Bombay High Court

Mukand Iron & Steel Works Ltd. vs V.G. Deshpande Registrar Of Trade ... on 5 February, 1986

Equivalent citations: 1987 (1) BomCR 286, 1986 (52) FLR 367, (1986) IILLJ 290 Bom

Bench: S Bharucha

JUDGMENT

1. On 11th August, 1983 the Additional Registrar of Trade Unions informed the Rashtriya Mukand
Employee's Union (the 2nd respondent that he had on 10th August, 1983 cancelled its registration on
the ground that it had contravened the provisions of Section 28 of the Trade Union Act by failing to send
an annual return. On 18th August, 1984 the Registrar of Trade Unions informed the 2nd respondent,
with reference to its letters enclosing the annual return and requesting restoration of registration, that
the letter dated 11th August, 1983 "is hereby withdrawn as the Union has complied with provisions of
Trade Unions Act, 1926, by submitting the necessary annual returns". The only question that I have to
consider in this petition is whether the Registrar had the power to withdraw the cancellation of the
registration.

2. Mukand Iron & Steel Works Ltd., (the petitioners) have a factory at Kalwe in the district of Thane. The
2nd respondent was the recognised trade union representing workmen at the Kalwe factory. The 2nd
respondent was until 10th August, 1983 registered as a trade union under the provisions of the Trade
Unions Act, 1926 (now referred to as "the said Act"). On 11th August, 1983 the Additional Registrar
informed the 2nd respondent that he had cancelled its registration on the ground that, after due notice
from the Registrar, it had continued wilfully to contravene the provisions of S. 28 of the Act and Rule 17
of the Bombay Trade Unions Regulations in that it had failed to send to the Registrar by the prescribed
date the annual general statement of accounts in the prescribed annual return form for the year ending
31st December, 1981, which was required under the said section to be sent annually to the Registrar.

3. It is the case of the 2nd respondent that the notice referred to in the letter dated 11th August, 1983
had not been received by it for it was operating from premises other than the address registered with
the Registrar.

4. On 17th August, 1984 the 2nd respondent wrote to the Registrar, enclosing the annual return of for
the year ended 31st December, 1981, and requested him to "withdraw the cancellation letter". On 17th
August 1984 the 2nd respondent wrote to the Registrar stating that audit for the year 1982 was in

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progress and expressing the hope that it would be in a position file the annual returns for the year 1982
by 25th August, 1984. The letter requested condonation of delay.

5. On 18th August, 1984 the Registrar wrote to the 2nd respondent thus : "with reference to your letters
dated 17-8-84 and 18-8-84 together with the Annual Returns of your union for the year ending 31st
December 1981 and 1982 requesting for the restoration of the registration of your union, I have to state
that this office letter No. CL/TUA/1181/Cancellation/By-II-D/ 7108 dated 11-8-83 is hereby withdrawn as
the Union has complied with provisions of Trade Unions Act, 1926, by submitting the necessary annual
returns."

6. This petition is filed to quash the letter dated 18th August, 1984.

7. The said Act was enacted to provide for the registration of trade unions and in certain respects to
define the law relating to registered trade unions. A trade union is defined under Section 2(h) to mean
any combination, whether temporary or permanent, formed primarily for the purpose of regulating the
relations between workmen and employers or between workmen and workmen, or between employers
and employers, or for imposing restrictive conditions on the conduct of any trade or business, and
includes any federation of two or more trade unions. A registered trade union is defined by section 2(e)
to be a trade Union registered under the said Act. Section 8 provides that the Registrar, on being
satisfied that a trade union has complied with all the requirements of the said Act in regard to
registration, shall register the trade union by entering in a register, to be maintained in such form as
may be prescribed, the particulars relating to the trade union contained in the statement accompanying
the application for registration. Under Section 9 the Registrar is enjoined, on registering a trade union
under Section 8, to issue a certificate of registration in the prescribed form which would be conclusive
evidence that the trade union had been duly registered under the said Act. The certificate of registration
of a trade union may, under Section 10, be withdrawn or cancelled by the Registrar inter alia if the
Registrar is satisfied that the trade union, after notice from the Registrar, has wilfully contravened any
provision of the said Act, provided that not less than two months' previous notice in writing specifying
the ground on which it was proposed to withdrawal or cancel the certificate had been given by the
Registrar to the trade union. Any person aggrieved by the refusal of Registrar to register a trade union or
by the withdrawal or cancellation of a certificate of registration may, under Section 11, appeal. Where
the head office of the trade union is situated within the limits of a Presidency town the appeal lies to the
High Court. The appellate court may dismiss the appeal, or it may pass an order directing the Registrar
to register the trade union and to issue a certificate of registration, or it may set aside the order of
withdrawal or cancellation. The Registrar is obliged to comply with such order. For the purposes of the
appeal, the appellate court is obliged, so far as may be, to follow the same procedure and has the same
powers as it follows and has when trying a suit under the Code of Civil Procedure. Where the head office
of the trade union is not situated within the limits of a Presidency town, the appeal lies to a court

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subordinate to the High Court and, in the event of its dismissal, persons aggrieved have the right of
appeal to the High Court. Section 12 deals with the registered office of a trade union and requires notice
of any change in the address thereof to be given within 14 days of such change to the Registrar in
writing so that the changed address can be recorded in the register. Every registered trade union is, by
virtue of the provisions of Section 13, a body corporate of the name under which it is registered, and has
perpetual succession and a common seal with power to acquire and hold both movable and immovable
property and to contract, and can by the said name sue and be sued. Section 28 deals with the returns
to be sent annually to the Registrar. It requires that a general statement audited in the prescribed
manner of all receipts and expenditure of every registered trade union during the calendar year next
preceding such prescribed date shall be sent to the Registrar. Section 31 provides for the penalties that
may be imposed upon the trade union's office bearers if default is made by the trade union in sending
any statement or document required by the provisions of the said Act.

8. Mr. Desai, learned counsel for the petitioners, submitted, having regard to the powers of the
Registrar under the said Act, that, plainly, the Registrar had no power to withdraw the cancellation of
the registration of the 2nd respondent.

9. Mr. Morje, learned counsel for the Registrar (the 1st respondent), relied upon Section 21 of the
General Clauses Act. In his submission, by virtue of Section 21, the Registrar had the power to rescind or
cancel any order made by him.

10. Section 21 of the General Clauses Act states that where, by any Central Act or Regulation, a power to
issue notification, orders, rules or bye-laws is conferred, then that power includes a power, exercisable
in the like manner and subject to the like sanction and conditions, if any, to add to, amend, vary or
rescind only notifications, orders, rules or bye-laws so issued. From a bare perusal it is clear that Section
21 applies only to notifications, orders, rules or bye-laws of general application made under enactments
and in the manner of subordinate legislation. It has no application to an order such as that passed by the
Registrar on 18th August, 1984 to cover a specific case. I find support for this construction in the
judgment of a Division Bench of the Patna High Court in Bhola Prasad Singh v. Prof. U. A. Goswami. .

11. Mr. Deshmukh, learned counsel for the 2nd respondent, submitted that the Registrar had implicit
power to withdraw the cancellation of the 2nd respondent's registration, and it had to be deduced from
the fact that the provisions of the said Act were intended to register trade unions, not to exclude them
from registration. While there can be no quarrel with this, it is difficult to see how it can lead to the
conclusion that the Registrar has such implicit power.

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12. In this regard, Mr. Deshmukh also relied upon the provisions of Section 11(3) whereunder, as has
been pointed out, the appellate court is invested with the same powers and is required to follow the
same procedure as it has and follows while trying a suit under the Code of Civil Procedure. Mr.
Deshmukh submitted that a court hearing a suit is obliged to record terms of compromise between the
parties. By reason of Section 11(3) the appellate court was obliged to accept terms of compromise
between a trade union and the Registrar whereby the cancellation of registration was withdrawn. This
showed that the Registrar had implicit power to withdraw the cancellation of registration.

13. Mr. Deshmukh relied upon the judgment of the Supreme Court in Grindlays Bank v. The Central
Government Industrial Tribunal [1981-I L.L.J. 327]. This was a case in which the tribunal had made an
exparte award. On the application of the party who was not heard the tribunal set aside the exparte
order. It was contended before the Supreme Court that the tribunal had no power to do so. The
Supreme Court was of the opinion that the tribunal had the power to pass the impugned order if it so
thought fit in the interests of justice. It was a well-known rule of statutory construction that tribunal or
body should be considered to be one of the parties. The tribunal should, therefore, be considered as
invested with such incidental or ancillary powers unless there was any indication in the Industrial
Disputes Act to the contrary. Examining the statute, the Supreme Court found that there was no
statutory prohibition, but there were indications to the contrary. One such indication was the fact that
the tribunal was empowered to follow such procedure as it thought fit. This was a power of the widest
amplitude and confered ample power upon the tribunal to devise such procedure as the justice of the
case demanded. The Supreme Court confirmed its earlier finding in Narshi Takershi's that a review on
merits could not be made unless the power to do so had been conferred either specifically or by
necessary implication. But when a review was sought due to a procedural defect, the inadvertent error
committed by the tribunal had to be corrected exdebito justitiae to prevent the abuse of its process and
such power inhered in every court or tribunal. The Supreme Court also considered the argument that
the tribunal had become functus officio once it made the award and found it unacceptable because the
proceedings with regard to a reference under Section 10 of the Industrial Disputes Act were not deemed
to be concluded until the expiry of 30 days from the publication of the award. Till then the tribunal
retained jurisdiction over the dispute referred to it and had the power to entertain an application in
connection with the dispute.

14. The principles laid down in Grindlay Bank's case (supra) can have no application to the present case.
In the first place, it must be noted that the Registrar purported to withdraw the cancellation not
because prior notice of such cancellation had not been served on the 2nd respondent, as Mr. Deshmukh
strenuously argued, but, in terms, because it had, subsequent to the cancellation, submitted the annual
returns. The order withdrawing the cancellation was, therefore, in no sense an order made to correct an
abuse. In the second place, the 2nd respondent had a remedy against the order in that it could appeal
there against or apply for fresh registration. The order was, therefore, in no sense necessary exbedito

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justitiae. Thirdly, the order was passed relying upon events that had occurred subsequent to the
cancellation.

15. Mr. Deshmukh pointed out that the cancellation had been intimated to the 2nd respondent on 11th
August, 1983 by the Additional Registrar of Trade Unions while the withdrawal of the cancellation had
been effected by the Registrar of Trade Unions. He pointed out that under Section 3(2) the Additional
Registrar discharged the powers and functions of the Registrar under the superintendence and direction
of the Registrar. In Mr. Deshmukh's submission, the order of withdrawal dated 18th August 1984 was
passed by the Registrar in exercise of his power of superintendence. A bare reading of the letter dated
18th August 1984 makes it clear that it was passed not in exercise of any powers of superintendence but
because the 2nd respondent had by then filed the annual returns.

16. Mr. Deshmukh said that the cancellation that had been effected on 10th August, 1983 had been
effected only by drawing a line across the entry relating to the 2nd respondent in the register
maintained by the Registrar. The registration certificate of the 2nd respondent remained with it and was
conclusive evidence of registration under Section 9. By virtue of Section 10, no cancellation could be
effected except in the manner thereunder prescribed. In Mr. Deshmukh's submission, there had,
therefore, been no valid cancellation of the 2nd respondent's registration.

17. The validity of the cancellation is not in issue here. I must proceed in this petition upon the basis that
the 2nd respondent's registration was validly cancelled.

18. Mr. Deshmukh's last submission was that the court's discretionary power under Article 226 should
not be exercised in favour of the petitioners because the cancellation of the 2nd respondent's
registration had been effected without following the prescribed procedure, in that it had not been
addressed the notice that is a pre-condition of deregistration at its then address. It appears that this
address had not been communicated to the Registrar as is required by the said Act to be entered in the
register, but that some communications from the Registrar had been addressed to the 2nd respondent
at this address.

19. Where a party is aggrieved by an order of cancellation, and I assume the 2nd respondent was so
aggrieved, it has remedies in the form of an appeal and in the form of an application for fresh
registration. The 2nd respondent has not invoked these remedies. It cannot then be said that the
powers under Section 226 should not be exercised because the cancellation of the 2nd respondent's
registration had been effected improperly.

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20. Then, to sum up, the Registrar cancels or withdraws the registration of a trade union, it has the
option to appeal or to apply for fresh registration. If the appeal succeeds the order of cancellation or
withdrawal of recognition could be held to be bad ab initio and the trade union would continue on the
register as if that order has not been passed. If a fresh registration is permitted it would operate from
the date thereof. Once the Registrar cancels or withdraws the registration of a trade union he had no
power left qua that order. He has no power to review it. He certainly has no power to withdraw it
because of subsequent events.

21. In the result, the petition must succeed and it is made absolute in terms of prayer (a).

22. There shall be no order as to costs

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