Ex parte award of Labour court can be challenged after 30 days of its pronouncement.

By Azeez Nazar Sabri 

In a landmark judgment in the matter of M/s. Haryana Suraj Malting Ltd Vs. Phool Chand ( Civil Appeal No. 5649 of 2018 and 5893 of 2018 ), Supreme Court of India has held that the Labour Court/Tribunal is not functus officio after the award has become enforceable as far as setting aside an ex parte award is concerned.

The question arising for consideration in this case was whether the Industrial Tribunal/ Labour Court is funtus officio after the award has become enforceable, and is thus, prevent from considering an application for setting aside an ex parte award.

On this issue there were conflicting decisions of two benches of Apex Court in the matter of Sangham Tape Co. V. Hans Raj ( 2005) 9 SCC 331 and Radhakrishna Mani Tripathi V. L.H.Patel and another ( 2009) 2 SCC 81, therefore a reference to larger bench was made with the  following question of law:

Whether the Industrial Tribunal/ Labour Court become functus officio after 30 days of the pronouncement/ publication of the award and loses all power to recall an ex parte award on application made by an aggrieved party after 30 days from the pronouncement / Publication of award?

A larger bench of three judges held that merely because an award has become enforceable, does not necessarily mean that it has become biding. For an award to become binding, it should be passed in compliance with the principles of natural justice. An award passed denying an opportunity of hearing when there was a sufficient cause for non- appearance can be challenged on the ground of it being nullity.

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 in the Labour Court/ Tribunal when it was ex parte, the Labour Court/ Tribunal is bound to consider such an application and the application cannot be rejected on the ground that it was filed after the award had become enforceable.

It is within the power of the Labour Court/ Tribunal to entertain an application as per the scheme of the Act and in terms of the rules of natural justice.  Court also restated that the Industrial Disputes Act, 1947 is a welfare legislation intended to maintain industrial peace. In that view of the matter, certain powers to do justice have to be conceded to the Labour Court/ Tribunal, whether we call it ancillary, incidental or inherent.

Bench also observed that when an application for setting aside an ex parte award is made at the instance of the management, the Labour Court/ Tribunal has to balance equities.