Holding

The Industrial Tribunal was correctly empowered to hear the preliminary issue together with the main issues, and the High Court was right in refusing to interfere with its interlocutory order.

Summary

The National Council for Cement and Building Materials, a society, was challenged by its employees’ association to prepare certified standing orders under the Industrial Employment (Standing Orders) Act, 1946. The society argued that it was not an “industry” within the meaning of the Industrial Disputes Act, 1947, and therefore not bound by the Act. The Punjab & Haryana High Court referred the question of whether the society constituted an industry to the Industrial Tribunal, which first treated the question as a preliminary issue but later ordered that it be heard together with the main dispute. The society appealed this change in procedure by filing a petition under Article 226 of the Constitution, which the High Court dismissed. The Supreme Court held that the Tribunal was rightly entitled to consider the preliminary issue along with the main issues and that the High Court could not interfere with the Tribunal’s interlocutory order. Accordingly, the appeal was dismissed.

Issues considered

Whether the Industrial Tribunal may merge a preliminary issue (whether the establishment is an 'industry') with the main issues and decide them together
Whether the High Court can intervene in the Tribunal’s interlocutory order under Article 226 of the Constitution
Whether the appellant qualifies as an 'industry' within the meaning of Section 2(j) of the Industrial Disputes Act, 1947 (preliminary question)

Legislation cited

Constitution of Indias. 226
Industrial Disputes Act, 1947s. 10(4), s. 2(j), s. 2(k), s. 2(s)
Industrial Employment (Standing Orders) Act, 1946

Subjects

industrial disputedefinition of industrypreliminary issueindustrial tribunalinterlocutory orderArticle 226standing ordersdelay tactics

Judgment

J
NATIONAL COUNCIL FOR CEMENT AND BUILDING A
MATERIALS
v.
STATE OF HARYANA AND OTHERS

FEBRUARY 15, 1996
B
[KULDIP SINGH AND S. SAGHIR AHMAD, JJ.]

Labour Law:

Industrial Disputes Act, 1947: Sections 10(4), 2(j), (k) and (s). C

Industrial Dispute-Reference-Preliminmy and main issues-Proce-
dure for detennination of-Preliminmy issue-To decide if activities con-
stituted "indusny''-Framed to delay adjudication-Held: Industrial T!ibunal
rightly decided to hear the same along with the main issue-High Cowt also
lightly refused to inte1fere under A1ticle 226 of the Constitution with such D
interlocut01y order of the Tlibunal-Constitution of India, Anicle 226-In-
dustlial Employment (Standing Orders) Act, 1946.

lndustlial Tlibunal-Practice and Procedure-Scope of inte1ference
with.
E
An association of the employees of the appellant- society filed a writ
petition in the High Court for a direction to the appellant to have its own
certified Standing Orders made under the Industrial Employment (Stand-
ing Orders) Act, 1946. The writ petition was resisted by the appellant on
the ground that it was not an"industry" and, therefore, not liable to make F
its own certified standing orders. Pursuant to the direction by the High
Court, the dispute whether the appellant was an "industry" within the
meaning of Section 2(j) of the Industrial Disputes Act, 1947 was referred
to the Industrial Tribunal by the State. With the consent of the parties,
the Industrial Tribunal framed an additional issue as to whether the
reference was bad in law. Originally this issue was to be decided as a G
preliminary issue but by a subsequent order the Tribunal directed that
this issue as also other issues would be considered together. The appellant
challenged the above order in the High Court and the appeal was dis-
missed. Aggrieved by the High Court's Judgment the appellant preferred
the present appeal. H
689
690 SUPREME COURT REPORTS [1996] 2 S.C.R.

A Dismissing the appeal, this Court,

HELD : 1.1. Usually, whenever a reference comes up before the
Industrial Tribunal, the Establishment, in order to delay the proceeding,
raises the dispute whether it is an "industry" as defined in Section 2(j) of
the Industrial Disputes Act, 1947; or whether the dispute referred to it for
B adjudication is an "industrial dispute" within the scope of Section 2(k) of
the Act, and also whether the employees are "workmen" within the meaning
of Section 2(s) of the Act. A request is made that these questions may be
determined as preliminary issues so that if the decision on these questions
are in the affirmative, the Tribunal may proceed to deal with the real
C dispute on merits. The appellant is no exception and it has also raised the
same question which has brought this industrial litigation, still at its
infancy, to this Court. (693-C-D]

1.2. The Tribunal subsequently rightly decided to hear the issue along
with other issues on merits at a later stage of the proceedings. It was at this
D stage that the High Court was approached by the appellant with the
grievance that the Industrial Tribunal, having once decided to hear the
matter as a preliminary issue, could not change its mind and decide to hear
that issue along with other issues on merits. The High Court rightly refused
to intervene in the proceeding pending before the Industrial Tribunal at an
E interlocutory stage and dismissed the petition filed under Article 226 of the
Constitution. The decision of the High Court is fully in consonance with the
law laid down by this Court in its various decisions. (694-E-G]

Bangalore Water Supply & Sewerage Board v. A. Rajappa & Ors.,
[1978] 3 S.C.R. 207, referred to.
F
Cooper Engi,nee1ing Ltd. v. P.P. Mundhe, [1976] 1 S.C.R. 361; S.K.
Ve1ma v. Mahesh Chandra, [1983] 3 S.C.R. 799; D.P. Maheshwari v. Delhi
Administration, [1983] 3 S.C.R. 949 and Workmen v. Hindustan Lever Ltd.,
[1985] 1 S.C.R. 641, relied on.

G CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3519 of
1996.

From the Judgment and Order dated 22.9.95 of the Punjab &
Haryana High Court in C.W.P. No. 14201 of 1995.

H AK. Sikri and Ms. Madho Sikri for the Appellant.
\

j
N.C.C.B. MAlERIALS v. STAIB [S. SAGHIR AHMAD,J.] 691

The Judgment of the Court was delivered by A
S. SAGHIR AHMAD, J. Leave granted.

2. After the decision of this Court in Bangalore Water Supply &
Sewerage Board v. A. Rajappa & Ors., (1978) 1 Labour Law Journal
349 = [1978] 3 SCR 207 in which a comprehensive definition of the word B
"Industry" was attempted to be given followed by legislative changes in the
Industrial Disputes Act, it was thought that the Management or Estab-
lishments would give up their old habit of raising preliminary issues in
Industrial References as to "whether they are an 'Industry' within the
meaning of the Industrial Disputes Act or not", but Samuel Johnson's C
observation that "one of the maxims of civil law is that definitions are
hazardous" is still true and this question continues to be raised almost in
every case before the Tribunal.

3. The appellant is no exception and it has also raised the same
question which has brought this industrial litigation, still at its infancy, to D
this Court.

4. The appellant is a society registered under the Societies Registra-
tion Act, 1960 and respondent no. 3 is an association of its employees. In
Writ Petition No. 12525 of 1991 filed in the High Court of Punjab &
Haryana, respondent no. 3 prayed for a direction that the appellant should,
E
like other industrial establishments, have its own certified standing orders
made under the Industrial Employment (Standing Orders) Act, 1946. The
Writ Petition was resisted by the appellant on the grounds, inter alia, that
it was not an "industry" within the meaning of the Industrial Disputes Act
... and, therefore, there was no occasion for it to make its own certified F
standing orders under the Industrial Employment (Standing Orders) Act,
1946. The High Court by its Order dated 24th of March, 1992 directed the
State of Haryana to refer the dispute between the parties to the Industrial
Tribunal and acting on that basis, the State of Haryana made the following
reference to the Industrial Tribunal :-
G
"Whether the establishment "NATIONAL COUNCIL FOR CE-
MENT AND BUILDING MATERIALS" M-10, SOUTH EX-
TENSION-II, RING ROAD, NEW DELl:ll, is an "INDUSTRY"
within the meaning of definition of the terms "INDUSTRY" as
given in the Industrial Disputes Act." H
692 SUPREME COURT REPORTS [1996] 2 S.C.R.

A 5. The appellant has already put in appearance and has filed a
written statement before the Tribunal in which he has raised certain
preliminary objections including the objection that it was not an "Industry"
and consequently no reference could be made to the Industrial Tribunal.

6. On 10th May, 1994, the Industrial Tribunal passed the following
B orders :-

"Both the sides agree that the following additional issue be framed
and decided as preliminary issue :

c (a) Whether the reference is bad in law ?
O.P. Mgt."
To come up on 26.7.94 for evidence and arguments in this issue."

7. The Industrial Tribunal, however, by its order dated 22nd of
August, 1995 directed that the preliminary issue as also other issues will be
D considered together. Its order read as under :-

"Affidavits are not filed. Reply to the application moved on 27.7.95
is filed after hearing the Ars for the parties at length, I feel it shall
be in the fitness of things that the parties file their affidavits in
support of their rival contentions. The preliminary issues as well
E
as the other main issue may be considered later on. To come up
on 26.9.95 for filing affidavits."

8. The appellant challenged the above order in C.W. No. 14201 of
1995 in the High Court of Punjab & Haryana but it was dismissed on 22nd
F October, 1995. The appellant has now come up in appeal.

9. The reference of a dispute to the Industrial Tribunal is made under
Section 10 of the Act. Sub-section (4) of Section 10 provides as under :-

"(4) Where in an order referring an industrial dispute to 'a Labour
G Court, Tribunal or National Tribunal'(h) under this section or in
p. subsequent order, the appropriate Government has specified the
points of dispute for adjudication, "the Labour Court or the
Tribunal or the National Tribunal, as the case may be'(i) shall
confine its adjudication to those points and matters incidental
H thereto"G).
'(

j,
N.C.C.B. MATERIALSv. STATE [S.SAGHIRAHMAD,J.] 693

10. This sub-section indicates that the extent of jurisdiction of the A
adjudicatory Tribunals is confined to the points specified in the order of
reference or matters incidental thereto. Matters which are incidental to the
reference may, sometimes, assume significant proportions and may relate
to questions which go to the root of the jurisdiction of the Tribunal as, for
example, question relating to the nature of the activity of the Employer as
B
to whether it constitutes an industry or not, as has been done in the instant
case. It is on the determination of this question that the jurisdiction of the
Tribunal to adjudicate upon the reference rests.

11. Usually, whenever a reference comes up before the Industrial
Tribunal,. the Establishment, in order to delay the proceedings, raises the C
dispute wh.ether it is an "industry" as defined in Section 2G); or whether
the dispute referred to it for adjudication is an "industrial dispute" within
the scope of Section 2(k) and also whether the employees are "workmen"
within the meaning of Section 2(s). A request is made with that these
questions may be determined as preliminary issues so that if the decision D
on these questions are in the affirmative, the Tribunal may proceed to deal
with the real dispute on merits.

12. We, however, cannot shut our eyes to the appalling situation
created by such preliminary issues which take long years to settle as the
decision of the Tribunal on the preliminz.ry issue is immediately challenged E
in one or the other forum including the High Court and proceedings in the
reference are stayed which continue to lie dormant till the matter relating
to the preliminary issue is finally disposed of.

13. This Court in Cooper Engineering Ltd. v. P.P. Mundhe, (1975) 2
Labour Law Journal 379 = (1976] 1 SCR 361, in order to obviate undue F
delay in the adjudication of the real dispute, observed that the Industrial
Tribunals should decide the preliminary issues as also the main issues on
merits all together so that there may not be any further litigation at the
interlocutory stage. It was further observed that there was no justification
for a party to the proceedings to stall the final adjudication of the dispute G
referred to the Tribunal by questioning the decision of the Tribunal on the
preliminary issue before the High Court.

14. Again in S.K. Vernia v. Mahesh Chandra, (1983) Labour and
Industrial Cases 1483=[1983] 3 SCR 799, this Court strongly disapproved
the practice of raising frivolous preliminary objections at the instance of H
694 SUPREME COURT REPORTS [1996] 2 S.C.R.

A the employer to delay and defeat the purpose of adjudication on merits.

15. In D.P. Maheshwa1i v. Delhi Administration, (1983) Labour and
Industrial Cases 1629 = [1983] 3 SCR 949, this Court speaking through 0.
Chinnappa Reddy, J. observed that the policy to decide the preliminary
B issue required a reversal in view of the "unhealthy and injudicious practices
resorted to for unduly delaying the adjudication of industrial disputes for
the resolution of which an informal forum and simple procedure were
devised with avowed object of keeping them from the didlatory practices
of Civil Courts". The Court observed that all issues whether preliminary or
otherwise, should be decided together so as to. rule out the possibility of
C any litigation at the interlocutory stage~ To the same effect is the decision
in Workmen employed by Hindustan Lever Ltd. v. Hindustan Lever Ltd.,
(1984) Labour & Industrial Cases 1573 = [1985] 1 SCR 641.

16. The facts in the instant case indicate that the appellant adopted
D the old tactics of raising a preliminary dispute so as to prolong the
adjudication of industrial dispute on merits. It raised the question whether
its activities constituted an 'Industry' within the meaning of the Industrial
Disputes Act and succeeded in getting a preliminary issue framed on that
question. The Tribunal was wiser. It first passed an order that it would be
E heard as a preliminary issue, but subsequently, by change of mind, and we
think rightly, it decided to hear the issue along with other issues on merits
at a later stage of the proceedings. It was at this stage that the High Court
was approached by the appellant with the grievance that the Industrial
Tribunal, having once decided to hear the matter as a preliminary issue,
could not change its mind and decide to hear that issue along with other
F issues on merits. The High Court rightly refused to intervene in the
proceedings pending before the Industrial Tribunal at an interlocutory •
stage and dismissed the petition filed under Article 226 of the Constitution.
The decision of the High Court is fully in consonance with the law laid
down by this Court in its various decisions referred to above and we do
G not s~~ any occasion to interfere with the order passed by the High Court.
The appeal is dismissed, but without any order as to costs.

v.s.s. Appeal dismissed.