Case: National Engineering Industries Ltd Vs. State Of Rajasthan

cent of the total number of workman employed in unit of an industry may apply in the prescribed form to the Registrar for registration as a Representative Union. Then under Section 9-F [9-F. Cancellation for registration. - The Registrar shall cancel the registration of a Union - (a) if after holding such an inquiry, if any, as he deems fit he is satisfied - (i) ...........(ii) .......... (iii) that the registered Union is being conducted not bona fide in the interests of workmen but in the interest of employers to the prejudice of the interest of workmen or; (iv) ................ (b) If its registration under the Indian Trade Unions Act, 1926 (Central Act XVI of 1926) is cancelled] registration of a representative union can be cancelled on various grounds mentioned therein and one of such grounds is if, after holding such an inquiry, if any, as the Registrar deems fit he is satisfied that the registered union is being conducted not bona fide in the interest of the workman but in the interest of the employees to the prejudice of the interest of the workman. We have already quoted Section 9-E as to how a representative union is to be registered. Proviso to that Section makes it clear that if there are two are more unions fulfilling the criteria laid down in Section 9-D and apply for registration then the union having the largest membership of the employee has to be registered. As to what is representative union is not defined in the Act but in common parlance it would mean that it represents all the workers. It is not the case of the Workers Union that registration of the Labour Union is liable to be cancelled on any ground whatsoever. Notice given by Workers Union under sub-section (2) of Section 19 of the Act is obviously invalid as it did not represent majority of the persons bound by the settlement nor it is a representative union. In this view of the matter it is not necessary for us to consider what were the demands raised by the Workers Union in its charter which were not covered by the tripartite settlement. 24. It has not been shown to us as to how a settlement arrived at on a holiday would be invalid. We do not think there is any bar in having conciliation proceedings on a holiday and to arrive at a settlement. On a holiday atmosphere is rather more relaxed. Learned single Judge in his judgment did not examine with reference to each of the demands raised by the Workers Union as to why it was not covered under the tripartite settlement and even the earlier settlement of 1983. 25. Industrial Tribunal is the creation statute and it gets jurisdiction on the basis of reference. It cannot go into the question of validity of the reference. Question before the High Court was one of jurisdiction which it failed to consider. A tripartite settlement has been arrived at among the management, Labour Union and the Staff Union. When such a settlement is arrived at it is a package deal. In such a deal some demands may be left out. It is not that demands, which are left out, should be specifically mentioned in the settlement. It is not the contention of Workers Union that tripartite settlement is in any way mala fide. It has been contended by the Workers Union that the settlement was not arrived at during the conciliation proceedings under Section 12 of the Act and as such not binding on the members of the Workers Union. This contention is without any basis as the recitals to the tripartite settlement clearly show that the settlement was arrived at during the conciliation proceedings. 26. State Government failed to give due consideration to the direction of the High Court in its judgment dated March 23, 1989. State Government also failed in its duty to bring to the notice of the High Court of its notification dated March 17, 1989 making the impugned reference. It appears to us that the reference had occasioned while the judgment had been reserved by the High Court. In any case it was expected on the State Government to bring to the notice of the High Court before making a reference its decision to make the reference. After the judgment had been announced and directions issued by the High Court to hear the appellant it was incumbent of the State Government, in the circumstances of the case, to recall the reference. It could not direct the appellant to raise its objection to reference before the Industrial Tribunal for which Industrial Tribunal certainly lacked jurisdiction. State Government before making the reference did not consider all the relevant considerations which would clothe it with the power to make the reference under Section 10 of the Act. We find substance in the submissions of Mr. Pai. Wholesale reference of all the disputes in the charter of demands of Workers Union for adjudication was also bad inasmuch as many of such disputes were already the subject matter of tripartite settlement. This also shows non-application of mind by the State Government in making the reference. 27. When notice was issued on the special leave petition proceedings on the reference were stayed. Earlier also during the pendency of the writ petition before the High Court, which led to the impugned judgment proceedings, had been stayed. There has not been any progress before the Industrial Tribunal and all these years have passed. During the course of hearing we have been told that there have been even two more settlements and also that President of the Workers Union is now himself the President of the Labour Union. Even otherwise it would be futile to allow the reference to continue after lapse of all these years. This is apart from the fact that in our view reference in itself was bad as the tripartite settlement did bind the members of the Workers Union as well.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]23. It will be thus seen that High Court has jurisdiction to entertain a writ petition when there is allegation that there is no industrial dispute and none apprehended which could be subject matter of reference for adjudication to the Industrial Tribunal under Section 10 of the Act. Here it is a question of jurisdiction of the Industrial Tribunal, which could be examined by the High Court in its writ jurisdiction. It is the existence of the industrial tribunal which would clothe the appropriate Government with power to make the reference and the Industrial Tribunal to adjudicate it. If there is no industrial dispute in existence or apprehended appropriate government lacks power to make any reference. A settlement of dispute between the parties themselves is to be preferred, where it could be arrived at, to industrial adjudication, as the settlement is likely to lead to more lasting peace than an award. Settlement is arrived at by the free will of the parties and is a pointer to there being goodwill between them. 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 the 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. A settlement which is sought to be impugned has to be scanned and scrutinized.s (1) and (3) of Section 18 divide settlements into two categories, namely, (1) those arrived at outside the conciliation proceedings, and (2) those arrived at in the course of conciliation proceedings. A settlement which belongs to the first category has limited application in that it merely binds the parties to the agreement but the settlement belonging to the second category has extended application since it is binding on all the parties to the industrial disputes, to all others who were summoned to appear in the conciliation proceedings and to all persons employed in the establishment or part of the establishment, as the case may be, to which the dispute related on the date of the dispute and to all others who joined the establishment thereafter. A settlement arrived at in the course of conciliation proceedings with a recognized majority union will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same. Recognized union having majority of members is expected to protect the legitimate interest of labour and enter into a settlement in the best interest of labour. This is with the object to uphold the sanctity of settlement reached with the active assistance of the Conciliation Officer and to discourage an individual employee or minority union from scuttling the settlement. When a settlement is arrived at during the conciliation proceedings it is binding on the members of the Workers Union as laid down by Section 18(3)(d) of the Act. It would ipso facto bind all the existing workman who are all parties to the industrial dispute and who may not be members of unions that are signatories to such settlement under Section 12(3) of the Act. Act is based on the principle of collective bargaining for resolving industrial disputes and for maintaining industrial peace. This principle of industrial democracy is the bedrock of the Act, as pointed out in the case of P. Virudhachalam and others v. Management of Lotus Mills and another, 1998(1) SCC 650. In all these negotiations based on collective bargaining individual workman necessarily recedes to the background. Settlement will encompass all the disputes existing at the time of the time of the settlement except those specifically left outThere can be many splinter groups each forming a separate trade union. Under Section 4 of the Trade Union Act, 1926 any seven or more members of a trade union can get the trade union registered under that Act. If every trade union having few members is to go on raising a dispute and the State Government making reference again and again the very purpose of settlement is defeated. Once there is a representative union, which in the present case, is the Labour Union, it is difficult to see the role of the Workers Union. If there are number of trade unions registered under the Trade Union Act, 1926 not entitled to be registered as representative unions and they raise disputes, industrial peace would be a far cry. Under Section 2(oooo) [2(oooo) `Representative Union means a Union for the time being registered as a representative Union under this Act] of the Rajasthan Act `representative union means a union for the time being registered as a representative union under the Rajasthan Act (Rajasthan Act XXXIV of 1950). Under SectionAny Union which has for the whole of the period of at least three months during the period of six months immediately proceeding the calendar month in which is so applies under this section a membership of not less than fifteen per cent of the total number of workmen employed in unit of an industry may apply in the prescribed from to the Registrar for registration as a Representative Union] of the aforesaid Rajasthan Act any Union which has for the whole of the period of at least three months during the period of six months immediately preceding the calendar month in which it so applies under this Section a membership of not less than fifteen per cent of the total number of workman employed in unit of an industry may apply in the prescribed form to the Registrar for registration as a Representative Union. Then under SectionThe Registrar shall cancel the registration of a Union(a) if after holding such an inquiry, if any, as he deems fit he is satisfied(iii) that the registered Union is being conducted not bona fide in the interests of workmen but in the interest of employers to the prejudice of the interest of workmen or;(b) If its registration under the Indian Trade Unions Act, 1926 (Central Act XVI of 1926) is cancelled] registration of a representative union can be cancelled on various grounds mentioned therein and one of such grounds is if, after holding such an inquiry, if any, as the Registrar deems fit he is satisfied that the registered union is being conducted not bona fide in the interest of the workman but in the interest of the employees to the prejudice of the interest of the workman. We have already quoted SectionE as to how a representative union is to be registered. Proviso to that Section makes it clear that if there are two are more unions fulfilling the criteria laid down in SectionD and apply for registration then the union having the largest membership of the employee has to be registered. As to what is representative union is not defined in the Act but in common parlance it would mean that it represents all the workers. It is not the case of the Workers Union that registration of the Labour Union is liable to be cancelled on any ground whatsoever. Notice given by Workers Union undern (2) of Section 19 of the Act is obviously invalid as it did not represent majority of the persons bound by the settlement nor it is a representative union. In this view of the matter it is not necessary for us to consider what were the demands raised by the Workers Union in its charter which were not covered by the tripartite settlement24. It has not been shown to us as to how a settlement arrived at on a holiday would be invalid. We do not think there is any bar in having conciliation proceedings on a holiday and to arrive at a settlement. On a holiday atmosphere is rather more relaxed. Learned single Judge in his judgment did not examine with reference to each of the demands raised by the Workers Union as to why it was not covered under the tripartite settlement and even the earlier settlement of 198325. Industrial Tribunal is the creation statute and it gets jurisdiction on the basis of reference. It cannot go into the question of validity of the reference. Question before the High Court was one of jurisdiction which it failed to consider. A tripartite settlement has been arrived at among the management, Labour Union and the Staff Union. When such a settlement is arrived at it is a package deal. In such a deal some demands may be left out. It is not that demands, which are left out, should be specifically mentioned in the settlement. It is not the contention of Workers Union that tripartite settlement is in any way mala fide. It has been contended by the Workers Union that the settlement was not arrived at during the conciliation proceedings under Section 12 of the Act and as such not binding on the members of the Workers Union. This contention is without any basis as the recitals to the tripartite settlement clearly show that the settlement was arrived at during the conciliation proceedings26. State Government failed to give due consideration to the direction of the High Court in its judgment dated March 23, 1989. State Government also failed in its duty to bring to the notice of the High Court of its notification dated March 17, 1989 making the impugned reference. It appears to us that the reference had occasioned while the judgment had been reserved by the High Court. In any case it was expected on the State Government to bring to the notice of the High Court before making a reference its decision to make the reference. After the judgment had been announced and directions issued by the High Court to hear the appellant it was incumbent of the State Government, in the circumstances of the case, to recall the reference. It could not direct the appellant to raise its objection to reference before the Industrial Tribunal for which Industrial Tribunal certainly lacked jurisdiction. State Government before making the reference did not consider all the relevant considerations which would clothe it with the power to make the reference under Section 10 of the Act. We find substance in the submissions of Mr. Pai. Wholesale reference of all the disputes in the charter of demands of Workers Union for adjudication was also bad inasmuch as many of such disputes were already the subject matter of tripartite settlement. This also showsn of mind by the State Government in making the reference27. When notice was issued on the special leave petition proceedings on the reference were stayed. Earlier also during the pendency of the writ petition before the High Court, which led to the impugned judgment proceedings, had been stayed. There has not been any progress before the Industrial Tribunal and all these years have passed. During the course of hearing we have been told that there have been even two more settlements and also that President of the Workers Union is now himself the President of the Labour Union. Even otherwise it would be futile to allow the reference to continue after lapse of all these years. This is apart from the fact that in our view reference in itself was bad as the tripartite settlement did bind the members of the Workers Union as well.