State of Bombay vs. K.P. Krishnan & Ors.

Facts

The respondents (workmen employed by Century Spinning and Manufacturing Company) demanded bonus payments and reclassification of certain employees, but the appellant (Government of Bombay) refused to refer this dispute to industrial adjudication. The reason provided was that the respondents had engaged in “go-slow” tactics during the year of 1952-1953. The respondents challenged this reason for refusal, claiming that the appellant’s decision was arbitrary and unrelated to the merits of their demands. The Bombay High Court issued a writ of mandamus, directing the government to refer the dispute. The appellant challenged this decision of the High Courtin the Supreme Court.

Key Takeaways for Students

Legal Issue

• Whether the refusal by the appellant to refer the industrial dispute for settlement under Section 12(5) of the Industrial Disputes Act, 1947was justified?
• Whether the cases falling under section 12(5) can be referenced only under section 12(5) independently from section 10(1)of the Industrial Disputes Act, 1947?
• Whether the government is bound to base its decision only on the report made by conciliation officer under section 12(4) of the Industrial Disputes Act, 1947or has to verify all the relevant facts?

Holding

The Supreme Court held that under Section 10(1) of the Industrial Disputes Act, the government has discretion to refer disputes for adjudication, but this power must be exercised fairly, without arbitrary or punitive reasons. The refusal to refer the dispute, based solely on workers' misconduct (‘go-slow’ tactics), was considered unrelated to the issues of bonus and classification, making the government's action punitive, which violated the principles of industrial adjudication.

As per Section 12(5)of the Industrial Disputes Act, 1947, valid reasons must be recorded, and extraneous factors cannot be used to deny a referral. It is further made clear that the government is not required to rely only on the conciliation officer’s report under Section 12(4) of the Act. Instead, it can consider additional relevant facts to determine if a prima facie case for reference exists. The decision should be based on an evaluation of all available information, not just the report.The Court emphasized that claims like bonus, which are related to the contribution of workers to the employer’s profits, must not be dismissed merely due to prior misconduct if such conduct has already been addressed through disciplinary action. Such reason is extraneous thus the Court upheld the High Court’s decision, confirming that the appellant’s refusal was outside its legal jurisdiction.

Final Decision

Appeals dismissed

Ratio

The discretion of the government under Section 10(1) and Section 12(5) should be exercised justlybased on relevant facts and not punitively.The reasons for refusal to refer dispute for adjudication must be relevant to the industrial dispute itself.Section 12(5) doesnot confer on the government the power to make a reference on its own, without relying on Section 10(1).