Tata Engineering & Locomotive Co.
Ltd. Vs. Their Workmen  INSC 180 (16 October 1981)
ERADI, V. BALAKRISHNA (J) MISRA, R.B. (J)
CITATION: 1981 AIR 2163 1982 SCR (1) 929 1981
SCC (4) 627 1981 SCALE (3)1587
RF 1986 SC1830 (60)
Industrial Disputes Act, 1947-Section
18(1)-Workmen signed a settlement-Union claimed that the declaration was forged
and fictitious-Burden of proof on whom lay- Workmen, if could claim the
settlement was unjust and unfair.
In conciliation proceedings in relation to
the demands of one of the two unions (known as Sanghatana) of workers of the
appellant-company a settlement wat reached. At the instance of the second union
(Telco Union) which was dissatisfied with the settlement, the Government
referred the dispute to the tribunal. Before the tribunal the company contended
that since 564 out of 635 daily rated workers to whom the settlement reached by
the Sanghatana related, had assented to it, the dispute no longer survived.
Rejecting the Telco Union's is contention
that the settlement was vitiated by duress, coercion or false promises, the
tribunal held that it was binding on the parties under section 18 (1) read with
section 2 (p) of the Industrial Disputes Act. The tribunal, however, held that
it had not been proved by either party as to how many of the 564 workmen, who
had assented to the settlement, were members of the Sanghatana. Although the
tribunal found that the settlement was just and fair in most aspects it held
that an increase in the additional daily wages was called for in respect of
certain categories and calculated the increase separately for each grade. The
tribunal refused to act upon the settlement.
Allowing the appeal,
HELD: The declaration signed by 564 workers
of the company constituted presumptive proof of the fact that the signatories
to it were all members of the Sanghatana when they signed it. In the absence of
any evidence that any of the signatories to the declaration was not one of the
635 workers or that any signature appearing in the declaration was forged or
fictitious the assertion of each signatory that he was a member of the
Sanghatana is to be presumed to be correct until it is shown to be false. The
onus to prove the falsity of the assertion in the case of any particular
workman rested on the Telco Union which made no attempt to discharge the
burden. Out of 635 workmen, 564 signed the declaration. The fact that 400
workmen later on challenged the settlement only leads to the inference that at
least 329 workmen changed sides afterwards.
[932 H; 933A-C] 930 The conclusion of the
tribunal that the settlement was not just and fair is unsustainable. The
settlement as a whole was just and fair. If the settlement had been arrived at
by a vast majority of the concerned workmen with their eyes open and was
accepted by them in its totality, it must be presumed to be just and fair and
not liable to be ignored while deciding the reference merely because a small
number of workers were not parties to it or refused to accept it or because the
tribunal was of the opinion that the workers deserved marginally higher
emoluments than they themselves thought they did. The question whether a
settlement is just and fair has to be answered on the basis of principles
different from those which come into play when an industrial dispute is under
adjudication. [933 G-H] Herbertsons Limited v. Workmen of Hetbertsons Limited
& others, [197-/] 2 S.C.R. 15 followed.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1484 of 1971.
Appeal by special leave from the Award dated
the 1971 of the Industrial Tribunal Masharashtra, Bombay in Reference No. I.T.
123 of 1968 published in the Masharashtra Government Gazette dated the 5th
M.C. Bhandare and Dr. Y.S. Chitale, O.C.
Mathur, K.J. John and J.S. Sinha, for the Appellant.
Jitendra Sharma and Janardan Sharma for
Respondent No. 1.
K. Rajendra Choudhary for Respondent No. 2.
The Judgment of the Court was delivered by
KOSHAL, J. This is an appeal by special leave against an award dated 30th
April, 1971 of the Industrial Tribunal, Masharashtra (the Tribunal, for short),
deciding a reference made to it under clause (d) of sub-section I of section 10
of the Industrial Disputes Act (hereinafter called the Act) requiring
adjudication of demands raised by the workmen of the Tata Engineering and
Locomotive Company Limited (Machine Tools Division), Chinchwad (hereinafter
referred to as the company).
2. The facts leading to this appeal may be
briefly set out. The Company came into existence under an order passed by the
High Court of Masharashtra on the 27th June, 1966 directing amalgamation of two
pre-existing concerns, one having the same name as the Company and another
known as the Investa Machine 931 Tools and Engineering Company. After the
amalgmation a section A of the workers of the Compay formed a union known as
Telco Kamgar Union (for short, the Telco Union) which was registered as such on
the 2nd June, 1967, but which, even before that, submitted a charter of demands
to the Company on the 1st May, 1967. Subsequently other workers of the Company
established another union named the Telco Kamgar Sanghatana (hereinafter called
the Sanghatana) which presented another set of demands to the Company on the
29th September, 1967. A settlement was reached in conciliation proceedings in
relation to the demand last mentioned on the 3rd October, 1967. Being
dissatisfied with the attitude of the Assistant Labour Commissioner, Poona who
acted as the Conciliation officer, the Telco Union approached the State
Government who made the reference culminating in the impugned award.
3. The reference was received by the Tribunal
on the 22nd March, 1968 and was pending adjudication when, on the 18th
February, 1970, the Company filed in application (Exhibit C-10) stating that a
settlement (Exhibit C-10A) had been reached between it and the Sanghatana on
the 7th February 1973, that the same had been assented to by 564 out of 635
daily-rated workmen, that the dispute pending adjudication before the Tribunal
related only to that category of workmen and that it did not survive by reason
of the settlement.
Settlement Exhibit C-10A was challenged by
the Telco Union through an application (Exhibit U-1) made to the Tribunal on
the 14th April, 1970 and signed by 400 daily- rated workmen who professed to be
members of that Union with the allegation that it had been brought about by
coercion, duress and false promises.
In these circumstances, the Tribunal
addressed itself to the controversy regarding the legality and binding nature
of the settlement. In that behalf its findings were:
(a) There was no evidence of the settlement
being vitiated by any duress, coercion or false promises. It was, therefore,
both legal and fully binding on the parties, thereto under sub-section (I) of
section 18 read with clause (p) of section 2 of the Act.
(b) No attempt had been made by either party
to the reference to prove as to how many of the 564 workmen 932 who had
assented to the settlement were members of the Sanghatana.
(c) Those of the 564 workmen aforesaid who
were not members of the Sanghatana were not bound by the settlement in as much
as they were not parties thereto but had ratified or accepted the settlement
only after it had been reached; and such ratification and acceptance does not
make them parties to the settlement for the purposes of the Act.
The Tribunal, therefore, proceeded to find
out whether the settlement was just and fair and although it found it to be so
in most aspects, it was of the opinion that an increase in the additional daily
wage was called for in respect of each of the 7 grades of daily rated workmen.
That increase was calculated by it separately for each grade and varies from
Rs. 7.80 to Rs. 12.90 per month. By the impugned award it declared accordingly,
refusing to act upon the settlement although the same had been held by it to be
legal and binding on the parties to it.
4. After hearing learned counsel for the
parties, we have come to the conclusion that finding (b) above set out cannot
be sustained. It is not disputed before us that the settlement dated 7th
February, 1970 was arrived at between the Company on the one hand and the
Sanghatana on the other and also that it was assented to by the said 564
workmen by means of a document (Exhibit S-8) bearing their signatures
underneath a declaration which reads:
"We, the following workers, who are
members of the Telco Kamgar Sanghatana, hereby sign individually on the
settlement, which has been agreed upon and signed under Section 2 (p) of the Industrial
Disputes Act, 1947. The terms and conditions of the settlement are acceptable
to me and are binding on me." (emphasis supplied).
It is no body's case that any of the
signatories to this declaration was not one of the said 635 workers or that any
of the signatures appearing underneath the declaration was forged or
fictitious. And if that be so, the assertion by each signatory to the
declaration that he was a member of the Sanghatana has to be taken at its face
value and presumed to be correct until it is shown to be false. The Onus 933 to
prove the falsity of the assertion in the case of any particular A workman thus
rested heavily on the Telco Union but it made no attempt to discharge the same.
It has been urged on its behalf that the very fact that 400 workmen had
challenged the settlement claiming to be members of the Telco Union showed that
the declaration made earlier was not correct. Now it is true that out of a
total of 635 workmen, 564 signed the declaration and later on 400 challenged
the settlement. The only reasonable inference to be drawn from that
circumstance would, however, be that at least 329 workers changed sides in
between the 18th of February 1970 and the 14th of April, 1970. lt cannot be
further interpreted to mean, in the absence of any other evidence on the point,
that the declaration, when made, was false. In this view of the matter we must
hold that the declaration constitutes presumptive proof of the fact that the
signatories to it were all members of the Sanghatana when they signed it.
5. The correctness of finding (a) has not
been assailed before us on behalf of either party and in view of the provisions
of sub- L) section (1) of section 18 of the Act that finding must be upheld so
that settlement dated the 7th February 1970 would be binding on all workers who
were members of the Sanghatana as on that date including the 564 workers who
signed the declaration. Consequently finding (c) which is unexceptionable in so
far as it goes, loses all its relevance and we need take no further notice of
6. The conclusion reached by the Tribunal
that the settlement was not just and fair is again unsustainable. As earlier
pointed out, the Tribunal itself found that there was nothing wrong with the
settlement in most of its aspects and all that was necessary was to marginally
increase the additional daily wage. We are clearly of the opinion that the
approach adopted by the Tribunal in dealing with the matter was erroneous. If
the settlement had been arrived at by a vast majority of the concerned workers
with their eyes open and was also accepted by them in its totality, it must be
presumed to be just and fair and not liable to be ignored while deciding the
reference merely because a small number of workers (in this case 71, i.e.,
11.18 per cent) were not parties to it or refused to accept it, or because the
Tribunal was of the opinion that the workers deserved marginally higher
emoluments than they themselves thought they did. A settlement cannot be
weighed in any golden scales and the question whether it is just and fair has
to be answered on the basis of principles different from those which come into
play when an 934 industrial dispute is under adjudication. In this connection
we cannot do better than quote extensively from Herbertson Limited v. Workmen
of Herbertson Limited and Others,(1) wherein Goswami, J., speaking for the
"Besides, the settlement has to be
considered in the light of the conditions that were in force at the time of the
reference. It will not be correct to judge the settlement merely in the light
of the award which was pending appeal before this Court. So far as the parties
are concerned there will always be uncertainty with regard to the result of the
litigation in a Court proceeding. When, therefore, negotiations take place
which have to be encouraged, particularly between labour and employer, in the
interest of general peace and well being there is always give and take. Having
regard to the nature of the dispute, which was raised as far back as 1968, the
very fact of the existence of a litigation with regard to the same matter which
was bound to take some time must have influenced both the parties to come to
some settlement. The settlement has to be taken as a package deal and when
labour has gained in the matter of wages and if there is some reduction in the
matter of dearness allowance so far as the award is concerned, it cannot be
said that the settlement as a whole is unfair and unjust.
... ... ... ... ... ... ... ... ... ...
We should point out that there is some
misconception about this aspect of the case. The question of adjudication has
to be distinguished from a voluntary settlement. It is true that this Court has
laid down certain principles with regard to the fixation of dearness allowance
and it may be even shown that if the appeal is heard the said principles have
been correctly followed in the award. That, however, will be no answer to the
parties agreeing to a lesser amount under certain given circumstances. By the
settlement, labour has scored in some other aspects and will save all
unnecessary expenses in uncertain litigation. The settlement, therefore, cannot
be judged on the touch-stone of the principles which are laid down by this
Court for adjudication.
935 There may be several factors that may
influence parties to a settlement as a phased endeavour in the course of
collective bargaining. Once cordiality is established between the employer and
labour in arriving at a settlement which operates well for the period that is
in force, there is always a likelihood of further advances in the shape of
improved emoluments by voluntary settlement avoiding friction and unhealthy
litigation. This is the quintessence of settlement which courts and tribunals
should endeavour to encourage. It is in that spirit the settlement has to be
judged and not by the yardstick adopted in scrutinising an award in adjudication.
The Tribunal fell into an error in invoking the principles that should govern
in adjudicating a dispute regarding dearness allowance in judging whether the
settlement was just and fair.
... ... ... .... .... .... .... ... ... ...
It is not possible to scan the settlement in
bits and pieces and hold some parts good and acceptable and others bad. Unless
it can be demonstrated that the objectionable portion is such that it
completely outweighs all the other advantages gained the Court will be slow to
hold a settlement as unfair and unjust.
The settlement has to be accepted or rejected
as a whole and we are unable to reject it as a whole as unfair or unjust. Even
before this Court the 3rd respondent representing admittedly the large majority
of the workmen has stood by this settlement and that is a strong factor which
it is difficult to ignore. As stated elsewhere in the judgment, we cannot also
be oblivious of the fact that all workmen of the company have accepted the
settlement. Besides, the period of settlement has since expired and we are
informed that the employer and the 3rd respondent are negotiating another
settlement with further improvements. These factors, apart from what has been
stated above, and the need for industrial peace and harmony when a union backed
by a large majority of workmen has accepted a settlement in the course of
collective bargaining have impelled us not to interfere with this
settlement." The principles thus enunciated fully govern the facts of the
case in hand, and, respectfully following them, we hold that the 936 settlement
dated the 7th February 1970 as a whole was just and fair.
7. There is no quarrel with the argument
addressed to us on behalf of the workers that mere acquiescence in a settlement
or its acceptance by a worker would not make him a party to the settlement for
the purpose of section 18 of the Act (vide Jhagrakhan Collieries (P) Ltd. v.
Shri G.o. Agarwal, Presiding officer, Central Government Industrial
Tribunal-cum-Labour Court, Jabalpur and others, (I) It is further
unquestionable that a minority union of workers may raise an industrial dispute
even if another union which consists of the majority of them enters into a
settlement with the employer (vide Tata Chemicals Ltd. v. Its Workmen, (o), But
then here the Company is not raising a plea that the 564 workers became parties
to the settlement by reason of their acquiescence in or acceptance of a
settlement already arrived at or a plea that the reference is not maintainable
because the Telco Union represents only a minority of workers. On the other
hand the only two contentions raised by the Company are:- (i) that the
settlement is binding on all members of the Sanghatana including the 564
mentioned above because the Sanghatana was a party to it, and (ii) that the
reference is liable to be answered in accordance with the settlement because
the same is just and fair.
And both these are contentions which we find
fully acceptable for reasons already stated.
8. In the result the appeal succeeds and is accepted.
The impugned award is set aside and is
substituted by one in conformity with the settlement. There will be no order as
P.B.R. Appeal allowed.