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
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 4200 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 VDA 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 VDA at the rate of Rs 147 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 111 per day
Thereupon in 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 C2 of the Industrial Dispute  Act for short the Act  for determination of the amount of VDA 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 221 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 section 22 read with section 121 of the Act were held by Mr B D Sharma Assistant Labour Commissioner C Shahdol on the 21st and 22nd October
In the course of these conciliation proceedings on October 22 1969 besides other matters
the dispute relating to VDA 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 123 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 section 33C2 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 section 183 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 VDA 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 section 33 C2 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
vs Their workmen and others1 and The Sirsilk Ltd and ors
vs Government of Andhra Pradesh and anr2 Before dealing with the points canvassed it will be appropriate to examine the relevant provisions of the Act
Section 2p 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 conciliationproceedings 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 section 2p
The effect of a settlement of the first kind is indicated in subsection 3 and that of the second in sub section
1 of section 18 of the Act
The material part of section 18 reads 181 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 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 2 1964SCR 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 VDA 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 section 18 read with section 2d an agreement made otherwise than in 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 section 18
It follows therefore that even if 99 of the workers have impliedly accepted the agreement arrived at on October 22 1969 by drawing VDA 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 section 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 section 33 C2 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 vs 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 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 section 101 whereas the instant appeal arises out of proceedings under section 33 C2 for the recovery of money on the basis of the Wage Board s award and the dispute if any is about the computation of VDA in implementation of that award
The scope of section 33 C2 is not the same as that of section 101 of the Act
In East India Coal Company Ltd Banares Colliery Dhanbad vs Raweshwar and Ors1 this Court held that although the scope of section 33 C2 is wider than that of a 33 C1 cases which would appropriately be adjudicated under section 101 are outside the purview of section 33 C2
The provisions of section 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 section 101
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 C2 but the matter also is yet at the initial stage
The controversy between the parties still remains to be determined on merits
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
VMK 1


Summary:
The three collieries owned by the appellant company employ over 4200 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 VDA 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 VDA at the rate of Rs 147 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 section 33 C2 of the Industrial Disputes Act for determination of the amount of VDA 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
221 of the Act by the Panchayat the conciliation proceedings to be under section 22 read with sec
121 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 VDA 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 section 183 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 VDA 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 section 33 C2 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 VDA 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 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 vs Rameshwar and ors
 this Court held that although the scope of section 33C2 is wider than that of sec 33 C1 cases which would appropriately be adjudicated under sec
101 are outside the purview of sec
33C2
The provisions of section 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 sec33 C2 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
vs Their workmen and Ors
discussed and The Sirsilk Ltd and Ors
vs Govt
of Andhra Pradesh and Anr 1964 SCR 448 referred to