Co-Operative Store Ltd. vs Ved Prakash Bhambri
1988 Latest Caselaw 89 Del

JUDGMENT

1. This writ throws a challenge to the award, dated 24 May 1986, given by Sri O. P. Dwivedi, Industrial Tribunal, Delhi, which award was published in the Gazette, dated 3 July 1986.

2. The petitioner is the Co-operative Store, Ltd, and is running a super bazar. The respondent, Sri Ved Prakash Bhambri, was employed as cashier with the petitioner since 1966. The services of Ved Prakash Bhambri as well as of some other employees were terminated with effect from 1 May, 1976, on the ground that their services were no longer required by the petitioner. Subsequently, almost all other employees were taken back in service. However the respondent, Ved Prakash Bhambri, allegedly was not taken back as he had moved an application, dated 6 October 1976, addressed to the Accounts Officers stating that he was to go out of India as he had secured a passport and he requested that his provident fund case be forwarded to the Provident Fund Commissioner for necessary action. It appears that the respondent, Ved Prakash Bhambri, raised an industrial dispute and the matter was brought before the Conciliation Officer but without success and at the instance of Ved Prakash, the Administrator made a reference of the dispute to the Industrial Tribunal, vide notification dated 3 February 1977. The term of reference was to the following effect :

"Whether the termination of services of Sri Ved Prakash Bhambri is illegal and/or unjustified and if so, to what relief is he entitled ?"

The management has taken up the plea before the Industrial Tribunal that the services of Ved Prakash were terminated as an act of retrenchment and later on the employee had willingly settled his claim with the management and in pursuance of the settlement, had received a cheque for Rs. 9,849.33 in full and final settlement of all his claims including retrenchment benefits and the cheque was cleared for payment on 8 February 1977, and as the employee and settlement, no claim was left which could be adjudicated upon by the Industrial Tribunal.

3. The employee had, however, taken the plea before the Industrial that he had not willingly or voluntarily signed the said settlement. He gave out the fact that the management had got him arrested and with connivance of the police and under threat that he could be detained under the MISA or DIR, he was coerced into signing the alleged settlement. The Tribunal framed the following issues :

(1) Whether the workman has settled the claim ?

(2) As per terms of reference.

4. On issue (1) the parties led evidence. The management examined witnesses in or to show that it was a settlement made by the workman with his free will and the workman, however, examined the witnesses including himself to show that he was coerced into signing the said settlement. However, the Industrial Tribunal in its wisdom did not give any finding on the real controversy arising between the parties as to whether the said settlement was made willingly by the workman or not and the Industrial Tribunal went to hold that the settlement was not legally valid in as much as it did not comply with rule 58 of the Industrial Disputes (Central) Rules, 1957, read with Form H. So after holding that the settlement was not legally valid, the Tribunal gave the finding on issue (2) that the termination of services of the workman was illegal and the retrenchment had not been made in accordance with laws and so, he made the award directing the management to reinstate the workman with full back-wages with continuity of service.

5. It is evident that if the finding of the Tribunal with regard to the settlement being invalid is to be accepted, then the award by the Tribunal is unexceptional and must be maintained.

6. Counsel for the petitioner has vehemently argued that as there was no plea taken by the workman in challenging the settlement on the score that it did not comply with rule 58 of the Industrial Disputes (Central) Rules, 1957 (for short) the rules), the Tribunal had no jurisdiction to hold the settlement invalid on that score., There is no merit in this contention because this question was a question of law, viz., whether the settlement was arrived at in accordance with the statute and the rules and such question could always be raised even during the course of arguments. There was no necessity of taking any plea by the workman in his pleadings in this respect that the settlement being not in accordance with the law was invalid, Learned counsel for the petitioner has then argued that the settlement in question substantially complied with the rules and also with Form H and thus it could not be held to be invalid.

7. Counsel for the workman has, on the other hand, urged that rule 58 and Form H prescribed under the rules are to be strictly enforced and they are mandatory in nature and unless and until a settlement is arrived at in accordance with rule 58 and also strictly in Form H, the settlement cannot be considered valid. Section 2(p) of the Industrial Disputes Act, 1947 (for short the Act), defines "settlement" to mean a settlement arrived at in the course of conciliation proceeding and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been singed by the parties thereto in such manner as may be prescribed and a copy thereof has been signed by the parties authorised in this behalf by the appropriate Government and the Conciliation Officer. So, the very definition of "settlement" shows that it has to be by way of written agreement to be signed by both the parties and a copy thereof has to be sent to the officer concerned and also the Conciliation Officer. Section 18(1) lays down that a settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement. Before such a settlement could be considered binding on the parties, the settlement must be of the type prescribed in S. 2(p) of the Act. Rule 58 of the rules lays down that a settlement shall be signed by the employer himself or by his authorised agent and also by the workman. Rule 58(4) lays down that where a settlement is arrived at between an employer and his workman otherwise than in the course of conciliation proceedings ... the parties to the settlement shall jointly send a copy thereof to the Central Government, the Chief Labour Commissioner (Central), New Delhi, and the Regional Labour Commissioner, New Delhi, and to the Conciliation Officer (Central) concerned. Form H shows that the names of the parties have to be given and then a short recital of the case and the terms of the settlement are to be given and then it has to be signed by both the parties and it has to be witnessed by two witnesses.

8. The settlement in question, copy of which is annexure P-3 to this writ, shows that a cheque for Rs. 9,849.33 has been received by the employee in full and final settlement of his claim including all retrenchment benefits and it also records that the workman withdrew the dispute raised by him regarding termination of his services and he undertook to send a copy of this to the Presiding Officer, Additional Industrial Tribunal, Tis Hazari, and to the Labour Commissioner and that after the receipt of the said amount he had been left with no claim against the super bazar on any account. One Sri M. L. Malik, Chief Cashier of the super bazar, made an endorsement that Ved Prakash Bhambri had received the said cheque in his presence, The settlement is admittedly not signed by any authorised person on behalf of the management. It is also not witnessed by any two witnesses. So, strictly speaking, the settlement is not in accordance with Form H or in accordance with the definition of "settlement" given in S. 2(p). The very definition of "settlement" requires that the same must be in writing to be signed by both the parties. The requirement of rule 58(4) also is not met because the same made it incumbent that both the parties jointly should send copies of the settlement to the appropriate authorities. It may be that the authorities mentioned in that rule are not the concerned authorities as far as the present employee was concerned, still the authorities, i.e., Presiding Officer, Industrial Tribunal, and the Conciliation Officer and the Labour Commissioner, should have been forwarded with the copies of the settlement jointly by the workman and the management which admittedly has not been done. In the rejoinder, the petitioner had taken up the plea that it was the workman who had taken up the responsibility of sending the copies of the settlement to the said concerned authorities and if the workman had not complied with the undertaking, the management should not be allowed to suffer on that score. The question which arises for consideration is whether the said rule 58 and Form H have to be strictly followed before a settlement could be considered valid. Section 2(p) clearly contemplates a settlement to be executed in accordance with the rule and the form prescribed. So, rule 58 and the Form - H are statutory provisions which have to be given full effect before a settlement could be considered valid. Counsel for the workman has cited Workmen of Delhi Cloth and General Mills, Ltd. v. Delhi Cloth and General Mills Ltd., (1971-I-LLJ-99). The Supreme Court noticing the provisions of S. 18(1) the definition of "settlement", as given in S. 2(p), clearly held that a plain reading of the rule and form shows that the settlement has to be in compliance with the statutory provisions (para 15). In the cited case, it appears that the settlement was arrived at during the course of conciliation proceedings but as the settlement has not entered into with the concurrence of the Conciliation Officer and also as provisions of rule 58(4) were not complied with, the settlement was held to be invalid. It is true that in the present case the settlement was not arrived at during the pendency of the conciliation proceedings, yet the settlement has to be in accordance with the statutory provisions before it can be held to be valid. It has been observed in this very judgment that the provisions of rule 58 demand full compliance in order to clothe the settlement with a binding character (para 17).

9. Counsel for the petitioner has tried to distinguish this judgment by showing that the settlement which was the subject matter of dispute before the Supreme Court was of the nature that if it was to be held to be valid then it would have bound even certain workmen who were not parties to the dispute and in the context the Supreme Court thought it fit to lay down the law that the settlement must be strictly in compliance with the rules. I do not think that the law laid down by the Supreme Court could be held to be not applicable where the settlement is between an individual workman and the management even though in the case before the Supreme Court the settlement was of the nature which was to be considered binding on other workmen also who were not parties to the settlement.

10. Counsel for the petitioner has vehemently argued that, after all, even though the management had not got the settlement signed by any of his authorised persons and even though the copies of the settlement have not been sent to the parties concerned, even then the workman cannot challenge the settlement, if it is proved that the entered into this settlement voluntarily. I do not appreciate this contention because S. 2(p) clearly contemplates a settlement which has to be in writing signed by both the parties and the settlement has to be in accordance with the prescribed rule and form. The present settlement does not meet with this requirement at all.

11. Counsel for the petitioner then has argued that the settlements and the compromises should be encouraged and should be upheld in order to bring about harmonious relationship between the workmen and the managements and they should not be held invalid on technical grounds. When the law requires a particular thing to be done in a particular manner, then in order that particular act could be considered valid, the same must be shown to have been performed, in accordance with the procedure prescribed "Settlement" has been clearly defined in the statute and so, the settlement has to be in accordance with the statutory provisions. The Supreme Court has held that in order that a particular settlement could be valid, the same must be in strict compliance with the prescribed rules. In the present case, unfortunately, the settlement does not meet with the requirements of the statutory rules. Hence the Tribunal was right in holding that the settlement is not valid and was not enforceable in laws.

12. Counsel for the petitioner has made reference to Amalgamated Coffee Estates, Ltd. v. Their Workmen (1965-II-LLJ-110). The question which arose for decision in that case was whether the settlement arrived at during the pendency of the appeal before the Supreme Court, by a number of managements and their employees should be given effect to or not ? It was found that the settlement was voluntarily arrived at and the terms of the settlement were fair. The Supreme Court held that the said settlement must be given effect to. The question did not arise before the Supreme Court in that case as to whether the said settlement strictly complied with the statutory rules or not. Hence, this judgment would not help the case of the petitioner in any manner.

13. Counsel for the petitioner also cited Tata Chemicals, Ltd. v. Their Workmen (1978-II-LLJ-22), where in it was observed that the settlement arrived at by agreement between the employer and the workmen otherwise than in the course of conciliation proceedings is binding only on the parties to the agreement. That is the law as laid down in S. 18(1) of the Act. The Court was not considering the point as to whether a settlement has to comply strictly with rule 58 and Form H or not. So, this judgment also is of no assistance to the petitioner in any manner. Counsel for the petitioner also cited State of Madras v. C. P. Sarathy (1953-I-LLJ-174). The Supreme Court observed in this case the (p. 180) :

".... In view of the increasing complexity of modern life and the inter-dependence of the various sectors of a planned national economy, it is obviously in the interest of the public that labour disputes should be peacefully and quickly settled within the framework of the Act rather than by resort to methods of direct action which are only too well calculated to disturb the public peace and order and diminish production in the country, and Courts should not be astute to discover formal defects and technical flaws to overthrow such settlements".

It is true that a settlement voluntarily and willingly arrived at between the workman and the management must be given effect to and it should not be brushed aside on any hypertechnical ground, but in order to see whether a settlement is valid or not, the pre-requisite has to be satisfied that it is a settlement as contemplated by the statute and the rules framed there under. The present settlement being not strictly in accordance with the statutory rules and also not coming under the definition of "settlement" given in S. 2(p), the same could not be considered binding on the parties under S. 18(1) of the Act. I have no reason to differ with the reasoning given by the Tribunal on this aspect.

14. No other point has been urged by counsel for the petitioner in support of the petition.

15. Hence, I find no merit in this petition which I hereby dismiss with no order as to costs.