Kiran Raj

The Supreme Court Division Bench of Justice Pankaj Mithal and Justice S.V.N. Bhatti on Tuesday (January 27) held that a trade union is not required to first serve a formal charter of demands on the management before approaching the Conciliation Officer under the Industrial Disputes Act, 1947, and declined to interfere with the conciliation and the government reference challenged by the employer. The Court noted that the Act allows its machinery to be invoked when a dispute exists or is apprehended, and that insisting on a prior-demand step could weaken the statute’s preventive function, including in situations where raising demands with the employer may lead to loss of engagement. The dispute arises from contract workers, through a union, alleging the labour arrangement is a sham and seeking a determination of principal-employer status and related reliefs.

Conciliation proceedings commenced upon a representation filed directly before the Conciliation Officer, culminating in a failure report and a reference by the appropriate Government to the Industrial Court under Sections 10 and 12 of the Industrial Disputes Act. The management challenged the reference before the High Court, contending that no prior charter of demands had been served and that no industrial dispute existed.

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Parallelly, during the pendency of the reference, the workmen filed a complaint under Section 33-A of the Industrial Disputes Act alleging alteration of service conditions and cessation of work without permission. Interim relief was granted by the Industrial Court and affirmed by the High Court. The management assailed both the reference order and the interim directions before the Supreme Court.

The Court examined the nature of an industrial dispute and the scope of the appropriate Government’s power to refer disputes. It observed while referring to Shambu Nath Goyal v. Bank of Baroda, (1978): "If a case falls within the second limb or Section 10(1) of the ID Act, the appropriate Government is within its jurisdiction to refer an apprehended dispute to the Labour Court. By applying the same rule of interpretation, it can be construed that the appropriate Government may refer an Industrial Dispute apprehended to the Board, Labour Court and Tribunal. The argument of management introduces words into the Section and, at the same time, ignores the second contingent circumstance, namely, where an Industrial Dispute is apprehended and renders otiose the words apprehended. Such an interpretation is clearly unavailable, and the argument fails.”

The Court recalled that "This Court held the term “industrial dispute” is defined broadly as any “dispute or difference” between employers and workmen connected with employment, non-employment, the terms of employment, or conditions of labour. The ID Act does not prescribe any specific manner in which a dispute must arise. Specifically, a formal written demand by the workman is not a sine qua non for an industrial dispute to exist. The only exception is for public utility services, where Section 22 of the ID Act mandates a strike notice."

It further observed that permitting preliminary objections at the threshold would defeat the statutory object, noting that “Consequently, permitting Preliminary Objections (by the management) to stall this urgent process negates the preventive intent of the statute, converting a mechanism of immediate relief into an engine of delay. The appropriate Government, in its armchair, while referring an Industrial Dispute for resolution, keeps in its perspective industrial peace and prosperity, to enable workers to work out their just and economic demands and avoid strikes and lockouts.”

Addressing the tripartite relationship between management, contractor, and workers, the Court noted that “the very denial of the status could also be considered as a dispute in the established facts and circumstances of a case.” It observed that disputes regarding whether a contract is sham or genuine involve disputed questions of fact and “the relationship is to be decided by the Industrial Court, but not the Conciliation Officer.”

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The Court held that “the labour court is directed to frame two issues, namely, (i) whether the contracts through which the employment is provided to the contract labour are sham and nominal, and (ii) whether, considering the nature of work discharged by the workmen of the subject Union, the Management is the principal employer of the members of the Respondent-Union. The Industrial Court is directed to dispose of Reference (IT) No. 1 of 2021 expeditiously, preferably within four months from the date of receipt of a copy of this judgment.”

“The Civil Appeal fails and is dismissed accordingly. No order as to costs,” and “pending applications, if any, are disposed of accordingly.”

Advocates Representing the Parties

For the Appellants: Mr. C. U. Singh, Sr. Adv.(argued by) Mr. Atul Babasaheb Dakh, AOR Mr. Kawre B. R., Adv. Mr. Praveen Kumar Pandey, Adv.

For the Respondents: Mr. Shrirang B. Varma, Adv.(argued by) Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Mr. Sandeep Sudhakar Deshmukh, AOR (argued by) Mr. Nishant Sharma, Adv. Mr. Ankur S. Savadikar, Adv. Mr. Ankur Savadikar, Adv. Mr. Mayur P. Saavarkar, Adv. Mr. Mayur Saavarkar, Adv. Mr. B H Marlapalle, Sr. Adv.(argued by) Mr. Ajit Pravin Wagh, AOR Mr. Avinish Kr Saurabh, Adv.

Case Title: M/s Premium Transmission Private Limited v. State of Maharashtra & Others.
Neutral Citation: 2026 INSC 87
Case Numbers: Civil Appeal arising out of SLP (Civil) Nos. 9970 of 2023 and 12192 of 2023
Bench: Justice Pankaj Mithal, Justice S.V.N. Bhatti