AI Structured Summary
Not yet generated for this judgment
Judgment
K. Chandru, J.—The petitioner is the registered society describing itself as All India General Insurance OBC Employees Welfare
Association, represented by its General Secretary. In this writ petition, the petitioner seeks to challenge the notices dated 25.10.2012 issued by the
4 General Insurance companies, who are arraigned as respondents 1 to 4 with reference to checkoff exercise for the year 2012 insofar as it
confines the same to the unions / associations, representing Class I, II, III, IV / FTS /PTE or SC/ST, and after setting aside the same seeks for a
direction to initiate fresh checkoff exercise by including other backward classes (OBC) also as a representative class so as to enable the petitioner
association to take part in the checkoff exercise. The said writ petition was admitted on 14.12.2012. Pending the writ petition, an interim stay was
granted. Aggrieved by the grant of the interim stay, the first respondent United India Insurance Company Limited has filed a vacate stay application
in M.P. No. 1 of 2013 together with supporting counter affidavit, dated 03.01.2013. The petitioner has filed a reply affidavit, dated 30.01.2013.
It is seen from the records that the petitioner got itself registered as a society in Chennai and had registration No. 203/1998. The objects of the
society as found in the bylaws was to promote the welfare of backward classes employees working in General Insurance Corporation and its
subsidiaries and to protect the interest of the backward classes employees working in those organizations. The petitioner association earlier had
filed a writ petition in W.P. No. 22077 of 2009 for more or less similar relief, i.e., for a direction to the respondents insurance companies to allow
the association to have checkoff facility scheduled to be completed on 17.11.2009. On notice, on behalf of insurance companies, a common
counter affidavit was filed dated Nil (January, 2010). It was stated that 4 other associations working in the insurance companies filed writ petitions
and those writ petitions were dismissed on 17.11.2009 and after checkoff exercise was conducted, the result of the checkoff exercise was
published on 07.12.2009. The associations which had secured 30% or more representative strength were announced on 08.12.2009. But no final
orders have been passed in the writ petition.
Subsequently, when respondents 1 to 4 had issued notices regarding checkoff exercise for 2012 on 25.10.2012, the petitioner association sent
a letter dated 26.10.2012 to the Chairman of the General Insurers (Public Sector) Association of India, i.e., the 5th respondent, seeking for
inclusion of OBC association in the checkoff exercise. It was stated by them that the checkoff exercises were extended to SC/ST association, but
the OBC associations were excluded. By the non inclusion of OBC members, they were prejudiced. But, however, impugned notices clearly
stated that the notice inviting applications will start from 25.10.2012. The last date for receipt of the request was on 09.11.2012 and the
publication of the list of unions / associations eligible for participation in the checkoff facility was on 20.11.2012. The exercise of authorization by
all employees /officers on a common date was on 05.12.2012 and counting of letters of authorization at the Head office was from 13.12.2012 to
15.12.2012. The declaration of results was on 17.12.2012. Even before the exercise could be completed, a list of unions and associations in
SC/ST welfare groups found eligible for inclusion in the checkoff system was published on 20.11.2012 by respondents 1 to 4 and they were given
separate code numbers. It is at this juncture, the petitioner association had obtained the interim stay on 14.12.2012 thereby stalling the process of
request made by various trade unions.
The terms and conditions of the checkoff system was set out in the impugned notices. In paragraphs 3 and 4, the conditions were stipulated,
which are as follows:
Unions/Associations representing Class I/II/III/IV/FTS/PTE or SC/ST, as the case may be, wishing to avail the Check-off facility may submit
their applications in the prescribed format along with necessary documents by Registered Post, Acknowledgement Due, so as to reach Deputy
General Manager, Personnel Deptt., HO on or before 09.11.2012. The format of application to be submitted by the Unions/Associations is given
in Annexure-B.
...
The format for irrevocable letter of authorization to be submitted by the employee concerned is given in Annexure-C. The letter of Authorization
(to be serially numbered and signed by the Nominated Officer of RO) will be furnished to the employees by their respective offices. SC/ST
employees, in addition to authorizing for the Union/Association pertaining to their class, may also submit authorization for one of the Associations
representing SCs/STs. The authorization exercised by employees will be valid for a period of THREE YEARS.
In the terms and conditions for checkoff exercise for 2012, it was stated that the trade union or association should be a union or association
registered under the Trade Union Act, 1926. The union or association claiming to represent more than one class or category of employees or
officers shall submit separate applications in respect of each class or category of employees or officers.
The contention raised by the petitioner was that it is the only association to ventilate the grievance of the OBC employees in the insurance
companies. While the insurance companies have recognised only the SC/ST associations, they are keeping out the petitioner association
representing OBC employees. Hence it is violative of Article 14 of the Constitution. Subsequent to the reservation of 27% vacancies to the
members belonging to OBC community, a huge number of OBC employees have entered the insurance companies and unions representing their
interest have been formed. Hence it is the only association having 100% membership of OBC employees and they are entitled to participate in the
checkoff system. Only in case of SC/ST employees upto Scale IV cadre, two authorizations were given, one in favour of the union representing
Class I to Class IV and another authorization in favour of the association representing SC/ST. It was stated that such a similar exercise was
deprived to the OBC employees, thereby depriving their fundamental right of belonging to the union of OBC employees.
In the counter affidavit filed by the first respondent, it was stated that the checkoff system was introduced in the 4 insurance companies for the
first time in the year 2004. It was meant to determine the numerical strength of the trade unions in the companies and the associations representing
SC/ST employees for the limited purpose of calling them for structured meetings / discussions on policy matters or welfare matters relating to
SC/ST employees. The terms and conditions of the exercise of identification of representative strength was introduced in 2004. It contained
several terms and conditions. When the exercise was conducted in the year 2004 in all the four companies, 30 trade unions and associations
representing SC/ST employees had participated. Further the checkoff system took place in the year 2006, again in 2009. After the expiry of 2009
exercise, a fresh exercise was done on the same terms and conditions in the year 2012 which is impugned in this writ petition. It was stated that
employees belonging to OBC community along with other employees were eligible to choose any of the trade union participating in the checkoff
exercise and trade union / association are expected to represent the interest of the members belonging to OBC. When All India General Insurance
Backward Class Employees Forum filed W.P. No. 6749 of 2004 for including their association, this court by an order dated 26.4.2006 had
directed the respondent to consider their representation. On 5.5.2006, a speaking order was passed. In that order, it was stated as follows:
The respondent companies follow the guidelines of the Government of India issued from time to time on the subject of the welfare of SC/ST and
OBC employees. As per the existing guidelines certain concessions and relaxations are available both at the time of recruitment and after
recruitment whist in service for SC/ST employees. As regard OBC persons, certain relaxations/concessions, as per the guidelines of the
Government of India currently in force are available only at the time of recruitment. Accordingly, OBC Associations, such as the petitioner, cannot
be treated at par with SC/ST Association, who have been included in the check-off exercise in the company.
In any case, the employees of the company belonging to OBC, along with other employees, are eligible to choose any of the Trade Unions
qualifying in the check-off are expected to represent the interests of their members belonging to OBC also, along with their other members.
In the earlier occasion also, the associations were not allowed to participate in the checkoff system. It is only to identify the representative
strength of the union and does not involve the grant of recognition or of any other legal character. The notice issued for calling for applications for
checkoff system clearly stipulated conditions. The petitioner association was never called for any periodical meeting. With reference to inclusion of
SC/ST association, in paragraph 22 of the counter affidavit, it was averred as follows:
22...It is submitted that the SC/ST category employees have certain privileges guaranteed under the Constitution, keeping in view the
discrimination and disabilities they suffer from in public posts. They are eligible for reservations in promotions, relaxations in the qualifying marks in
any examination or lower standard of evaluation in the matter of promotions, concessions in transfer/postings, reservation in residential
accommodation, inclusion of Member belonging to SC/ST categories in Promotion Committees, etc., which are not applicable to OBC categories
employees. They do not have any concessions / relaxation or statutory privileges in service benefit after entry in the services. Hence, in addition to
trade unions, the welfare associations belonging to SC/ST categories are permitted to participate in the check-off process. It is denied that any
caste based association is included in the process, as averred by the petitioner.
There is no violation of Article 14 of the Constitution. The respondents had included various trade unions comprising of all cadres. The
associations representing SC/ST category are included. The members belonging to OBC can always give letter of authorization to any one of the
trade union participating in the checkoff system. Therefore, they requested for dismissal of the writ petition.
In the reply affidavit, the petitioner set out various steps taken by their association in protecting the interest of OBC employees and cited
instances where they were invited to take part in the checkoff exercise. In respect of the stand that OBC members can represent their interest to
other trade unions, it is stated that they are in general nature and any grievance specifically referable to OBC employees it is only through the
petitioner association they can represent. The petitioner also filed an additional typed set containing various circulars including the circular issued by
the Indian Railways, wherein the facilities extended to SC/ST associations were also extended to OBC associations.
The short question that arises for consideration is whether the petitioner association is entitled for the relief claimed in this writ petition?
It is admitted that the petitioner is a registered society under the Tamil Nadu Societies Registration Act, 1975. The object of the said society is
set out elsewhere in this order. Since the object is for improving the economic condition of its members, such association cannot be registered
under the Tamil Nadu Societies Registration Act in terms of Section 3(2) of the Tamil Nadu Societies Registration Act. The petitioner cannot claim
that it is advancing the other interest of its members, because the very purpose for which the association was started is for the welfare of its
members, who are working in the insurance industries. If they want benefits of checkoff facilities, which is the method by which subscription for the
trade union is deducted from the salary of its members by the employer and directly paid to the trade union and for that purpose, they have to
register itself as a trade union under the Trade Unions Act, 1926. u/s 14 of the Trade Unions Act, a trade union cannot register itself as a society
under the Societies Registration Act. Section 14 of the Trade Unions Act reads as follows : ""14. Certain Acts not to apply to registered Trade
Unions.- The following Acts, namely:-
(a)The Societies Registration Act, 1860 (21 of 1860)
(b)The Co-operative Societies Act, 1912 (2 of 1912),
[* * *]
[(e)The Companies Act, 1956 (1 of 1956),]
shall not apply to any registered Trade Union, and the registration of any such Trade Union under any such Act shall be void.
Though the Tamil Nadu Societies Registration Act is not specifically mentioned in the said provision, the Tamil Nadu Societies Registration Act
is enacted to replace the Societies Registration Act, 1860. The Societies Registration Act insofar as it applies to the State of Tamil Nadu has been
repealed by Section 57 of the Tamil Nadu Societies Registration Act. Hence, the petitioner society cannot masquerade itself as a trade union.
Section 57 of the Tamil Nadu Societies Registration Act, 1975 reads as follows:
Repeals and savings.-(1)The Societies Registration Act, 1860 (Central Act XXI of 1860), in so far as it applies to the State of Tamil Nadu
(hereafter in this section referred to as the said Act), is hereby repealed.
If the petitioner seeks for deduction of subscription by having checkoff facility, such a facility can be provided only to trade unions as can be
seen from the provisions of the Payment of Wages Act, 1936. u/s 2(kkk) of the payment of Wages Act, the deduction for subscription to a trade
union is made as an authorised deduction. It reads as follows;
(kkk) deductions made, with the written authorisation of the employed person, for payment of the fees payable by him for the membership of any
trade union registered under the Trade Unions Act, 1926 (16 of 1926);]
As noted already, if the petitioner wanting to advance the cause of its members by seeking the facility of checkoff system, they indirectly
wanted to prove their representative capacity of representing OBC employees by their society. If their allegation that they are being denied in the
participation of the system is accepted, then the action of the employer will amount to an unfair labour practice. For the purpose of advancing their
cause, if they do not register as a trade union in terms of Section 2(qq) of the Industrial Disputes Act, they will have no locus standi to come before
this court. Section 2(qq) of the I.D. Act defines the trade union, which reads as follows:
[(qq) ""trade union"" means a trade union registered under the Trade Unions Act, 1926 (16 of 1926);]
The question whether such an unregistered union can masquerade as a trade union came to be considered by the Supreme Court vide
judgment in B. Srinivasa Reddy Vs. Karnataka Urban Water Supply and Drainage Board Employees'' Association and Others, . The following
passages found in paragraphs 38 and 39 may be usefully extracted below:
38... Chapter III of the Trade Unions Act, 1926 sets out rights and liabilities of the registered trade unions. Under the said enactment, an
unregistered trade union or a trade union whose registration has been cancelled has no manner of right whatsoever, even the rights available under
the ID Act have been limited only to those trade unions which are registered under the Trade Unions Act, 1926 by insertion of clause 2(qq) in the
ID Act w.e.f. 21-8-1984 defining a trade union to mean a trade union registered under the Trade Unions Act, 1926.
The High Court, in our opinion, miserably failed and gravely erred in holding that Respondents 1 and 2 have locus standi to question the
appointment of the appellant in the light of the change of law that has been brought about by insertion of Section 2(qq) of the ID Act and having
regard to the provisions of Chapter III of the Trade Unions Act, 1926...
It is only when a trade union is registered under the Trade Unions Act, it has the benefit of checkoff facility and also complain in case of
discrimination regarding employer''s unfair labour practice which is set out in the Fifth Schedule of the I.D. Act. The V Schedule, Part I deals with
the employers'' partiality towards granting of favour to any one or several trade unions and complaint about employers'' sponsoring trade unions.
Therefore, the impugned circulars in limiting the checkoff facility only to trade unions functioning in the insurance industries is reasonable and well
within the legal norms set out above. The petitioner cannot have any locus standi to challenge the same in the absence of it not being a trade union
as defined u/s 2(qq) of the I.D. Act.
If the petitioner''s society seeks to function only as a society and compare itself to SC/ST Welfare associations, for whom such facilities are
granted, then the classification of giving such facilities to SC/ST associations alone do not suffer from any vice of discrimination. The SC/STs have
been discriminated from the society from the time immemorial. The Central Government had issued various circulars to various public sectors to
allow representation of such societies to be considered by the employers and also inviting them for discussions in formulating certain policies
towards service conditions of employees. The OBC employees which the petitioner society allegedly represented, cannot compare itself with
SC/ST employees as they do not face a similar social ostracism and in case of SC/ST employees, they are also otherwise members of the trade
union and they will have dual authorization, i.e., to authorise the trade union which represents their interest and also to authorise SC/ST association
which will represent their community''s interest. The allegation that such a condition is violative of Article 14 is to be rejected outrightly since the
classification is a reasonable one.
In this context, it is necessary to refer to a judgment of the Supreme Court in Food Corporation of India and Others Vs. Bhartiya Khadya
Nigam Karmchari Sangh and Another, and the following passage found in paragraph 11 may be usefully extracted below:
It is trite law that Article 14 of the Constitution which enshrines the principle of equality is of wide import. It guarantees equality before the law
and the equal protection of the laws within the territory of India. It implies right to equal treatment in similar circumstances, except in cases where
the two persons form ""a separate and distinct class and such classification is a reasonable one based on intelligible differentia having nexus with the
object sought to be achieved"". (See State of W.B. v. Anwar Ali Sarkar and John Vallamattom v. Union of India, SCC p. 622, para 19.)
For the purpose of representing the workmen, a group must first of all get itself registered under the Trade Unions At and thereafter, seek for
recognition as held by the Supreme Court in Food Corporation of India Staff Union Vs. Food Corporation of India and others, and in paragraph
1, it was observed as follows:
Collective bargaining is the principal raison d''jtre of the trade unions. However, to see that the trade union, which takes up the matter
concerning service conditions of the workmen truly represents the workmen employed in the establishment, the trade union is first required to get
itself registered under the provisions of Trade Unions Act, 1926. This gives a stamp of due formation of the trade union and assures the mind of the
employer that the trade union is an authenticated body; the names and occupation of whose office-bearers also become known. But when in an
establishment, be it an industry or an undertaking, there are more than one registered trade unions, the question as to with whom the employer
should negotiate or enter into bargaining assumes importance, because if the trade union claiming this right be one which has as its members
minority of the workmen/employees, the settlement, even if any arrived between the employers and such a union, may not be acceptable to the
majority and may not result in industrial peace. In such a situation with whom the employer should bargain, or to put it differently who should be the
sole bargaining agent, has been a matter of discussion and some dispute...
(Emphasis added)
The decision relied on by Ms. Dakshayani Reddy, i.e., Zoroastrian Co-operative Housing Society Limited and Another Vs. District Registrar
Co-operative Societies (Urban) and Others, does not advance the cause of the petitioner society except to an extent that the right to form a
society is constitutionally guaranteed in terms of Article 19(1)(c). But such a right to form a society cannot take within its sweep any other
concomitant rights, such as society''s right to seek for subscription deduction by the employers as a matter of right. Even if it becomes a registered
trade union, by the right guaranteed under Article 19(1)(c), it will not provide for any further concomitant right so as to have it enforced as held by
the Supreme Court in All India Bank Employees'' Association Vs. National Industrial Tribunal and Others, . In the light of the above, the writ
petition is misconceived. Accordingly, the writ petition will stand dismissed. No costs. Consequently, connected miscellaneous petitions stand
closed.