"Madras High Court Sets Aside Ex Parte Award in Industrial Dispute: ‘Tribunal Could Have Granted One More Opportunity’ but Imposes Pre-Condition for Rehearing"
Safiya Malik
The High Court of Judicature at Madras, Single Bench of Justice Dr. A.D. Maria Clete has set aside an ex parte award rendered by the Industrial Tribunal-cum-Labour Court, Puducherry, in a case concerning a dispute between a workman and the management of the Karaikal Co-op Milk Supply Society (KCMSS). The court has remitted the matter for fresh consideration, subject to the payment of a pre-condition amount by the petitioner.
The petitioner, KCMSS, challenged the order dated 30.01.2020, passed in I.A. No. 36 of 2019 in I.D. (L) No. 27 of 2016, where the Industrial Tribunal rejected the petitioner’s plea to set aside an ex parte award dated 05.12.2018. In the said award, the Tribunal directed the petitioner to provide proper accounts for gratuity, pay outstanding gratuity, subsistence allowance from 11.05.2001 until the workman’s retirement, and settle his retirement benefits. The Tribunal, however, denied the claim for compensation due to mental agony and damages for alleged false charges.
The respondent workman contended that he was employed as a temporary worker on 17.08.1973, regularized on 01.06.1984, and served until his resignation on 12.05.2001. He alleged that he was transferred, suspended, and forced to resign under duress, and later sought to withdraw his resignation on 04.06.2001. As no response was received from the petitioner, the workman initiated legal proceedings. The petitioner, in its defense, claimed that the workman had misappropriated funds and failed to return milk cans, leading to deductions from his retirement dues.
The workman had raised an industrial dispute before the Labour Officer, Karaikal, who subsequently issued a failure report on 10.08.2016. The dispute was then referred to the Industrial Tribunal-cum-Labour Court, Puducherry, where it was registered as I.D. (L) No. 27 of 2016. The management failed to file a counter within the stipulated time. On 17.04.2018, the Tribunal proceeded ex parte against the management due to their absence and recorded the evidence of the respondent workman.
In the ex parte award, the Tribunal framed three key issues:
- Whether the dispute raised by the workman was maintainable under the Industrial Disputes Act.
- Whether the workman was entitled to gratuity, outstanding wages, subsistence allowance, and other benefits claimed.
- Whether the industrial dispute could be allowed.
The Tribunal stated in favor of the workman, directing the management to pay gratuity, subsistence allowance, and retirement benefits but dismissing claims for compensation and damages. The management subsequently filed I.A. No. 36 of 2019 to set aside the ex parte award, which was dismissed by the Tribunal citing inordinate delay and lack of sufficient explanation for non-appearance.
Justice Dr. A.D. Maria Clete examined whether the Industrial Tribunal erred in refusing to set aside the ex parte award and whether the dispute fell within the scope of the Industrial Disputes Act, 1947. The court recorded:
“On 17.04.2018, when the management’s counsel was absent due to the bereavement of a close relative, the Tribunal could have granted one more opportunity to the management.”
The court acknowledged that the petitioner’s failure to appear on multiple occasions was blameworthy. However, it noted that under Haryana Suraj Malting Ltd. v. Phool Chand, (2018) 16 SCC 567, the Tribunal retains the power to set aside an ex parte award if sufficient cause is demonstrated.
“An award which is a nullity cannot be and shall not be a binding award. In case a party is able to show sufficient cause within a reasonable time for its non-appearance, the Labour Court/Tribunal is bound to consider such an application.”
The court also referenced United Labour Federation v. The Presiding Officer & Ors., MANU/TN/3968/2023, which recognized the Tribunal’s discretion in entertaining applications to restore industrial disputes, even if filed belatedly.
Further, the court observed that the workman’s claim for gratuity should have been adjudicated under the Payment of Gratuity Act and not the Industrial Disputes Act, as held in State of Punjab v. Labour Court, Jullundur, (1980) 1 SCC 4. It also noted that monetary claims are better addressed under Section 33C(2) of the Industrial Disputes Act.
The court examined whether the Industrial Tribunal’s rejection of the petitioner’s application was appropriate. It observed that although repeated non-appearance by the petitioner was detrimental to its case, the Tribunal should have considered the overall circumstances before passing an ex parte award. The court found that the Tribunal had the discretion to grant another opportunity, especially considering that the petitioner’s counsel cited bereavement as a reason for absence.
Furthermore, the court noted that the Tribunal’s decision to reject the petitioner’s application was based on a delay of one year and six months in filing I.A. No. 36 of 2019. However, it observed that under judicial precedents, including Haryana Suraj Malting Ltd. v. Phool Chand, delay should not be the sole ground for rejecting a plea to set aside an ex parte award if sufficient cause is demonstrated.
The court also stated that the ex parte award had significant financial implications for the petitioner, including backdated payments, which necessitated a fair hearing on merits rather than a dismissal based solely on technical grounds.
The High Court set aside the order dated 30.01.2020 in I.A. No. 36 of 2019 and remitted the matter for fresh disposal by the Tribunal. However, it imposed a condition requiring the petitioner to pay Rs. 20,000/- to the respondent workman before the application for setting aside the ex parte award could be reheard.
“The petitioner is directed to pay the respondent a sum of Rs. 20,000/- as a pre-condition for I.A. No. 36 of 2019 in I.D. (L) No. 27 of 2016 to be reheard by the Tribunal.”
Consequently, the Miscellaneous Petition in W.M.P. No. 24654 of 2020 stands closed.
Advocates Representing the Parties
For Petitioner: M/s. T. Sai Krishnan, Mr. L. Poovendra Perumal, and Ms. S. Janani, Advocates
For Respondent: M/s. Xavier Felix and Ms. A. Kamachi, Advocates
Case Title: M/s. Karaikal Co-op Milk Supply Society v. V. Ramakrishnan
Case Number: W.P. No. 19974 of 2020
Bench: Justice Dr. A.D. Maria Clete
[Read/Download order]
