Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 19
PETITIONER:
STATE OF KARNATAKA
Vs.
RESPONDENT:
THE MANAGEMENT OF KSRTC & ANR.
DATE OF JUDGMENT: 18/02/1999
BENCH:
S.B.Majmudar, U.C.Banerjee
JUDGMENT:
JUDGEMENT
S.B.Majumdar.J.
Leave granted in these special leave petitions being
S.L.P.(c) Nos. 19982-19983 of 1997 and S.L.P.(C) Nos.
22370-22371 of 1997. By consent of learned counsel of the
contesting parties, the appeals were heard finally and are
being disposed of by this common judgment. The Management
of Karnataka State Road Transport Corporation has filed the
first two appeals arising out of Special Leave Petition Nos.
19982 and 19983 of 1997 being aggrieved by the common
judgment & order rendered by the Division Bench of the High
Court of Karnataka in Writ Appeal Nos. 8635 and 8491 of
1996, while the other two appeals arising out of Special
Leave petition Nos. 22370 and 22371 of 1997 are filed by
the State of karnataka, also aggrieved by the aforesaid
common judgment & order in the very same two writ appeals.
The appellants have the common cause of complaint against
the impugned judgment of the Division Bench, while the
respondent KSRTC Staff and Workers Federation, which is the
common respondent in all these appeals, is the only
contesting respondent, being the original writ petitioner
whose writ petition was allowed by the learned Single Judge
of the High Court and which judgment came to be confirmed by
the impugned judgment of the Division Bench. We shall refer
to the appellant - Management of Karnataka State Road
Transport Corporation, the original Respondent No. 1 in the
writ petition, as the Corporation, the appellant State of
Karnataka in other two appeals, being original Respondent
No. 2 in the writ petition as the ’State’, while the
contesting Union, Respondent No.1 in these appeals in writ
petition as the ’Union’ for the sake of convenience in the
latter part of this judgment. The question involved in
these appeals in as to whether the order passed by the State
on 10th Sept., 1993 and the consequential order passed by
the Corporation on 21st September, 1993 were legal and
valid. Both these orders came to be set aside by the
learned Single Judge in the writ petition filed by the Union
and as noted above, the said order of the learned Single
Judge came to be confirmed by the Division Bench in the
impugned common judgment. The order dated 10th Sept. 1993
of the State instructing the Corporation to withdraw the Pay
Roll Check-off Facility given to the Union and the
consequential order dated 21st Sept., 1993 issued by the
Corporation withdrawing this facility came to be challenged
on various grounds in the writ petition which as noted
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 19
above, succeeded in the hierarchy of proceedings before the
Karnataka High Court. The short question therefore which
falls for our consideration is whether the impugned orders
of the State and the consequential order issued by the
Corporation could be sustained in law?
In order to appreciate the rival contentions
centering round the aforesaid controversy between the
parties, it is necessary to note a few relevant facts
leading to these proceedings.
INTRODUCTORY FACTS :
The Corporation is formed under Section 3 of the
Road Transport Corporation Act, 1950 (for short the
’Corporation Act’), for providing efficient, economical and
properly co-ordinated transport services to the travelling
public and the KSRTC has framed Service Regulations by
deriving powers under Section 45(2) (c) of the Corporation
Act. At the relevant time the Union was the sole bargaining
agent for the employees of the Corporation. On 11th
December, 1987 a referendum was held to choose the
collective bargaining agent on behalf of the employees of
the Corporation. The Union was elected as the recognised
agent with 53% of the votes polled by way of official
memorandum dated 24th December, 1987. The Corporation thus
granted recognition to the Union as sole bargaining agent a
Memorandum of Settlement under Section 18(1) read with
Section 2(p) of the Industrial Disputes Act 1947
(hereinafter referred to as the ID Act) was entered into by
the Corporation and the Union on 28th July, 1988. Under
this settlement it was agreed between the parties that the
Corporation shall deduct the subscription the members of the
Unions affiliated to the respondent Federation from their
wages on obtaining individual authorisations. The said
settlement was agreed to be followed till the recognition
accorded to the Federation lasted or until both the parties
terminated the terms by mutual consent earlier. This system
was popularly known as Pay Roll Check off Facility. A
Memoradum of Settlement regarding the wages payable to the
employees was also entered into on 1st January, 1988 between
the Corporation and the Union. the settlement was for a
period of four years commencing from 1st January, 1988 till
31st December, 1991. As the recognition given to the
Federation had come to an end, election had to be conducted
again to choose the sole bargaining agent by way of
referendum. The Union emerged successful as the sole
bargaining agent and was chosen as such. The Corporation by
its order dated 16th July, 1992 accorded recognition to the
Union as the sole bargaining agent as per the Memorandum.
It is not in dispute between the parties that as four years
period expired with effect from 16th July, 1996 a fresh
referendum had to be held for finding out as to whether the
Union still commanded majority membership of workmen so as
to be re-designated as a recognised Union. But the said
referendum has still not been held because of writ petitions
pending in the present proceedings.
During the time, admittedly, the Union was
functioning as a recognised Union it submitted a charter of
demands on various disputed items concerning service
conditions of the employees. Consequently, negotiations
were held between the Corporation and the Union and on 10th
May, 1993 a Memorandum of Understanding was reached. The
same was subject to approval by the Board of Directors and
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 19
the State Government. the Board of Directors of the
Corporation accepted the Memorandum and thereafter it was
submitted to the Govt. for its approval. The State by its
order dated 10th Sept. 1993, accorded approval to the
Memorandum of Understanding suggesting certain alterations
to the service conditions subject to other terms and
conditions. One of such conditions was that the Management
of the Corporation would not take up the responsibility of
collecting donations or monthly subscriptions from the
employees on behalf of the recognised Federation or Union of
employees. It was pursuant to the aforesaid Government
Order that the Corporation issued a Notification dated 21st
Sept. 1993 withdrawing the Pay Roll Check off Facility. As
noted earlier, the aforesaid G.O. issued by the State and
the consequent Notification issued by the Corporation were
brought in challenge in the writ petition by the Union. The
said writ petition was filed on 21st Sept. 1993. The
learned Single Judge, who heard the writ petition having
considered the rival contentions of the parties took the
view that there was no occasion for the Government to issue
such a direction under Section 34 of the Corporation Act on
10th Sept. 1993. Hence, the consequential Notification
issued by the Corporation could not survive. It was also
held that the said Notification of the Corporation was
violative of the provisions of Section 19(2) of the ID Act.
By his order dated 25th July 1996 the learned Single Judge
held that the settlement dated 28th July, 1988 occupied the
field as authoritative settlement under Section 18(1) of the
ID Act and was binding on the parties. It was also held
that the exercise of power by the State under Section 34 was
not proper. Consequently, the order of the State dated 10th
Sept. 1993 and the subsequent Notification by the
Corporation withdrawing Pay Roll Check off Facility on 21st
Sept. 1993 were held to be invalid. The writ petition was
accordingly allowed. As noted earlier, the aforesaid order
of the learned Single Judge was made the subject matter of
two separate appeals, one by the State and another by the
Corporation and both these appeals were dismissed by the
Division Bench by the impugned judgment and order and that
is how the Corporation and the State are before us in these
appeals on grant of Special Leave to appeal under Article
136 of the Constitution of India.
RIVAL CONTENTIONS:
Shri G.L.Sanghi, learned senior counsel appearing
for the Corporation, vehemently contended that the
settlement of 28th July, 1988 could not survive after 16th
July, 1996 when the Union ceased to be a recognised Union of
employees and till a new bargaining agent emerged by way of
recognition, the respondent Union could not rely upon the
terms of the earlier settlement of 28th July, 1988. It was
next contended that in any case the said settlement had
ceased to operate and was validly terminated by the
Corporation by the impugned Notification dated 21st Sept.,
1993 as the State had already directed the Corporation to
withdraw the Pay Roll Check of Facility given to the Union
by the earlier agreement dated 28th July 1988. It was
alternatively contended that in any case the said earlier
settlement dated 28th July, 1988 ceased to operate also on
the ground that subsequent to the said Notification a second
settlement was arrived at between the parties on the subject
matter on 8th Sept. 1994 and later on 5th Dec. 1994 and even
thereafter in the light of the latter settlements between
the parties on 16th Feb. 1995, 10th Oct., 1995 and 27th Dec.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 19
1995. Because of these settlements the parties agreed to get
clearance and approval from the State on the question of
continuance of Pay Roll Check-off Facility to be given to
the members of the Union and as such approval was not
forthcoming, the earlier right flowing from the Settlement
of 28th July, 1988 to the Union did not survive any further.
The State did not approve the continuance of the said Pay
Roll Check off Facility to the respondent Union.
Consequently, there remained no binding settlement between
the parties on the subject. Hence the writ petition was
required to be dismissed and was wrongly allowed by the
learned Single Judge and the said decision was erroneously
confirmed by the Division Bench of the High Court. It was
also contended by Shri Sanghi that after 1996 the
Corporation itself got trifurcated into three independent
statutory Corporations and hence also the earlier settlement
of 1988 did not survive any further.
Shri S.Vijay Shankar, learned Advocate General
appearing for the State of Karnataka, in support of the
appeals of the State, contended that the learned Single
Judge had patently erred in law in taking the view that
under Section 34 of the Corporation Act, the State could not
issue the impugned order dated 10th Sept. 1993 and that it
was not the general order contemplated by the side section.
He further submitted, placing reliance on various provisions
of the Corporation Act, that the State Govt. is the
monitoring authority so far as the functioning of the
Corporation is concerned and it could not be said that the
State had no role to play in regulating the working of the
Corporation or in issuing appropriate instructions to the
Corporation on relevant points to be placed for
consideration of the Corporation. He therefore, contended
that the Govt. Order dated 10th Sept., 1993 could not have
been found fault with by the High Court.
Shri M.C.Narsimhan, learned counsel for the Union on the
other hand, submitted that once there is a binding
settlement regarding the Pay Roll Check off Facility holding
the field between the parties from 28th July 1988 till the
said settlement was legally terminated as required by
Section 19(2) of the ID Act it remains binding on the
Corporation. That whether the Corporation subsequently got
trifurcated or not becomes irrelevant as even to the
successors of the Corporation the settlement would be
binding. It was next submitted that the Notification of the
Corporation dated 21st Sept. 1993 cannot be treated to be a
notice as contemplated by Section 19(2) of the ID Act. Even
assuming that it was such a notice, the binding effect of
the settlement of 1988 would not come to an end
automatically till a fresh settlement on the topic is
substituted by negotiations between the parties, as was
clearly laid down in the decision of three Judge Bench of
this Court in The Life Insurance Corporation of India Vs.
D.J.Bahadur & Ors. 1981(1) SCR 1083. It was then submitted
that the Memorandum of Understanding dated 10th May, 1993
was in connection with entirely different demands put
forward by the Union for consideration of the Corporation.
That it had nothing to do with the Pay Roll Check off
Facility which was already governed by a binding Settlement
of 28th July, 1988. Consequently, there was no occasion for
the State to pass the impugned order dated 10th Sept. 1993
in connection with withdrawal of the said facility by the
Corporation. It was also contended that in any case the
said order could not be covered by Section 34 of the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 19
Corporation Act. That the State had no power to direct the
Corporation to commit breach of statutory provisions of Sec.
19(2) of the ID Act. Nor could it issue any general
directions under Sec. 34 in connection with those
industrial matters which were already covered by binding
settlements or awards under the ID Act. That such general
directions, if any, could be issued by the State for
consideration of the Corporation only on industrial matters
which were not covered by any such binding agreements or
awards under the ID Act and when the field was open for
negotiations between the employees’ Union and the
Corporation wherein the parties could take independent
decisions in the first instance without violating any of the
provisions of the ID Act. It was, therefore, contended that
both the Govt. Order dated 10th Sept. 1993 and
Notification dated 21st Sept. 1993 were rightly set aside
by the learned Single Judge and that decision was rightly
confirmed by the Division Bench of the High Court. It was
also submitted that the Union had not ceased to be the sole
bargaining agent, as up to 16th July 1996, it was already
operating as a Union recognised by the Corporation itself
and thereafter it was not the case of the Corporation that
at any time by fresh referendum it had lost the majority of
the membership of the workers of the Corporation nor was it
replaced by any other recognised Union that the question of
locus standi of the Union to maintain the proceedings was
neither raised before the learned Single Judge when he
passed the impugned judgment nor before the Division Bench
which confirmed the decision of the learned Single Judge.
In the light of the aforesaid rival contentions the
following points arise for our determination:
1. Whether the Union has locus standi to maintain the
writ petition as well as the present proceedings on behald
of the workmen;
2. If it has, whether the Govt. Order dated 10th Sept.
1993 was legal and valid and/or was uncalled for;
3. Whether the impugned Notification issued by the
Corporation on 21st Sept. 1993 was legal and valid; and
4. What final order?
We shall deal with these points seriatim.
Point No.1:
So far as the locus standi of the Union in the
present proceedings is concerned, it must be kept in view
that the Corporation itself by its order dated 24th
December, 1987 granted recognition to the Union as the sole
bargaining agent for its members. It was noted by office
memorandum of the Corporation dated 24th Dec. 1987 that the
Federation having secured 53.04% of the votes polled at the
Corporation level in the referendum held on 11th Dec. 1987,
the Corporation was pleased to accord recognition to the
respondent Federation as sole bargaining agent at the
Corporation level. However, this was subject to the
conditions stipulated under Notification dated 30th April,
1987 which prescribed four years’ period from the date of
such concerned. It is also not in dispute between the
parties that even in the subsequent referendum, the
respondent Federation/Union secured 61.07% of votes polled
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 19
at the Corporation level and the Corporation by its Office
Memorandum dated 16th July, 1992 continued recognition to
the Union as sole bargaining agent subject to the conditions
stipulated in the earlier Notification dated 3rd Dec. 1991.
It is therefore, not in dispute between the parties that
till 16th, 1996 respondent Federation/Union can not
challenge the Govt. Order dated 10th Sept. 1993 and the
Consequent Notification issued by the Corporation on 21st
Sept. 1993. On both these occasions the respondent Union
was admittedly a recognised Union of the employees and had
got the benefit of Pay Roll Check-off Facility under the
settlement of 28th July 1988. It is also interesting to
note that before the learned Single Judge only three
questions were posed for consideration in the light of the
contentions of rival parties.
They were as under :
"(i) Whether this petition under Article 226
of the Constitution of India is not maintainable
in view of the question in controversy relates
to the breach of the Settlement?
(ii) Whether the Govt. has lawful authority
to interfere with the Settlement validly made
between the petitioner and the Corporation by
issuing direction under Sec.34 of the Act?
(iii) Whether Annexure-A is a direction under
Sec.34 of the Act?
The question of locus standi of the writ petitioner the
respondent Union, was not even brought in issue. But even
that apart, in appeals filed by the State and the
Corporation before the Division Bench which came to be
decided by the impugned common judgment dated 10th June,
1997, no such contention appears to have been canvassed. It
is also pertinent to note that it is not the case of the
Corporation that by any fresh referendum the respondent
Federation has lost its recognition as a sole bargaining
agent on account of its membership getting depleted and any
other rival Union has emerged as a recognised Union having
mustered sufficiently larger membership. Consequently, the
first point for determination as canvassed for our
consideration by the learned counsel for the appellants in
found to be totally devoid of any substance and stands
rejected. To say the least, such objection appears to have
been waived by both the appellants before the learned Single
Judge as well as before the Division Bench and, therefore,
also cannot be countenanced. This point for determination,
therefore, is answered in affirmative in favour of the
respondent Union and against the appellants.
Point No. 2:
That takes us to point no. 2. So far as this point
is concerned, it has to be kept in view that the Pay Roll
Check-off Facility was made available to the
respondent-Union by a binding settlement between the parties
dated 28th July, 1988. This settlement was current when the
Memorandum of Understanding dated 10th May. 1993 came to be
entered into between the respondent Union and the
Corporation. The said Memorandum of Understanding dealt with
various demands including revision of pay scales. They are
listed at item Nos. 1 to 23. In none of these demands, there
is any whisper about the then existing Pay Roll Check-off
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 19
Facility covered by the settelment of 28th July. 1988.
Paragraph 24 of the Memorandum on which strong reliance was
palced by learned senior counsel Shri Sanghi for
Corporation, deserves to be noted in extenso. It is
therefore extracted as under ;
"24 SAVINGS:
Benefits already granted under earlier
Settlements excepting those covered under this
Settlement, facilities continuing by way of
conventions and or practice to be continued in
respect of the employees who are in the
services of the Corporation as on the date of
signing of this Settlement.
An understanding has been reached on
the above mentioned points in anticipation of
approval of the Board of Directors and the
State Government. However, the issue regarding
free duty facility to R.Federation/R.Unions is
left to the decision of the State Govt.
The caption of paragraph 24 clearly indicates that it
provides a saving clause. Meaning thereby, it seeks to
continue the benefits and facilities which might have been
available to the workmen and their Union under the earlier
settlements. It is obvious that the demands for which
Memorandum of Understanding was reached between the parties
were pertaining to the workmen for whom they were raised by
their Union and the benefits of the understanding about
these demands were to be made available to the workmen
concerned. It has to be kept in view that the earlier
settlement of 1988 between the parties regarding facility of
Pay Roll Check-off was not a benefit to the workmen but was
a facility given to the Union to directly get its membership
contribution from the member-workers’ wages by their
consent. This facility imposed no additional burden on the
workmen nor gave any additional benefit to them but grant of
this facility only resulted into an easy method made
available to the Union to collect its subscription from its
members through the intervention of the Corporation. To
illustrate the point, if a member-employee was to get
hundred rupees by way of monthly wages and if he agreed with
the Corporation that out of hundred rupees payable to him,
five rupees may be deducted at source and paid over to his
Union for discharging his obligation to pay monthly
membership fee, the Corporation would not suffer any
additional financial burden thereby as it had the obligation
to pay full hundred rupees by way of wages to the workmen
having taken work from him for the month. Similarly, the
workmen also would not get any benefit thereby as he had
earned rupees hundred in full and on his own request five
rupees were to go directly to the Union by way of membership
fee which otherwise he would have been required to pay prom
his wages after receiving Rs. 100/-. Therefore, the scheme
of pay Roll Check-off Facts conferred a facility to the
Union of workmen without conferring any extra benefit to the
workmen or imposing any greater financial burden on the
Corporation. In the light of the aforesaid scheme, the Pay
Roll Check-off Facility was made available to the respondent
Union pursuant to the binding settlement of 28th July, 1988
by way of a tripartite agreement amongst the Union worker
Member concerned and the Corporation. We have to see as to
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 19
what is the scope and iambic of aforesaid clause 24 of the
Memorandum of Understanding dated 10th May, 1993 vis-a-vis
this scheme. The first part of clause 24 deals with
benefits already granted under earlier settlements but
excepting those covered by the settlement at hand namely the
Memorandum of Understanding. These benefits were to be
continued for the employees who were in the service of the
Corporation on the date of signing of the settlement. They
were obviously benefits already made available to the
workmen under any earlier settlements. Pay Roll Check-off
facility, as noted earlier, cannot be considered to be a
benefit available to the workmen. At the most, it will be a
facility to the Union to get an ensured method of securing
membership fees from its members on regular basis. The
first part of paragraph 24 states that facilities continuing
by way of conventions and or practice will be continued. It
is obvious that such facilities may include any of the then
available facilities to the Union or even to workmen.
However facility given to the Union of getting benefit of
the scheme of Pay Roll Check-off is obviously not a facility
available to workmen. It is available only to the Union,
that too under a binding settlement and not by way of
convention or practice. Such a facility will not be covered
by latter part of first paragraph of clause 24 as the
facilities contemplated therein refer to only those which
were continuing by way of conventions and or practice.
Hence, this facility was not contemplated even by the first
part of paragraph 24 of the Memorandum of Understanding. If
that is so, the second part of paragraph 24 also would be
out of picture so far as Pay Roll Check-off facility
available to respondent Union under the agreement of 28th
July, 1988 was concerned. The second part of paragraph 24
provides for an understanding which had been reached on the
earlier mentioned points in anticipation of approval of the
Board of Directors or the State Govt. It is difficult to
appreciate how it could be said that any understanding was
reached on Pay Roll Check-off Facility covered by any of the
points mentioned in the Memorandum of Understanding.
Understanding reached on the points mentioned in second part
of paragraph 24 naturally referred to the points mentioned
from paragraphs 1 to 23 of the Memorandum of Understanding.
It cannot refer to the saving clause mentioned in the very
same paragraph 24. We, therefore, cannot accept the
contention of learned senior counsel Shri Sanghi that the
phrase "the above mentioned points" as referred to in second
part of paragraph 24 of the Memorandum of Understanding
would also cover the first part of paragraph 24. But even
that apart, assuming that what Shri Sanghi contends is
right, even then the first part of paragraph 24 does not
cover any understanding regarding the Pay Roll Check-off
facility given to the Union by settlement as seen earlier.
Thus, neither first part of paragraph 24 nor its second part
can apply to the question of Pay Roll Check-off Facility.
for all these reasons, therefore, reliance placed on
paragraph 24 of the Memorandum of Understanding dated 10th
May 1993 by Shri Sanghi, learned senior counsel for the
Corporation, for subjecting the earlier granted Pay Roll
Check-off facility to the future approval of the State is
not of any avail.
We, accordingly hold that paragraph 24 of the
Memorandum of Understanding did not touch or cover in its
sweep the Pay Roll Check-off Facility available to the
respondent Union as per the binding settlement of 28th July,
1988. If that is so, there was no occasion for the State in
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 19
the light of the aforesaid Memorandum of Understanding to
pass the impugned Government Order dated 10th Sept., 1993,
on a wrong assumption that it was called upon to make any
observations or convey its decision whether it approved or
did not approve the grant of Pay Roll Check-off Facility to
the respondent Union. The proceedings of the Govt. of
Karnataka which are at page 110 of Vol. 1 of the paper book
clearly mentioned as its subject, List of demands submitted
by KSRTC Staff & Workers Federation and also referred to the
D.O.Letter dated 13th July, 1993 from the Chairman &
Managing Director of the Corporation. The Preamble of the
impugned G.O. issued by State recites that the Memorandum
of Understanding arrived at between the Chairman & Managing
Director of the Corporation, and the Management of
Corporation and KSRTC Staff & Workers Federation had been
signed on 10th May, 1993 in anticipation of approval of the
Board of Directors of the Corporation and the Govt. It is
in that light that the scope of the Govt. Order dated 10th
Sept. 1993 is to be appreciated. It states that after
examining in detail the proposal of the Corporation, the
Govt. had accorded approval to the understanding between
the parties with modifications and subject to the conditions
mentioned in the said order. It becomes at once clear that
even the State of Karnataka thought that it was called upon
to consider whether to approve or not to approve the
settlement on various demands as proposed in the Memorandum
of Understanding dated 10th May, 1993. Twenty two such
items are listed in the Govt. Order dated 10th Sept. 1993.
Nowhere we find a whisper about the Pay Roll Check-off
Facility which was already made available to the respondent
Union by the binding settlement of 28th July, 1988.
However, when we come to conditions mentioned in the
impugned Govt. Order dated 10th Sept. 1993 we find
Condition No.2 to the effect that the general directions
under Section 34 of the Corporation Act. The decision of
the learned Single Judge as confirmed by the Division Bench
can be sustained on the short ground that the Govt. Order
dated 10th Sept. 1993 laying down the aforesaid impugned
Condition No. 2 in connection with Pay Roll Check-off
Facility was ex-facie uncalled for and, therefore, the said
Govt. Memorandum in so far as it referred to Condition No.
2 was not required to be acted upon by the Corporation. We
keep the wider question about the applicability of Sec. 34
open for consideration in an appropriate case. We hold that
it was not necessary for the learned Single Judge to go into
this wider question for voiding the Govt. Memorandum dated
10th Sept. 1993 by interpreting sec. 34 of the Corporation
Act.
Bofore parting with the discussion on this point, we
may briefly refer to written submissions filed on behalf of
the State of Karnataka and the Corporation.
We may consider in the first instance the written
submissions filed on behalf of the State of Karnataka along
with the Management shall not take the responsibility of
collecting donations or monthly subscriptions from the
employees on behalf of the recognised. Federation or
Unions. Condition No.2 as mentioned in the impugned Govt.
Order dated 10th Sept. 1993, to say the least, was clearly
uncalled for and dehors the very scheme and ambit of the
Memorandum, as noted earlier, had nothing to do with the Pay
Roll Check-off Facility already made available to the Union
by a binding settlement between the Corporation and the
Union and it was holding the field at least by the time the
order dated 10th Sept. 1993 saw the light of the day. It
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 19
must, therefore, be held that Condition No.2 as imposed in
the impugned Govt. Memo dated 10th Sept. 1993 was totally
ultra vires and uncalled for and that the State had no
occasion to lay down such a condition in connection with
existing binding Pay Roll Check-off Facility. Once this
conclusion is reached, it becomes obvious that the aforesaid
condition contained in the impugned Memo must be held to be
null and void and inoperative at law. Consequently, it is
not necessary for us to examine the wider question canvassed
by learned Advocate General for the State of Karnataka
whether the State could issue such Cabinet Note in
connection with the charter of demands submitted by KSRTC
Staff and Workers Federation. So far as Pay Roll Check-off
Facility is concerned, it has to be kept in view that Free
Duty Check-off facility was substituted by a scheme of
direct deduction from the employees’wages the amount of
subscription for direct payment to their union, which became
Pay Roll Check-off Facility in place of duty free facility.
It is this Pay Roll Check-off Facility in place of duty free
facility. It is this Pay Roll Check-off Facility which
remains binding as a settlement under the ID Act between the
parties. As admitted in paragraph 7 of the written
submissions, the said facility which became a part of the
statutory settlement of July 1989 was approved by the State
Govt. However, it is not correct to submit as mentioned in
paragraph 9 of the written submissions, that the Memorandum
of Understanding dated 10th May, 1993, specially paragraph
24 dealing with Free Duty Facility covered Check-off
Facility which was an off shoot of Free Duty Facility. Free
Duty facility had ceased to have any connection with the
subsequent Pay Roll Check-off Facility as per the aforesaid
settlement. Subsequently, paragraph 24 of the Memorandum of
Understanding referred to different type of facility wherein
Union’s office bearers were to be given Free Duty Off for
conducting their Union’s activities which has nothing to do
with Pay Roll Check-off Facility. Consequently, the rest of
the contentions in the written submissions regarding the
question of Pay Roll Check-off Facility being placed for
consideration of the Govt. would not survive. As noted
earlier, the Federation’s agreement to discuss demands
including Check-off Facility at the Govt. level would not
amount to substitution of the already binding settlement
regarding Pay Roll Check-off Facility. Consequently, it
cannot be said as tried to be submitted on behalf of the
State of Karnataka in the written submissions, that the
Cabinet Note imposing Condition no. 2 regarding not
undertaking the responsibility of collecting the monthly
subscription from employees on behalf of the recognised
Federation or Union by the Corporation amounted to
substitution of the earlier binding settlement. At the
highest it remained in the realm of a mere suggestion for
future guidance of the Corporation. It must be held to be
beyond the scope of the demands put forward under the
Memorandum of Settlement for approval of the State Govt. It
has to be noted that Duty Free Facility covered by Item No.
24 of the Memorandum of Settlement pertained to giving duty
free work for trade union’s activities as clearly mentioned
by Condition No.3 referred to in Cabinet Note itself.
Hence, the written submissions filed on behalf of the State
of Karnataka do not advance its case any further. It is
also easy to visualise that in exercise of powers conferred
under Section 34 of the Corporation Act, the State of
Karnataka could not have directed the Corporation to commit
breach of any binding settlement operative between the
parties under Section 18(1) of the ID Act or to make the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 19
Corporation liable for criminal action in this connection.
It has to be noted that under Section 29 of the ID Act, any
party who commits breach of a binding settlement would be
liable to be prosecuted and the punishment may extend even
to six months’ imprisonment. It is also not possible to
agree with the contention canvassed in the written
submissions that because by way of an interim order of this
Court the parties were directed to arrive at some amicable
settlement of the dispute and which did not fructify, it can
be said that the said order of the Govt. declining to
restore the Check-off facility had put an end to the entire
controversy in the present case. If the Govt. had approved
a modified settlement in this connection and if that had
resulted into a fresh agreement between the parties
regarding Pay Roll Check-off Facility then it could have
become a new binding settlement between the parties. But
that eventually had never occurred. Hence, the efficacy ad
binding nature of the earlier settlement did not get
whittled down in the least. It must, therefore, be held
that the Govt. Order dated 10th Sept. 1993 was neither
legal nor was it called for in the facts and circumstances
of the case.
So far as the written submissions filed on behalf of
the Corporation are concerned, they seek to reiterate what
was submitted earlier and which has been considered and
rejected in the earlier part of this judgment. Reliance
placed on the settlement dated 27.12.1995 for replacing the
earlier binding settlement of 1988 cannot be countenanced
for the simple reason that all that was agreed to between
the parties in the said settlement of December 1995 was to
the effect that the Federation was to discuss the demand
relating to Check-off Facility at the Govt. level. Thus, it
was merely an agreement to discuss but it had not culminated
into any fresh settlement so as to supersede the earlier
settlement. The submission that after 15th July, 1996,
recognition of Respondent No.1 came to an end cannot be
countenanced for the simple reason that it is not the case
of the Corporation that in a fresh referendum any other
Union had emerged as the majority Union and got recognition.
It has also to be kept in view that even assuming
that settlement of 1988 had thereby come to an end, its
binding effect as contractual obligation continued till it
was replaced by other settlement as ruled by this Court in
The Life Insurance Corporation of India vs. D.J.Bahadur &
Ors. (supra). It is also difficult to appreciate how the
case of check-off Facility is not termed as condition of
service as by the said facility the Management had agreed to
deduct from the wages of the employees the requisite amount
to be paid to the Union by was of subscription of the
employees. Such permissible deduction from the wages cannot
but be treated as condition of service. The contention that
from 21st Sept., 1993 Check-off Facility has been given up
by the Corporation cannot be of any assistance to the
Corporation for the simple reason that it would amount to
violation of a binding settlement by the Corporation which
as per Section 29 of the ID Act would be penal. NO.
advantage in law, therefore, can be taken by the Corporation
from its unilateral withdrawal of binding Check-off Facility
as per settlement of 1988. It is also not possible to
countenance the submission that thought the Check-off
Facility may continue to exist de jure it would cease to
exist de facto. Such unilateral withdrawal of Check-off
Facility by one of the parties cannot be treated to be an
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 19
act which is legal and valid. Minutes of the meeting held
between the representatives of the Corporation and
Respondent NO.1 Union held on 18th October, 1995 also cannot
amount to substitution of a fresh settlement on the Pay Roll
Check-off Facility. To reiterate, the Federation’s only
agreement was to discuss demands relating to check off and
trade union facilities at the Govt. Level. So long as the
said discussion had not culminated into any other binding
settlement on the topic the earlier settlement cannot be
said to have been replaced or substituted by any other
validly binding settlement. Consequently, the aforesaid
written submissions do not advance the case of the
appellant.
We, thereforem answer point No.2 by holding that the
Govt. Order dated 10th Sept., 1993 in connection with the
impugned Pay Roll Check-off Facility was neither legal nor
valid and was totally uncalled for. This point is,
therefore, answered against the appellants and in favour of
the respondent Union subject to the clarification that the
submission canvassed by the learned Advocate General for the
State of Karnataka about the correct interpretation of
Section 34 of the Corporation Act in support of the Govt.
appeals is not required to be answered. Question of law on
this aspect is kept open for consideration in an appropriate
case as and when the occasion arises.
Point No.3:
So far as this point is concerned, it is obvious
that the impugned Notification dated 21st Sept. 1993 issued
by the Corporation was based solely on the State of
Karnataka’s order dated 10th Sept. 1993. Once that order is
held by us to be uncalled for and inoperative in law, the
consequential Notification dated 21st Sept., 1993 issued by
the Corporation must fall through as a logical corollary of
our aforesaid decision. Therefore, no fault can be found
with the ultimate decision rendered by learned Single Judge
voiding not only Govt. Order dated 10th Sept. 1993 but also
the consequential Notification of Corporation dated 21st
Sept. 1993.
But even that apart, the said Notification is liable
to be set aside also on a different ground. It has to be
kept in view that Pay Roll Check-off Facility was made
available to the respondent Union dated 28th July, 1988. It
is true that in para 7 of the said settlement it was
mentioned that the settlement was valid till the recognition
accorded to the Federation existed or would continue to be
in force until both the parties terminated the terms by
mutual consent earlier. It is not in dispute between the
parties that the settlement of 28th July, 1988remained in
force as the recognition granted to the respondent Union
continued at least till 16th July 1996. It is also pertinent
to note that there is no evidence that the Union lost such
recognition subsequently by any further referendum. Be that
as it may, the date on which the impugned Notification dated
21st Sept., 1993 was issued by the Corporation, the said
Settlement was fully operative and binding between the
parties. In order to salvage the situation for the
Corporation, Mr.Sanghi, learned senior counsel submitted in
the alternative that as per para 7 of the said settlement it
had to continue until both the parties terminated the
settlement by mutual consent earlier. Mr.Sanghi submitted
that the impugned Notification issued by the Corporation on
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 19
21st Sept. 1993 itself resulted into termination of the said
submission is to be stated to be rejected. The contingency
contemplated by second part of para 7 of the settlement
dated 28th July, 1988 could apply only when both the parties
namely, the Corporation as well as the respondent Union by
mutual consent, terminated the said settlement earlier
i.e.during the time the Union remained a recognised Union.
It obviously could not be submitted by Shri sanghi for the
Corporation that the unilateral Notification dated 21st
Sept. 1993 issued by the Corporation brought about the
termination of the settlement of 28th July, 1988 by mutual
consent of Corporation and the respondent Union.
Consequently, the second part of para 7 of the said
settlement could never have applied to the facts of the
present case. Having realised this difficulty, Mr.Sanghi,
learned senior counsel for the Corporation, submitted that,
in any case, the impugned order dated 21st Sept. 1993 of the
Corporation can be treated to be a Noitce under Section
19(2) of the ID Act. In this connection, it is necessary to
refer to Section 19 sub-sections (1) & (2) of the ID Act.
They read as under :
"19. Period of operation of Settlements and
awards.
1. A settlemtn shall come into
operation on such date as is agreed upon by
the parties to the dispute, and if no date
is agreed upon on the date on which the
memorandum of the Settlement is signed by
the parties to the dispute.
2. Such Settlement shall be binding
for such period as is agreed upon by the
parties, and if no such period is agreed
upon, for a period of six months [from the
date on which the memorandum of Settlement
is signed by the parties to the dispute],
and shall continue to be binding on the
parties after the expiry of the period
aforesaid, until the expiry of two months
from the date on which a notice in writing
of an intention to terminate the Settlement
is given by one of the parties to the other
party or parties to the Settlement.
It cannot be disputed that the settlemtn in question came
into force on 28th July, 1988 when it was signed by both the
parties. A question arises as to how far the binding effect
of that settlemtn may continue between the parties. As seen
earlier, Section 19 (2) clearly provides that such settlemtn
shall be binding for such period as is agreed upon by the
parties. Para 7 of the said settlement as seen earlier,
lays down the period for the currency of the settlement as
it clearly provides that the settlement would be valid till
the recognition accorded to the Federation existed. As we
have seen earlier, the recognition to the respondent
Federation continued all throughout and as on date even it
is not shown that its recognition has stood superseded by
any recognition given to any rival and competing recognised
Union. In any case, by the time of the impugned
Notification dated 21st Sept. 1993 that period had never
ended. Similarly, there was no earlier termination of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 19
settlement by mutual consent. Till either of these
eventualities occurred, there was no occasion for the
Corporation to terminate the settlement under Section 19
sub-section (2) by any notice as it is clearly laid down
therein that the settlement shall be binding between the
parties for the agreed periond and shall also continue to be
binding even after the expiry of the period until the expiry
of two months from the date on which a notice in writing of
an intention to terminate the settlement is given by one of
the partiws to the orther party. So even assuming that the
Corporation could have unilaterally terminated such
settlement it could not have done so during the time the
settlement was operative on its own terms, meaning thereby,
till the recognition accorded to the Union continued or till
any earlier termination by mutual consent. As seen earlier,
by 21st Sept. 1993 none of these contingencies had
occurred. Consequently, the so called unilateral
termination of the settlement by the Notification of
Corporation dated 21st Sept. 1993 must be held to be
completely ultra vires toe powers of the Corporation under
Section 19 sub-section (2). But even that apart, it has to
be observed that the Corporation had not given two month’s
notice in any case as contemplated by Section 19 sub-section
(2) for terminating the said binding settlement, though such
an occasion had still not arisen for the Corporation as the
binding effect of the settlement during the period provided
therein as per clause 7 had not come to an end by then.
Even on that ground the notification dated 21st Sept. 1993
fell foul on the touchstone of Section 19(2) of the ID Act,
having not complied with the said provision.
But even on an assumption that the aforesaid
notification satisfied the requirements of Section 19
sub-section (2) for terminating the settlement dated 28th
July, 1988, even then till a new settlement laying down
fresh terms of settlement on the question of Pay Roll
Check-off facility saw the light of the day, the binding
effect of the 1988 settlement has to continue to bind the
parties by way of contractual obligations. This aspect is
well-settled by a three Judge Bench decision of this Court
in The Life Insurance Corporation of India Vs. D.J.Bahadur &
Ors. (supra) Krishna Iyer, J., speaking for the Supreme
Court at page 1114 of the Report, has made the following
pertinent observations:
"The core question that first falls for
consideration is as to whether the
Settlements of 1974 are still in force.
There are three stages or phases with
different legal effects in the life of an
award or Settlement. There is a specific
period contractually or statutorily fixed as
the period of operation. Thereafter, the
award or Settlement does not become non est
but continues to be binding. This is the
second chapter of legal efficacy but
qualitatively different as we will presently
show. Then comes the last phase. If notice
of intention to terminate is given under
S.19(2) or 19(6) then the third stage opens
where the award or the Settlement does
survive and is in force between the parties
as a contract which has superseded the
earlier contract and subsists until a new
award or negotiated Settlement takes its
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 19
place. Like Nature, Law abhors a vacuum and
even on the notice of termination under
S.19(2) or (6) the sequence and consequence
cannot be just void but a continuance of the
earlier terms, but with liberty to both sides
to raise disputes negotiate Settlements or
seek a reference and award. Until such a new
contract or award replaces the previous one,
the former Settlement or award will regulate
the relations between the parties. Such is
the understanding of industrial law at least
for 30 years as precedents of the High Courts
and of this court bear testimony. To hold to
the contrary is to invite industrial chaos by
an interpretation of the ID Act whose primary
purpose is to obviate such a situation and to
provide for industrial peace. To distil from
the provisions of S.19 a conclusion
diametrically opposite of the objective,
intendment and effect of the Section is an
interpretative stultification of the
statutory ethos and purpose. Industrial law
frowns upon a lawless void and under general
law the contract of service created by an
award or settlement lives so long as a new
lawful contract is brought into being. To
argue otherwise is to frustrate the rule of
law. If law is a means to an end - order in
society can in commit functional harakiri by
leaving a conflict situation to lawless
void?"
In view of the aforesaid settled legal position, therefore,
if any unilateral notice to terminate the binding settlement
of 28th July 1988 was issued by the Corporation which on the
facts of the present case, is found not to have been issued
even then till any new settlement on the question of grant
of Pay Roll Check-off Facility was substituted by parties,
the legally binding effects of the earlier settlement of
1988 would continue to operate and the Corporation will then
be contractually bound to confer pay roll check-off facility
to the Union. Consequently, there was no occasion for the
Corporation to issue the impugned Notification dated 21st
Sept. 1993 even on this ground as it was clearly violative
of the mandatory requirement of Section 19 sub-section (2)
and was contrary to the settled legal position as aforesaid.
It wad, therefore, a still born Notification and rightly set
aside by the learned Single Judge on that ground and also by
the Division Bench of the High Court.
We may now refer to one last ditch effort made by
Shri Sanghi, learned senior counsel for the Corporation. He
submitted that at least by latter settlements dated 8th
Sept. 1994, 5th Dec. 1994, 16th Feb., 1995, 10th Oct.,
1995 and 27th Dec. 1995, the earlier settlement of 28th
July 1988 was given a complete go by so far as the Pay Roll
Check-off facility was concerned and even on that ground the
earlier settlement should be taken to have become non est.
In our view, this valiant attempt on the part of learned
senior counsel Shri sanghi, is completely futile. When we
turn to these latter settlements, it becomes at once clear
that the impugned Notification of 21st Sept. 1993 which is
found to have directly conflicted with Section 19(2) of the
ID Act therefore, was a still born one could not get life
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 19
because of any subsequent settlements as the subsequent
settlement in terms had not provided for a new scheme of Pay
Roll Check-off Facility to be binding between the parties.
Let us try to see what these other settlements had done.
Settlement of 8th Sept. 1994 under Section 2(q) of the ID
Act between the respondent Union and the Corporation recites
the various demands annexed to the strike notice given by
the respondent Union on 29th Aug. 1994. Out of the listed
demands are demand Nos. 4 & 5. So far as demand No. 4 is
concerned, it deals with "Collection of donations to the
recognised Union in terms of the Memorandum of settlement
dated 17th July, 1989". We are not concerned with this
demand in the present case. Demand No.5 deals with
"Collection of Union subscription through check-off facility
in terms of the Settlement dated 28th July, 1988". This
demand clearly shows that despite there being a settlement
of 28th July, 1988, the Corporation, because of its impugned
stand reflected by its Notification dated 21st Sept. 1993
had withdrawn the check-off facility. Therefore, it was the
contention of the respondent Union that the said withdrawal
was contrary to the settlement dated 28th July, 1988. This
demand therefore, in respect of giving a go by to the
settlement dated 28th July, 1988 regarding collection of
subscription through the check-off facility tried to
reiterate the said binding terms of the settlement and only
grievance was that these binding terms of settlement were
being violated by the Corporation and hence the demand was
to recall such withdrawal. The Federation in para 2 of the
said settlement clearly mentioned that, out of the nine
demands made by the Federation, for the demands at Nos. 1
to 5, the Federation would reserve its right to pursue with
the Govt. of Karnataka. Meaning thereby the Federation
agreed with the Corporation to take up the matter with the
Govt. of Karnataka and to persuade it to call upon the
Corporation to withdraw its impugned order dated 21st Sept.,
1993 and to restore the facility available under binding
terms of settlement dated 28th July., 1988. To say the
least, this agreement between the parties as per the
settlement of 8th Sept., 1994 cannot be said to have
whittled down the settlement dated 28th July, 1988 nor can
it neb said to have substituted it by any fresh scheme of
check-off facility. All that the Union can be said to have
agreed with the Corporation was to pursue the matter with
the Govt. for enforcement of the terms of the earlier
Settlement of 1988 and for doing the needful in this
connection. Consequently, the said Settlement of 8th Sept.
1994 does not touch the core question, namely, whether there
was any subsequent binding Settlement between the parties
giving a go by to or modifying the settled terms of Pay Roll
Check-off facility as emanating from the binding Settlement
of 28th July, 1988. Shri sanghi, learned senior counsel,
then took us to the second settlement dated 5th Dec. 1994.
It appears that the said settlement was also in connection
with the same demands which were mentioned in the earlier
strike notice referred to in the Section 2(p) settlement
dated 8th Sept., 1994 and on these demands also no fresh
settlement had been arrived at between the parties. Thus,
the parties appear to have been trying to arrive at an
amicable settlement in connection with the grievances of the
Union. That the check-off facility was wrongly withdrawn
though they were available in terms of settlement dated 28th
July., 1988. In fact, it appears that the said demand of
the Union which resulted into the aforesaid two settlements
dated 8th Sept., 1994 & 5th Dec., 1994 centered round the
question enforcement of the terms of settlement dated 28th
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 19
July, 1988 against the Corporations rather than giving a go
by to them. that demand had nothing to do with any
modification of the terms of settlement dated 28th July,
1998. The grievance of the Union was against
non-implementation of the terms of the settlement and not
for their modification. Even at Annexure-A to the said
settlement of 5th Dec., 1994 was the very same settlement
that was arrived at on 8th Sept. 1994. Our observations in
connection with settlement of 8th Sept., 1994. Our
observation in connection with settlement of 8th Sept., 1994
would, therefore, ipso facto apply to the terms of
settlement dated 5th Dec. 1994. In short, none of these
two settlements ever whispered about any agreed settlement
between the parties for modifying any of the terms of the
settlement dated 28th July, 1988 pertaining to the Pay Roll
Check-off facility made available to the Union by the
Corporation as per the said settlement. It is therefore,
not possible to agree with Shri Sanghi, learned senior
counsel for the Corporation that by these latter two
settlements, the earlier settlement of 28th July, 1988 was
given a go by consent of parties. On the contrary, as we
have seen earlier, instead of giving a go by to the terms of
the settlement, the Union was insisting upon complying with
the terms of the said settlement. It was not the case of
substituting the terms of the said settlement but it was a
case of reiterating those terms so far as the Union was
concerned. We then turn to settlement dated 16th Feb.,
1995. A mere look at the said settlement shows that it has
nothing to do with the Pay Roll Check-off Facility made
available to the respondent Union by the settlement of 28th
July, 1988. Therefore, this settlement is miles away from
the terms settled on 28th July, 1988 between the parties
regarding Pay Roll Check-off Facility. It is totally
irrelevant for deciding the question as tried to be raised
by Shri Sanghi regarding substitution of the terms of
settlement of 1988 by the settlement of 16th Feb., 1995.
Same is the position regarding the settlement of 10th Oct.,
1995 on which reliance was placed by Shri sanghi. The said
settlement also does not deal with the question of Pay Roll
Check-off Facility. That takes us to the last settlement
dated 27th Dec. 1995 strongly pressed in service by Shri
Sanghi for the Corporation. It is true that in the short
recital of the case as found in the settlement dated 27th
Dec., 1995, it has been mentioned that the Federation
reserves its right to pursue with the Govt. in respect of
these demands, one of which was regarding restoration of Pay
Roll Check-off Facility, collection of donations to the
recognised Unions in terms of Memorandum of Settlement dated
17th July, 1989 and earlier settlements. But that only
shows that the grievance of respondent Federation that
despite the earlier settlement the Pay Roll Check-off
Facility was withdrawn by the Corporation and was required
to be restored. Meaning thereby, the binding effect of the
earlier settlement was sought to be reinforced. Coming to
the express terms of the settlement as mentioned in the said
settlement dated 27th Dec., 1995, we find in para 5 a
recital that Federation agreed to discuss about the said
facility at the Govt. level. We fail to appreciate how
this agreement to discuss the demands amounts to any express
or implied substitution of the terms of binding settlement
dated 28th July, 1988 in connection with already granted Pay
Roll Check-off Facility to the respondent Union. It appears
clear that on account of the issuance of the impugned Govt.
Order dated 10th Sept., 1993 and the consequential
Notification dated 21st Sept., 1993 by the Corporation the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 19
Corporation had unilaterally withdrawn the Pay Roll
Check-off Facility granted to the Union and that too without
following the due procedure of Section 19 sub-section (2) of
the ID Act. On account of such illegal act on the part of
the Corporation, strike notices were given by the Respondent
Union and the Union had shown agreement to discuss the
matter across the table. This agreement clearly showed that
the respondent Union was amenable to an amicable settlement
of the dispute so that a fresh settlement could be entered
into in substitution of the settlement dated 28th July,
1988. But that eventuality never occurred. Result was that
the earlier settlement dated 28th July, 1988 never got
substituted by a fresh settlement on the topic and the
binding effect of the earlier settlement dated 28th July,
1988 in regard to Pay Roll Check-off Facility continued to
operate all through-out. Consequently, it must be held that
none of the latter settlements on which strong reliance was
placed by Shri Sanghi, learned senior counsel for the
Corporation, to cull out any express or even implied
substitution of the earlier settlement dated 28th July, 1988
or for exhibiting any conduct on the part of the respondent
Union of giving a go by to the terms of the earlier
settlement which gave it the said facility of pay roll check
off can be of any avail to Shri Sanghi. It must be held
that the settlement of 28th July, 1988 granting pay roll
check-off facility to the respondent Union has continued to
operate all throughout without in any way being substituted
by any fresh settlement between the parties in this
connection.
The submission made by Shri Sanghi, learned senior
counsel for the Corporation, that the Corporation has now
undergone trifurcation into three Corporations also cannot
be of any avail to him for the simple reason that such a
contention was not canvassed either before the learned
Single Judge or before the Division Bench. It is also bot
brought out on the record as to how this trifurcation has
taken place and whether the subsequent
successors-in-interest of the Corporation have undertaken
the liability of earlier existing settlements entered into
by their predecessor Corporation with the erstwhile Union.
All these vised questions of fact cannot be permitted to be
raised for the first time in these present proceedings
before us. Hence, the contention canvassed by learned
senior counsel for the Corporation on this additional ground
also is found to be devoid of any substance and cannot be
entertained and is, therefore, rejected. The third point,
accordingly, is answered in negative against the against the
appellant and in favour of the respondents.
Before parting with these proceedings, we may
mention that an attempt was made by us during the pendency
of these proceedings at the SLP stage to enable the parties
to find some amicable solution of the problem with a view to
ensuring industrial peace and therefore, by interim order
dated 27th Feb., 1998 it was suggested that the State Govt.
may have a fresh discussion with the respondent Union as
well as the Corporation in connection with the disputed item
of check-off facility. But unfortunately, no concrete result
ensured and the parties could not come to any amicable
solution of the problem by arriving at a fresh settlement on
the question. Consequently, the appeals were heard on merits
and are being disposed of by this judgment.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 19
Point No. 4
As a result of our findings on the aforesaid three
points, the inevitable result is that these appeals fail and
are dismissed subject to the limited clarification that the
question of applicability of Sec. 34 of the Corporation Act
to the impugned Govt. Order of 10th Sept., 1993 is kept
open. There will be no order as to costs in the facts and
circumstances of the case.