Prior Written Demand Not Necessary For 'Industrial Dispute' To Exist; Apprehended Dispute Can Be Referred : Supreme Court

The Supreme Court on Tuesday (January 27) observed that a trade union is not obliged to serve a formal “charter of demands” on the management before approaching the Conciliation Officer under the Industrial Disputes Act, 1947.

The Court observed that the Industrial Disputes Act is both preventive and remedial in character, and therefore a trade union or a worker is entitled to invoke its machinery as soon as a dispute exists or is apprehended, without being compelled to first place their demands before the management. It held that insisting on such a requirement would defeat the very object of the Act, particularly in situations where approaching the employer directly may expose workers to the risk of victimisation or termination.

The statute expressly empowers the appropriate Government to refer an industrial dispute that exists or is apprehended. Reading a mandatory requirement of prior demand would render the word 'apprehended' otiose, the Bench observed.

"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,"observed a bench of Justices Pankaj Mithal and SVN Bhatti, while referring to Shambu Nath Goyal v. Bank of Baroda, (1978) 2 SCC 353 where it was held that where the industrial unrest is apprehended, it is sufficient to invoke the forum for conciliation and “a formal written demand by the workman is not a sine qua non for an industrial dispute to exist.”

"The power to refer an 'apprehended' dispute is the statutory application of the old adage 'a stitch in time saves nine'," the Court observed.

“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.”, the court added.

Background

The case relates to the conciliation proceedings initiated by the contract laborers against the management in anticipation of their termination from the service. The contractual workers led by a Union claimed that the Appellant/management had denied permanent status for the perennial nature of work performed by them and statutory benefits.

Opposing the conciliation proceedings, the Appellant/management, relying on Sindhu Resettlement Corporation Ltd. v. Industrial Tribunal, (1968) 1 SCR 515 argued that no “industrial dispute” under Section 2(k) of the Industrial Disputes Act existed since the Union had not first raised a formal demand before it.

Aggrieved by the labour commissioner's decision to refer the dispute for adjudication before the Industrial Court, the Appellant preferred a Writ Petition before the High Court, which held that while normally a demand should be served on the employer first, a written demand is not a sine qua non for an industrial dispute to exist, unless it is a public utility service.

Aggrieved by the High Court's decision, the Appellant/management moved to the Supreme Court.

Decision

Affirming the impugned judgment, the judgment authored by Justice Bhatti upheld the validity of the reference and dismissed the management's appeal. The Court emphasised that under Section 10(1) of the ID Act, the appropriate government is empowered to refer a dispute that “exists or is apprehended.”

Relying on Shambu Nath Goyal (supra), the Court reiterated that a written demand is not a sine qua non for the existence of an industrial dispute, except in cases relating to public utility services. It further observed that the dispute in the present case was clearly “apprehended” and thus capable of being referred for adjudication.

Referring to Shambu Nath Goyal, the Court observed :

"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."

The Court distinguished the judgment cited by the Appellant from the facts of the present case, noting that in Sindhu (supra) involved admitted employer-employee relationships and crystallised disputes. In contrast, the present case involved a complex tripartite situation between the principal employer, contractor, and workers, where the relationship between the Appellant and contractual workers was not established.

Resultantly, the Court referred the matter to the Industrial Court to expeditiously decide the reference within four months by framing two specific issues:

(1) whether the labour contracts were sham and nominal, and

(2) whether the management was the principal employer of the concerned workers.

Accordingly, the appeal was dismissed.

Cause Title: M/S PREMIUM TRANSMISSION PRIVATE LIMITED VERSUS THE STATE OF MAHARASHTRA AND OTHERS

Citation : 2026 LiveLaw (SC) 86

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Appearance:

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

For Respondent(s) 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.