JHAGRAKHAN COLLIERIES (P) LTD. versus SHRI G. C. AGARWAL, PRESIDING OFFICER, CENTRAL GOVERNMENT INDUSTRIAL ·TRIBUNAL-CUM-LABOUR COURT, JABALPUR AND ORS.

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JHAGRAKHAN COLLIERIES (P) LTD. v. Sl!RI G. C. AGARWAL, PRESIDING OFFICER, CENTRAL GOV· ERNMENT INDUSTRIAL ·TRIBUNAL-CUM-LABOUR COURT, JABALPUR AND ORS. November 28', 1974 [A. ALAGIRISWAMI AND R. S. SARKARIA, JJ.J , Industrial Disputes Act, Sections 2(P) and 18-Co11ciliation agreement arrived at in proceedings otherwise than as required under the Act-Acceptance of the settleme/11 by cc>nituct by workmen 1101 parties to settlement-Effect.

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Industrial Disputes Act, Sections 10(1) and 33-C ('t)-Settlement during pendenq of proceedings under sec. 33·C (2 )-Settlement, if terminates the proceedings.

The three collieries owned by the appellant company employ over 4,200 work men. At the relevant time there were three Trade Unions fooctioning at the collieries namely, Madhya Pradesh· Koyla Mazdoor Panchayat, Azad Koyla Shramik Sabha and Madhya Pradesh Colliery Workers• Federation.

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At the matcrjal. time, the Panchayat, according to the allegations of the Company, had about 75 per cent of the workers on its rolls. This Union con duded a complete strike for 57 days in the months of March and April 1968 at the collieries. The Central Wage Board for Mining Industry by its award re· commended payment of Variable Dearness Allowance (V.D.A.), correlated to the cost of living index prevailing from time to time. The Company accepted those recommendations. The workers represented by the various Unions, on the basis of the Wage Board's award, demanded V.D.A. at the rate of Rs. J.47 per day With e!Rct from April .1. 1%8 while the Company was paying it at the rate of Re. 1.11 per day. The Company refused to pay more than Re. I.I! per day. Thereupon, in December 1968, the Federation which had a membership of 169 workers (Respondents 4 to 173) made an application before the Central Labour Court-cum-Industrial Tribunal Jabalpur (the Labour Court) under s. 33-C(2l of the Industrial DisptLtcs Act for determination of the amount of V.D.A. due tc the workers. The Company submitted its Written Statement on May 13, 1969, challenging the jurisdiction of the court and raised other legal objections.

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In consequence of the notice of strike under Sec. 22(1) of the Act )>y tbe Panchayat, the eonciliation proceedings to be under s. 22 read with sec. 12(1) of the Act were held by Mr. B. D. Sharma. Assistant Labour Commissioner. In the course of these conciliation jll'oceedings besides other matters, the dispute relating to V.D.A. was settled. Subsequent to tbe signing of the conciliation agreement, the company filed a supplementary statement before the LabOur Court that, in. yiew of the settlement, the application filed by the Federation had become infructuous. The stand taken by the workers was that the settlement was not in accordance with the provisions of the Act. The Labour Court tried this It held that Shri Sharma was not a, duly appointed issue as a preliminary issue. .conciliation officer on the date on which tile settlement was arrived at. and con· sequently, it did not put an end to the dispute pending before the Labour Court. The Writ Petition filed by the Company in the High Court impugning the order of the Labour Court was dismissed. Hence this appeal by special leave.

It was contended for the appellant-·(i) Assuming that the settlement in question was not a settlement in the course of conciliation proceedings and bind· ing under s. 18(3) of the Act, it WllS still a settlement binding on the workmen, including respondents 4 to 173 herein, when 99 per cent of the total workmen had accepted the terms of the settlement, including V.D.A; (ii) The Labour H Court's order refusing permission to the appellant Company to lead evidence to prove the implementatic'.'. and acceptance of. the aforesaid settlement by 99 per cent of the workers. was violative of the principles of n&tural justice, . and (iii) There is nothing in the Act which prohibits the employers and the workmen

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from entering into a settlement during the pendency of proceedings under s. 33-C(2) of the Act. On the other ·hand, settlements illfer se between the parties hav~ always been preferred by this Court to the adjudicatory process.

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HBLD 0) A perusal of sec. 18 of the Act makes it clear that a settlement arrived at in the ·:ourse of conciliation proceedings is binding not only on the actual parties to the industrial di!>lJu.te but also on the heirs, successors or ~ssigns of the emplo~r on the one hand, and all the workmen in the ·establishment, present or future. on the other. Thus, had Mr. B. D. Sharma been a duly appointed Conciliation Officer, the· settlement arrived at in the conciliatiM pro· ceedings, duly conducted by him under sec. 12, would have been binding on the entire body o.f the workers. Since the finding of the High Court to the effect, that the sett!ement between the Panchayat and the management cannot be deem. ed a settlem<lnt arrived at in the ·=ourse of conciliation proceedings under the 'Act, now s'ands unassailed, snb-iec. (3) of sec. 18 ·=~nnot be invoked to make it. binding on Respondents 4 to 173 represented by the Federation. An implied agreement by ac9uiescence or condu.ct su:h as acceptance of a benefit ~nder an C agreement to which the worker acqui!scing or accepting the benefit was not a party being outside the purview of the Act is not binding on such 11 · worker either under sub-sec. ( 1) or under sub sec. (3) of se'=· 18 of the Ac,t. It follows, therefore, that,· even if 99% of the workeis have impliedly accepted the agreement hy drawing V.D.A. under it, it will not-whatever its effect. under the general law-put an end to the dispute before the Labour Coun and make it funct11s officio under the Act, [878C-E; 879A-Bl

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{ii) The refusal of the Labour Court to allow the appellant to lead ev.idence D

at .this stage, has not caused any prejudice to the app:lllant. The issu~ decided as a prelimfoary issue involved a question of Jaw which could be dezided <>n the basis of material on record. Furthermore, the decision of the Labour Court neither debars the appellant from bringing on record evidence relevant to the . issues which still remejn to b-e decided, nor does it rule out· the ag1eement Jior all purposes.

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(iii)· In East India Coal Company Ltd., Benares ·Co//ie.ry, Dhanbad v. Ramesh· war and ors, [19681 I L.L.J. 6, this Court held that although the scope of s. 33- C(2) is .wider than tl!at of se9. 33 C(l), cases which would appropriatllly be adjudicated under sec. lO(l ). arc outside the purview of sec. 33C(2). Thi pro visions of S.. 33-C are broadly speaking in the nature of executing provisions. The jurisdiction of the Labour Court, ih the present case, is not only circum RCrihed 'by scc.33-C(2) but the matter also is yet at the initial st11ge. The1 con troversy between the parties still remains to be determined on merits. [880F & GJ ' Alna/gamated Coffee Estates Ltd. and Ors. v. Their Workmen anti Ors. [1965111 LU 110 discussed and The Slrsilk Ltd. and Ors. v. Govt. of Andhra .Prad~sh and A11r. (1964] S.C.R. 448, xeferred to.

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CML APPELLATE JURISDICTION: Civil Appeal No. 1968. of

1972.

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Appeal by SPe<:ial Leave from. the Judgment and Order dated the 4th Aul!USt. 19'71 of the Madhya Pradesh High Court in Misc. ·Petition No. 41 of 1970.

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0. P. Malhotra, 0. C. Mathur, and R. N. Mishra, for the Appel·

I ant.

· M. K. Ramamurthi and

!. Ramamurthi for Respondents Nos 14. 25. 31. 46. ·117, 59. 61, 68. 70, 72, 76, 79, 8(), 83, · 84. 89. 9~ .. 93. 95. 96. 102. 126 and 129.

The Judgment of the Court was delivered by SARKARIA, J.-This appeal by special leave is directed against the judgment, elated August 4, 1971, of the Madhya Pradesh High Court

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JHAGRAKHAN COLLIERIES v. LABOUR COURT (Sarkaria, /.)

875

wherebv the appellant's Writ Petition under Articles 226 and 22] of the Constitution was dismissed.

. The appellant is the Jh.agrakhan C?llieries (P) Ltd., a Company mcorpora~. un.der the Indian Compames Act. The Company owns three colli~n~s in Jhagrakhan in Surguja District of Madhya Pradesh. These colhencs employ over 4,200 workmen. At the . relevant time there were three Trade Unions functioning at the collieries, namely, (fort short, the .' 1) Mad~va Pradesh Koyla Ma1Xioor Panchayat .Panch~vat): (2) Azad Koyla the Sabha); ~3) Madhya Pradesh Colliery Workers' Federation (for short. the Federation')

Shramik Sabha (for short,

its award

At the material time, the Panchayat, according to the allegations of the Company, had about 75 per cent of the workers on its rolls. This Union conducted a complete strike for 57 days in the months of March and April 1968 at the collieries. The Central Wage Board for Coal Mining Industry by recommended payment of Variable Dearness Allowance (for short,' v:D.A.), correlated to the cost of livin2 index prevailing from time to time. The Company accepted these recommendations. The workers represented by the various Unions. oil the basis of the Wa2e Board's award demanded V.D.A. at the rate of Rs. 1.47 per day with effect from April 1, 1968 while the Companv was pavin.2 it at the rate of Rs. 1. H per day. The Companv refused to pay more than Rs. 1.11 per day, Thereupon, in December 1968. the Federation, which had a membership of 169 workers (Responllents 4 to 173 herein) made an application before the Central Labour Court-cum-Industrial Tribunal Jabalpur (for short1 the Labour Court) under Section 33-C(2) of the Industrial Disputes Act (for short the 'Act') for determination .of the amount nf V.D.A; due to the workers. The Company submitted its written statement on Mav 13. 1969, challen2in2 the jurisdiction of the court and raised other legal objections.

On October 4. 1969. the Panchayat served a notice of strike under Section 22< 1) of the Act on the Company together with a charter of 29 demands .an'd threatened to strike on or after November 7, 1969 if. their demands were not conceded. Thereupon, the counciliation proceedinl?S puroortin2 to be under s. 22 read with s. 12(1) of the Act were held by Mr. B. D. Sharma, Assistant Labour Commissioner (C) Shahdo1 on the 21st and 22nd October. 1969. Jn the course of these conciliation proceedings on October 22. 1969, besides other matters. the l.iispute relatin2 to V.D.A. was settled. On October 22, 1969, the Assistant Labour Commissioner (Mr. Sharma) sent a report tor?ether with a co0v of the settlement to the Government, as requir ed hv Section 12(3) of the Act. Subseauent to the si20ing of this conciliation al?l'eement, dated October 22. 1969. the Company filed a supplementarv statement on November 5, 1969. submitting that in view of the said settlement, the apPlication under s. 33C(2) of the Act filed bv the Federa~loh, had become infructuous. The Labour

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Court by its order, dated December 20, 1969 framed this additional issue : "Whether the claim stands iettled by reason of settlement dated 22-10-1969, if any''.

On b~half of the workers seve:ral objections were. raised to the enforceability of this settlement, Their ·ultimate stand was that the settlement was not in accordance with the provisions of the Act, inasmuch as it had not been brought about in proceedings before a dulv appointed Conciliation Officer. The Labour Court tried this It held that Shri Sharma was not a. duly issue as ·a preliminary issue. appointed Conciliation Officer on the date on which the settlement was arrived at, anti consequently, it did not put an end to the dispute pend ing before. the Labour Court.

To impugn this order of the Labour Court, the Company th:rough its agent and Mining Engineer filed a Writ Petition under Artick 226 and 227 of the Constitution, which as stated before, was dismiss1~d by . the High Court~ Hence this appeal. three .

Mr. Malhotra, learned Counsel for the appellant

raised

points in the course of his arguments before us :

( 1) Jn holding that the settlement, dated October 22, 1969 was ·not a settlement in the course of conciliation pro ceedings, the courts below have misconstrued Section 4 of the Act; inasmuch as, they have relied only upon sub-section <1) and have not taken into account i1s sub ·section ( 2) and the relevant notification there under:

(2) (a) ABsuming that the settlement in question was not a. settlement in the course of conciliation proceedings and bindin~ under s. 18 ( 3) on the Act, it was still a settlement binding on the workmon, including respon dents 4 to 173 herein, when 99 per cent of the. total workmen had accepted the terms of the settlement, in cluding V.D.A.

(b) The Labour Court's order refusing permission to the appellant Company to lead evidence to prove the implementation aild accept.a'nce of the aforesaid settlement by 99 per cent of the workers, was violative of the principles of natural jusqce.

(3) Tbere is nothing in the Act which prohibits

the em ployee and the workmen from entering into a s~ttle­ Jrient during the pendency of proceedings under s. 33-C(2) of the Act. On the other hand, settlements inter se between the parties have always been preferred by this Court to the adjudicatory process.

Subsequently, however, Mr. Malhotra withdrew his contention with the Court not to give an{

regard to point No. (1) and requested finding thereon. We, therefore, refrain from going into the same.

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JHAGRAKHAN COLLIERIES v. LABOUR COURT (Sarkaria, J.)

877

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For points (2)' and (3), Mr. Malhotra placed reliance on

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decisions of this Court, namely : Amalgamated Coffee Estates Ltd . . a11d ors. v. Their workmen and others(!) and The Sirsilk Ltd. and ors, v. Government of Andhra Pradesh and anr.( 2 )

Before dealing with the_ points canvassed, it will be appropriate to examine the relevant pro.visions of the Act. Section 2 (p) of "the Act defines settlement to mean-

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"a settlement arrived at in the course of conciliation pro ceedings an~ includes a written agreement between the em ployer anld 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 )?e pres cribed and a copy thereof has been sent to (an officer autho rised in this behalf by) the appropriate ,Government and the conciliation officer." ·

As analvsis of the above definition would show that it contem plates only two kinds of s~ttlement (i) A settlement arrived at in the course of conciliation proceedings . under the Act ahd (ii) a written agreement between the employer and the workmen arrived at other· wise than ·in the course of conciliation proceedinl!S. But a written agreement of the latter kind in order to fall within the definition must satisfy two more conditions, namely: (a) It must have been signed by the parties thereto in the prescribed. manner, and (b) a copy thereof must have been sent to the authorities indicated in s. 2(p).

The effect of a settlement of the first kind

is iridicated in sub section (3) and that of the second in sub-s. (l) of s. 18 of the Act. The material part of s. 18 reads:

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"18(1) A settlement arrived at by agreement between the employer and workmen otherwise than in the course of con ciliation proceedings shall be binding on the parties to the agreement. (2) Subject to the provisions of sub-section (3), an arbi·, ·tration award which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration."

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(3) A. settlement arrived at in the coiirse of conciliation procealinl!S under this Act (or an arbitration award in a case where a notification has been issued' under. sub-section (3A) of Section (10A) or (an award of a Labour Court, Tribunal or National Tribunal) which has become enforceable shall be binding on- ( a) all parties tQ the Industrial dispute; (b) all other parties summoned tc appear in the pro-· ceedings as parties to the dispute, unless the BOard, {arbitrator) (Labour Court, Tribunal or National (2) [1964)S.C.Jl. 448.

-..,..(1,....) [""19,..,65-]""'Il,-L-U-1..,.,10.

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Tribunal), as the case may be, records the opinion that they were 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 disput1! relates;

( d) where a party

referred

to in clause

(a) or clause (b) is composed of workmen, all persomi 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 aml all persons who subsequently become employed in that establishment or part."

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It is clear from a perusal of Section 18, that a settlement a1rrived at in the course of conciliation proceedings is binding not only on the . actual partjes to the industrial dispute but also on the heirs, succ1~ssors or assigns of the employer on the one hand, and all the workmen in the establishment: present or future-, on the other. In extending the operation of such a settlement beyond the parties thereto, sub-sc!Ction ( 3) of th•~ Section departs from the ordinary law of contract and gives effect to the principle of collective bargaining. Thus, had Mr. B. D. Sharma been a duly appointed Conciliation Officer, the Hettle ment arrived at in the conciliation proceedings, duly conducted by him under Section 12, would have been binding on the entire body of the workers includinJl: Respondents 4 to 173 represented by the Fe:dera tion. and others who are members of the Sabha. Since *e finding of the Higb Court to the effect that the settlement between the Pancha yat and the management cannot be deemed to be settlement arrived at in the course of conciliation procee'dings under the Act, now stands unassaileld. the aforesaid sub-section (3) cannot be invoked to make it binding on Respondents 4 to 173. The question remains: Can it be enforced against these Respondents by virtue of sub-section ( 1) of the Section ? This further narrows down into the issue : Were these resoondents parties and signatories the management and the f'anchayat ? The answer to this question undoubtedly in the negative.

to the agreement between

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Even Mr. Malhotra has conceded that at the time when the s.ettle ment was arrived at on October 22, 1969, these respondents and the members of the Sabha. were not parties to it. But his argum<:nt is that subsec1uentlv by drawing V.D.A. in accordance with the settle ment, 99% of the workers have accepted the settlement which, in consequence,. would be as effective against them as if they were parties to it.

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The argument is attractive but does not stand a close examination.

We have already noticed that accordin~ to the scheme .of s. 18, read with s. 2( d), an agreement, made otherwise than in the cc1urse of conciliation proceedings, to be a settlement within the meaning of

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JHAGRAKHAN COLLIERIES v. LABOUR COURT (Sarkaria, /.)

879

the Act must be a written agreement signed in the manner prescribed by the Rules framed under the Act As rightly pointed out by Mr. Ramamurthy, .learned Counsel for the Respondents an implied agree such as acceptance of a benefit ment bv acawescence, or conduct under an agreement in which the worker acquiescing or accepting the b~ne~t was not a partv. being outside the purview of the Act, is not binding on such a worker either under sub-section (1) or under It follows, therefore that even if 99% of sub-section (3) of s. 18. the workers have impliedly accepted t.Qe agr~ment arrived at on ~tober 22, 1969, by drawing V.D.A., under it, it will not-whatever its effect under the general law-put an end to the dispute before the Labour Court anQ. make it functus o.fficio under the Act.

The refusal of the Labour Court to allow the appellant to lead evide~ce at this stage, has not caused any pre.iudice to the appellant. The issue decided as a preliminary issue involved a question of law which could. be klecided on the basis of material on record. For its · '-'• ''" ·n. ir wits not necessary to prove that 99% of the workers had accepted the agreement dated October 22, 1969. Even on an assumption of that fact in favour of the Company, the claim before the Labour Court could not be deemed to have been settled qua respbndents 4 to 173.

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· Furthermore. the decision of the Labour Court neither debars the appellant from bringing on record evidence relevant to the is_!!ues which still remain to be ~ecided, nor does it rule out the agreement dated October -22, 1969, for all purposes. Indeed, the Labour Court the settlement, has in its order, towards the end, expr~ly said that dated October 22,_ 1969, can be binding under s. 18(1) of the Act between the contracting parties.

' In view of the above. we )V6uld negative contention (2) canva5sed by Mr. Malhotra.

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This takes us to the third contention. Assuming that the Act does not inhibit the employers and the workmen from arriving· at a settle- · ment during the pendency of proceedings under s. 33-C(2) of the_ Act, such a settlement, not being one arrived -at in the course of con ciliation proceedings would be enforceable only against the parties Jn the present case. Respondents 4 to· 173 and others who . thereto. were not parties to the settlement dated October 22, 1969' would ,not be bound by it.

In the case of Amalgamated Coffee Estates Ltd. v. Their workme11 .

(supra) cited bv Mr. Malhotra, pending the appeals .by the manage ment before this Court, the subject-matter of the award were settled between most of the managements and most of their employees !e- , presented by certain Unions. An application was made requestin~ the Court t-0 dispose of the appeals in terms of such settlement. . It was opposed on behalf of some of the employees; This Court called for a finding from the Industrial Tribunal on this issue.:

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"In view of the fact that admittedly a large number of workmen employed by the appellants have accepted pay ments 'consistently with th_e terms of the agreements set up by the employers, in their present petition, is it shown by the respondents that the said agreement is not valid and binding on them?"

The Tribunal submitted the finding that in every estate payments were made in terms of the settlement and such payments were voluntary It also held that the t1~rms and knowingly accepted by the workmen. of the settlement were fair. This Court accepted the finding of the Tribunal hol'ding that "the settlement appears to us also to be a fair one·.

It therefore, decided the appeals in terms of the settlement. It will be seen that the decision in Amalgamated Coffee Estates case · (supra) stands on its own facts. There the appeals arose out of an award of the Special Industrial Tribunal for plantations in a dis pute between 228 coffee, tea and rubber estates in South India and their employees referred to it under s. 10(1) whereas the instant appeal arises out of proceedings un'der s. 33-C(2) for the recove1y of monev on the basis of the Wage Board's award and the dispute, if any, is about the computation of V.D.A. in implementation of that award. The scope of s. 33..C(2) is not the same as that of s. 10(1) of the In East India Coal Company l~td. Banares Colliery, Dha11bG1d v. Act. Raweshwar Cllld Ors. U) this Court held that although tqe scope of s. 33-C(2) is wider than that of a 3:~-C(1), cases which would appro priatelv be, adiudicatetl under s. 10(1) are outside the purview of s. 33 C(2). The provisions of s. 33-C are, broadly speaking, in the nature of executing provisions.

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An app1~al being a rehearing of the case, in Amalgamated Coffee Estates· case. the jurisdiction o~ the Court to decide the dispute in a just manner was co-extensive with that of the Tribunal to which it was referred under s. 10( 1). This Court found in agreement with the report of the Tribunal that the settlement arrived at between the most of the Unions repres~nting most of the workers and the manage ments was fair and conducive to in'dustrial peace, and therefore, it was just and appropriate to decide the dispute and dispose of the appeals in terms of the settlement.

In the dase before us, the jurisdiction of the Labour Comt is not only circumscribed by s 33-C(2) but the matter also is yet at the initial stage. The controversy between the parties still remains tQ be dete1mined on merits. We. therefore, do. not think it necessary to say anything more with regard to contention No. 3 than what we have broadly intlicated above.

For the foregoing reasons, the appeal fails ancl is dismissed with

costs.

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