# MILLS v. MANAGEMENT OF MIS. DELHI CLOTH AND GENERAL MILLS LTD

- **Citation:** [1970] 2 S.C.R. 886
- **Court:** Supreme Court of India
- **Decided:** 1969-10-17
- **Bench:** V. R.Amaswami, I. D. Dua
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mills-v-management-of-mis-delhi-cloth-and-general-mills-ltd-4959
- **Pages:** 12

## Headnote

Industrial Disputes Act (14 of 1947) s. 18(1) and Industrial Disputes
(Central) Rules, 1957 r. 58 (4)-Non-comp/ionce with rule-Settlement
between 1nanageu1ent and union if binding on workmen.
In conciliation proceedings before the Concit ation Officer, D.C.M.
(City Shop) Karamchari Union espoused workman Shibban Lal's cause.
On .June 18, 1965 the Conciliation Officer submitted his failure report
to the Government.
On June 9, 1965 a settlement had been arrived at
between the Union and the management of the D.C. & G. Mills Ltd. The
Conciliation Officer was not informed of this settlement before the submissiop of his report.
The settlement dated June 9, 1965 was filed before the Conciliation Officer on June 30, 1965. Pursuant to the Conciliation Officer's report the industrial dispute was referred by the Government to the Additional Industrial Tribunal. On October 6, 1965 Written
statement was filed by the management before the Tribunal. The Kapra
Karamchari Sangh also filed a statement of clail\l on behalf of workman
Shibban Lal through its General Secretary along with an application for
substituting the Sangh in place of the Union. It was stated in the application that since the Union had entered into a settlement with the management not to contest Shibban Lal's case, 53 out of 88 worke'rs of D.C.M.
(City Shop) had requested the Sangh to take up this worker's case and
the Sangh had thereupon unanimously decided to take up his cause. The
management opposed this application. It was finally decided that the
Sangh should represent Shibban Lal workman without its being substituted for the Union. The management then pressed its objection to the
validity of the settlement of claim filed by the Sangh. The Tribunal held
that the claim filed by the Sangh should be deemed to have been filed on
behalf of Shibban Lal.
On appeal in this Court the correctness of this
view was not challenged on behalf of the respondent. The special leave
application in this Court was suppcirted by an affidavit sworn by Shibban
Lal.
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On a preliminary objection raised "on behalf of the respondent to the
·competency of the appeal presented in this Court by the Sangh oil the
ground that the Sangh was neither a parfy to the industrial dispute before
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the Tribunal nor did it espouse Shibban Lal's cause in the proceedings
against him.
HELD : (I) On the facts and circumstances of this case the special
leave application and the appeal must be held to have been filed in this
Court by the Sangh as representing Shibban Lal who had agreed to be
represented by the Sangh. The appeal filed by the Sangh, therefore, cannot be considered to be unauthorised and legally incompetenf on the
ground urged. [891 G-H]
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(2) Rule 58 (4) of the Industrial Disputes (Central) Rules, 1957
made under s. 38 of the Indusrial Disputes Act has full force of law of
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WORKMEN v. DELHI CLOTH MILLS (Dua, J.)
887
which judicial notice can be taken.
This rule must be fully complied
with if \he settlement is to have. a binding effect on all workmen. [896 A]
( 3) When a dispute is referred to the Conciliation Officer the management and the workers' Union cannot claim absolute freedom of contract
.to arrive at a settlement in all resl'fCls binding on all workmen.
An
agreement to be valid and binding 111ust cor.1ply with the provisions of the
SU.lute and the Rules made thereunder.
The settlement in the present
case did not comply with'r. 58(4) which is mandatory. Therefore, under
s. 18(1) of 'the Act read with the other sub-sections in the light of the
definition of "Settlement.. contained in s. 2 (p) · there is no unfettered
freedom in the management and the Union to settle the dispute as they
plea.e so ·us to clothe the settlement with a binding effect on all workmen
or even on ·all member-workmen of the Union. [895 B-D]
( 4) Though the plea of non-compliance with r. 5 8 ( 4) was not raised
by the appellant before the Tribunal if the respondent wanted to show· that
the reference

## Text

886
WORKMEN OF MIS. DELHI CWTH AND GENERAL
A
MILLS
v.
MANAGEMENT OF MIS. DELHI CLOTH AND GENERAL
MILLS LTD.
October 17, 1969
[V. R.AMASWAMI AND I. D. DUA, JJ.]
Industrial Disputes Act (14 of 1947) s. 18(1) and Industrial Disputes
(Central) Rules, 1957 r. 58 (4)-Non-comp/ionce with rule-Settlement
between 1nanageu1ent and union if binding on workmen.
In conciliation proceedings before the Concit ation Officer, D.C.M.
(City Shop) Karamchari Union espoused workman Shibban Lal's cause.
On .June 18, 1965 the Conciliation Officer submitted his failure report
to the Government.
On June 9, 1965 a settlement had been arrived at
between the Union and the management of the D.C. & G. Mills Ltd. The
Conciliation Officer was not informed of this settlement before the submissiop of his report.
The settlement dated June 9, 1965 was filed before the Conciliation Officer on June 30, 1965. Pursuant to the Conciliation Officer's report the industrial dispute was referred by the Government to the Additional Industrial Tribunal. On October 6, 1965 Written
statement was filed by the management before the Tribunal. The Kapra
Karamchari Sangh also filed a statement of clail\l on behalf of workman
Shibban Lal through its General Secretary along with an application for
substituting the Sangh in place of the Union. It was stated in the application that since the Union had entered into a settlement with the management not to contest Shibban Lal's case, 53 out of 88 worke'rs of D.C.M.
(City Shop) had requested the Sangh to take up this worker's case and
the Sangh had thereupon unanimously decided to take up his cause. The
management opposed this application. It was finally decided that the
Sangh should represent Shibban Lal workman without its being substituted for the Union. The management then pressed its objection to the
validity of the settlement of claim filed by the Sangh. The Tribunal held
that the claim filed by the Sangh should be deemed to have been filed on
behalf of Shibban Lal.
On appeal in this Court the correctness of this
view was not challenged on behalf of the respondent. The special leave
application in this Court was suppcirted by an affidavit sworn by Shibban
Lal.
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On a preliminary objection raised "on behalf of the respondent to the
·competency of the appeal presented in this Court by the Sangh oil the
ground that the Sangh was neither a parfy to the industrial dispute before
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the Tribunal nor did it espouse Shibban Lal's cause in the proceedings
against him.
HELD : (I) On the facts and circumstances of this case the special
leave application and the appeal must be held to have been filed in this
Court by the Sangh as representing Shibban Lal who had agreed to be
represented by the Sangh. The appeal filed by the Sangh, therefore, cannot be considered to be unauthorised and legally incompetenf on the
ground urged. [891 G-H]
H
(2) Rule 58 (4) of the Industrial Disputes (Central) Rules, 1957
made under s. 38 of the Indusrial Disputes Act has full force of law of
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WORKMEN v. DELHI CLOTH MILLS (Dua, J.)
887
which judicial notice can be taken.
This rule must be fully complied
with if \he settlement is to have. a binding effect on all workmen. [896 A]
( 3) When a dispute is referred to the Conciliation Officer the management and the workers' Union cannot claim absolute freedom of contract
.to arrive at a settlement in all resl'fCls binding on all workmen.
An
agreement to be valid and binding 111ust cor.1ply with the provisions of the
SU.lute and the Rules made thereunder.
The settlement in the present
case did not comply with'r. 58(4) which is mandatory. Therefore, under
s. 18(1) of 'the Act read with the other sub-sections in the light of the
definition of "Settlement.. contained in s. 2 (p) · there is no unfettered
freedom in the management and the Union to settle the dispute as they
plea.e so ·us to clothe the settlement with a binding effect on all workmen
or even on ·all member-workmen of the Union. [895 B-D]
( 4) Though the plea of non-compliance with r. 5 8 ( 4) was not raised
by the appellant before the Tribunal if the respondent wanted to show· that
the reference was invalid because of a lawful settlement then it was incumbent on tlie party relying on such a settlement to prove that it was lawful
and Valid, rendering the reference illegal.
It was also incumbent on the
Tribunal ·to satisfy itself that the settlement was in accordanee with the
Act and Statutory Rules. [896 A-Bl
[The case was accordingly remanded to the Tribunal for adjudication
upon the dispute on the me~its.]
CIVIL APPELLATE JURiso1cnoN : Civil Appeal No. 2006 of
1966.
Appeal by special leave from the Award dated February 17,
1966 of the Industrial Tribunal, Delhi in l.D. No. 176 of 1965.
D. R. Gupta and H. K. Puri, for the appellants.
C. K. Dapqtary, D.R. Thadani and A. N. Goyal, for the
respondent.
The Judgment of the Court was delivered by
Dua, J.
The Workmen of M/;. Delhi Cloth and General
Mills, Bara Hindu Rao, Delhi, have appealed to this Court by
special leave from the award of the Additional Industrial Tribunal,
Delhi dated February 17, 1966 holding that Shibban Lal was
bound by the settlement dated June 9, 1965 and, therefore, there
was no industrial dispute on the date of reference which could be
referred for adjudication.
The facts necessary for. the purpose of this appeal may now be
briefly stated.
The Chief Commissioner, Delhi by means of an
order dated September 9, 1965 referred the eispute in con:froveisy
to the Additional Industri;il Tribunal, the order of reference being
in the following terms :
"Whereas from a report submitted by the Conciliation Officer, Delhi under section 12( 4) of the Industrial
Dispute Act, 194 7, it appears that an industrial dispute
888
SUPREME COURT REPORTS
[1970] 2 s.c.R.
exists between the management of M/ s. Delhi Cloth &
General Mills, Ltd., Bara Hindu Ra1>, Delhi and its
workmen and Shri Shibban Lal and the said dispute has
been taken up by the D.C.M. (City Shop) Karamchari Union, 1121, Chatta Madan Gopal, Maliwara,
Chandni Chowk, Delhi."
Before the Additional Industrial Tribunal the Management
bad raised various preliminary objections including the objection
that Kapra Karamchari Sangh (hereafter called the Sangh) was
not competent to take up the case of Shri Shibbao. Lal, and that
the D.C.M. (City Shop) Karanichari Union (hereafter called the
Union), which had originally taken up the cause of workmen,
having agreed by the settlement dated June 9. 1965 not to prosecute his case, withdrew its support to his cause with the result
that the dispute relating to the dismissal of Shibban Lql was, not
an industrial dispute.
It was further averred that Shibban Lal
was bound by the act of his representatives who had made the
settlement dated June 9, 1965, and was, therefore, estopped from
challenging the same.
On these preliminary objections the following four issues were
framed and were taken up for decision in the first instance.
1. Has the Karpra Karamchari Sangh no locus-standi to
file the statement of claim ?
·
2. Is the reference incompetent because of settlement
dated June 9, 1965 between the D.C.M. (City Shop)
Karamchari Union and Management ?
3. Is the dispute not an industrial dispute 'I
4. Is Shibban Lal estopped from raising the present dispute?
On issue No. 1. the Tribunal held that although the Sangh had
been merely authorised to represent Shibban Lal and was not a
party entitled to file the statement of claim in its own right, nevertheless the claim filed by it was to be deemed to be on behalf of
Shibban Lal who had agreed to be represented by the Sangh.
Issues Nos. 2 to 4 were discussed together and the Tribunal held
that the settlement dated June 9, 1965which was signed on behalf
of workmen by the Secretary and Vice President of the Union
was not arrived at by unauthorised persons. The said settlement
was, therefore, held binding on persons who were parties thereto
and Shibban Lal being a member of the Union was bound by it.
In face of that settlement, the Tribunal felt that there was no industrial dispute which could be referred for adjudication on the date
of reference.
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WORKMEN v. DELHI CLOTH MILLS (Dua, I.)
889
In this Court on behalf of the respondent, the Management of
M/s. Delhi Clot!' and General Mills Ltd. a preliminary objection
was raised to the competency of the present appeal.
lt was contended by Shri Daphtary that the appeal was presented in this
Court by the Sangh which was neither a party to the industrial
dispute before the Tribunal, nor did it espouse the
cause of
Shibban Lal's dismissal.
Shibban Lal, according to the submission, being a party affected could certainly appeal but not the
Sangh.
It was added that Shibban Lal being the solitary
employee of the respondent, who was the member of the Sangh
the latter was not only disentitled to espouse Shibban Lal's cause
but as a matter of fact it did not so; the Sangh, the counsel
argued, merely undertook to represent Shibban Lal before the
Tribunal.
We are unable to uphold the
preliminary objection.
It is
clear from the record that the Union originally took up Shibban
Lal's cause.
On June 18, 1965 the Conciliation Officer submitted
his failure report to the Government. It is apparent that till then
the Conciliation Officer was not informed by either of the parties
that a settlement had been arrived at in the matter of the, dispute
in question,
Indeed the record shows that Shri Jai Bhagwan
Sharma, who represented the workman in the conciliation proceedings had informed the Co.nciliation Officer that no settlement had
been reached.
The settlement dated June 9, 1965 appears to have
been filed before the Conciliation Officer on June 30, 1965. long
after the submission of the failure report.
The Additional Indus:
trial Tribunal after taking cognizance of the dispute ISSued notice
to the parties on September 16, 1965 fixing October 5, 1965 for
filing the statements of claim.
The case was, however, taken up
on October 6, 1965 because October 5, 1965 was declared a
gazetted holiday,
On October 6, 1965 the written statement was
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'filed by the Management.
The Sangh also filed a statement of
claim on behalf of Shibban Lal through Shri J ai Bhagwan, General Secretary of the Sangh, with an application for substituting the
Sangh in place of the Union as mentioned in the reference,
1t
being averred in the application for substitution that consequent
upon the Union having entered into a settlement with the
Management not to covtest Shibban Lal's claim, 53 out of 88
workers of D,C.M. (City Shop) had requested the Sangh to take
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up Shibban Lal's case and the
Sangh thereupon unanimouslv
decided to take up his cause.
The dispute, it was added, c0ncerned all workmen.
The Management was given an opportunity
to file objections to this application.
On October 28, 1965 the
'.'1anagement opposed the application of the Sangh for being
1mpleaded in place of the Union.
While opposing the prayer of
the Sangh the Management expressed ignorance about the averment that 53 out of 88 workers of D.C.M. (City Shop) had
890
SUPREME COUJ!T REPORTS
[1970] 2 S.C.R.
requested the Sangh to take up the cause of Shibban LaL . It was
added that espousal by the Sangh at that stage was illegal as the
matter had already been referred by the Government.
Espousal,
according to this plea, could only be at the stage of conciliation
proceedings and not after the refer ;nee.
It was also denied that
the dispute concerned all workmen.
An agreement having been
entered into by the Union, representation by the Sangh was described to be an abuse of the process of law.
The dispute, pleaded
the Management, had been setlled for ever and Shibban Lal was
a par•y to the said settlement.
Shibban Lal filed an affidavit on
November 3, 1965, affirming that, on December 26,
1964, the
Union had properly resolved to contest his claim a,nd that on
December 28, 1964 the statement of claim, regarding Shibban
Lal's proposed retirement on December 31. 1964, was filed before
the Conciliation Officer. It was further affirmed in this affidavit :
(i) that during the pendency of the dispute before the Conciliation Officer, the Management retired him and he was not allowed
to join duty with effect from January 1, 1967, (ii) that in the
absence of any valid authority either from the Union or from the
parties, pursuant to a resolution to that effect, passed by the
workmen of the establishment, Shri Musaddi Lal and Shri Babu
Ram had no authority to ent.~r into any settlement in respect of
deponent's dispute, (iii) that no settlement was ever brought to
the notice of the Union or the workmen, (iv) that on June 14.
:1965 the Union of the workmen opposed the said
settlement,
was resolved that the Union did not agree to any settlement whatsoever regarding the deponent'> retirement, including settlement
in respect of the conciliation proceedin~s. (v) that on July 25,
1965 the Union oi the workmen opposed the sa:d settlement,
(vi) that the settlement had been filed
by the conciliation
Officer on June 24. 1965 whereas the failure
report
of the
said officer had even rtached the Government on June 18,
1965, (vii) that the settlement had not
be~n verified by
the Conciliation Officer, (viii) that the deponent had also
written a letter to·· the Union challenging the authority of the
signatories on its behalf, and even the authority of . the Union
itself, to enter into the said settlement without appropriate and
valid authority. (ix) that the deponent could not read or write
Hindi or English except that he could sign his name in English and
(x) that out of 88 employees 53 had authorised the Sangh to take
up the deponent's case with the result that espousal by his coemployee workers was continuous.
Tn the affidavit of Shri Deoki Nandan Agarwal, on behalf of
the Management, sworn on November 4, 1965. it was affirmed
inter alia (i) that the Management and the Union had on June 9,
1965 entered into two settlements, one relating to the industrial
dispute case No. 211 of 1962 and the other relating to the age of
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WORKMEN v. DELHI CLOTH MILLS (Dua, /.)
891
retirement including the case of Shibban Lal etc. pending before
the Conciliation Officer.
The settlement relating to the Industrial Dispute Case No. 211 of 1962 had been made an award of
the Court and the other settlement relating to the age of retirement had •been filed before the Conciliation Officer, copies of both
the settlements having been forwar.ded to Government authorities,
(ii) that Shibban Lat being the President of the Union, at the
time of settlement, was bound by it and (iii) that the Sangh, having
not espoused the cause of Shibban Lal before September 2, 1965,
the dJte of reference, could not do so thereafter; nor could any
other member of the Union take up his cause after the settlement
dated September 6, 1965.
The application for substitution was finally heard on December 17. 1965 when Shri D. R. Gupta, on behalf of the Sangh
stated that he did not want the Sangh to be substituted in place of
the Union but he merely wanted it to represent Shibban Lal, who
was at that time it~ member.
Shri G. C. Bhandari, on behalf of
the Management, did not object to Shibban Lal being reptesented
by the Sangh and he confined his objection only to Shibban Lal's
cause being espoused by the Sangh after the order of reference.
The Tribunal accordingly allowed the Sangh to represent Shibban
Lal.
Up to that stage the Management did not press the point
that there was no valid statement of claim filed on behalf of Shibb?n Lal and the validity of the claim filed by the Sangh had been
apparently assumed.
The Management was perhaps at that time
only thinking of questioning the existence of industrial dispute on
the ground that Shibban Lal's dispute was an individual dispute,
not being espoused by any union of workmen.
The validity of the statement of claim filed by the Sangh was
mooted and pressed in one of the preliminary objections which
gave rise to preliminary issue No. 1 reproduced earlier in this
judgment. On this issue, as already observed, the Tribunal decided that the claim filed by the Sangh should be deemed to have
been filed on behalf of Shibban Lal.
The respondent's counsel
did not challenge the correctness of this view of the Tribunal and
it was. not the respondent's submission before us that there was no
proper statement of claim on behalf of Shibban Lal.
In this
Court also special leave application is supported by an affidavit
sworn by Shibban Lal. the workman concerned.
The special
lea\e application and the appeal must, therefore, be held to have
been filed in this Court by the Sangh as representing Shibban Lal,
who apparently agreed to be so represented by the Sangh.
On
the facts and circumstances of this case, we do not think that the
present appeal can be considered to be unauthorised and legally
incompetent on the technical ground urged on behalf of the respondent and we do not find any cogent ground to reject the appeal
on the basis of the preliminary objection.
892
SUPREME COURT REPORTS
[1970] 2 $.C.R.
We now turn to the merits of the controversy.
The Tribunal
took the view that the dispute regarding retirement age of Shibban
Lal ceased to be an industrial dispute because of the settlement
dated June 9, 1965 and, therefore, it could not be referred to it
for adjudication.
Support of his case by the workers of any other
Union after reference could not in its view validate the reference.
The ap_l?ellant's learned counsel challenged this view and drew our
attention tor. 58 of the Industrial Disputes (Central) Rules, 1957
made under s. 38 of the Industrial Disputes Act, 1947.
This rule
reads as under :
"58. Memorandum of settlement:
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( 1) A settlement arrived at in the course of conciC
liation proceeding' or otherwise shall be in form 'II'
(2) the settlement shall be signed-
( a) in the case of an employee, by the employer hunself, or by his authorised agent or when the
employer is an incorporated com'pany or other
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body corporate, by the agent, mRnager or other
principal officer of the corporation;
(b) in the case of workmen, by any officer of a trade
union of workmen or by five representallves of
workmen duly authorised in this behalf at a meeting of the workmen held for the purpose.
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Explanation-In this rule "officer" means any of the
fol)owing officers, namely-
( a) the President;
(b) the Vice-President;
( c) the Secretary (including the General Secretary);
(d) a Joint Secretary;
( e) any other officer of the trade union authoris~d in
this behalf by the President and Secretary of the
Union.
( 3) Where a settlement is arrived at in the course
of conciliation proceeding the Conciliation Officer shall
send a report thereof to the Central Government
together with a copy of the memorandum of settle·
rne~t signed by the parties to the dispute.
( 4) Where a settlement is arrived at between an
employer and his worK:rnen otherwise than in the co1!rsc
of conciliation proceeding before a Board or a Conc11iaF
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WORKMEN v. DELHI CLOTH MILLS (Dua, J.)
893
tion Officer, the parties to the settlement shall jointly
s~nd a cqpy thereof to the Central Government, the
Chief Labour Commissioner (~entral) New Delhi, and
the Regional Labour Commissioner, New Delhi, and to
the Conciliation Officer (Central) concerned."
Form 'H' may also now be reproduced :
"Form for Memorandum of Settlement
Name of parties
Representing employer ( s)
Repres.enting workmen :
Short recital of the case
Terms of settlement
Witness
(1) ................. .
~2) ................. .
Signature of the parties
Signature of Conciliation Officer
Board of Conciliation
Copy to:
(I) Conciliation Officer (Central) ...•..........
(here enter the office address of the Conciliation Officer in the local area concerned).
(2) Regional Labour Commissioner (Central) ....
(3) Chief Labour Commissioner (Central) New
Delhi ......... .
( 4) The Secretary to the Government of India,
Ministty of Labour, New Delhi."
The plain reading of the rule and the Form, according to the
appellant, clearly suggests its mandatory character. It was contended that the settlement was not entered into with the concurrence of he Conciliation Officer nor was it entered during the conciliation proceedings.
Particular emphasis was laid on noncomplianc~ with s11b-rule ( 4). The settlement, in the circumstances, was urged to be invalid and the reference of the dispute
quite in accordanr.e with law: In tliis connection the learned
advocate
'referred to s. 18 of the Industrial Disputes Act, 1947
which is as follows :
"Persons on whom settlements and awards are
binding:
894
SUPREME COURT REPORTS
[1970] 2 S.C.R.
18. (1) A settlement arrived at by agreemt:nt
between the employer and workmen ( othery1ise than in
the course of conciliation proceeding) shall be binding
on the parties to the agreement.
( 2) Subjectto the provisions of sub-section ( 3) an
arbitration award which has became enforceable shall be
binding on the parties to the agreement who referred the
dispute to arbitration.
( 3) A settlement arrived at in the cou_rse of conciliation proceedings under this Act or an arbitration
award in a case where a notification has been issued.
under sub-section (3A) of section lOA or an award of
a Labour Court, Tribunal or National Tribunal which
has become enforceable shall be binding on-
·
(a) all parties to the industrial dispute;
( b) all other parties summoned to appear in the
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proceedings as parties to the dispute, unless the
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Board, Arbitrator, Labour Court, Tribunal or
National Tribunal, as the case may be, records
the opinion that they were so summoned without proper cause;
(c) where a party referred to in clause (a) or
clause (b) is an employer, his heirs, successors,
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or assigns in respect of the establishment to
which the dispute relates;
(d) where a party referred to in clause (a) or dause
(b) is composed of workmen, all persons who
were employed in the establishment or part of
the establishment, as the case may be, to which
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the dispute relates on the date of the dispute and
all persons who subsequently become employed
in that establishment or part."
The decision in The Bala Shoe Co. (P) Ltd. v. D. N.
Ganguly(') was cited in support of the submission that a settlement during the conciliation proceedings to be binding must be
arrived at with the assistance and concurrence of·the Conciliation
Officer.
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The. res~ondent's learned Advocate in reply obliquely suggested m this connect10n that the Management and the Union
were free to arrive at a settlement of their dispute and if they
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agree<!._to do so then the agreement could not but be held to be
II) [19~0] 3.S.C.R. 308.
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WORKMEN V. DELHI CLOTHi MILLS (Dua, J.)
895
binding.
We do not think the Managem~.1:it .and the Union c~n,
when a dispute is referred to the Conc1hation Officer, claun
absolute freedom of contract to arrive at a settlement in all respects binding on all workmen, to which. no objection whatsoever
can ever be raised by the workmen feel1.1g aggncved. The question o,f a valid and binding settlement in such circum;tances, is in
our opiniop, govemt,d by the statute and the rules made thereunder.
Reliance was next placed on s.18 (1)
to
support the
binding character of the settlement.
This sub-section for its proper construction must be read with the other sub-sections and the
relevant rules, in the light of the definition of 'settlement' as contained ins. 2(p) of the Industrial Disputes Act.
'Settiement' as
defined therein means settlemqit arrivd at in the course of conciliation proceeding and includes a written agreement between the
employer and workmen arrived at otherwise than in the course
of conciliation proceeding where such agree.nent has been signed.
by the parties thereto in such manner as may be prescribed and a
copy thereof has been sent to the appropriate Government and the
Conciliation Officer.
In the light of these provisions we do not
think that s.18 (1) vests in the Management and the Union unfettered freedom to settle the dispute as they please am.I clothe it
with a binding effect on.all workmen or even on all member workmen of the Urion.
The settlement has to be in compliance with
tte statutory provisions.
It was then contended by Shri Daphtary that non-compliance
with r. 88 ( 4) havin~ not been pleaded by the appellant before the
Tribunal, no question of proof by the respC1ndent of compliance
therewith arose.
This plea, it was strongly objected, should not
be allowed to be raised at this late stage in this Court.
We ·1re not impressed by this submission.
On reference having been made by the Government to the Tribunal, if the respondent wanted to show that this reference was invalid because of a
lawful settlement, then it was incumbent on the party relying on
such a settlement to prove that it was lawful and valid, rendering
the reference illegal.
This was particularly so when we find that
Shibban Lal had in his affirlavit expressly asserted that the settlement relied upon had not been filed before the Conciliation Officer
prior to June 18, 1965 when he sent his failure report and also
t~at the two perso~s entering into th settlement had no authority
either from the Umon or from the members thereof to enter into a
binding agreement.
Section 38 of the Industrial Disputes Act
empowers the approp~iate Government to make rules for the purpose of giving effect to the provisions of the Act.
Rules made by
the Central Government have to be laid before each House of
Parli~ent while in. session for a period of 30 days and the Houses
of Parhament ar7 ~IYen an opportunity of not only modifying them
but even of dectdmg that the rules -should not be made at all.
896
SUPREME COURT REPORTS
(1970] 2 S.C.R.
These rules thus appear to us to h~ve full force of law of which
A
judicial notice has to be taken.
It was therefore incumbent on
the Tribunal to satisfy itself that the settlement relied upon by the
respondent in support of the plea of it legality of the reference,
which vitally affected its jurisdiction, was in accordance with the
provisions of both Industrial Disputes Act and the relevant statutory rules.
This was all the more so in view of the plws containB
ed in Shibban Lal's affidavit produced before the Tribunal to
which reference has already been made in this judgment. Though
no reference was specifically made to r.58, the facts affirmed were
reasonably clear to attract the attention of the Tribunal to the
question of !e~ality of the >ettleme,nt.
Bearing in mind the object
of the Industrial Disputes Act and the important public purpose c
which it is designed to serve, the Tribunal, in our view, had an
obligation to make a deeper probe into the validity of the settlement 'and not to accept it casually.
However, on the respondent's argument that r.58 had not been
specifically relied upon by the appellant before the Tribunal we
felt inclined and indeed suggested to the respondent during the
course of arguments that the case might be submitted to the Tribunal for the purpose of deciding the question of compliance with
D
the said rule, particularly with sub-rule ( 4). But the respondent's
learned Advocate with his usual fairness, frankly pointed out that
remand for this purpose would not be of much use because this
sub-rule had not been complied with in terms.
A faint sugges- · l!l
tion thrown at once stage that it had been substantially complied
with was not seriously pressed though our attention was drawn in
that connection to a letter written by the Management on J,_;ly 16,
1965 to the Secretary, Ministry of Labour, Government of India,
enclosing a copy of the settlement arrived at by the Management
and the Union in connection with the matters stated therein.
The
settlement was said to contain the following :
F
1. Age of retirement
2. Case of Shri Shibban Lal
3. Case of Shri Mansuka
4. Case of 7 Kahars
, 5. Case of reduction in pay of 12 workmen
6. Case of Shri Jagan Nath
7. Case of Shri Chiranjilal Pahalwan.
This letter quite clearly does not amount to compliance with the
rule.
Keeping in view its object and purpose, this rule does seem
to demand full compliance in order to clothe the settlement with
a binding character on all workmen.
G
H
A
WORKMEN v. DELHI CLOTH MILLS (Dua, /,)
~97
We may observe here that we were not impressed by the
appellant's argument that r.58 sub-rule (2) (b) required that the
officer of a trade union of workmen must also be duly authorised.
We, however, do not express any considered opinion in view of
our conclusion on other points.
B
In the result this appeal must be allowed and the impugned
order set aside.
As the respondents have conceded that there is
no compliance with r.58 ( 4) the settlement in regard to the dispute referred to the Tribunal, must, therefore, be held to be illegal.
The case, has, therefore, to go back to the Tribunal for adjudication upon the dispute on the merits.
The respondent should pay
C ·the appellant's costs in this Court.
Y.P.
Appeal allowed.