# COOPER ENGINEERING LIMITED v. D. M. ANEY AND OTHERS

- **Citation:** [1974] 1 S.C.R. 240
- **Court:** Supreme Court of India
- **Decided:** 1973-05-04
- **Bench:** Grover, C. A. Vaid!Alingam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/cooper-engineering-limited-v-d-m-aney-and-others-5961
- **Pages:** 7

## Headnote

lndustria/ Disputes Act. 1947-Reference to industrial tribunal of industrial
ot'ispute relating to dt!tlrnes.s allowance etc.-Co1npetency oj reference in view
oJ earlier settlement.s between employer and workmen-State Government's 'view
that earlier settlements related 10 interim relief awaiting "final recommendations
oJ iva~e Board was a possible view, and therefore reference lvas comp"etent.
A
B
On July 6, 1963 there was a settlement between the appellant company and
two unions of its workmen regarding dearness .allowance.
On April 1, 1965
C
there was another settlement in respect of certain demands but the workmen
reserved their right to raise d~mands relating to wage scales, adjustmeilt and
dearness allowance.
On July 23, 1966 the Central Government accepted the
recommendations made by the Wage Board set up by it with effect from April
1, 1966. On November 1, 1966 the appellant and one of the unions of workmen (2nd !'espondent) entered into a settlement relating to payment of interim
relief as laid down by the Wage Board. The Union agreed not to raise any
demand for dearness aIIowance till the Wage Board made its final recommendaD
tions.
Thi5 positiori was reiterated in another settlement between the 2nd
respondent and the appellant on l\Iay 13, 1967. On ~lay 16, 1967 the third
respondent, another union of the appellant's workmen made certain demands
regarding dearness ailowance.
By notices given to the appellant company it
terminated the earlier settlements of 1963, 1965, 1966 and 1967 between the
appellant and the 2nd respondent.
l\1ean\\:hile on December 23, 1968/January
3. 1969, the Wage Board made its final recommendations. Since the appellant
did not accept the demands of the third respondent and conciliation proceedings
E
also failed the State Government on January 25, 1969 referred the dispute
to the Industrial Tribunal. The appellant challenged the validity
of
the
reference in a writ petition under Art. 226 of the Constitution. The High
Court dismissed the petition .. In appeal by special lea":e to this Court.
IJELD : The State GovernmeOt"s view that the settlements related ont'y to
interim relief \vas a possible one in the circumstances of this case.
Hence it
could not be said that the reference made by the State Government was
F
incompetent. [244 F-G]
None of the settlements entered into by the appeilant with its workmen
gives any indication that the said settlements were made in view
of the
statement made by the l\.1inister for Labour, State of l\.faharashtra.
On the
other hand every one of the settlements was preceded by a demand made by
the union concerned. It \Vas really in the interest of industrial peace
that
the appellant appeared to have entered into those settlements.
Therefore the
decisions of this Court in Jndo-AfRhan Ageniies and Century Spinning & ManuG
facturing Company Ltd. & A nr. did not apply to the case. [245G]
Union of India & Ors. v. Al/s Indo-Afgihan Agencies Ltd. [1968] 2 S.C.R.
366 and Century Spinninf! & lvfanufacturi112 Conipany Ltd. and Anr. v. The
Ulhasnagar Municipal Council and Anr., (19701 3 S.C.R. 854 held inapplic1
able~he question whether there was discrimination between the appellant and
another company in the matter of referring. the industrial dhi~pute to the
1
rdndustrial Tribunal was not_ raised before the High Court and t 1s Court cou
not
go into the question.
[246C]
l --· '" .. _,,, ~ -· ·~ ,.,
ll
COOPER ENGINEERING LTD. v. D. M. ANEY (Vaidialingam, /,)
241
A
[ln respect of the question \vhether the third respondent had the. ri~ht totern1inate the earlier settlement and whether it represented the maionty of
wo;krnen in the company, the Court observed that these questions must be
decided by the Tribunal].
OVIL APPELLATE JURISDICTION :
Civil Appeal
No.
554 of
1970.
B
Appeal by special leave from the judgment and or<,ler dated Jnly
31, and August 1, 1969 of the Bombay High Court in s.c. Appli·
cation No. 799 of 1969.
!. N. Shroff, for the appellant.
J. L. Hathi, K. L. Hathi

## Text

COOPER ENGINEERING LIMITED
v.
D. M. ANEY AND OTHERS
May 4, 1973
[A, N, GROVER AND C. A. VAID!ALINGAM, JJ.]
lndustria/ Disputes Act. 1947-Reference to industrial tribunal of industrial
ot'ispute relating to dt!tlrnes.s allowance etc.-Co1npetency oj reference in view
oJ earlier settlement.s between employer and workmen-State Government's 'view
that earlier settlements related 10 interim relief awaiting "final recommendations
oJ iva~e Board was a possible view, and therefore reference lvas comp"etent.
A
B
On July 6, 1963 there was a settlement between the appellant company and
two unions of its workmen regarding dearness .allowance.
On April 1, 1965
C
there was another settlement in respect of certain demands but the workmen
reserved their right to raise d~mands relating to wage scales, adjustmeilt and
dearness allowance.
On July 23, 1966 the Central Government accepted the
recommendations made by the Wage Board set up by it with effect from April
1, 1966. On November 1, 1966 the appellant and one of the unions of workmen (2nd !'espondent) entered into a settlement relating to payment of interim
relief as laid down by the Wage Board. The Union agreed not to raise any
demand for dearness aIIowance till the Wage Board made its final recommendaD
tions.
Thi5 positiori was reiterated in another settlement between the 2nd
respondent and the appellant on l\Iay 13, 1967. On ~lay 16, 1967 the third
respondent, another union of the appellant's workmen made certain demands
regarding dearness ailowance.
By notices given to the appellant company it
terminated the earlier settlements of 1963, 1965, 1966 and 1967 between the
appellant and the 2nd respondent.
l\1ean\\:hile on December 23, 1968/January
3. 1969, the Wage Board made its final recommendations. Since the appellant
did not accept the demands of the third respondent and conciliation proceedings
E
also failed the State Government on January 25, 1969 referred the dispute
to the Industrial Tribunal. The appellant challenged the validity
of
the
reference in a writ petition under Art. 226 of the Constitution. The High
Court dismissed the petition .. In appeal by special lea":e to this Court.
IJELD : The State GovernmeOt"s view that the settlements related ont'y to
interim relief \vas a possible one in the circumstances of this case.
Hence it
could not be said that the reference made by the State Government was
F
incompetent. [244 F-G]
None of the settlements entered into by the appeilant with its workmen
gives any indication that the said settlements were made in view
of the
statement made by the l\.1inister for Labour, State of l\.faharashtra.
On the
other hand every one of the settlements was preceded by a demand made by
the union concerned. It \Vas really in the interest of industrial peace
that
the appellant appeared to have entered into those settlements.
Therefore the
decisions of this Court in Jndo-AfRhan Ageniies and Century Spinning & ManuG
facturing Company Ltd. & A nr. did not apply to the case. [245G]
Union of India & Ors. v. Al/s Indo-Afgihan Agencies Ltd. [1968] 2 S.C.R.
366 and Century Spinninf! & lvfanufacturi112 Conipany Ltd. and Anr. v. The
Ulhasnagar Municipal Council and Anr., (19701 3 S.C.R. 854 held inapplic1
able~he question whether there was discrimination between the appellant and
another company in the matter of referring. the industrial dhi~pute to the
1
rdndustrial Tribunal was not_ raised before the High Court and t 1s Court cou
not
go into the question.
[246C]
l --· '" .. _,,, ~ -· ·~ ,.,
ll
COOPER ENGINEERING LTD. v. D. M. ANEY (Vaidialingam, /,)
241
A
[ln respect of the question \vhether the third respondent had the. ri~ht totern1inate the earlier settlement and whether it represented the maionty of
wo;krnen in the company, the Court observed that these questions must be
decided by the Tribunal].
OVIL APPELLATE JURISDICTION :
Civil Appeal
No.
554 of
1970.
B
Appeal by special leave from the judgment and or<,ler dated Jnly
31, and August 1, 1969 of the Bombay High Court in s.c. Appli·
cation No. 799 of 1969.
!. N. Shroff, for the appellant.
J. L. Hathi, K. L. Hathi and P. C. Kapur, for respondent No. 2.
c
R. S. Kulkarni and S. C. Agarwala, for respondent No. 3.
D
E
F
G
H
M. C. Bhandare and S. P. Nayar, for respondent No. 4.
The Judgment of the Court was delivered by
VAIDIALINGAM, J.-By order dated January 25, 1969. the State of
Maharashtra referred to the Industrial Tribunal, Bombay, for adjudication three disputes between the appellant and its workmen.
The said
di,putes were registered by the Tribunal as Reference (I.T.) No. 42 of
1969.
The appellant filed in the Bombay High Court Special Civil
Application No. 799 of 1969 under Article 226 of the Constitution to
quash the order of reference.
The ·High Court by its judgment and
order dated 31st July/1st August, 1969, dismissed the Writ Petition
holding that the reference made by the State Government was valid.
The appellant has filed the above appeal, by special leave, challenging
the de.cision of the High Court.
The facts leading up to the filing of the Writ Petition may now be
stated. On July 6, 1963, there was a settlement between the appellant
and the workmen represented by the Secretaries of two unions-the
Chemical Engineering and Metal Workers Union, Poona and the Association of Engineering Workers, Poona. Under clause 1 of this settle·
ment, the appellant agreed to pay dearness allowance on the basis of
75% neutralisation of the Sholarpur Cost of Living Index computed for
a month of 26 working days in substitution of the rate of dearness allowance that was then being paid. On July 7, 1964, a charter of demands
wa> submitted by the workmen represented by the General Secretary,
Association of Engineering Workers, Poona. The demands related to
various items including wage scales and dearness allowance. On April
J. 1965, the appellant and the said Association entered into a settleme~t. From the said settlement, it is seen that though the company
conoeded certain demands, it was not agreeable to accede in respect
of the wag-es and dearness allowance, on the ground that the Poona
Working Class Consumer ·Price Index was likely to be introduced at
an early date, when a change in the wage pattern and dearness allowance
in the region will be effected. Another reason given by the appellant
'Yas. that the demand~, _as made by the union, involved heavy financial
hab1hty. _The Associalion. agreed that all demands made by it on July
7, 1964, m respect of which no settlement has been reached, will be
242
SUPREME COURT REPORTS
[ 1974 j 1 S.C.R.
treated as withdrawn' for the time being.
Liberty was reserved to the
Association to raise those demands again after the Poona Working
Class Consumer Price Index was declared. With tqis reservation, came
the demand for wage scales, adjustment and dearness allowance.
On January 23, 1965, the Association, the 2nd respondent, was recognised by the appellant μnder the code of discipline. In June 1965,
.the Poona Working Class Consumer Price Index was deC!ared. The
second respondent again raised a demand on August 3, 1965. Demand
No. 2 related to dearness allowance. The demand was that the then
existing Sholapur Working Class Consumer Cost of Living Index Number should be replaced by the Poona Working Class Consumer Cost
of Living Index Number and the linking of old and new series, its multiplier artd its rate should be jointly decided between the management and
the Association.
The Association further required that after such a
decision, the workmen should be given 100%
neutralisation of the
Poona Index.
It should be stated at this stage that on December .12, 1964, the
Central Government had set up the Central Wage Board for engineering
industries.
After the Wage Board was set up, the labour agitated for
grant of interim relief. Accordingly the Wage Board recommended to
the Government a scheme of interim relief.
The Central Government
also accepted, by its resolution dated July 23, 1966, the majority recommendations of the Wage Board regarding the grant of interim relief with
effect from April 1, 1966. The Central Government further requested
all the emplo:yers in the engineering industries to implement the rccon1mendations of the Wage Board regarding the interim relief with effect
from April l, 1966.
When the Government's acceptance of the recommendations of the
Wage Board was known, the second respondent made a demand' on
July 28, 1966, for payment of the interim relief. AfteLmutual discus·
sions, the appellant and the second respondent entereP'fnto a settlement
on November l, 1966.
The entire settlement related to the paymen!
of the interim relief, as laid down by the Wage Board. It was furthe•:
provided that the interim relief granted shall be adjustable in any rise
in Wages as a result of the final recommendations made by the Wage
Board in due course. Clauses 11 and 12 of this settlement were as
follows:-·
"11. The Union agrees to treat as withdrawn the Charter
of demands regarding wage scales and/or Dearness Allowance
made hy it under its letter dated 3rd August 1965.
12. The Union further agrees that pending the deliberations and the final recommendations of the Wage Board it will
not raise any dispute regarding wages and/or Dearness
Allov1an~e."
A
B
D
[
F
G
On August 3, 1965, the second respondent again submitted a charH
ter of demands regarding wage scales, dearness allowance and various
other matters. After negotiations, the appellant and the .second respnn·
.dent entered into a settlement on May 13, 1967. There is a reference
1'
A
B
c
D
E
F
G
H
COOPER ENGINEERING LTD. v. D. M. ANEY (Vaidialingam, J.)
243
to the settlement of November 1, 1966. Under clause (2) of the settlement. the Association withdrew all demands made under its charters of
demands dated August 3, 1965, January 22, 1966 and February 26,
1966 relating to wage scales, dearness allowance and certain other matters. The Association further agreed not to raise any demands regarding wage scales and/or dearness allowance pending the deliberations and
the final recommendations of the Wage Board in view of the settlement
dated November 1, 1966, already entered into between ·the parties.
On May 16, 1967, the third respondent, Serva Shramik Sanghatana,
through its General Secretary, made a demand that all workmen should
be r.aid dearness allowance at the rate 6 paise per day for every point
of rise over 17 points of the Poona Consumer Price Index Number with
effect from January 1; !967. On October 3, 1967, the third respondent
issue.ct two notices to the appellant-company.
By the first notice, it
terminated the settlement dated July 6, 1963, entered into between the
appellant and the Chemical Engineering and Metal Workers Union and
the second respondent. representing the workmen. The second notice
terminated the settlements dated February 4, 1965, April !. 1965 Nov·
ember I, 1966 and May 13, 1967 entered into between the appellant and
the second respondent. Both the notices stated that the previous settlements are terminated under section 19(2) read 'with rule 83 of the
Industrial Disputes Act, 194 7.
It was also mentioned that the letters of
October 3. 1967, are to be treated as two months notice.
It will be
seen that by these two notices, the settlements dated July 6.
1963,
November !, 1966 and May 13, 1967 have been terminated.
Conciliation proceedings appear to have been initiated.
The appellant in its letter to the Deputy Commissioner of Labour dated July 2,
1968. has stated that the interim relief granted by the Wage Board has
been already implemented by the appellant. It gave a further assurance
that it will implement the final recommendations of the Wage Board,
as accepted by the Central Government.
On November 30, 1968, fresh
. demands for dearness allowance were made by the third respondent.
The Wage Board made its final recommendations to the Central Govern·
ment. The exact date is not very clear, but it is given differently as
December 23, 1968 or January 3, 1969. As the appellant did not
comply with the demands of the third respondent and as conciliation
proceedings failed, the State Government referred the dispute for adjudication on January 25, 1969. Item 1 related to the dearness allowance to be paid to the monthly rated staff.
Demand No. 2 related to
the dearness allowance regarding the daily rated workmen. The third
question referred related to the dismissal of the fourteen workmen mentioned in the order and payment of dearness allowance to them.
It was this order of reference that was challenged by the appellant
before the High Court in proceedings under Article 226. We have
fairly exhaustively given the details about the vadous settlements to
give the background of the dispute between the appellant and its workmen.
The first conte!1tion of Mr. Shroff, learned counsel for the appellant, was that the thrrd respondent, which represents only a minority
of the workmen, has no right to terminate agreements dated November
l, 1966 and May 13, 1967, entered into by the Associafion, the second
244
SUPREME COURT REPORTS
[ 1974] 1 s.c.R.
respondent, repr·osenting the majority of the workmen. As these agreements were subsisting and operating and were binding on all the workmen, they can be terminated only as contemplated under section 19(7)
of th·o Industrial Disputes Act, 1947 (hereinafter to be referred to as
the Act). When the settlements were subsisting, the order passed by
the State Government referring the disputes covered by those settlements, is invalid.
On behalf of the State Government, Mr. Bhandare, learned counsel,
has stated that the question whether the third respondent represented,
on the relevant date, the majority of the workmen bound by ~he settlements, can be investigated only by the Tribunal. The State Government
had taken the view that the entire settlement relates only to the interim
refief and, therefore, the question of terminating the agreements by any
union does not arise.
The counsel further pointed out that the view
taken by the State Government regarding the nature of the settlements
was a possible view and, therefore, it had power <o refer the disputes
for adjudication under section 10(1) of the Act.
Though there has been a very elaborate consideration by the High
Court regarding the competency of the third respondent to terminate the
settlements, its ultimate decision is rested on a constrnction of lhe two
settlements dated November 1, 1966 and Maiy 13, 1967. According
to the High Cour't, it is abundantly _clear on a reading of the various
clauses in the two settlements that they related to payment of wa!les
including dearness allowance, which had the character of an lntenm
relief, as awarded by the Wage Board. It is the further view of the High
Court that when the final recommendations of the Wage Board .arc
made, the workmen were at liberty to raise demands regarding wages
and dearness allowance legally payable to them. The agreement, if at
all, was not to raise any dispute pending the final recommendations of
the Wage Board.
We have ourselves gone through the various clauses in the two settlements and we are in entire agreement with the view of the High Court.
As there has been a very elaborate discussion by the High Court and as
we entirely agree with its reasoning, we do not propose to cover the
ground over again. As we are now on the limite!I question regarding
the competency of the State Government to make the reference, it must
be held that the State Government's view that the settlements related
only to the ;nterim relief is a possible one in the circumstances of this
caseHence, we cannot say that the reference made by the State Government was incompetent.·
We express no opinion on the question regarding the right of the
third respondent to terminate the two agreements in question because
there is a controversy as to whether, at the relevant date, the third respondent represented the majority of the workmen bound by •.!J.ese agreements.
The claim of the third respondent is that it represented the
majority of such workmen. The Tribunal, when it adjudicates the dispute, will have to investigate the question when considering the points
co11ered by the settlements as well as the question whether those settlements have been properly terminated, when the reference was made by
the State Government.
A
8
c
D
E
F
G
H
A
B
c
D
E
.G
JI
COOPER ENGINEERING LTD. v. D. M. ANEY (Vaidialingam, 1.)
245
In this view, we are not referring to the relevant provisions of the
Act; nor do we deal with the decisions cited on both sides.
The.further contention that is taken by Mr. Shroff is based upon the
decisions of this Court in Union of India & Ors. v. Mis lndo·Afghan
Agencies Ltd. ( 1) and Century Spinning & Manufacturing Company
Ltd. and Anr. v. The Ulhasnagar Municipal Council and Anr. (")
According to Mr. Shroff, the Minister for Labour of Maharashtra, at a
meeting of the employers and representatives of the employees, held on
September 9, 1965, stated :
"The Government of Maharashtra would not refer disputes
on wages and dearness allowance to adjudication in the case
of engineering establishments covered by the Wage Board, if
the concerned employer agreed to implement the recommendations, interim as well as final, of the Central Wage Board,
as accepted by the GoYernment of India."
On the basis of this statement of the Minister, the appellant implemented the interim relief and also assured the authorities concerned that it
will implement tile final rcommendations of the Wage Board. As the
appellant has acted on the representations made by the Minister to its
prejmlice, the reference of the dispute for adjudication was not justified.
Mr. Shroff referred us to the letter dated September 24, 1965, written
to the conccrn~d Minister for Labour by the India'l Engineering Association (Western Region) and Engineering Association of India (Western Region) Bombay. This letter refers to the statement made by the
Minister on September 9, 1965. He also invited our attention to the
letter dated July 2, 1968, written by the appellant to the Deputy Commissioner of Labour, Poona. In that letter, the appellant had stated
that it had agreed with its workers to implement the interim relief granted by the Wage Board. The appellant gave an assurance to the Deputy Commissioner of Labour, Bombay, that it will implement the
recommendations of the Wage Board for engineering industries, as
accepted by the Central Government.
The Act gives power to the State Government to refer a dispute
for adjudication.
As to how far, by a Minister making a statement,
the Government can be relieved of its obligation under the Act, is a
debatable question. It is, however, not necessary for us to go into .this
aspect in this particular case.
None of the settlements entered mto
by the appellant with its workmen gives any indication that the said
settlements were being made in view of the statement made by the
Minister. On the other hand, we have already pointed out that evevy
one of the settlements is preceded by a demand made by the union concerned. It is really in the interest of industrial peace that the appe1lant
appears to have entered into those settlements. Therefore, the decisions relied on by Mr. Shroff do not apply in this case.
Lastly, Mr. Shroff contended that th~ State Gov~rnment declined
to make a reference in the case of the Indian Hume Pipe Co. Ltd. speeifically on the ground that the said company had implemented the inU) [1968] (2) S. C.R. 366.
(2) [1970](3)S.C.R.854.
246
SUPREME COURT REPORTS
( 1974) 1 s.C.R.
terim recommendations of the Wap Board and that it was also prepared to implement its final recommendations. But in the case of the
appellant, the State Government made the reference and as such there
has been discrimination.
It is no doubt true that in the letter dated June 8, 1968, sent by
the State Government to Indian Hume Pipe Co. Ltd., the Government
states that it is not making a reference regarding the dispute between
the said company and its workmen.
The reason for not making the
reference is also stated to be the implementation by the company of
the interim recommendations of tne Wage Board and its preparedness
to implement the final recommendations also.
We find, however, from the judgment of the High Court that this
ques•i-in of discrimination with special reference to the Indian Hume
Pipe ..:ompany Ltd. has not been argued by the appellant. The inference under such circumstances is that such a contention was not pressed
before the High Court.
Hence we decline to go into that question.
Jn the result, the appeal fails and is dismissed. There will be no
order as to costs.
As the Reference i' qf the year 1969, the Tribunal
is directed to dispose of the matter expeditiously.
G.C.
Appeal dismissed.
c