Appeal No 404 of 1958
Appeal by special leave from the decision dated March 10 1958 of the Industrial Tribunal Rajkot in Adjudication Case No 67 of 1955
M C Setalvad Attorney General for India R J Kolah section N Andley J B Dadachanji Rameshwar Nath and P L Vohra for the appellants
Janardan Sharma for respondent No 2 1960
March 3
The Judgment of the Court was delivered by GAJENDRAGADKAR J
Can a registered trade union representing a minority of workmen governed by an award give notice to the other party intimating its intention to terminate the award under section 196 of the XIV of 1947 hereinafter called the Act That is the short question which arises for decision in the present appeal
In answering the said question it would be necessary to examine the scheme of the Act and to ascertain the true meaning
and effect of section 196 on its fair and reasonable construction
The controversy thus raised undoubtedly lies within a narrow compass but before addressing ourselves to the merits of the dispute it is necessary to state the material facts which led to the present proceedings
The present appeal has been brought before this Court by the Associated Cement Companies Limited hereinafter called the appellant against their workman hereinafter called the respondents and it arises from an industrial dispute between them which was referred for adjudication to the Industrial Tribunal for the State of Saurashtra by the Saurashtra Government under section 101 of the Act
Several items of demand presented by the respondents constituted the subject matter of the reference
When the tribunal began its proceedings the appellant raised four preli 159 minary objections against the competence of the reference itself
The tribunal heard parties on these preliminary objections and by its interlocutory judgment delivered on March 10 1958 it has found against the appellant on all the points
In the result it set down the reference for further hearing on the merits
It is against this interlocutory judgment and order that the appellant has come to this Court by special leave
Out of the four points urged by the appellant as preliminary objections we are concerned with only one in the present appeal and that relates to the incompetence of the reference on the ground that the award in question by which the parties were bound has not been duly terminated under section 196 of the Act inasmuch as the union which purported to terminate the said award represents only a minority of workmen bound by it
The circumstances under which this contention was raised must now be stated in some detail
The appellant is a limited company and owns and runs a number of cement factories spread out in different States in India as well as in Pakistan
It has a factory at Porbandar in Saurashtra
The factory is known as the Porbandar Cement Works
An industrial dispute arose between the appellant and the respondents in 1949 and it was referred for adjudication to the industrial tribunal on March 22 1949
This reference ended in an award made on September 13 1949
Thereafter the said award was terminated by the appellant and on disputes arising between it and the respondents another reference was made to the same tribunal for adjudication of the said disputes
A second award was made on July 24 1951 by which the earlier award with slight modifications was ordered to continue in operation
In the proceedings in respect of both the references the appellant s workmen were represented by their Union called Kamdar Mandal Cement Works Porbandar
It appears that the registration of the said union was cancelled on July 21954 and that led to the formation of two unions of the appellant s workmen the Cement Kamdar Mandal which was registered on 160 July 7 1954 and the Cement Employees  Union which was registered on September 18 1954
The Cement Kamdar Mandal gave notice to the appellant s manager on September 23 1954 purporting to terminate the first award pronounced on September 13 1949 at the expiration of two months  notice from the date of the said communication
By another letter written on December 201954 the same union purported to terminate the second award pronounced on July 24 1951 in a similar manner
On November 22 1954 the said Mandal presented fresh demands most of which were covered by the two previous awards
The said demands were referred to the Conciliation Officer for conciliation but the efforts at conciliation failed and on receiving a failure report from the officer the Saurashtra Government made the present reference purporting to exercise its jurisdiction under section 101c of the Act
The appellant s case is that the Cement kamdar Mandal was not authorised to terminate either of the two awards under section 196 of the Act that the second award is thus still in operation and so the reference is invalid
Meanwhile it appears that the Cement Employees  Union which represents the majority of the appellant s workmen at Porbandar instead of giving notice of termination under section 196 raised disputes with the appellant and the same were referred to the Conciliation Officer
Efforts at conciliation having failed the conciliation officer made a failure report to the Government of Saurashtra the Saurashtra Government however did not refer the  said dispute for adjudication
In the present proceedings this Union has been impleaded and it has supported the demands made by the Cement Kamdar Mandal in other words notwithstanding the rivalry between the two Unions the demands made by the minority union were supported by the majority union and in fact in the appeal before us it is the latter union that has appeared to contest the appeal
The tribunal has dealt with the point of law raised by the appellant under section 196 on the assumption that the Cement Kamdar Mandal which purported to terminate the awards under the said section represents the minority 161 of the workmen employed at Porbandar and we propose to deal with the point raised in the appeal on the same assumption
The main sections which fall to be considered in dealing with the dispute are sections 18 and 19 as they stood in 1954
Section 18 provides inter alia that an award 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 or tribunal as the case may be records the opinion that they were so summoned without proper cause c where a party referred to in cl
a or cl
b is an employer his heirs successors or assigns in respect of the establishment to which the dispute relates and d where a party referred to in cl
a or cl
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 became employed in that establishment or part
It is thus clear that though an industrial dispute may be raised by a group of workmen who may not represent all or even the majority of workmen still if the said dispute is referred to the industrial tribunal for adjudication and an award is made it binds not only the parties to the dispute or other parties summoned to appear but all persons who were employed in the establishment or who would be employed in future are also governed by the award  in other words the effect of section 18 is that an award properly made by an industrial tribunal governs the employer and all those who represent him under section 18c and the employees who are parties to the dispute and all those who are included in section 18b and d
Section 19 prescribes the period of operation of settlements and awards
Section 193 provides that an award shall subject to the provisions of this section remain in operation for a period of one year
This is subject to the provisos to suubs
3 as well as to sub section 4 but we are not concerned with the said provisions
Section 196 provides that notwithstanding the expiry of the period of operation under 21 162 sub section
3 the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which the notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award
The effect of this sub section is that unless the award is duly terminated as provided by it shall continue to be binding notwithstanding the expiration of the period prescribed by sub section
This position is not in dispute
The dispute between the parties centers round the question as to who can issue the notice terminating the award on behalf of workmen who are bound by the award as a result of section 18 of the Act
What the sub section requires is that a notice shall be given by any party bound by the award to the other party or parties
To whom the notice should be given may not present much difficulty
Where the award is sought to be terminated on behalf of the employees the notice has to be given to the employer and that is the party entitled to receive notice
Then as to  the parties  to whom also notices are required to be given it may perhaps be that the parties intended are those joined under section 10 sub section
5 or under section 18 sub section
2 or are otherwise parties to the dispute but with that aspect of the question we are not concerned in the present appeal because notice has been given to the appellant and all the workmen concerned in the dispute have appeared before the tribunal through the two respective unions
The question with which we are concerned and which is not easy to determine is the true interpretation of the word  any party bound by the award 
We have already noticed the effect of section 18 and we
have seen how wide is the circle of persons who are bound by the award as a result of the said section
 Literally construed any party bound by the award may mean even a single employee who is bound by the award and on this literal construction even one dissatisfied employee may be entitled to give notice terminating the award
On the other hand it may be possible to contend that any party in the context must mean a party that represents the majority of the persons bound by the award
163 Terminating the award is a serious step and such a step can be taken by a party only if it can claim to represent the will of the majority on that point
It is for this construction that the appellant contends before us
In construing this provision it would be relevant to remember that an industrial dispute as defined by section 2k of the Act means any dispute or difference between employers and employers or between employers and workmen or between workmen and workmen which is connected with the employment or non employment or the terms of employment or with the conditions of labour of any person
This definition emphatically brings out the essential characteristics of the dispute with which the Act purports to deal
The disputes must relate to the terms of employment or with the conditions of labour and they must arise inter alia between workmen and their employer
Ordinarily an individual dispute which is not sponsored by the union or is otherwise not supported by any group of workmen is not regarded as an industrial dispute for the purposes of the Act
A provision like that contained in section 33A is of course an exception to this rule
The basis of industrial adjudication recognised by the province of the Act clearly appears to be that disputes between employers and their employees would be governed by the Act where such disputes have assumed the character of an industrial dispute
An element of collective bargaining which is the essential feature of modern trade union movement is necessarily involved in industrial adjudication
That is why industrial courts deal with disputes in relation to individual cases only where such disputes assume the character of an industrial dispute by reason of the fact that they are sponsored by the union or have otherwise been taken up by a group or body of employees
In The Central Provinces Trans port Services Limited vs Raghunath Gopal Patwardhan 1 this Court has observed that  the preponderance of judicial opinion is clearly in favour of the view that an individual dispute cannot per se be an industrial dispute but may become one if taken up by a 1   164 trade union or a number of persons 
These observations have been cited with approval by this Court in the case of The Newspapers Limited vs The State Industrial Tribunal U P
Having regard to this aspect of the matter it would be difficult to hold that any party bound by the award  can include an individual workman though speaking literally he is a party bound by the award
In our opinion there fore the said expression cannot include an individual workman
We oughtto add that this position is fairly conceded by Sharma for the respondents
That takes us tothe question as to whether the expression  any party bound by the award  must mean a union representing the majority of the workmen bound by it or a group of workmen constituting such majority acting otherwise than through the union
The expression  any party bound by the award  obviously refers to and includes all persons bound by the award under section 18
The learned Attorney General has urged before us that we should construe section 196 so as to preclude a minority of workmen bound by the award from disturbing the smooth working of the award and thereby creating an industrial dispute
When an award is made it binds the parties for the statutory period under section 193 and even after the expiration of the said period it continues to be binding on the parties under section 196 unless it is duly terminated
The policy of the Act therefore appears to be that the smooth working
of the award even after the prescribed statutory period should not be disturbed unless the majority of the workmen bound by it feel that it should be terminated and fresh demands should be made
If a minority of workmen or a minority union is allowed to terminate the award it would lead to the anomalous result that despite the willingness of the majority of workmen to abide by the award the minority can create disturbance and raise an industrial dispute and that cannot be within the contemplation of the Legislature when it enacted section 196 of the Act
That in substance is the argument urged before us thus presented the argument no doubt appears prima facie attractive 1  165 but in our opinion it would be unreasonable to accept this construction and impose the limitation of the majority vote in the matter of the termination of the award
The effect of imposing such a limitation would in our opinion seriously prejudice the interests of the employees
It is well known that the trade union movement in this country cannot yet claim to cover all employees engaged in several branches of industry
Membership of the important trade unions no doubt shows an appreciable increase and progress but the stage when trade unions can claim to have covered all employees or even a majority of them has still not been reached
If the majority rule for which the appellant contends is accepted and section 196 is accordingly construed termination of the award would we apprehend become very difficult if not impossible in a very large number of cases
It is in this context that the effect of section 18 has to be borne in mind
As we have already indicated the class of employees bound by the award under section 18 is very much wider than the parties to the industrial dispute in which the award is made the said class includes not only all the persons employed in the establishment at the date of the award but it covers even the subsequent employees in the said establishment
It is therefore obvious that if the majority rule is adopted very few awards if any could be terminated because very few unions would be able to claim a majority of members on their rolls and in their present stage of Organization in very few cases would a majority of workmen be able to meet decide and act together otherwise than through their unions
That is why the majority rule would very seriously prejudice the rights of employees to terminate awards when they feel that they need to be modified or changed
That is one aspect of the matter which cannot be ignored in construing the material words in section 196
There is another aspect of the question which is also relevant and which in our opinion is against the construction suggested by the appellant
We have already noticed that an industrial dispute can be raised by a group of workmen or by a union even 166 though neither of them represent the majority of the workmen concerned in other words the majority rule on which the appellant s construction of section 196 is based is inapplicable in the matter of the reference of an Industrial dispute under section 10 of the Act
Even a minority group of workmen can make a demand and thereby raise an industrial dispute which in a proper case would be referred for adjudication under section 10
It is true that an award pronounced on such reference would bind all the employees under section 18 but logically if an industrial dispute can be raised by a minority of workmen or by a minority union why should it not be open to
a minority of workmen or a minority union to terminate the award which is passed on reference made at their instance  The anomaly to which the learned Attorney General refers has no practical significance
If the majority of workmen bound by the award desire that the award should continue and needs no modification they may come to an agreement in that behalf with their employer and adopt such course as may be permissible under the Act to make such agreement effective
However that may be we are satisfied that both logic and fairplay would justify the conclusion that it is open to a minority of workmen or a minority union to terminate the award by which they along with other employees are bound just as much as it is open to hem to raise an industrial dispute under the Act
hat is the view taken by the industrial tribunal in he present case and we see no reason to differ from it
It appears that when this question was argued before the tribunal the appellant strongly relied on rule 83 framed by the Government of Bombay under section 38 of the Act and it was urged that the said rule is consistent with the construction sought to be placed by the appellant on section 196
It is conceded that at he relevant time this rule was not in force and so it s strictly not applicable to the present proceedings
hat being so we do not propose to consider the argument based on the said rule and to examine the question as to whether the rule really supports the appellant s construction and if yes whether it would be valid
The question raised before us must obvi 167 ously be decided on a fair and reasonable construction of section 196 itself and the rule in question even if applicable would not be material in that behalf
We accordingly hold that on a fair and reasonable construction of section 196 the true position is that though the expression any party bound by the award refers to all workmen bound by the award notice to terminate the said award can be given not by an individual workman but by a group of workmen acting collectively either through their union or otherwise and it is not necessary that such a group or the union through which it acts should represent the majority of workmen bound by the award
In the result the appeal fails and is dismissed with costs
Appeal dismissed


Summary:
A relinquishment by a Hindu widow of her estate in favour of the next reversioner and a stranger in equal moieties is not a valid surrender under Hindu law
A valid surrender cannot be made in favour of anybody except the next heir of the husband
Mummareddi Nagireddi vs Pitti Durairaja Naidu 1951 SCR 655 followed
It is competent to a Hindu widow to enter into a compro mise in the course of the suit bona fide in the interest of the estate and not for her personal advantage and a decree passed on such a compromise will be binding on the rever sioner
The question whether a compromise is a bona fide settlement of a disputed right between the parties depends on the substance of the transaction and in order that it may bind the estate it should be a prudent and reasonable act
On the facts their Lordships held agreeing with the High Court that the compromise in the present case was neither prudent nor reasonable so far as it affected the interests of the estate and of the ultimate reversioners and that it was not therefore binding on the reversioners Ramsumaran Prasad vs Shyam Kumari 49 IA 342 Mohendra Nath Biswas vs Shamsunnessa Khatun 21 CLJ 157 and Imrit Kunwar vs Roop Narain Singh fol lowed
Mata Prasad vs Nageshar Sahai 52 IA 393 distin guished