CWP No.8114 of 2002 -1- IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH CWP No.8114 of 2002 Date of Decision 22.10.2009 Roop Lal ..... Petitioner V/s Presiding Officer, Labour Court, Amritsar & Another ..... Respondents CORAM: HON'BLE MR. JUSTICE K.KANNAN. Present: Mr.B.S.Jaswal, Advocate,for the petitioner. Mr.G.S.Bal, Advocate and Mr.P.K.Khindria, Advocate for respondent No.2. *** K.Kannan, J. (Oral) 1. The award that is challenged before this Court is rejection of reference sought at the instance of a workman on the ground that earlier on 12.09.2001, there had been a settlement between the parties when the Management had offered to pay to the workman Rs.38,250/- in fulfillment of all claims against the management. The offer of the Management was put by the Labour Court to the workman and the Presiding Officer of the Labour Court had recorded the fact in the following words: - “I have heard the above statement and admit the same to be correct and the award may be passed accordingly.” On 12.09.2001, therefore, there had been a settlement between the parties which was stated to be true and recorded as such by the Presiding Officer and signed alongside by the workman. The payment, which was offered to be made was required to be done on 22.09.2001 in the Lok Adalat. The reference to payment before the Lok Adalat was merely a venue for payment and there is nothing on record to suggest that the CWP No.8114 of 2002 -2- settlement itself had been made before the Lok Adalat. On the other hand, the acceptance of the settlement had been recorded by the Presiding Officer of the Labour Court. 2. Before the date, when the amount was to be paid i.e. on 22.09.2001, the workman had filed an application for cancellation of the settlement on the ground that he had arrived at the settlement due to “persuasion, mediation and conciliation by the Presiding Officer” but later on, he considered the consequences of the settlement and felt that it would not serve his interest. He, therefore, sought for cancellation of the settlement. The Management filed an objection to the application filed by the workman stating that there had been no vitiating circumstance and the settlement could not be cancelled unilaterally. The Management contended that demand draft had also been taken bearing Sr. No.149711 dated 17.09.2001drawn on Punjab & Sind Bank, Shri Durgyana Mandir, Amritsar Branch. The Management had also stated that they were not able to bear the burden of paying back-wages and stated that without prejudice to the legal right to contest the case on merits, the workman should be directed to resume duty. The Labour Court found that a settlement had been effected and it was impermissible for the workman to wriggle out of the same. It consequently rejected the application filed by the workman, in view of the statement made by the workman on 12.09.2001. 3. The learned counsel appearing for the workman contended that the settlement had not fructified as award and the Court had not passed an award and it was always possible for him to withdraw the same. He refers to a decision of the Karnataka High Court in case titled “The Commissioner, Karnataka State Public Instruction (Education), CWP No.8114 of 2002 -3- Bangalore & Others V/s Nirupadi Virbhadrappa Shiva Simpi reported in 2002 (1) Civil Court Cases, 5 (Karnataka), which states that case could be referred to Lok Adalat only with the consent of parties and if any one party is not agreeable for reference, any reference made by Court will be incompetent. The Court also held that if any one party is not agreeable to compromise, the Lok Adalat would stand stripped of its jurisdiction. I do not understand how this judgment has any relevance for, the decision before the Karnataka High Court was the circumstance when a reference could be made to Lok Adalat and how there could not be a settlement merely at the instance of one party if the other party was not willing for a compromise. The Court held that it shall not be permissible for a Lok Adalat to enter into any compromise. When an offer was made by the Management to make payment and that offer was accepted but the amount was only deferred to be paid, by the fact of such deferral the compromise does not lose its value. A compromise is a bilateral act which in order to be enforceable has to stand the scrutiny of a contract as provided under the Contract Act. Section 10 of the Contract Act sets out that "all agreement are contacts if they are made by the free consent of the parties competent to contract for a lawful consideration and lawful object and not hereby declared to be void. " Consideration is defined under Section 2(d) which contemplates a detriment to one party and a benefit which another person obtains at the desire of the promisor. Occasions where amounts are not immediately paid but which become payable in future are in the nature of executory agreements. In this case, the agreement was complete; it was between persons who were competent to contract and who could bind themselves by their conduct and all that was necessary was casting the imprimatur of the Court. On that day, CWP No.8114 of 2002 -4- when the offer had been made and when the workman had conceded before the Court on 12.09.2001 that the settlement proposed by the other party was true, and when Court set down terms thereof, the matters became concluded as far as the workman and the Management were concerned. From then on, it was merely an act of the Court to either exercise its discretion to reject a compromise or accept the same. The Court found nothing illegal about it except that one party was trying to resile from the same and that it was not possible for one party to wriggle himself out from the contract. Such an observation, in my view, was perfectly justified. 4. Learned counsel appearing for the Management refers to a judgment of the Allahabad High Court titled “Raza Textiles Ltd., and another V/s Raza Textiles Mazdoor Sangh and others reported in 1965-II L.L.J.65, page 598, where it was held by the Court that "it is true that there is no provision in the Act expressly permitting a compromise between the parties pending adjudication proceedings and for an award to be passed in terms of such compromise or settlement. But it is the normal right of the parties to compromise their disputes and for that reason it was not necessary to make an express provision providing for and dealing with the registration of such compromises. It is well settled that such matter could be compromised. The object behind the requirement of registration under Section 6B of the Act is to ensure that the settlement is not against social justice and is not the result of collusion, fraud or misrepresentation." The said decision records the fact that there is no provision under the Industrial Disputes Act itself for recording of compromise but there cannot be a situation where a compromise could ever be an unacceptable mode of terminating proceedings. All that the Court will have to see is whether it CWP No.8114 of 2002 -5- conforms to law or not. Yet another decision of Karnataka High Court is the decision in Mangalore Ganesh Beedi Works, Mysore & Others V/s Workmen Rep.by Secreary, Mangalore Ganesh Beedi Workers & Allied Beedi Factors Workers Association, Mysore reported in 2004- IIILLJ 228, where the Division Bench held that when a compromise is entered by a union with the employer, presumption is that it would be in the best interest of the workman. The Bench was referring to the presumption in the matter of binding nature of a contract brought by a Union to a member of the Union. The said decision does not cover the instance which we have at hand but I still refer to that for the sake of completion of the issues addressed before me. 5. The enforceability of compromise and the effect of a party resiling from the terms of the contract are also adumbrated under the provisions of Order 23 Rule 3 CPC. It provides that after a compromise is entered between the parties, if it is alleged by one party and denied by the other, that an adjustment or satisfaction had been arrived at, the Court shall decide the question. 6. Even under the scheme of the Civil Procedure Code, if a settlement is entered into, the fact that the Court had not immediately passed a decree in terms thereof, will not enable a party to resile from the same. If a dispute were to arise at all whether there existed a lawful compromise, the Court shall render an adjudication of whether such agreement was true or not. In this case, there is a confirmation by the workman himself before the Labour Court that the offer made by the Management was true and that the award could be passed in terms thereof. It ought not to have been possible for the workman to contend that the settlement was not acceptable to him by CWP No.8114 of 2002 -6- the fact that he had on hindsight realised that it was not a fair offer. Putting an end to a long drawn litigation by receiving some amount is itself a valid consideration. If one party had accepted the proposal and the other party had acted on such a conduct of the workman and had even prepared a draft for delivery, that amounts to detriment which the said party had suffered to constitute a valid consideration in the eye of law. Under the circumstances, the rejection of the application filed by the workman to withdraw from the agreement and the award that was passed by the Labour Court in terms of the agreement was perfectly justified and there is no scope for interference in the writ petition. If the award has not been published, it shall be so done by the government in terms of law. 7. The writ petition is dismissed. 22.10.2009 (K.KANNAN) shamsher JUDGE