Girja Shankar Kashi Ram v. The Gujarat Splnning & Weaving Co. Ltd.

Nanavati', J. B. Dadaclianji and 0. C. Malhur, for the respondent No. I.

N. M. Barot, Secretary of the Textjle. Labaur Associati<m, for respondent No. 2.

1962. January 30. The Judgment of the Court was delivered by WANCHOO, J.-Thi.s appeal by special leave against the order of the Born bay High Court summarily dismissing the pc ti ti on of the appellants under Art. 227 of the Constitution raises an important question with regard to the right of a Ropresentative Union under the Bombay Indus-trial Relations Act, No. XI of 1947, (hereinafter called tho Act) to appear in a proceeding under the Act to the exclusion of an employee desiring a change under s. 42(4) of the Act. Tbe question arises in this way. The Gujarat Spinning and Weaving Company Limited (hereinafter called thB old Company) closed its busineBB on May 14, 1953 and sold its assets to the Tarun Commercial Mills Company Limited (hereinaft:;r called the new Com· pany). The old Company had discharged all its workmen when it closed its business which happened before s. :!5F relating to retrenchment was intro-duced in the Industrial Disputes Act, (No. XIV of 1947). The new Company re-started the business after a week and took in it.s service the workmen of the old Company. It appears th:\t at the time the closure took place a <liHpute wa~ pending between the old Company and its workmen with respect to bonus. As the clo~ur1J had taken place while that dispute was pending, the Textile Labour Associa-196t tion (hereinafter called the Association), which· is a Girj• Shankar Representative Union of the textile workers in the Kas!ti Ren city of Abmedabad, filed an application under s. 22 v. The Guiar 1t of the Industrial Disputes (Appellate Tribunal) Act Spinning ch W eavi11., of 1950 before the Appellate Tribunal where Co. ltd. Lab~ur the dispute was pending. In that matter there was Wanch~o J, a compromise, and though, according to the old Company, there was no available surplus to give bonus, the old Company agreed to pay bonus by way of settlement to the extent of I /8th of the earnings of the work!Ilen for the year in dispute;

and in consideration of this the Association on be-half of all the workmen discharged as a result of closure agreed not to press for any compensation for their discharge and the workmen who accepted the b'.lnus by this agreement gave an undertaking not to c !aim compensation in any other way in any future proceeding. This happened in March 19.55. There-after in July 1956, 376 persons who had been in the employ of the old Company and were a minority of its workmen gave notice under s. 42(1) of the Act and claimed compensation for the closure which had taken place in 1953. As no settlement could be arrived at between the parties this was followed by an application under s. 42( 4) of the Act before the labour court in October 1956 and these workmen claimed that they should be paid adequate compen-sation for the closure of the mill in view of their past services. To this application both the old Company and the new Company were made parties.

The application was opposed by both the companies on various grounds with which we are however not concerned in the present appeal. In January 1957, the Association made an appearance before the labour court and contended that the application should be dismissed in view of the compromise wl:tich had been arrived at before the Labour Appellate Tribun'tl in 1953. The labour court accepted this contention and dismissed the application.

894 SUPREME OOURT REPORTS (1962] SUPP.

1962 Thereupon some of the workmen went in appeal Gir/• 81-lur to the industrial court and their contention seema

K.Jii Rm to have been that, though no individual oan be

v. permitted to appear in any proceeding where the '114 Gujatol Spimtirrz if. W tac1ng Rep.esentative Union 'lppears as representative of

Co. Ltd. employees, in this case the action of the Association w ,,... J. after itR appearance in not supporting the case of

the workmen before the labour court was malafide; therefore the Association should not have been allowed to appear on behalf of tho employees who had applied to the labour court and they ehould be permitted to carry on their application. This con-tention was rejected by the industrial court, which was of opinion that it was not for an industrial court to go into the question of bona/ides or mala-fitles for appearance of a Representative Union and that the law under the Act was clear that where a Representative Union appeared it alone could re-present thti applicants even in a case under s. 42( 4) of the Act. The appeal was therefore dismiBsed. Thereupon the employee.s appear to have filed a petition \,efore the High Court unde.r Art. 227 of the Constitution, which was summarily rejected. The High Cuurt also n· fuRed to give leave to appeal. Then thore was a petition to th is Court for special leave which was granted, and that is how the matter has come up before us.

'l'he main contention on behalf of the appellant.a h~fore U8 is tha.t reading the various provisions or theAct, an employee making an application under s. 42( 4) of th<' Act is not debarred from appearing in the labour or industrial court and carrying on with his application even though the Repreeent11tive Union makes an appearanoo. It is submitted that if the inti>rprntation pr1.·ssrd on behalf of the respon-dents were a.ceepten it would amount to tyranny of the Representative Union and this could not be the intention of the legislature in framing the Act. It is also contenrled that if the interpretation pressed on behalf of the respondents is correct, the provisions in the Act may he liable to be struck 1962 down as ultra vires the Constitution.

Girj11 Shankar The case of the respondents on the other hand liaski Ram is that the provisions of the Act are perfectly plain v. The Gujara~ and provide that where a Representative Union Spinning &: ·W eavin,e appears in any proceeding it alone, to the exclusion Co. Ltd. even of the employee who might have made an Wancho1 J. application under s. 42 (4), is entitled to carry on with the proceedings and the employee concerned has no locus standi in the matter after· the applica-tion has been filed by him, if the Representative Union chooses to appear. It is urged that the so-called tyranny by the Representative Union can have no bearing on the interpretation of the provi-sions of the Act if they are plain in their intent.

Further it is contended that there is no question of the constitutionality of the various provisions of the Act in this case as at no stage has the constitutiona-lity of the . provisions been challenged by the appellants, not even in their special leave petition.

Before we deal with the interpretation of the various provisions of the Act· in this behalf we may point out that the constitutionality of the provi-sions has never been challenged so far and we therefore express no opinion as to the colliltitutiona-lity of these provisions. We are further of opinion that the argument based on the so-called tyranny of a Representative Union or its motives in taking t.he action it may choose to take in any proceeding after it appears can have no relevance if the intention of the legislature as it can be gathered from the various provisions is perfectly plain.

Let us therefore see what the Act provides in this behalf. The main provisions with which are con-cerned are contained in Chap.Vof the Act which deals with "representatives of employees and employers, and appearance on their behalf". It may be stated at the outset that the Act contains elaborate provisions for registrat.ion of unions and approved unions in

IllOt Chapters III and IV respectively and ia in this Giri• Sh..J:., respect riifferent from the Industrial Disputes Act.

K•sln Rim Under Chap. III the Registrar is given the power ,.,., o.; v. ... to register a. Representative Union for any indUBtry

1 S#flti., .b W ,...., in any local area and also the power to cancel such

Co. Ltd. under certain circumstances and there

r~istration W.....U.J. is also a provision for appeal where a registration

is oancolled. Then <Jomes Chap. V which deals with the representatiVPil of employees and employers and anpe11.ranoe on their behalf in proceedings under the Act. Section 27 provide3 for recognition of an aeeociation of employers and its right to app!l&r in proceedings under the Act. Seotion 30 enumerates the representatives of employees and gives an order of preferenoe in which the six cl&lllle8 of rP.preqentatives of employees mentioned in that section oan appear or act in any industry in any local area., the first being a Representative Union for such industrv. It is not in dispute that the A88ociation in the present ca.se is a Representative Union in the textile industry in thl\t region and has the most preferential right to appear or to act &a the representative of employees in the textile industry in that are11. Sections 28 and 29 provide for election or representatives or employees where there is no Representative Union in rt'llp60t of any industry in any local area and such elected representativeR under s. 30 are respreaentativea of employees and are fifth in order of preference. Then we oome to SB. 27 A, 32 and 33 with which we are particularly concerned in this appeal. Th11y may be read in exten.~.

"2"A-Save as provided in sections 32 and 33. no employee shall be allowed to appear or act in any prooeeding under this Act except through the representative of employees."

"3~A conciliator, a Board, an Arbitra· ior. a'wsge Board, a Labour Court and the Industrial Court may, if hu or it coneiders it expedient for the ends of justice, permit an ,,,~ indivHual, whether an employee or not, to firj• Siank., appear in any proceeding before him or it ; Ksshi Ram v. Provided that no suoh individual shall be IM Guj•r•t S;innint o,. ch W enin permitted to appear in any proceedings in Lti. which a Representative Union has appeared as the representative of employees."

"33-N otwithstanding anything contained in any .other provision of this Aot, an em-ployee or a representative union shall be entitled to appear through any person.

(a) in all proceedings before the indus-trial court ;

(aa) in all proceedings before a wage board;

(b) in proceedings before a Labour Court for deciding whether a strike, lock-out, closure or stoppage or change or an order passed by an employer under the standing orders is illegal or for deoiding any industrial dispute referred to it under section 72 ;

( c) in such other proceedings as the Industrial Court may, on application made "in that behalf, permit ;

Provided that a legal practitioner shall not be permitted under clause (o) to appear in any proceeding under this Act except before a Labour Court as provided in section 83A or the Industrial Court ;

Provided further that no employee shall be entitled to appear through any person in any proceeding under this Act in which a Representative Union has appeared u the repre1entative of employees."

898 SUPREME OOURT REPOR'.l'S [1962] SUPP.

lift It will be seen that e. 27 A provides that no Qirj• Slwml:r employee ~hall be allowed to appear or act ,in any

~cshi '· R~ proceeding under the Act, except through the "nlc.Joru representative of employet>s, the only exception to ~v• w,..;,, this being t.he provisions of BB. 32 and 33. There·

Co. UC. fore, this R<'ctio!I completely bans the appearance W.W. J, of an employee or of any one on his behalf in any

proceeding after it has once commenced except through the representative of employees. The only exceptions to this complete ban are to be found in ee. 32 and 33, to which we shall presently refer. But it i~ clear that bona /irks or mala fi<IM of the reprt>eentative of employees can have nothing to do with th" ban placed by ~. 27 A 011 the appearance of any one else except the representative of em-ployees a.8 defined in e. 30 and that if anyone else can appPar in any proceeding. we must find a provi-sion in that behalf in either s. 32 or s. 33 which are the only exceptions to 8. 27A. It may be noticed that there is no exception in e. 27A in favour of the empfoyee, who might have made an application under s. 42 (4). to appear on his own behalf and the ban which is placed bys. 27A will apply equally to such an employee. In order however to aoften the rigour' of the provisions of a. 27A, for it may well be that the representative of employees may not choose to appear in many proceedings started by an employee under 8. 42 ( 4 ), exceptions are provided in es. 3:? and 33. The scheme of these three provi-sions clearly is that if the Representative Union appears, no one else can appear and carry on a proceeding, even if it be i,egun on an application under s. 42 (4\ but where the Representative Union does not cho06e to appear there are provisions in BB. 32 and 33 whi.ch permit others to appear in proceedings under the Act.

Section 32 gives power to a conciliator, a boa.rd, a wage board, a. labour court and the indus-trial court to permit an individual, whether an employee or not, to appear in any proceeding before 1911 him or it. This shows that the complete ban imposed bys. 27A can be removed if the authorities Qirj• ShtinkM Kash1 Ram under the Act think it expedient to permit another v. person to appear and that person may be an The Gujar•t ~·;innint tb W ea•inl employee or not. Thus· the employee who has Co. Ltd. made an application under s. 42(4) may be permit-Wanchoo J, ted to appear before tbe authorities under the Art ;

but this provision is subject to a proviso namely that no such individual which would include an employee who has himself made an application under s. 42(4), shall be permitted to appear in any proceeding in which the Representative Union has appeared as the representative of employees.

Reading therefore ss. 27A, 30 and 32 together, it is clear that no one else can appear in any proceed-ing under the Act except a representative of em-ployees ; but the authorities ari;i empowered to permit anyone to appear whether he be an employee or not, if they consider it expedient for the ends of justice (and we have no doubt that where represen-tative of employees does not choose to appear the authorities will generally permit the employee who has made the application under s. 42(4) to appear).

but this power is subject to the proviso, namely, that no one will be allowed to appear if the Repre-sentative Union has made an. appearance. It will be seen that the proviso puts the Representative Union in a special position out of the six classes mentioned as representatives of employees in s. 30.

Thuss. 32 makes it clear that where the Represen-tative Union of the six classes in s. 30, appears no one else can appear, including the person who mi~ht have made an application under s. 42 (4).

If the other five classes which ~.re mentioned in s. 30 as representatives of employees appear, the authorities have the P.Ower to allow the employee or any other person to appear along with them.

900 SUPREME OOURT REPORTS [19!12) SUPP.

]~· Then we come t-0 s. 33, which starts with a o;,;. si-ur non obBllt.nte clause and deals with the appearance of

Keslti •• Ram an employee or a repreRentative union through any Ti.. G.J.,.al person. 8Pction 33 thus is an exception to s. 27 A an :I Spitllt#i14' W..W.1 authorisea an employee who could not appear in

Co. Lid. any proceeding under the Act except through the W•.loo J. representative of employees under 8. 27 A, to appear

through any perRon in certain proceedings men· tioned in 8. 33, but this again i.~ subject to provisos, with the first of which we are not concerned here. The second proviso lays down that no employee Rhall he entitled to appear through any person in any pro<'PMing unrler thr-Aet in which the Repre-sentativ" Union has appeared as the rPpresente.· tive of timployees. This proviso age.in gives a. special position to the Representative Union out of the six classes of representatives of em-ployees provided in s. 30 anrl makes it clear that though an employee may appear in certain proceed-ings specified in s. 33 through any person in spite of s. 27A, he cannot do so where a Representative Union has appeared as tho representative of em· ployees. Here again the position is the same as in s. 32; if a representative of employees other than a Representative Union has appeared in the proceeding the employee can also appear through any pers'?n in the proceedings mentioned in s. 33; but he cannot do so where the representative of employe011 which has appeared even in proceedings under s. 33 is the RepresentBtive Union.

Tho result therefore <•f taking 88. 2i A, 32 and 33 together is that s. 27 A first places a complete ban on the appearanre of an employee in proceed. ings under the Act once it has commenced except throu<rh the representative of employees. But there a.re two exceptions to this ban contained in 88. 32 and 33, Sertion 32 is concerned with all prooeedings beforr the authorities and gives power to the authorities under the Act to permit an 1962 employee himself to appear even though a repre-Girja S4tutA:ar sentative of employees may have appeared hut Kashi 8am this permission cannot he granted where the repre-v. Tiu O,Yarat sentative Union has appeared as a representative Spinni11t th W1aving of employees. Section 33 which is the other C•. Ltd. exception allows an employee to appear through Wan&hoo J. any person in certain proceedings only even though a representative of employees might have appeared; but here again it is subject to this that no one else, not even the employee who might have made the application, will have the right to appear if a Representative Union has put in appearance as the rl:presentative of employees. It is quite clear therefore that the scheme of the Act is that where a Representative Union appears in any proceeding under the Act, no one else can be allowed to appear not even the employee at whose instance the proceedings might have begun under s. 42 ( 4). But where the appearance is by any representative of employees other than a Repre-sentative Union authorities under s. 32 can permit the employee to appear himself in all proceedings before them and further the employee is entitled to appear by any person in certain proceedings specified in s. 33. But whenever the Representa-tive Union has made an appearance, even the employee cannot appear in any proceeding under the Act and the representation must be confined only to the Representative Union. The complete ban therefore laid by s. 27 A on representation otherwise than through a representative of em-ployees remains complete where the representa-tive of employees is the Representative Union that has appeared ; but if the representativa of em-ployees that has appeared is other than the Re-presentative Union then ss. 32 and 33 provide for exceptions with which we have already dealt.

902 SUPRll:ME COURT REPORTS [1002] SUPP.

IHI '!'.here therefore be no escape from the concJu. oa.n BJOn tha.t the Act plainly intends that where the n. v. Representative Union appears in any proceeding

o.g..i under the Act even though that proceeding might l;iMiqdl L". w ...... have commenced by an employee under s. 42 (4)

C..

w.-..w.J. of the Act, the Representative Union alone can

represent the employee and the employee oa.nnot '.l.ppear or act in such proceeding.

. . In this view o.f t~e mattn the appeal must tail and Is hereby d1sm1ssed. In the circumstances we pa.as no order as to costs.

Appe.al dismiB&ed.

THE COMMISSIONER OF INCOME-TAX

J-.,Jl. BOMBAY v.

l\IANILAL DHANJI, BOMBAY

(S.K. DAs, M. liIDAYATULLAH and J.C. SHAH, JJ.)

Income Tax-Trmt crealed in favour of minor child-No benefit =ruing to ™nor in acwunting yoar-Whelher incomt from tnul la:etJbl< a.< i~ of a.<llUM~-Triut by aut.18tea fatMr-Aaae&U directed to iue it1COme for benefit of him8df, Ma wife and cAi/dron-Whtther income tazabl< a.< i•come of aaauaee-lndian lnconit·W Act 1922 (XI of 1922) as. 16(3) 41(1)-·Indian T"'81JJ Act, 1882 (11of1882) •· 8.

In 1953 the assessee created a trust in 1espect of a sum of money and provided that the interest on that amount was to be accumulated and added to the corpus and that his minor daughter C was to rettive the income from the corpu1 increased by the addition of interest when she attained the age of 18 years. In the relevant account year, when C was 1tlll a minor the income derived from the trust fund was Rs. 410 Earll.,; in 1941, the as1e1ace's father had created a tru1t in respect of =tain shares and money directing the trustees to pay the net intercat "':'d income ther"."f to the assessee "for the maintenance of hunself and h11 wife and for the malnten• ance education and bcneflt of all his children till his death". In the relevant account year a sum of Rs. 14, 170 accrued as income in the hands of the asscssee from the said trust funds,