Case: Syndicate Bank  Vs. Shri K. Umesh Nayak

1. These appeals have been referred to the Constitution Bench in view of the apparent conflict of opinions expressed in three decision in Management of Churakulam Tea Estate (P) Ltd. v. The Workmen& Anr. and a two-Judge Bench decision in Crompton Greaves Ltd. v. Its Workmen, on the one hand, and a two-JudgeBench decision in Bank of India v. T. S. Kelawala &Ors. (1990 I CLR 748) on the otherIn the first two cases, viz., Churakulam Tea Estate and Crompton Greaves, (supra), the view taken is that the strike must be both legal and justified to entitle the workmen to the wages for the period of strike whereas the latter decision in T. S. Kelawala, (supra), has taken the view that whether the strike is legal or illegal, the employees are not entitled to wages for the period of strike. To keep the record straight, it must be mentioned at the very outset that in the latter case, viz., T. S. Kelawala (supra) the question whether the strike was justified or not, was not raised and, therefore, the further question whether the employees were entitle to wages if the strike is justified, was neither discussed nor answered. Secondly, the first two decisions, viz., Churakulam Tea Estate and Crompton Greaves, (supra) were not cited at the Bar while deciding the said case and hence there was no occasion to consider the said decisions there. The decisions were not cited probably because the question of the justifiability or otherwise of the strike did not fall for consideration. It is, however, apparent from the earlier two decisions, viz., Churakulam Tea Estate and Crompton Greaves, (supra), that the view taken there is not that the employees are entitled to wages for the strike period merely because the strike is legal. The view is that for such entitlement the strike has both to be legal and justified. In other words, if the strike is illegal but justified or if the strike is legal but unjustified, the employees would not be entitled to the wages for the strike-period. Since the question whether the employees are entitled to wages, if the strike is justified, did not fall for consideration in the latter case, viz., in T. S. Kelawala, there is, as stated in the beginning, only an apparent conflict in the decisionsC. A. No. 2710 of 19913. On 10th April, 1989, a memorandum of settlement was signed by the Indian Banks Employees Unions including the National Confederation of Bank Employees as the fifth bipartite settlement. The appellant-Bank and the respondent-State Bank Staff union through their respective federations were bound by the said settlement. In terms of Clauses 8(d) and 25 of the memorandum of the said settlement, the appellant-Bank and the respondent-Staff Union had to discuss and settle certain service conditions. Pursuant to these discussions, three settlements were entered into between the parties on 9th June, 1989. These settlements were under Section2(p) read with Section18 (1) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act). Under these settlements, the employees of the appellant-Bank were entitled to certain advantages over and above those provided under the All India Bipartite Settlement of 10th April, 1989. It appears that the appellant-Bank did not immediately implement the said settlement. Hence, the employees Federation sent telex message to the appellant-Bank on 22nd June, 1989 calling upon it to implement the same without further loss of time. The message also stated that the employees would be compelled to launch agitation for implementation of the settlement as a consequence of which the working of the Bank and the service to the customers would be affected. In response to this, the Bank in its reply dated 27th June, 1989 stated that it was required to obtain the Governments approval for grantent the said extra benefits and that it was making efforts to obtain the Governments approval as soon as possible. Hence the employees Federation should, in the meanwhile, bear it with. On 24th July, 1989, the employees Federation again requested the Bank by telex of even date to implement the said settlement forthwith, this time, warning the Bank that in case of its failure to do so, the employees would observe a days token strike after 8th August, 1989. The Banks response to this message was the same as on the earlier occasion4. On 18th August, 1989, the employees Federation wrote to the Bank that the settlements signed were without any pre-condition that they were to be cleared by the Government and hence the Bank should implement the settlement without awaiting the Governments permission. The Federation also, on the same day, wrote to the Bank calling its attention to the provisions of Rule 58.4 of the Industrial Disputes (Central) Rules, 1957 (the Rules) and requesting it to forthwith forward copies of the settlements to the functionaries mentioned in the said rule. By its reply of 23rd August, 1989, the Bank once again repeated its earlier stand that the Bank is required to obtain Governments approval for granting the said extra benefits and it was vigorously pursuing the matter with the Government for the purpose. It also informed the Federal that the Government was actively considering the proposal and an amicable solution would soon be reached and made a request to the employees Federation to exercise restrain and bear with it so that their efforts with the Government may not be adversely affected. By another letter of the same date, the Bank informed the Federation that they would forward copies of the agreements in question to the concerned authorities as soon as the Governments approval regarding implementation of the agreement was received. The Federation by the letter of 1st September, 1989 complained to the Bank that the Bank had been indifferent in complying with the requirements of the said Rule 58.4 and hence the Federation itself had sent copies of the settlements to the concerned authorities, as required by the said rule5. On the same day, i.e., 1st September, 1989 the Federation issued a notice of strike demanding immediate implementation of all agreements/understandings reached between the parties on 10th April, 1989 and 9th June, 1989 and the payment of arrears of pay and allowances pursuant to them. As per the notice, the strike was proposed to be held on three different days beginning from 18th September, 1989. At this stage, the Deputy Chief Labour Commissioner and Conciliation Officer (Central), Bombay wrote both to the Bank and the Federation stating that he had received information that the workmen in the Bank through the employees Federation had given a strike call for 18th September, 1989. No formal strike notice in terms of Section22 of the Act had, however, been received by him. He further informed that he would be holding conciliation proceedings under Section12 of the Act in the office of the Regional Labour Commissioner, Bombay on 14th September, 1989 and requested both to make it convenient to attend the same along with a statement of the case in terms of Rule 41(a) of the rules6. The conciliation proceedings were held on 14th September, 1989 and thereafter on 23rd September, 1989. On the latter date, the employees Federation categorically stated employees Federation categorically stated that no dispute as such existed. The question was only of implementation of the agreements/understandings reached between the parties on 10th April, 1989 and 9th June, 1989. However, the Federation agreed to desist from direct action if the Bank would given in voting that within a fixed time they will implement the agreements/understandings and pay the arrears of wages etc., underthem. The Banks representatives stated that the Bank had to obtain prior approval of the Government for implementation of the settlements and as they were the matters with the Government for obtaining its concurrence, the employees should not resort to strike in the larger interests of the community. He also pleaded for some more time to examine the feasibility of resolving the matter satisfactorily. The conciliation proceedings were thereafter adjourned on 26th September, 1989. On this date, the Banks representatives informed that the Governments approval had not till then been obtained, and prayed for time till 15th October, 1989. The next meeting was held on 27th September, 1989. The Conciliation Officer found that there was no meeting ground and no settlement could be arrived at. However, he kept the conciliation proceedings alive by stating that in order to explore the possibility of bringing about an understanding in the matter, he would further hold discussions on 6th October, 19897. On 1st October, 1989, the employees Federation gave another notice of strike stating that the employees would strike work on 16th October, 1989 to protest against the inaction of the Bank in implementing the said agreements/ settlements validly arrived at between the parties. In the meeting held on 6th October, 1989, the Conciliation Officer discussed the notice of strike. It appears that in the meanwhile on 3rd October, 1989 the employees Federation had filed Writ Petition No. 13764 of 1989 in the High Court for a writ of mandamus to the Bank to implement the three settlements dated 9th June, 1989. In that petition, the Federation had obtained an order of interim injunction on 6th October, 1989 restraining the Bank from giving effect to the earlier settlement dated 10th April, 1989 and directing it first to implement the settlements dated 9th June, 1989. It appears, further that the employees had in the meanwhile, disrupted normal work in the Bank and had resorted to gherao. The Bank brought these facts, viz., filing of the writ petition and the interim order passed therein as well as the disruption of the normal work and resort to gheraos by the employees, to the notice of the Conciliation Officer. The meeting before the Conciliation Officer which was fixed on 13th October, 1989 was adjourned to 17th October, 1989 was adjourned to 17th October, 1989 on which date, it was found that there was no progress in the situation. It was on this date that the employees Federation gave a letter to the Conciliation Officer requesting him to treat the conciliation proceedings as closed. However, even thereafter, the Conciliation Officer decided to keep the conciliation proceedings the matter amicably8. On 12th October, 1989, the Bank issued a circular stating therein that if the employees went ahead with the strike on 16th October, 1989, the Management of the Bank would take necessary steps to safeguard the interest of the Bank and would deduct the salary for the days the employees would be on strike, on the principle of no work, no pay. Inspite of the circular, the employees went on strike on 16th October, 1989 and filed a writ petition on 7th November, 1989 to quash the circular of 12th October, 1989 and to direct the Bank not to make any deduction of salary for the day of the strike9. The said writ petition was admitted on 8th November, 1989 and an interim injunction was given by the High Court restraining the Bank from deducting the salary of the employees for 16th October, 198910. Before the High Court, it was not disputed that the Bank was a public utility service and as such Section22 of the Act applied. It was the contention of the Bank that since under the provisions ofn (1) (d) of the said Section 22, the employees were prohibited from resorting to strike during the pendency of the conciliation proceedings and for seven days after the conclusion of such proceedings, and since admittedly the conciliation proceedings were pending to resolve an industrial dispute between the parties, the strike in question was illegal. The industrial dispute had arisen because while the Bank was required to take the approval of the Central Government for the settlements in question, the contention of the employees was that no such approval was necessary and there was no such condition incorporated in the settlements. This being an industrial dispute within the meaning of the Act, the conciliation proceedings were validly pending on the date of the strike. As against this, the contention on behalf of the employees was that there could be no valid conciliation proceedings as there was no industrial dispute. The settlements were already arrived at between the parties solemnly and there could be no further industrial dispute with regard to their implementation. Hence, the conciliation proceedings were. The provisions of Section 22(1) (d) did not, therefore, come into play11. The learned single Judge upheld the contention of the Bank and held that the strike was illegal, and relying upon the decision of this Court in T. S. Kelawalas case (supra), dismissed the writ petition of the employees upholding the circular under which the deduction of wages for the day of the strike was ordered. Against the said decision, the employees Federation preferred Letters Patent Appeal before the Division Bench of the High Court and the Division Bench by its impugned judgement reversed the decision of the learned single Judge by accepting the contention of the employees and negativing that of the bank. The Division Bench in substance, held that the approval of the Central Government as a condition precedent to their implementation was not incorporated in the settlements nor was such approval necessary. Hence, there was no valid industrial dispute for which the conciliation proceedings could be held. Since the conciliation proceedings were invalid, the provisions of Section 22(1) (d) did not apply. The strike was therefore not illegal. The Court also held that the strike was, in the circumstances, justified since it was the Bank Managements unjustified attitude in not implementing the settlements, which was responsible for the strike. The Bench then relied upon two decisions of this Court in Churakulam Tea Estate and Crompton Greaves cases (supra) and held that since the strike was legal and justified, no deduction of wages for the strike day could be made from the salaries of the employees. The Bench thus allowed the appeal and quashed the circular of the 12th October, 198931. In the present case, the High Court relying on Churakulam Tea Estate and Crompton Greaves cases, has held that the strike was both legal and justified. It was legal according to the High Court because the reference to the conciliation proceedings was itself illegal and, therefore, in the eye of the law, on conciliation proceedings were pending when the employees struck work. The strike was, further justified according to the High Court because the Bank had taken a recalcitrant attitude and had insisted upon obtaining the approval of the Central Government for the implementation of the agreements in question, when no such approval was either stipulated in agreements or required by law.

Reasoning: While on the one hand, it has to be remembered that strike is legitimate and sometimes unavoidable weapon in the hands of labour it is equally important to remember that indiscriminate and hasty use of this weapon should not be encouraged. It will not be right for labour to think that for any kind of demand a strike can be commenced with impunity without exhausting reasonable avenues for peaceful achievement of their objects. There may be cases where the demand is of such an urgent and serious nature that it would not be reasonable to expect labour to wait till after asking the Government to make a reference. In such cases, strike even before such a request has been made may well be justified. The present is now however one of such cases24. In our opinion, the workmen might well have waited for some time after conciliation efforts failed before starting a strike and in the meantime to have asked the Government to make a reference. They did not wait at all. The conciliation efforts failed on November 30, 1955, and on the very next day the Union made its decision on strike and sent the notice of the intended strike from the 9th December, 1955 and on the 9th December, 1955, the workmen actually struck work. The Government appear to have acted quickly and referred the dispute on January 3, 1956. It was after this that the strike was called off. We are unable to see how the strike in such circumstances could be held to be justified29. There is, therefore, nothing in the decisions of this Court in Charukulam Tea Estate and Crompton Greaves cases [supra] or the other earlier decisions cited above which is contrary to the view taken in T. S. Kelawala. What is held in the said decisions is that to entitle the workment to the wages for the, the strike has both to be legal and justified. In other words, if the strike is only legal but not justified or if the strike is illegal though justified, the workers are not entitled to the wages for the strike period. In fact General Navigation case [supra], the Court has taken the view that a strike which is illegal cannot, at the same time be justifiable. According to that view, in all cases of illegal strike, the employer is entitled to deduct wages for the period of strike and also to take disciplinary action. This is particularly so in public utility services30. We, therefore, hold endorsing the view taken in T. S. Kelawala that the workers are not entitled to wages for the strike period even if the strike is legal. To be entitled to the wages for the, the strike has to be both legal or justified are questions of fact to be decided on the evidence on record. Under the Act, the question has to be decided by the industrial dispute within the meaning of the ActWe are afraid that the High Court has exceeded its jurisdiction in recording the said findings. It is the industrial adjudicator who had the primary jurisdiction to give its findings on both the said issues. Whether the strike was legal or illegal and justified or unjustified, were issues which fell for decision within the exclusive domain of the industrial adjudicator under the Act and it was not primarily for the High Court to give its findings on the said issues. The said issues had to be decided by taking the necessary evidence on the subject32. We find nothing in the decision of the High Court to enlighten us as to whether notwithstanding the fact that the agreements in question had not stipulated that their implementation was dependent upon the approval of the Central Government, in fact, the Bank, was not duty bound in law to take such approval. If it was obligatory for the Bank to do so, then it mattered very little whether the agreements in question incorporated such a stipulation or not. If the approval was necessary, then there did exist a valid industrial dispute between the parties and the conciliation proceedings could not be said to be illegal. It must be noted in this connection that the said agreements provided for benefits over and above the benefits which were available to the employees of the other banks. Admittedly, the employees struck work when the conciliation proceedings were still pending. Further, the question whether the implementation of the said agreements was of such an urgent nature as could not have waited the outcome of the conciliation proceedings and if necessary, of the adjudication proceedings under the Act, was also a matter which had to be decided by the industrial adjudicator to determine the justifiability or unjustifiability of the strike34. Sri Garg appearing for the employees did not dispute the proposition of law that notwithstanding the fact that the strike is legal, unless it is justified, the employees cannot claim wages for the. However, he contended that on the facts of the present case, the strike was both legal and justified.We do not propose to decide the said issues since the proper forum for the decision on the said issues in the present case is the adjudicator under the Act38. We are, therefore, more than satisfied that the High Court in the present case had erred in recording its findings on both the counts, viz., the legality and justifiability, by assuming jurisdiction which are properly vested in the industrial adjudicator. The impugned order of the High Court has, therefore, to be set aside40. In these two matters, arising out of a common judgment of the High Court, the question involved was materially different, viz., whether when the employees strick work only for some hours of the day, their salary for the whole day could be deducted.As in the case of T. S. Kelawala [supra], in this case also the question whether the strike was justified or not was not raised. No argument has also been advanced on behalf of the employees before us on the said issue. In the circumstances the law laid down by this Court in T. S. Kelawala with which we concur, will be applicable. The wages of the employees for the whole day in question, i.e., 29th December, 1977 are liable to be deducted.