# SUPREME COURT REPORTS [1961] THE BAT A SHOE CO. (P) LTD v. D. N. GANGULY & OTHERS - **Citation:** [1961] 3 S.C.R. 308 - **Court:** Supreme Court of India - **Decided:** 1959-02-24 - **Case number:** Civil Appeals Nos. 32 and 33 of 1960 - **Bench:** P. B. Gajendragadkar, K. N. W Anchoo - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/supreme-court-reports-1961-the-bat-a-shoe-co-p-ltd-v-d-n-ganguly-others-1991 - **Pages:** 17 ## Headnote Industrial Dispute-Illegal Strike-Managerial enquiry and dismissal of workmen-Settlement without approval of conciliation officer - Competence of Reference - Management's action against employees-Interference by Tribunal, if and when justified-Industrial Disputes Act, I947 (I4 of I947), SS. I2, IB. During the course of conciliation proceedings in respect ol a dispute ,between the appellant company and its workmen a settlement ':"as arrived at between the parties on February 18, 1954· Despite the settlement some of the workmen went on strike on February 23, 1954, but eventually it was called off on March 19 and 20, 1954· On the ground that the strike was illegal because it took place during the currency of a settlement, the appellant took steps to serve chargesheets on the workmen who had joined the strike and, after a managerial inquiry, dismissed sixty of them. There were conciliation proceedings in respect of the dismissal of the workmen before the Labour Commissioner and an agreement was arrived at between the appellant and the union on September 2, 1954. The Labour Commissioner was apprised of this settlement, but since it was found that the union was opposing reinstatement of certain workmen, he proposed to hold further conciliation proceedings. The appellant was against holding further conciliation steps and, therefore, the Labour Commissioner reported the matter to the Government under s. 12(4) of the Industrial Disputes Act, 1947· A reference ·was accordingly made and the Tribunal gave the award under which all the dismissed workmen were to be reinstated on the ground that they had not been shown to have taken part in violence and there were extenuating circumstances in their case inasmuch as they were misled to join the strike in order to oust the old office bearers of the union so that others might be elected in their place, and that though a much larger number of workmen had taken part in the illegal strike and the union took up the case, only these sixty were eventually dismissed while the rest were reinstated. The appellant objected to the award on the grounds (1) that as a settlement had been arrived at during the course of conciliation proceedings on September 2, 1954, which specifically dealt with the case of these sixty workmen, the reference was incompetent in view of s. 18 of that Act, (2) the reference was also incompetent because what was referred was not an industrial dispute but a dispute between the employer and its individual workmen, and (3) the Tribunal's order of reinstatement was in any case unjustified. 3 S.C.R. SUPREME COURT REPORTS 309 Held: (1) under ss. 12 and 18 of the Industrial Disputes 1960 Act, 1947• a settlement which is binding under s. 18 on the ground that it was arrived at in the course of conciliation proBala Sho• ceedings is a settlement arrived at with the assistance and conCo. (P) Lid. currence of the conciliation officer, and that a settlement which v. is not binding under s. 18 will not be a bar to a reference by the Gangvly Government. In the present case the agreement of September 2, 1954. did not have the approval of the conciliation officer and, consequently, the reference based on the report of the conciliation officer under s. 12 of the Act was competent. (2) that the reference was not bad on the ground that an individual dispute had been referred to the Tribunal for adjudication, because the dispute in the present case was originally sponsored by the union and related to the dismissal of a much larger number of workmen. (3) that where the finding of the Tribunal was that there was misconduct which merited dismissal under the Standing Orders and that the managerial inquiry was proper, the Tribunal was not justified in interfering with the action of the management unless it found unreasonable discrimination in the matter of taking back employees, or unfair labour practice or victimisation against the employees. Indian Iron and Steel Co. Ltd. and Another v. Their Workmen, ## Text 1900 Deceniber I 5. 308 . SUPREME COURT REPORTS [1961] THE BAT A SHOE CO. (P) LTD. v. D. N. GANGULY & OTHERS (P. B. GAJENDRAGADKAR and K. N. W ANCHOO, JJ.) Industrial Dispute-Illegal Strike-Managerial enquiry and dismissal of workmen-Settlement without approval of conciliation officer - Competence of Reference - Management's action against employees-Interference by Tribunal, if and when justified-Industrial Disputes Act, I947 (I4 of I947), SS. I2, IB. During the course of conciliation proceedings in respect ol a dispute ,between the appellant company and its workmen a settlement ':"as arrived at between the parties on February 18, 1954· Despite the settlement some of the workmen went on strike on February 23, 1954, but eventually it was called off on March 19 and 20, 1954· On the ground that the strike was illegal because it took place during the currency of a settlement, the appellant took steps to serve chargesheets on the workmen who had joined the strike and, after a managerial inquiry, dismissed sixty of them. There were conciliation proceedings in respect of the dismissal of the workmen before the Labour Commissioner and an agreement was arrived at between the appellant and the union on September 2, 1954. The Labour Commissioner was apprised of this settlement, but since it was found that the union was opposing reinstatement of certain workmen, he proposed to hold further conciliation proceedings. The appellant was against holding further conciliation steps and, therefore, the Labour Commissioner reported the matter to the Government under s. 12(4) of the Industrial Disputes Act, 1947· A reference ·was accordingly made and the Tribunal gave the award under which all the dismissed workmen were to be reinstated on the ground that they had not been shown to have taken part in violence and there were extenuating circumstances in their case inasmuch as they were misled to join the strike in order to oust the old office bearers of the union so that others might be elected in their place, and that though a much larger number of workmen had taken part in the illegal strike and the union took up the case, only these sixty were eventually dismissed while the rest were reinstated. The appellant objected to the award on the grounds (1) that as a settlement had been arrived at during the course of conciliation proceedings on September 2, 1954, which specifically dealt with the case of these sixty workmen, the reference was incompetent in view of s. 18 of that Act, (2) the reference was also incompetent because what was referred was not an industrial dispute but a dispute between the employer and its individual workmen, and (3) the Tribunal's order of reinstatement was in any case unjustified. 3 S.C.R. SUPREME COURT REPORTS 309 Held: (1) under ss. 12 and 18 of the Industrial Disputes 1960 Act, 1947• a settlement which is binding under s. 18 on the ground that it was arrived at in the course of conciliation proBala Sho• ceedings is a settlement arrived at with the assistance and conCo. (P) Lid. currence of the conciliation officer, and that a settlement which v. is not binding under s. 18 will not be a bar to a reference by the Gangvly Government. In the present case the agreement of September 2, 1954. did not have the approval of the conciliation officer and, consequently, the reference based on the report of the conciliation officer under s. 12 of the Act was competent. (2) that the reference was not bad on the ground that an individual dispute had been referred to the Tribunal for adjudication, because the dispute in the present case was originally sponsored by the union and related to the dismissal of a much larger number of workmen. (3) that where the finding of the Tribunal was that there was misconduct which merited dismissal under the Standing Orders and that the managerial inquiry was proper, the Tribunal was not justified in interfering with the action of the management unless it found unreasonable discrimination in the matter of taking back employees, or unfair labour practice or victimisation against the employees. Indian Iron and Steel Co. Ltd. and Another v. Their Workmen, [1958] S.C.R. 667, followed. I. G. N. and Railway Co. Ltd. v. Their Workmen, [1960] 2 S.C.R. 1, distinguished. CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 32 and 33 of 1960. Appeals by special leave from the Award dated February 24, 1959, of the Industrial Tribunal, Bihar, Patna, in Reference nos. IO of 1959 and I of 1955. M. C. Setalvad, Attorney-General for India, Nooni Coomar Chakravarti and B. P. Maheshwari, for the appellant. B. C. Ghose and P. K. Chatterjee, for the respondents. 1960. December 15. The Judgment of the Court was delivered by W ANCHOO, J .-These are two connected appeals W•...,hoo J. by special leave in an industrial matter and relate to the dismissal of sixty workmen of the appellant-company. The dispute was referred by two references; r960 Bata Shos Co. (P) Ltd. v. Ganguly Wanchoo ]. 310 SUPREME COURT REPORTS [1961] one relates to 31 workmen and the other to 29 workmen. They have been disposed of by a common award, though, as the references were two, there are two appeals before us. The brief facts necessary for present purposes are these: On November 10, 1953, a general meeting was held by the workmen of the appellant and a no confidence motion was passed against the executives -0f the workmen's union and Shri Shahabuddin Bari was elected as the new president of the union. On February 6, 1954, the newly elected president served a strike notice on the management. On February 18, 1954, a settlement was arrived at between the management and Shri Fateh Narain Singh, the general secretary of the old executive committeee. On February 23, 1954, the strike was launched in accordance with the notice served by Shri Bari and the strike continued for about a month. The strike was called off on March 19 and 20, 1954. The case of the appellant was that the strike which began on February 23, 1954, was an illegal strike as it took place during the currency of a settlement arrived at in the course of conciliation proceedings with the assistance of the Labour Commissioner who acted as conciliation officer. Consequently, the appellant took steps to serve chargesheets on the workmen, who had joined the illegal strike, on March 4, 1954. This was followed by the dismissal of these sixty workmen after a managerial inquiry. It is said that thereafter there were conciliation proceedings which failed and consequently the two references were made. The main findings of the tribunal are that the settlement of February 18, 1954, was a bona fide settlement arrived at during the course of conciliation proceedings and was therefore binding on the workmen; and consequently the strike which began on February 23, 1954, was in breach of the terms of the settlement and was therefore illegal. The tribunal further held that the strike was staged in hot-haste and no reasonable opportunity was given to the management to reply to the demands made before launching the strike. It also held that the trouble arose because of the election of 3 S C.R. SUPREME COURT REPORTS 311 Shri Bari and the new office bearers. This matter was referred to the Registrar of Trade Unions and he held that the meeting at which Shri Bari and the new office bearers were elected was irregular and in consequence the old office bearers of the union continued to remain validly elected executives of the union. This decision was given on February 22, 1954, and the strike was launched on February 23 immediately thereafter. The tribunal was not sure whether this decision had been communicated to Shri Bari before the strike was launched; but in any case it was of the opinion that there was no reason to stage the strike in such hothaste after the settlement of February 18, 1954. Having thus held that the strike was illegal and there was no reason why it should have been launched in such hot-haste, the tribunal went on to consider the case of these sixty workmen who were dismissed. It held that no charge of violence was brought home to these workmen and even the charge-sheets which were originally issued to the workmen did not contain arty charge of violence. The tribunal then divided the sixty workmen into three batches of 47, 11 and 2. In the case of 47 workmen, it held that they must be assumed to have been served with chargesheets as they refused to accept them and that proper inquiry was held into the charges, though in their absence. In the case of 11 workmen, it was of opinion that charge sheets had not been served on them and therefore any inquiry held in their absence was of no avail. In the case of two workmen, it held that no attempt was made to serve any charge-sheet on them. Further, it set aside the order of dismissal with respect to 13 of the workmen on the ground that they were either not served with any charge-sheet or no charge-sheet was issued to them; as for the remaining 4 7, though it found that charge-sheets had been issued to them and they had refused to accept them and proper inquiry had been held in their case, it set aside the order of dismissal on the ground that they had not been shown to have taken part in violence and there were extenuating circumstances in their case inasmuch as they were misled to join the strike in order to oust the old office Bala Shoe Co. (P) Lia. v. Ganeuly Wan&hoo ]. Bata Shoe Co. (P) Ltd. v. Ganguly Wanchoo ]. 312 SUPREME COURT REPORTS [1961] bearers of the union so that others might be elected in their place. It further pointed out that though a much larger number of workmen had taken part in the illegal strike and the union took up their case, only these sixty were eventually dismissed while the rest were reinstated. It was of the view that there was no reason for the appellant to make any dist.inction between these workmen and the others who were reinstated. It therefore ordered reinstatement of these 47 workmen also. Finally, it held that the workmen were sufficiently penalised, they being out of employment from March 1954 to February 1959 when it made the award and that there was no reason in the cricumstances to maintain their dismissal. It awarded 50% of the back basic wages to the two workmen in whose case charge-sheets were not even issued and 25 per cent of the back basic wages to the 11 workmen who were not served with chargesheets; no back wages were allowed to the forty-seven workmen who had refused to accept the charge-sheets. sent to them. Three points have been raised on behalf of the appellant before us; namely, (i) as a settlement had been arrived at during the course of conciliation pro-. ceedings on September 2. 1954, which specifically dealt with the case of these sixty workmen, the references were incompetent; (ii) the references were incompetent because what was referred was not an industrial dispute but a dispute between the employer and its individual workman; and (iii) the tribunal's order of reinstatement was in any case unjustified. Re. (i). It appears that after the dismissal of a large number of workmen consequent on the illegal strike that took place on February 23, 1954, there were conciliation proceedings before the Labour Commissioner, Bihar, with respect to these dismissals and other matters. These conciliation proceedings appear to have begun some time before May 1,, 1954, for we find that on that day the Labour Commissioner wrote to the appellant that its objection that conciliation proceedings were illegal and without jurisdiction was baseless. It seem1 1 3 S.C.R; SUPREME COURT REPORTS 313 . ~ .. that .effo;ts a.t conciliation continued right-up-to .the -· x96o end ,of August · 1954, for we find another Jetter· of Bata Shoa August 31, 1954, from the , Labour Commissioner to . co.

Ltd. the appellant saying that he had heard that mutual negotiations were going on between the appellant and v. Ganguly its workmen for the settlement of. their dispute and ·' vSeptember_ 2 had been fixed for that purpose. The Wanchoo J. Labour-·Co=issioner therefore gave notice to the appellant that he would hold conciliation proceedings on September 3 at 3 p.m. in his office in case the disputes -were .not mutually.settled before that date. It seems that an agreement was arrived at between the appellant ·and the. union on September 2. In this agreement it was noted that 76 dismissed workmen had already been employed; it was further provided that 110 workmen would also.be employed in the same manner as the seventy-six. Further 31 dismissed workmen were to remain dismissed and would not be c0nsidered for further employment or for any other benefit. 30 other dismisBed workmen would for the time being remain . dismissed and it would be decided later on between the union and the appellant whether their dismissal should be confirmed like t!10se of 31 mentioned above or whether they should be given the option to wait for employment as and when vacancies a.rose or, should be treated as retired on the date.of dismissal in order to enable them to receive the benefits· of gratuity and refund of provident fund.· It may be added that the present references are with respect to sixty workmen out of these sixty-one. It seems that the Labour Commissioner was apprised of this·. settlement. Consequently he wrote on September 3, 1954, to the appellant that the conciliation proceedings proposed to be held on that date were cancelled. Tl'u- Labour. Commissioner further pointed out that :fflc tmio~ was opposing reinstatement of certain wO,rkmen;,he therefore proposed to hold further.conciliation proceedings in thb case of such workmen on $Qpteruber 6, 1954, at· 3 p.m. before making his final recommendatfons to government in this matter. ' The appellant protested .to the Labour . Commissioner Bata SlttJe Co. (P) Ltd. v. Ganguly Wanchoo ]. 314 SUPREME COURT REPORTS [1961] against the holding of any further conciliation proceedings after the agreement of September 2 and apparently did not attend the meetiug fixed for September 6. Nothing further therefore seems to have taken place in the conciliation proceedings. Presumably the Labour Commissioner must have reported thereafter to the gevernment under s. 12(4) of the Industrial Disputes Act, No. XIV of 1947 (hereinafter called the Act). Then followed the two references by the government; the first on October 8, 1954, relating to 31 workmen and the other on January 15, 1955, relating to 29 workmen. On these facts the contention on behalf of the appel· lant is that the references were incompetent because of the agreement made on September 2, 1954. Reliance in this connection is placed on ss. 18 and 19 of the Act, as they were at the relevant time. Sec. 18 provided that a settlement arrived at in the course of' conciliation proceedings would be binding on all parties to the industrial dispute and others indicated therein and s. 19 provided that such settlement would come into force on such date as was agreed upon between the parties and if no date was agreed upon then on the date on which the memorandum of the settlement was signed by the parties. Such settlement would be binding for such period as was agreed upon by the parties and if no such period was agreed upon, for a period of six months and would continue to be binding upon the parties thereafter until the expiry of two months from the date on which a notice in writing to terminate the settlement was given by one of the parties to the other party or parties to the settlement. The contention on behalf of the appellant is that the agreement of September 2, 1954, arrived at during the course of conciliation proceedings between the appellant and the union was binding on all workmen and therefore it was not open to the government to make these references within six months of it. The question thus posed raises the question as to what is meant by the words "in the course of conciliation proceedings" appearing in s. 18 of the Act. One thing is clear that these words refer to the duration 3 S.C.R. SUPREME COURT REPORTS 315 when the conciliation proceedings are pending and it may be accepted that the conciliation proceedings with respect to these dismissals, which began sometime before May 1, 1954, were certainly pending upto . September 6, 1954, and may be a little later, as is clear from the two letters of the Labour Commissioner. But do these words mean that any agreement arrived at between the parties during this period would be binding under s. 18 of the Act? Or do they mean that a settlement arrived at in the course of conciliation procedings postulates that that settlement should have been arrived at between the parties with the concurrence of the conciliation officer? As we read this provision we feel that the legislature when it made a settlement reached during the course of conciliation proceedings binding not only on the parties thereto but also on all present and future workmen intended that such settlement was arrived at with the assistance of the conciliation officer and was considered by him to be reasonable and therefore had his concurrence. Sec. 12 of the Act prescribes duties of the conciliation offieer and provides that the conciliation officer shall for the purpose of bringing about settlement of the dispute without delay investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as he may think fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute: (vide s. 12(2) ). Then comes s. 12(3), which provides, "If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings the conciliation officer shall send a report thereof to the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute". Reading these two provisions along with s. 18 of the Act, it seems to us clear beyond doubt that a settlement which is made binding under s. 18 on the ground that it is arrived at in the course of conciliation proceedings is a settlement arrived at with the assistance and concurrence of the conciliation officer, for it is the duty of the conciliation officer to promote Bata Shoe Co. (P) Ltd. v . Ganguly Wanchoo ]. Bata Shod Co. (P) Ltd. v. Ganguly ~l'anchoo ]. 316 SUPREME COURT REPORTS (1961] a right settlement and to do everything he can to induce the parties to come to a fair and amicable settlement of the dispute. It is only such a settlement which is arrived at while conciliation proceedings are pending that can be binding under s. 18. In the present case it is obvious that the Labour Commissioner took no steps to promote the actual agreement. which was arrived at between t.he appellant aml the union on September -2. The letter of August 31 made it clear that the Labour Commissioner would take action under s. 12(2) on September 3 if no mutual agreement ·was a:rived at between the appellant and the union. It seems that a mutual agreement was arrived at between the appellant and the union without the assistance of the Labour Commissioner and it did not receive his concurrence even later; on the contrary evidence shows that the Labour Commissioner t with the assistance uf the conciliation officer and his concurrence; si,ch a settlement would be reported to the appropriate government under s. 12(3). In the present case the agreement of September 2, 1954 was not arrived at with the assistance and concurrence of the conciliat.ion officer, namely, the Labour Commissioner, which will be dear from his letter of September 3, 1954. In the circumstances it is nut a settlement which is binding un