Case: Shukla Manseta Industries Pvt. Ltd Vs. The Workmen Employed Under It

There was a settlement between the appellant, M/s. Sbukla Manseta Industries Private Limited (hereinafter to be described as the employer) and their workmen on July 6, 1970. The settlement came into force from July 6, 1970 and was to remain in force for a period of three years, that is, till 5th July, 1973. The workmen through their union (Shukla Manseta Mazdoor Sangh) gave notice to the employer on May 6, 1973, terminating the settlement after the expiry of the period of two months from the date of the notice. Thus under the terms of the notice the settlement would also have stood terminated at the instance of the workmen on July 5, 1973, which was also the dare of the expiry of the settlement under the agreed terms.The workmen thereafter raised certain demands on August 1, 1973 and the State Government, in due course, referred the dispute under section 10(1) (d) of the Act to the Industrial Tribunal by an order dated June 25, 1974.The employer took a preliminary objection before the Tribunal that the reference was incompetent and invalid in view of the fact that there was no legal and valid termination of the settlement in accordance with the provisions of section 19(2) of the Act. The workmen resisted the claim. The Tribunal over-ruled the preliminary objection and held that the notice was valid and the reference was competent. It is against the above order of the Tribunal that the employer has come to this Court by special leave.

Court's reasoning:
Under the provisions of section 19(2) it is clear that a settlement shall be binding for such period as is agreed upon by the parties and if there is no period mentioned in the agreement, for a period of six months from the date on which the settlement is signed by the parties. With regard to the period of operation of the settlement, section 19(2) confers a statutory continuity of the settlement even after the expiry of the period agreed upon until the expiry of two months from the date on which a written notice of the intention to terminate the settlement is given by one party to the other. It is, therefore, clear that when a period is fixed in settlement, the settlement remains in operation for the entire period and also thereafter until one or the other party gives written intimation of the intention to terminate the settlement and until expiry of two months from the date of suchobject of the above provision under section 19(2) is to ensure that once a settlement is arrived at there prevails peace, accord and cordiality between the parties during the period agreed upon and if the settlement does not require to be altered for some reason or the other the same climate prevails by extension of the settlement by operation of law. Section 19 is not a dead end freezing all manner of aspirations of labour or even, may be, sometime, hardship suffered by the employer on account of a settlement. There is an option given to either party to terminate the settlement by a written intimation after the expiry of two months from the date of such notice. This is in accord with the policy of settlement of industrial disputes which is the principal object underlying the provisions of the Act.Settlement between employers and workmen, if not duly terminated, will operate as inviolable conditions of service of workmen. Such settlements are only step-ups in labours progressive ascent to the goal of their ultimate Ideal, namely, a living wage with realisation of other aspirations including partnership with employer. How soon that goal will be reached will depend up on so many factors and other imponderables in the process of the nations achievement, with cooperation from all sectors, public and private, but each party being always alive to the larger national interest which includes thriving of the industry of which labour is an integralpolicy of the Act is to ban agitations over the matters covered by a settlement or by an award during the period specified under section 19(2) and section 19(6) respectively. To avoid uncertainty and speculation section 19 prescribed a terminus a quo and a terminus ad quem. If in a settlement there is no time limit agreed upon between the parties the period of operation is a space of six months from the date of signing of the settlement and will also last until the expiry of two months from the date of receipt of the notice of termination of the settlement. If the period is fixed it commences from the date as specified in the settlement and will theoretically end as agreed upon but shall continue to operate under the law until the expiry of the requisite period of two months by a clear writtenaward under section 19(3) of the Act has a longer period of operation, to start with, namely, one year from the date of the commencement of the award, which is on the expiry of 30 days from the date of publication of the award by the appropriate Government. As in the case of a settlement so also under section 19(6) the award continues to operate govern ing the conditions of service until the expiry of two months from the date of receipt of notice of termination of the award. Under the two provisos to sub-section (3) of section 19 Government hag the option to reduce or extend the period of operat ion of an award. This will be, however, always subject to sub-section (5) of section 19.Notice under section 19(2) or under section 19(6) is only for intimation of an intention to terminate a settlement or an award respectively. There is no legal impediment to give advance intimation of the aforesaid intention provided the contractual or statutory period of settlement is not thereby affected orif an- advance notice is given in the case of an award, provided the period of two months expires on the usual expiry of the award permitted by law and Government in exercise of its power extends the award in a given case, such a notice would be infructuous and inoperative under the law. The extension of the award by the Government in exercise of statutory power would prevail upon the action of the party to terminate the award bydo not read the above observation as supporting the submission of counsel that no advance notice can be given to terminate a settlement or an award provided the requisite period of two months required under section 19(2) expires on thee date of expiry of the settlement or award or thereafter. It is only if a notice under section 19(2) or 1 9(6) expires within the period of operation of the award or settlement, such a notice will be invalid under the law. In that event the settlement or the award will continue to be in operation and any reference by Government of a dispute during the period of settlement or an award without the same being terminated under the law will be invalid.In the instant case the notice under section 19(2) was given intimating the intention of the workers to terminate the award on a date when the agreed period would also expire. To repeat, there is no legal bar to give advance intimation about the intention to terminate the settlement on the expiry of the agreed period and to start negotiation for, a more favorable settlement immediately thereafter. The only condition that has to be fulfilled by such a notice is that the period of two months from the date of notice must end on the expiry of the settlement and not before it. In a given case it may be even advantageous to the parties who do not want to continue the settlement to strike a new bargain without loss of time so that unnecessary bickerings and resultant industrial unrest do not take place. In an industrial matter we are not prepared to subject a notice under section 19(2) to the irksome vagaries or tyranny of technicalities of a notice under section 106 of the Transfer of Propertyfind that although the agreement, there, was statutorily continuing after its expiry on August 26, 1952, notice for terminating the agreement was given on September 6, 1952 and the High Court rightly accepted the notice as valid. The High Court also rightly disagreed with the views of the Labour Appellate Tribunal in India Reconstruction Corporation Limited ((1953) Labour Appeal Cases 563 (Cal.).) that an agreement with a fixed period expired by efflux of the period and was not statutorily continued. "The period aforesaid" in s. 19(2) will include not only the contractual period but also the statutory period of six months. This decision, therefore, leads no assistance to Mr. Shroff.