Case: N.R.C. Employees' Union & Others Vs. The Government of Maharashtra Department of Industries, Energy & Labour & Others

Smt. Mhatre, J.1. These two petitions raise identical issues based on the same set of facts. They have therefore been heard together. Writ Petition No.8505 of 2009 has been filed by the NRC employees union and some of its members (for the sake of convenience, the petitioners in this petition will be referred to as the `staff union). Writ Petition No. 8574 of 2009 has been filed by individual workers employed in the factory of the respondent company for themselves and on behalf of 2083 workers whose names are listed in exhibit A to the Writ Petition. (for the sake of convenience, the petitioners in this petition will be referred as `individual workmen). Both these writ petitions, have been filed to challenge the execution and implementation of settlements which the employer i.e. the NRC Limited (for short, hereinafter referred to as the `company) has arrived at with NRC Mazdoor Sangh (for short, `the Mazdoor Sangh), which claims to be a recognised union under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (for brevity the MRTU an PULP Act). The principal challenge in both these petitions is to the settlement which is purportedly signed on 5.9.2008 in conciliation on the ground that the mandatory requirements of section 12 of the Industrial Disputes Act,1947 and Rule 11 of the Industrial Disputes (Bombay) Rules, 1957 have been breached and, it is therefore, not binding on either the staff union and its members or the individual workmen of the factory. The settlement has also been challenged on the ground that it violates the provisions of section 25-O and section 25-N of the Industrial Disputes Act.2. In order to appreciate the challenge to the settlements in these petitions it would be necessary to set out a few facts.FACTS:3. The Company was running three plants with a composite factory licence for the manufacture of nylon, rayon and chemicals in its factory at Mohane in District Thane. The factory was established over 442.55 acres of land. The individual workmen were engaged in the factory and were represented by the Maharashtra General Kamgar Union till 2001. Thereafter, the certificate of recognition was granted to Respondent No.3 union i.e. the Mazdoor Sangh on an application being filed by it u/s 14 of the MRTU & PULP Act. The staff employed by the company worked in the Head Office which was situated outside the precincts of the factory and in Mumbai city. The staff union was accorded recognition in 1991 under the MRTU & PULP Act and continued to represent the staff employed by the company. Several settlements were signed by it with the company in respect of the service conditions of the staff employed by the company; the last of such settlements was dated 25.8.1993 which was in force till 1996. Thereafter, the staff union raised a charter of demands for revision of the service conditions of the staff. The demands were referred for adjudication to the Industrial Tribunal under Reference (IT) No.10 of 1997. The Company too raised its demands qua the service conditions of the members of the staff union which were also referred for adjudication being Reference (IT) No.12 of 1997. Both these references are pending before the Industrial Tribunal.4. The staff was shifted from the Mumbai offices located in the Eros Building and in Ewart House to the factory premises in Mohane during the period from April 1995 to March 1996. The Mazdoor Sangh which claims to have obtained recognition under the MRTU & PULP Act in the place of the Maharashtra General Kamgar Union in 2001 did not file an application in either of the references being Reference Nos.(IT) Nos.10 of 1997 and 12 of 1997 to permit it instead of the staff union to represent the workmen i.e. the staff before the Tribunal.5. It appears that the company was declared a sick company in 1987. As its net worth increased, by an order dated 10.1.1994 the Board for Industrial and Financial Reconstruction (for short, `BIFR) discharged the company from the purview of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, `SICA). According to the Company, it undertook several measures in order to reduce the losses which it had incurred. However, in the financial year 2005-2006, there was a gradual erosion of the working capital of the company and consequently it was faced by a financial crunch. It appears that the Company decided to dispose off surplus land owned by it in the factory precincts in 2005-2006 in order to raise funds for the financial restructuring of the company. On 1.3.2007 it entered into an agreement to sell approximately 344 acres of land to K.Raheja Universal Ltd. On obtaining no objection certificates from its secured creditors, namely, several nationalised banks. The production activities in the nylon plant were discontinued by the company in November 2007. According to the company, it was required to undertake multifarious measures for restructuring its finances and while doing so, it entered into a settlement with the Mazdoor Sangh on 5.9.2008, which included a clause for an early retirement scheme. The company claims that out of the total strength of 3725 employees, including the clerical staff, , about 577 opted for the scheme. The operations in the Rayon plant were stopped in July 2008. An application was submitted by the company to the BIFR u/s 15(1) of the SICA. It was declared a sick company u/s 17(3) of the SICA by the BIFR on 16.7.2009. An appeal was filed by the company before the AAIFR. The AAIFR reversed the findings of the BIFR and, therefore, writ petitions were filed in this Court by the company as also by the NRC Employees Union and the NRC Mazdoor Sangh. This Court disposed off those writ petitions by judgement and order dated 29.7.2011. The order passed by the appellate authority was set aside and the order passed by the BIFR was confirmed in those petitions by the Division Bench of this court to which one of us (Marlapalle, J.) was a party.6 The staff union became aware of the settlement between the company and the Mazdoor Sangh which claimed to represent the individual workmen and other manual workers as well as the staff only when an application was submitted before the Tribunal by the company in the aforesaid references on 12.12.2008. In its application, the company requested the Tribunal to dispose off the references since it had entered into a settlement in conciliation on 5.9.2008 with the recognised union, namely, the Mazdoor Sangh. The staff union has opposed this application submitted by the company on 12.12.2008. No orders have been passed as yet on that application. A lockout notice dated 15.11.2009 was issued by the company. That lockout has not been lifted as yet.7. Three settlements have been challenged in these petitions i.e. the settlement of 5.9.2008, which the company claims is a settlement in conciliation and the subsequent settlements dated 10.12.2008 and 17.1.2009 signed u/s 2(p) by the company with the Mazdoor Sangh, extending the period within which the settlement dated 5.9.2008 was to take effect.GROUNDS ON WHICH THE SETTLEMENTS ARE CHALLENGED:8. The principal grounds on which these settlements have been challenged in Writ Petition No.8505 of 2009 filed by the Staff Union are:(i) the Mazdoor Sangh could not enter into a settlement with respect to the staff as it did not represent the staff; (ii) the settlement dated 5.9.2008 is not a settlement signed in conciliation as the provisions of the Industrial Disputes Act and the Rules framed thereunder have been violated; (iii) the settlement cannot be said to be binding on the staff when historically the service conditions of the staff have always been different from the factory workmen; (iv) the recognition accorded to the staff union in 1991 does not automatically come to an end because their workplace is shifted; (v) the settlements are in breach of section 33(1) of the Industrial Disputes Act as no permission has been obtained from the Industrial Tribunal where the aforesaid references are pending, before effecting a change in the working conditions of the staff by the three settlements challenged in the petition and (vi) these settlements have changed the service conditions, without issuing a notice of change under Section 9-A of the Industrial Disputes Act.9. The individual workmen have challenged these settlements in the writ petition filed by them being writ petition No.8574 of 2009 on the grounds that: (i) no charter of demands was raised by the Mazdoor Sangh in respect of the terms of the settlement; (ii) the demands of the management which were admitted in conciliation were with respect to enhancing the production norms and reduction of 1800 persons through an early retirement scheme; (iii) the settlement violates the provisions of section 25-O, 25-M and 25-N of the Industrial Disputes Act and, therefore, cannot be binding on the individual workmen; (iv) the conciliation officer has abdicated his statutory duties while terming the settlement of 5.9.2008 as a settlement signed in conciliation; (v) demands which were not admitted into conciliation could not be a part of a settlement in conciliation.10. At the hearing of these two petitions, Mr. Talsania, the learned Counsel appearing for the Company, and Mr. Bapat, appearing for the Mazdoor Sangh, raised two preliminary issues, namely, that the writ petitions challenging the settlement in conciliation were not maintainable and that the petitioners in either petition did not have the locus to challenge the settlement, as the Mazdoor Sangh was the recognised union.MAINTAINABILITY OF THE WRIT PETITIONS -11. It has been submitted on behalf of the respondents that once a settlement is signed in conciliation the only remedy which the union or individual workmen may have is to challenge that settlement by raising an industrial dispute. According to the learned Counsel appearing for the respondents, the present individual workmen or the staff union would have to raise an industrial dispute in respect of the settlement dated 5.9.2008 in order to have it set aside and the High Court cannot do so in exercise of its powers under Articles 226 and 227 of the Constitution of India. Reliance is placed by the learned Counsel for the respondents on the judgements of the Supreme Court in the case of K.C.P. Ltd. v/s Presiding Officer & ors., (1996) 10 SCC 446 ; National Engineering Industries Ltd. vs. State of Rajasthan, (2000) 1 SCC 372; State of Uttaranchal vs. Jaipal Singh, (2005) 8 SCC 49 ; Jaihind Roadways vs. Maharashtra Rajya Mathadi and Transport General Kamgar Union & Ors., (2005) 8 SCC 511 and Captain S.C. Adhikari & Ors. vs. Air India (through its Managing Director) & Ors., 2001 LLN 1119 decided by a Division Bench of this Court in support of this submission.12. It has been urged by Mrs. Doshi, learned Counsel appearing for the staff union, that this issue had been raised by the respondents when the petitions were heard for admission and it was only after the Court was satisfied that the petitions were maintainable that Rule was issued in both the petitions. According to her, the respondent company had approached the Supreme Court by way of Special Leave Petitions challenging the interim order passed by this Court while admitting the petition. Grounds with regard to the maintainability of the petition were raised before the Supreme Court by the Respondents. The Special Leave Petitions were dismissed and, therefore, the respondents cannot raise the issue regarding the maintainability of the petition at this stage again, urged the learned Counsel. She has submitted that since there is a breach of section 12 of the Industrial Disputes Act and Rule 11 of the Industrial Disputes (Bombay) Rules while recording the settlement of 5.9.2008 as a settlement in conciliation the only remedy available to the staff union is to file the present petition.13. Ms. Singh, appearing in the petition filed by the individual workmen reiterated the submissions advanced by Mrs. Doshi regarding the maintainability of the writ petition. She also submitted that a settlement could be signed by a recognised union only with respect to an industrial dispute and not regarding any and every dispute. According to her, some workmen including the petitioners who have been terminated from service as a consequence of the settlement of 5.9.2008 have challenged their respective termination orders on the ground that individual disputes cannot be settled by a recognised union when they are in respect of the suspension or the termination of service of the individuals, by way of discharge, dismissal, retrenchment, etc.14. The Division Bench of this Court while admitting the present petitions and granting interim relief has observed thus:7. In our opinion, prima facie even assuming that the representative Union has entered into a settlement it can only be in respect of dispute which would partake of an industrial dispute and in respect of individual dispute which it has raised. It will not be open to the recognised union under the guise of settlement either to settle the disputes which are not industrial dispute and/or individual disputes which have been raised by the individual workmen in their personal capacity and are pending before the industrial forum for rights which they are entitled to under the existing service conditions or other settlements.15. These observations of the Division Bench were obviously prima facie. However, they have been confirmed by the Supreme Court while dismissing the SLPs and, therefore, it would not be open to the respondents to agitate this issue again. We have however, considered the judgements cited by Counsel for the respondents and in our opinion, these judgements do not in any way indicate that the present writ petitions are not maintainable. In K.C.P. Ltd. (supra), the Supreme Court was concerned with the issue as to whether a settlement entered into between an employer and a trade union, otherwise than in conciliation proceedings, would bind dissenting members of the trade union. A number of workmen employed with K.C.P. Ltd. Were dismissed. The conciliation proceedings with respect to their termination from service were initiated by the sole recognized and representative union on being authorized by other workmen including the dismissed persons who continued to be its members. As the conciliation proceedings failed, the dispute was referred to the Labour Court for adjudication under Section 2(k) read with Section 10. The demand for reinstatement of the dismissed workmen was espoused by the trade union on their behalf. The dismissed workmen did not raise disputes individually and, therefore, the demand of each workman for reinstatement with continuity of service and back wages was not referred under Section 2-A of the Industrial Disputes Act. By an agreement between the union and the management, the dismissed workmen were provided an option either to avail of compensation with other monetary benefits or to accept conditional reinstatement. The dismissed workmen repudiated the settlement. The management and the union representing the workmen sought an award in terms of the settlement in the pending references. The Labour Court refused to pass such an award as 12 of the dismissed workmen had not accepted the settlement. In these circumstances, the Supreme Court observed that since the dispute was espoused by the union on behalf of the dismissed workmen, it was an industrial dispute as defined under Section 2(k) and not a dispute as envisaged under Section 2A of the Industrial Disputes Act. As the settlement was fair and just, the Supreme Court observed that the Labour Court ought to have passed an award in terms of the settlement instead of continuing the reference in relation to the dismissed workmen who had repudiated the settlement. The Counsel for the respondents attempted to draw an analogy by submitting that the Mazdoor Sangh which was the recognised union was well within its rights in signing a settlement with the company, in conciliation, which was binding on every workmen employed by the company. This judgement, in our opinion, has no application to the facts of the present case. The references and/or complaints pending before the Industrial Tribunal/Labour Court in respect of the individual workmen in the present case have been initiated at the instance of the workmen themselves. Their cause has not been espoused by any trade union, much less the Mazdoor Sangh. In any event, the proviso to Section 18(1) of the Industrial Disputes Act in no uncertain terms provides that an agreement in respect of the dismissal, discharge, removal, retrenchment, termination of service, or suspension of an employee cannot bind the employee concerned after the agreement is signed between a recognised union and the management. Similarly, the proviso to Section 36(1) of the Industrial Disputes Act also enables a workman who challenges the legality or propriety of an order of dismissal, discharge, removal, retrenchment, termination of service, or suspension to be represented either by a legal practitioner with the consent of the management and with the leave of the court or through an office bearer of any trade union, despite the presence of a recognized union in the establishment. Complaints with respect to the dismissal or discharge of a workman filed under the M.R.T.U. & P.U.L.P. Act can be prosecuted by individual workmen. Section 21 of this Act places an embargo on the appearance of an individual workman in a complaint filed in respect of unfair labour practices under Items 2 and 6 of Schedule IV of the MRTU & PULP Act. A complaint regarding dismissal or discharge of an employee would fall within Item 1 of Schedule IV of the MRTU & PULP Act. Therefore, the judgement of the K.C.P. Ltd. (supra) has no application to the present case. The contention that it is only the Mazdoor Sangh which could represent the individual employees and that the individual employees are bound by the settlement of 5th March, 2008 although it deals with their automatic termination from service and its consequences, is untenable and without merit.16. In the case of National Engineering Industries Limited (supra) three different unions had submitted separate charters of demands in 1986 which were identical in most respects. Conciliation proceedings were initiated and though a failure report was submitted by the conciliation officer in respect of the demands of one union, a settlement in conciliation was arrived at with the other two unions. The settlement was to be in operation for three years. All employees, including the members of the union whose demands resulted in a failure report, accepted the benefits of the settlement. The demands were later referred for adjudication by the appropriate government. The company contended that there were no demands pending and the members of the union which had obtained the reference had already accepted the benefit of the settlement. Consequently, there was no pending dispute which could be referred for adjudication. It is in these circumstances that the court held that when a representative union enters into a settlement and the workmen or other unions oppose that settlement on the ground that it is actuated by fraud, misrepresentation or concealment of facts, it would be a subject matter of yet another industrial dispute which an appropriate government may refer for adjudication. The Court has observed thus:24. ........... When there is a dispute that the settlement is not bona fide in nature or that it has been arrived at on account of fraud, misrepresentation or concealment of facts or even corruption and other inducements it could be subject matter of yet another industrial dispute which an appropriate Government may refer for adjudication after examining the allegations as there is an underlying assumption that the settlement reached with the help of the Conciliation Officer must be fair and reasonable. ........17. These observations have been reiterated in the case of Jaihind Roadways vs. Maharashtra Rajya Mathadi and Transport General Kamgar Union & Ors. (supra). However, in the present petitions what has been challenged is a settlement purportedly arrived at in conciliation. The ground of challenge as we have mentioned earlier is mainly that the conciliation officer abdicated his role of an unbiased facilitator of a settlement and breached the provisions of section 12 of the Industrial Disputes Act r/w Rule 11 of the Industrial Disputes (Bombay) Rules. Exception has been taken by the Petitioners to the procedure adopted by the conciliation officer in order to arrive at a settlement in conciliation. While doing so, the petitioners have also brought to our notice the patent illegalities of the settlement. In our opinion, the facts in the present case are different from the facts in the aforesaid judgements cited by the respondents inasmuch as the process of conciliation or the role of the conciliation officer was not impugned in those cases. Therefore, the writ petitions are maintainable.18. In the case of Provisional Liquidator, Ramakrishna Industries (Pvt.) Ltd. & Ors. vs. Workers Jothi Mills & Ors., 1992 II LLJ 797 Mad., the prayer in the writ petition was that the settlement entered into u/s 12(3) of the Industrial Disputes Act be quashed and for further appropriate orders. The grounds raised in the petition were almost identical to the ones raised in the present petitions. The learned Single Judge of the Madras High Court had allowed the writ petition filed by the workmen. This decision was impugned before the Division Bench of the Madras High Court in the appeal filed by the company. The grounds raised in the writ petition as noted by the Division Bench were as follows:5. the conciliation officer did not induce the parties to come to a fair and amicable settlement of the dispute. He merely and mechanically signed at the bottom of the settlement without any application of mind; (ii) the settlement was not in conformity with the provisions of sections 12(2) and 12(3) of the Industrial Disputes Act; (iii) the settlement was in breach of Chapter V-A and V-B of the Industrial Disputes Act patently containing arbitrary and unreasonable stipulations without any rhyme or reason.The learned Single Judge had issued a declaration that the settlement was not one arrived at in the course of conciliation proceedings u/s 12(3) of the Act and, therefore, was void and would have no effect qua the petitioner workmen. On behalf of the company, it was submitted that the question raised before the learned Single Judge ought to have been adjudicated upon by raising an industrial dispute and not in the exercise of powers under Article 226 of the Constitution of India. The Division Bench observed that when certain features of the settlement established that there were gross violations of the mandate of law, a writ petition was maintainable and there was no need to dismiss the writ petition on this ground. We respectfully agree with this reasoning of the Madras High Court and in our opinion, the present writ petitions are maintainable and, therefore, we are deciding them on merits.LOCUS OF THE PETITIONERS:19. It has been argued by the learned Counsel appearing for the respondents that since the settlement was signed by the company with a recognised union, no other union or individual workmen, whether members of the recognised union or not, had any locus to challenge the settlement. It was pointed out that under the proviso to section 18 of the Industrial Disputes Act, only a recognised union for any undertaking has the right to arrive at a settlement with the employer in respect of all other disputes except a dispute relating to the dismissal, discharge, removal, retrenchment, termination of service or suspension of an employee. Such a settlement is binding on all the persons referred to under clause (c) and (d) of subsection 3 of section 18. They have also submitted that the settlement of 5.9.2008 deals with various conditions of service and not merely about the dismissal, discharge, retrenchment or suspension of individual workmen and, therefore, the individual workmen of the factory had no right to challenge the settlement. As regards the staff union, it has been submitted that although it was a recognised union for the undertaking situated in the Eros building and at Ewart House in Mumbai upto 1996, the recognition came to an end when the staff was shifted to the factory premises in 1996. The recognised union for the factory in 1996 was the Maharashtra General Kamgar Union (MGKU) and, therefore, no other union could be considered as the recognised union although the workmen may have been members of a union recognised for a particular establishment at an earlier point of time. It was submitted that the recognition which is accorded by the Industrial Court under the MRTU & PULP Act is relates to the premises of an industry. Therefore, according to the learned Counsel, there cannot be a recognised union separately for the staff and individual workmen when they operate in the same premises. According to the learned Counsel for the Respondents, therefore, the petitioners in both the petitions have no locus to file the petitions.20. The submission of the learned Counsel for the respondents that the staff union has lost its status as a recognised union for the staff when the staff was shifted to the factory premises is fallacious. The Mazdoor Sangh applied for registration as a recognised union of the workmen in the factory in place of the MGKU in 1995 on the basis of their membership in the factory between October 1994 and March 1995. It did not simultaneously make any application for clubbing the concern at the factory with the concern at the office premises into one undertaking as is permissible in law. It chose to restrict its application made under s.14 of the MRTU and PULP act to the workmen in the factory. S.11 of the MRTU Act provides that an application may be filed by a union before the Industrial court for registering it as the recognized union for an undertaking. The word undertaking has been defined in the Act to mean any concern of the industry. Concern as defined in the Act means any premises including the precincts thereof where an industry is run. However while interpreting these words one cannot restrict the meaning only to the physical space of the building or premises in which the industry is run. It would have to mean and include the workmen employed in the particular premises or concern of the industry. Recognition of a union would have to be qua the workmen working in the concern. Recognition of a union cannot be only in respect of a physical space. For example, if a union is granted recognition in respect of a concern, meaning the physical space alone and the employer shifts the workplace of these workmen to another building it would be absurd to expect the union to apply for recognition once again. That could never have been the legislative intent. In a given case if an employer terminates the services of the employees in one unit where union A was the recognised union and shifts the workmen who were members of Union B (also recognised) to these premises from their original place of work, it can hardly be said that Union B would have to seek recognition again. Similarly when the members of a recognised union are shifted to a unit where there is already a recognised union of the workers in that unit in existence, the former cannot automatically lose its recognition. In fact the Act does not contemplate an automatic loss of recognition for any reason. It is only on an application being made to the Industrial Court that the recognition of a union can be cancelled. Even the cancellation can be effected only for the specific grounds mentioned in s.13. Shifting of the location of the work place of the members of the recognised union is not one such ground. Neither is there any concept of merger as the counsel for the respondents would have us believe. The recognition of one union cannot merge into the recognition of another. The members of one would have to resign and join the union which is in existence at the new workplace. Admittedly in the present case the members of the staff union have not forsaken it and joined the Mazdoor Sangh. Therefore the staff union would still continue as the recognised union for its members although the staff is now located in another unit. Moreover the recognition accorded to MGKU was only in respect of the workers employed in the factory and not for the staff. Mazdoor Sangh has been recognised in place of the MGKU as it filed an application under s.14 in 1994. The application was allowed in 2001 after verification of the membership for the six months between October 1994 and March 1995. The staff was shifted only in 1995-96 and therefore could never have been considered while ascertaining the membership. The submission of the learned counsel for the respondents is therefore untenable and without merit.21. Moreover the company itself treated the staff as a distinct workforce represented by the staff union. Admittedly, the staff union has entered into several settlements with the company over the years. In fact from April 1985 to March 1996, six settlements were signed between the staff union and the company, the last of which was a settlement dated 25.8.1993 which was in force till 1996. There is also no dispute that the staff was shifted to the factory premises during April, 1995 to March, 1996 in a phased manner. After the settlement of 25.8.1993 came to an end, the demands for changes in the service conditions were raised in 1996 by the staff union while its members were being shifted. The company raised demands simultaneously with respect to the service conditions of the workmen represented by the staff union alone, which have been referred to under reference (IT) No. 12 of 1997. There can be no dispute that the staff union represented only the staff and not the workmen employed in the factory. If indeed the Counsel for the respondents are correct that the staff union lost its recognition on the staff being shifted to the factory premises, then the company would certainly have raised this issue when it dealt with the charter of demands raised by the staff union in 1996. Instead of doing so, it raised its own demands with respect to only the staff represented by the staff union, which have been referred for adjudication. Even in the written statement filed by the company in the reference of the staff union the company has not thought it fit to raise this issue. In fact in the statement of claim filed by the Company in Reference (IT) No.12 of 1997, the Company has stated in para 2, the above reference pertains to the workmen employed at all places of the company. The total number of staff employees affected by this Reference is 366. The Company has further described the distinction between the service conditions of the staff and the factory workmen. In para 4, it has stated thus:4. It is further submitted that the Maharashtra General Kamgar Union is registered as a recognised union for the manual workmen working in the factory of the Company at Mohone. There is also another union, namely, NRC Mazdoor Sangh, representing workmen working in the Factory. The NRC Employees Union though not registered as a recognised union at Companys factory represents the staff workmen working in the factory and at Corporate and Registered Office at Mumbai and also the staff workmen working at Surat Branch Office of the Company.22. There is not a single pleading to the effect that the staff wherever placed cannot be represented by the staff union. In fact it appears from the statement of claim of the company that it wanted to bring parity in the service conditions of the staff and the factory workmen. Therefore, in our opinion, it is obvious that the respondents have merely tried to create a bogey with respect to the locus of the staff union which has questioned the procedure adopted while signing the settlement dated 5.9.2008.23. Mr. Bapat appearing for the Mazdoor Sangh has drawn our attention to section 36 of the Industrial Disputes Act to submit that as the Mazdoor Sangh is the recognised union for the undertaking, no workman in such an undertaking is entitled to be represented before the Tribunal by any other union, nor can he appear individually if the proceeding does not pertain to the legality or propriety of an order of dismissal or discharge or removal, suspension, etc. Significantly, the Mazdoor Sangh which claims to have been accorded recognition under the MRTU & PULP Act in 2001 did not care to apply to the court in the aforesaid References which are pending to permit it to represent the workmen in the References, to the exclusion of the staff union or individual workmen. Therefore this submission of Mr. Bapat is an after thought. Moreover the Mazdoor Sangh has not placed on record before us the application filed by it u/s 14 of the MRTU & PULP Act for cancellation of the recognition of MGKU and for being recognised in its place. There is no material before us to suggest that the members of the staff union had been included by the Mazdoor Sangh while seeking recognition.24. As regards the individual workmen, it has been argued on behalf of the Respondents that since they are members of the recognized union, they cannot file the present petitions. It is true that the Mazdoor Sangh was accorded recognition under the MRTU & PULP Act in place of the Maharashtra General Kamgar Union in 2001 when the members of the MGKU became members of the Mazdoor Sangh. However, it must be borne in mind that although the recognised union has precedence over all other unions and individual workmen when an issue is raised regarding the service conditions, this embargo on the appearance of other unions and individual workmen does not operate with respect to disputes regarding termination of service by way of retrenchment, dismissal, discharge, suspension, etc. On a perusal of the settlement of 5.9.2008, it is clear that the settlement speaks about the automatic termination of the services of individual workmen who do not accept the terms of the settlement. Clauses 6 and 7 envisage a reduction of 1500 workers from the complement of workers employed by the Company. These clauses provide for automatic termination of services of those workmen who do not resign under the early retirement scheme. It has been argued by Mr.Talsania that these clauses have not been acted upon and in fact the date of automatic termination has been extended by the settlements of 10.12.2008 and 1.1.2009. However, this submission does not in our opinion indicate that the clauses do not relate to individual termination of services. Such issues cannot be decided or settled upon by the recognised union. In these circumstances, although section 18(1) r/w 18(3) and the proviso to section 36(1) restrict any other union representing the workmen or individual workmen representing themselves when a recognised union is in existence in an establishment, the embargo will not operate in the present case. As a consequence of the impugned settlement the workmen would have to face termination of service without the due process of law being followed. The law laid down in the case of Oswal Agro Furane Ltd. & anr. Vs Oswal Agro Furane Workers Union & Ors., (2005) 3 SCC 224 , would permit the workmen to challenge the settlement though signed before the Conciliation Officer. In our opinion, the writ petition filed by both the staff union as well as individual workmen are maintainable and they have the locus to file the same.THE NATURE OF THE SETTLEMENT DATED 5.9.2008:25. It has been argued on behalf of the petitioners in both the petitions that the settlement of 5.9.2008 is not in fact a settlement in conciliation as claimed by the respondents. Both Mrs. Doshi as well as Ms. Singh has submitted that a settlement can be signed in conciliation only when the demands raised by the workmen or by the company are admitted in conciliation, and that demands were not admitted in conciliation find place in the settlement. It is also pointed out that a settlement in conciliation can be arrived at only with the conciliation officer fulfilling his role u/s 12 of the Industrial Disputes Act. Since in the present case, the conciliation officer had violated the provisions of section 12 as well as Rule 11 of the Industrial Disputes (Bombay) Rules, according to the learned Counsel, the settlement was not one in conciliation.26. In the backdrop of the facts before us it would be necessary to examine the provisions of section 12, Rule 11 and Rule 63. Section 12 delineates the duties of a conciliation officer. The conciliation officer may hold conciliation proceedings where an industrial dispute exists or is apprehended. It is his duty to act as a facilitator to bring about a settlement. He is expected to investigate the dispute and matters affecting the merits and to take such steps as are necessary to induce the parties to arrive at a fair and amicable settlement of the dispute. The conciliation officer must consider whether the disputes raised are in fact industrial disputes as defined in section 2(k) of the Industrial Disputes Act. When he finds that they are in fact industrial disputes. the conciliation officer must investigate the disputes by admitting the demands in conciliation for the purposes of bringing about a reconciliation between the parties. If the demands are not admitted in conciliation the question of entering into a settlement in conciliation does not arise. Any settlement arrived at prior to the demands being admitted into conciliation would be a settlement as envisaged u/s 2(p) of the Industrial Disputes Act r/w section 18(1). It would not partake of the colour of a settlement u/s 18(3). It is only when a settlement is arrived at during the course of conciliation proceedings with the active assistance of the conciliation officer that it can be termed as a settlement in conciliation. The conciliation officer is expected to create an atmosphere of conviviality to bring about a rapprochement between the parties and induce them to sign a settlement in respect of their disputes. The conciliation officer is required to record the steps taken by him in order to bring about a reconciliation between the parties and to submit a report to the appropriate government together with a memorandum of settlement signed by the parties to the dispute. If no such settlement is possible then, the report of the conciliation officer must indicate the steps taken by him for assessing the facts and circumstances relating to the dispute as also the reasons on account of which in his opinion a compromise could not be worked out. A report u/s 12 must be submitted by the conciliation officer within 14 days of the commencement of the conciliation proceedings. In the present case, admittedly no such report has been submitted by the conciliation officer. Therefore, in our opinion, the settlement cannot be termed as one signed in conciliation. Rule 11 requires the conciliation officer to give a formal intimation in writing to the parties concerned declaring his intention to commence conciliation proceedings from such date as may be specified. Unless the conciliation officer indicates his intention to intervene in the dispute and calls the parties for conciliation, the conciliation proceedings do not commence. Before deciding to intervene in any matter after the receipt of the justification statement from the party who has raised the industrial dispute, the conciliation officer may call the parties individually for a meeting to assess whether an industrial dispute in fact exists or is apprehended. It is only when the intimation of the intention of the conciliation officer to intervene and commence conciliation proceedings is sent to the parties and they appear before the conciliation officer that it can be said that conciliation proceedings have commenced. A settlement signed after the conciliation officer decides to intervene in the industrial dispute in order to bring about a resolution of the dispute can be considered as a settlement signed in conciliation.27. But in the present case the demands were admitted in conciliation on 5.9.2008 and the settlement was signed on the same day. A settlement in conciliation would require the active assistance of the conciliation officer to ensure that parties resolve their disputes and enter into settlement. The conciliation officer in the case before us, took no part in the discussions before the settlement was arrived at and merely appended his signature to the document. The only demands which the Mazdoor Sangh had raised were that production should be started in the factory and the workers should be paid their legal dues. This demand was raised on 20.8.2008. Similarly, the company merely put forth its own terms and conditions for restarting the production in the factory. The parties were invited by the conciliation officer for considering whether to the admit the demands in conciliation on 5.9.2008. It appears that on that day, the parties, i.e., the company and the Mazdoor Sangh appearing before the conciliation officer, produced a settlement dated 5.9.2008 signed by the respective parties and requested that it be recorded as a settlement in conciliation. There is no dispute that the demands were not admitted in conciliation at any time prior to 5.9.2008. It is therefore a misnomer to call the settlement dated 5.9.2008 a settlement signed in conciliation. In our opinion, such a settlement cannot be termed as one in conciliation. Our view is fortified by the decision in the case of Bata Shoe Co. (P) Ltd. v. D.N. Ganguly & Ors., AIR 1961 SC 1158 . The Supreme Court has considered the import of the words in the course of conciliation proceedings found in section 18 of the Industrial Disputes Act. In paras 7 and 8, the Supreme Court has held thus:7. The question thus posed raises the question as to what is meant by the words "in the course of conciliation proceedings" appearing in S. 18 of the Act. One thing is clear that these words refer to the duration when the conciliation proceedings are pending and it may be accepted that the conciliation proceedings with respect to these dismissals, which began sometime before May 1, 1954, were certainly pending upto September 6, 1954, and may be a little later, as is clear from the two letters of the Labour Commissioner. But do these words mean that any agreement arrived at between the parties during this period would be binding under S. 18 of the Act Or do they mean that a settlement arrived at in the course of conciliation proceedings postulates that that settlement should have been arrived at between the parties with the concurrence of the conciliation officer As we read this provision we feel that the legislature when it made a settlement reached during the course of conciliation proceedings binding not only on the parties thereto but also on all present and future workmen intended that such settlement was arrived at with the assistance of the conciliation officer and was considered by him to be reasonable and therefore had his concurrence. Sec. 12 of the Act prescribes duties of the conciliation officer and provides that the conciliation officer shall for the purpose of bringing about settlement of the dispute without delay investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as he may think fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute: (vide S. 12(2)). Then comes S.12(3), which provides, "If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings the conciliation officer shall send a report thereof to the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute".8. Reading these two provisions along with S. 18 of the Act, it seems to us clear beyond doubt that a settlement which is made binding under S. 18 on the ground that it is arrived at in the course of conciliation proceedings is a settlement arrived at with the assistance and concurrence of the conciliation officer, for it is the duty of the conciliation officer to promote a right settlement and to do everything he can to induce the parties to come to a fair and amicable settlement of the dispute. It is only such a settlement which is arrived at while conciliation proceedings are pending that can be binding under S.18. In the present case it is obvious that the Labour Commissioner took no steps to promote the actual agreement which was arrived at between the appellant and the union on September 2. The letter of August 31 made it clear that the Labour Commissioner would take action under S.12(2) on September 3 if no mutual agreement was arrived at between the appellant and the union. It seems that a mutual agreement was arrived at between the appellant and the union without the assistance of the Labour Commissioner and it did not receive his concurrence even later; on the contrary evidence shows that the Labour Commissioner did not approve of the settlement which excluded the reinstatement of a large group of workmen and so he did not act under S.12(3). In the circumstances such a mutual agreement could not be called a settlement arrived at in the course of conciliation proceedings even though it may be accepted that it was arrived at a time when conciliation proceedings were pending. A settlement which can be said to be arrived at in the course of conciliation proceedings is not only to be arrived at during the time the conciliation proceedings are pending but also to be arrived at with the assistance of the conciliation officer and his concurrence; such a settlement would be reported to the appropriate government under S. 12(3). In the present case the agreement of September 2, 1954 was not arrived at with the assistance and concurrence of the conciliation officer, namely, the Labour Commissioner, which will be clear from his letter of September 3, 1954. In the circumstances it is not a settlement which is binding under S.18 of the Act and therefore will not bar a reference by the Government with respect to these sixty workmen.28. In the case of Provisional Liquidator, Ramakrishna Industries (Pvt.) Ltd. & Ors. (supra), as noted earlier by us, the Madras High Court pronounced on when a settlement could be termed as one signed during the course of conciliation proceedings. It appears that the Court considered several judgements, which unfortunately have not been mentioned in the order, and observed: the uniform view is that the settlement will not have the effect of a settlement u/s 12(3) of the Act unless it is brought about with the assistance and concurrence of the conciliation officer and he has got a significant role to play to see to it that the terms arrived at are fair to both the parties. The Division Bench of the Madras High Court confirmed the view of the learned Single Judge that a settlement which was contrary and violative of the provisions of Chapter V-A and V-B of the Industrial Disputes Act could not be termed as a settlement in conciliation.29. An affidavit in reply has been filed by the Assistant Commissioner of Labour, Kalyan who has appended his signature to the settlement dated 5.9.2008. The affidavit devoid of any details as to when he received a copy of the demands raised by the Company or the Mazdoor Sangh, the date of admission of the demands in conciliation, the efforts made by him to induce parties to settle their disputes. There is no averment as to whether he had ascertained the fairness and reasonableness of the settlement. He has not stated whether he has complied with Rule 11 of the Industrial Disputes (Bombay) Rules by giving adequate notice to the workmen including the staff. Further, he has not stated whether a report was submitted by him to the appropriate government in accordance with section 12(3). Undoubtedly, the Assistant Commissioner has been remiss in performing his role as stipulated in section 12 of the Industrial Disputes Act r/w Rule 11 and in fact has abdicated his duties.30. Apart from this, the terms of settlement indicate that the settlement is not wholly regarding industrial disputes. The conciliation officer could not have been party to a settlement which did not deal with industrial disputes. For instance, in the present case, clause 10 of the terms of the settlement speaks of the eviction of employees from the quarters occupied by them. It provides that the quarters would be deemed to be automatically evicted on the expiry of 60 days from the date of settlement. The demand for eviction of the employees from the quarters was not raised either by the company or by Mazdoor Sangh or any other union and, therefore, could not have been admitted in conciliation or been a part of the settlement. A company which has provided residential quarters to its workmen cannot withdraw those quarters except by following the due procedure applicable, including by invoking section 630 of the Companies Act. Similarly, clause 14 of the settlement provides that individual cases would be disposed off in terms of the settlement and all pending cases filed by individuals or unions would be withdrawn as settled and that no new cases would be filed in respect of any terms of the settlement. These terms also were not a part of the demands raised by either side. The individual cases which were pending before the Industrial Court/Tribunal or the Labour Court were with respect to their termination from service and the Mazdoor Sangh had not filed these cases. As we have seen already no union, whether recognised or not, can decide or settle the disputes relating to the termination of service by whatever means or suspension of an individual employee, unless authorized specifically to do so by the individual workmen. Therefore, in our opinion, a settlement which deals with aspects other than an industrial dispute as defined under section 2(k) of the Industrial Disputes Act cannot be termed as a settlement in conciliation. We have no manner of doubt that the settlement dated 5.9.2008 is not a settlement in conciliation.31. It will be interesting to note some of the offending terms of the settlement dated 5.9.2008. Clauses 3, 6, 7, 11A(3) to 5, 12, 13, 14 read thus:Clause No.3. It is agreed by Union and Management that certain operations, including but not limited to Canteen, Civil House keeping, Packing, Dispatches, Loading, Unloading, Shifting, Charging, Maintenance (Preventive, periodic, breakdown major), Cleaning etc. to be outsourced at the earliest opportunity and workmen so released shall be deployed elsewhere in Rayon & Chemical Plants, or else where as per requirement of the Company, including being trained as a part of multi skill development programme in order to take care of skill gaps generated due to retirement or employees opting for ERS. Similarly the workmen transferred from Nylon plant shall also be deployed elsewhere in Rayon and Chemical Plants including being trained as a part of multi skill development program to take care of skill gaps generated due to retirement or employees opting for ERS or else where as per requirement of the Company.6. After, transfer of employees from Nylon Plant and workmen rendered surplus on account of outsourcing and keeping in mind that only Rayon and Chemical Plant will be available for production, it s agreed between the Union and management that in order be viable, a base production level as shown in Annexure A should be achieved and the strength of permanent employees be reduced by 1500 workmen and they will be paid ERS, (Early retirement scheme) by payment of their dues as if resigned/retired.7. Both the parties and specially the workmen and the union therefore agree that at least about 1500 of the workmen employed by the Company on permanent basis stand reduced as if retired (ERS)/resigned, subject to paying them their legal dues as if retired / resigned, such a earned wages, leave wages, bonus, leave encashment, Gratuity, which process will be completed within 60 days. In addition they would be paid their balance earned wages also. In the event less than 1500 workmen opt for ERS, the running of the Company would not be viable. It is, therefore, agreed between the parties that the balance workmens names will be decided by Management depending on Companys requirements after informing the Union, and these balance workmen stand resigned/retired automatically on 31.10.2008. It is further agreed for achieving this the Company also can adopt any other mode of achieving this, if required under law. The Union further agrees that in future if the Company requires further reduction in the permanent workmen in the Company they can do so as per their requirement. (emphasis added)8. It is agreed by Union and Management that in order to be viable in future, the total wage bill of the Company including welfare expenses relating to all categories of workmen stands reduced from current level to Rs.2.75 Cr. per month which will be effected within next 60 days. The reduction in the wage bill be achieved by (i) reduction in strength of at least 1500 permanent workmen by offering them Early Retirement Scheme (ERS) by payment of their dues as if resigned/retired; (ii) in case the number of employees voluntarily opting for ERS is inadequate, then by working out scheme for achieving the shortfall as per Clause 7; (iii) Reduction of wages; (iv) by any other means suggested by Union.11A(3) It is further agreed that workmen who have been dismissed, terminated or are under suspension, including all ex employees, have agreed with the Companys present condition and in furtherance to clause 9 and 10 of this settlement have accepted that they without any additional benefits, alternative accommodation or monetary claim, also stand vacated from the residential quarters presently occupied by them in order to enable the Company to hand over the property to Raheja. The workmen including ex workmen further agree to file joint pursuits before the Court of law to set aside the order of the court, staying vacation of quarters. All the workmen including ex workmen further agree that these quarters were allocated to them as per their service condition and therefore they were never tenants under law.11A(4) The workmen further agree to strictly perform their duty as required by the Company and be punctual with companys timings. The workmen further agree to do any other work as assigned to them by the Company.11A(5) It is hereby agreed by and between the parties that the 70 workmen, who were terminated in May 2008 stand deemed resigned on that date. Besides, of these 70 workmen there are few workmen, residing in the quarters in the colony within the Plant and these few workmen agree that they are deemed to have vacated their quarters with immediate effect but they request the company to give them benefits of ERS and as a special case treat them covered therein, which is agreed by the Company.12. Both the parties and specially the workmen and the Union agree that if need be the Company can effect temporary shut down of Rayon plant or any other plant with view to repair the plant and thereby restart group-wise.13. Both the parties and specially the workmen and the union agree that they consent for the Company to effect lay off, retrenchment as well as closure of the Nylon Plant and / or Rayon Plant or any other plant/section/Department/Establishment, if required, by applying to the Appropriate Government Authorities, for which they have no objection.14. Both the parties specially the workmen and the union agree that due to paucity of funds, the Company agrees to pay off the legal dues of the workmen who have earlier retired, resigned etc., and also of those workmen whose cases are pending before the various courts or authorities, to be paid on complete receipt of proceeds from the sale of land and both the parties further agree to file the said settlement before the various courts as well as other Authorities including before the Registrar of Societies and other legal forums as well as those listed in Annexure B for disposal of the cases in terms of the settlement. It is further agreed that all pending cases filed by the individuals or Union till date will be withdrawn as settled and further no new cases will be filed in respect of any terms of this settlement. If there is no specific settlement for any case, including past workmens cases, then the same would be automatically referred to the joint decision of recognised union and Company. (Emphasis supplied) These clauses in our opinion cannot form part of a settlement which is sought to bind the individual workmen or the staff union. There is a consensus to reduce the strength of the workmen by compelling them to opt for what is euphemistically called the Early Retirement Scheme. No additional benefits have been offered to workmen who accept this scheme. They are to be paid only their legal dues. The parties have also agreed to outsource work and have accepted that the services of the workmen will be terminated as a consequence. This settlement is obviously contrary to the mandatory provisions of law.32. The Mazdoor Sangh has contended that the demands that it raised regarding the restarting of the factory and payment of dues has been settled by virtue of this agreement. We are unable to appreciate how a demand for restarting of the business can lead to an agreement between the parties to violate the provisions of section 25-O, 25-M and 25-N of the I. D. Act which in effect has been agreed to under the aforesaid settlement. The clauses of the agreement extracted above in no uncertain terms permit the termination of service of the workmen, in breach of the provisions of the Industrial Disputes Act.33. In Gosalia Shipping Pvt. Ltd., Goa & Anr. vs. Regional P.F. Commissioner & Ors., 1997 I CLR 44, a learned Single Judge of this Court (Rebello, J., as he then was) has held that an understanding between the employer and employees, contrary to the provisions of the Employees Provident Fund (Miscellaneous Provision) Act, cannot be binding on a statutory authority. Similarly in the case of Shree Changdeo Sugar Mill and anr. V/s. Union of India & anr., 2001 I CLR 701, the Supreme Court has held that an employers agreement with an employee not to deduct provident fund contributions does not discharge the employer of his statutory obligations to make such payment. The terms of the settlement which are contrary to the statute and which provide that there shall be no deduction would only mean that the company has agreed to take on the liability of payment of the employees contributions as well.34. In Oswal Agro Furane Ltd. & anr. vs. Oswal Agro Furane Workers Union & Ors., (2005) 3 SCC 224 , the Supreme Court considered whether the settlement arrived at between the employer and the workmen would prevail over the mandatory statutory requirements contained in section 25-N and 25-O of the Industrial Disputes Act. The employer in that case contended that a notice for closure of the undertaking had been issued in terms of section 25-O of the Industrial Disputes Act to the State Government and to the workmen employed by it. A settlement was arrived at with the workmen in terms of section 12(3) of the Industrial Disputes Act under which the workers had agreed to the closure without waiting for the appropriate government to grant permission for the closure. The Court while considering whether such a procedure was legal has held thus:14.A bare perusal of the provisions contained in Sections 25-N and 25-O of the Act leaves no manner of doubt that the employer who intends to close down the undertaking and/or effect retrenchment of workmen working in such industrial establishment, is bound to apply for prior permission at least ninety days before the date on which the intended closure is to take place. They constitute conditions precedent for effecting a valid closure, whereas the provisions of Section 25-N of the Act provides for conditions precedent to retrenchment; Section 25- O speaks of procedure for closing down an undertaking. Obtaining a prior permission from the appropriate Government, thus, must be held to be imperative in character.15.A settlement within the meaning of Section 2(p) read with sub-section (3) of Section 18 of the Act undoubtedly binds the workmen but the question which would arise is, would it mean that thereby the provisions contained in Sections 25-N and 25-O are not required to be complied with The answer to the said question must be rendered in the negative. A settlement can be arrived at between the employer and workmen in case of an industrial dispute. An industrial dispute may arise as regard the validity of a retrenchment or a closure or otherwise. Such a settlement, however, as regard retrenchment or closure can be arrived at provided such retrenchment or closure has been effected in accordance with law. Requirements of issuance of a notice in terms of Sections 25-N and 25-O, as the case may, and/or a decision thereupon by the appropriate Government are clearly suggestive of the fact that thereby a public policy has been laid down. The State Government before granting or refusing such permission is not only required to comply with the principles of natural justice by giving an opportunity of hearing both to the employer and the workmen but also is required to assign reasons in support thereof and is also required to pass an order having regard to the several factors laid down therein. One of the factors besides others which is required to be taken into consideration by the appropriate Government before grant or refusal of such permission is the interest of the workmen. The aforementioned provisions being imperative in character would prevail over the right of the parties to arrive at a settlement. Such a settlement must conform to the statutory conditions laying down a public policy. A contract which may otherwise be valid, however, must satisfy the tests of public policy not only in terms of the aforementioned provisions but also in terms of Section 23 of the Indian Contract Act.16. It is trite that having regard to the maxim "ex turpi causa non oritur actio", an agreement which opposes public policy as laid down in terms of Sections 25-N and 25-O of the Act would be void and of no effect. The Parliament has acknowledged the governing factors of such public policy. Furthermore, the imperative character of the statutory requirements would also be borne out from the fact that in terms of subsection (7) of Section 25- N and sub-section (6) of Section 25-O, a legal fiction has been created. The effect of such a legal fiction is now wellknown. [See East End Dwellings Co. Ltd. V. Finsbury Borough Council (1951) 2 All ER 587, Om Hemrajani vs. State of U.P. and Another (2005) 1 SCC 617 and M/s Maruti Udyog Ltd. vs. Ram Lal & Ors. 2005 (1) SCALE 585 ].17. The consequences flowing from such a mandatory requirements as contained in Sections 25-N and 25-O must, therefore, be given full effect. The decision of this Court in P. Virudhachalam (supra) relied upon by Mr. Puri does not advance the case of the Appellant herein. In that case, this Court was concerned with a settlement arrived at in terms of Section 25-C of the Act. The validity of such a settlement was upheld in view of the first proviso to Section 25-C of the Act. Having regard to the provisions contained in the first proviso appended to Section 25-C of the Act, this Court observed that Section 25-J thereof would not come in the way of giving effect to such settlement. However, the provisions contained in Sections 25- N and 25-O do not contain any such provision in terms whereof the employer and employees can arrive at a settlement.35. The provisions of section 25N and section 25O of the Act are mandatory. The judgement in Oswal Agro Furane Ltd. & anr. vs. Oswal Agro Furane Workers Union & Ors. (supra), clearly stipulates that any settlement to the contrary would not be binding on the workmen. The clauses of the settlement dated 5.9.2008 in our opinion have far reaching consequences. The parties to that settlement have in fact agreed to bypass section 25-O and section 25-N of the Industrial Disputes Act which is apparent on scanning its terms. This is impermissible and illegal. Merely because no termination of service has been effected under the settlement as yet, as contended by Mr. Talsania, it would not mean that the settlement is legal. The provisions of section 12(3) read with section 18(3) of the Industrial Disputes Act cannot be used to circumvent the provisions of Chapters VA and VB of the Industrial Disputes Act.SETTLEMENT VIS A VIS PENDING REFERENCES:36. The references which are pending before the Tribunal relate to the service conditions of the staff. The demands have been raised by the staff union on behalf of its members and by the company with respect to these workmen. The references do not deal with the service conditions of individual workmen i.e. the Petitioners in Writ Petition No. 8574 of 2009 or the factory workmen. An application has been made by the company to the Industrial Tribunal to dispose of the references in terms of the settlement dated 5.9.2008 which according to the company is a settlement signed in conciliation. The references have been sought to be disposed off by the company on the ground that no disputes are pending now between the workers and itself and therefore the references need not be decided. On a scrutiny of the demands which have been referred for adjudication and the demands which have been settled under the settlement of September, 2008, it is obvious that there is no reference at all in the settlement to the demands raised by the staff or the company in 1996 and which are pending adjudication. Thus, unless the demands raised and referred for adjudication are settled between the parties, the question of disposing off the references does not arise. As noted by us earlier, no application has been filed by the Mazdoor Sangh to dispose off the references although it is now claimed before us that no other union can appear before the Tribunal except the Mazdoor Sangh in the aforesaid references.37. The References cannot be disposed off by the Tribunal as submitted by the company on the basis of a settlement. The settlement deals with issues which are foreign to the demands referred for adjudication and, therefore, the demands pending before the Tribunal will have to be adjudicated. It is trite that once a Reference is made for adjudication of a dispute, the Reference can either be allowed wholly or in part or it can be rejected. The Reference has to be answered. It cannot be disposed off merely because there is a settlement. If there is a settlement, the Tribunal is expected to consider whether the settlement deals with the demands which are referred for adjudication before it. If it comes to the conclusion that the settlement does indeed cover the demands referred for adjudication it can then assess whether the settlement is fair and reasonable. On finding the settlement to be fair and reasonable, the Industrial Tribunal may proceed to make an award in terms of the settlement. The contention of the company that because it has entered into a settlement in conciliation with the Mazdoor Sangh, the demands referred for adjudication before the Tribunal no longer survive is fallacious. Unless the references are answered by the Industrial Tribunal the disputes referred still exist and must be adjudicated upon. Therefore, the Tribunal cannot dispose off the references merely on the application of the company.38. It has been urged by Mr. Talsania that the settlements are binding on the staff union and the individual workmen by placing reliance on the judgements of the Supreme Court in the cases of Barauni Refinery Pragatisheel Shramik Parishad vs. Indian Oil Corporation Ltd., 1991 SCC 4 and P. Virudhachalam and Ors. vs. Management of Lotus Mills, AIR 1998 SC 554 . In the case of Barauni Refinery (supra), the apex court held that when a settlement is signed with the assistance of the conciliation officer the underlying assumption is that it is fair and reasonable and therefore can be safely made binding not only on the workmen of the union which signs the settlement but also on others. A settlement in conciliation has been equated with an award passed by an adjudicating authority by the supreme court. There can be no dispute about the proposition of law enunciated by the supreme court.However, as we have observed earlier the settlement of 5.9.2008 is neither fair nor reasonable and the conciliation officer has not considered this factor at all while affixing his signature to the settlement. The case of P.Virudachalam has been distinguished on facts by the supreme court while dealing with Oswal Agro Furanes case (supra). It has no application to the present case as the facts here are similar to the facts in the latter case.SETTLEMENT CONTRARY TO S.33(1) OF THE I. D. ACT39. The clauses in the settlement unmistakably indicate that the service conditions of the employees including the staff have been changed to their detriment without the permission of the Industrial Tribunal before whom the references are pending. Section 33(1) of the I. D. Act provides that conditions of service of employees must remain unchanged during the pendency of any conciliation proceedings or proceedings before the Labour Court or Tribunal or National Tribunal in respect of the industrial dispute. An employer is not permitted to alter to the prejudice of the workmen concerned in the dispute the conditions of service applicable to the workmen immediately before the commencement of the proceedings. The demand raised by the Mazdoor Sangh was that the company should restart its factory. Instead of resolving that dispute the conditions of service applicable to the workmen immediately prior to the commencement of theconciliation proceedings were altered to their prejudice by the settlement of 5.9.2008. Under the settlement, the Mazdoor Sangh has agreed that the company should outsource various operations thereby rendering surplus the employees engaged in those operations. The possibility of retrenchment of such employees in view of clause 3 of the settlement cannot be ruled out. Furthermore, clauses 6 and 7 deal with the reduction of the complement of workmen by 1500 on account of outsourcing. These workmen would be paid dues as if they had resigned or retired. Clause 12 grants a charter to the company to close down its Rayon plant. There is no dispute that the Rayon plant has been locked out from 15.11.2009 and the lockout is the subject matter of a complaint pending before the Industrial Court, Thane. Clause 13 provides that the company is entitled to lay-off or retrench the workmen or close any plant or department or section of any establishment without any objection being raised by the Mazdoor Sangh and it would result in termination of the services of the employees. The references pending before the Industrial Tribunal are with respect to wage adjudication, leave and various other demands. The terms and conditions of service governing the workmen covered by the reference would include their statutory rights under Chapters V-A and V-B of the Industrial Disputes Act. The service conditions of the workmen are sought to be changed by the employer through the instrument of a settlement when the references are pending. The settlement alters the service conditions applicable to the staff immediately prior to the commencement of the reference.40. Admittedly no permission has been obtained from the Industrial Tribunal before whom the references are pending before effecting such changes and therefore there is a breach of section 33(1). The service conditions of the individual workmen were governed by the settlement dated 3.7.2002 which have been sought to be changed by the settlement of 5.8.2009. It has been argued by the learned Counsel appearing for the respondents that section 33(1) has no applicability in the present case as the alteration in the service conditions have been made with the consent of the recognised union. According to them, it is only when the employer unilaterally changes the service conditions that the section comes into play. It is true that section 33 stipulates that no employer shall alter to the prejudice of the workmen concerned in a reference their conditions of service without the permission of the Tribunal. However, in the present case, since the settlement itself cannot be said to be binding on the staff union, it is the employer which has unilaterally changed the service conditions of the staff to their detriment while the references are pending before the Industrial Tribunal and, therefore, there has been a breach of section 33(1) of the Industrial Disputes Act.41. Mr.Talsania as a last resort submitted that there is no need for this court to interfere in these writ petitions since an overwhelming majority of the workmen had accepted the settlements. However, from the material on record it does not appear that this statement is true. The Company has filed a statement showing that out of a total number of 2633 workmen which included 62 clerical staff, 653 persons had applied for the Early Retirement Scheme. 13 of these 653 workmen were clerical staff. However, only 122 of the manual workmen i.e. the factory staff have been paid and relieved after they opted for the Early Retirement Scheme. In these circumstances it is not possible to accept this submission.42. Several judgements, other than the ones referred to above have been cited by the parties before us. After considering them, we have referred only to those judgements which are apt, apposite and relevant for the purposes of this judgement.

Decision:
1[ds]14. The Division Bench of this Court while admitting the present petitions and granting interim relief has observed thus:7. In our opinion, prima facie even assuming that the representative Union has entered into a settlement it can only be in respect of dispute which would partake of an industrial dispute and in respect of individual dispute which it has raised. It will not be open to the recognised union under the guise of settlement either to settle the disputes which are not industrial dispute and/or individual disputes which have been raised by the individual workmen in their personal capacity and are pending before the industrial forum for rights which they are entitled to under the existing service conditions or otherlearned Single Judge had issued a declaration that the settlement was not one arrived at in the course of conciliation proceedings u/s 12(3) of the Act and, therefore, was void and would have no effect qua the petitioner workmen. On behalf of the company, it was submitted that the question raised before the learned Single Judge ought to have been adjudicated upon by raising an industrial dispute and not in the exercise of powers under Article 226 of the Constitution of India. The Division Bench observed that when certain features of the settlement established that there were gross violations of the mandate of law, a writ petition was maintainable and there was no need to dismiss the writ petition on this ground. We respectfully agree with this reasoning of the Madras High Court and in our opinion, the present writ petitions are maintainable and, therefore, we are deciding them onregards the staff union, it has been submitted that although it was a recognised union for the undertaking situated in the Eros building and at Ewart House in Mumbai upto 1996, the recognition came to an end when the staff was shifted to the factory premises in 1996. The recognised union for the factory in 1996 was the Maharashtra General Kamgar Union (MGKU) and, therefore, no other union could be considered as the recognised union although the workmen may have been members of a union recognised for a particular establishment at an earlier point of time. It was submitted that the recognition which is accorded by the Industrial Court under the MRTUPULP Act is relates to the premises of an industry. Therefore, according to the learned Counsel, there cannot be a recognised union separately for the staff and individual workmen when they operate in the same premises. According to the learned Counsel for the Respondents, therefore, the petitioners in both the petitions have no locus to file thethe cancellation can be effected only for the specific grounds mentioned in s.13. Shifting of the location of the work place of the members of the recognised union is not one such ground. Neither is there any concept of merger as the counsel for the respondents would have us believe. The recognition of one union cannot merge into the recognition of another. The members of one would have to resign and join the union which is in existence at the new workplace. Admittedly in the present case the members of the staff union have not forsaken it and joined the Mazdoor Sangh. Therefore the staff union would still continue as the recognised union for its members although the staff is now located in another unit. Moreover the recognition accorded to MGKU was only in respect of the workers employed in the factory and not for the staff. Mazdoor Sangh has been recognised in place of the MGKU as it filed an application under s.14 in 1994. The application was allowed in 2001 after verification of the membership for the six months between October 1994 and March 1995. The staff was shifted only inand therefore could never have been considered while ascertaining the membership. The submission of the learned counsel for the respondents is therefore untenable and withoutis true that the Mazdoor Sangh was accorded recognition under the MRTUPULP Act in place of the Maharashtra General Kamgar Union in 2001 when the members of the MGKU became members of the Mazdoor Sangh. However, it must be borne in mind that although the recognised union has precedence over all other unions and individual workmen when an issue is raised regarding the service conditions, this embargo on the appearance of other unions and individual workmen does not operate with respect to disputes regarding termination of service by way of retrenchment, dismissal, discharge, suspension, etc. On a perusal of the settlement of 5.9.2008, it is clear that the settlement speaks about the automatic termination of the services of individual workmen who do not accept the terms of the settlement. Clauses 6 and 7 envisage a reduction of 1500 workers from the complement of workers employed by the Company. These clauses provide for automatic termination of services of those workmen who do not resign under the early retirementthese circumstances, although section 18(1) r/w 18(3) and the proviso to section 36(1) restrict any other union representing the workmen or individual workmen representing themselves when a recognised unionis in existence in an establishment, the embargo will not operate in the present case. As a consequence of the impugned settlement the workmen would have to face termination of service without the due process of law being followed. The law laid down in the case of Oswal Agro Furane Ltd.anr. Vs Oswal Agro Furane Workers UnionOrs., (2005) 3 SCC 224   , would permit the workmen to challenge the settlement though signed before the Conciliation Officer. In our opinion, the writ petition filed by both the staff union as well as individual workmen are maintainable and they have the locus to file thethe present case, admittedly no such report has been submitted by the conciliation officer. Therefore, in our opinion, the settlement cannot be termed as one signed in conciliation. Rule 11 requires the conciliation officer to give a formal intimation in writing to the parties concerned declaring his intention to commence conciliation proceedings from such date as may be specified. Unless the conciliation officer indicates his intention to intervene in the dispute and calls the parties for conciliation, the conciliation proceedings do not commence. Before deciding to intervene in any matter after the receipt of the justification statement from the party who has raised the industrial dispute, the conciliation officer may call the parties individually for a meeting to assess whether an industrial dispute in fact exists or is apprehended. It is only when the intimation of the intention of the conciliation officer to intervene and commence conciliation proceedings is sent to the parties and they appear before the conciliation officer that it can be said that conciliation proceedings have commenced. A settlement signed after the conciliation officer decides to intervene in the industrial dispute in order to bring about a resolution of the dispute can be considered as a settlement signed in conciliation.27. But in the present case the demands were admitted in conciliation on 5.9.2008 and the settlement was signed on the same day. A settlement in conciliation would require the active assistance of the conciliation officer to ensure that parties resolve their disputes and enter into settlement. The conciliation officer in the case before us, took no part in the discussions before the settlement was arrived at and merely appended his signature to the document. The only demands which the Mazdoor Sangh had raised were that production should be started in the factory and the workers should be paid their legal dues. This demand was raised on 20.8.2008. Similarly, the company merely put forth its own terms and conditions for restarting the production in the factory. The parties were invited by the conciliation officer for considering whether to the admit the demands in conciliation on 5.9.2008. It appears that on that day, the parties, i.e., the company and the Mazdoor Sangh appearing before the conciliation officer, produced a settlement dated 5.9.2008 signed by the respective parties and requested that it be recorded as a settlement in conciliation. There is no dispute that the demands were not admitted in conciliation at any time prior to 5.9.2008.An affidavit in reply has been filed by the Assistant Commissioner of Labour, Kalyan who has appended his signature to the settlement dated 5.9.2008. The affidavit devoid of any details as to when he received a copy of the demands raised by the Company or the Mazdoor Sangh, the date of admission of the demands in conciliation, the efforts made by him to induce parties to settle their disputes. There is no averment as to whether he had ascertained the fairness and reasonableness of the settlement. He has not stated whether he has complied with Rule 11 of the Industrial Disputes (Bombay) Rules by giving adequate notice to the workmen including the staff. Further, he has not stated whether a report was submitted by him to the appropriate government in accordance with section 12(3). Undoubtedly, the Assistant Commissioner has been remiss in performing his role as stipulated in section 12 of the Industrial Disputes Act r/w Rule 11 and in fact has abdicated his duties.30. Apart from this, the terms of settlement indicate that the settlement is not wholly regarding industrial disputes. The conciliation officer could not have been party to a settlement which did not deal with industrialwe have seen already no union, whether recognised or not, can decide or settle the disputes relating to the termination of service by whatever means or suspension of an individual employee, unless authorized specifically to do so by the individual workmen. Therefore, in our opinion, a settlement which deals with aspects other than an industrial dispute as defined under section 2(k) of the Industrial Disputes Act cannot be termed as a settlement in conciliation. We have no manner of doubt that the settlement dated 5.9.2008 is not a settlement in conciliation.In Oswal Agro Furane Ltd.anr. vs. Oswal Agro Furane Workers UnionOrs., (2005) 3 SCC 224   , the Supreme Court considered whether the settlement arrived at between the employer and the workmen would prevail over the mandatory statutory requirements contained in section5O of theIndustrial Disputes Act. The employer in that case contended that a notice for closure of the undertaking had been issued in terms of sectionof the Industrial Disputes Act to the State Government and to the workmen employed by it. A settlement was arrived at with the workmen in terms of section 12(3) of the Industrial Disputes Act under which the workers had agreed to the closure without waiting for the appropriate government to grant permission for the closure.The provisions of section 25N and sectionof the Actare mandatory. The judgement in Oswal Agro Furane Ltd.. vs. Oswal Agro Furane Workers UnionOrs. (supra), clearly stipulates that any settlement to the contrary would not be binding on the workmen. The clauses of the settlement dated 5.9.2008 in our opinion have far reaching consequences. The parties to that settlement have in fact agreed to bypass sectionN of the Industrial Disputes Act which is apparent on scanning its terms. This is impermissible and illegal. Merely because no termination of service has been effected under the settlement as yet, as contended by Mr. Talsania, it would not mean that the settlement is legal. The provisions of section 12(3) read with section 18(3) of the Industrial Disputes Act cannot be used to circumvent the provisions of Chapters VA and VB of the Industrial Disputesa scrutiny of the demands which have been referred for adjudication and the demands which have been settled under the settlement of September, 2008, it is obvious that there is no reference at all in the settlement to the demands raised by the staff or the company in 1996 and which are pending adjudication. Thus, unless the demands raised and referred for adjudication are settled between the parties, the question of disposing off the references does not arise. As noted by us earlier, no application has been filed by the Mazdoor Sangh to dispose off the references although it is now claimed before us that no other union can appear before the Tribunal except the Mazdoor Sangh in the aforesaidis trite that once a Reference is made for adjudication of a dispute, the Reference can either be allowed wholly or in part or it can be rejected. The Reference has to be answered. It cannot be disposed off merely because there is a settlement. If there is a settlement, the Tribunal is expected to consider whether the settlement deals with the demands which are referred for adjudication before it. If it comes to the conclusion that the settlement does indeed cover the demands referred for adjudication it can then assess whether the settlement is fair and reasonable. On finding the settlement to be fair and reasonable, the Industrial Tribunal may proceed to make an award in terms of the settlement. The contention of the company that because it has entered into a settlement in conciliation with the Mazdoor Sangh, the demands referred for adjudication before the Tribunal no longer survive is fallacious. Unless the references are answered by the Industrial Tribunal the disputes referred still exist and must be adjudicated upon. Therefore, the Tribunal cannot dispose off the references merely on the application of theis no dispute that the Rayon plant has been locked out from 15.11.2009 and the lockout is the subject matter of a complaint pending before the Industrial Court, Thane. Clause 13 provides that the company is entitled toor retrench the workmen or close any plant or department or section of any establishment without any objection being raised by the Mazdoor Sangh and it would result in termination of the services of the employees. The references pending before the Industrial Tribunal are with respect to wage adjudication, leave and various other demands. The terms and conditions of service governing the workmen covered by the reference would include their statutory rights under ChaptersVA and VB of the Industrial DisputesAct. The service conditions of the workmen are sought to be changed by the employer through the instrument of a settlement when the references are pending. The settlement alters the service conditions applicable to the staff immediately prior to the commencement of the reference.40. Admittedly no permission has been obtained from the Industrial Tribunal before whom the references are pending before effecting such changes and therefore there is a breach of section 33(1). The service conditions of the individual workmen were governed by the settlement dated 3.7.2002 which have been sought to be changed by the settlement of 5.8.2009. It has been argued by the learned Counsel appearing for the respondents that section 33(1) has no applicability in the present case as the alteration in the service conditions have been made with the consent of the recognised union. According to them, it is only when the employer unilaterally changes the service conditions that the section comes into play. It is true that section 33 stipulates that no employer shall alter to the prejudice of the workmen concerned in a reference their conditions of service without the permission of the Tribunal. However, in the present case, since the settlement itself cannot be said to be binding on the staff union, it is the employer which has unilaterally changed the service conditions of the staff to their detriment while the references are pending before the Industrial Tribunal and, therefore, there has been a breach of section 33(1) of the Industrial Disputes Act.41. Mr.Talsania as a last resort submitted that there is no need for this court to interfere in these writ petitions since an overwhelming majority of the workmen had accepted the settlements. However, from the material on record it does not appear that this statement is true. The Company has filed a statement showing that out of a total number of 2633 workmen which included 62 clerical staff, 653 persons had applied for the Early Retirement Scheme. 13 of these 653 workmen were clerical staff. However, only 122 of the manual workmen i.e. the factory staff have been paid and relieved after they opted for the Early Retirement Scheme. In these circumstances it is not possible to accept this submission.