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Judgment
Veeraswami, J.—This petition under Article 226 of the Constitution raises an interesting and important question as to the interpretation of
the scope of Section 18(3) of the Industrial Disputes Act, 1947. The question for decision is whether, where there are two separate conciliation
proceedings started at the instance of two Unions of different workmen but all belonging to the same establishment and one of such conciliation
proceedings ends in a settlement, such a settlement is binding upon the workmen who are members of the other union. In exercise of their power
u/s 10(1)(c), the State Government, by an order dated 4-4-1957, referred to the Industrial Tribunal, Madras for adjudication a number of issues,
of which this petition is concerned with only one, namely, fixation of the rate of increments to all the workers from the year 1953. The Tribunal
passed an award in November 1957, which was challenged by the Management in W. P. No. 48 of 1958. So far as the issue relating to the
fixation of the rate of increment to all the workers from the year 1953 was concerned, it was quashed by Balakrishna Aiyar, J. with a direction to
the Tribunal to dispose of the issue afresh. The Tribunal has now passed a revised award, holding that the workmen of the establishment other than
those who were parties to an agreement dated 29-5-1956, would be entitled to increment at the rates fixed in what is known as
Venkataramayya''s award of the year 1948. It may be mentioned, that, even in the first award, the Tribunal had so found. But Balakrishna Aiyar, J.
took the view that, inasmuch as Venkataramayya''s award had ceased to be in force from 1949 by efflux of time, the question of the rate of
increment, which the workmen might be entitled to would have to be decided afresh in the light of the alleged subsequent change of circumstances
in the financial position of the management. But, when the Tribunal took up the issue afresh, while it naturally felt bound by the view expressed by
this court, it considered that, not- withstanding the fact that Venkataramayya''s award had ceased to be in force by efflux of time, the obligations
under the Award would still continue to be binding upon the workmen and management concerned in terms of that award.
This position was canvassed before the Tribunal and has been repeated here. But it may be mentioned, in fairness to the argument on behalf of the
petitioner, that, in view of certain decisions, including the one in Burn and Co., Calcutta Vs. Their Employees, , this point could not be successfully
challenged in this petition. On the question of change of circumstances, the Tribunal after reviewing the relevant evidence, came to the conclusion
that the Management was making profit throughout except during the solitary year ending with March 31, 1954, and that, in view of this, the
stability of the company could in no view be said to be diminished to any extent. The Tribunal further expressed the opinion that the fact the
company worked at a loss only in one year could not furnish a proper justification for altering the structure and scales of wages. Though this finding
is sought to be canvassed in this petition, inasmuch as it is one of fact, the finding has to be accepted. On behalf of the company, it was further
urged before the Tribunal that there was an earlier award of a competent labour court passed u/s 33-A of the Industrial Disputes Act on the
identical question of rate of increment and that this worked as a bar to the Tribunal once again adjudicating upon the identical question. But the
Tribunal states in its revised award that this objection was taken at the fag-end of the enquiry before it, and expressed the doubt whether the
present employees of the company were members of the union at the time of the alleged award u/s 33-A and whether a complaint u/s 33-A was
filed on their behalf. The Tribunal apparently thought that this question would involve an investigation into facts and eventually declined to entertain
the objection at the late stage. I can find no error in this approach of the Tribunal to the said objection. Though this objection was reiterated on
behalf of the petitioner in this court, I find myself in agreement with the observations of the Tribunal on the question.
The more important question which Balakrishna Aiyar, J. directed the Tribunal to decide while considering the matter afresh, is whether the
settlement, dated 29-5-1956, and arrived at in the course of a conciliation proceeding, would not bar a second revised award on the question of
rate of increment of wages to the workers from the year 1953. In order to appreciate this question, it is necessary to notice a few more facts. The
company is doing business as a public transport company. In May 1956, it appears, there were 163 workmen employed by the company, of
whom 54 were drivers 54 were conductors and the remaining 55 belonged to the staff. There were two Unions called the Trichi District Motor
Workers union and the Motor Transport and General Workers Union, the latter consisting of 60 workmen and the former 84 workmen as
members out of the total strength of 163 workmen. But the Unions separately raised an industrial dispute on the issue of the rate of increments to
be given to the workmen from 1953, and they were taken up for conciliation. It would appear, however, that the dispute sponsored by the Motor
Transport and General Workers Union was settled between the management and that Union in terms of the agreement dated 29-5-1956. On the
basis of this agreement, the Conciliation Officer passed an order u/s 12(3) of the Act. It may be mentioned that the settlement so arrived at was
without reference to the other Union and the dispute raised by it and pending conciliation at the time before the same officer. The settlement
aforesaid also covered not all the workmen, but only drivers and conductors, and fixed the rate of increment in such a way that the drivers drawing
a salary above Rs. 60 would not be eligible for any increment. Of the 84 workers who were members of the Tiruchi District Motor Workers
Union, 21 happened to be drivers who had reached the level of Rs. 60 as salary at the time of the agreement. The Tribunal noted that, in the
circumstances, the settlement was detrimental to the interest of those drivers drawing at the time above Rs. 60 as salary. No settlement was as I
said arrived at in respect of workers other than drivers and conductors. The conciliation in respect of the identical dispute raised by the Trichi
District Motor Workers'' Union before the same officer seems to have failed, and, in such circumstances, therefore, the dispute was eventually
referred to the Industrial Tribunal, Madras, for adjudication.
Before that Tribunal, it was pressed on behalf of the management that the said settlement arrived at between the management and the Motor
Transport and General Workers Union would, in view of Section 18(3)(d) of the Act, be binding on the workmen who were members of the
Trichi District Motor Workers Union as well, and that, therefore, it was a bar to the same issue covered by the settlement being once again
adjudicated upon. The Tribunal negatived this contention, and it is this point which has been considerably debated before me at the Bar.
Before dealing with the argument, it will be essential to set out the relative statutory provisions. Section 12 lays down the duties of conciliation
officers. Sub-section (1) deals with the duties of a conciliation officer in relation to a public utility concern, and states that, where the dispute relates
to such a concern and a notice u/s 22 has been given, he shall hold conciliation proceedings in the prescribed manner. Rules have been accordingly
framed, prescribing the manner in which the proceedings should take place. Sub-section (3) provides that, if a settlement of a dispute or any of the
matters in dispute is arrived at in the course of a conciliation proceedings, the conciliation officer shall send a report to the appropriate Government
together with a memorandum of the settlement signed by the parties to the dispute. The word ""settlement"" itself has been defined by the Act in
Section 2(p) as a settlement arrived at in the course of a conciliation proceeding. In 1956, an inclusive clause has been added, to the definition of
settlement"" so as to bring within its scope a settlement arrived at between management and workmen otherwise than in the course of conciliation
proceedings. Section 18 proceeds to set out the effect of a settlement, both in the case of one arrived at in the course of a conciliation proceeding
and in the case of a settlement arrived at otherwise. Where the settlement has been arrived at not in the course of a conciliation proceeding, Sub-
section (i) of that section enjoins that it will be binding on the parties to the agreement. Sub-section (3) which is important in the instant case, reads,
A settlement arrived at in the course of conciliation proceedings under this Act, or (an award of a Labour Court, Tribunal or National Tribunal
which has become enforceable) shall be binding on-
(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board (Labour Court, Tribunal or National
Tribunal), as the case may be, records the opinion that they were so summoned without proper cause;
(c) where a party referred to in Clause (a) or Clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the
dispute relates;
(d) where a party referred to in Clause (a) or Clause (b) is composed of workmen, 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 all persons who subsequently become employed
in that establishment or part.
The argument with reference to these provisions is that, where a settlement is arrived at in the course of a conciliation proceeding, its effect is the
same as an award of a labour court, namely, that just like an award the settlement arrived at in the course of a conciliation proceeding will be
binding not only on the parties to the agreement, but the entirety of the rest of the workmen of the establishment as well. It is further contended
that, in the case of a settlement proceeding as in the case of a reference for adjudication, there should be an industrial dispute existing or
apprehended, but that an industrial dispute may have the collective backing of not all but only a substantial or appreciable number of the workmen
employed in the concern or establishment. Notwithstanding that the rest of the workmen may not participate in it or remain at the background, an
award which may result upon a reference of the dispute for adjudication will be binding on all the workmen. Likewise, a settlement arrived at u/s
12(3) will have the same effect. It is this effect that has been set out in Sub-section (3) of Section 18 of the Act. The workmen of the Motor
Transport and General Workers Union, so ran the argument, would, therefore, be bound by the settlement arrived at between the management and
the Tiruchi District Motor Workers Union. (sic)
In support of the contention, reference was made to The Associated Cement Companies Ltd. Vs. Their Workmen, in which the Supreme Court
construed the scope and ambit of Sub-section (6) of Section 19. It was held in that case, that, although one out of the two unions only had given
notice of termination of an award, it would, nevertheless, be a valid termination and that the words ""by any party"" in Sub-section (6) should be
understood not in the sense of all workmen of the relative management but only of substantial or appreciable section of the workmen in the
concern. This interpretation was placed in the context of the provisions in Subsection (3) of Section 18 and on the very definition and concept of
an industrial dispute, namely, as one raised not necessarily by all the workmen of an establishment, but by a substantial or appreciable section
thereof.
Where a dispute has ended in a settlement in the course of a conciliation of the dispute raised by some members of the workmen belonging to a
particular union, I think it cannot be doubted that it will be binding on all the workmen of the establishment, notwithstanding the fact that the other
workmen belonging to the other Union or Unions were not parties to the agreement forming the basis of the settlement in the course of conciliation.
So much is clearly stated in Sub-section (3) of Section 18. In the binding effect of a settlement under that sub-section, there is no difference
between a settlement arrived at in the course of a conciliation and an award of a Labour Court, Tribunal or National Tribunal, which has become
enforceable. But the question is whether a settlement arrived at in the course of conciliation between the workmen of a particular Union of the
establishment and the management is binding upon another set of workmen belonging to another Union, the settlement arrived at being without any
reference whatever to the latter workmen or union and at a time when the identical dispute raised by them is pending conciliation before the same
officer. The question so raised is not free from difficulty; but I have come to the conclusion that such a settlement will not be binding on the
workmen of the other Union which is not a party to the settlement. This result, in my opinion, appears to be irresistible from the scheme of the Act
with reference to a settlement in the course of conciliation and adjudication of industrial disputes, particularly the scheme of Section 18 itself.
Once an industrial dispute has been raised by a substantial or appreciable section of the workmen concerned, it has to end in a conciliation or an
adjudication, as the case may be. But, where there are two identical industrial disputes which are the subject-matter of conciliation before the same
officer, there appears to be no warrant in the provisions of the Act to hold that the settlement reached in the course of the conciliation between the
management and one set of workmen or their Union will automatically bring to an end the conciliation pending with reference to the other, but
identical, dispute before the same officer. Where there are two identical disputes raised by two sets of workmen or their relative Unions before the
same conciliation officer it seems to me that they should be regarded as one dispute and looking into the substance of the matter all the workmen
belonging to both the Unions will in effect and substantially be the parties to the industrial dispute, so that any settlement in such a situation will have
to be arrived at not between the management and some only of such workmen, but between the management and the entirety of the workmen who
are parties to the dispute either by themselves or through their Unions before the same officer, so as to make the settlement come within the ambit
of Section 18(3). Suppose the same situation is present before a labour court and two disputes on the identical issue are referred to it for
adjudication at the instance of two sets of workmen or their unions. In such a case it is obvious the labour court will have to deal with both the
disputes together which are but identical, hear all the workmen or their relative unions and pass an award. That is what is visualised by Clause (b)
of Sub-section (3) of Section 18.
It is of the essence of the matter, that though factually, two disputes have been raised by different workmen or their relative Unions, they are
identical in substance and in issue, so that the entire body of workmen, at whose instance the disputes have been raised, will be party to the
industrial dispute, with the result that any settlement u/s 12(3) would not be permissible or possible only as between a party or section of the
workmen, be it that they all belong to one union on the one hand and the management on the other. Section 12(3) postulates that it should be a
settlement between parties to the dispute, which would include hot merely one section of the workmen, but all the workmen who are before the
conciliation officer in connection with the conciliation proceedings on the identical issue. The same result is also reflected by Section 18 itself. As I
said, Sub-section (1) deals with the effect of a settlement arrived at otherwise than in the course of conciliation proceedings. In such a case, the
settlement will only be binding on the parties to the agreement. The object of Sub-section (3) is to make the settlement arrived at in the course of a
conciliation proceeding binding on those not parties to the conciliation as well. This provision does not postulate or cover a case where two
industrial disputes, but of an identical nature on an identical issue, are raised by two different sets of workmen by themselves or through their
relative or rival Unions and pending conciliation and a settlement arrived at only as between one set of workmen of one of such Union on the one
hand and the management on the other. The reason is that Clause (d) of Sub-section (3) is concerned with making the settlement binding on those
who were not parties thereto. This interpretation, in my opinion, is in keeping with the language of Clause (d) of Sub-section (3) of Section 18
particularly, the words ""is composed of workmen"" used in that clause.
To interpret Sub-section (3) in such a way as to make the settlement in question binding on the other workmen belonging to the other Union
would also involve undesirable and unhealthy consequences, especially where there are rival workmen or rival Unions, one or more of which may
possibly take sides with the management. A different interpretation may also result in conclusion and mischief in relation to the object of the Act,
namely, to conserve and promote industrial relations and peace. But my view of the scope of Clause (d) of Sub-section (3) of Section 18 is not
entirely based on the result which a different interpretation may produce, though such a result would, in my opinion, be also taken into account as it
has a bearing too on the interpretation especially as it touches industrial conciliation and adjudication. I hold, therefore, that the Tribunal has taken
the right view in finding that the settlement in question is not a bar to its jurisdiction to adjudicate upon the outstanding issue relating to the rate of
increment to the workmen who were members of the Trichi District Motor Workers Union.
The petition is dismissed with the costs of the second respondent.