Jhagrakhan Collieries (P) Ltd. v. Shri G. C. Agarwal, Presiding Officer, Central Government Industrial ·tribunal-Cum-Labour Court, Jabalpur and Ors.

Judgment

The Judgment of the Court was delivered by SARKARIA, J.-This appeal by special leave is directed against the judgment, elated August 4, 1971, of the Madhya Pradesh High Court JHAGRAKHAN COLLIERIES v. LABOUR COURT (Sarkaria, /.) wherebv the appellant's Writ Petition under Articles 226 and 22] of the Constitution was dismissed. The appellant is the Jh.agrakhan C?llieries (P) Ltd., a Company mcorpora~. un.der the Indian Compames Act. The Company owns three colli~n~s in Jhagrakhan in Surguja District of Madhya Pradesh. These colhencs employ over 4,200 workmen. At the . relevant time there were three Trade Unions functioning at the collieries, namely, .' 1) Mad~va Pradesh Koyla Ma1Xioor Panchayat (fort short, the .Panch~vat): (2) Azad Koyla Shramik Sabha (for short, the Sabha); ~3) Madhya Pradesh Colliery Workers' Federation (for short. the Federation') At the material time, the Panchayat, according to the allegations of the Company, had about 75 per cent of the workers on its rolls.

This Union conducted a complete strike for 57 days in the months of March and April 1968 at the collieries. The Central Wage Board for Coal Mining Industry by its award recommended payment of Variable Dearness Allowance (for short,' v:D.A.), correlated to the cost of livin2 index prevailing from time to time. The Company accepted these recommendations. The workers represented by the various Unions. oil the basis of the Wa2e Board's award demanded V.D.A. at the rate of Rs. 1.47 per day with effect from April 1, 1968 while the Companv was pavin.2 it at the rate of Rs. 1. H per day. The Companv refused to pay more than Rs. 1.11 per day, Thereupon, in December 1968. the Federation, which had a membership of 169 workers (Responllents 4 to 173 herein) made an application before the Central Labour Court-cum-Industrial Tribunal Jabalpur (for short1 the Labour Court) under Section 33-C(2) of the Industrial Disputes Act (for short the 'Act') for determination .of the amount nf V.D.A; due to the workers.

The Company submitted its written statement on Mav 13. 1969, challen2in2 the jurisdiction of the court and raised other legal objections. On October 4. 1969. the Panchayat served a notice of strike under Section 22< 1) of the Act on the Company together with a charter of 29 demands .an'd threatened to strike on or after November 7, 1969 if. their demands were not conceded. Thereupon, the counciliation proceedinl?S puroortin2 to be under s. 22 read with s. 12(1) of the Act were held by Mr. B. D. Sharma, Assistant Labour Commissioner (C) Shahdo1 on the 21st and 22nd October. 1969. Jn the course of these conciliation proceedings on October 22. 1969, besides other matters. the l.iispute relatin2 to V.D.A. was settled. On October 22, 1969, the Assistant Labour Commissioner (Mr. Sharma) sent a report tor?ether with a co0v of the settlement to the Government, as required hv Section 12(3) of the Act. Subseauent to the si20ing of this conciliation al?l'eement, dated October 22.

1969. the Company filed a supplementarv statement on November 5, 1969. submitting that in view of the said settlement, the apPlication under s. 33C(2) of the Act filed bv the Federa~loh, had become infructuous. The Labour 8 76 Court by its order, dated December 20, 1969 framed this additional issue : "Whether the claim stands iettled by reason of settlement dated 22-10-1969, if any''. On b~half of the workers seve:ral objections were. raised to the enforceability of this settlement, Their ·ultimate stand was that the settlement was not in accordance with the provisions of the Act, inasmuch as it had not been brought about in proceedings before a dulv appointed Conciliation Officer. The Labour Court tried this issue as ·a preliminary issue. It held that Shri Sharma was not a. duly appointed Conciliation Officer on the date on which the settlement was arrived at, anti consequently, it did not put an end to the dispute pending before. the Labour Court.

To impugn this order of the Labour Court, the Company th:rough its agent and Mining Engineer filed a Writ Petition under Artick 226 and 227 of the Constitution, which as stated before, was dismiss1~d by the High Court~ Hence this appeal. Mr. Malhotra, learned Counsel for the appellant raised three . points in the course of his arguments before us : ( 1) Jn holding that the settlement, dated October 22, 1969 was ·not a settlement in the course of conciliation proceedings, the courts below have misconstrued Section 4 of the Act; inasmuch as, they have relied only upon sub-section <1) and have not taken into account i1s sub ·section ( 2) and the relevant notification thereunder: (2) (a) ABsuming that the settlement in question was not a. settlement in the course of conciliation proceedings and bindin~ under s.

18 ( 3) on the Act, it was still a settlement binding on the workmon, including respondents 4 to 173 herein, when 99 per cent of the. total workmen had accepted the terms of the settlement, including V.D.A. (b) The Labour Court's order refusing permission to the appellant Company to lead evidence to prove the implementation aild accept.a'nce of the aforesaid settlement by 99 per cent of the workers, was violative of the principles of natural jusqce. (3) Tbere is nothing in the Act which prohibits the employee and the workmen from entering into a s~ttle­ Jrient during the pendency of proceedings under s. 33-C(2) of the Act. On the other hand, settlements inter se between the parties have always been preferred by this Court to the adjudicatory process. Subsequently, however, Mr. Malhotra withdrew his contention with regard to point No. (1) and requested the Court not to give an{ finding thereon. We, therefore, refrain from going into the same. JHAGRAKHAN COLLIERIES v. LABOUR COURT (Sarkaria, J.)

For points (2)' and (3), Mr. Malhotra placed reliance on two decisions of this Court, namely : Amalgamated Coffee Estates Ltd . . a11d ors. v. Their workmen and others(!) and The Sirsilk Ltd. and ors, v. Government of Andhra Pradesh and anr.( 2 ) Before dealing with the_ points canvassed, it will be appropriate to examine the relevant pro.visions of the Act. Section 2 (p) of "the Act defines settlement to mean- "a settlement arrived at in the course of conciliation proceedings an~ includes a written agreement between the employer anld workmen arrived at otherwise than in the course of conciliation proceeding where such agreement 'has been signed by the parties thereto in such manner as may )?e prescribed and a copy thereof has been sent to (an officer authorised in this behalf by) the appropriate ,Government and the conciliation officer." · As analvsis of the above definition would show that it contemplates only two kinds of s~ttlement (i)

A settlement arrived at in the course of conciliation proceedings . under the Act ahd (ii) a written agreement between the employer and the workmen arrived at other· wise than ·in the course of conciliation proceedinl!S. But a written agreement of the latter kind in order to fall within the definition must satisfy two more conditions, namely: (a) It must have been signed by the parties thereto in the prescribed. manner, and (b) a copy thereof must have been sent to the authorities indicated in s. 2(p). The effect of a settlement of the first kind is iridicated in subsection (3) and that of the second in sub-s. (l) of s. 18 of the Act. The material part of s. 18 reads: "18(1) A settlement arrived at by agreement between the employer and workmen otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement. (2)

Subject to the provisions of sub-section (3), an arbi·, ·tration award which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration." (3) A. settlement arrived at in the coiirse of conciliationprocealinl!S under this Act (or an arbitration award in a case where a notification has been issued' under. sub-section (3A) of Section (10A) or (an award of a Labour Court, Tribunal or National Tribunal) which has become enforceable shall be binding on- ( a) all parties tQ the Industrial dispute; (b) all other parties summoned tc appear in the pro-· ceedings as parties to the dispute, unless the BOard, {arbitrator) (Labour Court, Tribunal or National -..,..(1,....) [""19,..,65-]""'Il,-L-U-1..,.,10. (2) [1964)S.C.Jl. 448. Tribunal), as the case may be, records the opinion that they were summoned without proper cause; (c) where a party referred to in clause (a) or clause:

(b) is an employer, his heirs, successors or assigns in respect of the establishment to which the disput1! relates; ( d) where a party referred to in clause or clause (b) is composed of workmen, all persomi who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute aml all persons who subsequently become employed in that establishment or part." It is clear from a perusal of Section 18, that a settlement a1rrived at in the course of conciliation proceedings is binding not only on the . actual partjes to the industrial dispute but also on the heirs, succ1~ssors or assigns of the employer on the one hand, and all the workmen in the establishment: present or future-, on the other. In extending the operation of such a settlement beyond the parties thereto, sub-sc!Ction ( 3) of th•~ Section departs from the ordinary law of contract and gives effect to the principle of collective bargaining. Thus, had Mr. B. D. Sharma been a duly appointed Conciliation Officer, the Hettlement arrived at in the conciliation proceedings, duly conducted by him under Section 12, would have been binding on the entire body of the workers includinJl:

Respondents 4 to 173 represented by the Fe:deration. and others who are members of the Sabha. Since *e finding of the Higb Court to the effect that the settlement between the Panchayat and the management cannot be deemed to be settlement arrived at in the course of conciliation procee'dings under the Act, now stands unassaileld. the aforesaid sub-section (3) cannot be invoked to make it binding on Respondents 4 to 173. The question remains: Can it be enforced against these Respondents by virtue of sub-section ( 1) of the Section ? This further narrows down into the issue : Were these resoondents parties and signatories to the agreement between the management and the f'anchayat ? The answer to this question is . undoubtedly in the negative. Even Mr. Malhotra has conceded that at the time when the s.ettlement was arrived at on October 22, 1969, these respondents and the members of the Sabha. were not parties to it.

But his argum<:nt is that subsec1uentlv by drawing V.D.A. in accordance with the settlement, 99% of the workers have accepted the settlement which, in consequence,. would be as effective against them as if they were parties to it. The argument is attractive but does not stand a close examination. We have already noticed that accordin~ to the scheme .of s. 18, read with s. 2( d), an agreement, made otherwise than in the cc1urse of conciliation proceedings, to be a settlement within the meaning of JHAGRAKHAN COLLIERIES v. LABOUR COURT (Sarkaria, /.) the Act must be a written agreement signed in the manner prescribed by the Rules framed under the Act As rightly pointed out by Mr. Ramamurthy, .learned Counsel for the Respondents an implied agreement bv acawescence, or conduct such as acceptance of a benefit under an agreement in which the worker acquiescing or accepting the b~ne~t was not a partv. being outside the purview of the Act, is not binding on such a worker either under sub-section (1) or under sub-section (3) of s.

18. It follows, therefore that even if 99% of the workers have impliedly accepted t.Qe agr~ment arrived at on ~tober 22, 1969, by drawing V.D.A., under it, it will not-whatever its effect under the general law-put an end to the dispute before the Labour Court anQ. make it functus o.fficio under the Act. The refusal of the Labour Court to allow the appellant to lead evide~ce at this stage, has not caused any pre.iudice to the appellant. The issue decided as a preliminary issue involved a question of law which could. be klecided on the basis of material on record. For its · '-'• ''" ·n. ir wits not necessary to prove that 99% of the workers had accepted the agreement dated October 22, 1969.

Even on an assumption of that fact in favour of the Company, the claim before the Labour Court could not be deemed to have been settled qua respbndents 4 to 173. · Furthermore. the decision of the Labour Court neither debars the appellant from bringing on record evidence relevant to the is_!!ues which still remain to be ~ecided, nor does it rule out the agreement dated October -22, 1969, for all purposes. Indeed, the Labour Court has in its order, towards the end, expr~ly said that the settlement, dated October 22,_ 1969, can be binding under s. 18(1) of the Act between the contracting parties. ' In view of the above. we )V6uld negative contention (2) canva5sed by Mr. Malhotra. This takes us to the third contention. Assuming that the Act does not inhibit the employers and the workmen from arriving· at a settle- · ment during the pendency of proceedings under s.

33-C(2) of the_ Act, such a settlement, not being one arrived -at in the course of conciliation proceedings would be enforceable only against the parties thereto. Jn the present case. Respondents 4 to· 173 and others who . were not parties to the settlement dated October 22, 1969' would ,not be bound by it. In the case of Amalgamated Coffee Estates Ltd. v. Their workme11 . (supra) cited bv Mr. Malhotra, pending the appeals .by the management before this Court, the subject-matter of the award were settled between most of the managements and most of their employees !e- , presented by certain Unions. An application was made requestin~ the Court t-0 dispose of the appeals in terms of such settlement. . It was opposed on behalf of some of the employees; This Court called for a finding from the Industrial Tribunal on this issue.:

"In view of the fact that admittedly a large number of workmen employed by the appellants have accepted payments 'consistently with th_e terms of the agreements set up by the employers, in their present petition, is it shown by the respondents that the said agreement is not valid and binding on them?" The Tribunal submitted the finding that in every estate payments were made in terms of the settlement and such payments were voluntary and knowingly accepted by the workmen. It also held that the t1~rms of the settlement were fair. This Court accepted the finding of the Tribunal hol'ding that "the settlement appears to us also to be a fair one·. It therefore, decided the appeals in terms of the settlement. It will be seen that the decision in Amalgamated Coffee Estates case · (supra) stands on its own facts.

There the appeals arose out of an award of the Special Industrial Tribunal for plantations in a dispute between 228 coffee, tea and rubber estates in South India and their employees referred to it under s. 10(1) whereas the instant appeal arises out of proceedings un'der s. 33-C(2) for the recove1y of monev on the basis of the Wage Board's award and the dispute, if any, is about the computation of V.D.A. in implementation of that award. The scope of s. 33..C(2) is not the same as that of s. 10(1) of the Act. In East India Coal Company l~td. Banares Colliery, Dha11bG1d v. Raweshwar Cllld Ors. U) this Court held that although tqe scope of s. 33-C(2) is wider than that of a 3:~-C(1), cases which would appropriatelv be, adiudicatetl under s. 10(1) are outside the purview of s. 33 C(2). The provisions of s. 33-C are, broadly speaking, in the nature of executing provisions.

An app1~al being a rehearing of the case, in Amalgamated Coffee Estates· case. the jurisdiction o~ the Court to decide the dispute in a just manner was co-extensive with that of the Tribunal to which it was referred under s. 10( 1). This Court found in agreement with the report of the Tribunal that the settlement arrived at between the most of the Unions repres~nting most of the workers and the managements was fair and conducive to in'dustrial peace, and therefore, it was just and appropriate to decide the dispute and dispose of the appeals in terms of the settlement. In the dase before us, the jurisdiction of the Labour Comt is not only circumscribed by s 33-C(2) but the matter also is yet at the initial stage. The controversy between the parties still remains tQ be dete1mined on merits. We. therefore, do. not think it necessary to say anything more with regard to contention No. 3 than what we have broadly intlicated above.

For the foregoing reasons, the appeal fails ancl is dismissed with costs. V.M.K. Appeal Dismissed.