Vinod Kumar S/O Late Sh. Raghubir ... vs Presiding Officer, Labour Court ...
2004 Latest Caselaw 144 Del

JUDGMENT

Madan B. Lokur, J.

1. The Petitioner has challenged an Award dated 5th November 1999 passed by the Labour Court in ID No.698 of 1986. By the impugned Award, the learned Labour Court answered the following terms of reference against the Petitioner: --

"Whether the termination of services of Sh. Vinod Kumar is illegal and/or unjustified and if so, to what relief is he entitled and what directions are necessary in this respect?"

2. The Petitioner was working as a Turner with the Respondent-management at their HDPE pipe manufacturing unit at D-174, Okhla Phase I, New Delhi. This unit was closed down in 1985 and all the employees were retrenched with effect from 6th December 1986. In fact, the Respondent-management entered into a private settlement with 12 employees. With respect to the balance 21 employees, conciliation proceedings were entered into in the presence of the Conciliation Officer. During the conciliation proceedings, a settlement was arrived at with all the 21 employees under the provisions of Section 12(3) of the Industrial Disputes Act, 1947 (the Act). Their authorised representative Raj Kumar who was also the general secretary of the workmen's union signed the agreement on behalf of all the workmen. The Conciliation Officer witnessed the settlement.

3. The dispute raised by the Petitioner was to the effect that he had not signed the agreement and it was therefore not binding upon him. On the basis of the pleadings, the learned Labour Court framed the following issues: --

"1. Whether the dispute can not be entertained for reasons stated in preliminary objection No.1 and 3 of W.S.?

2. As per terms of reference."

4. During the hearing of the reference, it was admitted by the Petitioner that an agreement as mentioned above was entered into but it was not signed by him nor was Raj Kumar authorised to represent him. This was also the contention raised by learned counsel for the Petitioner before me. In other words, the merits of the agreement were not in dispute nor was it is anybody's case that the settlement was otherwise invalid.

5. In Barauni Refinery Pragatisheel Shramik Parishad v. Indian Oil Corpn. Ltd., , the Supreme Court pointed out (in paragraph 8 of the Report) the difference between settlements arrived at while conciliation proceedings were going on and other settlements. In this regard, it was stated as follows: --

"It may be seen on a plain reading of sub-sections (1) and (3) of Section 18 that settlements are divided into two categories, namely, (i) those arrived at outside the conciliation proceedings and (ii) 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 parties to the industrial dispute, 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. Therefore, 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 had objected to the same. To that extent it departs from the ordinary law of contract. The object obviously is to uphold the sanctity of settlements reached with the active assistance of the Conciliation Officer and to discourage an individual employee or a minority union from scuttling the settlement. There is an underlying assumption that a settlement reached with the help of the Conciliation Officer must be fair and reasonable and can, therefore, safely be made binding not only on the workmen belonging to the union signing the settlement but also on others. That is why a settlement arrived at in the course of conciliation proceedings is put on par with an award made by an ad judicatory authority. The High Court was, therefore, right in coming to the conclusion that the settlement dated August 4, 1983 was binding on all the workmen of the Barauni Refinery including the members of Petroleum and Chemical Mazdoor Union."

6. Similarly, in, the Supreme Court said (in paragraph 24 of the Report):-

"Sub-sections (1) and (3) of Section 18 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 in that 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 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 had objected to the same. The recognised union having the majority of members is expected to protect the legitimate interest of the labour and enter into a settlement in the best interest of the 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 a 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. The 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 vs. Lotus Mills, . In all these negotiations based on collective bargaining the 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."

7. Finally, in ITC Ltd. Workers' Welfare Assn. v. ITC Ltd.,(2002) 3 SCC 411, the Supreme Court relied upon Barauni Refinery and G.M., Security Paper Mill v. R.S. Sharma and reiterated "the fairly well-settled legal position and principles concerning the binding effect of the settlement and the grounds on which the settlement is vulnerable to attack in an industrial adjudication." (paragraph 15 of the Report).

8. In view of the clear legal position as enunciated by the Supreme Court, it is now too late in the day for the Petitioner to contend that the settlement is not binding upon him because it was not signed by him. The Supreme Court has made it very clear that a settlement, which is otherwise bona fide and valid, will be binding in view of the provisions of Section 18(3) of the Act.

9. Under the circumstances, I find no error in the Award of the learned Labour Court. The writ petition is dismissed. No costs.