20Th Century Fox

Bombay High CourtThe 20Th Century-Fox Corp. ... vs F.H. Lala And Ors. on 3 March, 1973Equivalent citations: (1974) IILLJ 156 BomAuthor: MukhiBench: D Deshpande, P Mukhi

JUDGMENT Mukhi, J.

1. By this Civil Application under Art. 226 of the Constitution the petitioner 20th Century-FoxCorporation (India) Private Limited, seeks to challenge the validity of the order passed by theIndustrial Tribunal, Bombay, dated the 16th of October, 1972, whereby the previous order passed onthe 12th of July, 1972 was maintained by the Tribunal.

It is to be noticed that the order relates to an application made by the Union the Foreign FilmDistributors Union for production of certain documents.

2. The short facts are that by an order dated the 5th of November, 1971 the Government ofMaharashtra referred the industrial dispute between the petitioners and the workmen employedunder them in relation to the demands specified in the schedule. It is necessary to notice that thefirst demand was for grades and scales of pay, the second for reclassification and up-grading, thethird for application of the grades and scales of pay and adjustment thereof, the fourth for annualincrements, the fifth for dearness allowance, the sixth for officiating allowance, the seventh forovertime allowance, the eighth for travelling allowance, the ninth for medical relief, the tenth forleave and the eleventh for gratuity.

3. It would appear that the union filed the statement of claim on 18th of December, 1971. Thepetitioners filed their written statement on the 18th January, 1972 and the union filed a rejoinder on15th February, 1972.

4. Thereafter on the 15th of February, 1972 the union filed an application for production ofdocuments in which the only statement as to the necessity of the production of the documents andthe relevance of the documents was made in the following words :

"..... After considering various submissions and averments made by the company in its writtenstatement, it is necessary that certain documents be produced before this Hon'ble Tribunal, whichwill throw sufficient light on various aspects of the issues involved in this reference ...."

A list of documents was then set out in the said application. It is appropriate that the entireapplication should be set out so as to appreciate the rival contentions of the parties :

"In the above reference the union has filed its statement of claims on 18th December, 1971, and theemployer company has filed its written statement on 18th January, 1972. The union has also filed itsrejoinder to the written statement of the company on 15th February, 1972. After considering varioussubmissions and averments made by the company in its written statement, it is necessary that

The 20Th Century-Fox Corp. ... vs F.H. Lala And Ors. on 3 March, 1973

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certain documents be produced before this Hon'ble Tribunal, which will throw sufficient light onvarious aspects of the issues involved in this reference. These documents are, however, in the solepossession of the employer-company.

"It is, therefore, prayed that the Hon'ble Tribunal may be pleased to direct the employer-company toproduce the following documents and further be directed to supply copies of the same to the unionsimultaneously.

DOCUMENTS

1. Balance sheet and profit and loss account statements of the company for each of the years 1966 to1971.

2. Pay roll of the Bombay Office of the company including that of officers and workmen staff for theyears 1966 to 1971 and various allowances along with quantum thereof paid to the officers of thecompany during the years 1966 to 1971.

3. The franchise agreement entered into by the employer-company with its parent-company inU.S.A. and also similar agreements entered into by the employer-company with other filmproducing companies in U.S.A.

4. The names of films distributed by the employer-company in India during the years 1966 to 1971giving the rates and the amount of royalty in respect of each such films paid by theemployer-company to its parent-company and or other companies in U.S.A. according to therespective franchise agreement.

5. Number of bookings and billings made by the employer-company during the each of the yearsfrom 1966 to 1971.

6. Sums advanced by the employer-company to the various theatres in India where the picturesdistributed by the company were released, during the period 1966 to 1971.

7. Names of the officers of the company who have been continued in the service of the company evenafter superannuation."

5. It would appear, that the learned Tribunal passed an order on the 12th July, 1972 in which he setout the list of documents wanted by the union and in paragraph 2 of the said order the Tribunalmade the following observations :

"Shri Nath for the companies had no objection to production of the balance sheets, etc., described atSr. No. 1. He, however, said that the union has not filed an affidavit in support of its application andnot given the reasons for which the other documents are required. The union representative saidthat pay rolls and other documents are needed to ascertain what high salaries and increments aregiven to officer and to get other relevant information. In my opinion, the documents and



information detailed at Sr. Nos. 2 to 7 above are relevant in this adjudication. I, therefore, direct thefour companies mentioned above to produce all the documents and information demanded in theapplication and described at Sr. No. 1 to 7".

6. It is to be noticed that excepting for referring to the contention of the advocates for the petitionerthat the union had not filed an affidavit in support of its application and not given the reasons forwhich the documents other than balance-sheets were required the Tribunal made no observationswhatsoever as to the grounds or reasons which persuaded him that the documents at Serial Nos. 2 to7 were relevant for the purpose of adjudication of bonus. The company by an application dated 31stJuly, 1972 filed what has been described as a review application for the order of the 12th July, 1972.By an order dated 16th October, 1972 the learned Tribunal decided to maintain its previous orderpassed on 12th July, 1972. In this order also, after noting that the company contended that theunion's application was untenable because it was not supported by an affidavit stated : "I have heldthat the union representative had shown how the documents were relevant and, therefore, I havedirected the companies to produce the information." In spite of the objection as to maintainabilityno affidavit was called for and the only basis on which the learned Tribunal decided to maintain itsorder dated 12th July, 1972 was stated in the following words :

"... It is useful to note that the workmen of these companies have demanded revision of their gradesand scales of pay and dearness allowance and other benefits. In support of that the workmen want toshow that the companies have been draining the amount by way of royalty, giving heavy advances tothe various theatres and also giving high salaries to the officers ...."

It is on these facts that the petitioner-company has approached this Court by this Special CivilApplication.

7. The first contention of Mr. Singhvi, the learned advocate for the petitioner, was that there was noproper application made by the union with the detailed information as to why the production ofdocuments was sought, how the documents were relevant and what was expected to be proved. Mr.Singhvi also contended that without a supporting affidavit the application for production ofdocuments was incompetent and the learned Tribunal had no jurisdiction to entertain the same orpass any order thereon. Mr. Singhvi further contended that it was settled law that the protection tobe given to a party's documents must be the same as in the Civil Procedure Code and that there weretwo basic ingredients which had to be considered before an order for production of documents couldbe made. The first ingredient was, that the petitioner must be in possession of the documents andthe second equally important one was that the document must be relevant. In other words, theremust be a proper inquiry on the question of relevance before any order for production andinspection of documents can be made. Mr. Singhvi invited our attention to S. 11 of the IndustrialDisputes Act and in particular to clause 3(b) thereof to show that the Industrial Tribunal had powersfor compelling production of documents and that these powers were to be exercised in the samemanner as those exercised by the Civil Court under Order 11 of the Code of Civil Procedure. For thisproposition he relied on a judgment of the Madras High Court in Mettur Chemical and IndustrialCorporation Ltd., v. Their Workmen, [1955 - I L.L.J. 27], in which the following observations occur :



"The combined effect of S. 11(3) of the Industrial Disputes Act, 1947, and Rule 21 of the Rulesframed thereunder is to vest in the Industrial Tribunal, with reference to discovery, production andinspection of documents the same powers which the Civil Procedure Code vest in a civil Court whenit tries civil suits. It is true that neither S. 11 of the Industrial Disputes Act, nor Rule 21, specificallyprovides for the application of all the provisions of the Civil Procedure Code governing thediscovery, inspection and production of documents. All the same, considering what are the powersof an Industrial Tribunal to order inspection of documents, the deciding factor should be what arethe power of a civil Court to order inspection. It is not an unlimited power or rather a power theexercise of which is limited only by the discretion of the judge, that even S. 30 of the Civil ProcedureCode confers on the civil Court. The power conferred by S. 30, Civil Procedure Code, is specificallysubjected to 'limitations and conditions as may be prescribed', that is, the conditions and limitationsprescribed for instance by relevant rules in Order XI, Civil Procedure Code. The Industrial Tribunalmust conform to the general principles that underlay the provisions in Order XI, Civil ProcedureCode, governing the inspection of documents."

"Under order XI, Rule 15, the right to seek inspection is confined to the documents referred to in thepleadings or affidavits of the party against whom that right can be claimed. Rule 18(1) of Order XI,Civil Procedure Code, provides for inspection of documents referred to in rule 15. Rule 18(2) ofOrder XI, Civil Procedure Code provides for inspection of documents other than those referred to inRule 15. The conditions to be satisfied before the power under Rule 18(2) of Order XI, CivilProcedure Code, can be exercised are (1) there should be an affidavit to show the documentsinspection of which is sought; (2) party who applied for the inspection of documents shouldestablish that he is entitled to inspect them, and (3) the documents inspection of which is soughtmust be in the possession of the party against whom the order for inspection is sought. The need foraffidavit, the first requirement, may at first sight appear to be a rule of procedure failure to conformto which may not affect the power of the Court to order inspection. But on examination of theclasses of documents excluded from the purview of clause 2 of Rule 18 of Order XI, Civil ProcedureCode, the need for an affidavit, becomes obvious. The second requirement mentioned above that theparty applying for inspection must be entitled to inspect the documents, appears to be a conditionfull proof of which the Court must insist upon before ordering inspection of documents that fallwithin the scope of Rule 18(2) of the Order XI, Civil Procedure Code. Whether the right to inspectclaimed in a given case is to be held established or not must of course depend on the circumstancesof that case and it is neither desirable nor even possible to prepare an exhaustive list of cases thatwould amount to an established right."

8. The Madras High Court in the same case also held that the exercise of power to order inspectionbefore the applicant satisfies the condition with reference to the documents that come within thescope of Rule 18(2) or Order XI, Civil Procedure Code, would be a case of erroneous assumption ofjurisdiction and not of erroneous exercise of jurisdiction. On this basis Mr. Singhvi argued that if itbe found that the learned Tribunal has passed an order for production of documents without thenecessary pre-conditions being satisfied than its order was liable to be set aside.

9. Mr. Singhvi also relied on a judgment of the Calcutta High Court in Burn & Co. v. Jitendra NathMaitra, , where it was held that until an affidavit of documents had been directed to be filed the



Court would have no jurisdiction to order inspection. The High Court also held that the IndustrialTribunals are creatures of law and, therefore, they are bound to follow the procedure laid down bylaw. They cannot evolve their own procedure in the case of discovery and inspection.

10. Now, it is not really necessary to consider authorities for the proposition that before anyTribunal can order production and inspection of documents it must be satisfied as to the relevancyof the documents called for. In order to determine the relevancy, there must be material before theTribunal. In order that there should be material before the Tribunal the applicant must place itbefore the Tribunal, and this he can do by setting out in the application the necessary facts, thenecessary contentions as to the nature of the documents, the necessity for their productions, whatkind of reliance he wishes to place thereon and what is the case which he wishes to make out.

11. Mr. Sowani, the learned counsel for the union, fairly conceded that the Tribunal could only orderproduction of relevant documents. According to Mr. Sowani, the documents asked for were relevantand also, according to him, it was not necessary that there must in all cases be an affidavit tosupport an application for production of documents. Mr. Sowani also contended that balance-sheetswere not sacrosanct, they did not prove themselves, evidence had to be let in support of proving thematerial in the balance-sheets and that the union was entitled to challenge the correctness of thebalance-sheets and the items contained therein. In order to do so, however, Mr. Sowani and (and inorder to prevent the union from making an improper challenge) it was necessary that the unionshould be supplied with the documents which would enable them to decide whether the financialposition as contained in the balance-sheets should be challenged or not.

12. Now, in our view, it is settled position in law that a party to any litigation cannot be permitted toembark on a fishing or roving inquiry in the hope that some material will come to hand on the basisof which he can set out his case. We do not wish to say that in a proper case, after the necessarymaterial is on record, the Tribunal cannot order production of relevant documents which would benecessary for the purpose of the adjudication. But before that can be done, it would be the duty ofthe party asking for production of documents to make out a case why it would be necessary forcertain documents to be produced.

13. In the instant case it is obvious from a reading of the application for production of documentsthat apart from a vague and a somewhat peremptory statement that in the opinion of the union itwould be necessary that the documents referred to be produced, there is no material on which anyTribunal could validly order production of the documents referred to. What is perhaps moreilluminating is that the union has started that the production of these documents will "throwsufficient light on the various aspects of the issues involved". Mr. Sowani also in his able argumentssought to persuade us that the company should provide some enlightenment to the union so that aproper case was made. We are afraid that production of documents and inspection thereof cannot bepermitted for such a purpose.

14. The learned counsel for both sides have taken us through the list of documents and in so far as itis sought by the union to obtain material to support their general allegation that the officers of thecompany are being given fabulous salaries and fabulous increments and superannuated officers are



being retained (so that nothing will be left for the workmen), Mr. Sowani made a somewhat startlingbut fascinating contention that according to the new concepts and development of social justice itwas open to the union to maintain that there must be some kind of parity between the officers andthe workmen. We wish to express no opinion on this contention except to say that at the moment itappears somewhat startling but it is true that concepts of social justice do develop as time passes.

15. For the purpose of the instant case, however, we are unable to appreciate how any "relativity"between officers and workmen can have any bearing on the financial capacity of the company in sofar as it can never be open to the union on principle or equity to question the business judgment ofthe employer in employing officers and paying them whatever he considers to be proper. We thinkthat there can be no dispute that in the matter of employment of officers, entering into contracts ormaking purchases or paying royalty the employer's judgment cannot be questioned by the union orthe workmen.

16. Now, in so far as the financial capacity is concerned, no doubt the Tribunal will, on properevidence and appraisal thereof, determine the question, but we have always felt that except in veryrare cases financial capacity is a state of facts and not of a state of putative facts or what should be.

17. In the circumstances we feel that no purpose will be served in discussing the various items in theapplication for production of documents. The order of the learned Tribunal dated 16th October,1972 as well as that of 12th July, 1972 is obviously without jurisdiction as not having been foundedon any material and must, therefore, be set aside.

18. Before parting with the matter we think that it will be appropriate to state that even though filingan affidavit in support of the application for production of documents would be desirable in mostcases, it would not mean that it must be necessarily filed in all cases except at the discretion of theTribunal. What is more important is that any application for production of documents must containall the necessary materials in order to enable the Tribunal to apply its mind, determine the relevancyof the documents and ascertain whether inspection should be allowed or not and then pass a properorder.

19. The petition is, therefore, allowed and the Rule made absolute with no order as to costs.



Documents

20Th Century Fox