1 IN THE HIGH COURT OF JUDICUATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2129 OF 2009 Surindra Engineering Co. Ltd. ..Petitioners Vs. Engineering Workers Union & Anr. ..Respondents Mr. Ashok D. Shetty with Mr. Shridhar Poojary for Petitioners Mr. R. D. Bhat for the Respondents CORAM: Dr. D.Y.CHANDRACHUD,J. DATE : 12TH NOVEMBER 2009 1. Rule 2. Counsel appearing on behalf of the Respondents waives service. With the Consent of Counsel and at their request, the Petition is taken up for hearing and final disposal. 3. The Petition is directed against an interlocutory order passed by the Industrial Court on 1st September 2009, in a pending wage reference. By the interim order, the Tribunal directed the management to pay an amount of 2 Rs.1500/- per month by way of interim relief to the first group of workmen, comprising of persons who are governed by a Settlement dated 1st December 2002, and an amount of Rs.2000/- per month to the second group of workmen comprising of persons who have not been governed by any Settlement. 4. The Petitioner is an engineering concern. The company employs 60 workmen who fall in the highly skilled, semi- skilled and unskilled categories. These workmen fall into three groups. The first group consists of 14 workmen, with whom the management had entered into settlement on 1st December 2002. The settlement expired on 30th November 2005. There has since been no wage revision or increments. The second group of workmen consists of 14 workmen, who are not governed by any settlement whatsoever but who are being paid ad-hoc wages which were determined at the time of their employment. The third and last group consists of 32 workmen who are 3 governed by a settlement dated 3rd August 2006. The last group of workmen were temporaries who were made permanent under the settlement of 2006. All these workmen would have 10 to 20 years of service on the date when they came to be confirmed. 5. The situation which has arisen is that, though the settlement of 1st December 2002, expired on 30th November 2005, the 14 workmen governed by the settlement have not been granted a revision of their wages or increments. Similarly, in so far as the second group of 14 workmen are concerned, they have been paid only wages and HRA without any dearness allowance or other allowances. 6. The Industrial Tribunal, for the purpose of evaluating the Application for interim relief adverted to several examples which would show that the workmen, who are covered by the settlement of 3rd August 2006, are drawing higher 4 wages than their counter parts in other groups who have been employed much earlier. 7. Counsel appearing on behalf of the management submits that the Industrial Tribunal did not consider the number of years of service put in by the workmen who were governed by the settlement of 3rd August 2006. For instance, while it is true that the workman by the name of Bhausaheb Mhaske has been confirmed on 15th April 2004. he would have rendered several years of temporary service prior to the date of his confirmation. 8. During the course of the hearing, it is admitted that as a result of the wage revision that has taken place on 3rd August 2006, the workmen, who are governed by that settlement, are in receipt of wages and other benefits which have not been extended to the first and second groups of workmen. The workmen comprised in the three 5 groups noted previously carry out similar work comprised in highly skilled, semi skilled and unskilled categories. Admittedly, Workmen doing the same nature of work are being paid different wages depending on whether they are or are not governed by the settlement of 3rd August 2006. The Settlement of 3rd August 2006 was made applicable only to 32 casual / temporary workmen who were made permanent by the settlement. This factual aspect has been admitted during the course of submissions by Counsel appearing on behalf of the management. 9. On behalf of the management, it has been urged that the Tribunal has not had any regard to the financial capacity of the employer, which is an important consideration which must guide an Award, final or interim, in a wage reference. Reference has been made to adverse circumstances faced by the Company as a result of which Punjab & Sind Bank had instituted proceedings before the 6 Debts Recovery Tribunal. It has been stated that the company owes Rs. 1.3 crores to financial institutions. The Company is stated to have incurred a loss of Rs.76 lakhs between 2005-2008. 10. At this stage, it would be necessary to note that the management had entered into a settlement on 3rd August 2006 with a group of 32 casual workmen, by which a wage revision was granted to those workmen. During the course of hearing, Counsel appearing on behalf of the management stated that, there was no objection to the grant of the same wage revision to the other groups of workmen, provided the Reference is disposed of in terms of the settlement. In my view, prima facie at the interlocutory stage, there is merit in the contention which has been urged on behalf of the Petitioners that the ad-hoc wage increase, which has been granted by the Industrial Tribunal would require interference of this Court, since it 7 has not been passed on an evaluation of the financial capacity of the employer. It is not necessary to burden the Judgment with a long time of authority on the subject, since it is a well settled principle of law that in wage adjudication, the financial capacity of the employer is an important aspect which has to be borne in mind by the Industrial Tribunal. Equally, the well settled position in law is that the employer is under a mandate to provide similar wages and conditions of service to workers who perform similar work. As noted earlier, the wage revision of 3rd August 2006, which took place by a settlement, has been applied only to 32 workmen who had rendered service as casual / temporary workmen earlier. The first and second groups of workmen which comprise respectively of workmen who are governed by the earlier settlement of 2002 and workmen who are not governed by any settlement at all, have not been granted any wage revision at all, though they perform similar work. This 8 position cannot be allowed to continue since it is bound to lead to industrial unrest. Counsel appearing on behalf of the management has, during the course of the submissions, not raised any objection to the extension of the settlement of 3rd August 2006, to the first and second groups of workmen, subject to the reference eventually being disposed of in terms of the settlement. Counsel fairly stated that the fairness of the settlement dated 3rd August 2006 would have to be evaluated by the Industrial Tribunal. The Court has been informed that the settlement of 3rd August 2006 was entered into under section 2(P) of the Industrial Disputes Act, 1977 read with Section 18(1). 11. The ends of justice would be served, if the benefit of the settlement of 3rd August 2006, is extended to all the workmen subject to the workmen agreeing to abide by all the terms of the settlement, save and except Clause 11. Clause 11 of the settlement, inter alia, states that the 9 workers will not join any Union or Representative Body formed by outside persons’. This part of Clause 11 is objected to by Respondent No.1, which is affiliated to the CITU. The clause, which prohibits the workmen from joining a union, cannot be countenanced. During the course of the hearing, counsel appearing on behalf of the management states that the provisions of Clause 11, which prohibits the workmen from joining any Union formed by outside persons, will not be enforced. The statement is accepted. The impugned order of the Tribunal is set aside. In substitution of the order dated 1st September 2009, the Petition shall stand disposed of with the following directions: (a) The management shall extend the benefit of the settlement dated 1st September 2006, to the first and second groups of workmen comprised of 14 workmen who are governed by the settlement 10 dated 1st December 2002 and the 14 workmen who are not governed by any settlement subject to the workmen agreeing to abide by the entire settlement, save and except for Clause 11 to the extent that it prohibits the workers from joining a Union, Association or representative body formed by outside persons; (b) The Industrial Tribunal shall, during the course of the adjudication consider the fairness and reasonableness of the settlement dated 3rd August 2006 and if any application is moved by the management for the disposal of the reference in terms of the settlement, the Tribunal shall deal with the application in accordance with law. The benefit of the settlement of 3rd August 2006, shall be extended from 1st April 2007, as applicable to all other workmen; 11 (c) All the observations contained in the present order are confined to the disposal of the Application for interim relief and shall not affect the final adjudication of the wage reference by the Industrial Tribunal. (d) All the rights and contentions of the parties are kept open. (e) The Petition is disposed of in the aforesaid terms. (f) There shall be no order as to costs. (Dr.D.Y.Chandrachud,J.)