# KC.P. LID v. PRESIDING OFFICER - **Citation:** [1996] Supp. 6 S.C.R. 148 - **Court:** Supreme Court of India - **Decided:** 1996 - **Case number:** Civil Appeal No. 11944 of 1996 - **Bench:** AM. AHMAm;·a, S.B. Majmudar, B.N: KlRPAL - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/kc-p-lid-v-presiding-officer-15671 - **Pages:** 17 ## Headnote • 1 , • • , •n ·~ . ~ Labour Law: IndustlialDisputes Act, 1947: Sections 2(k) & (p), 2-A and 18(1). Settlement-Otlwwise than in conciliation proceedings-Dispute between employer compal.ly and workmen-Resulted in dismissal of certain workmen-Sole recognised and representative trade u11ion pa,1Jic,ippf~4 ,in conciliation proceedings on behalf of ail workmen including the dismissed ones who co1ttini1ed to be members of trade union-Conciliation proceediitgs ultimately f ailed-Pursua11t to which industlial dispute raised under S. 2(k)-No industlial dispute raised under S. 2-A by dismissed workmenDwing pe11de11cy of dispute before Labour Cowt, the said trade union and employer anived at settlemeni:-.Option either to accept reinstatement with co11tinuity in se1vice without back wages or accept a specified lwnpsum amount with other mo1ietmy be11efits-Some dismissed workmen did not approve settlement-But trade union entered into settlement on behalf of all dismissed workmen including the dissenting 011es-Howeve1; Labour Court declined to pass award iii tenns of settlement-Held : settlement was not ex facie, unjust or un.fai1~77ierefore, it was binding even on such dismissed workmen who did not approve the settlement-Hence, Labour Cowt should have passed an award in tenns of settlement and should not have continued the industdal dispute in relation to dismissed workmen who did not approve settlement. Settlement-Othe1wise than in conciliation proceedings-Ce1tain dispute between employer company and workmen led to go slow, stdke and lock G out-Disciplina1y action against 29 workmen for va1ious acts of misconduct resulted i.u-tll.ejr dismissal-Subsequently, settlement anived at between employer anti-trade union-Option either to accept reinstatement with continuity in se1vice without back wages or accept a specified lwnpsum amount with other nwnet01y benefits-All stdking workmen other than dismissed ones H reinstated without back wages-Held : In the circumstances of the case, the 148 KC.P. LID. v. PRESIDING OFFICER 149 tenns oj seitlemen't relating to proposed reinstatement of dismissed workmen A without. back wages neither unfair nor unjust. The appellant-Company had an Engineering Unit where it manufactured inachinery and employed about 500 workmen. Respondent No. 2 was the only recognised and a representative trade union of all the workmen in the said establishment. Certain disputes between the appellant and the workmen led to go slow, strike and lock out declared by the appellant-Company. Disciplinary action against 29 workmen for various acts of miscondu~t l'esulted in "their ·m~missal: The respondent No. 2~trade union participated iri the concilation proceedings on behalf of all workmen inclu~ng the ·dismissed ones, which ultimately failed. An industrial dispute under SectiOn 2(k) of the Industrial Disputes Act, 1947 was raised by the r~sl.iondent No:'. 2~trade union on behalf of the said 29 workmen. However, none of the said 29 workmen raised industrial dispute in their • r,. • ·~ I f. ' . ~~ J • • ·-· • individual "capacity under Section 2-A of the Act. B c · ·During the pendency of the said industrial dispute before the Labour D Court the said trade union entered into a settlement with the appellantCompany under Section 18(1) of the Act otherwise than in the course of conciliation proceedings on behalf of all the said 29 dismissed workmen giving option to either accept reinstatement with continuity of service without back wages or accept a specified lumpsum amount with other E monetary benefits. However, 12 workmen out of the said 29 workmen did not accept the aforesaid settlement. The Labour Court·declined to pass an award in terms -of the settlement on the ground that the 12 workmen had not approved the settlement and ·industrial dispute in respect of them would continue and proceed furthe1·. However, out of the said 29 workmen, 17 workmen had agreed to abide by the terms or the settlement and were F reinstated in exercise of'th ## Text _Characters 0–39,860 of 44,773. This is a partial read: ask again with offset=39860 for what follows._ A B c D E F. /' . , K.C.P. LIMITED ' ' ~ . ..., ·~ ' . . . . '• 'v. ' .-. ' '. THEJ~,RE§~DiNG OFFI.CER,f;\ND o~s. ··-· ,l ,;I. . ' : · . . ·· -~ I . ·t ' ; . ,. . • . [AM. AHMAm;·a., S.B. MAJMUDAR AND B.N: KlRPAL, JJ.] • 1 , • • , •n ·~ . ~ Labour Law: IndustlialDisputes Act, 1947: Sections 2(k) & (p), 2-A and 18(1). Settlement-Otlwwise than in conciliation proceedings-Dispute between employer compal.ly and workmen-Resulted in dismissal of certain workmen-Sole recognised and representative trade u11ion pa,1Jic,ippf~4 ,in conciliation proceedings on behalf of ail workmen including the dismissed ones who co1ttini1ed to be members of trade union-Conciliation proceediitgs ultimately f ailed-Pursua11t to which industlial dispute raised under S. 2(k)-No industlial dispute raised under S. 2-A by dismissed workmenDwing pe11de11cy of dispute before Labour Cowt, the said trade union and employer anived at settlemeni:-.Option either to accept reinstatement with co11tinuity in se1vice without back wages or accept a specified lwnpsum amount with other mo1ietmy be11efits-Some dismissed workmen did not approve settlement-But trade union entered into settlement on behalf of all dismissed workmen including the dissenting 011es-Howeve1; Labour Court declined to pass award iii tenns of settlement-Held : settlement was not ex facie, unjust or un.fai1~77ierefore, it was binding even on such dismissed workmen who did not approve the settlement-Hence, Labour Cowt should have passed an award in tenns of settlement and should not have continued the industdal dispute in relation to dismissed workmen who did not approve settlement. Settlement-Othe1wise than in conciliation proceedings-Ce1tain dispute between employer company and workmen led to go slow, stdke and lock G out-Disciplina1y action against 29 workmen for va1ious acts of misconduct resulted i.u-tll.ejr dismissal-Subsequently, settlement anived at between employer anti-trade union-Option either to accept reinstatement with continuity in se1vice without back wages or accept a specified lwnpsum amount with other nwnet01y benefits-All stdking workmen other than dismissed ones H reinstated without back wages-Held : In the circumstances of the case, the 148 KC.P. LID. v. PRESIDING OFFICER 149 tenns oj seitlemen't relating to proposed reinstatement of dismissed workmen A without. back wages neither unfair nor unjust. The appellant-Company had an Engineering Unit where it manufactured inachinery and employed about 500 workmen. Respondent No. 2 was the only recognised and a representative trade union of all the workmen in the said establishment. Certain disputes between the appellant and the workmen led to go slow, strike and lock out declared by the appellant-Company. Disciplinary action against 29 workmen for various acts of miscondu~t l'esulted in "their ·m~missal: The respondent No. 2~trade union participated iri the concilation proceedings on behalf of all workmen inclu~ng the ·dismissed ones, which ultimately failed. An industrial dispute under SectiOn 2(k) of the Industrial Disputes Act, 1947 was raised by the r~sl.iondent No:'. 2~trade union on behalf of the said 29 workmen. However, none of the said 29 workmen raised industrial dispute in their • r,. • ·~ I f. ' . ~~ J • • ·-· • individual "capacity under Section 2-A of the Act. B c · ·During the pendency of the said industrial dispute before the Labour D Court the said trade union entered into a settlement with the appellantCompany under Section 18(1) of the Act otherwise than in the course of conciliation proceedings on behalf of all the said 29 dismissed workmen giving option to either accept reinstatement with continuity of service without back wages or accept a specified lumpsum amount with other E monetary benefits. However, 12 workmen out of the said 29 workmen did not accept the aforesaid settlement. The Labour Court·declined to pass an award in terms -of the settlement on the ground that the 12 workmen had not approved the settlement and ·industrial dispute in respect of them would continue and proceed furthe1·. However, out of the said 29 workmen, 17 workmen had agreed to abide by the terms or the settlement and were F reinstated in exercise of'their·option. The 12 workmen were members of the respandent No. 2-trade union who were acting on their behalf and still continued to be members of the union. ;I The appellant-Company filed a writ petition before the High Court G challenging the decision of the Labour Court.to continue the dispute in connection with the said 12 workmen. The High Court dismissed the writ petition. Hence this appeal. ..jl I\ lt.l'·, • . . , On behalf of the appellant-Company it was contended that when respondent No. 2-Union had espoused the cause of all the 29 dismissed H 150 SUPREME COURT REPORTS [1996) SUPP. 6 S.C.R. A workmen, and the reference was made under Section 2(k) of the Act, the union which represented all the workmen including the said 12 workmen was entitled to act on behalf of all of them and enter into a settlement;. and that under these circumstances individual workmen had no independent right to contest their dismissal orders and were bound by the settlement B which was not in any way ex facie, unfair or unjust. Allowing the appeal, this Court HELD : 1.1. The settlement arrived at by the respondent No. 2-union with the appellant-company was not in the course of conciliation proceedC ings. Therefore, it would be binding under Section 18(1) of the Industrial Disputes Act, 1947 to the parties to the agreement, namely, the appellantcompany on the one hand and respondent No. 2-union representing all the 29 dismissed employees, who were its members and on whose behalf it had raised the industrial dispute under Section 2(k) of the Act, on the other. The D settlement was duly signed by both the parties. Under these circumstances, respondent Nos. 3to14 (in all 12 workmen) also would be ordinarily bound by this settlement entered into by thefr representative union \'tith the company unless it is shown tl)at the said settlement was ex-facie, unfair unjust or malafide. No. such case could be even alleged much less made out by the dissenting respondent Nos. 3 to 14 before the trial court. The entire inE dustrial dispute was raised by respondent No. 2-union on behalf of all the 29 dismissed workmen and as it was not an industrial dispute covered by Section 2A of the Act whereunder individual dismissed workman could come in the arena of contest, it could not be held, as wrongly assumed by the Labour Court that this settlement was not entered into under Section 18(1) F of the Act by these dissenting workmen when the respondent-union did represent them from beginning to-end and is still representing them as they are members of the union at present. Tue terms of the settlement cannot be considered to be in any way ex-facie, unjust or unfair and that the said settlement consequently must be held to be binding on these contesting workmen also. Hence, the entire industri.al dispu~e should have been disG posed of in the light of this settlement and an award in terms of the settlement should have been passed by the first respondent-court in the case of respondents 3 to 14 also. [157~C-D; 157-F-H] Ram Prasad Vishwakanna v. The Chaimian, Industrial Tribunal, H [1961] 3 SCR 196; lferbertsons Ltd. v. The Workmen of Herbertsons Ltd. & KC.P. LID. v. PRESIDING Ofl!CER [S.B. MAJ MUD AR, J.] 151 Ors., AIR (1977) SC 322 and Banmi Refilwy Pragatisheel Shannik Parishad A v. Indian Oil C01poration, [1991) 1 SCC 4, relied on. 1.2. The relief of reinstatement without back wages could not be said to be unreasonable as all other workmen also lost their back wages only because they they supported the cause of these 29 colleagues of theirs and ·/ I I B hence there was no reason why the workmen who indulged in the acts or misconduct and who were also to be taken in service should not also lose, their wages. Relief of reinstatement was made available to respondents 3 to 14 on the same line as it was made available to their 17 remaining colleagues who were covered by the very same settlement and who accepted the same. Such a package deal entered into by respondent No. 2 in the best C interest of these workmen could not be said to be unfair or unjust from any angle. On the contrary, if the back wages were given to them, then the remaining workmen against whom there was no disciplinary action or any alleged misconduct and who had also lost wages only because they were in sympathy with these 29 dismissed workmen would have stood discriminated against. Consequently, it is not possible to agree with the contention of the respondent Nos. 3 to 14 that the said settlement was in any way unfair or unjust. [162-F-H; 163-A; BJ CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11944 of 1996. From the Judgment and Order dated 4.4.95 of the Madras High Court in W.A. No. 1186 of 1993. N.B. Shetye, V. Balaji and A.T.M. Sampath for the Appellant. V.G. Pragasam, M.A. Krishnamoorthy and M.A. Chinnasamy for the Respondents. The Judgment of the Court was delivered by S.B. MAJMUDAR, J. Leave granted. This appeal by special leave arises out of the judgment and order dated 4th April, 1995 of the High Court of Judicature at Madras in Writ Appeal No. 1186 of 1993. A Division Bench of the High Court dismissed D E F G the appeal of the appellant company and confirmed the judgment and order of the learned Single Judge in writ petition No. 611 of 1993 dismiss- H 152 SUPREME COURT REPORTS [1996] SUPP. 6 S.C.R. A ing ·the sanie'. 'I ·' A few relevant facts leading to this appeal deserve to ,be noted at the ''. . ;. •. ; .• .1 - -1..,'. z : ' • , ; 'I' j • .. •.1. ~1 t'-, I -'~I :-; I • • ; • : 1 c. : outset. The appellant ts havmg an Engmeering Umt at Tiruvottiyur, Madras ,. . . • -·,-.: • ~. 1 ' - .. ' ,.- i ... ~ ... ~ ~ I I ,tlhl IJ ;';" ":i»d·-~n .. •t"•,)f"l'" , •• ol where it manufactures machinery for sugar, cement and alhed industries ~-~.1< .· , ... ; .. ~ . · ,·'.;·'. ~11·i:. . .. tj; _1;;.a,_·, Jr~!~· J·q[ffl~~'. f'-1!' t".Hl ',f'!l.~b;~v B' '. a~d ~~pl9~~ ~b~u,t ?op,:-;o.~¥~en. R,~sp,?~?f~~I~~·. ~ ,~~J·~~~;o~~¥/;f~pll~§:?~iii and a representar1ve umon of all th~ workm,en ~orkmg .m the said, estab- ••. ~. :1 .-: Sn 1 .( .. ·, .. . -.• ·.r.-... ·~ J•L .1:.l ;. 4~• ·p·:!.t ... •r':l.'°'' d~l.J Dt•r !~}Ul)."j• 1 .. uh hshment. In the past alJ mdustnal disputes were settled by the appellant c6m~~~ 1 6~· i~~ '~asi~' 'qi '1~ng th~~ 'settl~~~~t~· ~~i 1 i~~d 1 iht~ '~th'i~e: ?~~ii ret~n strike on 'and'from OCtober 26,' 1990. It is. the case of .the appellant tliat iii view of the deteriorating situa'tio'n 'a~d 'tith: ·~; ~J\J';to" pr~te~t 11pe~sb~h1'' securi}Y qf th.e §upervisory an~l M~n;;1.~e~i~l, s~~ff, ~t 1_h<;tg·: ~~ ~,t;clar7 ,a1 lock out on October 30, 1990. The appellant also chargesheeted 29 workmen , E including respondents 3 to 14 herein on November 5, 1990 for various acts of misconduct allegedly committed by them between ~eptemher 25, .1990 and October 29, 1990 when the workmen had resorte~ to go slow and other '- alleged violent acts of misconduct. ; . . i I .. • 1 The explanation given by 29 workmen having not been found satisF . ') d factory, the appellant. decided- to hold 'inquiry~ into' .-the ;charges inv61ved against the said 29 workmen. Inquiries were conducted by the two 'tetired'.>' District Judges and during the inquiries all the 29 workmen participated in the inquiry proceedings which contii1ued froni .i'itnuary8,1991 to August 21, 1992. , On October 31, 1990 the Government of Tamil Nadu intervened and !~;:·-·f_' : <. •,::,•,':J!': ·~ 1 I .J~. '_'r., '. '.; I .1 ! JI f' ·~( 1 , .. '~ p .t I imti~~e~. co.ncihation pr9,ce~dings to. bring, about s..ettlem,ent ,in_ !e&P.ect. of !t.""•,·.· 1 .,.~l•a.1 . .,.-.,.~.~ .• ·, (·,lt.H,l .• 1 • j,,l~ .• 0Ji·L+..01"t1 the pending dispqtes including lock out .. As no settlement could take .place durii{g' concili~tiOn ~~~ceedings, .the Co~citi~tio~ Office~ submltt~d report: L~\ ·, ,lt' 1! ~ .. I · ,• . J;,;f. ; i;._·· l,•jfj: If ,I ; .'! ~c I .~ i .i ·a· ·. 1 . J to t~~i !,\pptopr~ate q?v.ern~er-t '.op,. Amil 9,, .19~L On ¥,~y 7, .~9?1 .~~~., H Government of Tamil Nadu issued three different orders referring certain KC.P·. LTD. v. PRESIDING OFFICER [S.B. MAJMlIDAR,J.] 153 , - indu_strial disputes for adjudication. G.O. No. 485 was in respect of revision A of scale of pay, revision of dearness allowance, revision of house rent allowance etc. By G.O. No. 486 the Government of Tamil Nadu declined to refer cer~in disputes .such ~as leave facility, housing scheme, medical facilities etc. for adjudication. by giving.reasons in: the said G.O. No. 486. The third G.O. ,No. 487 was issued under Section 10-B of the Industrial Disputes -Act, 1947 (hereinafter referred to s 'the Act') . directing the appellant to lift lock out on or before 13.5.1991 and allow all except 29 ·, workmen to resume work. In the. said G.O. No. 487 the ·appellant was directed to maintain status quo obtaining prior to the date of.the lock out.·• in regard to the terms and conditions of service and the appellant was further directed to· complete inquiry proceedings against 29 workmen on or before 10.6.1991 a:hd: to pay 'them full wages during the' period- of disciplinary proceedings. In the saio G.O. No. 487 the workmen •were· directed to niallitain norinal'production ·which they whe giving prior to -the · ! date of the High Court order an'd also to maintain di~cipline in the-f~cf6ry. : - i ' By August 19, 1991 inquiries' in respect of all the 29 workmen were completed and on the basis of the findings by the Inquiry Officer and other extenuating circllmstances, the 29 workmen were dismissed from service betweellK 23.8."t991 to 1~16.1991. . I B c D In a meeting held before the Joint Comll).issioner of Labour on E October 4, 1991 between the appellant and the 2nd respondent, an agreement was reached on the qua~tum of increase in wages: recoverable advance and issue· of bonus for the years 1989-90 and 1990-91. It was fur,ther agreed that th~ 1 issue of 'nc)n-employment of 29· dismissed workmen wouta be' discussed sepa~ately ·and on that basis all workin~n except the F saia 29 workmin ~~eed to resume work in a phased manne~ _not later than October 12, 1991 although the lock out was lifted on May 13, l991. - ' · 1; ,, Subsequer1tly, a settlemell.t was _arrived at between the appellant a¥d '"\ the 2i;id responc1ent ~nder Section 12(~) of the Act wherein it was agreed G ' ' th~t the is~ue of, non;~mployment of 29 d_ismis&ed workmen w_ould _be . discussedip. the. pr~ceeciip.gs to be initiated by the Joint Labour C::ommissioner as ~arly as possible. T~e- J9int Labour Commissioner held m~etings, bety.;een !~uary 8, 199~ and March 6, 19_9~ ap.d as no settlement coμld ,be, reached report with regard to failure of t}ie conciliation proceedings '¥as submitted to the Government of Tamil Nadu which by order dated H 'l .A B c 154 SUPREME COURT REPORTS [1996) SUPP. 6 S.C.R. 13.5.1992 referred the issue of non-employment of 29 workmen for adjudication to the 1st respondent. The said reference was registered as l.D. No. 708 of 1992 on the file of the 1st respondent. ~- The said industrial dispute was referred for adjudication pursuant to the demand espoused by all the workmen and raised by the 2nd respondent union under Section 2(k) of the Act. All the said 29 workmen who were members of the union had also authorised the 2nd respondent to represent them before the Conciliation Officer whereafter reference was made to the 1st respondent. None of the said 29 workmen raised industrial dispute in their individual capacity under Section 2A of the Act. It appears that thereafter the appellant company on the one hand and second respondent - union on the other held discussions regarding non-employment of 29 workmen: Ultimately on 7th November, 1992 an understanding was reached between the appellant and the 2nd respondent - union that option would be given to the said 29 workmen either to accept D reinstatement without backwages or a lumpsum amount of Rs. 75,000 with other monetary benefit may be accepted by the concerned workmen: E F Respondent Nos. 3 to 14 (in all 12 workmen) out of these 29 workmen did not accept the proposed settlement and accordingly addressed a letter to the Commissioner of Labour on 2nd December, 1992. Thereafter, the 2nd respondent entered into a settlement with the appellant company under Section 18(i) of the Act on behalf of all the 29 workmen whose industrial dispute with regard to non-employment was espoused and raised by it under Section 2(k) of the Act. On 14th December, 1992 a comprehensive settlement was arrived at and signed by the appellant and the 2nd respondent - union. Copies of the said settlement were also forw2.rded to various authorities as contemplated under the provisions of the Act and Ru'le thereunder. A joint memorandum signed by respondent No. 2 and the appellant company was filed before the Presiding Officer. First Additional Labour G Court, Madras, respondent No. 1 herein, before whom the industrial dispute was pending for adjudica!ion. It was requested that an award in terms of the settlement may be passed in the pending industrial dispute reference No. 708of1992. However, respondent No. 1, by his order dated 28th December, 1992 declined to make an award in terms of the settlement H dated 14th December, 1992 on the ground that the respondent Nos. 3 to K.C.P. LTD. v. PRESIDING OFFICER [S.B. MAJMUDAR,J.] 155 14 had not approved the settlement and therefore industrial dispute in A respect of these respondents will continue and proceed further. It may be stated that out of the 29 dismissed workmen in connection with . whose dismissal, respondent No. 2 - union had raised the industrial dispute under Section 2(k} of the Act., 17 workmen had already agreed to abide by the terms of the settlement and had got reinstated in exercise of their option. Only the remaining 12 dismissed workmen, respondent Nos. 3 to 14 herein. proceeded with the dispute and did not agree to the terms of the settlement even though admittedly they were members of the respondent No. 2 - union who wa.s acting on their behalf and even till date they have continued to B be the members of the said union. As the 1st respondent decided to continue the reference in connection with respondent Nos. 3 to 14, the appellant company filed Writ Petition No. 611 of 1993 before the Madras High Court. As seen earlier, c the learned Single Judge by his Judgment and order dated 29th September. 1993 dismissed the said Writ petition. The appellant thereafter moved the D Division Bench of the High Court in appeal which also got dismissed on 4th April, 1995 an"d that is how the appellant company has moved this appeal on special leave. Learned counsel for the appellant company vehemently submitted that when respondent No. 2 - union had espoused the cause of all the 29 E dismissed workmen, and the reference was got made by it under Section 2(k) of the Act, the union which represented all the workmen including the dismissed respondents 3 to 14 was entitled to act on behalf of all of them by way of collective bargaining and could legitimately enter into the settlement which was for the benefit of all concerned workmen. Under these F circumstances, individual workmen had no independent right to contest their dismissal orders and were bound by the settlement which was not shown by them to be in any way ex-facie, unfair or unjust; that it was a package deal entered into by respondent No. 2 - union with the appellant company and in such a collective industrial bargaining there was always G give and take; that there were no exceptional grounds for rejecting such a settlement which was for the benefit of all concerned workmen and the Labour Court ought to have acted upon the same. Consequently, the order of the Labour Court refusing to act upon the said settlement so far as respondent Nos. 3 to 14 are concerned, was patently erroneous in law and hence, the order of the learned Single Judge of the High Court confirming H A 156 SUPREME COURT REPORTS [i996j SUPP: 6 S.C.R. such order of respondent No. 1 and 'further order of the Divisio~ B~~~hl also equally suffered from pat~nt errors of l~~. ln ~~pport of thes~, sub~ , missions, various decisions of this Court' 'were 'died to which we wili 1 r~fe~ 1 . . ~-' ~ . :• . ' ( .,/ -. ; ~. . . u a little later. H Learned counsel fO'r· respondent Nos'. j to 14 ori' tlie ·otl~dr 'hand . B submitted 'that though these respondents w~}e admittedly ·fhemBers ~f ! t~e L respondiri(~ ufliort, tlief haH Ii.or acrept~d iilhgrms' of th:e'!~eit16~eiit'ano 1 ' the said s~ttlem~h.t '\v'as'Mt biAciing on'ihenr;' that iH;fa 1tt:l~b&'irmh1{t6 'tlie' ie.l:rnb\• ' ' ! 1 • ll""'·I -'"! · I }..: (}! Cl~· 1;~ ·l '· !:,O case, the settlement was ncit fafr 'and just as the workmen were: required to givb 'up" all the bac.:k wages ~~eri tliough tngy were gi~~n r6instateinent with ·i.'• • ~ ,·· I, 1,. ~ '-,J~. !i 11' i~",I, '~ 1'1'1 ,,. 'i ·J· •·f, ,. continuity of service and t:J:iey were' farther' required to give a letter in 'I 1 ·, - "·t~ (~ j-', i' • t fll\r/'~)~r _f.1 f ' ·_ . j D t f wrj,tin~· t? the Manage~ent,~fat~~g t~?t .trey,_wa,u~~ ~~qujt themselves in an orderly manner and would assure that they would not give a room for any m1sc~n~uct and dis~l.plina~y acti6~ i~· future: It wa~'s'ubWiitted that under these circumstances the contesting respondents were e~'titled to insist that ; · their dispute should be adjudicated on merits by the Labour Court. .,j:J•, •.1, ' ,j •' ' t I lj • • (! .1 l '• •' I - ' E H:aiing given our aniious consideration to these rival submissiOris, we find thafthe 'terink of th~ settlement cann6t be·considered to be' in any way· 1 ex~fdi:ie; tlnjbst .or unfair and that the'said 'settleili.ent 'consequently must b~ · held to be biu'Ciing dn thes.e contesting workmen a:lso. - ·. · '1' · ' · • .! i '~: ; : 1 j ! f i ,, ~. • ~: ' • ... . ' 1 ·:It has to be; Ied by ~tJYh~~ 1 fh~ said, 11ni9n}1a,yi11g; c9nsi?e~ed . H the pros and cons of the situation, entered into the settlement on behalf of l(.C,P.LID. v. PRESIDINGOFFICER[S.B.MAJMUDAR,J.J 157 I, • , ~ · all the workmen for whom it had taken cudgels unless the said settlement A < ,~l , ' ,,, I ( , was found.to ex- facie, unjust or unfair it could not be gone behind by these · respo~?ents who, can' ~e said to be parties t~ the same through their representative union - respondent No. 2. In this connection a reference is ,also ~~q~ired to be made t.o Se,ction 18(1) of the Act which lays down as under: B "A settle~ent arriv~d at by agreement between the employer and workman. otherwise than in the course of conciliation proceeding shall be binding on. the parties to the agreement." It is not in dispute that the settlement arrived at by respondent No. C 2 - union with the appellant company was not in the course of conciliation proceedings. Therefore, it would' be binding to the parties to the agreement, namely, the appellant company on the one hand and respondent No. · 2 ~ union representing all the 29 dismissed employees, who were its members and on whose behalf it had raisea the industrial dispute under D Section·2(k) of the Act, on the other. f~ I } ; ' f 1 l~ ' : · .!~ Section 2(p) of the Act .defines a settlement to mean a settlement arrived at in the course of_ conciliation proceedings and includes a written agreement between the employer and workmen arrived at otherwise than E in the course of conciliation proceedings where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof ha~ been. sent to an officer authorised in this behalf by the appropriate, Government and the Conciliati9n Officer. ' I It, is .. also ~o~ in dispute that parties to the settlement were the· t F 1.appellant conipany on th~ one hand and respondent No. 2 - . union on tl}e. other,_ which acted_ on .qehalf of all .the 29. dismissed workmen for .• ~horn refenmce,.w._a~ pending in the, I.abour C,qurt I_t was duly .signe,d by both these parties. Under these circumstances, respondent Nos, 3 to 14 also would be ordinarily bound by this settlement entered into by their: ' G r_epreseptath:'e.u11i911: ~ti! t~e compa!J,y it.is shown that the said settlement was..: ex-facie, unfair,· ,unjust ·or malafide. No such case could .. be even alleged ,much less,made.·out by the.dissent~ng respondent Nos. 3 tgi 14 before the..trial, court.. It is interesting to note. that.before the Labour .·. CoutHhe,only argument put forward.on behalf of respondent Nos. 3 to·' H 158 SUPREME CoURT REPORTS [1996) SUPP. 6 S.C.R. A 14 was that they were not parties to the settlement and therefore, it was not binding on them. Once it is kept in view thii.t the entire industrial dispute was raised by respondent No. 2 union on behalf of all the 29 dismissed workmen and as it was not an industrial dispute covered by Section 2A whereunder individual dismissed workman could come in the B arena of contest, it could not be held, as wrongly assumed by the Labour Court that this settlement was not entered into •mder Section 18(1) of the Act by these dissenting workmen when the respondent - union did represent them from beginning to end and is still representing them as they are members of the union even at present. In the case of Ram Prasad C Vishwakanna v. The Chainnan, lndustlial Tlibzmal, [1961) 3 SCR 196 a Bench of three Hon'ble Judges of this Court had an occasion to consider the effect of a settlement entered into by the union of workmen which had espoused the cause of its members by raising an industrial dispute under Section 2(k) of the Act and the further question whether under D these circumstances an individual workman had any independent locus standi in proceedings before the reference court. Rejecting the contention on behalf of the individual workman, it was observed by ·oas Gupta., J. speaking for the Court that the concerned workman was not entitled to separate representation when already represented by the Secretary of the union which espoused his cause. A dispute between an individual E workman and an employer cannot be an industrial dispute as defined in Section 2(k) of the Act unless it is taken up by a union of ~orkmen or by a considerable number of workmen. When an individu.al workman becomes a party to a dispute under the Act he is a party, not indeF G pendently of the union which has espoused his cause. It was further observed that although no general rule can be laid down in the matter, the ordinary rule should be that representation by an officer of the trade union should continue throughout the proceedings in the absence of exceptional circumstances justifying other representation of the workman concerned. It is true that the said decision was rendered prior to the insertion of Section 2-A in the Act by which individual workmen were also given a fight to raise industrial dispute in case of discharge, dismissal or retrenchment or otherwise termination of service. It is also true that the present H controversy has arisen after the coming into operation of Section 2-A but KC.P. LTD. v. PRESIDING OFFICER [S.B. MAIMUDAR,J.] 159 as noted earlier the industrial dispute raised for 29 dismissed workmen was A raised by the union - respondent No. 2 under Section 2(k) of the Act and there was no reference under Section 2-A of the Act, so far as respondent nos. 3 to 14 are concerned. In the case of Herbe1tsons Ltd. v. 771e Workmen of Herbensons Ltd. and Ors., AIR (1977) SC 322 another Bench of three learned Judges of this Court considered the effect of a settlement arrived at by recognised union of majority of workers pending appeal to Supreme Court. It was observed by Goswami, J., speaking for the Court that when a recognised union negotiates with an employer the workers as individuals do not come into the picture. It is not necessary that each individual worker should know the implications of the settlement since a recognised union, which is expected to protect the legitimate interests of labour enters into a settlement in the B c best interests of labour. This would be the normal rule. There may be exceptional cases where there may be allegations of ma/a fides, fraud or even corruption or other inducements. But in tl1e absence of such allegaD tions a settlement in the course of collective bargaining is entitled to due weight and consideration. In connection with the justness and fairness of the settlement it was observed that this has to be considered in the light of the conditions that were in force at the time of the reference. When, therefore, negotiations lake place which have to be encouraged. particularly between labour and employer in the interest of industrial peace and well-being, there is always give and take. The settlement has to be taken as a package deal and when labour has gained in the matter of wages and if there is some reduction in the matter of dearness allowance so far as the award is concerned, it cannot be said that the settlement as a whole is unfair and unjust. It was further observed that it is not possible to scan the settlement in bits and pieces E F and hold some parts good and acceptable and others bad. Unless it can be demonstrated that the objectionable portion is such that it completely outweights all the other advantages gained the Court will be slow to hold G a settlement as unfair and unjust. The settlement has to be accepted or rejected as a whole. It has to be kept in view that under the Scheme of labour legislations like the Act in the present case, collective bargaining and the principle of industrial democracy t>ermiate the relations between the management on H 160 , A the one hand and the union which resorts.to collective bargaining on behalf '6('it~' 1 fuembers- workmen ~ith 'thelUci~kaiJdierif'6n 'the' other. 'siich a . ' 'tblle~tiv~' bargaining whlc;h inay result 1 i~' 1 jtist 'all1d f~ir ''sbttl~m~n't would · • •'f . ''' ' ' r · f · JI,.• ./ 1 ,I ~1 11 ., ~ I /' ;" ·' "r 7 • always be beneficial to the managemenca:s well as to the oody of workmen and society at large as there would b~ indtistri~l 'p'eace 1 'an~ ttlntjullity B pursuant to such settlement a.nd; w~if~i~W~I.~. ~~.oi? ~1!:?e~~~s~~'Y social strife and tribulation on the one hand and promote industrial and commer- . , .·' ,!l - ·~· ...-'1 l:;n;.,f~.i· '.:--~ It'\.·,~, _:nl1 1. · .~r ~ cial development on tpe -~ther ~~!1~·, Keepmg m, .~ew ,t\le aforesaid salient -,;i /,1) _ n. l' I, ·'. 10 JI t. J )a L [_1(,.).I ·fl features of the Act the settlement. whidi is sought to,oe impugned has to be scanned and scrutinised: 's~itlg~enr ~f '1a~o 1 tfr 'Ute gets referred for adjudication, even pending such'disputes; the·par.ties fan arrive at amicable settlement which may be binding to the parties to the settlement unlike settlement l ~irived a'( Cluririg! !contili'ation pr'ohe~dings E which may be binding not 6'nl)it~ 'the 1 part'iesJt~· the shtt!ein'efit but' everi, to the entire labour force working in th'e coli'cerned''6rgahisatfon even tliough they may not be members of the uni6n' which might have entered into settlement during conciliation proceedings. The differe1we between the _ I l'f f' '' ' .,. I• ,..f , ' settlement arrived at under the Act during conciliation proce·edings · by F " parti~s and the settlement arr~~e~}t_'·o~~er~s(t~~n. :.~u,ri~g c?~'t~li~t.ion proceedings has been succinctly br.ought ciut by the decision of thi's Court in Barauni Refi1\J,!y 'Pragatisheel' slt'/aiiiik Palishad Etc. Et~. V. b;didn Oil ~ , ~ 1, ! , . ~ ·, · ' · . , r ; . '"" . . • .. J .1 l • • • • .. J ir , 't , · 1 1 1 L" .. · l: ft,.r;J ,·l,.iJ' .. , n1i(t1·1rJ ·:;·f{IL~l1• L·· (