State of Bihar v. D.N. Ganguli, 1958

Introduction 

The case “The State Of Bihar vs D. N. Ganguly & Others” was decided by the Supreme Court of India on August 22, 1958. The primary legal issue at hand was whether the appropriate government had the power to cancel or supersede a reference of an industrial dispute that was pending before an industrial tribunal, as per the Industrial Disputes Act, 1947.

The background of the case stems from a dispute involving the Bata Shoe Company and its workmen. The government of Bihar had referred industrial disputes concerning the dismissals of certain employees to an industrial tribunal for adjudication. Subsequently, the government issued a notification attempting to combine these disputes and modify the initial references, which were challenged as being illegal and beyond its authority.

The court, presided over by Justices P.B. Gajendragadkar and A.K. Sarkar, focused on interpreting the powers conferred upon the government under Section 10(1) of the Industrial Disputes Act. It ultimately ruled that the government did not possess the authority to cancel a pending reference once it had been made, highlighting the significance of the tribunal’s role in resolving industrial disputes and ensuring that workers’ rights were preserved within the legal framework.

Facts of the case 

The case “The State Of Bihar vs D. N. Ganguly & Others” revolves around the following key facts:

1. Initial Dispute: The industrial dispute involved the Bata Shoe Company and its workmen, where a number of workmen were dismissed from their jobs following an illegal strike that occurred in February 1954. The dispute was whether the dismissals of the workmen were justified and what relief, if any, they were entitled to.

2. Government Notifications:

– On October 8, 1954, the government of Bihar referred the dispute concerning the dismissal of 31 workmen to an industrial tribunal under Section 10(1) of the Industrial Disputes Act. This reference became known as case No. 10 of 1954.

– Subsequently, on January 15, 1955, the government issued another notification to refer a similar dispute concerning 29 other workmen to the same tribunal, known as reference No. I of 1955.

1. Superseding Notification:

– While the two references were pending and had made some progress before the tribunal, the Bihar government issued a third notification on September 17, 1955. This notification attempted to supersede the earlier references by consolidating them into one, adding the Bata Mazdoor Union as a party to the dispute, and referring it to the same tribunal.

1. Legal Challenge: The Bata Company and its workmen filed petitions before the High Court of Patna under Articles 226 and 227 of the Constitution, challenging the legality of the third notification. They contended that the government had no authority to supersede the earlier notifications and that the new reference was illegal and ultra vires.

2. High Court Decision: On April 4, 1956, the High Court ruled in favor of the workmen, stating that the Bihar government did not have the power to cancel the previous references and ordered the industrial tribunal to resume its proceedings with the original disputes.

3. Appeal to Supreme Court: The Bihar government obtained leave to appeal to the Supreme Court against the High Court’s decision, leading to the present case being heard.

The core of the dispute centered on whether the government could cancel a pending reference to an industrial tribunal after it had been established, raising questions about the boundaries of executive power under the Industrial Disputes Act and the rights of workers in the adjudication process.

Arguments by the parties 

In the case “The State Of Bihar vs D. N. Ganguly & Others,” the arguments presented by both parties revolved around the legality of the government’s actions in superseding the notifications referring industrial disputes to the tribunal. Here are the key arguments from each side:

Arguments by the State of Bihar (Appellant):

1. Authority to Supersede: The State of Bihar contended that it had the authority to supersede the earlier references made under Section 10(1) of the Industrial Disputes Act. They argued that the government could exercise its powers to modify references as it deemed fit while managing industrial relations effectively.

2. Administrative Discretion: The state claimed that the actions taken were within the exercise of its administrative discretion. The government should have the flexibility to reassess and reorganize cases based on new circumstances or information that arises.

3. Precedent Reliance: The State’s counsel referenced the judgment in “Minerva Mills Ltd. v. Their Workmen” to support their argument, suggesting that the government could alter the referral of disputes under certain interpretations of implied powers under the Act.

Arguments by D. N. Ganguly & Others (Respondents):

1. Lack of Cancellation Power: The respondents argued that Section 10(1) of the Industrial Disputes Act does not grant the government the power to cancel or supersede a reference once it has been made. They emphasized the nature of the reference as a binding commitment to resolve the dispute through adjudication.

2. Judicial Precedent: They pointed out the High Court’s earlier ruling, which established that the government did not have the authority to supersede earlier notifications. The reliance on established legal principles and past judicial decisions reinforced their position.

3. Protection of Workers’ Rights: The respondents emphasized that the government’s action undermined the rights of the workmen to seek justice concerning their dismissals. They raised concerns that superseding the references would deny the workmen their rightful adjudication, suggesting that the government’s action was ultra vires and contrary to the objectives of the Industrial Disputes Act.

4. Nature of the Tribunal’s Role: The respondents argued that the industrial tribunal plays a crucial role in resolving disputes and that abruptly altering the reference undermines the tribunal’s authority and the stability of the adjudication process.

Court’s Consideration:

The Supreme Court had to weigh these arguments against the statutory provisions of the Industrial Disputes Act as well as the broader implications for judicial processes and workers’ rights. Ultimately, the Court upheld the position held by the respondents, reaffirming that the government does not possess the power to rescind a reference while it is pending adjudication.

Judgment of the case 

In the case “The State Of Bihar vs D. N. Ganguly & Others,” the Supreme Court delivered a judgment on August 22, 1958. The key points of the judgment are as follows:

1. Cancellation of Reference: The Supreme Court ruled that once an industrial dispute has been referred to a tribunal for adjudication under Section 10(1) of the Industrial Disputes Act, the appropriate government does not have the power to cancel or supersede that reference while it is pending. The Court emphasized that such a power of cancellation is not implied in the Act.

2. Court’s Interpretation: The Court interpreted the legislative intent behind the Industrial Disputes Act as designed to protect the rights of workers by ensuring that disputes referred to adjudication are resolved efficiently and fairly. Thus, the tribunal must be allowed to make decisions on such disputes without interference from the government once a reference has been made.

3. Validation of High Court’s Decision: The Supreme Court affirmed the earlier decision made by the High Court of Patna, which had ruled that the government of Bihar could not supersede its prior notifications. The High Court’s writ, which quashed the government’s superseding notification and directed the tribunal to proceed with the original references, was upheld.

4. Order for Tribunal to Proceed: The judgment specifically ordered the industrial tribunal to take up and dispose of the pending references as expeditiously as possible, respecting the rights of the workmen involved.

5. Dismissal of Appeals: As a result of the judgment, the appeals brought by the State of Bihar were dismissed, and the government was ordered to bear the costs of the proceedings.

In conclusion, the Supreme Court decisively ruled in favor of the workmen, reinforcing the principle that once a reference for adjudication is made under the Industrial Disputes Act, the government cannot unilaterally cancel or modify it while proceedings are ongoing.