The Sirsilk Ltd. v. Government of Andhra Pradesh (1963)

The case answers two questions that come up often in Interpretation of Statutes.

First, it shows how a court decides whether shall is mandatory. The Court did not stop at the word. It looked at what the sub-section that follows says about finality, and at the next section, which spells out the Government's limited powers over an award.

Second, it shows what a court does when two mandatory provisions collide on facts the legislature did not foresee. The Court kept s. 17(1) mandatory. It still held that publication must be withheld in one narrow situation, because that was the only way to give effect to both provisions.

In Appeal No. 220 (the other two appeals were similar), a dispute between the appellant and its workmen was referred to the Industrial Tribunal, Andhra Pradesh, on 6 June 1956. The tribunal sent its award to the Government in September 1957. Before the Government published it, the parties settled the dispute. On 1 October 1957 they wrote jointly to the Government saying the dispute had been settled and asking it not to publish the award.

The Government replied that s. 17 was mandatory and that it was bound to publish. The appellants filed writ petitions under Art. 226 asking for a direction not to publish. The High Court agreed that s. 17 was mandatory and dismissed the petitions, and it granted certificates.

1. Is the duty in s. 17(1) to publish an award within thirty days mandatory or directory?
2. If it is mandatory, what happens when a settlement that binds the parties under s. 18(1) is reached after the award has gone to the Government but before it is published? Can the Government withhold the award?

The appeals were allowed. The Court concluded: "We therefore allow the appeals and direct the Government not to publish the awards sent to it by the industrial tribunal in these cases in view of the binding nature of the settlements arrived at between the parties under s. 18 (1) of the Act." The parties were to bear their own costs.

Section 17(1) is mandatory. The Court rejected the first contention. It said that the use of the word shall "is a pointer to s. 17(1) being mandatory", though in certain circumstances shall in a statute may be equal to may. In this case, the Court held, "the intention was to give a mandate to Government to publish the award within the time fixed therein."

Two things confirmed that reading. Section 17(2) makes the published award final, and "Obviously when the legislature intended the award on publication to be final, it could not have intended that the Government concerned had the power to withhold publication of the award." And s. 17A sets out exactly what powers the Government has over an award. Those powers assume that the award is published. The Court concluded:

"It is clear therefore reading s. 17 and s. 17A together that the intention behind s. 17 (1) is that a duty is cast on Government to publish the award within thirty days of its receipt and the provision for its publication is mandatory and not merely directory."

But the two mandatory provisions must be reconciled. Section 18(1) makes a settlement reached outside conciliation binding on the parties. Section 18(3) makes a published award binding. The Court said it still had to reconcile the mandatory duty to publish in s. 17(1) with "the equally mandatory character of the binding nature of the settlement". The Act had no provision for a settlement reached after the tribunal had finished its work. The Court's answer:

"The only way in our view to resolve the possible conflict which would arise between a settlement which is binding under s. 18 (1) and an award which may become binding under s. 18 (3) on publication is to withhold the publication of the award once the Government has been informed jointly by the parties that a settlement binding under s. 18 (1) has been arrived at."

This did not weaken s. 17(1): "This would not in our opinion in any way affect the mandatory nature of the provision in s. 17 (1), for the Government would ordinarily have to publish the award but for the special situation arising in such cases."

Another way of looking at it. Once the parties have settled, "there is in fact no dispute left to be resolved by the publication of the award." The award sent to the Government may very well be "considered to have become infructuous".

The fraud objection. The respondents feared that a party might allege that a settlement was obtained by fraud. The Court held that the requirements of ss. 2(p), 18(1) and 19(1) (signing in the prescribed manner, with copies to the Government and the conciliation officer) ordinarily guard against that. It added that there is "no scope for any inquiry by the Government as to the bona fides of the settlement." A genuine dispute about the settlement "would be another industrial dispute" that the Government may refer. If the settlement is found not to be binding, "it will always be open to the Government then to publish the award which it had withheld".

The word shall in s. 17(1) of the Industrial Disputes Act is mandatory. That reading is confirmed by the finality given to a published award in s. 17(2) and by the limited powers in s. 17A. But when two mandatory provisions would produce conflicting binding results, the court must reconcile them. Here that means a binding s. 18(1) settlement against an award that would bind under s. 18(3) once published. If the settlement is reached after the award is sent to the Government but before it is published, and the parties jointly inform the Government, the only way to reconcile them is to withhold publication. The duty in s. 17(1) remains mandatory in every other case.

• How does a court decide whether "shall" in a statute is mandatory or directory? Use Sirsilk. The word is only a pointer. The court reads the rest of the section and the connected sections (here s. 17(2) and s. 17A) to find the legislature's intention.
• Explain harmonious construction with an example where two mandatory provisions conflict. This is one of the best illustrations. Both s. 17(1) and s. 18(1) stay mandatory, and the court finds the single reading that gives effect to both.
• Problem question: an award reaches the Government, and the next week employer and union jointly send a signed settlement and ask the Government not to publish. Advise them that the Government ought not to publish, and can be directed by writ not to. If the settlement is later challenged and found not binding, the Government may publish the award then.
• Cross-reference: in Labour Law, the case is the authority on the effect of a settlement reached after an award is submitted but before it is published.