# [1979] 2 S.C.R. 911

- **Citation:** [1979] 2 S.C.R. 911
- **Court:** Supreme Court of India
- **Decided:** 1979
- **Case number:** Civil Appeal No. 2335 of 1978
- **Bench:** P. N. Shinghal, P. S. Kailasam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1979-2-s-c-r-911-7677
- **Pages:** 12

## Headnote

B
U.P. lndu51ria/ Disputes Act, 1947 (28 of 1947) Ss. 2(/), J(d), 4K, 6B,
61, 1(ii)-lu<lustrial dispute-Tests for calling a dispule an "industrial dispute"
-Eltabli:.l11nen1 had a union affiliated to a Fcdtratio:1 and a non-affiliated union
-Employer entered into settlement with affiliated union-Non-affiliated union
tcot a p(l.riy to such settlement-Disputei raised by a non-affiliated un{on on the
Same point-If an i_ndustrial dispute.
C
Industrial Disputes Act, 1947 (14 of 1947) S. IS-Applicability of.
The appe.llant company had its establishments in a number of/ States in the
.country. In its establishment at Kanpur there wer'e two unions, One of which,
the Shramik Sangh; was a-ffiliated to the Fr..deral Union comprising of some
of the trade unions in the various establishments. while the other, the Karama·
chari lTnior:, was not.
A demand relating to revision of dearness allowance
D
among others, was raised by -both the Unions at Kanpur. The Shramik Sangh
and the appel1ant entered into a settlement. Karamchari Union which was not
a party to the settlement, made an application to the State Government to
constitute a concililartion board for reference of the dispute.
"('he Board was
constituted.
In the meantime, how'cver, to bring the settlement within the
purview of the U.P. Industrial Disputes Act the Shramik Sangh applied for the
constitution of a conciliation board.
A conciliation board was constituted ac.d
E
the memorandum of settlement arrived at between th'e parties was registere~
even though the dispute on the same point raised by the Karamchari Union
was pending before th'e Conciliation Boa.rd all the while.
The dispute raised
by the Karamchari Union was, therefor6, referred to a Tribunal under s 4K
of th< Act.
The Tribunal rejected the appellant's co1,1tention that it had no jurisdiction
ir
10 adjudicate on th'e dispute.
On appeal to this Court it was contended that it was implicit in the various
provisions of the U.P. Act that a settlement arrived at before a Conciliation Board
by a Union of the majority of workmen was binding on all the workmen ~r.d
that in the absence of a provision like s. 18 of the Industrial Disputes Act, 1947
it 1vas not pe1missible for the Karamchari Union to contend that the, settlement
·would bind ooly the members- of the Shramik Sangh and in arw event reference
G
"(lf the dispute to a Tribunal was without jurisdiction.
·
Dismissing the appeal,
HELD: l. The State Government rightly took the view that the controversy
raised hy the Karamchari Union was an industrial dispute. [922 GwH]
2. A realling of the relevant provisions of the U.P. Industrial Disputes Act,
H
1947, clearly shows that there is nothing in the Act to require that the di9pute
2-119SCI/79
A
912
S1JPREME COURT REPORTS
[1979] 2 S.C.R.
or difference should be raised by all the workmen of the industry, or by
everyone of them, or even by a majority of them. It is enough if the controversy is between the empl6y'cr on the orie side and workmen· on the other. There
is also nothing in the Act to require that the workmen raising the controversy
shculd form a majority of the employees, the reason being that wh~re it is
found that the controversy affects, or will affect, the interests of workmen as a
clas~, the law envisages that, in the interest of industr'ial peace, it should be
exc,rnined and decided in one of the modes provided by it. [917 D-F]
3. An individual dispute cannot, however, be said to be an industrial dispute
•
unless the other workmen associate themselves with it.
No bard and fas-t rule
· t-1
can be laid down to decide when and by how many workmen an industrial
dispute could be raised within the meaning of the Act, or whether a minority
union or 'even an unrecognised union, could raise an industrial dispute. It is
C
enough if there is a potential cause of disharmony which is li~ely to endanger
industrial peace, and a substantial number of workmen raise a dispute about it,
for then it is permissible to view it as an indus

## Text

.
4,
I
..
~
~
•
•
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\
INDIAN OXYGEN LTD.
v:
THE WORKMEN AS REPRESENTED BY INDIAN
OXYGEN KARAMCHARI UNION
Januar;y 9, 1979
911
A
[P. N. SHINGHAL AND P. S. KAILASAM, JJ.]
B
U.P. lndu51ria/ Disputes Act, 1947 (28 of 1947) Ss. 2(/), J(d), 4K, 6B,
61, 1(ii)-lu<lustrial dispute-Tests for calling a dispule an "industrial dispute"
-Eltabli:.l11nen1 had a union affiliated to a Fcdtratio:1 and a non-affiliated union
-Employer entered into settlement with affiliated union-Non-affiliated union
tcot a p(l.riy to such settlement-Disputei raised by a non-affiliated un{on on the
Same point-If an i_ndustrial dispute.
C
Industrial Disputes Act, 1947 (14 of 1947) S. IS-Applicability of.
The appe.llant company had its establishments in a number of/ States in the
.country. In its establishment at Kanpur there wer'e two unions, One of which,
the Shramik Sangh; was a-ffiliated to the Fr..deral Union comprising of some
of the trade unions in the various establishments. while the other, the Karama·
chari lTnior:, was not.
A demand relating to revision of dearness allowance
D
among others, was raised by -both the Unions at Kanpur. The Shramik Sangh
and the appel1ant entered into a settlement. Karamchari Union which was not
a party to the settlement, made an application to the State Government to
constitute a concililartion board for reference of the dispute.
"('he Board was
constituted.
In the meantime, how'cver, to bring the settlement within the
purview of the U.P. Industrial Disputes Act the Shramik Sangh applied for the
constitution of a conciliation board.
A conciliation board was constituted ac.d
E
the memorandum of settlement arrived at between th'e parties was registere~
even though the dispute on the same point raised by the Karamchari Union
was pending before th'e Conciliation Boa.rd all the while.
The dispute raised
by the Karamchari Union was, therefor6, referred to a Tribunal under s 4K
of th< Act.
The Tribunal rejected the appellant's co1,1tention that it had no jurisdiction
ir
10 adjudicate on th'e dispute.
On appeal to this Court it was contended that it was implicit in the various
provisions of the U.P. Act that a settlement arrived at before a Conciliation Board
by a Union of the majority of workmen was binding on all the workmen ~r.d
that in the absence of a provision like s. 18 of the Industrial Disputes Act, 1947
it 1vas not pe1missible for the Karamchari Union to contend that the, settlement
·would bind ooly the members- of the Shramik Sangh and in arw event reference
G
"(lf the dispute to a Tribunal was without jurisdiction.
·
Dismissing the appeal,
HELD: l. The State Government rightly took the view that the controversy
raised hy the Karamchari Union was an industrial dispute. [922 GwH]
2. A realling of the relevant provisions of the U.P. Industrial Disputes Act,
H
1947, clearly shows that there is nothing in the Act to require that the di9pute
2-119SCI/79
A
912
S1JPREME COURT REPORTS
[1979] 2 S.C.R.
or difference should be raised by all the workmen of the industry, or by
everyone of them, or even by a majority of them. It is enough if the controversy is between the empl6y'cr on the orie side and workmen· on the other. There
is also nothing in the Act to require that the workmen raising the controversy
shculd form a majority of the employees, the reason being that wh~re it is
found that the controversy affects, or will affect, the interests of workmen as a
clas~, the law envisages that, in the interest of industr'ial peace, it should be
exc,rnined and decided in one of the modes provided by it. [917 D-F]
3. An individual dispute cannot, however, be said to be an industrial dispute
•
unless the other workmen associate themselves with it.
No bard and fas-t rule
· t-1
can be laid down to decide when and by how many workmen an industrial
dispute could be raised within the meaning of the Act, or whether a minority
union or 'even an unrecognised union, could raise an industrial dispute. It is
C
enough if there is a potential cause of disharmony which is li~ely to endanger
industrial peace, and a substantial number of workmen raise a dispute about it,
for then it is permissible to view it as an industrial dispute within the meaning
of clause (1) of s. 2 of the Act, and to refer it for adjudication to a tribunad.
[917 f·HJ
4. The settlement arrived at with the1 Federal Union did not bind the
D
;Karamchari Union as it was not a party to it and was not affiliated 'to the
Federal Union. Section 18 of the Central Act provides that a settlement arrived
at by agfeement between the pa.rties oth'erwise than in the course of conciliation
proceedings Ehall be binding on the parties Jo the agrcen1e111. [918 E]
5. Moreover, the s'ettlement arrived at with the Shramik Sangh was under
the provisions of the U.P. Act arid, therefore, s. 18 of the Central Act had no
E
arpl.icaticn. There is no provision similar 10 it in the U.P. Act. [918 G]
F
G
H
6. There was no occasion for invoking s. 7 of the U.P. Act.
That Bection
iS ma.inly intended to serv'e the purposes contemplated bys. 3 of the Act, namely,
securing the rublic safety or convenience or the maintenance of public order or
supplies and services essential to the' life of th'e community or for maintaining
employment etc.
It cannot therefore be said that the settlerllent arrived at by
the Sa·ngh became binding on all workmen including the Karamchari Union
which W<hS not a party to it nor is there any other provis.ion in the Act or the
Rules making the settlement binding on the Karamchari Union.
Nor again
can it be said that s. 3(d) of the U.P. Act justifies the argument that merely
becaus'e a union, consisting of a ·majority of workers, can represent all the
workmen, the settlement arrived at before a conciliation board would bind those
\vho are net parties to it. [919 B, C, F-GJ
7. In the abse".Jce of any prohibitory provision in the Act it cannot be said
that the State Government had no jurisdiction to make a general reference under
s. 4K of the U.P. Act merely because the settlement was made by a majority
union and wa.s binding on the Shramik Sangh, The Tribunal has found it ~s a
fact that the Karamchari Union represented a substantial number of the workmen of the company at Kanpur, and there is no reason why they should be
debarred from raising a dispute for the benefit of all the workmen as a class.
It is well recognised, that "collective bargaining" can take place between the
emploYer and a bona fide labour unio~ and there is nothing on the record to
show that the Karamchari Union was not a bona fide unio.n. [920 A.CJ
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INDIAN OXYGEN LTD. V. WORKMEN (Shinghal, !.)
913
In the instant case the Shramik Sangh entered into the settlement in collu·
A
sioo with the company and th'e ·Conciliation Board finalised the settlement even
though the Karamchari Union's dispute was still pending. No effort was made
to make it a party to the proceedings. · Although, to begin with, a both the
Shramik Sangh and the Karamchari Union were opposed to the settlement
'earlier arrived at by the Federal Union the Shramik Sangh changed its otand
and endorsed the settlement of the Federal Union when it was placed on the
notice board. The Tribunal also found as a fact that the settlement was not
B
even put on th'e notice board of the company. In these circumstances if thrState Government had decided to make a reference of the dispute to the Tribuna1
it could not be said that it did not apply its mind to the controversy or com~
milted an illegality in doing so.
[920 H-921 CJ
8. Ev'en c:\bsuming that the earlier settlements wefe in the nature of a package
C
deal arrived at between the company and the Federal Union it cannot be said
that there Was any legal bar to the reference of the dispute r'egarding one particular item of the package deal for adjudication by the tribuna.l so as to vitiate
t're reference. The company brought this aspect of the matter specifically to the
notice of the State Government.
The point does not, however, relate to the
jurisdiction or the maintainability of the reference under s. 4K for it is essen·
tially a matter for the Tribunal's examination with due regard to the evidence
before it. [921-F-G]
D
Herbertsons Ltd. v. Workmen of Herbertsons Ltd. & Ors. [1977] 2 SCR 15
and New Standard Engg. Co. Ltd. v. M. L. Abhyankar & Ors., [1978] 1 L.L.J.
487; held inltpplicable.
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2335
of
1978.
E
Appeal by Special Leave from the Judgment and Order dated
14-7-78 of the Industrial Tribunal U.P. in Adjudication Case
No. 15/77 .
F. S. Nariman, 0. C. Mathur and D. N. Misra for the Appellant.
M. K. Ramamurthl, litendra Sharma and lanardan Sharma for the
Respondent.
The Judgment of the Court was delivered by
F
SmNGIIAL J.-This appeal by special leave is directed against the
G
order of Industrial Tribunal (Ill) U.P. at Kanpur dated July 14.
1978, deciding the following two preliminary issues which were raise.i
by the Indian Oxygen Ltd. (hereinafter referred to as the Company)
against the Company-
"(1) Whether present dispute is not an industrial dis11
pute in the light of the objections raised by the employers in paragraph (1) of their written Statement?
A
B
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E
F
G
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914
SUPREME COURT REPORTS
[1979] 2 s.c.R.
( 2) Whether the present Order of Reference is
bad in
law in the light of the objections raised by the employers in paragraph (1) of their Written Statement?"
The Company employed some 5400 workmen in its establishment
in West Bengal, Bihar, U.P., Assam, Punjab, Delhi,
Maharashtra,
Gujarat, Tamilnadu, Andhra Pradesh, Karnataka and Kerala. Then'
were several recognised trade unions of the workmen. The All-India
Federation of Indian Oxygen Employees Union (hereinafter referred
to as the Federal Union) was the recognised federation of some of
the trade unions from 1973 onwards.
The Indian Oxygen Shramik
Sangh (hereinafter referred to as the Shramik Sangh), which represented some of the workmen at Kanpur, was affiliated to the Federal
Union.
There was another union known as the Indian Oxygen Karamchari Union (hereinafter referred to as the Karamchari Union)
which was registered much earlier but its constitution was revised because of the merger of two other unions in it and was approved by
the R~gistrar of Trade Unions on May 10, 1978. It was not
a
member of the Federal Union.
The Federal Union raised a charter of demands in February 1973
of all India nature and a settlement was arrived at on June 22, 1973,
according to which the demand for revision of pay scales was to be
taken .up for discussion at a mutually convenient, date.
A similar
settlement was made with the Shramik Sangh on November 22, 1973.
It was followed by negotiations and an order was made for the constitution of a Conciliation Board under section 3(d) of the U.P. Industrial Disputes Act, 1947 (hereinafter referred to as the U.P. Act) .
A memorandum of settlement was drawn up on April 30, 1974 between the Company and the Shramik Sangh.
It was agreed, inter
alia, that the question of revision of the dearness allowance of the
Kanpur unit employees would be negotiated by the Company with the
Federal Unit and/or the Union on or before April 1, 1975.
1n the meantime, the Karamchari Union made on application on
January 23, 1975, for the constitution of a Conciliation Board under
section 3(d) of the U.P. Act and the Board was constituted by an
order dated January 30, 1975.
The Company raised objections to
the constitution of the Board on February 24, 1975, but the proceedings were commenced by the Board on February 26, 1975, and March
19, 1975 was fixed for appearance.
The Company however proceed-
'
cd with its efforts for a settlement with the Federal Union,
and entered into a ·settlement with.it on June 30. 1975. In order to bring
it under the purview of the U.P. Act, the Shramik Sangh applied on
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INDIAN OXYGEN LTD. v. WORKMEN (Shinghal, !.)
915
July 18, 1975, for the constitution· of a Conciliation Board under that
Act and a Conciliation Board was constituted on July 29, 1975.
A
memorandum of settlement about the dearness allowance was drawn
up with the Shramik Sangh on Angust 27, 1975; in accordance with
rnle SA of the U.P. Industrial Disputes Rules, 1957, jn Form IA,
even though the dispute regarding the variable dearness allowance,
which had been raised by the Karamchari Union earlier, was pending
all the while.
The settlement with the Shramik Sangh made a specific reference to the all-India Federation settlement which had been
made ?n June 30, 1975.
That settlement with the Federal Union
was in fact annexed to the settlement with the Shramik Sangh and
was treated as a settlement under the U .P. Act.
The dispute regarding the variable dearness allowance which had
been raised by the Karamchari Sangh by its appl.ication dated January 23, 1975 for the constitution of a Conciliation Board, did not
however bear fruit.
Moreover the settlement which had been reach-
·A
B
c
ed between the Company and the Federal Union was opposed by the
Shramik Sangh and the Karamchari Sangh.
The Conciliation Officer . D
· did not therefore pass an order for the registration of the aforesaid
settlement.
The Shramik Sangh, which had claimed dearness allowance according to the Kanpur cost of living index, however changed
its stand and, as has been stated,, it filed a memorandum of the settlement on August 27, 1975.
These facts are not in dispute before
us.
It was in these circumstances that the State Government made an
order on May 23, 1977, referring the dispute between the Company
and the Karamchari Sangh for adjudication under section· 4K of the
E
U .P. Act. The precise matter of dispute was the question whether the
dearness allowance payable by the Company to its workmen should
be revised and linked with ilie consumer price inde.x for the industrial workers at Kanpur computed by the Labour ;Bureau at Simla
F
and, if so, from what date and with what other details.
The Company filed a written statement in which it raised preliminary objections to the maintainability of the reference.
That gave rise
to the two issues mentioned above and as they have been found
against the Company by the impugned order of the Tribunal, it has
come up in appeal to this Court.
It has been argued by Mr. Nariman, learned counsel for
the
Company, that it is implicit in the various provisions of the U.P. Act
,.
G
that a settlement arrived at before a Conciliation Board, by a union
H
of a majority of the workmen, is binding on all the workmen.
Refer·
enoe in this connection has been made to the Preamble. and sections
A
916
SUPREME COURT REPORTS
(1979] 2 S.C.R,
2(t), 3(d), 6B, 6-1, ?(ii) of the U.P. Act, rules SA and 40 and
Forms lA and !I! of the U.P. Industrial Disputes Rules, and to
clauses (4) and (8) of the order dated December .3, 1957 made
under section 3(d) of the U.P. Act. It has further been argued that
the power to enforce a settlement under section 7 of the U.P. Act
[B
shows that the settlement is meant to be binding on all the workmen.
It has also been argued that once a valid settlement is made, it is not
permissible to refer a dispute (covered by it) for adjudication.
An
attempt has been made to support that contention with reference to
some decisions.
Learned counsel has gone to the extent of arguing
that as there is no provision in the U.P. Act similar to sub-sections
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[F
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(1) and (3) of section 18 of the Industrial Disputes Act, 1947,
(hereinafter referred to as the Central Act), it is not permissible for
the Karamchari Union to contend that the settlement which had been
made with the Shramik Sangh will bind only the workmen who were
members of that Sangh.
In the alternative, it has been argued that
the State Government did not have the jurisdiction to make a valid
reference under section 4K of the U.P. Act as the demand for variable dearness allowance had been settled through the Shramik Sangh
in respect of a majority of the workmen of the Kanpur unit and was
binding on the members of that Union. Then it has been argued
that the settlement which had been made with the Federal Union on
June 30, 1975 was by itself and independently of the U.P. Settlement
(with the Shramik Sangh), a settlement under section 18(1) of the
Central Act and was binding on the members of the Shramik Sangh
as it was affiliated to the Federal T.Jnion and for that reason also it
was not permissible to make a reference for adjudication in respect
of all the workmen including those who belonged to the
Shramik
Sangh. It has further been argued that the settlement of June 30,
1975 with the Federal Uniol) would have been operative even without
the Shramik Sangh settlement and section 18 ( 1) of the Central Act
would be applicable to it as it was not a setilement during the course
of conciliation proceedings and was binding on the Federal Union
under section 36(1)(a) and (b) of the Centra~ Act and it was not
permissible to make a general reference covering even the workmen
belonging to a union affiliated to the Federal Union. It has been
urged that the reference should have been restricted to those workmen
who were not governed by the settlement of June 30, 1975 or that
settlement should also have been referred to the Tribunal if it was felt by
the State Government that it was not valid or fair.
Lastly, it has
been argued that the settlements of June 30, 1975 and August 27,
1975 were in the nature of package deals arising out of collective! and
mutual bargaining and a reference refating to one term of the deals
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INDIAN OXYGEN LTD. v. WORKMEN (Shinghal, l.)
917
was invalid.
Reference for this proposition has been made to Herbertsons Limited v. Workmen of Herbertsons Limited and others(')
and New Standard Engg. Co. Ltd. v. M. L. Abhayankar and others(').
Thus the question for consideration before us is whether the State .
Government had the authority or jurisdiction to make the order dated
May 23, 1977, under section 4K of the U.P. Act referring the dispute
regarding variable dearness allowance for adjudication to the Tribunal .
The two issues before the Tribunal related to that basic question and
it will be sufficient for us to examine it in the facts and circumstances of
this case and the law bearing on it.
Section 4K of the U.P. Act provides that where the State Government is of opinion that any industrial dispute exists or is apprehended,
it may refer the dispute or any matter appearing to be comiected with,
or relevant to the dispute to a Tribunal. Clause ( 1) of section 2 of
that Act defines an industrial dispute to mean, inter alia, any
dispute or difference between employers and workmen which is connected with the terms of their employment.
The expression "workmen"
bas been defined in clause (z) of section 2 to mean, speaking generally,
"any person" employed in any industry in the capacity mentioned
therein.
There is nothing in the Act to' require that the dispute or
difference should be raised by all the workmen of the industry, or by
every one of them, or even by a majority of them. It is enough if the
controversy is between the employer on the one side and workmen on
the other.
So also, there is nothing in the Act to require that the
workmen raising the controversy should form a majority of the employees.
The reason appears to be that where it is found that the
controversy affects, or will affect, the interest of workmen as a class,
the law envisages that, in the interest of industrial peace, it should be
examined and decided in one of the modes provided by it.
An individual dispute cannot however be said to be an industrial dispute unless of course the other workmen associate themselves with it.
No
hard and fast rule can possibly be laid down in such circumstances to
decide when and by how many workmen an industrial dispute can be
raised within the meaning of the Act, or whether a minority union,
A
B
c
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F
or even an unrecognised union, can raise an industrial dispute. It is
G
enough if there is a potential cause of disharmony which is likely to
endanger industrial peace, and a substantial number of workmen raise
a dispute about it, for then it is permissible to take the view that it
is an industrial dispute within the meaning of clause (1) of section 2
of the U.P. Act, and to refer it for ·adjudication
to a
Tribunal.
Reference in this connection may be made to the Tr\bunal's finding
H
(!) (1977] 2 S.C.R. 15
(2) (1978] l L.L. J. 487.
A
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c
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918
SUPREME COURT REPORTS
[1979] 2 s.c.R.
of fact that although the Karamchari Union was not a
recognised
union and it was not a
member of the Federal Union, it had a
"substantial number of workmen of the concern as its
members."
We have no doubt therefore that the State Government rightly took
the view that the controversy raised by the Karamchari Union was
an industrial dispute,
It cannot be gainsaid that the dispute in the present case
was
raised by the Karamchari Union and they made an application for the
constitution of a Conciliation Board as far back as January 23, 1975,
and the Board was constituted on January 30, 1975. It will be recalled that the Company filed its objections
before the Board on
February 24, 1975, and the Board fixed March 19, 1975 for their
consideration. It is not in controversy before us that the conciliation
·effort met with failure, and the point for consideration is whether the
State Government lost its power to make a reference under section 4K
of the U.P. Act merely because of the settlement dated June 30, 1975
between the Company and the Federal Union under the Central Act
and the settlement dated August 27, 1975 between the Company and
the Shramik Sangh in the conciliation proceedings under the U.P. Act.
Section 18 of the Central Act deals with the binding effect
of
settlements and awards.
Sub-section ( 1) of that seCtion provides
that a &ettlement arrived at by agreement between the employer and
E
workmen otherwise than in
the course of conciliation
proceeding
shall be binding on the parties to the agreement.
The settlement
dated June 30, 1975, with the Federal Union did not therefore bind
the Karamchari Union as it was not a party to it and was not affiliated
to the Federal Union.
F
G
It is true that the Shramik Sangh made an application for
the
constitution of a Conciliation Board on July 18, 1975, and a Board
was constituted on July 29, 1975.
That in fact led to a settlement
with the Shramik Sangh on August 27, 1975.
But that took place
.under the provisions of the U.P. Act and Mr. Nariman has himself
pointed out the proceedings in fact took place under rule SA of the
U.P. Industrial Disputes Rules, 1957 and the memorandum of settlement was prepared in Form 1-A.
Sub-section (3) of section 18 of·
the Central Act could not therefore be attracted to that settlement and
there is no provisi?n similar to it in the U.P. Act.
We have gone through ~ection ?(ii) of the U.P. Act and the
H
rules made thereunder, as well as the order dated December 31, 1957,
on which much reliance has been placed by Mr. Nariman.
Clause
(ii) of section 7 deals with the power of the State Government to
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•
INDIAN OXYGEN LTD. V. WORKMEN (Shinghal, J.)
919
enforce, by order, in the prescribed manner. for snch period as ·may
be specified, the whole or any part of an agreement reached in conciliation proceedings between the parties to an industrial dispute. But
the section, it appears, is mainly intended to deal with an order passed
under any other enactment, and is meant to serve the purposes contemplated in section 3, namely. for securing the public safety or conveniences or the maintenance of public order or supplies and services
essential to life of the commnnity, or for maintaining employment etc.
It has not been urged before us that there was any such occasion for
invoking section 7.
A mere reference to that section cannot therefore
sustain the argnment that the settlement dated Augnst 27,
1975,
became bindhg on all workmen including the Karamchari
Union,
which had nothing to do with it and was not even a party to it, and
that the Union was precluded from raising an industrial dispute and
the State Government was precluded from referring it for adjuqication
under section 4K of the U.P. Act. Rule SA of the U.P. Industrial
Disputes Rules and the preparation of the memorandum of settlement
in Form 1-A could not therefore justify the argnment to the contrary.
So also, a reference to Form III of the Rules which provides that a
person who contravenes or attempts to contravene, any provision of
the State Government's order shall be liable, on conviction, to fine or
to imprisonment not exceeding three years or both, is hardly of any
'avail for obvious reasons.
In fact Mr. Nariman has not found it
!possible to support his argnment about the binding nature of the
settlement dated August 27, 1975, on the basis of such a penal provision in a form appended to a set of Rules, and we need not examine ·
it any further.
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We have gone through the order which has been made under
section 3(d) of the U.P. Act, on paragraph 8 of which considerable
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reliance has been placed by Mr. Nariman. It was made on December
31, 1957, and was to remain in force for one year n_nder paragraph
15. Even otherwise, paragraph 8 merely makes provision for impleading other workmen, or concerns, or a union, in proceedings before
a Conciliation Board. It provides that it would be enough to implead
a union covering the majority of such "concern or workmen". But
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such a provision cannot justify the argum~nt that, merely because a
union consisting of a majority of workers cat\ represent all the workmen, the settlement made in the Conciliation Boar~ will bind those
who are not parties to it.
As regards the alternative argument of Mr. Nariman that as the
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settlement dated August 27, 1975, was made by a "majority union",
it was, at any rate, binding on the members of the Shramik Sangh, and
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SUPREME COURT REPORTS
[1979] 2 S.C.R.
that the State Government had no jurisdiction to make a general
reference under section 4K of the U.P. Act, it will be sufficient to say
that no such bar could possibly be raised in the absence of any prohibitory provision in the law.
As has been stated, the Tribnnal has
found it as a fact that the Karamchari Union represented a substantial
number of the workmen of the Company at Kanpur, and there is no
reason why they should be debarred from raising a dispute for· the
benefit of all the workmen as a class. It is
well recognised, and
cannot be disputed, that "collective bargaining" can take place between the employer and a bona fide labour union, and there is nothing
on the record to show that the Karamchari Union was not a bona
fide union.
In fact it may well be said that as the Shramik Sangh was
an affiliated unit of the Federal Union, it was not permissible for it
to make the application dated July 18, 1975, for the constitution of
a Conciliation Board to resolve the dispute and to
enter into the
memorandum of settlement dated August 27, 1975.
The Tribnnal
has examined the file (No.391 of 1975) of the Conciliation Board
case relating to the industrial dispute raised by the Karamchari Union
on January 23, 1975, about the payment of the dearness allowance to
the workers of the Kanpur unit according to the cost of living index
for industrial workers at Kanpur, and the file of the other conciliatiDn
case relating to the similar dispute raised by the Shramik Sangh on
July 18, 1975, and has stated the factual position as follows-
"It is clear from the latter file that the management of
the Kanpur unit of the Company had applied on 29-7-75 to
the Regional Conciliation Officer for the registration of the
settlement reached between the company and the All India
Federation of Indian Oxygen Employees Unions on 30-6-75
but on. account of the pendency of C.B. Case No.391/75
some information was asked to be furnished by the company
which the company did not furnish.
On the other band,
the representatives of the Shramik Sangh and the Kanpur unit
of the company appeared before the Regional Conciliation
Officer, Kanpur on 27-8-75 and submitted ·a brief memorandum of settlement making applicable to the Kanpur unit the
settlement which had been reached between the company
and the Federation" on 30-6-75."
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It will thus appear that the Shramik Sangh entered into the settleI< '
ment dated August 27, 1975 in collusion with the Company and that
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the Conciliation Board allowed the memorandum of settlement to be
filed and firialised even though the Karamchari Union's dispnte dated
January 23, 1975 was pending and no effort was made to make it a
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INDIAN OXYGEN LTD. v. WORKMEN (Shinghal, J.)
921
party to the proceedings which were taken at the instance of the
Shrarnik Sangh.
It is. important to remember in this connection that
although the settlement which had been made by the Federal Union
on June 30, 1975 was opposed by both the Unions when it was placed
on the notice board of the Kanpur unit, the Shrarnik Sangh changed
its stand and filed a memorandum of settlement on August 27, 19i5
endorsing the settlement which had 'been made with the Federal Union
on June 30, 1975. The Tribunal has also stated it as a fact that the
settlement dated August 27, 1975 was not even put on the notice
board
of
the Company.
If, therefore,
the State
Government decided to make a reference of the dispute to the Tribunal in
these circumstances, it cannot be said that it did not apply its mind
to the controversy or committed an illegality in doing so.
It has, to be appreciated that it would not have been practicable
for the State Government.to exclude the workmen who were members ·
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of the Shramik Sangh (at Kanpur) from the scope of the reference
under section 4K of the U.P. Act and. to confine the dispute to the
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rest of the workmen, for that might have given rise to one pay structure for one section of the workmen (represented by the Karamchari
Union) and another for the other workmen (represented by the
Shrarnik Sangh). At any rate, this was not a matter at the threshold,
and is essentially fot the Tribunal to examine on the merits of the
controversy.
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We have also considered the other argumeIJ.t of Mr. Nariman that
as the settlements dated June 30, 1975 and August 27, 1975 were in
the nature of package deals, and arose out of collective bargaining, it
was not permissible for the State Government to make a reference
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to the Tribunal about one item of that deal, namely, that relating to
the variable dearness allowance. Our attention in this connection has
been invited to the statement of the Company's Personnel Manager
V. John in which reference has been made to the nature and the contents of the package.
The point does not however relate to the
jurisdiction or the maintainability of the reference under section 4K
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of the U.P. Act, for it is essentially a matter for the Tribunal's examination ·with due regard to the evidence before it. It appears from
the record that the Company brought this aspect of the matter specifically to the notice of the State Government in its representation dated
April 20, 1976, and it cannot be said that it was not before the Government when it made the impugned order of reference dated May
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23, 1977. At any rate, it cannot be said that there is any legal bar
to 'the reference of the dispute regarding one particular item of a ·
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SUPREME COURT REPORTS
[1979) 2 S.C.R.
package deal for adjudication by the Tribu11al so as to vitiate the
reference at the threshold.
We have gone through the two cases which have been cited by
Mr. Nariman in this connection.
Herbertsons Ltd. (supra)
was a
case where all the workers of the Company had accepted the settlement and received the arrears and the emoluments according to it.
In fact it was in the facts and circumstances of that case that this
Court took the view that it was not possible to scan the settlement in
bits and pieces and hold some parts good and acceptable and others
bad.
Even so, \his Court expressed the view that if the objectionable
part was shown to outweigh all the other advantages, the Court would
be slow to hold the settlement unfair and unjust.
llerbertsons is
therefore no authority for the argument that a part of a package deal
cannot be the subject matter of a reference for adjudication by the
Tribunal.
New Standard Engineering Co. Ltd (supra) was also a
different case, for there the justness and fairness of the settlement was
examined with reference to t,he situation as it stood on the date on
which it was arrived at, and it cannot also avail the argument of Mr.
Narimari about the illegality of a reference merely because it relates
to a part of a· package deal.
That is essentially a matter for the
Tribunal to examine and adjudge on the merits of the reference.
Lastly, Mr. Nariman has argued that as the members of the Karamchari Union accepted the benefits . of the settlement which had been
made with the Federal Union on June 30, 1975, they were precluded
from obtaining the order of reference dated
May 23, 1977. The
argument is fu(ile because the Tribunal has specifically stated in its
order under appeal that even the settlement dated August 27, 1975
was not put on the Company's notice board and the emoluments of
the workmen were increased from July 1975. It has further been
stated that the members of the Karamchari Union "took the increase
but under protest vide the Union's letter dated 28-7-75 which
is
annexure D to the Workmen's written statement."
There is thus no force in the argument which have been advanced
for the purpose of showing that the settlements dated June 30, 1975
and August 27, 1975 debarred the State Government from making the
impugned order of reference dated May 23, 1977 under section 4K
of the U.P. Act or that the dispute was not an industrial dispute and
the order was otherwise bad in law.
The appeal fails and is dismissed
with costs.
N.V.K.
Appeal dismisJed.
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