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Judgment
Deb, J.—On February 16, 1973, this Rule nisi was issued in this writ application in relation to an Industrial Dispute Award dated November 28, 1972, made by the Respondent No. 2, hereinafter referred to as ''the Tribunal''.
The Petitioner is a registered Trade Union of Employees of the Respondent No. 1, hereinafter referred to as ''the Company''. Two Joint Secretaries of the Petitioner were Gour Mohan Dutta and Ajit Kumar Ganguly. There is also another registered Trade Union of the workmen of the Company. On May 30, 1962, the Company retrenched its 9 employees and many workmen. It also dismissed its several employees and one of them was Gour Mohan. Hence, disputes arose between the Company and the Unions. No settlement could be reached in conciliation proceedings and hence, by an order dated August 10, 1962, made u/s 10 of the Industrial Disputes Act, 1947, the Respondent No. 3, the State Government, referred to the Tribunal for its adjudication on the issues to the effect, namely, that whether their retrenchment was justified and what relief, if any, they were entitled to.
Thereafter, the Company and the workmen''s Union arrived at a settlement in which the Petitioner was not a party. On July 4, 1970, the Company and Gour Mohan, in his capacity as one of the Joint Secretaries of the Petitioner, settled the dispute regarding those retrenched and dismissed employees.
On June 13, 1970, the Company filed before the Tribunal a compromise petition setting out therein the disputed terms of settlement. The said petition was signed by Gour Mohan and Ajit Kumar, as the Joint Secretaries of the Petitioner and also by a Director of the Company. On July 25, 1970, the Petitioner by its Vice-President filed an objection petition challenging the validity of the said settlement, inter alia, on the ground that Gour Mohan and Ajit Kumar had no authority to settle the disputes and the signature of Ajit Kumar was fraudulently obtained by Gour Mohan on the said petition.
The said objection petition was tried on evidence by the Tribunal. Gour Mohan was re-employed by the Company in the meantime and he gave evidence for the Company. The Company also called another witness, whereas Ajit Kumar, including many members of the Executive Committee of the Petitioner, gave evidence for the Petitioner. The Tribunal was not impressed by the evidence adduced on behalf of the Petitioner and by accepting the evidence of Gour Mohan and the resolutions passed by the Executive Committee of the Petitioner, made the impugned order in terms of the said compromise petition. Hence, this Rule, was obtained by the Petitioner.
It is an admitted fact that the Company and the Petitioner were eager to settle the said dispute after it was referred to the Tribunal. Gour Mohan, in his evidence, has said that the offer of the Company was that the Company would reinstate 3 retrenched and 2 dismissed employees and the Executive Committee of the Petitioner authorised him to settle it on that term. This evidence of Gour Mohan was accepted by the Tribunal.
The compromise petition, however, provides that the Company would ''re-employ'' 3 retrenched and 2 dismissed employees ''as new recruits'' at their basic salary with effect from July 16, 1970, subject to the acceptance of the said term by the Tribunal. The disputed settlement was not notified to the Respondent No. 3 or its officers and it was not in Form ''J'' prescribed under Rule 68 of the West Bengal Industrial Disputes Rules, 1958. In the impugned Award, the Tribunal, inter alia, said as follows:
From the resolution dated 2.7.70 (Ex. A) it appears that the Executive Committee decided to compromise the dispute under the reference with the Company and the Committee further decided that amongst the retrenched workmen, Sri Surit Sarkar, Sri Aran Kundu and Sri Bibhuti Chakravarty should be reinstated. From the impugned petition of compromise it also appears that one of the terms of the said compromise was exactly the said 3 workmen should be reinstated in service....It also appears that the impugned settlement was in accordance with the terms as agreed upon by the Executive Committee.
It has been contended by Mr. Sankardas Banerji, the Learned Counsel appearing for the Company, than as the said impugned settlement was accepted by the Tribunal, it was bound to make the said Award in terms of the said compromise petition on the principles laid down by the Supreme Court in the case of The State of Bihar Vs. D.N. Ganguly and Others, , in the following terms:
It is, however, urged that if a dispute referred to the Industrial Tribunal u/s 10(1) is settled between the parties, the only remedy for giving effect to such a compromise would be to cancel the reference and to take the proceedings out of the jurisdiction of the Industrial Tribunal. This argument is based on the assumption that the-Industrial Tribunal would have to ignore the settlement by the parties of their dispute pending before it and would have to make an award on the merits in spite of the said settlement. We are not satisfied that this argument is well-founded. It is true that the Act does not contain any provision specifically authorising the Industrial Tribunal to record a compromise and pass an award in its terms corresponding to the provisions of Order XXIII, Rule 3 of the Code of Civil Procedure. 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 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 Sections 12(2) and 13(3) and the same are made binding u/s 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 settlements between the parties. In this connection, we may incidentally refer to the provisions of Section 7(2)(b) of the Industrial Disputes (Appellate Tribunal) Act, 1950 (XLVIII of 1950), which expressly refer to an award or 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 recognised the making of awards by the Industrial Tribunals with the consent of the parties. Therefore, we cannot accept the argument that cancellation of reference would be necessary in order to give effect to the amicable settlement of the dispute reached by the parties pending proceedings before the Industrial Tribunal.
But, the question before the Supreme Court in that case was whether the State Government had any power to cancel the earlier reference made u/s 10 of the Act and in that context the quoted observations were made. Further, the settlement was not disputed in that case nor the Supreme Court was called upon to express any opinion on its validity. Furthermore, the Supreme Court also did not go into the question as to the legality of any disputed settlement. Hence, it is not an authority on the question involved before me.
In these circumstances, it has been contended by Mr. Banerji that the Tribunal had duly and properly applied its mind to all relevant facts and circumstances of the case and therefore, its award cannot be questioned and there is no error apparent on the face of the award and hence, the Company has no case to meet.
It is true that the Tribunal has exhaustively dealt with the evidence adduced by and the submissions made on behalf of the parties, but, as rightly pointed out by the learned Advocate Mr. S.R. Ghose, appearing for the Petitioner, that the Tribunal did not apply its mind at all to the most important facts and the questions involved before it as hereinafter stated.
The Executive Committee authorised Gour Mohan to settle the said disputes on the agreed term, namely, that 3 retrenched and 2 dismissed employees would be ''reinstated'' by the Company and that was also the finding of the Tribunal. But the Tribunal did not go through the petition of compromise for it provided that the Company would ''re-employ'' 3 retrenched and 2 dismissed employees 9 ''as new recruits'' which was not the agreed term between the Company and the Petitioner.
Hence, Gour Mohan and Ajit Kumar had no authority to settle the said disputes on that term, which was wrongly incorporated in the petition of compromise and this aspect of the matter was completely overlooked by the Tribunal.
Re-instatement is not re-employment as new recruit. Reinstatement carries with it all benefits of service already accrued to an employee whereas the employee forfeits all such accrued benefits, if he is re-employed as a new recruit and this aspect of the matter has also been completely overlooked by the Tribunal.
In this view of the matter, I am not impressed by the contentions of Mr. Banerji and in my opinion, this Award is tainted with error apparent on its face as stated above and it is also hit by the principles laid down by this Court in the case of Golam Mohiuddin Vs. State of West Bengal and Others, and by the Supreme Court in the case of The State of Uttar Pradesh v. Mohammed Noor AIR 1958 S.C 86 cited by Mr. S.R. Ghose.
The Tribunal, in the impugned Award, has also said as follows:
Strictly speaking, a settlement arrived at between the parties, while an industrial dispute is pending in the Industrial Tribunal, does not come within the purview of the definition of ''settlement'' as given in Section 2(p) of the Industrial Disputes Act, 1947 and as such, Rule 68 to the said Act also does not apply to such a settlement.... Thus it is evident that the impugned compromise filed in this Tribunal on 13.1.1970 was quite legal and valid and there is no reason to reject it. The said compromise is, therefore, accepted.
The above finding of the Tribunal is correct in the submission of Mr. Banerji and hence, to appreciate his contention it is necessary to set out below Section 2(p) of the Act:
''Settlement'' means 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 signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate Government and the conciliation officer.
Rule 68 speaks of ''Memorandum of Settlement'' and it, inter alia, says:
A settlement arrived at in course of conciliation proceedings or otherwise shall be in Form J.
The Tribunal is not a party to the impugned agreement and therefore, it has been contended by Mr. Banerji that this argument is not a ''settlement'' within the meaning of Section 2(p) of the Act and hence, the impugned agreement was not required to be notified to the Respondent No. 3. In this connection, he has also argued that Rule 68 has no application for this agreement is not a ''settlement'' as defined by Section 2(p) of the Act.
A ''settlement'' can be arrived at either in course of conciliation proceeding or otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in the prescribed manner and a copy of which has been sent to an authorised officer and to the Conciliation Officer. This agreement must be in writing and it must also be in the Form prescribed by the Rules. A copy of such agreement must be sent to the Government and to the Conciliation Officer. These provisions are mandatory. Non-compliance with any of these mandatory provisions will make an agreement null and void.
The Act has created the Tribunal and its jurisdiction. No agreement of the parties can confer jurisdiction on the Tribunal. The Tribunal and the parties must comply with the provisions of the Act and they have no "absolute freedom of contract to arrive at a settlement in all respects binding on all workmen" is the decision of the Supreme Court in the case of Workmen of M/s. Delhi Cloth and General Mills Ltd. v. The Management of Delhi Cloth and General Mills Ltd. AIR 1970 S.C. 1851 (1856). The Supreme Court also said this:
The question of a valid and binding settlement in such circumstances is, in our opinion, governed by the statute and the rules made thereunder. Reliance was next placed on Section 18(1) to support the binding character of the settlement. This sub-section for its proper construction must be read with the other sub-sections and the relevant rules, in the light of the definition of ''settlement'' as contained in Section 2(p) of the Industrial Disputes Act. ''Settlement'' as defined therein means 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 signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to the appropriate Government and the Conciliation Officer. In the light of these provisions we do not think that Section 18(1) vests in the Management and the Union unfettered freedom to settle the dispute as they please and clothes it with a binding effect on all workmen or even on all member workmen of the Union. The settlement has to be in compliance with the statutory provisions.
Rule 68 is in pari materia with the Central Government Rule 58 and they have ''force of law'' is also the decision of the Supreme Court in Delhi Cloth Mill''s case Supra (1857)s. And when the settlement is not ''in accordance with the'' Act and ''the statutory rules'' it ''vitally'' affects the ''jurisdiction'' of the Tribunal is what the Supreme Court has also said in that case. This decision of the Supreme Court has been followed by S.C. Ghose J. in Quazi Almas Khan and Ors. v. The Presiding Officer Seventh Industrial Tribunal and Ors. Unreported decision dated December 22, 1972 of Ghose J; in Matter No. 232 of 1971 and his Lordship says this:
It appears that the affidavit filed by the said workmen could not be a settlement within the meaning of the Industrial Disputes Act in particular Rule 68 of the West Bengal Industrial Disputes Rules quoted above and the Tribunal was justified in ignoring the same.
Hence, I am not impressed by the contentions of Mr. Banerji. In my opinion, the Tribunal has no jurisdiction to make the impugned Award in terms of the said compromise petition which is not a settlement within the meaning of Section 2(p) of the Act and also for the reason of its non-compliance with Rule 68. This lack of jurisdiction of the Tribunal strikes at the root of the impugned Award and makes it null and void.
Hence, the impugned Award is quashed so far as the Petitioner and its members and the Respondent No. 1 are concerned and the Rule nisi is made absolute. The Respondent No. 2 is directed to act in accordance with law in so far as the dispute between the employees who are the members of the Petitioner and the Company are concerned and the Respondent No. 1 is directed to pay the costs of this application to the Petitioner. On the prayer of Mr. Biswas, the learned Advocate for the Company, the operation of this order will remain stayed for 8 weeks from today.