Full Judgment Text
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PETITIONER:
JHAGRAKHAN COLLIERIES (P) LTD.
Vs.
RESPONDENT:
SHRI G. C. AGARWAL, PRESIDING OFFICER, CENTRAL GOVERNMENT
DATE OF JUDGMENT28/11/1974
BENCH:
SARKARIA, RANJIT SINGH
BENCH:
SARKARIA, RANJIT SINGH
ALAGIRISWAMI, A.
CITATION:
1975 AIR 171 1975 SCR (2) 873
1975 SCC (3) 613
CITATOR INFO :
R 1978 SC 828 (14,18)
D 1981 SC2163 (7)
ACT:
Industrial Disputes Act Sections 2(P) and 18-Conciliation
agreement arrived at in proceedings otherwise than as
required under the Act-Acceptance of the settlement by
conduct by workmen not parties to settlement-Effect.
Industrial Disputes Act, Sections 10(1) and 33-C (2)-
Settlement during pendency of proceedings under sec. 33-C
(2)-Settlement, if terminates the proceedings.
HEADNOTE:
The three collieries owned by the appellant company employ
over 4,200 workmen. At the relevant time, there were three
Trade Unions functioning at the collieries namely, Madhya
Pradesh Koyla Mazdoor Panchayat, Azad Koyla Shramik Sabha
and Madhya Pradesh Colliery Workers’ Federation.
At the material time, the Panchayat, according to the
allegations of the Company, had about 75 per cent of the
workers on its rolls. This Union conducted a complete
strike for 57 days in the months of March and April 1968 at
the collieries. The Central Wage Board for Mining Industry
by its award recommended payment of Variable Dearness
Allowance (V.D.A.), correlated to the cost of living index
prevailing from time to time. The Company accepted those
recommendations. The workers represented by the various
Unions, on the basis of the Wage Board’s award, demanded
V.D.A. at the rate of Rs. 1.47 per day with effect from
April 1, 1968 while the Company was paying it at the rate of
Re. 1. 1 1 per day. The Company refused to pay more than
Re. 1. 11 per day. Thereupon, in December 1968. the
Federation. which had a membership of 169 workers
(Respondents 4 to 173) made an application before the
Central Labour Court-cum-Industrial Tribunal Jabalpur (the
Labour Court) under s. 33-C(2) of the Industrial Disputes
Act for determination of the amount of V.D.A. due to the
workers. The Company submitted its Written Statement on May
13, 1969, challenging the jurisdiction of the court and
raised other legal objections.
In consequence of the notice of strike under Sec. 22(1) of
the Act by the Panchayat, the conciliation proceedings to be
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under s. 22 read with sec. 12(1) of the Act were held by Mr.
B. D. Sharma. Assistant Labour Commissioner. In the course
of these conciliation proceedings besides other matters, the
dispute relating to V.D.A. was settled. Subsequent to the
signing of the conciliation agreement, the company filed a
supplementary statement before the Labour Court that, in
view of the settlement, the application filed by the
Federation had become infructuous. The stand taken by the
workers Was that the settlement was not in accordance. with
the provisions of the Act. The Labour Court tried this
issue as a preliminary issue. It held that Shri Sharma was
not a duly appointed ,conciliation officer on the ’date on
which the settlement was arrived at and consequently, it did
not put an end to the dispute pending before the Labour
Court. The Writ Petition filed by the Company in the High
Court impugning the order of the Labour Court was dismissed.
Hence this appeal by special leave.
It was contended for the appellant-(i) Assuming that the
settlement in question was not a settlement in the course of
conciliation proceedings and binding under s. 18(3) of the
Act, it was still a settlement binding on the workmen,
including respondents 4 to 173 herein, when 99 per cent of
the total workmen had accepted the terms of the settlement,
including V.D.A; (ii) The Labour Court’s order refusing
permission to the appellant Company to lead evidence to
prove the implementation and acceptance of the aforesaid
settlement by 99 per cent of the workers, was violative of
the principles of natural justice, and (iii) There is
nothing in the Act which prohibits the employers and the
workmen
874
from entering into a settlement during the pendency of
proceedings under S. 33 C(2) the Act. On the other
hand, settlements inter se between the parties have always
been preferred by this Court to the adjudicatory process.
HELD (i) A perusal of sec. 18 of the Act makes it clear that
a settlement at-rived at in the course of conciliation
proceedings is binding not only On the actual parties to the
industrial dispute but also on the heirs, successors or
assigns ,of the employer on the one hand, and all the
workmen in the establishment, present or future. on the
other. Thus had Mr. B. D. Sharma been a duly appointed
Conciliation Officer, the settlement arrived at in the
conciliation proceedings, duly conducted by him under sec.
12, would have been binding on the entire body of the
workers. Since the finding of the High Court to the effect,
that the settlement between the Panchayat and the management
cannot be deemed a, settlement arrived at in the course of
conciliation proceedings under the Act, now stands
unassailed, sub-sec. (3) of sec. 18 cannot be invoked to
make it binding on Respondents 4 to 173 represented by the
Federation. An implied agreement by acquiescence or conduct
such as acceptance of a benefit under an agreement to which the
worker acquiescing or accepting the benefit was not a party
being out-side the purview of the Act is not binding on such
a worker either under sub-sec. (1) or under sub sec. (3)
of sec. 18 of the Act. It follows, therefore, that, even if
99% of the workers have impliedly accepted the agreement by
drawing V.D.A. under it, it will not-whatever its effect
under the general law-put an end to the dispute before the
Labour Court and make it functus officio under the Act,
[878C-E; 879A-B]
(ii) The refusal of the Labour Court to allow the appellant
to lead evidence at this stage, has not caused any prejudice
to the appellant. The issue decided as a preliminary issue
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involved a question of law which could be decided on the
basis of material on record. Furthermore, the decision of
the Labour Court neither debars the appellant from bringing
on record evidence relevant to the issues which still remain
to be decided, nor does it rule out the agreement for all
purposes. [879C-E] ’
(iii) In East India Coal Company Ltd., Benares Colliery,
Dhanbad v. Rameshwar and ors. [1968] 1 L.L.J. 6, this Court
held that although the scope of s. 33C(2) is wider than that
of sec. 33 C(1), cases which would appropriately be
adjudicated under sec. 10(1) are outside the purview of sec.
33C(2). The provisions of S. 33-C are broadly speaking in
the nature of executing provisions. The jurisdiction of the
Labour Court, in the present case, is not only circumscribed
by sec.33-C(2) but the matter also is yet at the initial
stage. The controversy between the parties still remains to
be determined on merits. [880F & G]
Amalgamated Coffee Estates Ltd. and Ors. v. Their workmen
and Ors. [1965] 11 LLJ 110 discussed and The Sirsilk Ltd.
and Ors. v. Govt. of Andhra Pradesh and Anr, [1964] S.C.R.
448, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1968 of 1972.
Appeal by Special Leave from the Judgment and Order dated
the 4th August 1971 of the Madhya Pradesh High Court in
Misc. Petition No. 41 of 1970-
O. P. Malhotra, O. C. Mathur, and R. N. Mishra, for the
Appellant.
M. K. Ramamurthi and J. Ramamurthi for Respondents Nos 14.
25. 31. 46. 47, 59, 61, 68, 70, 72, 76, 79, 80, 83, 84. 89.
90. 93. 95, 96, 102, 126 and 129.
The Judgment of the Court was delivered by
SARKARIA, J.This appeal by special leave is directed against
the judgment, dated August 4, 1971, of the Madhya Pradesh
High Court
875
whereby the apPellant’s Writ Petition under Articles 226 and
227 of the Constitution was dismissed.
The appellant is the Jhagrakhan Collieries (P) Ltd., a
Company incorporated under the Indian Companies Act. The
Company owns three collieries in Jhagrakhan in Surguja
District of Madhya Pradesh. These collieries employ over
4,200 workmen. At the relevant time there were three Trade
Unions functioning at the collieries, namely, (1) Madhya
Pradesh Koyla Mazdoor Panchayat (for short, the ’Panchayat’
); (2) Azad Koyla Shramik Sabha (for short, the ’Sabha’),
(3) Madhya Pradesh Colliery Workers’ Federation (for short.
the Federation)
At the material time, the Panchayat, according to the
allegations of the Company, had about 75 per cent of the
workers on its rolls. This Union conducted a complete
strike for 57 days in the months of March and April 1968 at
the collieries. The Central Wage Board for Coal Mining
Industry by its award recommended payment of Variable
Dearness Allowance (for short, V.D.A.), correlated to the
cost of living index prevailing from time to time. The
Company accepted these recommendations. The workers
represented by *,he various Unions, on the basis of the Wage
Board’s award demanded V.D.A. at the rate of Rs. 1.47 per
day with effect from April 1, 1968 while the Company was
paying it at the rate of Rs. 1. 11 per day. The Company
refused to pay more than Rs. 1.11 per day. Thereupon, in
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December 1968. the Federation, which had a membership of 169
workers (Respondents 4 to 173 herein) made an application
before the Central Labour Court-cum-Industrial Tribunal
Jabalpur (for short, the Labour Court) under Section 33-C(2)
of the Industrial Dispute-,; Act (for short the ’Act’) for
determination of the amount of V.D.A. due to the workers-
The Company submitted its written statement on May 13. 1969,
challenging the jurisdiction of the court and raised other
legal objections.
On October 4, 1969, the Panchayat served a notice of strike
under Section 22(1) of the Act on the Company together with
a charter of 29 demands and threatened to strike on or after
November 7, 1969 if their demands were not conceded.
Thereupon. the counciliation Proceedings purporting to be
under s. 22 read with s. 12(1) of the Act were held by Mr.
B. D. Sharma, Assistant Labour Commissioner (C) Shahdol on
the 21st and 22nd October. 1969. In the course of these
conciliation proceedings on October 22, 1969, besides other
matters. the dispute relating to V.D.A. was settled. On
October 22, 1969, the Assistant Labour Commissioner (Mr.
Sharma) sent a report together with a copy of the settlement
to the Government, as required by Section 12(3) of the Act.
Subsequent to the signing of this conciliation agreement,
dated October 22, 1969. the Company filed a supplementary
statement on November 5, 1969, submitting that in view of
the said settlement, the application under s. 33C(2) of the
Act filed by the Federation, had become infructuous. The
Labour
876
Court by its order, dated December 20, 1969 framed this
additional issue : "Whether the claim stands settled by
’reason of settlement dated 22-10-1969, if any".
On behalf of the workers several objections were raised to
the enforceability of. this settlement, Their ultimate stand
was that the settlement was not in accordance with the
provisions of the Act, inasmuch as it had not been brought
about in proceedings before a duly appointed Conciliation
Officer. The Labour Court tried this issue as a preliminary
issue. It held that Shri Sharma was not a duly appointed
Conciliation Officer on the date on which the settlement was
arrived at, and consequently, it did not put an end to the
dispute pending before the Labour Court.
To impugn this order of the Labour Court, the Company
through its agent and Mining Engineer filed a Writ Petition
under Article 226 and 227 of the Constitution, which as
stated before, was dismissed by the High Court. Hence this
appeal.
Mr. Malhotra, learned Counsel for the appellant raised three
points in the course of his arguments before us :
(1) In holding that the settlement, dated
October 22, 1969 was not a settlement in the
course of conciliation proceedings, the courts
below have misconstrued Section 4 of the Act ,
inasmuch as, they have relied only upon sub-
section (1) and have not taken into account
its sub-section (2) and the relevant
notification thereunder.
(2) (a) Assuming that the settlement in
question was not a settlement in the course of
conciliation proceedings and binding under s.
18(3) on the Act, it was still a settlement
binding on the workman, including respondents
4 to 173 herein, when 99 per cent of the total
workmen had accepted the terms of the
settlement, including V.D.A.
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(b) The Labour Court’s order refusing
permission to the appellant Company to lead
evidence to prove the implementation and
acceptance of the, aforesaid settlement by 99
per cent of the workers, was. violative of the
principles of natural justice.
(3) There is nothing in the Act which
prohibits the employee and the workmen from
entering into a settlement during the pendency
of proceedings under s. 33-C(2) of the Act.
On the other band, settlements inter se
between the parties have always been preferred
by this Court to the adjudicatory process.
Subsequently, however, Mr. Malhotra withdrew his contention
with regard to point No. (1) and requested the Court not to
give any finding thereon. We, therefore, refrain from going
into the same.
877
For points (2) and (3), Mr. Malhotra placed reliance on two
decisions of this Court, namely : Amalgamated Coffee Estates
Ltd. and ors. v. Their workmen and others(1) and The Sirsilk
Ltd. and ors. v. Government of Andhra Pradesh and anr.(2)
Before dealing with the points canvassed, it will be
appropriate to examine the relevant provisions of the Act.
Section 2(p) of the Act defines settlement to mean-
" a settlement arrived at in the course of
conciliation proceedings and includes a
written agreement between the employer and
workmen arrived at otherwise than in the
course of conciliation proceeding ’where such
agreement has been signed by the parties
thereto in such manner as may be prescribed
and a copy thereof has been sent to (an
officer authorised in this behalf by) the
appropriate Government and the conciliation
officer."
As analysis of. the above definition would show that it
contemplates only two kinds of settlement (i) A settlement
arrived at in the course of conciliation,proceedings under
the Act and (ii) a written agreement between the employer
and the workmen arrived at otherwise than in the course of
conciliation proceedings. But a written agreement of the
latter kind in order to fall within the definition must
satisfy two more conditions, namely : (a) it must have been
signed by the parties thereto in the prescribed manner, and
(b) a copy thereof must have been sent to the authorities
indicated in s. 2(p).
The effect of a settlement of the first kind is indicated in
subsection (3) and that of the second in sub-s. (1) of s. 18
of the Act. The material part of s. 18 reads
"18)1) A settlement arrived at by agreement
between the employer and workmen otherwise
than in the course of conciliation proceedings
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 (3A) of Section (10A) or (an award of
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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
(1) [1965] 11 LLJ 110.
(2) [1964]S.C.R. 448.
878
Tribunal), as the case may be, records the
opinion that they were 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."
It is clear from a perusal of Section 18, that a settlement
arrived at in the course of conciliation proceedings is
binding not only on the actual parties to the industrial
dispute but also on the heirs, successors or assigns of the
employer on the one hand, and all the workmen in the
establishment, present or future, on the other. In
extending the operation of such a settlement beyond the
parties thereto, sub-section (3) of the Section departs from
the ordinary law of contract and gives effect to the
principle of collective bargaining. Thus, had Mr. B. D.
Sharma been a duly appointed Conciliation Officer, the
settlement arrived at in the conciliation proceedings, duly
conducted by him under Section 12, would have been binding
on the entire body of the workers including Respondents 4 to
173 represented by the Federation. and others who ’are
members of the Sabha. Since the finding of the High Court
to the effect that the settlement between the Panchayat and
the management cannot be deemed to be settlement arrived at
in the course of conciliation proceedings under the Act, now
stands unassailed. the aforesaid sub-section (3) cannot be
invoked to make it binding on Respondents 4 to 173. The
question remains : Can it be enforced against these
Respondents by virtue of sub-section (1) of the Section ?
This further narrows down into the issue : Were these
respondents parties and signatories to the agreement between
the management and the Panchayat ? The answer to this
question is undoubtedly in the negative.
Even Mr. Malhotra has conceded that at the time when the
settlement was arrived at on October 22, 1969, these
respondents and the members of the Sabha. were not Parties
to it. But his argument is that subsequently by drawing
V.D.A. in accordance with the settlement, 99% of the
workers have accepted the settlement which, in consequence,
would be as effective against them as if they were parties
to it.
The argument is attractive but does not stand a close
examination.
We have already noticed that according to the scheme of s.
18, read with s. 2(d), an agreement, made otherwise than in
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the course of conciliation proceedings, to be a settlement
within the meaning of
879
the Act must be a written agreement signed in the manner
prescribed by the Rules framed under the Act. As rightly
pointed out by Mr. Ramamurthy, learned Counsel for the
Respondents an implied agreement by acquiescence, or conduct
such as acceptance of a benefit under an agreement in which
the worker acquiescing or accepting the benefit was not a
party being outside the purview of the Act, is not binding
on such a worker either under sub-section (1) or under sub-
section (3) of s. 18. It follows, therefore, that even if
99% of the workers have impliedly accepted the agreement
arrived at on October 22, 1969, by drawing V.D.A., under it,
it will not-whatever its effect under the general law-put an
end to the dispute before the Labour Court and make it
functus officio under the Act.
The refusal of the Labour Court to allow the appellant to
lead evidence at this stage, has not caused any prejudice to
the appellant. The issue decided as a preliminary issue
involved a question of law which could be decided on the,
basis of material on record. For its it was not necessary
to prove that 99% of the workers had accepted the agreement
dated October 22, 1969. Even on an assumption of that fact
in favour of the Company, the claim before the Labour Court
could not be deemed to have been settled qua respondents 4
to 173.
Furthermore. the decision of the Labour Court neither debars
the appellant from bringing on record evidence relevant to
the issues; which still remain to be decided, nor does it
rule out the agreement dated October 22, 1969, for all
purposes. Indeed, the Labour Court has in its order,
towards the end, expressly said that the settlement, dated
October 22,_ 1969, can be binding under s. 18 (1) of the Act
between the contracting parties.
In view of the above, we would negative contention (2)
canvassed by Mr. Malhotra.
This takes us to the third contention. Assuming that the
Act does not inhibit the employers and the workmen from
arriving at a settlement during the pendency of proceedings
under s. 33-C(2) of the Act, such a settlement, not being
one arrived at in the course of conciliation proceedings
would be enforceable only against the parties thereto. In
the present case, Respondents 4 to 173 and others who were
not parties to the settlement dated October 22, 1969, would
not be bound by it.
In the case of Amalgamated Coffee Estates Ltd. v. Their
workmen (supra) cited by Mr. Malhotra, pending the appeals
by the management before this Court, the subject-matter of
the award were settled between most of the managements and
most of their employees represented by ’certain Unions. An
application was made requesting the Court to dispose of the
appeals in terms of such settlement. It was opposed on
behalf of some of the employees. This Court called for a
finding from the Industrial Tribunal on this issue
880
"In view of the fact that admittedly a large
number of workmen employed by the appellants
have accepted payments consistently with the
terms of the agreements set up by the
employers. in their present petition, is it
shown by the respondents that the said
agreement is not valid and binding on them ?"
The Tribunal submitted the finding that in every estate
payments were made in terms of the settlement and such
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payments were voluntary and knowingly accepted by the
workmen. It also held that the terms of the settlement were
fair. This Court accepted the finding of the Tribunal
holding that "the settlement appears to us also to be a fair
one". It therefore, decided the appeals in terms of the
settlement.
It will be seen that the decision in Amalgamated Coffee
Estates case (supra) stands on its own facts. There the
appeals arose, out of an award of the Special Industrial
Tribunal for plantations in a dispute between 228 coffee,
tea and rubber estates in South India and their employees
referred to it under S. 10(1) whereas the instant appeal
arises out of proceedings under S. 33-C(2) for the recovery
of money on the basis of the Wage Board’s award and the
dispute, if any, is about the computation of V.D.A. in
implementation of that award. The scope of S. 33-C(2) is
not the same as that of s. 10(1) of the Act. In East India
Coal Company Ltd. Banares Colliery, Dhanbad v. Raweshwar
and Ors.(1) this Court held that although the scope of s.
33-C(2) is wider than that of a 33-C(1), cases which would
appropriately be adjudicated under S. 10(1) are outside the
purview of S. 33 C(2). The provisions of S. 33-C are,
broadly speaking, in the nature of executing provisions.
An appeal being a rehearing of the case, in Amalgamated
Coffee Estates’ case, the jurisdiction of the Court to
decide the dispute in a just manner was co-extensive with
that of the Tribunal to which it was referred under s.
10(1). This Court found in agreement with the report of the
Tribunal that the settlement arrived at between the most of
the Unions representing most of the workers and the manage-
ments was fair and conducive to industrial peace, and
therefore, it was just and appropriate to decide the dispute
and dispose of the appeals in terms of the settlement.
In the case before us, the jurisdiction of the Labour Court
is not only circumscribed by s 33-C(2) but the matter also
is yet at the initial stage. The controversy between the
parties still remains to be determined on merits. We.
therefore, do not think it necessary to say anything more
with regard to contention No. 3 than what we have broadly
indicated above.
For the foregoing reasons, the appeal fails and is dismissed
with costs.
Appeal Dismissed.
V.M.K.
1. [1968] 1 L.L. J. 6.
881