Introduction
The case of Bharat Bank Ltd. v. Employees (AIR 1950 SC 188) is a landmark judgment that addressed the nature and jurisdiction of Industrial Tribunals under the Industrial Disputes Act, 1947. It raised significant constitutional questions regarding whether awards passed by such tribunals could be challenged in the Supreme Court under Article 136 of the Indian Constitution. This case helped define the judicial or quasi-judicial character of Industrial Tribunals and their legal standing in India’s constitutional framework.
Bench
- Justice M.C. Mahajan
- Justice S.R. Das
- Justice B.K. Mukherjea
- Justice Chandrasekhara Aiyar
- Justice Vivian Bose
Facts
The dispute in this case arose between Bharat Bank Ltd., a company registered under the Indian Companies Act and operating in Delhi, and its employees. The employees had put forth several demands related to their working conditions, which the Bharat Bank Ltd. refused to accept. Due to the Bharat Bank Ltd. non-cooperative response, the employees decided to go on strike on 9th March 1949. In response, the bharat bank ltd. issued notices to the striking employees, directing them to return to work. When the employees did not comply, the bank took disciplinary action and proceeded to discharge a number of them between 19th and 24th March 1949.
Given the seriousness of the industrial unrest, the Central Government exercised its power under Section 10 of the Industrial Disputes Act, 1947, and referred the dispute to an Industrial Tribunal for adjudication. This tribunal, consisting of three members, was constituted under Section 7 of the same Act. The specific subject of the dispute was recorded as Item 18 in the Government’s notification, which dealt with “Retrenchment and victimization,” and required the tribunal to examine whether the discharged employees had been unfairly targeted by the employer.
The Industrial Tribunal conducted hearings and gave its award (decision) on 19th January 1950, which was later published in the Government of India Gazette on 4th February 1950. The award was declared binding for one year. However, a critical procedural issue arose — the award was signed by only two of the three tribunal members, and no formal reconstitution of the tribunal had been carried out to allow only two members to decide the matter. This raised doubts about the legal validity of the award.
Challenging the tribunal’s decision, Bharat Bank approached the Supreme Court under Article 136 of the Constitution, seeking special leave to appeal. The bank contended that the tribunal had violated principles of natural justice, failed to record proper evidence, and had denied it a full opportunity to defend itself. It also argued that the tribunal was improperly constituted and that the award was procedurally flawed and legally unsustainable.
Issues
- Whether the Industrial Tribunal functions as a court or a tribunal exercising judicial power under Article 136 of the Constitution.
- Whether the award made by the tribunal can be considered a “determination” under Article 136 and thus appealable to the Supreme Court.
- Whether the procedural irregularities in the tribunal’s functioning (like award being signed by only two members) render its award invalid.
Arguments
Petitioner (Bharat Bank Ltd.):
The Bharat Bank Ltd. argued that the Industrial Tribunal had failed to follow basic principles of natural justice. The award was made without sufficient evidence, and the employer had been denied a proper opportunity to present its case. It was also argued that the award was invalid as only two out of three members signed it, without proper reconstitution of the tribunal.
The petitioner further claimed that the tribunal’s findings amounted to victimization, but such a determination was made without proof or inquiry. The Bharat Bank Ltd. also emphasized that reinstatement of striking employees who allegedly participated in an illegal strike was unjustified.
Respondents (Employees and Central Government):
The respondents raised a preliminary objection that Article 136 does not apply to Industrial Tribunals because they are not “courts” and do not exercise judicial power. They argued that the award was not a judgment, decree, or order, and thus, the Supreme Court had no jurisdiction. They further claimed that the tribunal functioned within its legal mandate and followed due process.
Ratio Decidendi (Legal Principle Applied)
The Supreme Court held that the term “tribunal” under Article 136 of the Constitution should be interpreted broadly. It does not refer only to courts that strictly follow judicial procedures but includes quasi-judicial bodies that perform adjudicatory functions, such as Industrial Tribunals.
The Court recognized that though an Industrial Tribunal is not a regular court, it performs functions akin to a judicial authority — it adjudicates disputes, hears parties, receives evidence, and issues binding decisions. Therefore, its determinations fall within the scope of Article 136, making them appealable to the Supreme Court.
Observation
The Court observed that tribunals like those constituted under the Industrial Disputes Act must function with fairness and impartiality, especially since their decisions can significantly impact the rights and livelihoods of both employers and workers. It emphasized that procedural irregularities, such as making an award without proper evidence or signature of all tribunal members, violate natural justice.
The tribunal in this case had failed to record proper evidence, denied the employer a full opportunity to present its case, and made the award based merely on verbal statements without affidavits or documents. Furthermore, the tribunal’s award lacked the signature of the third member, and no official reconstitution of the tribunal was done.
Decision
The Supreme Court allowed the appeal and quashed the award of the Industrial Tribunal. The Court held that:
- The award was invalid due to procedural lapses and absence of proper evidence.
- The tribunal acted in violation of natural justice, which justified the Supreme Court’s intervention.
- A tribunal exercising quasi-judicial functions under statutory authority is within the jurisdiction of Article 136.
- The matter was remanded for fresh adjudication by the properly constituted tribunal.
Conclusion
Bharat Bank Ltd. v. Employees is a foundational judgment that clarified the status and nature of Industrial Tribunals under Indian law. It established that tribunals exercising adjudicatory functions come within the ambit of judicial review under Article 136, thus reinforcing the constitutional right to appeal against decisions affecting fundamental rights and justice.
The case also set procedural standards for Industrial Tribunals, insisting on compliance with rules of evidence, fairness, and complete tribunal constitution for valid adjudication.
