# [1964] 2 S.C.R. 448

- **Citation:** [1964] 2 S.C.R. 448
- **Court:** Supreme Court of India
- **Decided:** 1964
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1964-2-s-c-r-448-2935
- **Pages:** 11

## Headnote

1963
March 20
448 SUPREME COURT REPORTS [1964] VOL.
THE SIRSILK LTD. AND OTHERS
t',
GOVER.:'\ME~T OF ANDHRA PRADESH
& A~OTHER
(P. B. GA.JF.:-<"DRAGADKAR, K. N. WANCI!OO,
and K. C. DAS Gt:PTA JJ.).
Industrial Dispute-Award senl to Go•·ernment by the
Trilnma/-Settlement between parties thereafter-Goi·ernment, if
mu•I
publ~•h the A ward -Conflict between Award and .ettlenumt-Resolution of-hzdU.Jtrial Ji.,pu/es Act, 1947 ( 14 of 1947)
88. 2 (p),.17, 18, 19.
The facts of the three appeals are similar and the
questions of law involved are identical.
Industrial disputes
having arisen between the appellants and their workmen the
disputes were referred for adjudication.
After the Tribunal
forwarded their 1\wards to the Government the parties in each
dispute came to scttlctnent. l'hercafter letters were sent to the
Government r<'quc5ting thcn1 to \\'i1itholcl the puUlication of the
Awards.
The Government replied that under s. 17 of the
r\ct it \\'<lS mandatory for the Govern1ncnt to publish the A, .. ·ards
and they could not withhold publication. Thereupon writ
petitions were filed before the High Court under Art. 226 of
the Constitution praying that the Govcrnn1ent might be directed
to withhold the publication. The High Court held that since
the provisions of s. 17 of the Act ,,·r.re 1nandatory it \\'as not
open 'to the 1 Iigh (~ourt to issue \vrits as prJyc<l for and rejected
the petitions. The preo;ent appeals <\re hy \\'ay of certificate
granted by the Higil Court.
The n1ain contentions in the appeals \Vere that the provisions of s. 17 \Vere not n1andatory but we·rc only direcr.ory an<l
in the alternative that even if they -.....were 111andatory some -l'ia
media had to be found in view of the conflict that would arjse
between an award published under s. 17 (I) and a settlement
which was bind in~ nnc.ler s. I 8 (I) and therefore where there
was a settlement which was binding under s. IB (I) it would be
open to the Govt-rnment not to publish the a\vard., It was contended on behalf of the respondent that if the arg~ment of the
appellants \Vas accepted it \Vould create a difficult situation in a~
:.much as it woulcl be possiblr. for one party or the other to repr..
'iicnt to the Go\'ernment that the settlement had bec11 arrived al
2 S.C.R.
SUPREME COURT REPORTS
4'49
as a re;.ult of fraud, misrepre.sentation or undue influence and !\
corruption etc.
Held that it is clear on a readin~ of s. 17 and s. l 7A[
together that the intention behind s. 17 (1) is that a duty is cast.
on Government to pahlish the a.Yard within thirty days of itsJ
receipt and the provision for its publication is ma11datory and
not rnerely directory. Waen an agreem~nt has been arrived atbetween the parties, though not in the eoursc of conciliation.
proceedings, it becomes a settlement as per the definition under
s. 2 (p) ands. 18 (I) lays d>wn that such a settlement shall be
binding on all the parties to it.
If a situation like the one in the present case arises which
may lead to a conflict between a se<tlement under s. 18 (1) and
an award binding under s. 18 (3) on publication, the only &>Ju.
tion is to withhold the award from publication. This would
not in any way affect the m1ndatory nature of the provisions in
s. 17 ( 1) for the Governmont would ordinarily have to publish
the award but for the special situation arising in such cases.
If any dispute arises as to the binding natuce of the settlement on grounds of fraud or misrepresentation etc. that would
be another industrial dispute, whirh the Government m1y refer
for adjudication and if such a settlement is found not to be
binding under s. 18 (1) of the Act it will always be open to the
Governmont to P"bli'h the Award which it had wilhheld.
Stale of Bihar v. D. N. Ganguly, (1959] S. C.R. I 191,
referred to.
CIVIL APPELLATE JuRISDIOTION: Civil Appeals
Nos. 220, 423 and 424of1962.
Appeals from the judgment and order dated
January 12, 1960 and August 19, 1960 of the Andhra
Pradesh High Court, in Writ Appeals Nos. 12

## Text

1963
March 20
448 SUPREME COURT REPORTS [1964] VOL.
THE SIRSILK LTD. AND OTHERS
t',
GOVER.:'\ME~T OF ANDHRA PRADESH
& A~OTHER
(P. B. GA.JF.:-<"DRAGADKAR, K. N. WANCI!OO,
and K. C. DAS Gt:PTA JJ.).
Industrial Dispute-Award senl to Go•·ernment by the
Trilnma/-Settlement between parties thereafter-Goi·ernment, if
mu•I
publ~•h the A ward -Conflict between Award and .ettlenumt-Resolution of-hzdU.Jtrial Ji.,pu/es Act, 1947 ( 14 of 1947)
88. 2 (p),.17, 18, 19.
The facts of the three appeals are similar and the
questions of law involved are identical.
Industrial disputes
having arisen between the appellants and their workmen the
disputes were referred for adjudication.
After the Tribunal
forwarded their 1\wards to the Government the parties in each
dispute came to scttlctnent. l'hercafter letters were sent to the
Government r<'quc5ting thcn1 to \\'i1itholcl the puUlication of the
Awards.
The Government replied that under s. 17 of the
r\ct it \\'<lS mandatory for the Govern1ncnt to publish the A, .. ·ards
and they could not withhold publication. Thereupon writ
petitions were filed before the High Court under Art. 226 of
the Constitution praying that the Govcrnn1ent might be directed
to withhold the publication. The High Court held that since
the provisions of s. 17 of the Act ,,·r.re 1nandatory it \\'as not
open 'to the 1 Iigh (~ourt to issue \vrits as prJyc<l for and rejected
the petitions. The preo;ent appeals <\re hy \\'ay of certificate
granted by the Higil Court.
The n1ain contentions in the appeals \Vere that the provisions of s. 17 \Vere not n1andatory but we·rc only direcr.ory an<l
in the alternative that even if they -.....were 111andatory some -l'ia
media had to be found in view of the conflict that would arjse
between an award published under s. 17 (I) and a settlement
which was bind in~ nnc.ler s. I 8 (I) and therefore where there
was a settlement which was binding under s. IB (I) it would be
open to the Govt-rnment not to publish the a\vard., It was contended on behalf of the respondent that if the arg~ment of the
appellants \Vas accepted it \Vould create a difficult situation in a~
:.much as it woulcl be possiblr. for one party or the other to repr..
'iicnt to the Go\'ernment that the settlement had bec11 arrived al
2 S.C.R.
SUPREME COURT REPORTS
4'49
as a re;.ult of fraud, misrepre.sentation or undue influence and !\
corruption etc.
Held that it is clear on a readin~ of s. 17 and s. l 7A[
together that the intention behind s. 17 (1) is that a duty is cast.
on Government to pahlish the a.Yard within thirty days of itsJ
receipt and the provision for its publication is ma11datory and
not rnerely directory. Waen an agreem~nt has been arrived atbetween the parties, though not in the eoursc of conciliation.
proceedings, it becomes a settlement as per the definition under
s. 2 (p) ands. 18 (I) lays d>wn that such a settlement shall be
binding on all the parties to it.
If a situation like the one in the present case arises which
may lead to a conflict between a se<tlement under s. 18 (1) and
an award binding under s. 18 (3) on publication, the only &>Ju.
tion is to withhold the award from publication. This would
not in any way affect the m1ndatory nature of the provisions in
s. 17 ( 1) for the Governmont would ordinarily have to publish
the award but for the special situation arising in such cases.
If any dispute arises as to the binding natuce of the settlement on grounds of fraud or misrepresentation etc. that would
be another industrial dispute, whirh the Government m1y refer
for adjudication and if such a settlement is found not to be
binding under s. 18 (1) of the Act it will always be open to the
Governmont to P"bli'h the Award which it had wilhheld.
Stale of Bihar v. D. N. Ganguly, (1959] S. C.R. I 191,
referred to.
CIVIL APPELLATE JuRISDIOTION: Civil Appeals
Nos. 220, 423 and 424of1962.
Appeals from the judgment and order dated
January 12, 1960 and August 19, 1960 of the Andhra
Pradesh High Court, in Writ Appeals Nos. 120 and
57 of 1960.
8. K. Bose
and B. P. Maheshwari, for the
appellant (in C. A. No. 220 of 1962).
M. 0. Setalvad,
S. K. Bose
and
Sardar
Bahadur, for the appellants (in C. As. Nos. 423 &
424 of J !J62).
K. R. Chaudhuri and P. D. Menon, for respon·
dent No, 1 (in all the appeals).
~i11ilk Lti.
v.
G•1JtTnmmt ~
"'"'°'" ''"""
1963
Sii silk I ti .
•.
C•1¥.'7fl"l'.1nt •f
Anlhr11 PurJtrh
450 SUPREME COURT REPORTS (1964] VO
1963. March 20. The judgment of the Court
was delivered by
WANCBOO J.-These three appeals on certificates raise the same question and will be dealt
with together. It will be enough to refer to the
facts of one appeal only i.e., No. 220,
to under·
stand the point arising for decision, the facts in the
other appeals being similar.
Briefly the facts in appeal No. 220 are that
an order referring certain disputes between the
appellant and
its workmen was made to the
Industrial Tribunal, Andhra Pradesh on June 6,
l 'J56.
The tribunal sent its award to Government
in September, 1957. Under s. 17 of the Industrial
Disputes Act, No. XIV of 1947 (hereinafter referred
to as the Act). the award has to be published by
the appropriate government within a period of thirty
days from the date of its receipt by the governme11t
in such manner as the government thinks fit. Before,
however, the Government could publish the award
under s. 17, the parties to the dispute which had
been referred for adjudication came to a settlement
and on October 1, 1957, a letter was written to
Government signed jointly on behalf of the employrr
and the employees intimating that the dispute," liich
had been pending before the tribunal, had been
settled and a request was made to Government not
to publish the award.
The Government, however,
expressed its inability to withhold the publication
of the award, the view taken by the Government
being that s. 17 of the Act
wa.~ mandatory and the
Government was bound to publish the award. Thereupon the appellants filed writ petitions beK>re the
High Court under Art. 226 of the Constitution
praying that the Government may be directed not to
publish the award sent to it by the industrial tribunal. The High Court held that s. 17 was mandatory
and it wa~ not open to Government to withholi:I
2 S.C.R.
SUPREME COURT REPORTS
451
•
publication of an award sent to it by an industrial
tribunal. Therefore it was not open to the High
Court to direct the Government not to publish the
award when the law enjoined upon it to publish it.
The writ petitions were therefore dismissed.
There
were then a:;iplications for certificates which were
granted and that is how the matter has come up
before us.
The main contention on behalf of the appel·
!ants before us is that s. 17 of the Act when it pro·
vides for the publication of an award is directory and
not mandatory.
In the alternative, it is conteaded
that even ifs. 1 7 is mandatory some via media has
to be found in view of the conflict that would arise
between an award published under s. 17 (1) and a
settlement which is binding under s. 18 (1), and
therefore where there is a settlement which is binding under s. 1$ (1), it would be open to the Government not to publish the award in these special circumstances.
We are of op1mon that the first contention on
behalf of the appellants, namely, that the publica·
tion of the award under s. 17 (1) is directory cannot
be accepted.
Section 17 (I.) lays down that every
award shall within a period of thirty days from the
date of its receipt by the appropriate government be
published in such manner as the appropriate government thinks fit. The use of the word "shall" is a pointer to s. 17(1) being mandatory, though undoubtedly
in certain circumstances the word "shall" used in a
statute may be equal to the word "may". In the
present case, however, it seems to us that when the
word "shall" was used in s. 17(1) the intention was
to give a mandate to Government to publish the
award within the time fixed therein.
This is en·
forced by the fact that sub-s. (2) of s. 17 provides
that "the award published under sub-section (1) shall
be final and shall not be called in question by any
1903
Sirsillc LJJ.
..
G*vernmmt ef
Ari"'1a P Uesh
IY6j
&irslll: Lei.
..
"-"nm14t •/
Atr~ra PrttiJdi
•
452
SUPREME COURT REPORTS (1964] VOL.
court in any manner whatscever".
Obviously when
the legislature intended
the award on pc1blication
to be final, it could n0t
have intended that the
Government concerned had the power to withhold
publication of the awdnl.
Further s. 17 A shows
that whatcwr power the Go,·ernmcnt has in the
matter of an award is specifically provid<d in that
section, whid1 allows the Government
in certain
circumstances to declare that the award shall riot
become enfo:·ceable on the expiry of thirty days from
the date of its publication, which under s. 17 A is the
date of the e11force,1bility of the award. Section 17-A
also cnvisaE(eS
that the award must be published
though the Government may declare in certain conting ·ncies that it may not be enforceable.
Subsection (2) of s. l 7A also gives power to Government
to make an order rejecting or modifying the award
within ninety days from the date of iti publication.
It is clear therefore reading s 17 and s. 17 A together
that the intention behind s. Ii (I) is that a duty is
cast on Grivcrnment to puhli,h the award within
thirty days of its receipt and the provision for i•s
publication is mandatory and not merely directory.
This however docs not end the matter, particularly after t!1c amendment of the Act by Central
Act XXXVI of 1956 by which s. 18 (I) was introduced in the Act. Section 18 (l) provides that a
settlement arrived at by agreement
between the
employer and workmen utherwise th rn in the coune
of conciliation proc,·cding shall he binding on the
partir' to 1\w agreement.
·'Settlement" is dt"finrd in
s. 2 (p) a' meaning a settlement arrived at in the
cour'c of co:1ciliation
proceeding and
includes a
wri:ten ag,·,·cment between the employer and workmen arri,,erl at otherwise than in
the course of
conciliation proceeding where such agreement
h~s
been si.r;n··d 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
:! S.C.R. SUPREME COURT REPORTS 453
officer.
When such an agreement has bee~ _ar~iv
ed at, though not in the course of conc1hat10n
proceedingi, it becomes a settlement and s. 18 (I)
lays down that such a settlement shall be binding on
the parties thereto.
Further s. 18 (3) provides that
an award which has become en force a hie shall be
binding on all parties to the industrial dispute and
others. Section 19 ( 1) provides that a set clement
comes into operation on such date as is agreed upon
by the parties to the dispute, and if no date is agreed
upon, on the date on which the memorandum of
settlement is signed by the parties to the dispute. In
the present case the settlement that was arrived at
between the parties to the dispute was signed on
October 1, 1957, and as it had not fixed any date
for its coming into force, it became operaiive from
October 1, 1957 itself and was binding on the parties
to the agreement who were also before the industrial
tribunal and would be bound by the award after its
publication.
The contention on behalf of the appellant in
the alternative is this.
It is said that the main
purpose of the Act is to maintain peace between the
parties in an industrial concern. Where therefore
parties to an industrial dispute have reached a settlement which is binding under s. 18 (1), the dispute
between them really comes to an end. In such a
case it is urged that the settlement arrived at between
the parties should be respected and industrial peace
should not be allowed to be disturbed by the pu bli ·
cation of the award which might be different from
the settlement. There is no do.ubt that a settlement
of the dispute between the parties themselves is to
be preferred, where it can be arrived at, to industrial
adjudication, as the settlement is likely to lead to
more lasting peace than an award, as it is arrived at
by the free will of the parties and is a point.er to
there being goodwill between them. Even though
this may be so, we have still to reconcile the rn°.ndatory
190$
Sirsilk Ltd
..
Gournment •f
Andhra P1aderh.
\
1963
Sirsilk LtJ.
v.
Ge~m1urat •f
Antl.'ir. p,,,.,,,,
454 SUPREME COCRT REPORTS[l!lti4] \'OL.
character of the provision contained in s. 1 i (l)
for the pubJ;cation of th« award to tl1e equally
mandatory
character
of the
bir.di11g
nature
of the settlement arrived at between the parties as
provided in s. l~ (!). Ordinarily there should be
no difficulty about the matter, for if a settlement
has been arrived a• between the partiC$ while the
dispute is pending before the tribunal, the parties
would file the settlement before the tribunal and
the tribunal would make the award in accordance
with the settleml'nt.
In the S/ntr of liil111r v. /J. N.
Ganguly ('), dealing with an argument urged before
this Court that where a scttlcn1e11t has bLrn arrived
at between the parties, while an indus1rial dispute
is pending before a tribunal, the only remedy for
giving effect to sach a sett!ernent would be to cancel
the reference, this Court observed that though the
Act did not contain any provision specifically authori!ing the industrial tribunal to record a compromise
and pass an award in its terms corresponding to the
provisions of 0. XX!II, r. 3 of the Code of Civil
Procedure, 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 panics, and th~re can be no doubt that
if a dispute before a tribunal is ambicably settled,
the tribunal would immcdbtely agree to make an
award in terms of the settlement between the parties.
In that case this Court dealt with what would happen
if a settlement was arrived at while the matter was
pending before the tribunal.
The difficulty arises in
the present case because the proceedings before the
tribunal had come to an end, and the tribunal had
sent its award to Government before the settiement
was arrived at on October 1,
1957.
Th~rc is no
provision in the Act dealing with such a situation
just as there was no provision in·the Act dealing
'with the situation which arose where the parties came
(1) [1959] S. C.R. 1191,
I
J
2 S.C.R.
SUPREME COURT REPORTS
455
to an agreement while the dispute was pending before
the tribunal. This Court held in Gftnr;uly\~ case ('),
that in such a situation the settlement or compromise
would have to be filed before the tribunal and the
tribunal would make an award . thereupon in accordance with the
settlement. Difficulty, however,
arises when the matter has gone beyond the purview
of the tribunal as in the present case. That difficulty
in our opinion ha~ to be resolved in order to avoid
possible conflict between s. 18 ( 1) which makes the
settlement arrived at between the parties otherwise
than in the course of conciliation proceeding binding
on the parties and the terms of an award which are
binding under s. 18 (3) on publication and which
may not be the same as the terms of the settlement
binding under s. 18 ( 1 ).
The only way in our view
to resolve the possible conflict which would arise
between a settlement which is binding under s. 18 (1)
and an award which may become binding under
s. 18 (3) on publication is to withhold the publication of the award once the. Government has been
informed jointly by the parties thilt a settlement
binding under s. 18 {I) has been arrived at. It is
true that s. 17 ( 1) is mandatory and ordinarily the
Government has to publish an award sent to it by the
tribunal ; but where a situation like the one in the
present cases arises which may lead to a conflict
between a settlement under s. 18 (l) and an award
binding under s. 18
(3) on publication, the only
solution is to withhold the a ward frcm publication.
This would not in our opinion in any way affect the
mandatory nature of the provision in s. 17 (I), for
the Government would
ordinarily have to publish
the award but for the special situation arising in
such cases.
The matter may be looked at in another way.
The reference to the tribunal is for the purpose of
resolving the dispute that may have arisen between
employers and their workmen. Where a settlement
(I) [1959] S. C. R. 1191
1963
SirJiJk LtJ.
••
G8venment •f
. Amlhr• Prdlm
· Wan:hoa J.
1!63
••
G<om•1t•I ef
.bu"'•'•"""
w .. cA.o1.
456 SUPREME COURT REPORTS [!UGI] VOL.
is arrived at between the parties to a dispute before
the tribunal after the award has been submitted to
Government but before its publication, there is in
fact no dispute left to be resolved by the publication
of the award.
In such a case, the award sent to
Government may very well be considered to haw become infructuous and so the Government should
refrain from
~ublishing such an award because no
dispute ramains to be resolved by it.
It is however urged that the view wc have
taken may
create a difficulty
inasmucl1
as
it
is possible for one party or the other to represent t<•
the Government that the settlement has been arrived
at as a result of fraud, misrepresentation or undue
influence or that it is not binding as the workmen's
representative had bartered away their interests for
penonal considerations. This difficulty, if it is a difficulty, will always be there even in a case where a
settlement has been arrived at ordinarily betw~en the
parties and is binding under s. 18 (I), even though
no dispute has been referred in that connection to
a tribunal. Ordinarily, however, such difficulty should
not arise at all, if we read ss. 2 (p), 18 (I) and 19 (I)
of the Act together.
Section 2 (p) lays down what
a settlement is and it 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 hy the parties
thereto in such manner as may be prescribed and a
copy thereof has been sent to the approprtiate government and the conciliation officer".
Therefore the
settlement has to be signed in the manner prescribed
by the rules and a copy of it has to be sent to the
Government and the conciliation officer. This should
ordinarily ensure that the agreement has been arrived
at without any of those defects to which we have referred above, if it is in accordance with the rules.
Then s. 18 (I) provides that such a settlement would
be binding between the parties and 11. 19 (1) provides
2 s.c.R.
SUPREME COURT REPORTS
457
that it shall come into force on the date it was signed
or on the date on which it sa1s that it shall come
into force.
Therefore 'as soon as an agreement
is signed in the prescribed manner and a copy of it
is sent to the Government and the conciliation officer
it becomes binding at once on the parties to it and
comes into operation on the date it is signed or on
the date which might be mentioned in it for its
coming into operation. In such a case there is no
scope for any inquiry by Government as to the bona
fide character of the settlement which becomes binding and comes into operation once it is signed in the
manner provided in the rules and a copy is sent to the
Government and the conciliation officer. The settlement having thus become binding and in many cases
having already come into operation, there is no scope
for any inquiry by the Government as to the bona
fides of the settlement.
In such a case in view of
the possibility of conflict between the settlement in
view of its binding nature under s. 18 ( l) and an
award which might become binding on publication
under s. 18 (3), the proper course for the Government
is to withhold the award from publication to avoid
this conflict. If any dispute of the nature referred
to above arises as to a settlement, that would be
another industrial dispute, which the Government
may refer for adjudication and if on such an adjudication the settlement is found not to be binding
under s. 18 (1) of the Act it will always be open to
the Government then to publish the award which it
had withheld, though we do not think that such
instances are likely to be anything but extremely rare.
We are therefore of opinion that though s. 17 (1) is
mandatory and the Government is bound to £Ublish
the award received by it from an industrial tribunal,
the situation arising in a case like the present is of
an exceptional nature and requires reconciliation
betweens. 18 (1) ands. 18 (3), and in such a situation the only way to reconcile the two provisions is to
withhold the publication of the award, as a bindini
196J
Sirsilk Lttl.
••
Gov11nmtnt •f
A.ndhril P1adtJh
1963
Sirsillc ltd
y,
Go1.trnmtrd of
111.dhra p,::dtih
H'muhoo J.
1963
M~ch 21
458 SUPREME COURT REPORTS[l!JH4] VOL.
settlement
ha.~ already come into force in order
to avoid possible conflict between a binding settlement under s. 18 (I) and a biuding award undrr
s. 18 (3).
In such a situation we arc of opinion that
the Government ought not to publish the award
under s. 17 (I) and in cases where governmrnt is going to publish it, it can be directed not to publish
the award in view of the binding settlement arrived
at between the parties under s. 18 (I) with respect to
the very matters which were the subject-matter of
adjudication under the award. We therefore allow
the appeals and direct the Government not to pu bfah
the awards sent to it by the industrial tribunal in
these cases in view of the b;nding nature of the
settlements arrived at between the parties under
s. 18 (I) of the Act. In the circumstances we order
the parties to bear their own costs.
.4 ppea/s allawed.
HARJNAGAR CANE FARM A:-10 OTHERS
1).
STATE OF BIHAR A:'{D OTHERS
(P. B. GA.TENDRAOAIJK!R, K.
~-
WANCHOO
and K. C. DAS GUPTA JJ.)
b1dU&trial Di .. pule-Agricultural operation, if constitute.
"indtMlry"-InatUlrial Di•putu Act, J.947 (U of 1947) •· 2(j).
The appellant in appeal C. A. No. 31 of 196 I is a private
limited company registered under the Indian Companies Act.
It mainly produce. sugarcane. It also produces wheat, paddy
etc., for sale in the market.
Further it undertakes contract
works for maintaining tram lines,
weigh bridge, tlc. The
appellant in the other appeal has been purchased hy Harinagar Sugar Mills Ltd. and since then is functioning as a
department of the said Mills.