Case: Poona Employees Union Vs. Force Motors Limited

3. The factual backdrop has to be summarily outlined to better comprehend the issue and the rival assertions. The company, Force Motors Limited, earlier named as Bajaj Tempo Limited, has its office at Akurdi, Pune. The respondent No. 2- union i.e. Bhartiya Kamgar Sena (for short, hereinafter to be referred to as) is the recognized union of the company. The appellant union in its bid to be adjudged as the recognized union in place of BKS, filed an application on 6.9.2003 before the Industrial Court, Pune, as required under the provision of the Act. It insisted that almost all the employees members of BKS had meanwhile tendered their resignation, and had expressed their desire to discontinue their membership therewith. It claimed that majority of the employees had become its members, so much so that in the month of January, 2003, it had in its fold 1973 employees members. Claiming that it was a union registered under the Trade Unions Act, 1926 (for short, hereinafter to be referred to as) on 20.7.1986 with a valid certificate to that effect, it asserted that with the exodus of the employees members from BKS to its ranks, it had the holding of 85% of the total employees of the company. It disclosed, inter alia, as well the names and particulars of the office bearers and members of the Executive Committee as in the month of January, 2003 and mentioned as well that its membership subscription was Rs. 2 per month and that the meetings of the Executive Committee were being held at regular intervals of not more than 3 months. It maintained as well that the resolutions passed by the Executive Committee and the General Body thereof were recorded in the Minute Book and that its accounts were being duly audited by a Chartered Accountant for every financial year and that certificate(s) to that effect was/were issued as well. Contending that it, in any case, had in its roll more than 30% membership of the employees of the company, this along with the other factors entitled it to be adjudged as the recognized union thereof under the Act. That it complied with the prescription of the statute more particularly as laid down in Sections 11 and 19 of the Act, was emphasized.4. The company resisted the application by pleading, amongst others, that the appellant union was not duly registered under the 1926 Act. It denied as well that it did have, at that point of time, 30% membership of the employees of the company and that it did comply with the imperatives of Section 19 of the Act. Dismissing the appellantclaim of majority membership to be a bogey, it refuted its claim of having larger membership of the employees of the company compared to BKS. The company alleged that the appellant union had failed to maintain the records as per Section 22 of the 1926 Act and that it was, thus not eligible to be conferred the status of recognized union of the company.5. BKS, as well, joined the fray in similar lines with the company. Apart from reiterating that the appellant union was not duly registered under the 1926 Act and thus it had no locus standi to claim the status of a recognized union, it categorically controverted its clam of holding 30% membership of the company as compared to it (BKS). It denied that the appellant union had complied with the mandatory provisions of Section 19 of the Act pertaining to minimum subscription of membership, meetings of the Executive Committee at regular intervals, record of resolutions in Minute Book and audit of its accounts. It alleged that the appellant union had produced false and fabricated records in respect of membership as well as the meetings of its Executive Committee. BKS claimed that it had been working efficiently and effectively as the recognized union of the company over the years and had zealously guarded the interest of the workers by entering into settlements with the company from time to time to effectuate the same. It alleged further that the office bearers of the appellant union were outsiders and that it (appellant upon) had not been working in the interest of the employees of the company.6. In the proceedings registered as Application (MRTU) No. 3 of 2003 before the Industrial Court at Pune, following issues were framed founded on the rivalWhether the Applicant Union proves that it has membership of not less than 30% of the total number of the employees, employed in the undertaking for the whole of the period of six months, immediately preceding the calendar month, in which it soWhether the membership of Applicant Union was larger than that of the membership of the Non-Applicant No. 2 (Recognized Union), during the whole of the period of six months, prior to the filing of the petition?3) Whether the Applicant Union has made compliance of Section 19 of MRTU & PULP Act, 1971?4) Whether the Applicant Union is entitled for the certificate of registration as a recognized union in place of Non-Applicant No. 2 Union as per Section 14 (3) of MRTU & PULP Act, 1971?5) What order?At the outset, the Industrial Court recorded that the application of the appellant union was in keeping with the requirement that there should be a time lag of two years since the date of registration of the recognized union and an interregnum of one year since the date of disposal of the previous application for recognition, if any.8. The Industrial Court in the course of adjudication entrusted an exercise to the Investigating Officer contemplated by the Act to verify the membership of both the unions and to submit a report before it. This was patently in order to satisfy itself of the compliance of the prescriptions of Sections 11 and 12 of the Act, by the appellant union seeking the status of recognized union. As the decision eventually rendered by the Industrial Court on 22.3.2006 would reveal, both the unions were afforded sufficient opportunity by the Investigating Officer to adduce evidence on the rival claims of membership. The report of the Investigating Officer dated 26.10.2004, as is available on record, was taken note by the Industrial Court in details.9. It took into account the findings recorded in the report that there were 26 and 217 exclusive members of the appellant union and BKS respectively and 1908 common members of both the unions. This was in the face of the total strength of the employees of the company ranging from 2109 to 2155 during the relevant period i.e. March 2003 to August, 2003. That vis-à-vis, this strength, whereas the appellant union had claimed its hold over 1973, BKS asserted that it had 2166 employees as its members. As a plea was raised before the Industrial Court that the aspect of overlapping membership ought to be excluded and that exclusive membership of the unions ought to be determined as a correct index of the membership strength of the competing unions, it undertook an analysis, inter alia, of the oral evidence adduced before it as would be adverted to hereafter. The appellant union had examined witnesses including its President – Madhav and a member–Gugario to prove the issue of majority membership of the employees of the company. The company and the BKS produced witnesses as well in support of their resistance. For BKS, office bearers including its General Secretary, President of Pune Unit, Executive Member of Pune Unit, Secretary and Vice-President of BKS were examined.10. In the process of evaluation of the oral evidence adduced, it transpired that the membership fee of BKS was being deducted from the bonus amount payable to the workers every year. That the act of the company in deducting the membership fee from the bonus amount was the subject matter of assailment in the Industrial Court in a separate proceeding was noted. The Industrial Court recorded that for the last five to six years prior to the adjudication, the company was collecting Rs. 100 per worker per annum from the bonus amount and adjusting the same against the membership fee of BKS. It also noted that such deduction was at the instance of BKS, requesting the company to do so from the bonus payable to the workers every year. It was also recorded that there was no practice to pay membership fee in cash by the employees of the company to BKS for this period. The endeavour on the part of the witnesses of the BKS in the capacity of office bearers to testify that it used to collect membership fee in cash from the workers was not accepted as the same was opposed to the contemporaneous records. To fortify this conclusion, the Industrial Court also referred to the documentary evidence as available demonstrating that more than 1500 workers of the company along with appellant union had raised this issue in the year 2002 and had impeached the deduction of membership fee of BKS from the bonus amount by filing complaints in the year 2003 before the same forum. That there was no individual consent letter of the workers authorizing the company or the BKS to effect deduction used for adjustment against membership fee was noted as well. The Industrial Court returned a finding that such deduction did not amount to voluntary subscription of membership fee from theaccounts and in fact was an exaction against their consent and will since the year 2002. The oral evidence adduced on behalf of BKS about acceptance of membership fee in cash for the year 2003 was, thus discarded as untrustworthy.11. In arriving at this conclusion, the Industrial Court, inter alia, referred to the findings of the Investigating Officer pertaining to the anomalies noticed in the cash book of BKS maintained for the relevant period. To discard the entries made therein, as proof of collection of membership fee, the observation of the Investigating Officer that the cash book was not only not in the prescribed proforma but also not signed by any of the office bearers of BKS, was noted. The oral evidence of the witnesses produced by BKS relating to the transactions with the bank involving membership fee was not accepted, being not duly corroborated by the documentary evidence on record, besides being inherently untrustworthy. The Industrial Court, in particular, recorded its reservation on the inconsistency between the two versions, namely, deduction from the bonus amount by the company till the year 2003 against membership fee and the claim of the BKS of collection of such fees by cash which were mutually mutilative. Taking cognizance of the proceedings separately instituted in a representative capacity on behalf of the members of the appellant union and other employees of the Company, objecting to the deduction from bonus amount, for the membership fee of BKS, its (BKS) claim of majority membership was rejected.12. In contradistinction, the Industrial Court noted that the Investigating Officer had not detected any irregularity or mistake with regard to the collection of membership fee for the relevant period of six months and that the entries in cash book of the appellant union were correct and were in conformity with the receipt books maintained therefor. The finding of the Investigating Officer that the amount of membership fee collected, however, was not deposited in the bank, was also marked. This omission on the part of the appellant union, according to the Industrial Court, was not a cardinal lapse, as it was making its endeavour to acquire the status of a recognized union. The Industrial Court recorded as well that the appellant union, as per the report of the Investigating Officer, could collect membership fee from 1973 employees which amply demonstrated their spontaneous support for it. It was deduced that the objections raised by 1500 employees of the company against its action of effecting deductions from the bonus amount towards the membership fee of BKS also evinced that there was no voluntary payment thereof, belying thus its (BKS) claim of having a hold on majority of the employees members of the company.13. In course of the adjudication before the Industrial Court, an application was filed by the appellant union to produce affidavits of its members numbering 1556 to consolidate its decision of majority membership. The Industrial Court in the proceedings dated 29.11.2004 under Section 11 of the Act overruled the objection of the respondents that such proof of affidavits was inadmissible and allowed the prayer with the condition that the same would not be used for proving the point of membership of the appellant union and would be used for other relevant and ancillary purposes. In granting this permission, the Industrial Court took note of the submission made on behalf of the appellant union that these affidavits would not be used or proving the issue of membership but for other relevant and ancillary purposes. The non-applicants/respondents were also granted the liberty to file counter-affidavits of rebuttal, if so advised. BKS, though did challenge this order before the High Court, the petition was dismissed on 9.8.2005. Eventually, BKS, also filed affidavits of 170 employees.14. The Industrial Court took note of the contents of 1556 affidavits filed on behalf of the appellant union to deduce that the affiants had resigned from the membership of BKS in the year 2002 and had not paid the membership fee since December, 2002. It was held by the Industrial Court that these affidavits did substantiate that these 1556 employees did bring an end to their relationship with the BKS and had not paid the membership fees to it after December, 2002. That the contents of these affidavits did clearly indicate that the concerned employees had severed their ties with the BKS and had come over to the appellant union was concluded. On a scrutiny of the cross-examination of the 100 affiants, as was permitted, the Industrial Court held that there was no circumstance or ground to disbelieve the deponents on their plea that they had disconnected their membership with the BKS and had stopped paying membership fees to it after December, 2002. The intention of the affiants numbering 1556 to support the appellant union, according to the Industrial Court, was conspicuously established. It referred to as well the 170 affidavits filed by BKS only to return a finding that if its claim of common membership of 1908 employees was credible, it ought to have been in a position to produce more affidavits. The Industrial Court thus inferred that this fact also authenticated that only a small segment of the employees of the company was in support of BKS. The claim of common membership of 1908 employees advanced by BKS was thus rejected. The Industrial Court, thus eventually in deciding the issue of membership, heldafter comparing the entire evidence adduced by both unions on the point of strength of their membership read together with report of Investigating Officer as well 1556 affidavits of the employees filed on record by Applicant Union, I am of the (Opinion that the Applicant Union was having more than 30 % of membership of the total employees of the Company as well as larger membership than the membership of B.K.S. during the period of six months from the month of March 2003 till August 2003. In such circumstances, mandatory requirements as given under Section 11 and Section 14 of MRTU & PULP Act, 1971, are substantially complied by the Applicant Union, and Applicant Union has succeeded in establishing membership of not less than 30 % of total employees as well as larger membership of the total employees of the company with it during the period of six months prior to filing of the present petition. So, I answer No. 1 and 2 in affirmative.As would be evident from the above extract, the Industrial Court did take note of the contents of 1556 affidavits of the employees and acted thereon to conclude that the appellant union did hold at that point of time more than 30% membership of the total employees of the company during the relevant time i.e. March, 2003 to August, 2003 and that it had otherwise satisfied as well, the mandatory requirements of Sections 11 and 14 of the Act.16. Referring to Section 19 of the Act, the Industrial Court next adverted to the constitution of the appellant union placed on record and the evidence of its President to the effect that the membership fee of Rs. 2 per month from each member was being collected and that the Minute Book of the meetings of the Executive Committee as well as the audit of its accounts was being done regularly and further that the necessary records namely, receipt book, register of members, cash book etc. were also being maintained. It held that the prescriptions of Section 19 of the Act had also been complied with. It, however, recorded that any irregularity in the observance of the enjoinment of Section 19 of the Act, per se would not debar a union from claiming the status of recognized union as those, were to be necessarily complied with after the said status was conferred. The allegation leveled against the appellant union that it had instigated, aided or assisted illegal strikes during the relevant period, was also dismissed in absence of corroboration thereof by any evidence. The imputation that the appellantrequest for being acknowledged as the recognized union, lacked bonafide, was rejected as well. In all, the Industrial Court, thus returned a finding that having regard to the materials on record, the appellant union was entitled to be adjudged eligible to be conferred the status of recognized union and did issue a direction to that effect. It was directed that the appellant union be registered as recognized union in place of BKS for the company and also saddled BKS with costs of Rs. 25000/- for resisting the process without the support of the majorityof the company.17. The High Court, as the impugned judgment would disclose, took note of the order dated 29.09.2004 of the Industrial Court by which the objection of BKS to the prayer of the appellant union to file affidavits was rejected with the observation that the same would not be taken into consideration for the purpose of verification of the membership. It also took cognizance of the fact that as per the report of the investigating officer dated 26.10.2004, the appellant union had exclusive membership of 26, and BKS of 270 and that 1908 employees were common to both the unions. It also marked the finding of the Investigating Officer that the appellant union had never deposited any amount in its bank account. Taking note of the order dated 29.9.2004 whereby the Industrial Court had permitted cross-examination of 99 affiants out of 1556 affidavits, the High Court did record that 17 of them had admitted that they still continue to be the members of the BKS and that 7 had admitted in their cross-examination that they had filed the affidavits only on the assurance of the appellant union that they would be reimbursed the wages deducted on account of go-slow initiatives resorted to by them. The fact that the prayer of the BKS to cross-examine all the 1556 affiants was rejected by the Industrial Court, was minuted.18. Vis-a-vis the first limb of impugnment registered by the respondents, namely, the applicant union had no right to represent the employees, the High Court referred to its constitution and more particularly its object of organizing and uniting the employees, and recorded that though the same was represented to be included in the schedule thereto, the same was not discernable therefrom and thus the purpose for which the applicant union had been established was not forthcoming for which it was not eligible to be recognized under Section 11 of the Act.19. On the aspect of the reception of 1556 affidavits, the High Court was of the view that the liberty to cross-examination only 99 affiants, when the contents of the affidavits were the same, was unfair as these documents were relied upon to draw conclusions about the factum of membership of the unions. It referred to the report of the Investigating Officer in details pertaining to the facet of membership and held that the approach of the Industrial Court in dealing with this issue by overlooking the fact that it was the onus of the appellant union to prove that the BKS had lost its representative character and that it was eligible to be recognized under Section 11 of the Act, was defective. It was of the considered view, that the Industrial Court in fact had relied upon the affidavits as a proof of membership of the applicant union by marking a departure from its order that the same would not be used for such purpose. The High Court thus concluded that the affidavits filed by 1556 employees did play a decisive role to enable the Industrial Court to reach the conclusion that the applicant union commanded majority of membership of the undertaking which was unsustainable in law.20. The High Court also took note of the findings recorded in the report of the Investigating Officer about the exclusive and dual membership claimed by both the unions as per the records as well as the observations on the documents produced by them. Referring to the decision of this court in Automobile Products of IndiaUnion Vs. Association of Engineering Workers, Bombay and Others, (1990) 2 SCC 444 , the High Court returned the finding that the decision of the Industrial Court holding the appellant union to be eligible under the Act to be conferred the status as the recognized union was flawed and untenable and thus interfered with the same.

Court's reasoning:
30. So far as the documents of the BKS were considered, the Investigating Officer on his inspection thereof, recorded that it had submitted a list of 2166 workers claiming them to be its members, out of which 41 were found to be ineligible. It was thus set down that 2125 members could be treated as eligible.31. On a scrutiny of the receipt books of the members, the Investigating Officer opined that no responsible official bearer of the union had signed the same and that it was not maintained as per the provision of the 1926 Act. The particulars of the contribution book were elaborately examined and the deposit of membership fee of 2166 members, was noted. The Investigating Officer was of the view that the cash book of the BKS was not in the prescribed form and was not signed by any responsible office bearer of the union. That there were some anomalies with regard to the dates of the deposits and the receipts, were pointed out as well. It was noted too that out of 2166 members, claimed by the BKS to be in its hold, 54 had either retired or resigned or expired during the period March 2003 to August 2003. On a comparison of the lists of members submitted by the unions, the Investigating Officer noted that 26 and 217 members were exclusively in the ranks of the appellant union and BKS, whereas 1908 members appeared to be common to both the entities, i.e. with dual membership.On a conjoint reading of the above referred provisions of the Act, it is abundantly and predominantly clear that the exercise of examining an application of a union in an undertaking seeking the status of recognized union whether by replacing an existing recognized union or not, is neither a routine ritual nor an idle formality. Not only the applicant-union has to be eligible to apply as per the prescriptions with regard to the extent of membership it has to command for the relevant period, its application has to be bona fide in the interest of the employees and it must not have indulged in any activity of instigating, aiding or assisting, the commencement or continuation of a strike during the said period. The detailed procedure in both the eventualities, as contemplated in Sections 12 and 14 of the Act, enjoins a participating enquiry to verily ascertain the membership pattern of the rival unions, and also the existence or otherwise of the disqualifying factors as stipulated by the Act.The factual conspectus, albeit, not wholly identical herein, the fact remains that though it had been undertaken by the appellant union that if permitted to file its affidavits, the same would not be utilized to decide the issue of membership and was endorsed as well by the Industrial Court, its decision would clearly reveal that the contents of the affidavits not only had been taken note of by it but also relied upon along with the other materials on record, to eventually hold that the appellant union held in its ranks, the majority membership of the employees of the undertaking. To this extent, we are constrained to hold that the approach of the Industrial Court in deciding the issue of membership cannot be sustained being in derogation of the letter, spirit and objectives of the procedure prescribed by the Act to determine the issue of majority of membership for the purpose of identifying the recognized union of an industrial establishment.True it is that the extract of this clause in the impugned judgment and order wrongly recordspreceding the wordHowever, the copy of the constitution available on records does not contain the schedule as well. We leave it at that.We have perused the materials on record, relevant to the issues involved and are of the considered opinion that dehors the affidavits, the evidence or the materials laid by the appellant union are not overwhelmingly determinative of its claim of majority membership as required under Sections 11,12, and 14 of the Act. The adjudication on the issue of deduction of bonus amount by the company for adjustment against the membership fee of BKS in the background pertaining thereto and narrated hereinabove does not conclusively clinch the cause in favour of the appellant union. The decision of this Court in Balmer LawrieUnion (supra) is as such of no avail to it.In the facts of the present case, in our estimate, the analysis and evaluation of the materials on record as undertaken cannot be denounced as illogical, irrational or uncalled-for and the view recorded in the impugned judgment and order is one permissible on the basis thereof.60. We have perused the impugned judgment and order. In the above presiding backdrop of facts and law, we are of the unhesitant opinion that the view taken by High Court is plausible and rational being based on a logical analysis of the materials on record and the law applicable does not merit any interference at our end. Having regard to the paramount objectives of the Act and in the interest of industrial orderliness, stability, peace and overall wellbeing as well, we find no persuasive reason to intervene at this distant point of time.