1.As in the case of State of Bombay vs KP Krishnan SC while explaining government discretionary power while referring a dispute SC said “Chapter III which consists of ss. 10 and 10A deals with reference of dispute to Boards, Courts or Tribunals. Section 10(1) provides that where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time by order in writing refer the dispute to one or the other authority specified in cls. (a) to (d). This section is of basic importance in the scheme of the Act. It shows that the main object of the Act is to provide for cheap and expeditious machinery for the decision of all industrial disputes by referring them to adjudication, and thus avoid industrial conflict resulting from frequent lock-outs and strikes. It is with that object that reference is contemplated not only in regard to existing industrial disputes but also in respect of disputes which may be apprehended. This section confers wide and even absolute discretion on the Government either to refer or to refuse to refer an industrial dispute as therein provided. Naturally this wide discretion has to be exercised by the Government bona fide and on a consideration of relevant and material facts. The second proviso to s. 10(1) deals with disputes relating to a public utility service, and it provides that where a notice under s. 22 has been given in respect of such a dispute the appropriate Government shall, unless it consider that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make a reference under this sub-section notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced. It is thus clear that in regard to cases falling under this proviso an obligation is imposed on the Government to refer the dispute unless of course it is satisfied that the notice is frivolous or vexatious or that considerations of expediency required that a reference should not be made. This proviso also makes it clear that reference can be made even if other proceedings under the Act have already commenced in respect of the same dispute. Thus, so far as discretion of the Government to exercise its power of referring an industrial dispute is concerned it is very wide under s. 10(1) but is limited under the second proviso to s. 10(1). Section 10(2) deals with a case where the Government has to refer an industrial dispute and has no discretion in the matter. Where the parties to an industrial dispute apply in the prescribed manner either jointly or separately for a reference of the dispute between them the Government has to refer the said dispute if it is satisfied that the persons applying represent the majority of each party. Thus, in dealing with this class of cases the only point on which the Government has to be satisfied is that the persons applying represent the majority of each party; once that test is satisfied the Government has no option but to make a reference as required by the parties. Similarly s. 10A deals with cases where the employer and his workmen agree to refer the dispute to arbitration at any time before the dispute has been referred under s. 10, and it provides that they may so refer it to such person or persons as may be specified in the arbitration agreement; and s. 10A(3) requires that on receiving such an arbitration agreement the Government shall, within fourteen days, publish the same in the official Gazette. Section 10A (4) prescribed that the arbitrator or arbitrators shall investigate the dispute and submit the arbitration award to the appropriate Government; and s. 10A(5) provides that such arbitrations are outside the Arbitration Act. Thus cases of Voluntary reference of disputes to arbitration are outside the scope of any discretion in the Government. That in brief is the position of the discretionary power of the Government to refer industrial disputes to the appropriate authorities under the Act. The appropriate authorities under the Act are the conciliator, the Board, Court of Enquiry, Labour Court, Tribunal and National Tribunal. Section 11(3) confers on the Board, Court of Enquiry, Labour Court, Tribunal and National Tribunal all the powers as are vested in a civil court when trying a suit in respect of the matters specified by cls. (a) to (d). A conciliation officer, however, stands on a different footing. Under s. 11(4) he is given the power to call for and inspect any relevant document and has been given the same powers as are vested in civil courts in respect of compelling the production of documents.
2. Section 12 deals with the duties of conciliation officers. Under s. 12(1) the conciliation officer may hold conciliation proceedings in the prescribed manner where an industrial dispute exists or is apprehended. In regard to an industrial dispute relating to a public utility service, where notice under s. 22 has been given, the conciliation officer shall hold conciliation proceedings in respect of it. The effect of s. 12(1) is that, whereas in regard to an industrial dispute not relating to a public utility service the conciliation officer is given the discretion either to hold conciliation proceedings or not, in regard to a dispute in respect of a public utility service, where notice has been given, he has no discretion but must hold conciliation proceedings in regard to it. Section 12(2) requires the conciliation officer to investigate the dispute without delay with the object of bringing about a settlement, and during the course of his investigation he may examine all matters affecting the merits and the right settlement of the dispute and do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement. The duty and function of the conciliation officer is, as his very name indicates, to mediate between the parties and make an effort at conciliation so as to persuade them to settle their disputes amicably between themselves. If the conciliation officer succeeds in his mediation s. 12 (3) requires him to make a report of such settlement together with the memorandum of the settlement signed by the parties to the dispute. Section 18(3) provides that a settlement arrived at in the course of conciliation proceedings shall be binding on the parties specified therein. It would thus be seen that if the attempts made by the conciliation officer to induce the parties to come to a settlement succeeds and a settlement is signed by them it has in substance the same binding character as an award under s. 18(3). Sometimes efforts at conciliation do not succeed either because one of the parties to the dispute refuses to co-operate or they do not agree as to the terms of settlement. In such cases the conciliation officer has to send his report to the appropriate Government under s. 12(4). This report must set forth the steps taken by the officer for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof together with a full statement of such facts and circumstances and the reasons on account of which in his opinion a settlement could not be arrived at. The object of requiring the conciliation officer to make such a full and detailed report is to apprise the Government of all the relevant facts including the reasons for the failure of the conciliation officer so that the Government may be in possession of the relevant material on which it can decide what course to adopt under s. 12(5). In construing s. 12(5), therefore, it is necessary to bear in mind the background of the steps which the conciliation officer has taken under s. 12(1) to (4). The conciliation officer has held conciliation proceedings, has investigated the matter, attempted to mediate, failed in his effort to bring about a settlement between the parties, and has made a full and detailed report in regard to his enquiry and his conclusions as to the reasons on account of which a settlement could not be arrived at.
3. Section 12(5) provides that if, on a consideration of the report referred to in sub-section (4), the appropriate Government is satisfied that there is a case for reference to a Board, Labour Court, Tribunal or National Tribunal, it may make such reference. Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefore. This section requires the appropriate Government to consider the report and decide whether a case for reference has been made out. If the Government is satisfied that a case for reference has been made out it may make such reference. If it is satisfied that a case for reference has not been made out it may not make such a reference; but in such a case it shall record and communicate to the parties concerned its reasons for not making the reference which in the context means its reasons for not being satisfied that there is a case for reference.
4. It is true that s. 12(5) provides that the appropriate Government may make such reference and in that sense it may be permissible to say that a power to make reference is conferred on the appropriate Government by s. 12(5). The High Court was apparently inclined to take the view that in cases falling under s. 12(5) reference can be made only under s. 12(5) independently of s. 10 (1). In our opinion that is not the effect of the provisions of s. 12(5). If it is held that in cases falling under s. 12(5) reference can and should be made only under s. 12(5) it would lead to very anomalous consequences. Section 10(3) empowers the appropriate Government by an order to prohibit the continuance of any strike or lock-out in connection with an industrial dispute which may be in existence on the date of the reference, but this power is confined only to cases where industrial disputes are referred under s. 10(1). It would thus be clear that if a reference is made only under s. 12(5) independently of s. 10(1) the appropriate Government may have no power to prohibit the continuance of a strike in connection with a dispute referred by it to the tribunal for adjudication; and that obviously could not be the intention of the Legislature. It is significant that ss. 23 and 24 prohibit the commencement of strikes and lock-outs during the pendency of proceedings therein specified, and so even in the case of a reference made under s. 12(5) it would not be open to the employer to declare a lock-out or for the workmen to go on strike after such a reference is made; but if a strike has commenced or lock-out has been declared before such a reference is made, there would be no power in the appropriate Government to prohibit the continuance of such a strike or such a lock-out. Section 24(2) makes it clear that the continuance of a lock-out or strike is deemed to be illegal only if an order prohibiting it is passed under s. 10(3). Thus the power to maintain industrial peace during adjudication proceedings which is so essential and which in fact can be said to be the basis of adjudication proceedings is exercisable only if a reference is made under s. 10(1). What is true about this power is equally true about the power conferred on the appropriate Government by s. 10(4), (5), (6) and (7). In other words, the material provisions contained in sub-ss. (3) to (7) of S. 10(1) which are an integral part of the scheme of reference prescribed by Chapter III of the Act clearly indicate that even if the appropriate Government may be acting under s. 12(5) the reference must ultimately be made under s. 10 (1).
5. Besides, even as a matter of construction, when s. 12(5) provides that the appropriate Government may make such reference it does not mean that this provision is intended to confer a power to make reference as such. That power has already been conferred by s. 10(1); indeed s. 12(5) occurs in a Chapter dealing with the procedure, powers and duties of the authorities under the Act; and it would be legitimate to hold that s. 12(5) which undoubtedly confers power on the appropriate Government to act in the manner specified by it, the power to make a reference which it will exercise if it comes to the conclusion that a case for reference has been made must be found in s. 10(1). In other words, when s. 12(5) says that the Government may make such reference it really means it may make such reference under s. 10(1). Therefore it would not be reasonable to hold that s. 12(5) by itself and independently of s. 10(1) confers power on the appropriate Government to make a reference.
6. The next point to consider is whether, while the appropriate Government acts under s. 12(5), it is bound to base its decision only and solely on a consideration of the report made by the conciliation officer under s. 12(4). There is no doubt that having regard to the background furnished by the earlier provisions of s. 12 the appropriate Government would naturally consider the report very carefully and treat it as furnishing the relevant material which would enable it to decide whether a case for reference has been made or not; but the words of s. 12(5) do not suggest that the report is the only material on which Government must base its conclusion. It would be open to the Government to consider other relevant facts which may come to its knowledge or which may be brought to its notice, and it is in the light of all these relevant facts that it has to come to its decision whether a reference should be made or not. The problem which the Government has to consider while acting under s. 12(5)(a) is whether there is a case for reference. This expression means that Government must first consider whether a prima facie case for reference has been made on the merits. If the Government comes to the conclusion that a prima facie case for reference has been made then it would be open to the Government also to consider whether there are any other relevant or material facts which would justify its refusal to make a reference. The question as to whether a case for reference has been made out can be answered in the light of all the relevant circumstances which would have a bearing on the merits of the case as well as on the incidental question as to whether a reference should nevertheless be made or not. A discretion to consider all relevant facts which is conferred on the Government by s. 10(1) could be exercised by the Government even in dealing with cases under s. 12(5) provided of course the said discretion is exercised bona fide, its final decision is based on a consideration of relevant facts and circumstances, and the second part of s. 12(5) is complied with.
7. We have already noticed that s. 12 deals with the conciliation proceedings in regard to all industrial disputes, whether they relate to a public utility service or not. Section 12(1) imposes an obligation on the conciliation officer to hold conciliation proceedings in regard to an industrial dispute in respect of public utility service provided a notice under s. 22 has been given. If in such a dispute the efforts at conciliation fail and a failure report is submitted under s. 12(4) Government may have to act under s. 12(5) and decide whether there is a case for reference. Now, in dealing with such a question relating to a public utility service considerations prescribed by the second proviso to s. 10(1) may be relevant, and Government may be justified in refusing to make a reference if it is satisfied that the notice given is frivolous or vexatious or that reference would be inexpedient. Just as discretion conferred on the Government under s. 10(1) can be exercised by it in dealing with industrial disputes in regard to non-public utility services even when Government is acting under s. 12(5), so too the provisions of the second proviso can be pressed into service by the Government when it deals with an industrial dispute in regard to a public utility service under s. 12(5).
8. It would, therefore, follow that on receiving the failure report from the conciliation officer Government would consider the report and other relevant material and decide whether there is a case for reference. If it is satisfied that there is such a case for reference it may make a reference. If it does not make a reference it shall record and communicate to the parties concerned its reasons therefor.
9. If power is conferred on an authority and it is coupled with the performance of a duty the words conferring power though directory must be construed as mandatory. As Mr. Justice Coleridge has observed in Reg. v. Tithe Commissioners ((1849) 14 Q.B. 459, 474 : 117 E.R. 179, 185). The words undoubtedly are only empowering; but it has been so often decided as to have become an axiom, that, in public statutes, words only directory, permissory or enabling may have a compulsory force where the thing to be done is for the public benefit or in advancement of public justice”. The argument is that s. 12(5) makes it obligatory on the Government to record and communicate its reasons for not making the reference and this obligation shows that the power to make reference is intended to be exercised for the benefit of the party which raises an industrial dispute and wants it to be referred to the authority for decision. It may be that the Legislature intended that this requirement would avoid casual or capricious decisions in the matter because the recording and communication of reasons postulates that the reasons in question must stand public examination and scrutiny and would therefore be of such a character as would show that the question was carefully and properly considered by the Government; but that is not the only object in making this provision. The other object is to indicate that an obligation or duty is cast upon the Government, and since the power conferred by the first part is coupled with the duty prescribed by the second party “may” in the context must mean “shall”. There is considerable force in this argument. Indeed it has been accepted by the High Court and it has been held that if the Government is satisfied that there is a case for reference it is bound to make the reference.
10. On the other hand, if the power to make reference is ultimately to be found in s. 10(1) it would not be easy to read the relevant portion of s. 12(5) as imposing an obligation on the Government to make a reference. Section 12(5) when read with s. 10 (1) would mean, according to the appellant, that, even after considering the question, the Government may refuse to make a reference in a proper case provided of course it records and communicates its reasons for its final decision. In this connection the appellant strongly relies on the relevant provisions of s. 13. This section deals with the duties of Boards and is similar to s. 12 which deals with conciliation officers. A dispute can be referred to a Board in the first instance under s. 10(1) or under s. 12(5) itself. Like the conciliation officer the Board also endeavours to bring about a settlement of the dispute. Its powers are wider than those of a conciliator but its function is substantially the same; and so if the efforts made by the Board to settle the dispute fail it has to make a report under s. 13(3). Section 13(4) provides that if on receipt of the report made by the Board in respect of a dispute relating to a public utility service the appropriate Government does not make a reference to a Labour Court, Tribunal or National Tribunal under s. 10, it shall record and communicate to the parties concerned its reasons therefor. The provisions of s. 13 considered as a whole clearly indicate that the power to make a reference in regard to disputes referred to the Board are undoubtedly to be found in s. 10(1). Indeed in regard to disputes relating to non-public utility services there is no express provision made authorising the Government to make a reference, and even s. 13(4) deals with a case where no reference is made in regard to a dispute relating to a public utility service which means that if a reference is intended to be made it would be under the second proviso to s. 10(1). Incidentally this fortifies the conclusion that whenever reference is made the power to make it is to be found under s. 10(1). Now, in regard to cases falling under s. 13(4) since the reference has to be made under s. 10 that can be no doubt that the considerations relevant under the second proviso to s. 10(1) would be relevant and Government may well justify their refusal to make a reference on one or the other of the grounds specified in the said proviso. Besides, in regard to disputes other than those falling under s. 13(4) if a reference has to be made, it would clearly be under s. 10(1). This position is implicit in the scheme of s. 13. The result, therefore, would be that in regard to a dispute like the present it would be open to Government to refer the said dispute under s. 12(5) to a Board, and if the Board fails to bring about a settlement between the parties Government would be entitled either to refer or to refuse to refer the said dispute for industrial adjudication under s. 10(1). There can be no doubt that if a reference has to be made in regard to a dispute referred to a Board under s. 13 s. 10(1) would apply, and there would be no question of importing any compulsion or obligation on the Government to make a reference. Now, if that be the true position under the relevant provisions of s. 13 it would be difficult to accept the argument that a prior stage when Government is acting under s. 12(5) it is obligatory on it to make a reference as contended by the respondent.
11. It is common ground that a writ of mandamus would lie against the Government if the order passed by it under s. 10(1) is for instance contrary to the provisions of s. 10(1)(a) to (d) in the matter of selecting the appropriate authority; it is also common ground that in refusing to make a reference under s. 12(5) if Government does not record and communicate to the parties concerned its reasons therefor a writ of mandamus would lie. Similarly it is not disputed that if a party can show that the refusal to refer a dispute is not bona fide or is based on a consideration of wholly irrelevant facts and circumstances a writ of mandamus would lie. The order passed by the Government under s. 12(5) may be an administrative order and the reasons recorded by it may not be justiciable in the sense that their propriety, adequacy or satisfactory character may not be open to judicial scrutiny; in that sense it would be correct to say that the court hearing a petition for mandamus is not sitting in appeal over the decision of the Government; nevertheless if the court is satisfied that the reasons given by the Government for refusing to make a reference are extraneous and not germane then the court can issue, and would be justified in issuing, a writ of mandamus even in respect of such an administrative order. After an elaborate argument on the construction of s. 12(5) was addressed to us it became clear that on this part of the case there was no serious dispute between the parties. That is why we think the controversy as to the construction of s. 12(5) is of no more than academic importance.
12. It is true that making a reference under section 10(1) of the ID Act is within the discretion of the appropriate government. Referring to the unamended section 10(1) of ID Act this court in State of Madras v. C.P.Sarathy [1953 (4) SCR 334], laid down the following principles:
(i) The government should satisfy itself, on the facts and circumstances brought to its notice, in its subjective opinion that an `industrial dispute’ exists or is `apprehended.
(ii) The factual existence of a dispute or its apprehension and the expediency of making reference are matters entirely for the government to decide.
(iii) The order making a reference is an administrative act and it is not a judicial or a quasi-judicial act.
(iv) The order of reference passed by the government cannot be examined by the High Court in its jurisdiction under art 226 of the Constitution to see if the government had material before it to support the conclusion that the dispute existed or was apprehended.
13. The opening words of section 10 of ID Act “if any industrial dispute exists or is apprehended the appropriate government may” were replaced by the words “where the appropriate government is of the opinion that any industrial dispute exists or is apprehended it may at any time” by Act 18 of 1952. The issue was thereafter again considered in Rohtas Industries Ltd. v. SD Agarwal [AIR 1969 SC 707]. After referring to the propositions in Sarathy, this Court held :
“This interpretation of s 10(1) is based on the language of that provision as well as the purpose for which the power in question was given and the effect of a reference. That decision cannot be considered as an authority for the proposition that whenever a provision of law confers certain power on an authority on its forming a certain opinion on the basis of certain facts, the courts are precluded from examining whether the relevant facts on the basis of which the opinion is formed had in fact existed.”
(emphasis supplied) 12.2) The amended section 10 was considered in Western India Match Co. v. Western India Match Co. Workers’ Union [1970 (1) SCC 225]. This court, again, after referring to the observation in Sarathy that the order of the government is an administrative function, observed thus :
“…….the government cannot go into the merits of the dispute, its function being only to refer such a dispute for adjudication so that the industrial relations between the employer and the employees may not continue to remain disturbed, and the dispute may be resolved through a judicial process as speedily as possible.”
14. In State of Bombay v. K.P. Krishnan [1961] 1 SCR 227, this court referred to the scope of section 10(1) thus :
“Section 10(1) provides that where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time by order in writing refer the dispute to one or the other authority specified in clauses (a) to (d). This section is of basic importance in the scheme of the Act. It shows that the main object of the Act is to provide for cheap and expeditious machinery for the decision of all industrial disputes by referring them to adjudication, and thus avoid industrial conflict resulting from frequent lock-outs and strikes. It is with that object that reference is contemplated not only in regard to existing industrial disputes but also in respect of disputes, which may be apprehended. This section confers wide and even absolute discretion on the Government either to refer or to refuse to refer an industrial dispute as therein provided. Naturally this wide discretion has to be exercised by the Government bona fide and on a consideration of relevant and material facts.”
This court clarified that the writ court can direct the government to reconsider whether a reference should be made or not after leaving out the relevant and extraneous considerations.
15. In Bombay Union of Journalists & Ors. v. The State of Bombay & Anr. [1964] 6 SCR 22, this court once again discussed the scheme of reference and observed:
“… section 10(1) confers discretion on the appropriate Government either to refer the dispute, or not to refer it, for industrial adjudication according as it is of the opinion that it is expedient to do so or not … in entertaining an application for a writ of mandamus against an order made by the appropriate Government under s. 10(1) read with s. 12(5), the Court is not sitting in appeal over the order and is not entitled to consider the propriety or the satisfactory character of the reasons given by the said Government. … It is no doubt desirable that the party concerned should be told clearly and precisely the reasons why no reference is made, because the object of s. 12(5) appears to be to require the appropriate Government to state its reason for refusing to make a reference, so that the reasons should stand public scrutiny; but that does not mean that a party challenging the validity of the Government’s decision not to make a reference can require the court in writ proceedings to examine the propriety or correctness of the said reasons.”
This court however made it clear that if the appropriate government refuses to make a reference for irrelevant considerations, on extraneous grounds or acts mala fide, a party would be entitled to move the High Court for a writ of mandamus.
16. This position was reiterated in Hochtif Gammon v. State of Orissa [1975 (2) SCC 649]. In Hochtif Gammon, this Court observed thus:
“The executive have to reach their decisions by taking into account relevant considerations. They should not refuse to consider relevant matter nor should take into account wholly irrelevant or extraneous consideration. They should not misdirect themselves on a point of law. Only such a decision will be lawful. The courts have power to see that the executive acts lawfully. It is no answer to the exercise of that power to say that the executive acted bona fide nor that they have bestowed painstaking consideration. They cannot avoid scrutiny by courts by failing to give reasons. If they give reasons that they are not good reasons, the courts can direct them to reconsider the matter in the light of relevant matters, though the propriety, adequacy or satisfactory character of those reasons may not be open to judicial scrutiny. Even if the executive considers it inexpedient to exercise their powers they should state their reasons and there must be material to show that they have considered all the relevant facts.”
17. Thereafter the matter came up for consideration in Avon Services (supra) relied upon by the High Court. In Avon Services, this Court reiterated the principles thus:
“Section 10(1) confers a discretionary power and this discretionary power can be exercised on being satisfied that an industrial dispute exists or is apprehended. There must be some material before the Government on the basis of which it forms an opinion that an industrial dispute exists or is apprehended. The power conferred on the appropriate Government is an administrative power and the action of the Government in making the reference is an administrative act. The formation of an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any the less administrative in character. Thus the jurisdictional facts on which the appropriate Government may act are the formation of an opinion that an industrial dispute exists or is apprehended which undoubtedly is a subjective one, the next step of making reference is an administrative act. The adequacy or sufficiency of the material on which the opinion was formed is beyond the pale of judicial scrutiny. If the action of the Government in making the reference is impugned by a party it would be open to such a party to show that what was referred was not an industrial dispute and that the Tribunal had no jurisdiction to make the Award but if the dispute was an industrial dispute, its factual existence and the expediency of making a reference in the circumstances of a particular case are matters entirely for Government to decide upon, and it will not be competent for the Court to hold the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material before Government on which it could have come to an affirmative conclusion on those matters.
Merely because the government rejects a request for a reference or declines to make a reference, it cannot be said that the industrial dispute has ceased to exist…… The industrial dispute may nonetheless continue to remain in existence and if at a subsequent stage the appropriate government is satisfied that in the interest of industrial peace and for promoting industrial harmony it is desirable to make a reference, the appropriate government does not lack power to do so under s 10(1), nor is it precluded from making the reference on the only ground that on an earlier occasion it had declined to make the reference.”
18. In Ram Avtar Sharma vs. State of Haryana [1985 (3) SCC 189], this Court considered a refusal by the government as it found that the services of the employee were terminated only after charges against him were proved in a domestic enquiry, that this Court held that a clear case of grant of writ of mandamus was made out on the ground of the following reasoning:
“The assumption underlying the reasons assigned by the Government are that the enquiry was consistent with the rules and the standing orders, that it was fair and just and that there was unbiased determination and the punishment was commensurate with the gravity of the misconduct…….. The reasons given by the Government would show that the Government examined the relevant papers of enquiry and the Government was satisfied that it was legally valid and that there was sufficient and adequate evidence to hold the charges proved. It would further appear that the Government was satisfied that the enquiry was not biased against the workmen and the punishment was commensurate with the gravity of the misconduct charged. All these relevant and vital aspects have to be examined by the Industrial Tribunal while adjudicating upon the reference made to it. In other words, the reasons given by the Government would tantamount to adjudication which is impermissible. That is the function of the Tribunal and the Government cannot arrogate to itself that function. Therefore if the grounds on which or the reasons for which the Government declined to make a reference under Section 10 are irrelevant, extraneous or not germane to the determination, it is well settled that the party aggrieved thereby would be entitled 10 move the Court for a writ of mandamus. It is equally well settled that where the Government purports to give reasons which tantamount to adjudication and refuses to make a reference, the appropriate Government could be said to have acted on extraneous, irrelevant grounds or grounds not germane to the determination and a writ of mandamus would lie calling upon the Government to reconsider its decision.”
19. In Telco Convoy Drivers Mazdoor Sangh vs. State of Bihar [1989 (3) SCC 271], this Court held that while exercising power under section 10(1) of the Act, the function of the appropriate government is an administrative function and not a judicial or quasi-judicial function. In performing this administrative function the government cannot delve into the merits of the dispute and take upon itself the determination of the lis, which would certainly be in excess of the power conferred on it by section 10 of the Act. However, there may be exceptional cases in which the state government may, on a proper examination of the demand, come to a conclusion that the demands are either perverse or frivolous and do not merit a reference. But the government should be slow to attempt an examination of the demand with a view to declining reference and courts will always be vigilant whenever the government attempts to usurp the powers of the Tribunal for adjudication of valid disputes, and to allow the government to do so would be to render section 10 and section 12(5) of the Act nugatory. Where, as in the instant case, the dispute is whether the persons raising the dispute are workmen or not, the same cannot be decided by the government in exercise of its administrative function under section 10(1). When the dispute was whether the convoy drivers were employees or workmen of TELCO, that is to say, whether there was relationship of employer and employees between TELCO and the convoy drivers, the Deputy Labour Commissioner and/or the state government was not justified in holding that the convoy drivers were not workmen and accordingly, no reference could be made. When it is found that the dispute should be adjudicated by the Industrial Tribunal and the state government had persistently declined to make a reference under section 10(1) despite chances given by High Court and Supreme Court to reconsider the matter, the court would direct the government to make a reference of the dispute to the appropriate industrial tribunal. The principles were reiterated in Sultan Singh vs. State of Haryana [1996 (2) SCC 66 and Secretary, Indian Tea Association vs. Ajit Kumar Barat [2000 (3) SCC 93].
20. Thus it can safely be concluded that a writ of mandamus would be issued to the appropriate government to reconsider the refusal to make a reference, where (i) the refusal is on irrelevant, irrational or extraneous grounds; (ii) the refusal is a result of the appropriate government examining the merits of the dispute and prejudging/adjudicating/determine the dispute; (iii) the refusal is mala fide or dishonest or actuated by malice; (iv) the refusal ignores the material available in the failure report of the Conciliation Officer or is not supported by any reason
ing to refer the dispute under s. 12(5).So this is the legal postion in regard to government discretionary power for making a reference of disputes under I.D. ACT 1947.
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