Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 11
CASE NO.:
Appeal (civil) 3337-3338 of 2002
PETITIONER:
CHAIRMAN S.B.I. & ANR.
Vs.
RESPONDENT:
ALALSSOORCIISASTAIOSNTA&TEORBSA.NK OFFICERS
DATE OF JUDGMENT: 06/05/2002
BENCH:
D.P. Mohapatra & K.G. Balakrishnan
JUDGMENT:
D.P.MOHAPATRA,J.
Leave is granted.
These appeals filed by the Chairman, State Bank of
India, Central Office, Mumbai and the Chief General
Manager, State Bank of India, Local Head Office at
Bhubaneshwar are directed against the judgment dated
24.11.1998 of the High Court of Orissa in OJC No.
8863/1997 and the Order dated 23.7.1999 disposing of the
petition for review of the said judgment, Civil Review
No.15/99, filed by the appellants. The operative portion of
the judgment dated 24.11.98 reads as follows:
"For the foregoing reasons we set aside
paragraph 2 of the Staff Circular No.91
of 1987 if the same is still in force and
direct the opposite parties to confer
such rights on the petitioner-
Association as are available to them
under Rule 24 of the Verification Rules.
The Management of the State Bank of
India are also directed to keep in mind
the observations made in this
judgment while dealing with its
employees, officers and their Unions,
recognized or unrecognized."
The High Court, allowing the review petition in
part by the order dated 23rd July, 1999, issued the
following directions :
"For the aforesaid reasons, in partial
modification of the judgment dated
24.11.1998, we pass the following
order:-
(i) We set aside paragraph 2 of the
Staff Circular No.91 of 1987 if the
same is still in force and direct
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 11
the management of the Bank to
permit the writ petitioners-
Association to meet and discuss
the grievances of any individual
member of the petitioner-
Association relating to his service
conditions in a regulated
prescribed manner and further to
appear on behalf of its members
in any domestic or departmental
enquiry or in any proceeding
before the Conciliation Officer,
Labour Court, Industrial Tribunal
or any other Tribunal.
(ii) The management of the Bank will
be at liberty to take such suitable
disciplinary action as permissible
in law if any individual employee
or officer or office bearer of any
Union or Association including
the writ petitioner Association,
recognized or unrecognized,
indulge in any coercive or
intimidating or indisciplined acts
or behaviour.
(iii) We also direct the management of
the State Bank of India to keep in
mind the relevant observations
made in the judgment dated
24.11.1998 and also in this order
while dealing with its employees,
officers and their Unions,
recognized or unrecognized.
The review is allowed in part to the
extent indicated above."
In the circular, Staff Circular No.91 of 1987 dated
13-11-1987 which was under challenge in the writ
petition, it was stated that the bank does not enter into
any dialogue etc. with a non-recognized union/
association; that the bank has recognized the All India
State Bank Officers’ Association for this circle; the said
rights and privileges cannot be extended to any other
association of the Officers in the same circle.
Para 2 of the Staff Circular No.91 of 1987 which was
struck down by the High Court, reads as follows:
"Having regard to very serious
developments as brought out in our
Staff Circulars Nos. 84 and 90 of 1987,
it will not be in order for any Bank
functionary to enter into any dialogue
or accept any representation from the
office-bearers of the unrecognized All
Orissa State Bank Officers’ Association
in this Circle, even in matters
pertaining to individual grievances. In
case the representatives of the above
unrecognized Association resort to any
coercive methods like dharna, gherao
etc. decisions obtained, if any, under
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 11
such circumstances would be deemed
to have been taken under duress and
such decisions shall not be binding on
the Bank. Needless to add that the
cases of officers indulging in such
unwarranted actions would be dealt
with sternly and suitable disciplinary
action would be taken against them."
From the judgment under challenge it is clear that
the controversy raised in the case relates to the rights of
the All Orissa State Bank Officers’ Association (a non-
recognised association), respondent no.1 herein, vis-a-vis
the Management of the Bank, to espouse the case of the
officers of the Bank with the management of the bank;
whether the respondent association has any such right
or the rights are vested only in a recognized association,
the All India State Bank Officers’ Federation/Association.
The respondent No.1 Association represented
through its General Secretary, filed the writ petition
raising grievance against unjust, unfair and hostile
treatment towards its members and claiming treatment at
par with office-bearers of the recognized association, and
prayed that norms for guidance in matters relating to a
non-recognized association may be laid down by the
Court. It does not appear to have been disputed before
the High Court and it was also not disputed in this Court
that a non-recognized association is a registered
association under the Trade Unions Act. The
management of the Bank has not recognized the said
association. According to the Bank, the association does
not satisfy the criteria laid down by the Verification of
Membership and Recognition of Trade Unions’ Rules,
1994 (hereinafter referred to as ’the Verification Rules’)
framed by the Government of Orissa. The non-recognized
association pleaded that in 1982 the association
submitted a list of its members and claimed recognition,
but in spite of recommendation of the Officer-in-charge of
the local Head Office, the Central Office at Bombay did
not take any decision and started adopting unfair labour
practice to encourage defection from the petitioner’s
association to the recognized association. The non-
recognized association also alleged that members of the
recognized association are being shown illegal and undue
favour in the matter of posting, transfer, entertainment or
representations whereas the members of the non-
recognized association are being put to various
inconveniences in a systematic and calculated manner.
Certain instances were stated in the writ application in
support of the allegation of hostile discrimination and
unfair treatment.
The Chief General Manager in the local Head Office
at Bhubaneshwar, respondent No.2 herein, in his counter
affidavit denied the allegations of discrimination,
arbitrary treatment and unfair practice. However, he
referred to certain rights and privileges allowed to
members of recognized association and asserted that only
such rights and privileges were not being extended to the
office-bearers of the non-recognized association. He
refuted the claim of the non-recognized association for
parity of treatment with members and office bearers of
the recognized association.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 11
The High Court in para 5 of the judgment observed,
"Admittedly, the verification of membership and
recognition of Trade Union Rules, 1994 framed by the
State of Orissa are applicable to the petitioner-
Association". Thereafter the High Court took note of the
provisions in Rule 18 in which it is laid down that the
Union which secures not less than 30% of the total
number of votes polled shall be entitled to be recognized
and considered. The provision of Rule 24 in which are
enumerated the rights of a non-recognized union is
quoted herein below :
"24 (a) Rights of Unrecognised
Union to meet and discuss with
the employer or any person
appointed by him in that behalf
the grievances of any individual
member relating to his service
conditions.
(b) To appear on behalf of its
members employed in the
establishment in any
domestic or departmental
enquiry held by the
employer and before the
Conciliation Officer/Labour
Court/Industrial Tribunal
or Arbitrator."
The High Court also took note of Rules 21 and 23 in
which are enumerated the rights and facilities of
recognized unions. The High Court observed that the
petitioner association (respondent no.1) is still a non-
recognized union and it is not possible for the Court in
exercise of writ jurisdiction to determine the dispute over
membership and that, when a statutory machinery is
available it is for the non-recognized association to avail of
that machinery in accordance with the prescribed
procedure. Dealing with the question of the right of the
non-recognized association to speak on behalf of its
members, the High Court observed that a non-recognized
union has no right to represent the entire workmen but it
has the right to represent those who are its members,
individually or as a group of workmen; acceptance of a
demand and discussion over a demand is not the one and
same thing; right of raising grievance and discussion is a
fundamental right and cannot be taken away totally. The
High Court drew a distinction between acceptance of a
demand and discussion over the demand. The High Court
placed reliance on the principles laid down and
observations made by this Court in Balmer Lawrie
Workers’ Union, Bombay & Anr. vs. Balmer Lawrie & Co.
Ltd. & Ors. [(1985) 2 SCR 492). The High Court held that
the staff circular No.91/1987 on the face of it is contrary
to Rule 24 of the Verification Rules and also violative of the
rights forming the basis of a domestic society, and that
the management of the Bank cannot direct its officers not
to enter into any dialogue or accept any representation
from the non-recognized union even in matters pertaining
to individual grievances. In para 9 of the Judgment the
High Court summed up its conclusions on the point in the
following words:
"Mr. Dora, learned Advocate appearing
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 11
for the Bank and its management fairly
submits that there cannot be any
direction contrary to Rule 24 of the
Verification Rules. Thus the direction
contained in para 2 of the Staff
Circular No.91 of 1987 is arbitrary,
contrary to Rule 24 of the Verification
Rules and liable to be set aside."
Dealing with the allegations of discrimination or
unfair labour practice etc. the High Court recorded the
following findings in para 11 of its judgment:
"However, on the basis of the materials
produced before us, we are unable to
hold that there is any deliberate or
consistent policy of discrimination or
unfair labour practice against the
members of the petitioner Association.
In the affidavits filed on behalf of the
management almost all the instances
given by the petitioner-Association
have been specifically dealt with and
answered. There is no sufficient
material from which we can
conclusively hold any systematic
victimization or harassment of the
members of petitioner-Association."
The High Court also took note of the submissions
made on behalf of the management of the Bank that
excepting the specified office bearers of the recognized
Association or Union all other officers of the bank are
entitled to be treated equally in accordance with the
Bank’s administrative policy irrespective of their union
affiliation. On the above findings and observations the
High Court allowed the writ petition.
Coming to the order passed on the review petition
filed by the appellants it appears that the main grounds
urged in support of the prayer for review of the judgment
were that the Verification Rules framed by the Govt. of
Orissa were not applicable to the Officers of the Bank
since they are not ’employees’ within the meaning of Rule
3 (c) of the Verification Rules, and that the Court had
erred in quashing para 2 of the Staff Circular No.91 of
1987 dated 13.11.1987 which is applicable on All India
basis, since that would amount to disturbing a long
standing All India Policy of the Bank. Considering the
first ground, the High Court observed that the
submission appears to be correct although during
hearing of the writ application it was clearly stated that
the said Rules are applicable. The High Court expressed
its inability to give any finding on the point in the
absence of sufficient material before it. However, the High
Court further observed "so we are inclined to accept the
contention that the Verification Rules as such will not
cover a Union which is not a union of workmen as
defined in the Industrial Disputes Act". The further
observation of the High Court was that although Rule 24
of the Verification Rules in terms does not apply to a
union of officers who are not ’workmen’ but the principle
behind the Rule can be extended to any non-recognized
union even if it is not a union of workmen. Dealing with
the allegation made by the non-recognized association
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 11
regarding discrimination against its members and office-
bearers, the High Court reiterated that though the
Verification Rules as such do not apply to the petitioner’s
association if it is not a union of workmen as defined
under the Industrial Disputes Act, if any individual
employee or officer of a union or association of employees
or officers including petitioners association recognized or
not indulge in any disorderly or indisciplined or
intimidating acts or behaviour, the management is at
liberty to take such action as is permissible in law.
The High Court disposed of the Review Petition by
passing the judgment/order which has been quoted
earlier.
With growth of industrialization in the country and
progress made in the field of trade union activities the
necessity for having multiple unions in an industry has
been felt very often. Taking note of this position power
has been vested in the management to recognize one of
the trade unions for the purpose of having discussions
and negotiations in labour related matters. This
arrangement is in recognition of the right of collective
bargaining of workmen/employees in an industry. To
avoid arbitrariness, bias and favouritism in the matter of
recognition of a trade union Rules have been framed
laying down the procedure for ascertaining which of the
trade unions commands support of majority of
workmen/employees. Such procedure is for the benefit
of the workmen/employees as well as the management/
employer since collective bargaining with a trade union
having the support of majority of workmen will help in
maintaining industrial peace and will help smooth
functioning of the establishment. Taking note of the
possibility of multiple trade unions coming into existence
in the industry, provisions have been made in the Rules
conceding certain rights to non-recognized unions.
Though such non-recognized unions may not have the
right to participate in the process of collective bargaining
with the management/employer over issues concerning
the workmen in general, they have the right to meet and
discuss with the employer or any person appointed by
him on issues relating to grievances of any individual
member regarding his service conditions and to appear
on behalf of their members in any domestic or
departmental enquiry held by the employer or before the
conciliation officer or labour court or industrial tribunal.
In essence, the distinction between the two categories of
trade unions is that while the recognized union has the
right to participate in the discussions/negotiations
regarding general issues affecting all workmen/
employees and settlement if any arrived at as a result of
such discussion/negotiations is binding on all
workmen/employees, whereas a non-recognized union
cannot claim such a right, but it has the right to meet
and discuss with the management/employer about the
grievances of any individual member relating to his
service conditions and to represent an individual member
in domestic inquiry or departmental inquiry and
proceedings before the conciliation officer and
adjudicator. The very fact that certain rights are vested
in a non-recognized union shows that the Trade Union
Act and the Rules framed thereunder acknowledge the
existence of a non-recognised union. Such a union is not
superfluous entity and it has a relevance in specific
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 11
matters relating to administration of the establishment. It
follows, therefore, that the management/employer
cannot outrightly refuse to have any discussion with a
non-recognized union in matters relating to service
conditions of individual members and other matters
incidental thereto. It is relevant to note here that the
right of the citizens of this country to form an association
or union is recognized under the Constitution in Article
19(1)(c). It is also to be kept in mind that for the sake of
industrial peace and proper administration of the
industry it is necessary for the management to seek
cooperation of the entire work force. The management by
its conduct should not give an impression as if it favours
a certain sections of its employees to the exclusion of
others which, to say the least, will not be conducive to
industrial peace and smooth management. Whether
negotiation relating to a particular issue is necessary to
be made with representatives of the recognized union
alone or relating to certain matters concerning individual
workmen it will be fruitful to have
discussion/negotiations with a non-recognized union of
which those individual workmen/employees are members
is for the management or its representative at the spot to
decide. At the cost of repetition we may state that it has
to be kept in mind that the arrangement is intended to
help in resolving the issue raised on behalf of the
workmen and will assist the management in avoiding
industrial unrest. The management should act in a
manner which helps in uniting its workmen/employees
and not give an impression of a divisive force out to
create differences and distrust amongst workmen and
employees. Judged in this light the contents of
paragraph 2 of the Staff Circular No.91 of 1987 clearly
give an impression that the management has decided at
the threshold before being aware of the nature of the
dispute raised that its representatives should have no
discussion at all with office bearers of the non-recognized
association. Such a circular is not only contrary to the
express provision in Rule 24 but also runs counter to the
scheme of the Trade Union Act and the Rules.
In the case of Balmer Lawrie Workers’ Union
(supra), this Court, reviewing the scheme of the
Maharashtra Recognition of Trade Unions and Prevention
of Unfair Practices Act, 1971, traced the history of
development of trade-unions on the advent of industrial
revolution and the need for multiple trade-unions in
industries and consequential necessity for selecting one
of the trade-unions as the recognised union by the
management, and also took note of the difference
between the rights and privileges of a recognized trade-
union and a non-recognised trade-union. In that
connection, this Court made certain observations,
portions of which are extracted hereunder:
"A need was felt that where there are
multiple unions seeking to represent
workmen in an undertaking or in an
industry, a concept of recognized,
union must be developed. Standing
Labour Committee of the Union of
India at its 29th Session held in July
1970 addressed itself to the question of
recognition of trade union by the
employer. In fact even amongst trade
union leaders there was near
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 11
unanimity that the concept of
recognized union as the sole
bargaining agent must be developed in
the larger interest of industrial peace
and harmony. National Commission
on Labour chaired by late Shri P.B.
Gajendragadkar, former Chief Justice
of India, after unanimously and
wholeheartedly expressing itself in
favour of the concept of recognized
union and it being clothed with
powers of sole bargaining agent with
exclusive right to represent workmen,
addressed itself only to the question of
the method of ascertaining which
amongst various rival unions must be
accorded the status of a recognized
union. Planting itself firmly in favour of
democratic principle, it was agreed that
the union which represents the largest
number of workmen working in the
undertaking must acquire the status
as that would be in tune with the
concept of industrial democracy."
xxx xxx xxx
"Before the introduction of Sec.2-A in
the Industrial Disputes Act, 1947 the
courts leaned in favour of the view that
individual dispute cannot be
comprehended in the expression
’industrial dispute’ as defined in the
Industrial Disputes Act, 1947. Any
dispute not espoused by the union for
the general benefit of all workmen or a
sizeable segment of them would not be
comprehended in the expression
’industrial dispute’ was the courts’
view. Often an invidious situation
arose out of this legal conundrum. An
individual workman if punished by the
employer and if he was not a member
of the recognized union, the latter was
very reluctant to espouse the cause of
such stray workman and the individual
workman was without a remedy.
Cases came to light where the
recognized union by devious means
compelled the workmen to be its
member before it would espouse their
causes. The trade union tyranny was
taken note of by the legislature and
Sec.2-A was introduced in the
Industrial Disputes Act, 1947 by which
it was made distinctly clear that the
discharge, dismissal retrenchment or
termination of service of the individual
workman would be an industrial
dispute notwithstanding that no other
workman or any union of workman is
a party to the dispute. Sec.20, sub-
sec.2 while conferring exclusive right
on the recognized union to represent
workmen in any proceeding under the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 11
Industrial Disputes Act, 1947
simultaneously denying the right to be
represented by any individual
workman has taken care to retain the
exception as enacted in Sec.2A. This
legal position is reiterated in Sec.20(2)
(b). Therefore while interpreting
Sec.20(2)(b) it must be kept in view
that an individual workman, who has
his individual dispute with the
employer arising out of his dismissal,
discharge, retrenchment or termination
of service will not suffer any
disadvantage if any recognized union
would not espouse his case and he will
be able to pursue his remedy under the
Industrial Disputes Act, 1947. Once
this protection is assured, let us see
whether the status to represent
workmen conferred on a recognized
union to the exclusion of any
individual workman or one or two
workmen and who are not members of
the recognized union would deny to
such workmen the fundamental
freedom guaranteed under Art.19(1)(a)
and 19(1)(c) of the Constitution."
xxxx xxx xxx
".Conferring the status of recognized
union on the union satisfying certain
pre-requisites which the other union is
not in a position to satisfy does not
deny the right to form association. In
fact the appellant union has been
recognized under the Trade Unions Act
and the members have formed their
association without let or hindrance by
anyone. Not only that the appellant
union can communicate with the
employer, it is not correct to say that
the disinclination of the workmen to
join the recognized union violates the
fundamental freedom to form
association. It is equally not correct to
say that recognition by an employer is
implicit in the fundamental freedom to
form an association. Forming an
association is entirely independent and
different from its recognition.
Recognition of a union confers rights,
duties and obligations. Non-
conferring of such rights, duties and
obligations on a union other than the
recognized union does not put it on an
inferior position nor the charge of
discrimination can be entertained. The
members of a non-recognised
association can fully enjoy their
fundamental freedom of speech and
expression as also to form the
association.
The Legislature has in fact taken
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 11
note of the existing phenomen in trade
unions where there would be unions
claiming to represent workman in an
undertaking or industry other than
recognized union. Sec.22 of 1971 Act
confers some specific rights on such
non-recognised unions, on such being
the right to meet and discuss with the
employer the grievances of individual
workman. The Legislature has made a
clear distinction between individual
grievance of a workman and an
individual dispute affecting all or a
large number of workmen. In the case
of even an unrecognized union, it
enjoys the statutory right to meet and
discuss the grievance of individual
workman. It also enjoys the statutory
right to appear and participate in a
domestic or departmental enquiry in
which its member is involved. This is
statutory recognition of an
unrecognized union. The exclusion is
partial and the embargo on such
unrecognized union or individual
workman to represent workman is in
the large interest of industry, public
interest and national interest. Such a
provision could not be said to be
violative of fundamental freedom
guaranteed under Article 19(1)(a) or
19(1)(c) of the Constitution."
(emphasis supplied)
The judgment of the High Court disposing of the
writ petition and the order disposing of the review petition
filed on behalf of the management make the position
amply clear that the rights and privileges vested in a
non-recognized association are limited to espousing the
grievances of individual members relating to their service
conditions and representing them in domestic or
departmental enquiries held by the employer and not
proceeding before the conciliation officer, labour court,
industrial tribunal or arbitrator. The High Court has not
conceded any right to the non-recognized union to
participate in discussions relating to general issues
concerning all workmen.
In our considered view there is no serious illegality
or infirmity in the judgment and order passed by the
High Court. Therefore, no interference in the matter is
called for. Accordingly, the appeals are dismissed, but in
the circumstances of the case without any order as to
costs.
..J.
(D.P. MOHAPATRA)
..J.
(K.G. BALAKRISHNAN)
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11
May 6,2002