The Management Of Birla Cotton ... vs Kapra Mazdoor Ekta Union And Anr.
2001 Latest Caselaw 1319 Del

JUDGMENT

R.C. Jain, J.

1. In this Writ Petition, the petitioners seek for the quashing of order dated 19.2.1990 passed by the Presiding Officer Industrial Tribunal No. II, Delhi, and for declaring that the award dated 12-6-1986 made by the earlier Presiding Officer has effectively terminated the reference pending before the Tribunal.

2. Briefly stated, the facts leading to the present petition are that dispute arose between the petitioners-Management of M/s Birla Cotton Spinning and Weaving Mills, and its workmen consequent upon the closure of some looms of weaving section of the Mill. In exercise of its powers Under Section 10(1)(d) and 12(5) of the Industrial Disputes Act, 1147 (hereinafter referred to as the 'Act'). The appropriate Government (Delhi Administration, in this case) vide Notification No. F.24 (1781)/82-Lab. 19704 dated 13-12-1983 referred the said dispute to Industrial Tribunal, Delhi, with the following terms:-

1. "Whether the action of the management in refusing duties to a large number of workers is illegal and/or unjustified, and if so, what directions are necessary in this regard?"

2. "Whether the management is justified in closing down a large number of looms in the mill and if not to what relief the affected workers are entitled and what further directions are necessary in this respect?"

While reference was pending adjudication before the Industrial Tribunal, an application dated 10th August, 1983, was moved on behalf of the management stating therein that the management of the mill and representatives of the workers have entered into a conciliation settlement on 17th May, 1983, before Mrs. Bassi, Deputy Labour Commissioner-cum-conciliation officer, Delhi, copy of the settlement was also enclosed with the application and it was prayed that in terms of Para 8.1 of the said settlement the Tribunal is being requested to give its award in terms of the above conciliation settlement dated 17th May, 1993. The respondent-No. 1- Kapra Mazdoor Ekta Union contested the application for recording the settlement or making an award in terms of the said settlement inter alia on the grounds that the dispute was referred to the Tribunal on the basis of demands of the workmen represented by as many as eight unions of the workers, because malafide, illegal and invalid action of the management resulted in the unemployment of large scale workers numbering above three thousand; the alleged settlement was between the management and only two unions i.e. Textile Mazdoor Congress and Kapra Mazdoor Lal Jhanda Union representing a very insignificant number of workmen and, therefore, was not binding upon the other Unions. In May, 1993, when the said settlement is stated to have been reached, no conciliation proceedings were pending before the conciliation officer and, therefore, the conciliation officer had no power or jurisdiction to record settlement and, therefore, the said settlement is not a conciliation settlement. It was also alleged that the alleged settlement did not settle the disputes and demands raised by Kapra Mazdoor Ekta Union and was not acceptable to majority of workmen and they had expressly conveyed their disapproval of the said settlement. Lastly, it was contended that the settlement was very unfair for the workmen as was apparent from the terms of the settlement.

3. The respondent No. 1 had earlier filed a Writ Petition contending therein that the settlement dated 17-5-1983 was not a conciliation settlement. The said writ petition was dismissed vide order dated 3.1.1986. Aggrieved by the dismissal of the writ petition, respondent No. 1 filed Special Leave Petition (No. 1526/85), which was dismissed by the Supreme Court vide an order dated 5-8-1986, with the following observations:-

"We have heard learned counsel for the parties. We do not see any reason whey we should entertain this Special Leave Petition at this stage. It is conceded that the settlement between the employer and certain trade unions has been filed before the Industrial Tribunal to which a reference of this dispute was made and a settlement was filed before the Tribunal three years ago. It is for the Industrial Tribunal to dispose of the question whether the settlement is valid and binding between the employer and the workmen. It is only after the Industrial Tribunal has disposed of the matter that this Court may look into it. While we dismiss the Special Leave Petition, we may observe that the Industrial Tribunal should dispose of the question as to the validity and binding nature of the settlement as expeditiously as possible. Having regard to the lapse of time which has taken place we trust that the Industrial Tribunal will be able to adjudicate on the matter within three months from today."

The Tribunal, thereafter, heard the parties and made an award dated 12-6-1987 holding that the terms of the settlement were not only well bargained but quite detailed and very sound in the obtaining circumstances inasmuch as it made provision for meeting all relevant problems of relief and rehabilitation of the affected workers arising on account of the closure of weaving section of the Mill and envisaging an expert technical body for deciding all possibilities and extent of the revival of weaving work in the mill under a time bound schedule. The Tribunal also recorded a finding that the settlement was fair and just and consequently decided the reference and declared that the dispute stands already settled between the parties through a valid and binding settlement dated 17-5-1983 and in consequence the reference was rendered redundant and there was no dispute surviving and no purpose was left in 1987 t make the terms of the settlement of 1983 as part of the award because all the agreed terms stood executed and implemented much earlier. The said award was published in the Gazette by the appropriate Government on 10-8-1987.

4. Subsequently, the respondent union made an application dated 7-9-1987 before the Tribunal praying for the recall of the said award and for deciding the question of fairness of the settlement after providing opportunity of producing evidence and hearing to the parties on the grounds that the question whether the settlement was just and fair and should be accepted by the Tribunal was not argued as it was the impression of the applicant-union that the question will be decided lateron after taking evidence and hearing the parties, that in any case under some misconception, the Tribunal had determined the terms of the said settlement to be fair and just, the award is ex-parte award and has been made in violation of the basis principles of natural justice. The management opposed the application by filing its reply refuting the averments and allegations made in the application and denying that there was any good ground to recall the award dated 12th June, 1987. By means of the impugned order the said application was disposed of by the successor Presiding Officer thereby holding that the predecessor Presiding Officer did not make a single observation as to whether the settlement dated 17-5-1983 was just and fair, no issue was framed, no evidence was recorded, no arguments were advanced and no finding was given in the award on this point. Accordingly, the order (Award) dated 12-6-1987 was reviewed and the following issue was framed:-

"Whether the settlement dated 17-5-83 is just and fair and if so is it not binding with parties?"

At the same time the Tribunal held that no evidence needs to be recorded on the said point and only arguments was being heard for deciding the matter.

5. The order dated 19-2-1990 is sought to be challenged, inter alia, on the grounds that the award dated 12-6-1987 was sound and in accordance with law; it effectively terminated the dispute in accordance with the relevant provisions of the Act; the Tribunal became functus officio after the expiry of 30 days from the date of publication of the award; impugned order was beyond the power/jurisdiction of the respondent No. 2 and in any case there was no good or sufficient reason justifying the review of the order (Award) dated 12-6-1987 and it was done on irrelevant consideration and inappropriate and incorrect appreciation of the factual position with regard to certain observations and findings recorded by the predecessor Tribunal, the award of the Tribunal having categorically recorded a finding, that the settlement dated 17-5-1983 was just and fair.

6. As against this, the contentions put-forth on behalf of respondent-union are that the order/award dated 12-6-1987 was no award in the eyes of law; the settlement of May 1983 is not a conciliation settlement having been reached between the management and some of the unions of workers during the pendency of reference before the Tribunal; in any case the said settlement was not a valid, just and fair settlement which could bind all the unions representing majority of workers and lastly the award was passed without affording any opportunity to the respondent-union to produce its evidence on the above aspects which were germane to the acceptance of the said settlement and for making the award in terms of the said settlement.

7. We have heard Shri Sameer Prakash, learned counsel representing the petitioner-management and Shri Vijay K. Jain, Advocate, representing the respondent No. 1 workers Union and have given our anxious consideration to their respective submissions.

8. The first submission of the learned counsel for the petitioner is that the impugned order recalling the order/Award dated 12-6-1987 was without jurisdiction; firstly, because the successor Presiding Officer or for that reason the same Presiding Officer had become functus officio once the award made on 12-6-1987 was published in the Gazette on 6-8-1987 and the dispute referred to the Tribunal for adjudication had effectively terminated with the making of the said award. In this regard he has referred to the provision of Sub-section (1) of Section 17A of the Act, which provides that an award shall become enforceable on the expiry of 30 days from the date of its publication under Section 17 of the Act. As noticed above in the case in hand the award dated 12-6-1987 was published in the Gazette on 10-8-1987 and, therefore, it would become enforceable on 9-9-1987. The impugned order recalling the order dated 12-6-1987 was passed on 19-2-1990 only i.e. after more than two and a half years of the award becoming enforceable in law. However, since an application for recall of the order was made on 7-9-1987 on behalf of the respondent-union, this argument that the Tribunal had become functus officio and had no jurisdiction to entertain the application for recall is, therefore, not available to the petitioners.

9. Learned counsel for the petitioners has next argued that the impugned order is bad and cannot be sustained because the Industrial Disputes Act which governed the proceedings before the Tribunal does not contain any provision empowering the Tribunal to review its own orders and no inherent power was vested in the Tribunal to review, recall or modify its earlier order. In this connection reliance is placed on the judgment of the Supreme Court in the case of Kuntesh Gupta v. Management of Hindu Kanya Maha Vidyalaya, Sitapur (UP) (1987) SCC 525 wherein the Apex Court had laid down the general principal of law that a quasi judicial authority is not competent to review its own order in absence of express statutory power to that effect. Reference is also made to the well-known decision of the Supreme Court in the case of Patel Narshi Thakershi and Ors. v. Pradymanshinghju Arjunshingji holding that power to review is not an inherent power and it must be conferred either specifically or by necessary implications. Reliance is also placed in the case of Silk Cloth Products Association Kumbakonam v. State of Madras and Ors. 1954 (2) LLJ 410, decided by the Madras High Court holding that power of review is not inherent in any Court or Tribunal but it must be necessarily conferred by statute and the operative words of Section 11(3) of the Industrial Dispute Acts cannot most certainly be construed to confer on the Tribunal a power to review the award becomes binding upon all the parties when it is so declared by Government under Section 15(2) of the Act and is published in the official Gazette. It further laid down that whatever powers the Tribunal might have possessed before the Government declared the award binding, there was no power in the Tribunal to alter, modify, clarify or even interpret the award except a possible power to correct clerical mistakes. It seems that the learned Tribunal in making the impugned order was largely guided by a decision of the Supreme Court in the case of Grindlays Bank Limited and Central Government Industrial Tribunal and Ors. 1981 (1) LLJ 327 thereby holding that the Tribunal had jurisdiction to set aside the ex-parte award if it was shown that the party is visited with an award without notice of the proceedings. Although in the application for recall of the award filed by the workers union it was vaguely stated that the award was an ex-parte award but it was not explained as to how the said award could be termed as an ex-parte award particularly when the worker's union was duly represented before the Tribunal through its authorized representative and were afforded due opportunity of hearing. On the face of this position, we are of the view that the Tribunal was not justified in exercising the power of review/recall of its earlier order on the premise that it was competent to set aside the ex-parte award.

The main thrust of the respondent-union in support to recall of the earlier order was that no opportunity was given to the union to establish that the settlement was neither just nor fair and no finding was recorded by the Tribunal in this behalf which is factually incorrect. Accordingly, we are of this considered view that the learned Tribunal was not justified in recalling the award dated 12-7-1987 on the assumption that it was setting aside an ex-parte award.

10. Learned counsel for the petitioners has then urged that the settlement dated 7th May, 1983, reached between the management and the worker's union in presence of conciliation officer is a conciliation settlement within the meaning of Section 18(3) read with Section 2(b) and no fault can be found with the same and the Tribunal was fully justified in making the order dated 12-6-1987 by passing the award in terms of the said settlement. He supported his argument by several decisions of Supreme Court. In the case of Sir Silk Limited v. Government of Andhra Pradesh AIR 1963 (ii) LLJ 647 holding that once a settlement has been arrived under the Industrial Disputes Act the dispute no longer survives. Similar view was taken in the case of Bihar v. D.N. Ganguli 1959 SCR 19 holding as under:-

"But it would be very unreasonable to assume that the industrial tribunal would insist upon dealing with the dispute on the merits even after it is informed that the dispute has been amicably settled between the parties. We have already indicated that amicable settlements of industrial disputes, which generally lead to industrial peace and harmony, are the primary object of this Act. Settlements reached before the conciliation officers or boards are specifically dealt with by Sub-section 12(2) and 13(3) and the same are made binding under Section 18. There can, therefore, be no doubt that if an industrial dispute before a tribunal is amicably settled, the tribunal would immediately agree to make an award in terms of the settlement between the parties. It was stated before us at the bar that innumerable awards had been made by Industrial Tribunals in terms of the settlement between the parties. In this connection we may incidentally refer to the provisions of Section 7(2)(b) of the I.D. (Appellate Tribunal) Act, 1950 (xviii of 1950) which expressly refer to an award for decision of an industrial tribunal made with the consent of the parties. It is true that this act is no longer in force, but when it was in force, in providing for appeals to the Appellate Tribunal set up under the said Act, the legislature had recognized the making of awards by the industrial tribunals with the consent of the parties."

11. As against this, the learned counsel for the respondent-union submitted that the settlement of May, 1983, is not a conciliation settlement because it was not reached between the management and representatives of all the worker's unions during the pendency of conciliation proceedings and in fact it was made subsequent to the termination of the said proceedings before the conciliation officer and even much after the appropriate government referred the dispute for adjudication to the tribunal. In support of his contention reliance is placed on the decision of Tata Chemical Limited v. Workmen etc. . In that case the court held that as the agreement dated December 14, 1973, between the appellant and the employees union was not arrived at during the course of conciliation proceedings it could not, under Section 18(1) bind anyone other than the parties thereto. Reference is also made to the case of Bata Shoe Company Pvt. Ltd. v. B.N. Ganguli and Ors. AIR 1961 wherein the Court considered the question as to what was meant by the words, "In the course of conciliation proceedings" appearing in Section 18 of the Act. On the consideration of the facts of the said case, the Court laid down that the legislature when it made a settlement reached during the course of conciliation proceedings bind not only the parties thereto but also on all present and future workmen intended that such settlement was arrived on with the assistance of the conciliation officer and was considered by him to be reasonable and, therefore, had his concurrence. Further that Section 12 of the Act prescribes duties of the conciliation officer and provides that the conciliation officer shall for the purpose of bringing about settlement of the dispute without delay investigate the dispute and all matters affecting the merits of the right settlement, therefore, and may do all such things that he may think fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute. It also laid down that a settlement which is made binding under Section 18 on the ground that it is arrived at in the course of conciliation proceedings is a settlement arrived at with the assistance and concurrence of the conciliation officer, for it is the duty of the cancellation officer to promote right settlement and to do everything he can to induce parties to give a fair and amicable settlement of the dispute. It is only such a settlement, which is arrived at while conciliation proceedings are pending that can be binding under Section 18. To our mind, this authority does not advance the case of the respondent in any way because the settlement of May, 1983, in the case in hand itself shows that it was with the assistance of the conciliation officer more particularly Smt. M. Bassi, the Deputy Labour Commissioner. The settlement was aimed at achieving peace and harmony between the management and the workers and to defuse the tension which was prevailing at the time. The settlement cannot be invalidated merely on the ground that it was reached between the parties after the dispute has been referred and were pending adjudication before the Industrial Tribunal.

Following observations of the Apex Court in regard to the nature and work of the settlement between the employer and employees made int eh case of P. Virudhachalam v. Management of Lotus Mills are relevant in this context:-

"Any settlement between the employer and the employees is placed on a higher pedestal than an award passed after adjudication. The machinery of the Act envisages resolution of industrial disputes and conflicts at the grassroots level by conciliation by which settlement can be arrived at between the employer and the workmen and industrial peace can be achieved and industrial strife can be put to an end. In view of Section 2(p), a settlement which is based on a written agreement between the parties can be arrived at either in conciliation proceedings or even outside conciliation proceedings between the representatives of the workmen on the one hand and the management on the other. Section 18(1) and (3) deal with the binding nature of the two types of settlement."

"The said provisions show that once a written settlement is arrived at during the conciliation proceedings such settlement under Section 12 (3) has a binding effect not only on the signatories to the settlement but also on all parties to the industrial dispute which could cover the entire body of workmen, not only existing workmen but also other workmen. Written, agreements would become settlements contemplated by Section 2(p) read with Section 12(3) of the Act when arrived at during conciliation proceedings or even outside conciliation proceedings. Thus, all settlements necessarily are based on written agreements between the parties. It is impossible to accept the submission of the appellants that settlements between the parties are different from agreements between the parties. Therefore, the settlement in the instant case had a binding effect under Section 18(3) of the Act not only on the members of the signatory unions but also on the remaining workmen who were represented by the fifth union which, though having taken part in conciliation proceedings, refused to sign the settlement."

"The industrial Disputes Act is based on the principle of collective bargaining for resolving industrial disputes and for maintaining industrial peace. In all these negotiations based on collective bargaining the individual workman necessarily recedes to the background. Consequently, settlements arrived at by the unions with management would bind at least their members and if such settlement is arrived at during conciliation proceedings, it would bind even non-members. Individual workman comes into the picture only in connection with a limited case of industrial disputes as indicated by Section 2- of the Act."

Reference may also be made to the observations of the Supreme Court in the case of National Engineering Industrial Limited v. State of Rajasthan and Ors. which read as under:-

"A settlement of dispute between the parties themselves is to be preferred, where it could be arrived at, to industrial adjudication. 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 the 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. Sections 18(1) and 18(3) divide 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 a limited application since it merely binds the parties to the agreement but the settlement belonging to the second category has an 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 consideration proceedings with a recognised majority union will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same. 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. The Act is based on the principle of collective bargaining for resolving industrial disputes and for maintaining industrial peace."

12. In view of the foregoing legal position there is no escape from the conclusion that the settlement dated 17-5-1983 reached between the management and the representatives of the workmen was a valid and binding settlement and the Tribunal was fully justified in accepting the same and rendering an award in terms of the said settlement.

13. Learned counsel for the respondents then strenuously urged that the Tribunal in its order/award dated 12-6-1987 failed to consider the material question if the said settlement was just and fair. In this regard, suffice it would be, to take note that the Tribunal on consideration of the terms of the said settlement has returned a categorical finding about the settlement being fair and just by observing as under:-

"I have carefully gone through the terms and the settlement. These are not only well bargained but quite detailed and very sound the circumstances obtaining. It's various items made provisions for setting all the relevant problems of relief and rehabilitation of the affected workers because of the closures of weaving section of the mill and envisages an expert technical body for deciding on the possibility and extent of the revival of weaving work in the mill, under a time bound schedule. I find the settlement fair and just."

This would clearly show that the learned Tribunal has erred and failed to take note of the correct position while making observation in the order dated 12-6-1987 to the effect that there was not a single observation as to whether the settlement dated 17-5-1983 was just and fair. It is, however, true that no specific issue was framed and no evidence was led on this point but it is not always necessary to do so more particularly when such a question can be considered and decided on the strength of available material placed on record. Besides, in the present case it is not disputed that pursuant to the said settlement and the award, all the employees barring a few have been taken back on work and their rehabilitation and relief fully accomplished. This by itself would show that the finding of the Tribunal that the settlement was fair and just is correct.

14. The learned counsel representing the workmen's union has also urged that the award dated 12-6-1987 is not a legal and valid award within the meaning of Section 2(b) of the Act as it has not answered and adjudicated upon the reference made to it by the appropriate Government so much so that even the terms of the settlement dated 17-5-83 have not been incorporated in the award nor the award has been made in terms of the said settlement. In this connection reference is made to the ultimate paragraph of the order of the award dated 12-6-1987, which reads as under:-

"In result I decide the reference declaring that the dispute terms stand settled already between the parties by a valid and binding settlement dated 17-5-1983 and in consequence, this reference is rendered redundant. There is no dispute surviving. There is no purpose left now in 1987 to make the terms of a valid and binding settlement of 1983 as a part of the award, because all the agreed terms should stand executed and implemented much earlier.

The reference is accordingly adjudged."

To substantiate his contention, the learned counsel for the workmen's union has referred to the provisions of Order 23, CPC, for showing that if the settlement dated 17-5-1983 was a valid conciliation settlement, the Tribunal ought to have made an award in terms of the said settlement after recording the statement of the parties to the settlement and those represented before the Tribunal and since it was not done, it lacks the essential attributes of either ad judicatory or conciliatory award. We do not find any substance in this contention because the application made by the management for recording the settlement was opposed by the respondent-union and, therefore, the application had to be disposed of after hearing the parties which was precisely done by the Tribunal while passing the award dated 12-6-1987, and only after having reached a conclusion that the settlement was well bargained and it was fair and jut and had even being accepted and acted upon by the majority of unions excepting one union i.e. Ekta Union. In view of this position it would have been an idle formality on the part of the tribunal to have embarked upon to make the terms of the said settlement of 1983 as a part of the award more particularly when the Tribunal was satisfied that the terms of the settlement stood already executed and implemented. The award dated 12-6-1987 cannot be faultered on that count.

15. It was next urged on behalf of the employees union that said settlement of 1983 is not binding on all the workmen's union because it was reached between the management and only two unions and, therefore, it cannot bind the other unions representing the majority of the workmen. This contention too appears to be devoid of any merit because it is not disputed that the majority of the workers have accepted the said settlement. In terms of Sub-section (3) of Section 18 of the Act, the said settlement will be not only bind all the parties to the Industrial dispute but also the parties summoned to appear in the proceedings and on all workmen and all persons who were employed in the establishment or part of the establishment as the case may be to which the dispute relates on the date of the dispute, and even on future employees of the establishment. It is, therefore, not correct to say that the said settlement is not binding upon all the workmen of the establishment.

16. It was lastly urged on behalf of the respondent-union that the impugned order is justified because the respondent was not afforded any opportunity to lead evidence and place material on record to show that the said settlement was not just and fair and no arguments were advanced at this aspect. It may be so but the ultimate question for consideration is that as to whether the respondent was taken by surprise by the Tribunal while holding the said settlement as valid and binding and in recording a finding about the same also being fair and just. The answer would be a plain no. There is nothing on record to show that the parties wanted to lead evidence and make submissions on this aspect but as the award was made after hearing the parties and finding was returned that the settlement was fair and just, it must be presumed that this aspect was also duly deliberated before the Tribunal. It seems, therefore, too late in the day to urge that the employees union was not provided any opportunity to put forward their case on this aspect. It is pertinent to note here that even by the impugned order the Tribunal has simply framed an issue on the question whether the settlement dated 17-5-1983 is just and fair and if so is binding on the parties but at the same time it observed that no evidence need to be recorded on this point and only arguments shall be heard and the matter shall be decided. This shows that parties were not allowed to lead evidence on this aspect and only arguments were to be advanced. We do not see any useful purpose would be served at this belated stage if the parties are once again given an opportunity to make submissions on this point particularly when the award dated 12-6-1987 has in unequivocal words recorded a categoric finding that it was well bargained settlement and was just and fair. To do so would amount to reopening and reviving the industrial dispute which otherwise stands duly settled several years back. Such a course does not appear to be conducive to the harmonious relationship and industrial peace between the management and workmen.

17. We are, therefore,of the considered view that the impugned order dated 19-2-1990, passed by respondent No. 2, which has the effect of recalling/review of the award dated 12-6-1987 is wholly unwarranted and unjustified on the facts and circumstances of the case and material obtaining on record and, therefore, can not be sustained and is liable to be set aside. Accordingly we allow the petition and quash the order dated 19-2-1990 of respondent No. 2 and declare that the award/order dated 12-6-1987 has effectively terminated the industrial dispute referred to the Tribunal.

18. In the facts and circumstances of the case there will be no order as to the costs.