Case: Maharashtra General Kamgar Union &amp; Others Vs. Pix Transmission Limited

Some of the material facts of the present case are briefly stated as under :2.The respondent No.1 is carrying on business of manufacture of rubber belts. The appellant is a Union representing the workmen working in the saidThe appellant is a registered union. There are two other Unions in the said establishment of which one Nagpur Kamgar Union is a recognised union in accordance with the provisions of the Trade Unions Act.3.On or about 29th November, 1993 a settlement was arrived at by thewith recognised union Nagpur Kamgar Union (hereinafter referred as NGU). The appellant was not invited for negotiations and settlement which was arrived at by and between the respondent No.1 and the said NGU. Accordingly, appellant filed a complaint being Complaint (ULP) No.74/1994, alleging discriminatory treatment to the members of theOn expiry of settlement dated 29th November, 1993, a fresh charter of demand was submitted to theHowever, since thewas not invited for negotiations in the charter of demand, the respondent filed a complaint being Complaint (ULP) No.1104/1996 in the Industrial Court inter alia for interim relief that they should be invited by thefor participating in the said settlement process in respect of charter of demand submitted by them. The negotiations were not fructified and, therefore, settlement was not arrived at. Thus the matter was proceeded with for conciliation before the Conciliation Officer. Even before the Conciliation Officer, the matter was not settled and he filed failure report and the matter was thereafter referred to the Industrial Court.4.In this complaint, thecontended that benefit of both the settlements of 1993 and 1998 should be extended to the members of thealso. The basic contention is that even when settlements are challenged by thestill they are entitled to benefit thereof. It is further contended by thethat insofar as the obligation of the members of theis concerned to give higher figure of production, they have complied with the same right from 1993 and thus, they are entitled to benefits of settlement, particularly, higher wages and higherprescribed thereunder. It is further contended that even though they are not accepting the said settlement yet, they are entitled to benefit which is acquired by the other respondents.5.On the other hand,learned Counsel for therespondents contended that thehas refused to accept the said settlement and, therefore, not entitled to the benefits thereunder. It is further contended that the settlement which was arrived at under section 18(1) of the Industrial Disputes Act, 1947 is binding only between the parties to the settlement and not to third parties who are not parties to the said settlement. It is also further contended bylearned Counsel for therespondents that the settlement is not in the course of conciliation proceeding and, therefore, provisions of section 18(3) of the Industrial Disputes Act, 1947 are not applicable. It is, therefore, contended by the respondents to the written statement that members of thehave not complied with the obligations as contemplated by settlements of 1993 and 1998 of giving increased productions, it is further contended that thehad not accepted the said settlements by filing necessary undertaking and thus, they are not entitled to extended benefit thereof and those who refused to accept settlement cannot claim benefit of the said settlements.6.On the aforesaid pleadings, the industrial Court framed following preliminary issues for determination :Preliminary issues Findings1. Whether theare entitled to the benefits of the settlements dated98 entered into under section 2(p) read with section 18(1) of the ID. Act when admittedly the complainants are not party to the settlements No2. What Order As per the final order.7.The matter was thereafter heard by the Industrial Court and by order and judgment datedthe Industrial Court dismissed the complaint on the preliminary issue itself and held that the appellants are not entitled to the benefits of settlement dated98 which are entered into under section 2(p) and 18(1) of the Industrial Disputes Act, 1947 and accordingly said complaint has been dismissed.8.The said order of dismissal of the complaint was a subject matter of challenge before the learned Single Judge by way of writ petition. The learned Single Judge by order dated 29th January, 1993 considered various aspects and ultimately came to the conclusion that there is no merit in the writ petition and, therefore, same has been dismissed.9.This order of the learned Single Judge is the subject matter of challenge in the present appeal before us.

Court's reasoning:
Counsel for the appellant thereafter relied upon another judgment of the Delhi High Court in the case of Usha Spg. and Wvg. Mills Association vs. Usha India and ors. reported in 1999 (1) CLR559. From para 21 of the said judgment, it is clear that the said judgment is against the appellant. In paras 12 and 13 of the said judgment the Court has considered the effect of the provisions of section 18(3) of the I.D. Act. We find that the view which we are taking is in consonance with the view which Delhi High Court has taken that the settlement under section 18(1) cannot be enforced by the parties who are not parties to such settlement. Thereafter,reliance is placed on the judgment of the learned Single Judge of this Court in the case of Sarva Shramik Sangh vs. V.V.F. Ltd., 2002 (1) CLR797. In para 6 of the said judgment, the learned Single Judge of this Court has considered and followed judgment of the Apex Court in the case of Herbertsonss case (supra). The learned Single Judge after considering the factors came to the conclusion that the settlement can be challenged by workmen who are not party to the settlement. In that event, if the settlement is just and fair this Court has power to bind other workers to such settlement. We are not at all disputing the said proposition of law. However, whether a union who is not a party to the settlement has a right to claim enforcement of the said agreement when the same is not acceptable to them and challenged in the pending proceedings. In the present case, it is not their case that they are accepting the said settlement. They have challenged the said settlement in the main complaint which is admittedly pending before the Industriald Counsel for thes also relied on judgment in the case of Cooper Engineering Ltd. vs. D.M. Aney and ors, 1971 (1) LLJIn the case of Tata Chemicals Ltd. vs. The Workmen, AIR 1978 SC 828   the Supreme Court has observed as under:"13. A bare perusal of the above quoted section would show that whereas a Settlement arrived at by agreement between the employer and the workmen otherwise than in the course of conciliation proceeding is binding only on the parties to the agreement, a settlement arrived at in the course of conciliation proceedings under the Act is binding not only on the parties to the industrial dispute but also on the other persons specified in clauses (b), (c) and (d) of subsection (3) of section 18 of the Act. We are fortified in this conclusion by a decision of this Court in Ramnagar Cane and Sugar Co. Ltd. vs. Jatin Chakravorty, 1960 (3) SCR 968   :(AIR 1960 SC 1012  ) where it was held as follows (at p. 10 15 of AIR) :"When an industrial dispute is thus raised and is decided either by settlement or by an award the scope and effect of its operation is prescribed by section 18 of the Act. Section 18(1) provides that a settlement arrived at by agreement between the employer and the workmen otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement, whereas section 18(3) provides that a settlement arrived at in the course of conciliation proceedings which has become enforceable shall be binding on all the parties specified in Cls. (a), (b), (c) and (d) of(3) section 18(3)(d) makes it clear that, where a party referred to in Cl. (a) or (b) is composed of workmen, all persons who are employed in the establishment or part of the establishment, as the case may be, to which the disputes relates on the date of the dispute and all persons who subsequently become employed in that establishment or part, would be bound by the settlement In order to bind the workman it is not necessary to show that the said workman belong to the Union which was a party to the dispute before the conciliator. The whole policy of section 18 appears to be to give an extended operation to the settlement arrived at in the course of conciliation proceedings. And that is the object with which four categories of persons bound by such settlement, are specified in section 18,(3).""14. Similar view seems to have been held by another Division Bench of this Court in The Jhagrakhan Collieries (P) Ltd. vs. G.C. Agrawal, 1975 (3) SCC 613  : (AIR 1975 SC 171  ).""15. The legal position emerging from theprovisions of the Act being clear, we now proceed to tackle the questions set out above.""16. As the first two questions are inseparably linked up, we propose to deal with them together. Although prima facie there seems to be considerable force in the Sanghs stand that if paras 2.3, 3.1 and 3.3 of the aforesaid agreement of December 14, 1973 arrived at, between the employees union and the appellant Company related only to the special pay and did not cover the Sanghs demand for variable Dearness Allowance linked to the Ahmedabad cost of living index, we do not consider it necessary to go into this question, as the said agreement not having been arrived at during the course of conciliation proceeding, it could not, according to section 18(1) of the Act bind any one other than the parties thereto. A fortiori, the fact that the employees union which had been duly recognised under the Code of Discipline arrived at the aforesaid agreement with the appellant Company could not operate as a legal impediment in the way of the Sangth (which was not a party to the agreement).to raise a demand or dispute with regard to the Variable Dearness Allowance linked to Ahmedabad cost of living index or affect the validity of the reference by the Government or the jurisdiction of the Industrial Tribunal to go into the dispute. The conclusion that minority union can validly raise an industrial dispute gains support from section 2(k) of the Act which does not restrict the ambit of the definition of "industrial dispute" to a dispute between an employer and recognised majority union but takes within its wide sweep may dispute or difference between employer and workmen including a minority union of workmen which is connected with employment or terms of employment or conditions of labour of workmen as well as the observations made by this Court in Workmen of Dharampal Premchand vs. Dharampal Premchand, 1965 (3) SCR 394  : (AIR 1966 SC 182  ).""17. It may also be relevant to mention in this connection that both the Counsel for the Employees Union and the Counsel for the appellant Company admitted before the Industrial Tribunal that the aforesaid agreement had been terminated by two months notice (See p.39 of the Industrial Tribunals Award). We have, therefore, no hesitation in holding that neither the Sangh was precluded from raising the demand or the dispute, nor was the Government debarred from making the reference nor was the Industrial Tribunals competence to go into the dispute and make the award affected in any manner. The first two questions are decided accordingly."18.On the perusal of the aforesaid judgments, in our view, following position clearly emerges;Firstly, if a settlement is under section 18(1) of the Industrial Disputes Act and the same is not binding on the workers who are not party to the said settlement. Secondly, a person who does not accept the settlement is not entitled to benefits of the said settlement. For the purpose of deriving benefits of the said settlement it is necessary that the workman must accept the said settlement, particularly, it is not permissible in law that the workman can claim the benefits of the settlement while he refuses to comply with obligations thereunder. Thirdly, in case settlement is arrived at under section 18(3) of the I.D. Act, in the course of conciliation proceeding, then settlement becomes binding on all the parties and all the workmen irrespective of the fact whether such workman has been accepted such settlement or not.