in exercise of its ancillary or
E
incidental powers, is competent to entertain such an application –
That power cannot be circumscribed by the principle of functus
officio.
Disposing of the appeals, the Court
HELD: 1.1 Under Section 17(1) of the Industrial Disputes F
Act, 1947, an award shall be published by the appropriate
Government within 30 days of its receipt. Under Section 17(2),
the award becomes final subject to Section 17A. Under Section
17A, an award becomes enforceable on the expiry of 30 days
from the date of its publication under Section 17. Under the
statutory scheme, the labour court/tibunal is empowered to follow G
its own procedure as it thinks fit, meaning thereby, a procedure
which is fit and proper for the settlement of the industrial dispute
and for maintaining industrial peace. If a party fails to attend the
court/tribunal without showing sufficient cause, the court/tribunal
can proceed ex parte and pass an ex parte award. The award, H
377
378 SUPREME COURT REPORTS [2018] 5 S.C.R.

A ex parte or otherwise, has to be sent to the appropriate
Government as soon as it is made and the appropriate
Government has to publish it within 30 days of its receipt. The
award thus, published becomes enforceable after a period of 30
days of its publication. Furthermore, an ex parte award can be
set aside in case the court/tribunal is approached within 30 days
B
of its publication under Section 17 of the Act, is no more res
integra. [Para 7, 12, 14] [382-F-G; 383-C-D; 384-F-G; 385-A]
1.2 On a close reading of Grindlays case in the background
of the analysis of law, it is difficult to comprehend that the power
to set aside an ex parte award is not available to a Labour Court/
C Industrial Tribunal. On the principles of natural justice, and on a
purposive interpretation of the scheme of the Act and Rules, it is
difficult also to discern that the ratio of the decision in Grindlays
case, is what is stated to the extent that an application for setting
aside an ex parte award has to be filed within 30 days of publication
D of the award. On the contrary, the ratio in Grindlays case is that
the tribunal can exercise its ancillary and incidental powers, on
the broader principles contained under Order IX Rule 13 of the
CPC. No doubt, the Limitation Act, 1963 is not applicable to the
labour court/tribunal. [Para 30] [394-GH; 395-A]
E 1.3 In case a party is in a position to show sufficient cause
for its absence before the labour court/ tribunal when it was set
ex parte, the labour court/tribunal, in exercise of its ancillary or
incidental powers, is competent to entertain such an application.
That power cannot be circumscribed by limitation. What is the
sufficient cause and whether its jurisdiction is invoked within a
F reasonable time should be left to the judicious discretion of the
labour court/tribunal. [Para 32] [396-D-E]
1.4 It is a matter of natural justice that any party to the
judicial proceedings should get an opportunity of being heard,
and if such an opportunity has been denied for want of sufficient
G reason, the labour court/tribunal which denied such an opportunity,
being satisfied of the sufficient cause and within a reasonable
time, should be in a position to set right its own procedure.
Otherwise as held in Grindlays case, an award which may be a
nullity will have to be technically enforced. It is difficult to
H comprehend such a situation under law. [Para 33] [396-E-F]
M/S. HARYANA SURAJ MALTING LTD. v. PHOOL CHAND 379

1.5 Merely because an award has become enforceable, does A
not necessarily mean that it has become binding. For an award to
become binding, it should be passed in compliance with the
principles of natural justice. An award passed denying an
opportunity of hearing when there was a sufficient cause for non-
appearance can be challenged on the ground of it being nullity.
B
An award which is a nullity cannot be and shall not be a binding
award. In case a party is able to show sufficient cause within a
reasonable time for its non-appearance in the labour court/tribunal
when it was set ex parte, the labour court/tribunal is bound to
consider such an application and the application cannot be rejected
on the ground that it was filed after the award had become C
enforceable. The labour court/tribunal is not functus officio after
the award has become enforceable as far as setting aside an ex
parte award is concerned. It is within its powers to entertain an
application as per the scheme of the Act and in terms of the rules
of natural justice. The Industrial Disputes Act, 1947 is a welfare
D
legislation intended to maintain industrial peace. In that view of
the matter, certain powers to do justice have to be conceded to
the labour court/tribunal, whether it is called ancillary, incidental
or inherent. [Para 35] [397-B-E]
1.6 When an application for setting aside an ex parte award
is made at the instance of the management, the labour court/ E
tribunal has to balance equities. The awards are remitted to the
labour court for consideration as to whether there was sufficient
cause for non- appearance of the management. Since the litigation
has been pending for a long time, the appellants are directed to
pay an amount of Rs.1,00,000/- in each case to the workmen by F
way of provisional payment. However, the payment is subject to
the final outcome of the aw ards and would be adjusted
appropriately. [Para 36] [397-F-G]
Grindlays Bank Ltd. v. Central Government Industrial
Tribunal and others [1981] SCR 341 : (1980) Suppl. G
SCC 420 – relied on.
Kapra Mazdoor Ekta Union v. Birla Cotton Spinning
and Weaving Mills Ltd. and Another [2005] 2 SCR
888 : (2005) 13 SCC 777 – distinguished.
H
380 SUPREME COURT REPORTS [2018] 5 S.C.R.

A Anil Sood v. Presiding Officer, Labour Court II (2001)
10 SCC 534; Jammu Tehsil v. Hakumar Singh and
others (2006) 12 SCC 193; M.P. Steel Corporation v.
Commissioner of Central Excise (2015) 7 SCC 58;
Nityananda, M. Joshi and others v. Life Insurance
Corporation of India and others (1969) 2 SCC 199;
B
Union of India and another v. Paras Laminates (P) Ltd
(1990) 4 SCC 453; J. K. Synthetics Ltd v. Collector
of Central Excise [1996] 5 Suppl. SCR 295 : (1996)
6 SCC 92; Sangham Tape Co. v. Hans Raj
[2004] 4 Suppl. SCR 728 : (2005) 9 SCC 331; and
C Radhakrishna Mani Tripathi v. L. H Patel and another
[2008] 16 SCR 490 : (2009) 2 SCC 81; Haryana Suraj
Malting Limited v. Phool Chand (2012) 8 SCC 579 -
referred to.
Case Law Reference
D [2004] 4 Suppl. SCR 728 referred to Para 3
[2008] 16 SCR 490 referred to Para 3
(2012) 8 SCC 579 referred to Para 3
(2001) 10 SCC 534 referred to Para 23
E
(2006) 12 SCC 193 referred to Para 26
[2005] 2 SCR 888 distinguished Para 29
[1981] SCR 341 relied on Para 30
(2015) 7 SCC 58 referred to Para 30
F
(1969) 2 SCC 199 referred to Para 30
(1990) 4 SCC 453 referred to Para 31
[1996] 5 Suppl. SCR 295 referred to Para 31
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5650
G
of 2018.
From the Judgment and Order dated 08.09.2009 of the High Court
of Punjab and Haryana at Chandigarh in Civil Writ Petition No.15090 of
2000
H WITH
M/S. HARYANA SURAJ MALTING LTD. v. PHOOL CHAND 381

Civil Appeal No. 5649 of 2018 A
Civil Appeal No. 5893 of 2012.
Mr. Chetan Joshi, Rameshwar Prasad Goyal, Aftab Ali Khan,
M. Mohsin Islaily, Advs. for the Appellant.
Rishi Malhotra, Adv. for the Respondent. B
The Judgment of the Court was delivered by
KURIAN, J. 1. Leave granted.
2. The question arising for consideration in this case is whether
the Industrial Tribunal/Labour Court is functus officio after the award
C
has become enforceable, and is thus, prevented from considering an
application for setting aside an ex parte award.
3. In view of the conflict between two decisions of this Court -
Sangham Tape Co. v. Hans Raj1 and Radhakrishna Mani Tripathi
v. L.H Patel and another2, by order dated 21.01.2011 in Haryana
D
Suraj Malting Limited v. Phool Chand3, a reference to a larger bench
was made in the following terms:
“1. Whether the Industrial Tribunal/Labour Court becomes
functus officio after 30 days of the pronouncement/publication of
the award and loses all powers to recall an ex parte award on an
application made by the aggrieved party after 30 days from the E
date of pronouncement/publication of the award is the question
that once again arises for consideration in these cases.
2. It may be noted that on this question two Division Bench
decisions have taken apparently conflicting views. In Sangham
Tape Co. v. Hans Raj a two-Judge Bench held and observed F
that an application for recall of an ex parte award may be
entertained by the Industrial Tribunal/Labour Court only in case it
is filed before the expiry of 30 days from the date of
pronouncement/publication of the award. A contrary view was
taken in Radhakrishna Mani Tripathi v. L.H. Patel to which G
one of us (Aftab Alam, J.) was a party.

1
(2005) 9 SCC 331
2
(2009) 2 SCC 81
3
(2012) 8 SCC 579
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382 SUPREME COURT REPORTS [2018] 5 S.C.R.

A 3. In both cases, that is to say, Sangham Tape Co. and
Radhakrishna Mani Tripathi, the Court referred to and relied
upon the earlier decisions in Grindlays Bank Ltd. v. Central
Govt. Industrial Tribunal and Anil Sood v. Labour Court but
read and interpreted those two decisions completely differently.
B 4. The conflict which has arisen as a result of the two decisions
can only be resolved by a larger Bench. Let these cases be,
therefore, listed before a three-Judge Bench.”
4. Heard learned counsel appearing for the parties and Mr. Shekhar
Naphade, learned senior counsel assisting the Court as Amicus Curiae.
C
5. The Industrial Disputes Act, 1947 (hereinafter referred to as
“the Act”) was enacted “…to make provision for the investigation
and settlement of industrial disputes, and for certain other
purposes”. Chapter IV provides for the “procedure, powers and duties
of authorities”. Under Section 11(1) of Chapter IV, it is provided that
D the Labour Court or Tribunal can follow such procedure as it thinks fit.
“11(1) Subject to any rules that may be made in this behalf, an
arbitrator, a Board, Court, Labour Court, Tribunal or National
Tribunal shall follow such procedure as the arbitrator or other
authority concerned may think fit.”
E
6. Under Section 17(1), an award shall be published by the
appropriate Government within 30 days of its receipt. Under Section
17(2), the award becomes final subject to Section 17A. Under Section
17A, an award becomes enforceable on the expiry of 30 days from the
F date of its publication under Section 17.
7. Section 20 deals with the commencement and conclusion of
proceedings. Under Section 20(3), proceedings before the Court/Tribunal
shall be deemed to have been concluded on the date on which the award
becomes enforceable under Section 17A.
G “20. Commencement and conclusion of proceedings.-
(1) A conciliation proceeding shall be deemed to have commenced
on the date on which a notice of strike or lock- out under section
22 is received by the conciliation officer or on the date of the
order referring the dispute to a Board, as the case may be.
H
M/S. HARYANA SURAJ MALTING LTD. v. PHOOL CHAND 383
[KURIAN, J.]

(2) A conciliation proceeding shall be deemed to have concluded- A
(a) where a settlement is arrived at, when a memorandum of
the settlement is signed by the parties to the dispute;
(b) where no settlement is arrived at, when the report of the
conciliation officer is received by the appropriate
Government or when the report of the Board is published B
under section 17, as the case may be; or
(c) when a reference is made to a Court, Labour Court,
Tribunal or National Tribunal] under section 10 during
the pendency of conciliation proceedings.
C
(3) Proceedings before an arbitrator under section 10A or
before a Labour Court, Tribunal or National Tribunal shall be
deemed to have commenced on the date of the reference of the
dispute for arbitration or adjudication, as the case may be and
such proceedings shall be deemed to have concluded on the date
on which the award becomes enforceable under section 17A.” D
8. Section 38 provides for power to frame rules for the purpose of
giving effect to the provisions of the Act including the powers and
procedure of the Courts/Tribunals.
9. Rule 10B(9), as introduced in 1984 of the Industrial Disputes
E
(Central) Rules, 1957 (hereinafter referred to as the “Central Rules”),
reads as follows:
“10B(9). In case any party defaults or fails to appear at any stage
the Labour Court, Tribunal or National Tribunal, as the case may
be, may proceed with the reference ex parte and decide the
F
reference application in the absence of the defaulting party:
Provided that the Labour Court, Tribunal or National Tribunal,
as the case may be, may on the application of either party filed
before the submission of the award revoke the order that the
case shall proceed ex parte, if it is satisfied that the absence of
the party was on justifiable grounds.” G

10. Rule 22 of the Central Rules also provides that the Court/
Tribunal can proceed ex parte in case any party fails to attend the Court/
Tribunal without sufficient cause being shown. The Rule reads as follows:

H
384 SUPREME COURT REPORTS [2018] 5 S.C.R.

A “22. Board, Court, Labour Court, Tribunal, National
Tribunal or Arbitrator may proceed ex parte.-If without
sufficient cause being shown, any party to proceeding before a
Board, Court, Labour Court, Tribunal, National Tribunal or
Arbitrator fails to attend or to be represented, the Board, Court,
Labour Court, Tribunal, National Tribunal or Arbitrator may
B
proceed, as if the party had duly attended or had been represented.”
11. Rule 24 provides that the Boards, Courts, Labour Courts,
Tribunals and National Tribunals shall have the same powers as are
vested in a Civil Court in respect of the matters specified within the
Rule. The Rule reads as follows:
C
“24. Power of Boards, Courts, Labour Courts, Tribunals
and National Tribunals.- In addition to the powers conferred by
the Act, Boards, Courts, Labour Courts, Tribunals and National
Tribunals shall have the same powers as are vested in a Civil
Court under the Code of Civil Procedure, 1908, when trying a
D suit, in respect of the following matters, namely:-
(a) discovery and inspection;
(b) granting adjournment;
(b) reception of evidence taken on affidavit, and the Board, Court,
E Labour Court, Tribunals or National Tribunal may summon and
examine any person whose evidence appears to it to be material
and shall be deemed to a civil court within the meaning of sections
480 and 482 of the Code of Criminal Procedure, 1973.”
12. Thus, under the statutory scheme, the Labour Court/Tribunal
F is empowered to follow its own procedure as it thinks fit, meaning thereby,
a procedure which is fit and proper for the settlement of the industrial
dispute and for maintaining industrial peace. If a party fails to attend the
Court/Tribunal without showing sufficient cause, the Court/Tribunal can
proceed ex parte and pass an ex parte award. The award, ex parte or
otherwise, has to be sent to the appropriate Government as soon as it is
G made and the appropriate Government has to publish it within 30 days of
its receipt. The award thus published becomes enforceable after a period
of 30 days of its publication.
13. In case of an ex parte award, whether the Court/Tribunal can
set aside the same after 30 days of its publication, is the question to be
H considered.
M/S. HARYANA SURAJ MALTING LTD. v. PHOOL CHAND 385
[KURIAN, J.]

14. That an ex parte award can be set aside in case the Court/ A
Tribunal is approached within 30 days of its publication under Section 17
of the Act, is no more res integra. In Grindlays Bank Ltd. v. Central
Government Industrial Tribunal and others 4, it has been held at
paragraph-14 that:
“14. The contention that the Tribunal had become functus officio B
and, therefore, had no jurisdiction to set aside the ex parte award
and that the Central Government alone could set it aside, does not
commend to us. Sub-section (3) of Section 20 of the Act provides
that the proceedings before the Tribunal would be deemed to
continue till the date on which the award becomes enforceable
under Section 17-A. Under Section 17-A of the Act, an award C
becomes enforceable on the expiry of 30 days from the date of its
publication under Section 17. The proceedings with regard to a
reference under Section 10 of the Act are, therefore, not deemed
to be concluded until the expiry of 30 days from the publication of
the award. Till then the Tribunal retains jurisdiction over the dispute D
referred to it for adjudication and up to 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
Section 17-A…….”
At paragraph-6 in Grindlays (supra), it was held that the Tribunal can
exercise such powers, if it thinks fit, in the interest of justice. It has also E
been held that the Tribunal is endowed with such incidental or ancillary
powers as are necessary to discharge its functions effectively for the
purpose of doing justice between the parties, unless there is any express
indication in the statute to the contrary. To quote:
“6. We are of the opinion that the Tribunal had the power to F
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 thereunder giving the Tribunal jurisdiction to do so. But it
is a well known rule of statutory construction that a Tribunal or
body should be considered to be endowed with such ancillary or G
incidental powers as are necessary to discharge its functions
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 with such incidental or ancillary
4
1980 (Supp) SCC 420
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386 SUPREME COURT REPORTS [2018] 5 S.C.R.

A powers unless there is any indication in the statute to the contrary.
We do not find any such statutory prohibition. On the other hand,
there are indications to the contrary.”
15. In paragraph-7, it has been held that although the Tribunal or
other authorities specified in Section 11 of the Act are not Courts, they
B have the trappings of a Court and they exercise quasi-judicial functions.
16. At paragraph-8, it has been held that “... all these authorities
being quasi-judicial in nature, objectively determining matters
referred to them, have to exercise their discretion in a judicial
manner, without caprice and according to the general principles of
C law and rules of natural justice”.
17. At paragraph-10, it has been held that an award passed without
participation on sufficient causes is a nullity, and hence, the Court/Tribunal
has the power and duty to set aside an ex parte award.
18. At paragraph-11, it has been held that the view taken at
D paragraph-10 is in consonance with the mandate of Rule 22.
19. At paragraph-12, the Court took the view that going by Rule
24 of the Central Rules regarding grant of adjournment being governed
by the Code of Civil Procedure, 1908 (hereinafter referred to as “the
CPC”), the provisions of Order IX Rule 13 of the CPC would apply in
E case of an ex parte award.
20. In paragraph-13, it was held that setting aside an ex parte
award is a matter of procedural review exercised ex debito justitiae to
prevent abuse of its process and such powers are inherent in every
Court or Tribunal.
F
21. Paragraphs-10 to 13 read as follows:
“10. When sub-section (1) of Section 11 expressly and in clear
terms confers power upon the Tribunal to regulate its own
procedure, it must necessarily be endowed with all powers which
bring about an adjudication of an existing industrial dispute, after
G affording all the parties an opportunity of a hearing. We are inclined
to the view that where 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. It is needless to stress that where the Tribunal
H
M/S. HARYANA SURAJ MALTING LTD. v. PHOOL CHAND 387
[KURIAN, J.]

proceeds to make an award without notice to a party, the award A
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 heard afresh.
11. The language of Rule 22 unequivocally makes the jurisdiction
of the Tribunal to render an ex parte award conditional upon the B
fulfilment of its requirements. If there is no sufficient cause for
the absence of a party, the Tribunal undoubtedly has jurisdiction
to proceed ex parte. But if there was sufficient cause shown
which prevented a party from appearing, then under the terms of
Rule 22, the Tribunal will have had no jurisdiction to proceed and
consequently, it must necessarily have power to set aside the ex C
parte award. In other words, there is power to proceed ex parte,
but such power is subject to the fulfilment of the condition laid
down in Rule 22. The power to proceed ex parte under Rule 22
carries with it the power to enquire whether or not there was
sufficient cause for the absence of a party at the hearing. D
12. Under Rule 24(b) a Tribunal or other body has the powers
of a civil court under Order 17 of the Code of Civil Procedure,
relating to the grant of adjournments. Under Order 17, Rule 1, a
civil court has the discretion to grant or refuse an adjournment.
Where it refuses to adjourn the hearing of a suit, it may proceed E
either under Order 17, Rule 2 or Rule 3. When it decides to
proceed under Order 17, Rule 2, it may proceed to dispose of the
suit in one of the modes directed in that behalf by Order 9, or to
make such other order as it thinks fit. As a necessary corollary,
when the Tribunal or other body refuses to adjourn the hearing, it
may proceed ex parte. In a case in which the Tribunal or other F
body makes an ex parte award, the provisions of Order 9, Rule 13
of the Code are clearly attracted. It logically follows that the
Tribunal was competent to entertain an application to set aside an
ex parte award.
13. We are unable to appreciate the contention that merely G
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, amounts to review. The decision in Patel Narshi
Thakershi v. Pradyumansinghji Arjunsinghji is distinguishable.
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388 SUPREME COURT REPORTS [2018] 5 S.C.R.

A It is an authority for the proposition that the power of review is
not an inherent power, it must be conferred either specifically or
by necessary implication. Sub-sections (1) and (3) of Section 11
of the Act themselves make a distinction between procedure and
powers of the Tribunal under the Act. While the procedure is left
to be devised by the Tribunal to suit carrying out its functions
B
under the Act, the powers of civil court 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 Section 11. The answer to
the question is, therefore, to be found in sub-section (1) of Section
C 11 and not in sub-section (3) of Section 11. Furthermore, different
considerations arise on review. The expression “review” is used
in the 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 corrected
D
is one of law and is apparent on the face of the record. It is in the
latter sense that the court in Patel Narshi Thakershi case held
that no review lies on merits unless a statute specifically provides
for it. Obviously when a review is sought due to a procedural
defect, the inadvertent error committed by the Tribunal must be
E corrected ex debito justitiae to prevent the abuse of its process,
and such power inheres in every court or Tribunal.”
(Emphasis supplied)
22. The Court has unambiguously held that it is the power and
duty of the Tribunal exercising its ancillary and incidental powers to set
F aside an award which is a nullity. In that process, the Tribunal is governed
by the principles of Order IX Rule 13 of the CPC. However, apparently,
on facts, the Court came to the conclusion that the power to set aside an
ex parte award remained only till the award had become enforceable
under Section 17A, viz., before the expiry of 30 days from the date of its
G publication under Section 17. It may be seen that the application for
setting aside the award in Grindlays (supra) was filed within 30 days of
publication; the award was made on 09.12.1970, published on 25.12.1976
and the application was filed on 19.01.1977. It is interesting to note that
in Grindlays (supra), the Court summarised the legal position in the
concluding paragraph to the effect that “...There is no finality attached
H
M/S. HARYANA SURAJ MALTING LTD. v. PHOOL CHAND 389
[KURIAN, J.]

to an ex parte award because it is always subject to its being set A
aside on sufficient cause being shown. The Tribunal had the power
to deal with an application properly made before it for setting aside
the ex parte award and pass suitable orders.”
23. In Anil Sood v. Presiding Officer, Labour Court II5 , the
Court relied on Grindlays (supra). The facts in the case of Anil Sood B
(supra) are important for the purpose of calculating the 30 days period.
In this case, a reference was made to the Labour Court and the award
was made on 11-09-1995. An application was filed by the appellant therein
on 06-11-1995 contending that he had no notice of the proceedings. That
application was dismissed on the ground that the Labour Court had
become functus officio. It is pertinent to note that the decision does not C
mention the date of publication of the award. Following the decision in
Grindlays (supra), the Court held as follows:
“5. This Court in Grindlays Bank Ltd. case examined the
scheme of the provisions under the Industrial Disputes Act and
enunciated that Section 11 of the Industrial Disputes Act conferred D
ample powers upon the Tribunal to devise its own procedure in
the interest of justice which includes powers which bring out the
adjudication of an existing industrial dispute. Sub-sections (1) and
(3) of Section 11 of the Act thereby indicate the difference between
procedure and powers of the Tribunal under the Act, while the E
procedure is left to be devised by the Tribunal to suit carrying out
its functions under the Act, the extent of powers of the civil court
are clearly set out.
6. The aspect that the party against whom award is to be
made due opportunity to defend has to be given is a matter of F
procedure and not that of power in the sense in which the language
is adopted in Section 11. When matters are referred to the tribunal
or court they have to be decided objectively and the tribunals/
courts have to exercise their discretion in a judicial manner without
arbitrariness by following the general principles of law and rules
of natural justice. G
7. The power to proceed ex parte is available under Rule 22
of the Central Rules which also includes the power to inquire
whether or not there was sufficient cause for the absence of a
5
(2001) 10 SCC 534
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390 SUPREME COURT REPORTS [2018] 5 S.C.R.

A party at the hearing, and if there is sufficient cause shown which
prevented a party from appearing, then if the party is visited with
an award without a notice which is a nullity and therefore the
Tribunal will have no jurisdiction to proceed and consequently, it
must necessarily have power to set aside the ex parte award.
B 8. If this be the position in law, both the High Court and the
Tribunal (sic Labour Court) fell into an error in stating that the
Labour Court had become functus officio after making the award
though ex parte. We set aside the order made and the award
passed by the Labour Court and affirmed by the High Court in
this regard, in view of the fact that the learned counsel for the
C respondent conceded that application filed by the appellant be
allowed, set aside the ex parte award and restore the reference.
To decide the matter afresh, the parties shall appear before the
Labour Court on 11-12-2000 to take further directions as regards
the proceedings. As the matter is very old, it would be appropriate
D for the Labour Court to dispose of this reference as expeditiously
as possible but not later than six months from today.”
24. In Sangham (supra), the Court took the view that the Labour
Court/Tribunal retains jurisdiction over disputes referred to it for
adjudication only up to the expiry of 30 days of the publication of the
E award, and thereafter, the Court/Tribunal becomes functus officio.
Referring to paragraph-14 in Grindlays (supra), the Court held as follows:
“8. The said decision is, therefore, an authority for the
proposition that while an Industrial Court will have jurisdiction to
set aside an ex parte award, but having regard to the provision
F contained in Section 17-A of the Act, an application therefor must
be filed before the expiry of 30 days from the publication thereof.
Till then the Tribunal retains jurisdiction over the dispute referred
to it for adjudication, and only up to that date, it has the power to
entertain an application in connection with such dispute.

G XXX XXX XXX
10. In view of this Court’s decision in Grindlays Bank [1980
Supp SCC 420 : 1981 SCC (L&S) 309] such jurisdiction could be
exercised by the Labour Court within a limited time frame, namely,
within thirty days from the date of publication of the award. Once
H
M/S. HARYANA SURAJ MALTING LTD. v. PHOOL CHAND 391
[KURIAN, J.]

an award becomes enforceable in terms of Section 17-A of the A
Act, the Labour Court or the Tribunal, as the case may be, does
not retain any jurisdiction in relation to setting aside of an award
passed by it. In other words, upon the expiry of 30 days from the
date of publication of the award in the gazette, the same having
become enforceable, the Labour Court would become functus
B
officio.
11. Grindlays Bank has been followed in Satnam Verma v.
Union of India and J.K. Synthetics Ltd. v. CCE.”
(Emphasis supplied)
25. This Court in Sangham (supra) also referred to the decision in C
Anil Sood (supra) and noted as follows:
“12.This Court in Anil Sood did not lay down any law to the
contrary. The contention raised on the part of Mr Jain to the effect
that in fact in that case an application for setting aside an award
was made long after 30 days cannot be accepted for more than D
one reason. Firstly, a fact situation obtaining in one case cannot
be said to be a precedent for another. (See Mehboob Dawood
Shaikh v. State of Maharashtra). Secondly, from a perusal of
the said decision, it does not appear that any date of publication of
the award was mentioned therein so as to establish that even on
E
fact, the application was made 30 days after the expiry of publication
of the award. Furthermore, the said decision appears to have been
rendered on concession.”
(Emphasis supplied)
26. In Jammu Tehsil v. Hakumar Singh and others6, following F
the decisions in Grindlays (supra), this Court at paragraph-5 held that
“In view of this Court’s decision in Grindlays Bank case such
jurisdiction could be exercised by the Labour Court within a limited
time-frame, namely, within thirty days from the date of publication
of the award. Once an award becomes enforceable in terms of
Section 17-A of the Act, the Labour Court or the Tribunal, as the G
case may be, does not retain any jurisdiction in relation to setting
aside of an award passed by it. In other words, upon the expiry of
30 days from the date of publication of the award in the Gazette,
6
(2006) 12 SCC 193
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392 SUPREME COURT REPORTS [2018] 5 S.C.R.

A the same having become enforceable, the Labour Court would
become functus officio”.
27. In Radhakrishna Mani Tripathi (supra) the argument was
that Rule 26 (2) of the Industrial Disputes (Bombay) Rules is ultra vires.
The Rule as quoted in the decision, to the extent relevant, reads as follows:
B “(2) Where any award, order or decision is made ex parte
under sub-rule (1), the aggrieved party, may within thirty days of
the receipt of a copy thereof, make an application to the Board,
Court, Labour Court, Tribunal or an arbitrator, as the case may
be, to set aside such award, order or decision. If the Board, Court,
C Labour Court, Tribunal or arbitrator is satisfied that there was
sufficient cause for non-appearance of the aggrieved party, it or
he may set aside the award, order or decision so made and shall
appoint a date for proceeding with the matter:
Provided that, no award, order or decision shall be set aside on
D any application as aforesaid unless notice thereof has been served
on the opposite party.”
It was contended that under Section 17-A of the Act an award becomes
enforceable on expiry of 30 days from the date of its publication
whereupon the Labour Court is rendered functus officio. Reliance was
E placed on certain observations in Grindlays (supra) and it was further
submitted that the provision of Rule 26(2) of the Bombay Rules was in
derogation of Section 17-A of the Act. However, the Court held as follows:
“15. Similarly, the Court pointed out in Grindlays Bank, the
provision of Rule 24(b) empowered the Industrial Courts to refuse
F to adjourn the hearing and to proceed ex parte. Hence, in a case
in which the Industrial Court makes an ex parte award the
provisions of Order 9 Rule 13 CPC would be clearly attracted. It
logically follows that the Tribunal is competent to entertain an
application to set aside an ex parte award. (Vide para 12 of the
decision.) The Court thus founded the Industrial Court’s jurisdiction
G and power to recall an ex parte award on Rules 22 and 24(b) of
the Central Rules. It is thus to be seen that in Grindlays Bank
what this Court held to be implicit in Rule 22 of the Central Rules
is made explicit and clear in the Bombay Rules in the form of sub-
rule (2) of Rule 26.”
H
M/S. HARYANA SURAJ MALTING LTD. v. PHOOL CHAND 393
[KURIAN, J.]

28. After referring to and quoting paragraph-14 in Grindlays A
(supra), it was further held that:
“16. ...From the above quotation it would appear that in
Grindlays Bank the recall application was filed within thirty days
from the date of publication of the award and hence, the objection
raised on the basis of Section 17-A did not arise in this case. In B
Grindlays Bank this Court did not say that the Industrial Courts
would have no jurisdiction to entertain an application for setting
aside an award made after thirty days of its publication.
Nevertheless, on the basis of the passage marked in italics in the
above quotation Ms Issar strongly contended that that is the true
import of the judgment. C

17. We are unable to accept. The position is made clear in
the later decision in Anil Sood v. Labour Court. In Anil Sood
interestingly the Labour Court had rejected the recall application
on the very same ground that after making the award it became
functus officio in the matter. The order of the Labour Court was D
challenged before the High Court but the High Court also took
the same view. In appeal this Court noted that the award was
made on 11-9-1995 and the application for its recall was filed on
6-11-1995.…
18. In light of the decision in Anil Sood we find no substance E
in the appellant’s submission based on Section 17-A of the Act.
There being no substance in the first limb of the submission there
is no question of any conflict between Rule 26(2) of the Bombay
Rules and Section 17-A of the Act.”
(Emphasis supplied) F
29. Kapra Mazdoor Ekta Union v. Birla Cotton Spinning
and Weaving Mills Ltd. and Another7 is a decision by a Bench of 3
Judges which has also referred to Grindlays (supra). It is a case where
the award was made on 12.06.1987 and published on 10.08.1987. The
recall application was made on 07.09.1987, before the expiry of the 30 G
days period provided under Section 17A. It is also to be noted that the
application for recall of the award was with a prayer for raising an
additional issue. To quote from paragraph-20 of the judgment, “...The
recall of the award of the Tribunal was sought not on the ground
7
(2005) 13 SCC 777
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394 SUPREME COURT REPORTS [2018] 5 S.C.R.

A that in passing the award the Tribunal had committed any procedural
illegality or mistake of the nature which vitiated the proceeding
itself and consequently the award, but on the ground that some
matters which ought to have been considered by the Tribunal were
not duly considered. Apparently the recall or review sought was not
a procedural review, but a review on merits. Such a review was not
B
permissible in the absence of a provision in the Act conferring the
power of review on the Tribunal either expressly or by necessary
implication.” Therefore, Kapra (supra) is distinguishable on facts and
on the question of law dealt with therein: it was a case of substantive
review whereas, setting aside an ex parte award is a matter of procedural
C review. In the case of procedural review, as held in Kapra (supra), the
party “... has to establish that the procedure followed by the court
or the quasi-judicial authority suffered from such illegality that it
vitiated the proceeding and invalidated the order made therein,
inasmuch as the opposite party concerned was not heard for no
fault of his, or that the matter was heard and decided on a date
D
other than the one fixed for hearing of the matter which he could
not attend for no fault of his. In such cases, therefore, the matter
has to be reheard in accordance with law without going into the
merit of the order passed. The order passed is liable to be recalled
and reviewed not because it is found to be erroneous, but because
E it was passed in a proceeding which was itself vitiated by an error
of procedure or mistake which went to the root of the matter and
invalidated the entire proceeding. In Grindlays Bank Ltd. v. Central
Govt. Industrial Tribunal it was held that once it is established that
the respondents were prevented from appearing at the hearing due
to sufficient cause, it followed that the matter must be reheard and
F
decided again.”
30. Therefore, all the decisions hereinabove noted by us referred
to Grindlays (supra). On a close reading of paragraph-14 of Grindlays
(supra), in the background of the analysis of law under paragraphs-10 to
13, it is difficult for us to comprehend that the power to set aside an ex
G parte award is not available to a Labour Court/Industrial Tribunal. On
the principles of natural justice, and on a purposive interpretation of the
scheme of the Act and Rules, we find it difficult also to discern that the
ratio of the decision in Grindlays (supra), is what is stated in paragraph-
14 to the extent that an application for setting aside an ex parte award
H
M/S. HARYANA SURAJ MALTING LTD. v. PHOOL CHAND 395
[KURIAN, J.]

has to be filed within 30 days of publication of the award. On the contrary, A
the ratio in Grindlays (supra) is that the Tribunal can exercise its ancillary
and incidental powers, on the broader principles contained under Order
IX Rule 13 of the CPC. No doubt, the Limitation Act, 1963 is not
applicable to the Labour Court/Tribunal8.
31. In Union of India and another v. Paras Laminates (P) B
Ltd9 this Court held that the legislature has intended and has conceded
certain powers to the tribunals in their assigned field of jurisdiction for
the efficacious and meaningful exercise of their power. Such powers
are implied in every tribunal unless expressly barred.
“8. There is no doubt that the Tribunal functions as a court C
within the limits of its jurisdiction. It has all the powers conferred
expressly by the statute. Furthermore, being a judicial body, it has
all those incidental and ancillary powers which are necessary to
make fully effective the express grant of statutory powers. Certain
powers are recognised as incidental and ancillary, not because
they are inherent in the Tribunal, nor because its jurisdiction is D
plenary, but because it is the legislative intent that the power which
is expressly granted in the assigned field of jurisdiction is
efficaciously and meaningfully exercised. The powers of the
Tribunal are no doubt limited. Its area of jurisdiction is clearly
defined, but within the bounds of its jurisdiction, it has all the powers E
expressly and impliedly granted. The implied grant is, of course,
limited by the express grant and, therefore, it can only be such
powers as are truly incidental and ancillary for doing all such acts
or employing all such means as are reasonably necessary to make
the grant effective. As stated in Maxwell on Interpretation of
Statutes (11th edn.) “where an Act confers a jurisdiction, it F
impliedly also grants the power of doing all such acts, or employing
such means, as are essentially necessary to its execution”. [See
also ITO v. M.K. Mohammed Kunhi].”
In J. K. Synthetics Ltd v. Collector of Central Excise10, while
dealing with a case from the Customs, Excise and Gold (Control) Appellate G

8
M.P. Steel Corporation v. Commissioner of Centrral Excise (2015) 7 SCC 58; Nityananda,
M. Joshi and others v. Life Insurance Corporation of India and others (1969) 2 SCC
199.
9
(1990) 4 SCC 453
10
(1996) 6 SCC 92 H
396 SUPREME COURT REPORTS [2018] 5 S.C.R.

A Tribunal (CEGAT), this Court went a step further to hold that there are
certain inherent powers vested in every tribunal in regulating their own
procedure. It held at paragraph-6 as follows:
“6. If, in a given case, it is established that the respondent
was unable to appear before it for no fault of his own, the ends of
B justice would clearly require that the ex parte order against him
should be set aside. Not to do so on the ground of lack of power
would be manifest injustice. Quite apart from the inherent power
that every tribunal and court constituted to do justice has in this
respect, CEGAT is clothed with express power under Rule 41 to
make such order as is necessary to secure the ends of justice.
C CEGAT has, therefore, the power to set aside an order passed ex
parte against the respondent before it if it is found that the
respondent had, for sufficient cause, been unable to appear.”
32. In case a party is in a position to show sufficient cause for its
absence before the Labour Court/ Tribunal when it was set ex parte,
D the Labour Court/Tribunal, in exercise of its ancillary or incidental powers,
is competent to entertain such an application. That power cannot be
circumscribed by limitation. What is the sufficient cause and whether its
jurisdiction is invoked within a reasonable time should be left to the
judicious discretion of the Labour Court/Tribunal.
E 33. It is a matter of natural justice that any party to the judicial
proceedings should get an opportunity of being heard, and if such an
opportunity has been denied for want of sufficient reason, the Labour
Court/Tribunal which denied such an opportunity, being satisfied of the
sufficient cause and within a reasonable time, should be in a position to
F set right its own procedure. Otherwise, as held in Grindlays, an award
which may be a nullity will have to be technically enforced. It is difficult
to comprehend such a situation under law.
34. In this context, it is also necessary to refer to Section 29, the
penal sanction which includes imprisonment for breach of award.
G “29. Penalty for breach of settlement or award.- Any
person who commits a breach of any term of any settlement or
award, which is binding on him under this Act, shall be punishable
with imprisonment for a term which may extend to six months, or
with fine, or with both, and where the breach is a continuing one,
with a further fine which may extend to two hundred rupees for
H
M/S. HARYANA SURAJ MALTING LTD. v. PHOOL CHAND 397
[KURIAN, J.]

every day during which the breach continues after the conviction A
for the first and the Court trying the offence, if it fines the offender,
may direct that the whole or any part of the fine realised from him
shall be paid, by way of compensation, to any person who, in its
opinion, has been injured by such breach.”
35. Merely because an award has become enforceable, does not B
necessarily mean that it has become binding. For an award to become
binding, it should be passed in compliance with the principles of natural
justice. An award passed denying an opportunity of hearing when there
was a sufficient cause for non-appearance can be challenged on the
ground of it being nullity. An award which is a nullity cannot be and shall
not be a binding award. In case a party is able to show sufficient cause C
within a reasonable time for its non-appearance in the Labour Court/
Tribunal when it was set ex parte, the Labour Court/Tribunal is bound to
consider such an application and the application cannot be rejected on
the ground that it was filed after the award had become enforceable.
The Labour Court/Tribunal is not functus officio after the award has D
become enforceable as far as setting aside an ex parte award is
concerned. It is within its powers to entertain an application as per the
scheme of the Act and in terms of the rules of natural justice. It needs to
be restated that the Industrial Disputes Act, 1947 is a welfare legislation
intended to maintain industrial peace. In that view of the matter, certain
powers to do justice have to be conceded to the Labour Court/Tribunal, E
whether we call it ancillary, incidental or inherent.
36. We may also add that when an application for setting aside an
ex parte award is made at the instance of the management, the Labour
Court/Tribunal has to balance equities. The appeals are hence disposed
of as follows. The awards are remitted to the Labour Court for F
consideration as to whether there was sufficient cause for non-
appearance of the management. Since the litigation has been pending
for a long time, we direct the appellants to pay an amount of Rs.1,00,000/-
in each case to the workmen by way of provisional payment. However,
we make it clear that the payment is subject to the final outcome of the G
awards and will be adjusted appropriately. We record our deep
appreciation for the gracious assistance rendered by Mr. Shekhar
Naphade.

Nidhi Jain Appeals disposed of. H