Shukla Manseta Industries Pvt. Ltd. Vs.
The Workmen Employed Under It [1977] INSC 157 (2 August 1977)
GOSWAMI, P.K.
GOSWAMI, P.K.
KRISHNAIYER, V.R.
CITATION: 1977 AIR 2246 1978 SCR (1) 249 1977
SCC (4) 31
CITATOR INFO :
RF 1980 SC2181 (135)
ACT:
Industrial Disputes Act, 1947-S. 19(2)-Scope
of-Employers and employees arrived at settlement to be operative for three
years-Employees gave notice of termination two months before the expiry of the
period of three years Validity of notice.
HEADNOTE:
Section 19(2) of the Industrial Disputes Act,
1947 provides that a settlement shall be binding on the parties for such period
as is agreed upon by them and shall continue to be binding after the expiry of
the period until the expiry of two months from the date on which a notice in
writing of an intention to terminate the settlement is given by one of tile
parties to the other party or parties to the settlement.
The appellant-employers and the
respondent-workers agreed that the settlement reached by them in 1970 should be
in force for three years till 5th July, 1973. On May 6, 1973 the workers gave
notice terminating the settlement after the expiry of two months from the dated
of notice Demands raised by the workmen on August 1, 1973 were referred to an
Industrial Tribunal. The employers' preliminary objection that the reference
was incompetent since there was no legal and valid termination of the
settlement under s. 19(2) was rejected by the Tribunal.
Dismissing the employers' appeal to this
Court
HELD : There is no legal bar to give advance
intimation about the intention to terminate the settlement on the expiry of the
agreed period and to start negotiation for a more favorable settlement immediately
thereafter. The only condition to be fulfilled by such a notice is that the
period of two months from the date of notice must end on the expiry of the
settlement and not before it. [255H] (1)The policy of the Act is to ban
agitations over the matters covered by a settlement or by an award during the
period specified under s. 19(2) and s. 19(6) respectively.
To avoid uncertainty and speculation s. 19
prescribes a terminus a quo and a terminus ad quem. If in a settlement there is
no time limit agreed upon between the parties the period of operation is a
space of six months from the date of signing of the settlement and will last
until the expiry of two months from the date of receipt of the notice of
termination of the settlement. If the period is fixed it commences from the
date as specified in the settlement and will theoretically end as agreed upon,
but shall continue to operate under the law until the expiry of the requisite
period of two months by a clear written notice. [253C-D] (2) In an industrial
matter this Court is not prepared to subject a notice under s. 19(2) to the
irksome vagaries or tyranny of technicalities of a notice under s. 106 of the
Transfer of Property Act. [256B] (3)Notice under s. 19(2) or under s. 19(6) is
only for intimation of an intention to terminate a settlement or an award
respectively. There is no legal impediment to give advance intimation of the
aforesaid intention provided the contractual or statutory period of settlement
is not thereby affected or curtailed. [253F] Management of Bangalore Woollen,
Colton & Silk Mills Co.
Ltd. v. The Workmen [1968] 1 SCR 581; Indian
Link Chain Manufactures Ltd v. Their Workmen [1972] 1 SCR 790; National Carbon
Co. (India) Ltd. v. M. N. Gan, Judge, Labour Appellate Tribunal & Ors A.I.R.
1957 Cal. 500; Deccan Tile Works v. Their Workmen (Tile Factories Workers
Union, Samalkot [1960] 2 LL.J. 298 held inapplicable.
India Reconstruction Corporation Ltd. 1953
L.A.C. 563 (Cal.) disapproved.
5-768SCI/77 250 (4)Section 19(2) does not
entitle a party to a settlement to repudiate the settlement while the same is
in operation.
Giving advance notice within the ambit of the
law is not repudiation of the settlement. [255A] (5)The appellant's argument
that since there is a power in the Government to extend the period of an award
a notice of termination prior to the date of expiry of the award cannot be
contemplated under the law and since this is the position regarding an award, a
settlement cannot be treated differently, has no force. Even if an advance
notice is given in the case of an award, provided the period of two months
expires on the usual expiry of the award permitted by law and Government in
exercise of its power extends the award in a given case, such a notice would be
in fructuous and inoperative under the law. The extension of the award by the
Government in exercise of a statutory power would prevail upon the action of
the party to terminate the award by notice. It is only if a notice under s.
19(2) or 19(6) expires within the period of operation of the award or
settlement, such a notice will be invalid under the law. In that event the
settlement or the award will continue to be in operation and any reference by
Government of a dispute during the period of settlement or an award without the
same being terminated under the law will be invalid. [255B-C; G] Patna
Municipal Corporation v. The Workmen of Patna Municipal Corpora tion & Ors.
[1970] Labour Industrial Cases 1236 held inapplicable.
CIVIL APPELLATE JURISDICTION, : Civil Appeal
No. 1324 of 1977.
Appeal by Special Leave from the Award dated
22-2-1977 of the Industries Tribunal, Maharashtra in Reference (IT) No. 168 of
1974 published in the Maharashtra Government Gazette dated the 7th April, 1977.
I. N. Shroff, for the Appellant.
F. D. Damania, P. H. Parekh, Miss Manju
Jetley and K. Vasude, for Respondents.
The Judgment of the Court was delivered by
GOSWAMI, J.-The short but important question which arises for decision in this
appeal by special leave turns on the interpretation of section 19(2) of the
Industrial Disputes Act, 1947 (briefly the Act). Does law require that notice
of termination under section 19(2) has to be given only after the date of
expiry of a settlement ? That is the question. We are informed that there is no
direct authority of this Court on this point.
There was a settlement between the appellant,
M/s. Sbukla Manseta Industries Private Limited (hereinafter to be described as
the employer) and their workmen on July 6, 1970. The settlement came into force
from July 6, 1970 and was to remain in force for a period of three years, that
is, till 5th July, 1973. The workmen through their union (Shukla Manseta
Mazdoor Sangh) gave notice to the employer on May 6, 1973, terminating the
settlement after the expiry of the period of two months from the date of the
notice.
Thus under the terms of the notice the
settlement would also have stood terminated at the instance of the workmen on
July 5, 1973, which was also the dare of the expiry of the settlement under the
agreed terms.
The workmen thereafter raised certain demands
on August 1, 1973 and the State Government, in due course, referred the dispute
under section 10(1) (d) of the Act to the Industrial Tribunal by an order dated
June 25,1974.
251 The employer took a preliminary objection
before the Tribunal that the reference was incompetent and invalid in view of
the fact that there was no legal and valid termination of the settlement in
accordance with the provisions of section 19(2) of the Act. The workmen
resisted the claim. The Tribunal over-ruled the preliminary objection and held
that the notice was valid and the reference was competent. It is against the
above order of the Tribunal that the employer has come to this Court by special
leave.
We may immediately turn our attention to
section 19 of the Act which reads as follows :- "19. (1) A settlement
shall come into operation on such date as is agreed upon by the parties to the
dispute, and if no date is agreed upon, on the date on which the memorandum of
the settlement is signed by the parties to the dispute.
(2) Such settlement shall be binding for such
period as is agreed upon by the parties, and if no such period is agreed upon,
for a period of six months from the date on which the memorandum of settlement
is signed by the parties to the dispute, and shall continue to be binding on
the parties after the expiry of the period aforesaid, until the expiry of two
months from the date on which a notice in writing of an intention to terminate
the settlement is given by one of the parties to the other party or parties to
the settlement.
(3) An award shall, subject to the provisions
of this section, remain in operation for a period of one year from the date on
which the award becomes enforceable under section 17A :
Provided that the appropriate Government may
reduce the said period and fix such period as it thinks fit :
Provided further that the appropriate
Government may, before the expiry of the said period, extend the period of
operation by any period not exceeding one year at a time as if thinks fit so,
however, that the total period of operation of any award does not exceed three
years from the date on which it came into operation.
(4) x x x x (5) Nothing contained in
sub-section (3) shall apply to any award which by its nature, terms or other
circumstances does not impose, after it has been given effect to, any
continuing obligation on the parties bound by the award.
2 5 2 (6) Notwithstanding the expiry of the
period of operation under sub-section (3), the award 'shall continue to be
binding on the parties until a period of two months has elapsed from the date
on which notice is given by any party bound by the award to the other party or
parties intimating its intention to terminate the award.
IL (7) No notice given under sub-section (2)
or sub-section (6) shall have effect, unless it is given by a party
representing the majority of persons bound by the settlement or award, as the
case may be".
We may also note the definition of settlement
given under section 2(p) of the Act :
"2. (p) 'Settlement' means a 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 an officer authorised in this behalf by the appropriate Government and
the conciliation officer".
There is no dispute that the settlement in question
comes within the purview of section 2(p) of the Act.
Under the provisions of section 19(2) it is
clear that a settlement shall be binding for 'such period as is agreed upon by
the parties and if there is no period mentioned in the agreement, for a period
of six months from the date on which the settlement is signed by the parties.
With regard to the period of operation of the settlement, section 19(2) confers
a statutory continuity of the settlement even after the expiry of the period
agreed upon until the expiry of two months from the date on which a written
notice of the intention to terminate the settlement is given by one party to
the other. It is, therefore, clear that when a period is fixed in settlement,
the settlement remains in operation for the entire period and also thereafter
until one or the other party gives written intimation of the intention to
terminate the settlement and until expiry of two months from the date of such
intimation.
The object of the above provision under
section 19(2) is to ensure that once a settlement is arrived at there prevails
peace, accord and cordiality between the parties during the period agreed upon
and if the settlement does not require to be altered for some reason or the
other the 'same climate prevails 'by extension of the settlement by operation
of law. Section 19 is not a dead end freezing all manner of aspirations of
labour or even, may be, sometime, hardship suffered by the employer on account
of a settlement. There is an option given to either party to terminate the
settlement by a written intimation after the expiry of two months from the date
of such notice. This is in accord with the policy of settlement of industrial
disputes which is the principal object underlying the provisions of the Act.
253 Settlement between employers and workmen,
if not duly terminated, will operate as inviolable conditions of service of
workmen. Such settlements are only step-ups in labour's progressive ascent to
the goal of their ultimate Ideal, namely, a living wage with realisation of
other aspirations including partnership with employer. How soon that goal will
be reached will depend upon so many factors and other imponderables in the
process of the nation's achievement, with cooperation from all sectors, public
and private, but each party being always alive to the larger national interest
which includes thriving of the industry of which labour is an integral part.
The policy of the Act is to ban agitations
over the matters covered by a settlement or by an award during the period
specified under 'section 19(2) and section 19(6) respectively. To avoid
uncertainty and speculation section 19 prescribed a terminus a quo and a
terminus ad quem. If in a settlement there is no time limit agreed upon between
the parties the period of operation is a space of six months from the date of
signing of the settlement and will also last until the expiry of two months
from the date of receipt of the notice of termination of the 'settlement. If
the period is fixed it commences from the date as specified in the settlement
and will theoretically end as agreed upon but shall continue to operate under
the law until the expiry of the requisite period of two months by a clear
written notice.
An award under section 19(3) of the Act has a
longer period of operation, to start with, namely, one year from the date of
the commencement of the award, which is on the expiry of 30 days from the date
of publication of the award by the appropriate Government. As in the case of a
settlement so also under section 19(6) the award continues to operate governing
the conditions of service until the expiry of two months from the date of
receipt of notice of termination of the award. Under the two provisos to
sub-section (3) of section 19 Government hag the option to reduce or extend the
period of operation of an award. This will be, however, always subject to
sub-section (5) of section 19.
Notice under section 19(2) or under section
19(6) is only for intimation of an intention to terminate a settlement or an
award respectively. There is no legal impediment to give advance intimation of
the aforesaid intention provided the contractual or statutory period of
settlement is not thereby affected or curtailed.
It is submitted by Mr. Shroff on behalf of
the appellant that the view taken by the Tribunal is erroneous and he further
submits that there is a decision of another Industrial Tribunal in Maharashtra
in his support against the impugned view. He has also referred to two decisions
of this Court and some decisions of the High Courts but admits that none of
these is directly to the point which is raised before us.
In Management of Bangalore Woollen, Cotton
& Silk Mills Co.
Ltd. v. The- Workmen & Anr.,(1) this
Court has held that when there is a subsisting award binding on the parties the
Tribunal has no jurisdiction (1)[1968] 1 S.C.R. 581.
2 54 to consider the same points in a fresh
reference. In that case the earlier award had not been terminated and,
therefore, the reference was held by this Court to be incompetent. That was a
case in which there was not only a settlement between the parties but also an
earlier award dealing, inter alia, with some common items of dispute.
While the settlement was terminated after its
expiry by the union, the earlier award which also had disposed of some of the
items of the dispute which were raised but abandoned as a package deal in the
subsequent settlement had not been terminated in accordance with law. Indeed
there was an attempt in that case to show that the earlier award had been
terminated by a letter dated June 26, 1961 and if so, the award would have
expired on August 26, 1961. Since, however, the settlement disposing of common
points of dispute was terminated by a letter dated August 14, 1961 and thereby
the settlement stood terminated only on October 14, 1961, the termination of
the award by a letter dated June 26, 1961, during the operation of the
settlement was held to be invalid. The facts of Bangalore Woollen, Cotton &
Silk MU&' case (supra) are, therefore, entirely different from those with
which we are concerned in this appeal.
The other decision namely, the Indian Link
Chain Manufactures Ltd. v. Their workmen,(1) is also not directly to the point
raised in this case.
Our attention is drawn to a decision of the
Calcutta High Court in the National Carbon Co. (India) Ltd. v. M. N. Gan,
Judge, Labour Appellate Tribunal and Others,(2) wherefrom reading paragraph 13
in the decision, Mr. Shroff sought to derive some assistance. We find that
although the agreement, there, was 'statutorily continuing after its expiry on
August 26, 1952, notice for terminating the agreement was given on September 6,
1952 and the High Court rightly accepted the notice as valid. The High Court
also rightly disagreed with the views of the Labour Appellate Tribunal in India
Reconstruction Corporation Limited(3) that an agreement with a fixed period
expired by efflux of the period and was not statutorily continued.- "The
period aforesaid" in s. 19(2) will include not only the contractual period
but also the statutory period of six months. This decision, therefore, leads no
assistance to Mr. Shroff.
Mr. Shroff also relied upon a decision of the
Andhra Pradesh High Court in Deccan Tile Works v. Their Workmen (Tile Factories
Workers' Union, Samalkot) and two others(4) which does not at all lead
assistance to his submission. Although the facts are not very clear from the
report we find, the High Court has observed that- "obviously the
management was not within its rights in terminating and unilaterally repudiating
Ex. A. I" (the agreement).
(1) (1972)1 S.C.R. 790.
(2) A.I.R. 1957 Cal. 500.
(3) (1953) Labour Appeal Cases 563 (Cal.).
(4) [1960] 2 L.L.J. 298.
255 Section 19(2) does not entitle a party to
a settlement to repudiate the settlement while the 'same is in operation.
Giving advance notice within the ambit of the
law is not repudiation of the settlement.
Mr. Shroff next submits that section 19(2)
should be given the, same meaning as section 19(6) since both these provisions
are on the same subject dealing with the period of operation of settlement and
award respectively. It is submitted that so far as an award is concerned under
the second proviso to sub-section (3) of section 19, the appropriate Government
may extend the period of operation by any period not exceeding one year at a
time subject to a total period of operation not exceeding three years from the
date on which it comes into operation. According to counsel since there is a
power in the Government to extend the period of the award a notice of
termination prior to the date of expiry of the award cannot be contemplated
under the law and', since this is the position regarding an award, a settlement
cannot be treated differently. We are unable to accede to this submission. Even
if an- advance notice is given in the case of an award, provided the period of
two months expires on the usual expiry of the award permitted by law and
Government in exercise of its power extends the award in a given case, 'such a
notice would be infructuous and inoperative under the law. The extension of the
award by the Government in exercise of statutory power would prevail upon the
action of the party to terminate the award by notice.
Mr. Shroff relied upon a decision of the
Patna High Court in Patna Municipal, Corporation v. The Workmen of Patna
Municipal ,Corporation and others(1) and read to us the following observation
from that decision "A party to the award cannot terminate it so long it
remains operative either during the period of one year or during the extended
period under sub-section (3) of section 19".
We do not read the above observation as
supporting the sub- mission of counsel that no advance notice can be given to
terminate a settlement or an award provided the requisite period of two months
required under section 19(2) expires on the date of expiry of the settlement or
award or thereafter. It is only if a notice under section 19(2) or 19(6)
expires within the period of operation of the award or settlement, such a
notice will be invalid under the law. In that event the settlement or the award
will continue to be in operation and any reference by Government of a dispute
during the period of settlement or an award without the same being terminated
under the law will be invalid.
In the instant case the notice under section
19(2) was given intimating the intention of the workers to terminate the award
on a date when the agreed period would also expire.
To repeat, there is no legal bar to give
advance intimation about the intention to terminate the settlement on the
expiry of the agreed period and to start negotiation for, a more favorable
settlement immediately thereafter. The only (1) [1970] Labour Industrial Cases
1236.
256 condition that has to be fulfilled by
such a notice is that the period of two months from the date of notice must end
on the expiry of the settlement and not before it. In a given case it may be
even advantageous to the parties who do not want to continue the settlement to
strike a new bargain without loss of time so that unnecessary bickering and
resultant industrial unrest do not take place. In an industrial matter we are
not prepared to subject a notice under section 19(2) to the irksome vagaries or
tyranny of technicalities of a notice under section 106 of the Transfer of
Property Act.
There is, therefore, no substance in the
contention that the reference is incompetent and invalid. The appeal is
dismissed with costs. The Tribunal will try to dispose of the case.
expeditiously.
P.B.R. Appeal dismissed.
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