State of Bihar Vs. Kripa Shankar
Jaiswal  INSC 169 (14 October 1960)
CITATION: 1961 AIR 304 1961 SCR (2) 1
Proceedings--Unregistered Union--Settlement with--If binding on
management--Industrial Disputes Act, 1947 (14 of 1947), ss. 11(2), 12(6),
18(3)(a) and (d).
A settlement was arrived at between the
management of Mankatha Distillery and the workmen's union before the conciliation
officer. The Union was not registered under the Indian Trade Unions Act on the
date of the said settlement.
The terms of the settlement not having been
carried out by the management the respondent, who was the proprietor, and the
manager of the said distillery were prosecuted and were convicted by the
Magistrate. The Sessions Court, on appeal by the respondent, confirmed the
Magistrate's order. On an appeal to the Patna High Court by the respondent the
High Court set aside the order of conviction and acquitted the respondent
holding that there was no recognised union and that because the conciliation
officer had visited the Distillery without giving a reasonable notice, on
18-3-1954 there could be no agreement between the proprietor on one side and
the workmen as a whole on the other on the date and it was wrong to suppose
that because somu workmen had signed the settlement that it bound all the
Held, that for a dispute to constitute an
industrial dispute it is not a requisite condition that it should be sponsored
by a recognised union or that all the workmen of an industrial establishment
should be parties to it. A settlement arrived at in course of conciliation
proceedings falls within s. 18(3)(a) and (d) of the Industrial Disputes Act and
as such binds all the workmen though an unregistered union or only some of
workmen may have raised the dispute.
The absence of notice under s. 11(2) by the
Conciliation Officer does not affect the jurisdiction of the conciliation
officer and its only purpose is to apprise the establishment that the person
who is coming is the conciliation officer and not a stranger. Any contravention
of S. 12(6) in not submitting the report within 14 days may be a breach of duty
on the part of the conciliation officer ; it does not affect the legality of
the proceedings which terminated as provided in S. 20(2) of the Act.
1 2 Where a fresh settlement is arrived at
between the parties and all disputes are settled, then " public interest
does not require that the stale matter should be resuscitated ".
Newspapers Limited, Allahabad v. State
Industrial Tribunal, Uttar Pradesh,  2 L.L.J. 37, referred to.
Andheri Marol Kurla Bus Service v. The State
of Bombay, A.I.R.  S.C. 841 and State of Bihar v. Hiralal Kejrilal,
 1 S.C.R. 726, approved.
CRIMINAL APPELLATE JURISDICTION: Criminal
Appeal No. 83 of 1959.
Appeal from the judgment and order dated July
25, 1958, of the Patna High Court in Criminal Revisions Nos. 593 and 594 of
1958 arising out of the judgment and order dated March 3, 1958, of the
Additional Sessions Judge, Monghyr, in Criminal Appeal No. 286 of 1956.
D. P. Singh and R. H. Dhebar, for the
C. P. Lal, for the respondent.
1960. October 14. The Judgment of the Court
was delivered by KAPUR J.-This is an appeal brought in pursuance of a
certificate under art. 134(1)(c) of the Constitution against the judgment and
order of acquittal of the High Court of Patna.
There were certain disputes between the
workmen and the Management of Mankatha Distillery of which the proprietor is
the respondent. On November 23, 1953, a petition was submitted on behalf of the
workmen of the Distillery to the Assistant Labour Commissioner, Bhagalpur,
which was signed by one Banarsi Choudhuri on behalf of himself and for and on
behalf of the workmen of the Distillery. In this petition, certain grievances
of the workmen were set out. Conciliation proceedings were started, and there
was an agreement on December 5, 1953, which the High Court has described as
'some sort of agreement'.
On January 12, 1954, an application was made
for the registration of the Union of the workmen of the Distillery under the
Indian Trade Unions Act, and the same was registered on March 23, 1954, under
the 3 name and style of Mankaths Distillery Mazdoor Panchayat.
The Distillery was closed and the workmen
were discharged, and thereafter on February 19, 1954, the General Secretary of
the Mankatha Distillery Mazdoor Panchayat, even though it was not registered at
the time, sent a letter to the Management, protesting against the discharge of
the workmen without payment of compensation and objecting to the intention of
the employers to re-start the factory after employing other workmen. It was
also stated therein that the workers who had been discharged, had been working
for some years and a list of such workmen was attached to the letter. The
following portion of the letter is relevant for the purposes of this appeal:"
All the persons, named below, shall work in the factory in legal manner, on
monthly salary on permanent basis. It is not only hoped, rather fully believed
that you would consider the above facts and gladly accept the same.
On getting a stisfactory reply, all the
workers, who had been working in your factory since years, would report
themselves to duty and work according to your orders ".
Although it is addressed to the proprietors
of the Distillery, it seems to have been sent to the Assistant Commissioner of
Labour, Bhagalpur, where it was received on February 25, 1954. The following
endorsements were made on this letter:" Discussed with you. The management
is re. quested to attend conciliation proceeding on 10th March, 1954, at 11
a.m. The Union is also informed accordingly ".
Another petition dated March 5,1954, was sent
by the General Secretary of the Distillery Mazdoor Panchayat to the Assistant
Labour Commissioner, in which the names of all the persons who had been freshly
employed by the proprietors, were mentioned and it was prayed that those who
were discharged at the time of the closing of the factory, may be reinstated
and wages paid, and a request was made to the Assistant Labour 4 and get the
workmen reinstated. The order on this petition was:", The parties have
been called to-morrow in my office for conciliation. The result of the
proceeding may be awaited." On March 18, 1954, a settlement was arrived at
between the management and the workers which is signed by the Conciliation
Officer appointed under s. 4 of the Industrial Disputes Act, 1947 (Act 14 of
1947) (hereinafter termed, for the sake of brevity, the Act). This document was
signed by the proprietor and the manager of the Distillery and by Banarsi
Choudhuri, General Secretary of the Workers' Panchayat and also by six other
members of the Panchayat who were evidently the members of the Executive
Committee of the Panchayat. The terms of the settlement were as follows:
" 1. It is agreed that the workers'
named in Schedule " A " shall be taken to jobs without break in their
2. The new hands appointed after the closure
of the factory shall be discharged.
3. If three shifts will start and any other
increased opportunity of employment will be available in the factory, the
management shall employ only those workers who are left to-day and who had
worked in August 1953 and September 1953 in order of seniority.
4. Shri Banarsi Choudhry, Balmiki Singh,
Bhaso Singh and Kaltu (?) Singh are accused in a case pending before the Court
at Monghyr. The Management agrees that if they will be acquitted from the
court, they will be given jobs.
5. All the workers will be put in permanent
basis as they were previously. The order putting them in the temporary basis
after the opening of the Mill is cancelled.
6. The arrears will be paid on monthly basis as
before instead of weekly basis as at present after the re-opening of the
7. The grievances raised by the workers and
covered by the agreement dated the 5th December, 5 1953, will be decided by the
Labour Commissioner Bihar, Patna and his decision shall be acceptable to and
final for the parties.
8. The work of the factory will be resumed
9. The workers will continue to have all the
benefits and privileges which are guaranteed by law or usage and custom.
10. The workers will not be victimised for
their Trade Union activities".
The prosecution case is that the terms of the
settlement were not carried out in that the old workmen were not reemployed and
the newly employed workmen were not discharged.
Thereupon, the respondent and the manager of
the Distillery, one Ram Narain Lal were prosecuted on a complaint filed by the
Labour Superintendent, Mr. L. D. Singh, after sanction of the Government of
Bihar had been obtained. Both the accused persons were convicted and sentenced
to a fine of Rs. 150 each or, in default, one month's simple imprisonment. The
learned Magistrate held that there was an industrial dispute within the meaning
of the Act, and that the conciliation settlement dated March 18, 1954, was a
valid settlement and the respondent failed to implement the first term of the
settlement. Against this order, an appeal was taken to the Sessions Court and
the Third Add1.
Sessions Judge dismissed the appeal. He
confirmed the findings of the learned Magistrate.
Against this order of the Sessions Judge, an
appeal was taken to the High Court by the respondent only, and the High Court
set aside the order of conviction and acquitted the accused. It held that there
was no recognised Union, though there was " some kind of a vague Union "
existing, and that because the Conciliation Officer had visited the Distillery
without giving a reasonable notice, the " decision of the Conciliation
Officer on 18-3-1954, must, therefore, be deemed to be without jurisdiction
", and that there was no agreement arrived at between the proprietor on
one side and the " labourers " as a whole on the other, and ":
it is preposterous to suppose that because some labourers 6 had signed the
settlement that it bound all the labourers.
It seems to me that there is a serious defect
in this settlement which is described as a decision of the Conciliation Officer
dated 18-3-1954 ". On the ground, therefore, that the settlement was not a
settlement which was binding on the respondent, the conviction was set aside.
It would be an erroneous view if it were said
that for a dispute to constitute an industrial dispute it is a requisite
condition that it should be sponsored by a recognised union or that all the
workmen of an industrial establishment should be parties to it. A dispute
becomes an industrial dispute even where it is sponsored by a union which is
not registered as in the instant case or where the dispute raised is by some
only of the workmen because in either case the matter falls within s. 18(3)(a)
and (d) of the Act. See also Newspapers Limited, Allahabad v. The State
Industrial Tribunal, Uttar Pradesh (1). The settlement of March 18, 1954,
arrived at during the conciliation proceedings was signed by the General
Secretary and members of the executive committee of the Union though it was
unregistered at the time. We cannot therefore give our accord to the decision
that the settlement of March 18, 1954, was not a settlement binding between the
The scope and effect of s. 11(2) was raised
before us and it was argued that because the conciliation officer did not give
any reasonable notice before he came to the Distillery on March 18, 1954, the
settlement was not a legal settlement and consequently was not binding on the
parties and its breach could not fall within the penal consequences of s. 29 of
the Act. Now, s. 11(2) provides:" A conciliation officer or a member of a
Board or Court or the presiding officer of a Labour Court, Tribunal or National
Tribunal may for the purpose of inquiry into any existing or apprehended
industrial dispute, after giving reasonable notice, enter the premises occupied
by any establishment to which the dispute relates ".
(1)  2 L.L.J. 37 at 38.
7 Section 11 only deals with the procedure
and powers of the conciliation officers and sub-section 2 authorises the
conciliation officer to enter the premises occupied by any establishment to
which the dispute relates after giving a reasonable notice. This notice is only
for the purpose of entering the premises to make an enquiry into any existing
industrial dispute or an apprehended industrial dispute, and is merely to
apprise the establishment that it is the conciliation officer who is coming and
not an absolute stranger who has no connection at all with the machinery set up
for the purposes of the Act. The absence of a notice under s. 11(2) therefore
does not affect the jurisdiction of the Conciliation Officer.
As to what the conciliation officer can and
should do, is contained in s. 12 of the Act. Sub-section 1 empowers the conciliation
officer to hold conciliation proceedings in the case of a public utility
service after notice under s. 22 whereby a mandatory duty is cast upon him to
do so, and in other disputes it is 'his discretion to hold conciliation
proceedings in the prescribed manner. Under sub-s. (2) he has to investigate
without delay the dispute in all matters affecting the merits of the dispute,
and he can do such things as he thinks necessary for inducing the parties to
come to a fair and amicable settlement. Sub-section (3) provides that if a
settlement of the dispute is arrived at, a report thereof shall be sent to the
appropriate Government, and sub-s. (4) also provides for the sending of a
similar report to the appropriate Government if no settlement is arrived at.
Sub-s. (5) deals with the powers of the Government when a report is received as
to the non-settlement of the dispute, and sub-s. (6) which was relied upon
provides:. 12(6) " A report under this section shall be submitted within
fourteen days of the commencement of the conciliation proceedings or within
such shorter period as may be fixed by the appropriate Government.
Provided that the time for the submission of
the report may be extended by such period as may be agreed upon in writing by
all the parties to the dispute." 8 It was argued that because the report
had not been sent to the Government within fourteen days of the commencement of
the conciliation proceedings, the settlement arrived at was invalid and was not
binding. This contention must be repelled because any contravention of s. 12(6)
may be a breach of duty on the part of the conciliation officer; that does not
affect the legality of the proceedings which terminated as provided in s. 20(2)
of the Act. It was so held by this Court in Andheri Marol Kurla Bus Service v.
The State of Bombay (1). It cannot be said, therefore, that the settlement
which was arrived at on March 18, 1954, was not a legal settlement and that a
breach of it would not attract the penal provisions of s. 29 of the Act.
After the case was decided by the Judicial
Magistrate the parties arrived at a fresh settlement on October 6, 1956, which
" That this settlement made this day the
6th October, 1956, at Patna, settles all the pending grievances and/or demands
of workmen whatsoever ".
As a result of this out of the discharged
workmen 25, whose names are given in Appendix A attached to the compromise,
were reinstated with effect from October 8, 1956. The claim with regard to the
other discharged workmen was withdrawn.
This settlement was accepted by the
Industrial Tribunal by an order dated October 10, 1956. This shows that all
disputes between the parties have been settled and workmen have been
reinstated. In view of this in the words of Subba Rao, J., in the State of
Bihar v. Hiralal Kejrilal (2) " public interest does not require that the
stale matter should be resuscitated ". Therefore we do not think it
necessary to interfere under art. 136 with the order of the High Court.
The appeal is therefore dismissed.
(1)  Supp. 2 S.C.R. 734.
(2)  :S.C.R. 726, 736.