- (1.) WE have heard Shri Shashi Nandan, Senior Advocate assisted by Shri Vijay Sinha, learned counsel appearing for M/s. L.M.L. Limited -the appellant. Ms. Bushra Maryam appears for L.M.L. Mazdoor Ekta Sangathan, Kanpur. Learned Standing Counsel appears for the State respondents. M/s. L.M.L. Limited - a public limited company registered under the Companies Act has preferred this intra -court Special Appeal under Chapter VIII Rule 5 of the Rules of the High Court against the judgement of learned Single Judge dated 17.9.2010 by which he dismissed the writ petition challenging the reference made by the State Government vide Government Order dated 21.5.2008, suo moto, to the Industrial Tribunal relating to the issue of propriety and legality of the lay off declared on 15.4.2007 and its consequences.
(2.) LEARNED Single Judge did not agree with the grounds of challenge to the reference, namely that, LML Mazdoor Ekta Sangathan, Kanpur is a small splinter group of workmen, who have received all the benefits under the agreement providing lay -off dated 13.4.2007. They have tried to disturb the peaceful functioning of the company by getting themselves registered under the Trade Union Act, which was successfully challenged by the company in Writ Petition No. 5903 of 2008. The writ petition was allowed by this Court on 23.4.2008 quashing the registration certificate in favour of LML Mazadoor Ekta Sangathan, Kanpur. The agreement dated 13.4.2007 providing for lay off of some of the workmen was entered into during the conciliation proceedings with the workmen through their union -Lohiya Machines and LML Karamchari Sangh and was signed by the representatives of the employer and employees and the Additional Labour Commissioner & Conciliation Officer, Kanpur Region, Kanpur. The agreement provided for withdrawing the strike with immediate effect on which the company lifted the lock out w.e.f. 15.4.2007, provided for taking such number of workmen depending upon the market requirements and orders of work, and employment in phases on departmental seniority basis and for lay off of all other workmen. It was valid and binding on all the workmen under Section 18 of the Industrial Disputes Act, 1947. The agreement was acted upon, on which the manufacturing in the petitioner -company has started and that there existed no industrial disputes whatsoever to refer the matter to the Industrial Tribunal. With a view to disturb the industrial peace, the members of the respondent No. 3, which is an unregistered and unrecognised union, tried to raise an industrial dispute under Section 4 -K of the Industrial Disputes Act, on which the impugned order was passed on 21.5.2008 by the State Government making a suo moto reference to Industrial Tribunal without application of mind. The petitioner also challenged the notice dated 28.5.2008 issued by the Industrial Tribunal, U.P. requiring the company to file its statement and other evidences in support of its contention. Learned Single Judge, accepting the contention of Ms Bushra Maryam appearing for LML Mazadoor Ekta Sangathan, Kanpur, held that for the purposes of settlement or agreement to be binding it is required to be registered under Section 6 -B of the Industrial Disputes Act. The settlement dated 13.4.2007 was not registered and is thus not binding upon the workmen of the petitioner -company. He held that only those workmen of the company, who are members of the pocket union with which the settlement was entered into and were re -employed while the majority of workmen have been deprived of re -employment. Consequently it cannot be said that there is no disputes existing in the company between the workmen and the employer when the reference was made.
(3.) BEFORE proceeding to consider the grounds of challenge to the opinion of learned Single Judge, we find it appropriate to refer to the observations of the Supreme Court in National Engineering Industries Ltd. v. State of Rajasthan : AIR 2000 SC 469 in which the jurisdiction of the High Court to entertain the writ petition against the reference for adjudication to the Industrial Tribunal under Section 10 of the Industrial Tribunal Act, in view of the settlement reached in conciliation proceedings and outside the conciliation proceeding, was examined. Hon'ble Mr. Justice D.P. Wadhwa, J. in the landmark judgment summed up the legal position in paragraphs 25 and 26, as follows: - - 25. 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 dispute 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 other 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. Sub -sections (1) and (3) of Section 18 divides 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 recognised majority union will be binding on all workmen of the establishment, even those who belong to the minority union which has objected to the same. Recognised 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 workmen 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 v. Management of Lotus Mills. In all these negotiations based on collective bargaining individual workman necessarily recedes to the background. Settlements will encompass all the disputes existing at the time of the settlement except those specifically left out. 26. There can be many splinter groups each forming a separate trade union. Under Section 4 of the Trade Unions 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 Unions Act, 1926 not entitled to be registered as representative unions and they raise disputes, industrial peace would be a far cry. Under Section 2 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 Section 9 -D 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 percent of the total number of workmen 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 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 workmen but in the interest of the employers to the prejudice of the interest of the workmen. 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 or more unions fulfilling the criteria laid down in Section 9 -D and apply for registration then the union having the largest membership of the employees 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.;