Workmen of M/S. Delhi Cloth and
General Mills Vs. Management of M/S. Delhi Cloth and General Mills Ltd. [1969]
INSC 301 (17 October 1969)
17/10/1969 DUA, I.D.
DUA, I.D.
RAMASWAMI, V.
CITATION: 1970 AIR 1851 1970 SCR (2) 886 1969
SCC (3) 302
CITATOR INFO:
D 1981 SC1660 (7)
ACT:
Industrial Disputes Act (14 of 1947) s. 18(1)
and Industrial Disputes (Central) Rules, 1957 r. 58 (4)-Non-compliance with
rule-Settlement between management and union if binding on workmen.
HEADNOTE:
In conciliation proceedings before the
Conciliation Officer, D.C.M. (City Shop) Karamchari Union espoused workman
Shibban Lal's cause. On June 18, 1965 the Conciliation Officer submitted his
failure report to the Government. On June 9, 1965 a settlement had been arrived
at between the Union and the management of the D.C. & G. Mills Ltd. The
Conciliation Officer was not informed of this settlement before the submission
of his report. The settlement dated June 9, 1965 was filed before the
Conciliation Officer on June 30, 1965.
Pursuant to the Conciliation Officer's report
the industrial dispute was referred by the Government to the Additional
Industrial Tribunal. On October 6, 1965 written statement was filed by the
management before the Tribunal. The Kapra Karamchari Sangh also filed a
statement of claim on behalf of workman Shibban Lal through its General
Secretary along with an application for substituting the Sangh in place of the
Union. It was stated in the application that since the Union had entered into a
settlement with the management not to contest Shibban Lal's case, 53 out of 88
workers of D.C.M. (City Shop) had requested the Sangh to take up this worker's
case and the Sangh had thereupon unanimously decided to take up his cause. The
management opposed this application. It was finally decided that the Sangh
should represent Shibban Lal workman without its being substituted for the
Union. The management then pressed its objection to the validity of the
settlement of claim filed by the Sangh.
The Tribunal held that the claim filed by the
Sangh should be deemed to have been filed on behalf of Shibban Lal. On appeal
in this Court the correctness of this view was not challenged on behalf of the
respondent. The special leave application in this Court was supported by an
affidavit sworn by Shibban Lal.
On a preliminary objection raised on behalf
of the respondent to the competency of the appeal presented in this Court by
the Sangh on the ground that the Sangh was neither a party to the industrial
dispute before the Tribunal nor did it espouse Shibban Lal's cause in the
proceedings against him.
HELD : (1) On the facts and circumstances of
this case the special leave application and the appeal must be held to have
been filed in this Court by the Sangh as representing Shibban Lal who had
agreed to be represented by the Sangh.
The appeal filed by the Sangh, therefore,
cannot be considered to be unauthorised and legally incompetent on the ground
urged. [891 G-H] (2) Rule 58 (4) of the Industrial Disputes (Central) Rules,
1957 made under s. 38 of the Industrial Disputes Act has full force of law of
887 which judicial notice can be taken. This rule must be fully complied with
if the settlement is to have a binding effect on all workmen. [896 A] (3) When
a dispute is referred to the Conciliation Officer the management and the
workers' Union cannot claim absolute freedom of contract to arrive at a
settlement in all respects binding on all workmen. An agreement to be valid and
binding must comply with the provisions of the Statute and the Rules made there
under. The settlement in the present case did not comply with r. 58(4) which is
mandatory. Therefore, under s. 18(1) of the Act read with the other
sub-sections in the light of the definition of "Settlement" contained
in s. 2(p) there is no unfettered freedom in the management and the Union to
settle the dispute as they please so as to clothe the settlement with a binding
effect on all workmen or even on all member-workmen of the Union. [895 B-D] (4)
Though the plea of non-compliance with r. 58(4) was not raised by the appellant
before the Tribunal if the respondent wanted to show that the reference was
invalid because of a lawful settlement then it was incumbent on the party
relying on such a settlement to prove that it was lawful and valid, rendering
the reference illegal. It was also incumbent on the Tribunal to satisfy itself
that the settlement was in accordance with the Act and Statutory Rules. [896
A-B] [The case was accordingly remanded to the Tribunal for adjudication upon
the dispute on the merits.]
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 2006 of 1966.
Appeal by special leave from the Award dated
February 17, 1966 of the Industrial Tribunal, Delhi in I.D. No. 176 of 1965.
D. R. Gupta and H. K. Puri, for the
appellants.
C. K. Daphtary, D. R. Thadani and A. N.
Goyal, for the respondent.
The Judgment of the Court was delivered by
Dua, J. The Workmen of M/s. Delhi Cloth and General Mills, Bara Hindu Rao,
Delhi, have appealed to this Court by special leave from the award of the Additional
Industrial Tribunal, Delhi dated February 17, 1966 holding that Shibban Lal was
bound by the settlement dated June 9, 1965 and, therefore, there was no
industrial dispute on the date of reference which could be referred for
adjudication.
The facts necessary for the purpose of this
appeal may now be briefly stated. The Chief Commissioner, Delhi by means of an
order dated September 9, 1965 referred the dispute in controversy to the
Additional Industrial Tribunal, the order of reference being in the following
terms :
"Whereas from a report submitted by the
Conciliation Officer, Delhi under section 12(4) of the Industrial Dispute Act,
1947, it appears that an industrial dispute 888 exists between the management
of M/s. Delhi Cloth & General Mills, Ltd., Bara Hindu Rao, Delhi and its
workmen and Shri Shibban Lal and the said dispute has been taken up by the
D.C.M. (City Shop) Karamchari Union, 1121, Chatta Madan Gopal, Maliwara,
Chandni Chowk, Delhi." Before the Additional Industrial Tribunal the Management
had raised various preliminary objections including the objection that Kapra
Karamchari Sangh (hereafter called the Sangh) was not competent to take up the
case of Shri Shibban Lal, and that the D.C.M. (City Shop) Karamchari Union
(hereafter called the Union), which had originally taken up the cause of
workmen, having agreed by the settlement dated June 9, 1965 not to prosecute
his case, withdrew its support to his cause with the result that the dispute
relating to the dismissal of Shibban Lal was, not an industrial dispute.
It was further averred that Shibban Lal was
bound by the act of his representatives who had made the settlement dated June
9, 1965, and was, therefore, estopped from challenging the same.
On these preliminary objections the following
four issues were framed and were taken up for decision in the first instance.
(1) Has the Karpra Karamchari Sangh no locusstandi
to file the statement of claim ?
2. Is the reference incompetent because of
settlement dated June 9, 1965 between the D.C.M. (City Shop) Karamchari Union
and Management ?
3. Is the dispute not an industrial dispute?
4. Is Shibban Lal estopped from raising the
present dispute ? On issue No. 1. the Tribunal held that although the Sangh had
been merely authorised to represent Shibban Lal and was not a party entitled to
file the statement of claim in its own right, nevertheless the claim filed by
it was to be deemed to be on behalf of Shibban Lal who had agreed to be
represented by the Sangh. Issues Nos. 2 to 4 were discussed together and the
Tribunal held that the settlement dated June 9, 1965 which was signed on behalf
of workmen by the Secretary and Vice President of the Union was not arrived at
by unauthorised persons. The said settlement was, therefore, held binding on persons
who were parties thereto and Shibban Lal being a member of the Union was bound
by it.
In face of that settlement, the Tribunal felt
that there was no industrial dispute which could be referred for adjudication
on the date of reference.
889 In this Court on behalf of the
respondent, the Management of M/s. Delhi Cloth and General Mills Ltd. a
preliminary objection was raised to the competency of the present appeal. It
was contended by Shri Daphtary that the appeal was presented in this Court by
the Sangh which was neither a party to the industrial dispute before the
Tribunal, nor did it espouse the cause of Shibban Lal's dismissal. Shibban Lal,
according to the submission, being a party affected could certainly appeal but
not the Sangh. It was added that Shibban Lal being the solitary employee of the
respondent, who was the member of the Sangh the latter was not only disentitled
to espouse Shibban Lal's cause but as a matter of fact it did not so; the
Sangh, the counsel argued, merely undertook to represent Shibban Lal before the
Tribunal.
We are unable to uphold the preliminary
objection. It is clear from the record that the Union originally took up
Shibban Lal's cause. On June 18, 1965 the Conciliation Officer submitted his
failure report to the Government. It is apparent that till then the
Conciliation Officer was not informed by either of the parties that a
settlement had been arrived at in the matter of the dispute in question. Indeed
the record shows that Shri Jai Bhagwan Sharma, who represented the workman in
the conciliation proceedings had informed the Conciliation Officer that no
settlement had been reached. The settlement dated June 9, 1965 appears to have
been filed before the Conciliation Officer on June 30, 1965, long after the
submission of the failure report. The Additional Industrial Tribunal after
taking cognizance of the dispute issued notice to the parties on September 16,
1965 fixing October 5, 1965 for filing the statements of claim. The case was,
however, taken up on October 6, 1965 because October 5, 1965 was declared a
gazetted holiday. On October 6, 1965 the written statement was filed by the
Management. The Sangh also filed a statement of claim on behalf of Shibban Lal
through Shri Jai Bhagwan, General Secretary of the Sangh, with an application
for substituting the Sangh in place of the Union as mentioned in the reference,
it being averred in the application for substitution that consequent upon the
Union having entered into a settlement with the Management not to contest Shibban
Lal's claim, 53 out of 88 workers of D.C.M. (City Shop) had requested the Sangh
to take up Shibban Lal's case and the Sangh thereupon unanimously decided to
take up his cause.
The dispute, it was added, concerned all
workmen. The Management was given an opportunity to file objections to this
application. On October 28, 1965 the Management opposed the application of the
Sangh for being impleaded in place of the Union. While opposing the prayer of
the Sangh the Management expressed ignorance about the averment that 53 out of
88 workers of D.C.M. (City Shop) had 890 requested the Sangh to take up the
cause of Shibban Lal. It was added that espousal by the Sangh at that stage was
illegal as the matter had already been referred by the Government. Espousal, according
to this plea, could only be at the stage of conciliation proceedings and not
after the reference. It was also denied that the dispute concerned all workmen.
An agreement having been entered into by the Union, representation by the Sangh
was described to be an abuse of the process of law. The dispute, pleaded the
Management, had been settled for ever and Shibban Lal was a party to the said
settlement. Shibban Lal filed an affidavit on November 3, 1965, affirming that,
on December 26, 1964, the Union had properly resolved to contest his claim And
that on December 28, 1964 the statement of claim, regarding Shibban Lal's
proposed retirement on December 31, 1964, was filed before the Conciliation
Officer. It was further affirmed in this affidavit : (i) that during the
pendency of the dispute before the Conciliation Officer, the Management retired
him and he was not allowed to join duty with effect from January 1, 1967, (ii)
that in the absence of any valid authority either from the Union or from the
parties, pursuant to a resolution to that effect, passed by the workmen of the
establishment, Shri Musaddi Lal and Shri Babu Ram had no authority to enter
into any settlement in respect of deponent's dispute, (iii) that no settlement
was ever brought to the notice of the Union or the workmen, (iv) that on June
14, 1965 the Union of the workmen opposed the said settlement, was resolved
that the Union did not agree to any settlement whatsoever regarding the
deponent's retirement, including settlement in respect of the conciliation
proceedings, (v) that on July 25, 1965 the Union of the workmen opposed the
said settlement, (vi) that the settlement had been filed by the conciliation
Officer on June 24, 1965 whereas the failure report of the said officer had
even reached the Government on June 18, 1965, (vii) that the settlement had not
been verified by the Conciliation Officer, (viii) that the deponent had also
written a letter to the Union challenging the authority of the signatories on
its behalf, and even the authority of the Union itself, to enter into the said
settlement without appropriate and valid authority, (ix) that the deponent
could not read or write Hindi or English except that he could sign his name in
English and (X) that out of 88 employees 53 had authorised the Sangh to take up
the deponent's case with the result that espousal by his co-employee workers
was continuous.
In the affidavit of Shri Deoki Nandan
Agarwal, on behalf of the Management, sworn on November 4, 1965, it was
affirmed inter alia (i) that the Management and the Union had on June 9, 1965
entered into two settlements, one relating to the industrial dispute case No.
211 of 1962 and the other relating to the age of 891 retirement including the
case of Shibban Lal etc. pending before the Conciliation Officer. The
settlement relating to the Industrial Dispute Case No. 211 of 1962 had been
made an award of the Court and the other settlement relating to the age of
retirement had been filed before the Conciliation Officer, copies of both the
settlements having been forwarded to Government authorities, (ii) that Shibban
Lal being the President of the Union, at the time of settlement, was bound by
it and (iii) that the Sangh, having not espoused the cause of Shibban Lal
before September 2, 1965, the date of reference, could not do so thereafter;
nor could any other member of the Union take up his cause after the settlement
dated September 6, 1965.
The application for substitution was finally
heard oil December 17, 1965 when Shri D. R. Gupta, on behalf of the Sangh
stated that he did not want the Sangh to be substituted in place of the Union
but he merely wanted it to represent Shibban Lal, who was at that time its
member.
Shri G. C. Bhandari, on behalf of the
Management, did not object to Shibban Lal being represented by the Sangh and he
confined his objection only to Shibban Lal's cause being espoused by the Sangh
after the order of reference. The Tribunal accordingly allowed the Sangh to
represent Shibban Lal. Up to that stage the Management did not press the point
that there was no valid statement of claim filed on behalf of Shibban Lal and
the validity of the claim filed by the Sangh had been apparently assumed. The
Management was perhaps at that time only thinking of questioning the existence
of industrial dispute on the ground that Shibban Lal's dispute was an
individual dispute, not being espoused by any union of workmen.
The validity of the statement of claim filed
by the Sangh was mooted and pressed in one of the preliminary objections which
gave rise to preliminary issue No. 1 reproduced earlier in this judgment. On
this issue, as already observed, the Tribunal decided that the claim filed by
the Sangh should be deemed to have been filed on behalf of Shibban Lal. The
respondent's counsel did not challenge the correctness of this view of the
Tribunal and it was not the respondent's submission before us that there was no
proper statement of claim on behalf of Shibban Lal. In this Court also special
leave application is supported by an affidavit sworn by Shibban Lal, the
workman concerned. The special leave application and the, appeal must,
therefore, be held to have been filed in this Court by the Sangh as
representing Shibban Lal, who apparently agreed to be so represented by the
Sangh. On the facts and circumstances of this case, we do not think that the
present appeal can be considered to be unauthorised and legally incompetent on
the technical ground urged on behalf of the respondent and we do not find any
cogent ground to reject the appeal on the basis of the preliminary objection.
892 We now turn to the merits of the
controversy. The Tribunal took the view that the dispute regarding retirement
age of Shibban Lal ceased to be an industrial dispute because of the settlement
dated June 9, 1965 and, therefore, it could not be referred to it for
adjudication. Support of his case by the workers of any other Union after
reference could not in its view validate the reference. The appellant's learned
counsel challenged this view and drew our attention to r. 58 of the Industrial
Disputes (Central) Rules, 1957 made under S. 38 of the Industrial Disputes Act,
1947. This rule reads as under :
"58. Memorandum of settlement:
(1) A settlement arrived at in the course of
conciliation proceedings or otherwise shall be in form 'H' (2) the settlement
shall be signed(a) in the case of an employee, by the employer himself, or by
his authorised agent, or when the employer is an incorporated company or other
body corporate, by the agent, manager or other principal officer of the
corporation;
(b) in the case of workmen, by any officer of
a trade union of workmen or by five representatives of workmen duly authorised
in this behalf at a meeting of the workmen held for the purpose.
Explanation-In this rule "officer"
means any of the following officers, namely(a) the President;
(b) the Vice-President;
(c) the Secretary (including the General
Secretary);
(d) a Joint Secretary;
(e) any other officer of the trade union
authorised in this behalf by the President and Secretary of the Union.
(3) Where a settlement is arrived at in the
course of conciliation proceeding the Conciliation Officer Shall send a report
thereof to the Central Government together with a copy of the memorandum of
settlement signed by the parties to the dispute.
(4) Where a settlement is arrived at between
an employer and his workmen otherwise than in the course of conciliation
proceeding before a Board or a Concilia893 tion Officer, the parties to the
settlement shall jointly send a copy thereof to the Central Government, the
Chief Labour Commissioner ( Central) New Delhi, and the Regional Labour
Commissioner, New Delhi, and to the Conciliation Officer (Central) concerned."
Form 'H' may also now be reproduced "Form for Memorandum of Settlement
Name of parties Representing employer (s) Representing workmen :
Short recital of the case Terms of settlement
Witness (1) (2) Signature of the parties Signature of Conciliation Officer Board
of Conciliation Copy to:
(1) Conciliation Officer (Central) (here
enter the office address of the Conciliation Officer in the local area
concerned).
(2) Regional Labour Commissioner
(Central)....
(3) Chief Labour Commissioner (Central) New
Delhi (4) The Secretary to the Government of India, Ministry of Labour, New
Delhi." The plain reading of the rule and the Form, according to the
appellant, clearly suggests its mandatory character. It was contended that the
settlement was not entered into with the concurrence of he Conciliation Officer
nor was it entered during the conciliation proceedings. Particular emphasis was
laid on noncompliance with sub-rule (4). The settlement, in the circumstances,
was urged to be invalid and the reference of the dispute quite in accordance
with law. In this connection the learned advocate referred to s.
18 of the Industrial Disputes Act, 1947 which
is as follows :
"Persons on whom settlements and awards
are binding 894
18. (1) A settlement arrived at by agreement
between the employer and workmen (otherwise than in the course of conciliation
proceeding) shall be binding on the parties to the agreement.
(2) Subject to the provisions of sub-section
(3) an arbitration award which has became enforceable shall be binding on the
parties to the agreement who referred the dispute to arbitration.
(3) A settlement arrived at in the course of
conciliation proceedings under this Act or an arbitration award in a case where
a notification has be-en issued under subsection (3A) of section 10A or an
award of a Labour Court, Tribunal or National Tribunal which has become
enforceable shall be binding on(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in
the proceedings as parties to the dispute, unless the Board, Arbitrator, Labour
Court, Tribunal or National Tribunal, as the case may be, records the opinion
that they were so summoned without proper cause;
(c) where a party referred to in clause (a)
or clause (b) is an employer, his heirs, successors, or assigns in respect of
the establishment to which the dispute relates;
(d) where a party referred to in clause (a)
or clause (b) is composed of workmen, all persons who were employed in the
establishment-or part of the establishment, as the case may be, to which the
dispute relates on the date of the dispute and all persons who subsequently
become employed in that establishment or part." The decision in The Bata
Shoe Co. (P) Ltd. v. D. N.
Ganguly(l) was cited in support of the
submission that a settlement during the conciliation proceedings to be binding
must be arrived at with the assistance and concurrence of the Conciliation
Officer.
The respondent's learned Advocate in reply obliquely
suggested in this connection that the Management and the Union were free to
arrive at a settlement of their dispute and if they agreed to do so then the
agreement could not but be held to be (1) [1960] 3.S.C.R. 308.
895 binding. We do not think the Management
and the Union can, when a dispute is referred to the Conciliation Officer,
claim absolute freedom of contract to arrive at a settlement in all respects
binding on all workmen, to which no objection whatsoever can ever be raised by
the workmen feeling aggrieved. The question of a valid and binding settlement
in such circumstances, is in our opinion, governed by the statute and the rules
made there under.
Reliance was next placed on s.18(1) to
support the binding character of the settlement. This sub-section for its proper
construction must be read with the other sub-sections and the relevant rules,
in the light of the definition of 'settlement' as contained in s. 2(p) of the Industrial
Disputes Act. 'Settlement' as defined therein means settlement arrived at in
the course of conciliation proceeding and includes a written agreement between
the employer and workmen arrived at otherwise than in the course of
conciliation proceeding where such agreement has been signed by the parties
thereto in such manner as may be prescribed and a copy thereof has been sent to
the appropriate Government and the Conciliation Officer. In the light of these
provisions we do not think that s. 1 8 (1 ) vests in the Management and the
Union unfettered freedom to settle the dispute as they please and clothe it
with a binding effect on all workmen or even on all member workmen of the Union.
The settlement has to be in compliance with the statutory provisions.
It was then contended by Shri Daphtary that
non-compliance with r. 8 8 (4) having not been pleaded by the appellant before
the Tribunal, no question of proof by the respondent of compliance therewith
arose. This plea, it was strongly objected, should not be allowed to be raised
at this late stage in this Court.
We 'are not impressed by this submission. On
reference having been made by the Government to the Tribunal, if the respondent
wanted to show that this reference was invalid because of a lawful settlement, and
then it was incumbent on the party relying on such a settlement to prove that
it was lawful and valid, rendering the reference illegal. This was particularly
so when we find that Shibban Lal had in his affidavit expressly asserted that
the settlement relied upon had not been filed before the Conciliation Officer
prior to June 18, 1965 when he sent his failure report and also that the two
persons entering into the settlement had no authority either from the Union or
from the members thereof to enter into a binding agreement. Section 38 of the Industrial
Disputes Act empowers the appropriate Government to make rules for the purpose
of giving effect to the provisions of the Act. Rules made by the Central
Government have to be laid before each House of Parliament while in session for
a period of 30 days and the Houses of Parliament are given an opportunity of not
only modifying them but even of deciding that the rules should not be made at
all.
896 These rules thus appear to us to have
full force of law of which judicial notice has to be taken. It was therefore
incumbent on the Tribunal to satisfy itself that the settlement relied upon by
the respondent in support of the plea of it legality of the reference, which
vitally affected its jurisdiction, was in accordance with the provisions of
both Industrial Disputes Act and the relevant statutory rules. This was all the
more so in view of the pleas contained in Shibban Lal's affidavit produced
before the Tribunal to which reference has already been made in this judgment.
Though no reference was specifically made to r.58, the facts affirmed were
reasonably clear to attract the attention of the Tribunal to the question of
legality of the settlement. Bearing in mind the object of the Industrial
Disputes Act and the important public purpose which it is designed to serve,
the Tribunal, in our view, had an obligation to make a deeper probe into the
validity of the settlement and not to accept it casually.
However, on the respondent's argument that
r.58 had not been specifically relied upon by the appellant before the Tribunal
we felt inclined and indeed suggested to the respondent during the course of
arguments that the case might be submitted to the Tribunal for the purpose of
deciding the question of compliance with the said rule, particularly with
sub-rule (4). But the respondent's learned Advocate with his usual fairness,
frankly pointed out that remand for this purpose would not be of much use
because this sub-rule had not been complied with in terms.
A faint suggestion thrown at once stage that
it had been substantially co 'lied with was not seriously pressed though our
attention was drawn in that connection to a letter written by the Management on
July 16, 1965 to the Secretary, Ministry of Labour, Government of India,
enclosing a copy of the settlement arrived at by the Management and the Union
in connection with the matters stated therein. The settlement was said to
contain the following
1. Age of retirement
2. Case of Shri Shibban Lal
3. Case of Shri Mansuka
4. Case of 7 Kahars
5. Case of reduction in pay of 12 workmen
6. Case of Shri Jagan Nath 7. Case of Shri
Chiranjilal Pahalwan.
This letter quite clearly does not amount to
compliance with the rule. Keeping in view its object and purpose, this rule
does seem to demand full compliance in order to clothe the settlement with a
binding character on all workmen.
897 We may observe here that we were not
impressed by the appellant's argument that r.58 sub-rule (2)(b) required that
the officer of a trade union of workmen must also be duly authorised. We,
however, do not express any considered opinion in view of our conclusion on
other points.
In the result this appeal must be allowed and
the impugned order set aside. As the respondents have conceded that there is no
compliance with r. 5 8 (4) the settlement in regard to the dispute referred to
the Tribunal, must, therefore, be held to be illegal. The case, has, therefore,
to go back to the Tribunal for adjudication upon the dispute on the merits. The
respondent should pay the appellant's costs in this Court.
Y.P. Appeal allowed.
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