G.S. Dhara
Singh Vs. E.K. Thomas & Ors [1988] INSC 215 (9 August 1988)
Venkataramiah,
E.S. (J) Venkataramiah, E.S. (J) Dutt, M.M. (J)
CITATION:
1988 AIR 1829 1988 SCR Supl. (2) 258 1988 SCC (4) 565 JT 1988 (3) 310 1988
SCALE (2)648
ACT:
Trade
Unions Act, 1926: Sections 15 and 18 Trade Union- Worker resigning from
membership-Whether entitled to ask for account and claim refund of amounts
received by trade union from management.
%
Civil Procedure Code 1908, Section 9.
Central
Trade Union Regulations 1938, Regulation ll(i).
Civil
suit by workers-Against office bearers of Trade Union-Claiming refund of
amounts received by Union from management-Maintainability of.
HEAD NOTE:
The
terms and conditions of service including the rates of wages and other allied
matters were decided and settled through mutual negotiations between the trade
union represented by respondent No. 3, its General Secretary and respondent No.
4, President of the Employers Association.
Respondent
Nos. 1 and 2 were workers and were members of the trade union.
Under
an agreement entered into in October, 1973 an amount equivalent to 10 paise out
of every rupee earned by the workers was deducted by the management towards the
gratuity fund and transferred to the trade union for and on behalf of the
workers. Under another agreement a sum equivalent to 10 paise per rupee in the
wages of the workers was paid by the management to the trade union towards
accident benefit fund of which the workers were the beneficiaries. The amounts
so collected were entrusted to the petitioner, who was also the treasurer and
custodian of these funds of the trade union. The petitioner deposited the
amounts received by him in his personal name in his bank account, and no
account of these amounts was rendered by him to the members of the trade union.
He did not call any general body meeting and the members of the trade union
could not ventilate their grievance regarding mismanagement of the funds.
In
view of the aforesaid difficulty, 85 workers including Respon- PG NO 258 PG NO
259 dent Nos. 1 and 2 and three others resigned from this trade union on
January 13, 1976, and formed a separate trade union of their own and A
registered the same under the Trade Unions Act, 1926.
Respondent
Nos. 1 & 2 and three other persons instituted five suits in the Munsiff
Court against the petitioner and respondent No. 3 for a decree directing the
petitioner and respondent No. 3 to render an account of the amounts collected
on their behalf from December, 1969 towards the accident benefit fund and from
October, 1973'towards the gratuity fund.
The
petitioner who was the President and the Treasurer of the trade union resisted
the suits and contended that since the plaintiffs had resigned and ceased to be
members of the trade union they had no right to claim the refund of the sums
due to them from out of the funds of the trade union and that the suits were
not maintainable in the Civil Courts in view of the provisions of the Payment
of Gratuity Act, 1972 and the Workmen's Compensation Act, 1923.
All
these suits were tried together and the Munsiff passed a preliminary decree
against the petitioner and respondent No. 3 directing them to render an account
of the amounts received by them, and further directed that each of the
plaintiffs was entitled to get his proportionate share of the amount due to him
from out of the total amount received by the petitioner and respondent No. 3.
The
petitioner filed an appeal and the Additional Sub-Judge found that the
petitioner and respondent No. 3 had received from the management amounts on
behalf of the workmen, but held that the plaintiffs were not entitled to any
decree at the hands of the Civil Court since the suits were not maintainable in
view of the provisions of the Payment of Gratuity Act, l972 and the Workmen's
Compensation Act, 1923.
Second
Appeals were filed in the High Court by respondent Nos. 1 & 2 and the High
Court by a common judgment set aside the judgment and decree passed by the
First Appellate Court and restored the judgment and decree passed by the Trial
Court.
In the
appeal by Special Leave to this Court it was contended that the provisions of
the Payment of Gratuity Act, 1972 and the Workmen's Compensation Act, 1923 have
debarred the filing of the suit, that respondent Nos. 1 & 2 could not claim
the amount after resigning from the PG NO 260 membership of the trade union as
the said amounts formed part of the general fund of the trade union, and that
only on the dissolution of the trade union its funds could be distributed as
per the rules of the trade union, and where the rules did not provide for the
same, then the fund was liable to be distributed as per Rule 11(1) of the
Central Trade Union Regulations, l938.
On the
question: whether a member of the trade union is entitled to ask for an account
and to claim refund of sums received by the trade union from the management for
and on his behalf on his ceasing to be a member.
Dismissing
the Special Leave Petition,
HELD:
1. The civil suits filed by the workers-Respondent Nos. 1 & 2 were not
barred under the provisions of the Payment of Gratuity Act 1972 and the
Workmen's Compensation Act, 1923. [264C]
2. The
amounts were received by the trade union from the employer concerned towards
the gratuity and accident benefit to which the workers were entitled. There was
no scheme drawn up by the trade union regarding the payment of the gratuity
amount and the accident benefit fund received on behalf of the workmen to the
workmen concerned. There was no agreement between the trade union and its members
that the amount received towards gratuity and accident benefit should form part
of funds of the trade union. Any amount received for and on behalf of the
members is liable to be refunded to the workmen concerned. [264D] In the
instant Case, the amount which had been received on behalf of Respondent Nos. 1
& 2 by the petitioner and Respondent No. 3 had, therefore, to be refunded
to them on their resignation from the membership of the trade union. [264E]
3.
There is no warrant for the view that only on the dissolution of the trade
union its funds could be distributed as per the rules of the trade union and
that where the rules did not provide for the same, the fund was liable to be
distributed as per Rule 11(1) of the Central Trade Union Regulations 1938. [264B]
Balmer Lawrie Workers Union. Bombay and Anr. v. Balmer Lawrie and Co. Ltd. and Ors., [l985] 2
S.C.R. 492 distinguished.
PG NO
261
CIVIL
APPELLATE JURISDICTION: Special Leave Petition (Civil) No. 7506 of 1988.
From
the Judgment and Order dated 22.10.1987 of the Kerala High Court in S.A. Nos.
527 of 1981 and 535 of 1981.
M.K.
Ramamurthy, Mrs. C. Ramamurthy and M.A. Krishnamurthy for the Petitioner.
The
Order of the Court was delivered by VENKATARAMIAH, J. The question involved in
this petition is whether a member of a trade union is entitled to ask for an
account and to claim refund of the sums received by the trade union from the
management for and on his behalf on his ceasing to be a member of the said
trade union.
Respondents
1 and 2, E.K. Thomas and K.K. Surendran respectively, were employees of a
certain management which was the member of the Cochin Railway Forwarding Agents
Association whose President is impleaded as Respondent No. 4 in this petition.
The management concerned was doing the business of a clearing agent in the
Cochin Harbour Terminus Railways Goods Shed. The respondents 1 and 2 were
working as head load workers. Some of the employees working under the
management concerned were members of a trade union called Cochin Port Thozhilali
Union (hereafter referred to as `the trade union') whose General Secretary is impleaded
as Respondent No. 3 in this petition. The petitioner, G.S. Dhara Singh was the
President of the trade union. The terms and conditions of service including the
rates of wages and other allied matters relating to the head load workers were
decided and settled through mutual 'negotiations between the trade union and
Respondent No. 4. Under an agreement entered into in October, l973 an amount
equivalent to 10 paise out of every rupee earned by the workers was deducted by
the management towards the gratuity fund and transferred to the trade union for
and on behalf of the workers. Under another agreement a sum equivalent to 10 paise
per rupee in the wages of the workers was paid by the management to the trade
union towards accident benefit fund of which the workers were the
beneficiaries. The amounts so collected were entrusted to the petitioner, who
was also the treasurer and custodian of the funds of the trade union. It is
alleged that the Petitioner deposited the amounts so received by him in his
personal name in his bank account. No account of the amounts so received by him
was rendered and the members of PG NO 262 the trade union found that it was not
possible to keep control over the funds so received by the petitioner.The
petitioner who was the President of the trade union did not call any general
body meeting and thus the members of the trade union could not ventilate their
grievance regarding the mismanagement of the funds received by the petitioner
by democratic means. In view of the above difficulty faced by them 85 workers
including Respondents 1 & 2 and three others, namely, K.T. Raghavan, A.N.
Joseph and K.J.
Anthappan,
resigned from the trade union on 13.1.1976 and formed a separate union of their
own, which was registered under the Trade Unions Act. Thereafter Respondent
Nos. 1 & 2, K.T. Raghavan, 'A.N. Joseph and K.J. Anthappan instituted five
suits being Original Suits Nos. 49 to 52 and 54 of 1977 on the file of the Munsiff,
Cochin against the petitioner and Respondent No. 3 praying for a decree
directing the petitioner and Respondent No. 3 to render an account of the
amounts collected on their behalf from December, 1969 towards the accident
benefit fund and from October, 1973 towards the gratuity at the rate of 10 paise
per rupee under each head and to pay the amounts due to them. Each of the
plaintiffs in the said suits estimated the amount payable to him at Rs. 3000.
They also claimed future interest at 6 per cent per annum on the amounts found
to be due to them till the date of payment.
The
petitioner, who was the President and Treasurer of the trade union took up
various pleas denying his liability to render account and to refund the amount.
One of the pleas raised by the petitioner was that since the plaintiffs had
resigned and ceased to be the members of the trade union they had no right to
claim the refund of the sums due to them from out of the funds of the trade
union and that if they rejoined the trade union they would be entitled for
payment of gratuity and accident benefit when occasion arose for payment of the
same. He also pleaded that the suits were not maintainable in civil courts in
view of the provisions of the Payment of Gratuity Act, 1972 and the Workmen's
Compensation Act, 1923. On the basis of the pleas raised by the parties, the
Trial Court framed two issues, in each of the suits namely, (i) whether the
plaintiff could ask the petitioner and Respondent No. 3 to render an account of
the amounts received by them and (ii) whether he was entitled to claim the
refund of any amount. All the five suits were tried together and they were
disposed of by a common Judgment dated 31.5. 1979 by the learned Munsiff. By
his judgment the Munsiff passed a preliminary decree against the petitioner and
Respondent No. 3 directing them to render an account of the amounts received by
them towards the accident benefit fund from PG NO 263 December l969 to
16.11.1975 and towards gratuity from October, 1973 to 16.11.1975. The learned Munsiff
further directed that each of the plaintiffs was entitled to get proportionate
share of the amount due to him from out of the total amount received by the
petitioner and Respondent No. 3. He further directed the plaintiffs to apply for
a final decree for ascertaining the actual amount due to them in accordance
with the preliminary decree passed by him along with future interest at 6 per
cent per annum from the date of suit till date of realization. Aggrieved by the
judgment and decree passed by the learned Munsiff the petitioner filed two
appeals in A.S. 122 of 1979 and A.S. 124 of 1979 on the file of the Additional
Sub-Judge, Cochin against the decrees passed by the Munsiff in favour of
Respondent Nos. 1 and 3 respectively. After hearing the parties the learned Sub
Judge found that the petitioner and Respondent No. 3 had received from the
management amounts on behalf of the workmen concerned towards gratuity and
accident benefit fund but the plaintiffs were not entitled to the decree at the
hands of the Civil Court since the suits were not maintainable in view of the
provisions of the Payment of Gratuity Act, 19)7?. and the Workmen's
Compensation Act, 1923 which provided for separate remedies. He accordingly set
aside the decrees passed in favour of Respondent Nos. 1 and 2 in the suits
filed by them. Aggrieved by the common Judgment dated 21.8.1980 of the learned
Additional Sub-Judge Respondent Nos. 1 and 7 filed Second Appeal No. 537 of
1981- F and Second Appeal No. 535 of 1981-G respectively on the file of the
High Court of Kerala. The two second appeals were heard together and the High
Court by its common Judgment dated 22. 10. 1987 set aside the judgment and
decrees passed by the First Appellate Court and restored the judgment and decrees
passed by the Trial Court. This Special Leave Petition is filed by the
petitioner against the said common judgment of the High Court under Article 136
of the Constitution of lndia.
At the
hearing of the Special Leave Petition the learned counsel for the petitioner
stated and we think rightly that the ground on which the First Appellate Court
had set aside the decrees passed by the Trial Court, namely, that the suits
were barred under the provisions of the Payment of Gratuity Act, 1972 and the
Workmen's Compensation Act, 1923 was unsustainable. But he, however, contended
that since the amounts had been realised by the petitioner and Respondent No. 3
from the management under settlements which had been entered into through the
trade union Respondents 1 and 2 could not claim the amount after resigning from
the membership of the trade union as the said amounts formed part of the
general fund of the trade union to which a PG NO 264 member who had resigned
had no right. The learned counsel further urged that since the amounts were
made available to the trade union by the employer for the benefit of the
members of the trade union on the happening of certain contingencies and since
the resignation from membership of the trade union was not one such contingency
a member of a trade union who had resigned from the membership of the trade
union could not claim the amount. He further urged that only on the dissolution
of the trade union its funds could be distributed as per the rules of the trade
union and where the rules did not provide for the same then the fund was liable
to be distributed as per rule 11(1) of the Central Trade Union Regulations,
1938.
We do
not find that the petitioner is right in his contentions. Admittedly, the
amounts were received by the trade union from the employer concerned towards
the gratuity and accident benefit to which the workers were entitled.
There
was no scheme drawn up by the trade union regarding the payment of the gratuity
amount and the accident benefit fund received on behalf of the Workmen to the
workmen concerned. There was no agreement between the trade union and its
members that the amount received towards gratuity and accident benefit should
form part of funds of the trade union. Any amount received for and on behalf of
the members is liable to he refunded to the workmen concerned.. In the instant
case the amount which had been received on behalf of Respondent Nos. 1 and 1 by
the petitioner and Respondent No. 3 had, therefore, to be refunded to them on
their resignation from the membership of the trade union. We do not find any
tenable defence which the trade union could put forward in the circumstances of
the case.
On the
question that the workmen concerned were entitled to the amounts received on
their behalf there is a concurrent finding of all the three courts in favour of
the plaintiffs. The decision in Balmer Lawrie Workers' Union, Bombay and Anr.
v. Balmer Lawrie and Co. Ltd. and Ors., [ l985 ] 2 S.C.R. 492 is of no
assistance to the petitioner. In that case this Court was concerned with the
validity of clause 17 of the Settlement, referred to therein, which read as
follows:
"Arrears
will be paid within two months from the date of signing of the settlement.
Further, the Company shall collect from each workman an amount equivalent to
15% of the gross arrears payable to each employee under this settlement as
contribution to the Union Fund and this Amount shall be paid to the Union within 3 days of the payment of arrears by Payee's
A/c Cheque." (emphasis added) PG NO 265 The appellant in the above case
which was a non- recognised union had challenged the validity of clause 17,
referred to above, on the ground that it permitted a compulsory exaction not
permitted by the Payment of Wages Act from the arrears payable to the workmen.
This Court rejected the said contention since under clause 17 the amount of 15%
of the gross arrears received by the Union
was to be treated as contribution to the Union Fund and that the said clause
was a valid one.
In the
case before us the petitioner and Respondent No. 3 have not shown that there
was any such settlement between the management and the trade union or a scheme
prepared by the trade union which was binding on the workmen under which the
amounts received towards the gratuity and the accident benefit fund on behalf
of the workmen would become a part of the Union fund.
We do
not, therefore, find any ground to interfere with the judgment of the High
Court. This Special Leave Petition, therefore, fails and it is dismissed.
N.V.K.
Petition dismissed.
Back