Full Judgment Text
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CASE NO.:
Appeal (civil) 7170 of 2000
PETITIONER:
ANZ Grindlays Bank Ltd @ Standard Chartered Grindlays Bank Ltd
RESPONDENT:
Union of India and others
DATE OF JUDGMENT: 08/11/2005
BENCH:
H.K. Sema & G.P. Mathur
JUDGMENT:
J U D G M E N T
G.P. Mathur, J.
This appeal, by special leave, has been preferred against the
judgment and order dated 19.6.2000 of the Bombay High Court by
which the Letters Patent Appeal filed by ANZ Grindlays Bank
Limited (hereinafter referred to as the ’Bank’) was dismissed and the
order dated 29.2.2000, passed by the learned single Judge dismissing
the writ petition filed by the Bank, was affirmed. The present appeal
has been filed by ANZ Grindlays Bank Limited and the respondents
arrayed in the appeal are (1) Union of India, (2) All India Grindlays
Bank Employees Federation, and (3) All India Grindlays Bank
Employees Association. During the pendency of the appeal in this
Court the entire share capital of ANZ Grindlays Bank Limited has
been acquired by Standard Chartered Bank Limited and consequently
an application (I.A. No. 3 of 2000) has been moved to change the
name of the appellant from ANZ Grindlays Bank Limited to Standard
Chartered Grindlays Bank Limited, which has been allowed.
2. The Bank has branches all over the country and employs
approximately 1666 personnel commonly known as Award Staff in its
branches/offices in India. The All India Grindlays Bank Employees
Association (third respondent) is recognized by the Bank and it
represents majority workmen of the Bank all over the country. The
All India Grindlays Bank Employees Federation (second respondent)
represents the minority workmen of the Bank. The terms and
conditions of the employment of the workmen of the appellant Bank,
popularly known as Award Staff, are governed by Shastri Award as
modified by Desai Award and the bipartite settlements entered into
between the Indian Banks Association and the Unions and Federations
representing the workmen in the banking industry. Apart from these
industry wise bipartite settlements, the appellant-Bank also entered
into in-house bilateral settlement with second and third respondents
and these settlements are usually signed after every three years in
respect of certain allowances and benefits and other terms and
conditions of employment. The third respondent the All India
Grindlays Bank Employees Association (for short the ’Association’)
represents over 66% of the workmen of the appellant-Bank. The
Grindlays Bank Employees Union, Calcutta, an affiliate of the second
respondent All India Grindlays Bank Employees Federation (for short
the ’Federation’) represents nearly 13% of the workmen of the Bank
and the balance, who are not members of either of these unions are
represented by the second respondent the All India Grindlays Bank
Employees Federation.
3. The case of the appellant is that the Federation (second
respondent) is in the habit of backing out from signing the settlement
at the last minute after having agreed to the terms thereof. Since 1993
several settlements were entered into between the Bank, the
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Association (third respondent) and also Grindlays Bank Employees
Union, Calcutta. However, on account of the recalcitrant attitude of
the Federation (second respondent), in the settlement entered into
under Section 18(1) of the Industrial Disputes Act, 1947 (for short the
’Act’) a clause had to be incorporated for voluntary acceptance of the
terms and conditions of such settlements by non-members of the
Association (third respondent) with a view to extend the benefit of
such settlements to such of the non-members of the Association, who
are willing to accept the settlement.
4. A strike notice dated 14.3.1996 was issued to the management
of the Bank by the Federation (second respondent). Discussions were
held with all the parties and finally a settlement was arrived at
between the appellant-Bank and the Association (third respondent),
which was signed on 18.8.1996. The Federation (second respondent),
however, backed out and refused to sign the settlement. The
Federation then informed the Conciliation Officer (Central) on
19.8.1996 that it had not signed the settlement and that the signing of
the settlement by the Bank with the Association (third respondent)
amounted to unfair labour practice. On 6.12.1997 Grindlays Bank
Employees Union, Calcutta, a constituent of the Federation (second
respondent) representing 13% of the workmen of the Bank accepted
the terms of the settlement dated 18.8.1996 by signing a separate
settlement dated 6.12.1997. The settlement dated 18.8.1996 contained
the following clause: -
"DURATION
This settlement will come into force with effect from
August 18, 1996 and on various dates as specified under
different items contained in the settlement. The same
shall be binding on the parties until December 31, 1998.
After December 31, 1998 and except in the case of ex-
gratia system/payments all other terms and conditions
thereof shall continue to be binding on the parties until
the settlement is terminated by either party giving to the
other statutory notice as prescribed in law for the time
being in force.
It is agreed that since the settlement shall be binding
between the parties to this settlement under Section 18(1)
of the Industrial Disputes Act, 1947, it will also be
binding on the affiliated units of All India Grindlays
Bank Employees’ Association and hence on their
members and thus the members shall automatically be
entitled to the benefits of this settlement and subject to
the obligations under this settlement. However, any
other workmen who is not a member of any Union
affiliated to All India Grindlays Bank Employees’
Association shall also be bound by the terms and
conditions of this settlement and consequently entitled to
the benefits flowing out of this settlement if he/she
accepts this settlement by signing a receipt and the
format of the settlement enclosed with this settlement,
which will be made available to such employees.
The benefits arising out of this settlement will be given
effect to by September 10, 1996."
The settlement itself contained a format in which the receipt had to be
given and the same is as under: -
"To
The Manager
ANZ Grindlays Bank Limited.
Sir,
The terms and conditions of the settlement dated
August 18, 1996 between the Management of ANZ
Grindlays Bank and their workmen represented by All
India Grindlays Bank Employees’ Association in respect
of the various demands have been perused by me. I
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accept the settlement and the same will be binding on me.
I undertake to receive the benefits in terms of the
conditions set out in the settlement. I, therefore, request
you to release the benefits accruing to me under the
same.
This may be construed as my receipt towards
payment/receipt of grant under the subject settlement.
Sd/-
SIGNATURE"
As a result of signing of the settlement by the Association (third
respondent) and the Calcutta Union, almost 99% of the Award Staff
signed the settlement and only 29 persons remained, who did not sign
the settlement and were objecting to the same. However, according to
the Federation (second respondent) 60 persons have not signed the
settlement and are objecting to the same. Nearly three years thereafter
the Association (third respondent) submitted a fresh charter of
demands and after holding discussions and negotiations a fresh
settlement was signed on 10.3.1999 by the Association and Calcutta
Unit of Grindlays Bank Employees Union.
5. At the instance of All India Grindlays Bank Employees
Federation (second respondent) the Central Government, by order
dated 29.12.1997, made a reference under Section 10(1) of the Act for
adjudication by the Industrial Tribunal. After issuance of a
corrigendum on 17.12.1998, the reference reads as under: -
"Whether the terms of bipartite settlement dated
18.8.1996, between the management of ANZ Grindlays
Bank Limited, and All Indian Grindlays Bank Employees
Association which bound withholding of benefits of
settlement to workmen who are not members of All India
Grindlays Bank Employees Association until the
individual gives acceptance of the settlement in the given
format is legal and justified? If not, to what relief are the
workmen entitled to?"
Feeling aggrieved by the aforesaid reference made by the Central
Government the ANZ Grindlays Bank filed a writ petition under
Article 226 of the Constitution before the Bombay High Court for
quashing and setting aside the same. The writ petition was dismissed
by a learned single Judge and the appeal preferred against the said
decision before the Division Bench also failed. The present appeal
has been filed by the Bank challenging the aforesaid orders.
6. Mr. Gaurab Banerji, learned senior counsel for the appellant-
Bank, has submitted that the reference made by the Central
Government is wholly redundant and it does not show what is the
precise demand of the Federation (second respondent) and how the
decision of the reference by the Industrial Tribunal if answered in
favour of the second respondent, would give any benefit to the said
respondent. The language in which the reference has been couched
clearly shows that the Federation (second respondent) merely wants a
declaratory relief which by itself would be wholly ineffective and will
give no benefit to the Federation. The settlement arrived at between
the Bank and the Association (third respondent) was under Section
18(1) of the Act and consequently it did not bind those who are not
parties to the settlement like the Federation (second respondent) and
thus the rights, if any, of the Federation were not affected in any
manner by the settlement. Learned counsel has also submitted that the
Central Government had on two previous occasions refused to make a
reference and there being no change in circumstance there was no
occasion for reviewing the decision taken earlier and in making the
reference on 29.12.1997. It has been further contended by Mr.
Banerji that the settlement made on 18.8.1996 had already worked
itself out and benefits had been given to the employees in terms
thereof. The said settlement had been superseded by another
settlement on 10.3.1999. If the settlement arrived at on 18.8.1996 is
held to be illegal or unjustified, it will result in causing serious injury
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to the appellant Bank as it will be impossible to recover back the
benefits which had already been given to the employees in terms of
the settlement.
7. It may be mentioned at the very outset that the appellant-Bank
had entered into the settlement dated 18.8.1996 with the Association
(third respondent) and members of the Grindlays Bank Employees
Union, Calcutta, after holding discussions and negotiations. The
settlement had not been entered into either before a conciliation
officer or labour court or industrial tribunal. In view of Section 18(1)
of the Act the settlement was binding only upon the parties thereto.
Section 18 of the Act reads as under: -
"18. Persons on whom settlements and awards are
binding.-- (1) A settlement arrived at by agreement
between the employer and workman otherwise than in the
course of conciliation proceeding shall be binding on the
parties to the agreement.
(2) Subject to the provisions of sub-section (3), an
arbitration award which has become enforceable shall be
binding on the parties to the agreement who referred the
dispute to arbitration.
(3) A settlement arrived at in the course of conciliation
proceedings under this Act or an arbitration award in a
case where a notification has been issued under sub-section
(3-A) of Section 10-A or an award of a Labour Court,
Tribunal or National Tribunal which has become
enforceable shall be binding on--
(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the
proceedings as parties to the dispute, unless the
Board arbitrator, Labour Court, Tribunal or National
Tribunal, as the case may be, records the opinion
that they were so summoned without proper cause;
(c) where a party referred to in clause (a) or clause (b)
is an employer, his heirs, successors or assigns in
respect of the establishment to which the dispute
relates;
(d) where a party referred to in clause (a) or clause (b)
is composed of workmen, all persons who were
employed in the establishment or part of the
establishment, as the case may be, to which the
dispute relates on the date of the dispute and all
persons who subsequently become employed in that
establishment or part."
A plain reading of the provisions of Section 18 would show that
where a settlement is arrived at by agreement between the employer
and the workman otherwise than in the course of conciliation
proceeding shall be binding on the parties to the agreement in view of
the clear language used in sub-section (1) thereof. Sub-sections (2)
and (3) of Section 18 contemplate different situations where an
arbitration award has been given or a settlement has been arrived at in
the course of conciliation proceedings. In M/s. Tata Chemicals Ltd.
vs. The Workmen employed under M/s. Tata Chemicals Ltd. AIR
1978 SC 828, it was held as under: -
"Whereas a settlement arrived at by agreement
between the employer and the workman otherwise than
in the course of conciliation proceeding is binding only
on the parties to the agreement, a settlement arrived at in
the course of conciliation proceeding under the Act is
binding not only on the parties to the industrial dispute
but also on other persons specified in Cls. (b), (c) and (d)
of sub-sec. (3) of S. 18 of the Act."
8. The Federation (second respondent) not being party to the
settlement, it is obvious that the same is not binding upon it in view of
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sub-section (1) of Section 18 of the Act. Thus the settlement dated
18.8.1996 did not affect the rights of the Federation (second
respondent) in any manner whatsoever and it can possibly have no
grievance against the said settlement.
9. Mr. S.N. Bhat, learned counsel for the Federation (second
respondent), has submitted that under the settlement such employees
of the bank, who were not members of the Association (third
respondent), were required to give a receipt in writing in order to avail
of the benefits of the settlement and this was clearly illegal. We are
unable to accept the submission made. As already stated, the
settlement was arrived at between the Bank and the Association (third
respondent) and by virtue of sub-section (1) of Section 18 of the Act it
bound only the members of the Association (third respondent).
However, the Bank also extended the benefit of settlement to such
other employees, who were not members of the Association. In order
to avail of the benefit they had to give a receipt that they were
accepting the settlement and the same shall be binding upon them and
the format of the receipt, which has been reproduced earlier, does not
contain any such term, which may be of detriment to them. To protect
its interest the Bank was perfectly justified in asking for a receipt from
those employees, who were not members of the Association (third
respondent), but wanted to avail of the benefit of the settlement.
Therefore, we do not find anything wrong in the Bank asking for a
receipt from the aforesaid category of employees.
10. The principal issue, which requires consideration, is whether
the Central Government was justified in making a reference to the
Industrial Tribunal in terms set out earlier. Section 2(k) of the Act
defines "industrial dispute" and it means any dispute or difference
between employers and employers, or between employers and
workmen, or between workmen and workmen, which is connected with
the employment or non-employment or the terms of employment or
with the conditions of labour, of any person. The definition uses the
word "dispute". The dictionary meaning of the word "dispute" is: to
contend any argument; argue for or against something asserted or
maintained. In Black’s Law Dictionary the meaning of the word
"dispute" is: a conflict or controversy, specially one that has given rise
to a particular law suit. In Advance Law Lexicon by P. Ramanatha Iyer
the meaning given is: claim asserted by one party and denied by the
other, be the claim false or true; the term dispute in its wider sense may
mean the ranglings or quarrels between the parties, one party asserting
and the other denying the liability. In Gujarat State Cooperative Land
Development Bank Ltd. Vs. P.R. Mankad and others (1979) 3 SCC 123,
it was held that the term dispute means a controversy having both
positive and negative aspects. It postulates the assertion of a claim by
one party and its denial by the other.
11. A plain reading of the reference made by the Central
Government would show that it does not refer to any dispute or
apprehended dispute between the Bank and the Federation (second
respondent). It does not refer to any demand or claim made by the
Federation or alleged refusal thereof by the Bank. In such
circumstances, it is not possible to hold that on account of the
settlement dated 18.8.1996 arrived at between the Bank and the
Association (third respondent), any dispute or apprehended dispute
has come into existence between the Bank and the Federation (second
respondent). The action of the Bank in asking for a receipt from those
employees, who are not members of the Association (third
respondent) but wanted to avail of the benefit of the settlement, again
does not give rise to any kind of dispute between the Bank and the
Federation (second respondent). Thus, the reference made by the
Central Government by the order dated 29.12.1997 for adjudication
by the Industrial Tribunal is wholly redundant and uncalled for.
12. There is another aspect of the matter, which deserves
consideration. The settlement dated 18.8.1996 had already worked
itself out and a fresh settlement had been arrived at between the Bank
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and the Association (third respondent) on 16.11.1999. The members
of the Association (third respondent) and other employees, who
availed of the benefit of the settlement, have received payments in
terms thereof. Some of the employees have already retired from
service. Even if the settlement is set aside the Federation (second
respondent) would not gain in any manner as no enforceable award
can be given in its favour, which may be capable of execution. On the
contrary the appellant-Bank would be a big loser as it will not only be
very difficult but almost impossible for the Bank to recover the
monetary benefits already paid to its employees under the settlement.
We are, therefore, of the opinion that the reference made by the
Central Government is wholly uncalled for and deserves to be set
aside.
13. Mr. Bhat, learned counsel for the second respondent, has
submitted that this Court should not interfere with the order of the
Central Government making a reference under Section 10 of the Act,
as the appellant can ventilate its grievances before the Industrial
Tribunal itself and if the decision of the tribunal goes against the
appellant, the same may be challenged in accordance with law.
According to learned counsel the writ petition is pre-mature as the
appellant has got a remedy before the Tribunal to show that the
reference is either bad in law or is uncalled for. We are unable to
accept the submission made. It is true that normally a writ petition
under Article 226 of the Constitution should not be entertained against
an order of the appropriate Government making a reference under
Section 10 of the Act, as the parties would get opportunity to lead
evidence before the Labour Court or Industrial Tribunal and to show
that the claim made is either unfounded or there was no occasion for
making a reference. However, this is not a case where the infirmity in
the reference can be shown only after evidence has been adduced. In
the present case the futility of the reference made by the Central
Government can be demonstrated from a bare reading of the terms of
the reference and the admitted facts. In such circumstances, the
validity of the reference made by the Central Government can be
examined in proceedings under Article 226 of the Constitution as no
evidence is required to be considered for examining the issue raised.
14. In National Engineering Industries Ltd. vs. State of Rajasthan
and others (2000) 1 SCC 371, this Court held as under in para 24 of
the report:
"It will be thus seen that High Court has jurisdiction to
entertain a writ petition when there is allegation that there
is no industrial dispute and none apprehended which
could be subject matter of reference for adjudication to
the Industrial Tribunal under Section 10 of the Act. Here
it is a question of jurisdiction of the Industrial Tribunal,
which could be examined by the High Court in its writ
jurisdiction. It is the existence of the industrial dispute
which would clothe the appropriate Government with
power to make the reference and the Industrial Tribunal
to adjudicate it."
15. In view of the discussions made above it is manifestly clear that
there is no industrial dispute in existence nor there is any apprehended
dispute between the appellant-Bank and the Federation (second
respondent) and as such there is absolutely no occasion for making
any reference for adjudication by the Industrial Tribunal. The
reference being wholly futile, the same deserves to be quashed.
16. The appeal is accordingly allowed with costs. The judgments
and orders of the learned single Judge dated 29.2.2000 and that of the
Division Bench of the High Court dated 19.6.2000 are set aside and
the reference made by the Central Government to the Industrial
Tribunal on 29.12.1997 is quashed.
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