Transmission
Corpn., A.P. Ltd. & Ors Vs. P. Ramachandra Rao & Anr [2006] Insc 207 (17 April 2006)
Arijit
Pasayat & Tarun Chatterjee Arijit Pasayat, J.
Challenge
in this appeal is to the judgment rendered by a Division Bench of the Andhra
Pradesh High Court dismissing the writ appeal filed under Clause 15 of the
Letters Patent.
Order
of learned Single Judge allowing writ petition filed by the respondents was
affirmed.
Background
facts in a nutshell are as follows:
Respondents
retired from the services of the Andhra Pradesh State Electricity Board (in
short the 'Board") on 30.4.1990 after attaining the age of superannuation.
The Transmission Corporation of Andhra Pradesh Ltd. (in short the
'Corporation'), is the successor company of the Board which came into existence
with effect from 1.2.1990 by virtue of the Andhra Pradesh State Electricity
Reforms Act, 1998 (in short the 'Reforms Act'). The pay scales of the employees
were revised with effect from 1.7.1990 by which time the respondents herein
were drawing maximum pay in the concerned scale. The rational of fixing the
date with effect from 1.7.1990 was that employees who retired prior to 1.7.1990
are entitled to D.A. at the rate of 38% on the pension whereas the D.A. payable
to pensioners retired on or after 1.7.1990 is 12.4%, but not before the date of
issue of the order. The revised pay scales permitted grant of three annual
increments beyond the time scale in regard to those who had reached or crossed
the maximum pay as on 1.7.1986. However, in respect of the respondents herein
the additional amount was shown as personal pay and the stagnation increments
were adjusted towards the said additional amount.
Questioning
correctness of the action of the Corporation and its functionaries the
respondents herein filed writ a petition. Prayer was to direct the appellants
herein to fix their pension and other terminal benefits at par with other UDCs.
retired on or after 1.7.1990 and to pay all the arrears of pensions and other
terminal benefits. Learned Single judge having regard to the intended purpose
of the scheme held that the respondents have been discriminated while
calculating the pension on the ground that they had retired prior to the
introduction of the scheme. Stand of the employer in essence was that the Board's
proceedings Ms No 481 dated 4.2.1991 had application only to those who were on
its rolls as on 1.7.1990. In view of the fact that the respondents retired on
30.4.1990 the said scheme has no application to them. In any event the scheme
was introduced keeping in view the settlement dated 29.1.1991 entered into
between the Wage Negotiation Committee and the Board before the Joint
Commissioner of Labour and State Conciliation Officer in terms of Section 12(3)
of the Industrial Disputes Act, 1947 (in short the 'Act') and the same cannot
be the subject matter of interpretation in the writ petition. In the Appeal its
stand before learned Single Judge was reiterated before the Division Bench.
Stand of the writ petitioners was that the learned Single Judge was justified
in its conclusion.
The
Division Bench upheld the view taken by the learned Single Judge. Placing
reliance on the decision of this Court in D.S. Nakara & Others V. Union of India (1983 (1) SCC 305) it was held that
the cut off date fixed was discriminatory.
In
support of the appeal learned counsel for the appellant highlighted that the
learned Single Judge and the Division Bench had not considered the issues in
their proper perspective. D.S. Nakara's case (supra) has no application to the
facts of the present case. There was no challenge to the settlement and the
only challenge relating to rational of fixing the cut off date with effect from
1.7.1990. The conclusion that the respondents were entitled to the stagnation
increment deducting the same from the personal pay is clearly tenable.
Learned
counsel for the respondents on the other hand supported the judgment of learned
Single Judge as affirmed by the Division Bench.
A
brief reference to the factual position would be necessary. Relevant portion of
the Board's proceedings dated 4.2.1991 are as follows:
"The
scales of pay of Office Staff, O& M Staff, Construction Staff, Medical
Staff, Fire Fighting Staff, Security Staff and Teaching Staff etc. were revised
with effect from 1.7.86 in the B.P. first read above as subsequently amended,
as per the negotiated settlements with the employees Unions. The said
settlements expired on 30.6.90." As result the earlier settlement expired
on 30.6.1990 the paras 5 & 6 are also relevant and they read as follows
:
"The
A.P.S.E. Board also directs that the amount of stagnation increments not
released earlier in 1986 pay scales but adjusted against P.P. shall now be
released on 30.6.1990 but effect shall be given from 1.7.1990 or from the date
of going over to the revised scales, as the case may be, this amount will be
taken into account for the purpose of fixation of pay in the revised pay
scales.
The
date of option for the revised pay scales shall be 1.7.1990 or the date on
which an employee earns his next increment in the existing scale of pay."
The notification issued on 4.2.1991 is in exercise of powers conferred under
Section 79(C) of the Electricity Supply Act, 1948, which notified Boards'
regulations. It is stated at Para 1(ii) that the regulations shall be deemed to
have come into force with effect from 1.7.1990. In Clause 2(iv) it is stated
that 'Pensioner" means an employee who retired on or after 1.7.1990 but
before the date of issue of the order. Grievance of the writ petitioners
basically was that the persons who retired from service after 1.7.1990 were
drawing more pension than the writ petitioners. Learned Single judge referred
to the Memorandum of Settlement but did not attach much importance to it. The
Memorandum of Settlement clearly shows that the period of settlement was from
1.7.1990 to 30.6.1994. Claim of the writ petitioners was that the employer and
its functionaries were liable to fix the pension and other terminal benefits of
the writ petitioners at par with the other UDCs retired on or after 1.7.1990.
As noted above, the grievance was that the said category of persons was drawing
more pensions. It was pointed out that the revision of pay scale in BPMs. No.
878 dated 5.10.1981 effective from 1.4.1981 was only for a period of 4 years
and the same was required to be revised after expiry of the period i.e. with
effect from 1.4.1985. The Board instead of revising the pay scales with effect
from 1.4.1985 revised the same with effect from 1.7.1986. It was, therefore,
submitted that the classification as done was violative of Article 14 of the
Constitution of India, 1950 (in short the
'Constitution').
Learned
Single Judge and the Division Bench clearly overlooked the fact that there was
no challenge to the settlement. Undisputedly, the three stagnation increments
deducted from personal pay have been added to the basic pay.
There
was no challenge to the settlement made under Section 12(3) of the Act. No
finding has been recorded by either learned Single Judge or the Division Bench
that the modality adopted is wrong. It has to be noted that in terms of the
Fifth Schedule to the Act under Section 2(ra) as per Sr. No. 13 consequences
flow for failure to implement the award, settlement or agreement. There is no
dispute that the Board's decision is prospective. There is also no challenge to
the legality of the Board's decision on the ground that there is no rational
for fixing the date, except saying that it should have been done from an
earlier date i.e. 1985 and not from 1.7.1986 as done earlier. There was no
challenge at the stage it was done. The line of enquiry whether settlement was
unfair and unjust has been examined by this Court in several decisions.
In Herbertsons
Ltd. v. Workmen (1976) 4 SCC 736) this Court called for a finding on the point
whether the settlement was fair and just and it is in the light of the findings
of the Tribunal that the appeal was disposed of. Goswami, J. speaking for the
three-Judge Bench made it clear that the settlement cannot be judged on the
touchstone of the principles which are relevant for adjudication of an
industrial dispute. It was observed that the Tribunal fell into an error in
invoking the principles that should govern the adjudication of a dispute
regarding dearness allowance in judging whether the settlement was just and
fair. The rationale of this principle was explained thus :
"25.
There may be several factors that may influence parties to come 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 scrutinizing an award in adjudication." The line of enquiry whether
settlement was unfair and unjust in K.C.P. Ltd. v. Presiding Officer (1996) 10
SCC 446) was adopted by a three-Judge Bench of this Court speaking through Majumdar,
J. It was observed at SCC p. 451, paragraph 21 that:
"Under
these circumstances, Respondents 3 to 14 also would be ordinarily bound by this
settlement entered into by their representative Union with the Company unless it is shown that the said
settlement was ex facie, unfair, unjust or mala fide." The Court came to
the conclusion that the settlement cannot be characterised to be unfair or
unjust. It was further observed that "once this conclusion is reached it
is obvious that the entire industrial dispute should have been disposed of in
the light of this settlement". It was reiterated in the case of Tata Engg.
and Locomotive Co. Ltd. v. Workmen ((1981) 4 SCC 627) that :
"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 industrial dispute is under
adjudication." Earlier, it was observed :
"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." These aspects were
highlighted in ITC Ltd. Workers' Welfare Association and Anr v. Management of
ITC Ltd. and Another (2002(3) SCC 411.) Exclusion of workmen retiring before
the date fixed is no good ground to characterize settlement as unjust or
unfair. In fact in the instant case there is no challenge to the legality of
the settlement.
As the
settlement entered into in the course of conciliation proceedings assumes
crucial importance in the present case, it is necessary for us to recapitulate
the fairly well-settled legal position and principles concerning the binding
effect of the settlement and the grounds on which the settlement is vulnerable
to attack in an industrial adjudication. Analysing the relative scope of
various clauses of Section 18, this Court in the case of Barauni Refinery Pragatisheel
Shramik Parishad v. Indian Oil Corpn. Ltd. (1991) 1 SCC 4) succinctly
summarized the position thus:
"Settlements
are divided into two categories, namely,
-
those arrived at
outside the conciliation proceedings [Section 18(i)] and
-
those arrived at
in the course of conciliation proceedings [Section 18(3)]. A settlement which
belongs to the first category has limited application in that it merely binds
the parties to the agreement. But a settlement arrived at in the course of
conciliation proceedings with a recognised majority union has extended
application as it will be binding on all workmen of the establishment, even those
who belong to the minority union which had objected to the same. To that extent
it departs from the ordinary law of contract. The object obviously is to uphold
the sanctity of settlements reached with the active assistance of the
Conciliation Officer and to discourage an individual employee or a minority
union from scuttling the settlement. There is an underlying assumption that a
settlement reached with the help of the Conciliation Officer must be fair and
reasonable and can, therefore, safely be made binding not only on the workmen
belonging to the union signing the settlement but also on the others. That is
why a settlement arrived at in the course of conciliation proceedings is put on
par with an award made by an adjudicatory authority." As observed by this
Court in Tata Engineering's case (supra) a settlement cannot weigh 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 comes into play when an
industrial dispute is under adjudication. If the settlement had been arrived at
by a vast majority of 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 made under the Act merely
because a small number of workers were not parties to it or refused to accept
it or because the Tribunal was on the opinion that the workers deserved
marginally higher emoluments than they themselves thought they did. The
decision in Herbertsons Ltd.'s case (supra) was followed.
As
noted above there was no challenge to the settlement which was the foundation
for the Board's decision. A copy of the Memorandum of Settlement under Section
12(3) of the Act before the Joint Commissioner and Labour and State
Conciliation officer, Government of Andhra Pradesh, Hyderabad was placed on record. On the basis
of the settlement, the Board's decision was taken. Paragraph 2 of the
proceedings is very significance and read as follows:
"A
Wage Negotiation Committee was therefore constituted by the Board in the B.P.
sixth read above. The committee held detailed discussions with the
representatives of the unions and finally reached a negotiated settlement with
the recognized union under the code of discipline on 29.1.1991 before the Joint
Commissioner of Labour and State Conciliation Officer under Section 12(3) of
I.D. Act." Above being the position the judgment of the learned Single
judge and that of the Division bench affirming the same cannot be maintained
and are, therefore, set aside. The appeal is allowed but in the circumstances
no order as to costs.
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