An Enforceable Award does not become binding unless confirms following principles of natural justice: MP HC

An Enforceable Award does not become binding unless confirms following principles of natural justice: MP HC

The Madhya Pradesh High Court has held that an award passed in defiance to principle of Natural Justice doesn’t become binding.

The single-judge bench of Justice Anil Verma observed the above while adjudicating upon a petition under Article 227 of the Constitution of India filed in aggrieve of award passed by Labour Court.

The petitioner/Municipal Corporation has challenged the award, wherein the Presiding Officer has proceeded an ex-parte award against the petitioner directing reinstatement of petitioner without backwages.

Thereafter the petitioner has filed application under Order 9 Rule 13 of CPC twice for setting aside the ex-parte award which were eventually dismissed both the times.

Counsel for the petitioner/Municipal Corporation contended that the Court has erred in law in dismissing the application filed by the petitioner for conducting by party hearing in the case on the ground that permission to publish award was already granted granted to him.

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He submitted that the petitioner could not remain present before the Court below for the reason that Court Clerk has received the notice, but he did not informed the higher authorities about the receiving of notice and therefore there was no appearance on behalf of the petitioner. He further averred that Court has failed to consider that the petitioner has initiated the disciplinary proceedings against the erring Clerk and the respondent has failed to produce any relevant documents to establish that she was worked more than 240 days in a year.

Submitting that the respondent has never worked with the petitioner/Municipal Corporation and that there is no master and servant relationship between them, he pleaded for setting aside of impugned order contending that it is bad in law and contrary to the facts in law and evidence.

The Court noted that before acknowledgment of the award passed the petitioner has again filed an application under Section 9 Rule 13 of CPC  before the Court below but the same has been dismissed on the ground that permission for publication of award has already been granted to the petitioner.

The Court referred to M/S Haryana Suraj Maltings Ltd. Vs. Narender Kumar, 2016 Latest Caselaw 185 SC wherei the Apex Court 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.

In this view, the Court observed that it is clear that merely because an award had become enforceable, it does not mean that it had become binding.

“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 could be challenged on the ground of it being nullity. An award which is a nullity could not be and should not be a binding award. In case, if a party was able to show sufficient cause within a reasonable time for its non-appearance in the Labour Court/Tribunal, when it was set ex-parte, the Labour Court was bound to consider such an application and the application cannot be dismissed on the ground that it was filed after the award had become enforceable.”

It thus noted that the Court has not considered all these legal aspects of the matter while passing the impugned orders and the petitioner/Municipal Corporation has shown sufficient reason of his non-appearance before the Labour Court.

The petitioner is a local autonomous body and due to a fault of erring Clerk, the whole Department cannot be punished, the Court remarked.

“The senior officials of the Department have been informed regarding service of notice and due action has been taken against the erring Clerk, therefore, the Petitioner/Corporation have a sufficient ground for nonappearance before the Court below. In the aforesaid facts and circumstances of the case, the learned Labour Court ought to have allowed the application filed by the petitioner. Thus, the Court below has committed an error while rejecting both the applications filed by the petitioner under Order 9 Rule 13 of CPC.”

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