Civil Appeal No 1484 of 1971
Appeal by special leave from the Award dated the 1971 of the Industrial Tribunal Masharashtra Bombay in Reference No IT 123 of 1968 published in the Masharashtra Government Gazette dated the 5th August 1971
MC Bhandare and Dr YS Chitale OC Mathur KJ John and JS Sinha for the Appellant
Jitendra Sharma and Janardan Sharma for Respondent No 1
K Rajendra Choudhary for Respondent No 2
The Judgment of the Court was delivered by KOSHAL J
This is an appeal by special leave against an award dated 30th April 1971 of the Industrial Tribunal Masharashtra the Tribunal for short deciding a reference made to it under clause d of sub section I of section 10 of the Industrial Disputes Act hereinafter called the Act requiring adjudication of demands raised by the workmen of the Tata Engineering and Locomotive Company Limited Machine Tools Division Chinchwad hereinafter referred to as the company
The facts leading to this appeal may be briefly set out
The Company came into existence under an order passed by the High Court of Masharashtra on the 27th June 1966 directing amalgamation of two pre existing concerns one having the same name as the Company and another known as the Investa Machine 931 Tools and Engineering Company
After the amalgmation a section A of the workers of the Compay formed a union known as Telco Kamgar Union for short the Telco Union which was registered as such on the 2nd June 1967 but which even before that submitted a charter of demands to the Company on the I st May 1967
Subsequently other workers of the Company established another union named the Telco Kamgar Sanghatana hereinafter called the Sanghatana which presented another set of demands to the Company on the 29th September 1967
A settlement was reached in conciliation proceedings in relation to the demand last mentioned on the 3rd october 1967
Being dissatisfied with the attitude of the Assistant Labour Commissioner Poona who acted as the Conciliation officer the Telco Union approached the State Government who made the reference culminating in the impugned award
The reference was received by the Tribunal on the 22nd March 1968 and was pending adjudication when on the 18th February 1970 the Company filed in application Exhibit C 10 stating that a settlement Exhibit C 10A had been reached between it and the Sanghatana on the 7th February 1973 that the same had been assented to by 564 out of 635 daily rated workmen that the dispute pending adjudication before the Tribunal related only to that category of workmen and that it did not survive by reason of the settlement
Settlement Exhibit C 10A was challenged by the Telco Union through an application Exhibit U 1 made to the Tribunal on the 14th April 1970 and signed by 400 daily rated workmen who professed to be members of that Union with the allegation that it had been brought about by coercion duress and false promises
In these circumstances the Tribunal addressed itself to the controversy regarding the legality and binding nature of the settlement
In that behalf its findings were a There was no evidence of the settlement being vitiated by any duress coercion or false promises
It was therefore both legal and fully binding on the parties thereto under sub section I of section 18 read with clause p of section 2 of the Act
b No attempt had been made by either party to the reference to prove as to how many of the 564 workmen 932 who had assented to the settlement were members of the Sanghatana
c Those of the 564 workmen aforesaid who were not members of the Sanghatana were not bound by the settlement in as much as they were not parties thereto but had ratified or accepted the settlement only after it had been reached and such ratification and acceptance does not make them parties to the settlement for the purposes of the Act
The Tribunal therefore proceeded to find out whether the settlement was just and fair and although it found it to be so in most aspects it was of the opinion that an increase in the additional daily wage was called for in respect of each of the 7 grades of daily rated workmen
That increase was calculated by it separately for each grade and varies from Rs 780 to Rs 1290 per month
By the impugned award it declared accordingly refusing to act upon the settlement although the same had been held by it to be legal and binding on the parties to it
After hearing learned counsel for the parties we have come to the conclusion that finding b above set out cannot be sustained
It is not disputed before us that the settlement dated 7th February 1970 was arrived at between the Company on the one hand and the Sanghatana on the other and also that it was assented to by the said 564 workmen by means of a document Exhibit S 8 bearing their signatures underneath a declaration which reads We the following workers who are members of the Telco Kamgar Sanghatana hereby sign individually on the settlement which has been agreed upon and signed under Section 2 p of the 
The terms and conditions of the settlement are acceptable to me and are binding on me emphasis supplied
It is no body s case that any of the signatories to this declaration was not one of the said 635 workers or that any of the signatures appearing underneath the declaration was forged or fictitious
And if that be so the assertion by each signatory to the declaration that he was a member of the Sanghatana has to be taken at its face value and presumed to be correct until it is shown to be false
The Onus 933 to prove the falsity of the assertion in the case of any particular A workman thus rested heavily on the Telco Union but it made no attempt to discharge the same
It has been urged on its behalf that the very fact that 400 workmen had challenged the settlement claiming to be members of the Telco Union showed that the declaration made earlier was not correct
Now it is true that out of a total of 635 workmen 564 signed the declaration and later on 400 challenged the settlement
The only reasonable inference to be drawn from that circumstance would however be that at least 329 workers changed sides in between the 18th of February 1970 and the 14th of April 1970
lt cannot be further interpreted to mean in the absence of any other evidence on the point that the declaration when made was false
In this view of the matter we must hold that the declaration constitutes presumptive proof of the fact that the signatories to it were all members of the Sanghatana when they signed it
The correctness of finding a has not been assailed before us on behalf of either party and in view of the provisions of sub L section 1 of section 18 of the Act that finding must be upheld so that settlement dated the 7th February 1970 would be binding on all workers who were members of the Sanghatana as on that date including the 564 workers who signed the declaration
Consequently finding c which is unexceptionable in so far as it goes loses all its relevance and we need take no further notice of it
The conclusion reached by the Tribunal that the settlement was not just and fair is again unsustainable
As earlier pointed out the Tribunal itself found that there was nothing wrong with the settlement in most of its aspects and all that was necessary was to marginally increase the additional daily wage
We are clearly of the opinion that the approach adopted by the Tribunal in dealing with the matter was erroneous
If the settlement had been arrived at by a vast majority of the concerned workers with their eyes open and was also aecepted by them in its totality it must be presumed to be just and fair and not liable to be ignored while deciding the reference merely because a small number of workers in this case 71 ie 1118 per cent were not parties to it or refused to accept it or because the Tribunal was of the opinion that the workers deserved marginally higher emoluments than they themselves thought they did
A settlement cannot be weighed in any golden scales and the question whether it is just and fair has to be answered on the basis of principles different from those which come into play when an 934 industrial dispute is under adjudication
In this connection we cannot do better than quote extensively from Herbertson Limited vs Workmen of Herbertson Limited and Others1 wherein Goswami J speaking for the Court observed
Besides the settlement has to be considered in the light of the conditions that were in force at the time of the reference
It will not be correct to judge the settlement merely in the light of the award which was pending appeal before this Court
So far as the parties are concerned there will always be uncertainty with regard to the result of the litigation in a Court proceeding
When therefore negotiations take place which have to be encouraged particularly between labour and employer in the interest of general peace and well being there is always give and take
Having regard to the nature of the dispute which was raised as far back as 1968 the very fact of the existence of a litigation with regard to the same matter which was bound to take some time must have influenced both the parties to come to some settlement
The settlement has to be taken as a package deal and when labour has gained in the matter of wages and if there is some reduction in the matter of dearness allowance so far as the award is concerned it cannot be said that the settlement as a whole is unfair and unjust     
We should point out that there is some misconception about this aspect of the case
The question of adjudication has to be distinguished from a voluntary settlement
It is true that this Court has laid down certain principles with regard to the fixation of dearness allowance and it may be even shown that if the appeal is heard the said principles have been correctly followed in the award
That however will be no answer to the parties agreeing to a lesser amount under certain given circumstances
By the settlement labour has scored in some other aspects and will save all unnecessary expenses in uncertain litigation
The settlement therefore cannot be judged on the touch stone of the principles which are laid down by this Court for adjudication
935 There may be several factors that may influence parties to a settlement as a phased endeavour in the course of collective bargaining
Once cordiality is established between the employer and labour in arriving at a settlement which operates well for the period that is in force there is always a likelihood of further advances in the shape of improved emoluments by voluntary settlement avoiding friction and unhealthy litigation
This is the quintessence of settlement which courts and tribunals should endeavour to encourage
It is in that spirit the settlement has to be judged and not by the yardstick adopted in scrutinising an award in adjudication
The Tribunal fell into an error in invoking the principles that should govern in adjudicating a dispute regarding dearness allowance in judging whether the settlement was just and fair       
It is not possible to scan the settlement in bits and pieces and hold some parts good and acceptable and others bad
Unless it can be demonstrated that the objectionable portion is such that it completely outweighs all the other advantages gained the Court will be slow to hold a settlement as unfair and unjust
The settlement has to be accepted or rejected as a whole and we are unable to reject it as a whole as unfair or unjust
Even before this Court the 3rd respondent representing admittedly the large majority of the workmen has stood by this settlement and that is a strong factor which it is difficult to ignore
As stated elsewhere in the judgment we cannot also be oblivious of the fact that all workmen of the company have accepted the settlement
Besides the period of settlement has since expired and we are informed that the employer and the 3rd respondent are negotiating another settlement with further improvements
These factors apart from what has been stated above and the need for industrial peace and harmony when a union backed by a large majority of workmen has accepted a settlement in the course of collective bargaining have impelled us not to interfere with this settlement
 The principles thus enunciated fully govern the facts of the case in hand and respectfully following them we hold that the 936 settlement dated the 7th February 1970 as a whole was just and fair
There is no quarrel with the argument addressed to us on behalf of the workers that mere acquiescence in a settlement or its acceptance by a worker would not make him a party to the settlement for the purpose of section 18 of the Act vide Jhagrakhan Collieries P Ltd vs Shri Go
Agarwal Presiding officer Central Government Industrial Tribunal cum Labour Court Jabalpur and others I It is further unquestionable that a minority union of workers may raise an industrial dispute even if another union which consists of the majority of them enters into a settlement with the employer vide Tata Chemicals Ltd vs Its Workmen o But then here the Company is not raising a plea that the 564 workers became parties to the settlement by reason of their acquiescence in or acceptance of a settlement already arrived at or a plea that the reference is not maintainable because the Telco Union represents only a minority of workers
On the other hand the only two contentions raised by the Company are i that the settlement is binding on all members of the Sanghatana including the 564 mentioned above because the Sanghatana was a party to it and ii that the reference is liable to be answered in accordance with the settlement because the same is just and fair
And both these are contentions which we find fully acceptable for reasons already stated
In the result the appeal succeeds and is accepted
The impugned award is set aside and is substituted by one in conformity with the settlement
There will be no order as to costs
PBR Appeal allowed


Summary:
In conciliation proceedings in relation to the demands of one of the two unions known as Sanghatana of workers of the appellant company a settlement wat reached
At the instance of the second union Telco Union which was dissatisfied with the settlement the Government referred the dispute to the tribunal
Before the tribunal the company contended that since 564 out of 635 daily rated workers to whom the settlement reached by the Sanghatana related had assented to it the dispute no longer survived
Rejecting the Telco Union s is contention that the settlement was vitiated by duress coercion or false promises the tribunal held that it was binding on the parties under section 18 1 read with section 2 p of the Industrial Disputes Act
The tribunal however held that it had not been proved by either party as to how many of the 564 workmen who had assented to the settlement were members of the Sanghatana
Although the tribunal found that the settlement was just and fair in most aspects it held that an increase in the additional daily wages was called for in respect of certain categories and calculated the increase separately for each grade
The tribunal refused to act upon the settlement
Allowing the appeal  HELD The declaration signed by 564 workers of the company constituted presumptive proof of the fact that the signatories to it were all members of the Sanghatana when they signed it
In the absence of any evidence that any of the signatories to the declaration was not one of the 635 workers or that any signature appearing in the declaration was forged or fictitious the assertion of each signatory that he was a member of the Sanghatana is to be presumed to be correct until it is shown to be false
The onus to prove the falsity of the assertion in the case of any particular workman rested on the Telco Union which made no attempt to discharge the burden
Out of 635 workmen 564 signed the declaration
The fact that 400 workmen later on challenged the settlement only leads to the inference that at least 329 workmen changed sides afterwards
932 H 933A C 930 The conclusion of the tribunal that the settlement was not just and fair is unsustainable
The settlement as a whole was just and fair
If the settlement had been arrived at by a vast majority of the concerned workmen with their eyes open and was accepted by them in its totality it must be presumed to be just and fair and not liable to be ignored while deciding the reference merely because a small number of workers were not parties to it or refused to accept it or because the tribunal was of the opinion that the workers deserved marginally higher emoluments than they themselves thought they did
The question whether a settlement is just and fair has to be answered on the basis of principles different from those which come into play when an industrial dispute is under adjudication
933 G H Herbertsons Limited vs Workmen of Hetbertsons Limited  others 197  2 SCR 15 followed