ORDER P.K. Tare, C.J. This is a petition under Articles 226 and 227 of the Constitution of India for quashing the award, dated 18-9-1972 (Petitioners' Annexure-J), passed by the Central Government Industrial Tribunal-Cum-Labour Court, Jabalpur, in Industrial Dispute No. CGIT/LC (R) (10) 69, based on the settlement, dated 31-8-1972 (Petitioners' Annexure-H) arrived at between the representative of the employer and the representatives of the employees as represented by the office-bearers of the fourth respondent, namely, the M. P. Colliery Workers' Federation, through General Secretary. At the time the industrial dispute was referred to the Labour Court on 12-3-1969 (Vide Petitioners' Annexure-A) under section 10(1)(d) of the Industrial Disputes Act, 1947, (Act No. 14 of 1947) for adjudication by the Labour Court, the question referred to the Tribunal was as follows: Whether the management of (1) the New Chirimiri Ponri Hill Colliery, Post Office Chirimiri, and (2) West Chirimiri Colliery, Post Office Chirimiri, having regard to their financial capacity are justified in not paying variable dearness allowance as per the recommendations of the Wage Board for the Coal Industry with effect from the 1st April, 1968? If so, what should be the quantum of variable dearness allowance in the above mentioned collieries ?" Sd./- Under Secretary. The petitioners, however, later appeared before the Labour Court and filed an application for being impleaded. The Industrial Court accordingly passed the order, dated 5-7-1972. The order permitted the petitioner Union, namely, M. P. Koyala Panchayat, Khurasia Colliery, to participate in the proceedings from the stage when the application was made and the petitioners were not permitted to reopen the proceedings that had already taken place. In compliance with that order, the petitioners filed a written-statement (Petitioners' Annexure-G) before the Labour Court objecting to the settlement between the representative of the employer and the fourth respondent, namely, the M. P. Colliery Workers' Federation. Hereinafter the petitioners will be described as the Mazdoor Panchayat and the fourth respondent will be described as Workers Federation. The Labour Court by order, dated 18-9-1972 (Petitioners Annexure-J), which is impugned in the present writ petition, rejected the petitioners' objection and passed an award on the basis of the settlement arrived at between the employer and the Workers Federation. Hence this writ petition by the Mazdoor Panchayat challenging the settlement as also the award. Shri K. K. Adhikari, Dy. The Labour Court by order, dated 18-9-1972 (Petitioners Annexure-J), which is impugned in the present writ petition, rejected the petitioners' objection and passed an award on the basis of the settlement arrived at between the employer and the Workers Federation. Hence this writ petition by the Mazdoor Panchayat challenging the settlement as also the award. Shri K. K. Adhikari, Dy. Government Advocate appearing for respondents 1 and 2, raised a preliminary objection to the effect that the petitioners being interveners in the proceedings before the Labour Court, have no right to file the present writ petition challenging the settlement and the award. The proceedings of the Tribunal show that the petitioners were not mere interveners, but they were impleaded as parties to the proceedings and were permitted to participate from the stage at which the application was made. The petitioners as per the order sheet, dated 18-9-1972 (Petitioners' Annexure-J) were also permitted to raise objection to the settlement arrived at between the employer and the workers Federation. The petitioners were in fact heard on the question as to whether the award on the basis of the settlement should be passed or not. Under the circumstances the contention that the petitioners were mere interveners is not tenable and is obviously contrary to the material on record. In fact, the petitioners were a party to the proceedings as they were impleaded as such. As a result, the preliminary objection raised on behalf of respondents 1 and 2 is over-ruled. The learned counsel for the petitioners urged that the petitioners were not afforded a proper opportunity to contest the settlement and the award. The second ground urged was that the award is neither fair nor reasonable and the last ground was that the award based on the settlement is opposed to public policy as per section 23 of the Indian Contract Act as the settlement contemplates lifting of the wages of the workers within three months and in the event of default the amount so not lifted is to be distributed between the employer and the Workers Federation. Therefore, we have to consider these three grounds. Ordinarily a dispute ought to be settled between all parties to the lis. Difficulties may arise where all parties to the lis are not parties to the settlement. Therefore, we have to consider these three grounds. Ordinarily a dispute ought to be settled between all parties to the lis. Difficulties may arise where all parties to the lis are not parties to the settlement. In that event the Tribunal or the Labour Court has to apply its mind whether an award should be passed on the basis of such a settlement to which all the parties have not signified their assent and in that event, it becomes necessary to examine whether the settlement is fair or reasonable. The learned counsel for the respondents urged that the petitioners cannot challenge the settlement and the award, especially in view of the provisions of sub-section (3) of section 18 of the Industrial Disputes Act, 1947. In order to appreciate the point it may be relevant to reproduce section 18, which is as follows: S. 18.-Persons on whom settlements and awards are binding.-(1) A settlement arrived 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. (2) Subject to the provisions of sub-section (3) an arbitration 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 course of conciliation proceedings under this Act or an arbitration award in a case where a notification has been issued under sub-section (3 A) 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 to the industrial dispute; (b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the 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 or assigns in respect of the establishment to which the dispute relates; (d) where a party referred to in clause (a) or clause (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 the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part. Thus, sub-section (1) makes an agreement binding on the parties to the agreement and sub-section (2) makes the arbitration award binding on the parties to the agreement, who referred the dispute to arbitration. However, in the present case the respondents do not contend that the settlement and the award are binding on the petitioners by virtue of sub-section (1) or sub-section (2). But their contention is that they are bound by virtue of sub-section (3) of section 13. It is true that subsection (3) provides that an award of a Labour Court is binding on all parties to the industrial dispute. As such, the award would certainly bind the workers whom the petitioners claimed to represent and who might be members of the petitioner Mazdoor Panchayat. Therefore, it is necessary for the Labour Court to exercise all caution in the matter of passing an award on the basis of a settlement arrived at to which all the parties to the lis have not given their assent. In this connection reference might be made to the pronouncement of their Lordships of the Supreme Court in Sirsilk Ltd. v. Govt. of Andhra Pradesh A I R 1964 S. C. 160. In that case after the Tribunal had passed an award in an industrial dispute, the parties entered into a settlement. Therefore, the question was as to which of them should prevail, whether the award or the settlement. Their Lordships of the Supreme Court while trying to reconcile sub-section (1) and sub-section (3) of section 18 of the Industrial Disputes Act, 1947, laid down that as the settlement was subsequent to the award, the only course open to the Government was to withhold publication of the award as it had been rendered in fructuous by the subsequent settlement effected. If there be a prior settlement on the basis of which an award is based by the Labour Court or the Tribunal, the settlement merges into the award and in that event, sub-section (3) of section 18 of the Industrial Disputes Act, 1947, would operate. this In connection it may be pertinent to take note of some decisions of this Court. In Sital Sukhiram v. Central Government Industrial Tribunal-cum-Labour Court, Jabalpur & Ors. this In connection it may be pertinent to take note of some decisions of this Court. In Sital Sukhiram v. Central Government Industrial Tribunal-cum-Labour Court, Jabalpur & Ors. 1969 M P L J 39, a Division Bench of this Court held that even if a compromise be arrived at between the parties before the Tribunal the Tribunal cannot deal with it like a settlement between the parties to suit. It can adjust the compromise as the foundation of its award after considering whether it is a just and fair settlement of the dispute. The Division Bench also opined that an award merely recording a settlement between the parties would be illegal. It is true that Order 23, Rule 3, Civil Procedure Code does not apply to such a compromise or adjustment or even to a settlement. Therefore, the question would always arise as to what procedure the Tribunal ought to follow in such a case. In this connection we might advert to the pronouncement of their Lordships of the Supreme Court in Ramnagar Cane and Sugar Co. Ltd. v. Jatin Chakravorty & Ors. A I R 1960 S. C. 1012, wherein their Lordships laid down the following principles: It is now well settled that the industrial dispute can be raised in regard to any matter only when it is sponsored by a body of workmen acting through a union or otherwise. When an industrial dispute is thus raised and is decided either by settlement or by an award the scope and effect of its operation is prescribed by section 18 of the Act. Section 18(1) provides that a settlement arrived at by agreement between the employer and the workmen otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement; whereas section 18(3) provides that a settlement arrived at in the course of conciliation proceedings which has become enforceable shall be binding on all the parties specified in clauses (a)(b), (c) and (d) of sub-section (3). Section 18(3)(d) makes it clear that, where a party referred to in clauses (a) or (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 the dispute relates on the date of the dispute and all persons who subsequently became employed in that establishment or part, would be bound by the settlement. In other words, there can be no doubt that the settlement arrived at between the appellant and the Employees' Union during the course of conciliation proceedings on 23-2-1 954, would bind not only the members of the said Union but all workmen employed in the establishment of the appellant at that date. That inevitably means that the respondents would be bound by the said settlement even though they may belong to the rival Union. In order to bind the workmen it is not necessary to show that the said workmen belong to the Union which was a party to the dispute before the conciliator. The whole policy of section 18 appears to be to give an extended operation to the settlement arrived at in the course of conciliation proceedings, and that is the object with which the four categories of persons bound by such settlement are specified in section 18, sub-section (3). On facts their Lordships found that the settlement arrived at in the conciliation proceedings was not only for the benefit of the employees, but that it had been accepted by the workers and for that reason their Lordships held that as the settlement was a fair and reasonable one, it was binding on all the workmen and consequently a strike declared by one of the rival Unions, which did not accept the settlement, was illegal. Thus, there can be no doubt that a settlement can be arrived at between the employer and one of the Unions representing the workmen. There can be no doubt that in such a situation it is incumbent on the Tribunal or the Labour Court to see if the settlement is a fair and reasonable one. That duty the Tribunal or the Labour Court cannot avoid by relying on a settlement without examining its fairness and reasonableness. Therefore, the principles to be deduced from the pronouncement of their Lordships of the Supreme Court would be that ordinarily a settlement should be arrived at between all parties to the lis and in that event, the Labour Court or the Tribunal would have no difficulty in passing an award on the basis of such a settlement. Therefore, the principles to be deduced from the pronouncement of their Lordships of the Supreme Court would be that ordinarily a settlement should be arrived at between all parties to the lis and in that event, the Labour Court or the Tribunal would have no difficulty in passing an award on the basis of such a settlement. Where, however, all parties to the lis are not parties to the settlement, the Labour Court or the Tribunal must examine the aspect whether the settlement is fair or reasonable and whether it should be made binding on parties who are not parties to the settlement. That would involve a judicial process in which all aspects of the particular facts and circumstances of a case ought to be considered by the Tribunal or the Labour Court. If there is no application of the mind from that point of view, the award, in our opinion, can be challenged and the same can be said to have been vitiated by non-application of a judicial mind to such a question. In the light of the above principles we propose to examine the order impugned (Petitioners' Annexure-J). The Central Government Labour Court observed that it was only on 5-7-1972 that the M. P. Koyala Mazdoor Panchayat entered into the arena. There was nothing to indicate as to why the M. P. Colliery 'Workers' Federation was incompetent to come to a fair settlement of the workers dispute with the management. The learned Presiding officer further observed that he was not considering the claims of the rival Unions for representing the workers. The fact, however, remains that it was the M. P. Colliery Workers Federation which had raised the dispute on behalf of the workmen and it was at their instance that the reference was made to the Tribunal. The learned Presiding Officer was not prepared to accept the objection of the M. P. Koyala Mazdoor Panchayat at a belated stage. Considering the terms of the compromise the learned Presiding Officer held that they appeared to be fair and reasonable and, therefore, he decided to pass an award in terms of the settlement. The learned Presiding Officer was not prepared to accept the objection of the M. P. Koyala Mazdoor Panchayat at a belated stage. Considering the terms of the compromise the learned Presiding Officer held that they appeared to be fair and reasonable and, therefore, he decided to pass an award in terms of the settlement. With reference to the line of reasoning adopted by the learned Presiding Officer of the Tribunal, we may observe that there is no indication as to how the terms of the settlement are fair and reasonable and as to why they should be made binding on parties to the lis, who are not parties to the settlement. In fact the learned Member refused to apply his judicial mind to the instant question because of the belated appearance of the Mazdoor Panchayat. As such, we are clearly of the opinion that the order impugned cannot be sustained in law as there was no application of judicial mind to the question involved, under a misapprehension that the Mazdoor Panchayat had tried to intervence at a late stage and that the interests of all the workers were properly safeguarded by the Workers Federation. Therefore, it becomes necessary to consider the terms of the settlement in order to decide whether the settlement was fair and reasonable. The Wage Board recommendations were accepted by the Central Government on 15-8-1967. It was in pursuance of that decision of the Central Government that the employers also agreed to implement the recommendations of the Wage Board by introducing adoption of the scheme of variation dearness allowance as given in the Coal Wage Board. The Workers Federation, therefore, in their written-statement (Vide Annexure-B), claimed the variation dearness allowances with effect from 1st April, 1968. For different periods they claimed different dearness allowance according to the cost of living and index number. As such, the total amount claimed by the Workers Federation was in the region of Rs. 11,00,000/- to Rs. 12,00,000/-. By the settlement the employer and the Workers Federation (Vide petitioners') Annexure-H, the terms settled were as follows: (1) The employers have agreed to pay to such workmen who were on the muster rolls between 1-4-68 to 30-9-1969 the sum of Rs. 102,198-51 ps. as arrears on variation dearness allowance to be distributed proportionate to the attendance scored in this period. 102,198-51 ps. as arrears on variation dearness allowance to be distributed proportionate to the attendance scored in this period. (2) The employers also agreed to pay to such workmen who were on the muster rolls between 1-8-71 to 31-5-1972 the sum of Rs. 130,707-04 ps. as arrears on variation dearness allowance to be also distributed proportionate to the attendance scored in this period. (3) It was further agreed that variation dearness allowance payable per day would be 2-13 ps. per workman with effect from 1-6-1972. (4) In terms-3 above for the period 1-6-1972 to 31-8-1972 since an amount of Rs. 1.29 ps. per day remains already paid as variation dearness allowance the balance payable as arrears would only be Rs. 084 ps. per day per worker on roll during this period. (5) It is agreed that arrears payment as above would be effected within three months after the date of Consent Award. (6) It is agreed that the arrears payment will be kept open for a period of three months from the date of commencement of such payment. In case any workman for any reason does not avail of the arrears within, the stipulated time the same would be deemed to have been forfeited and the same would be equally divided between the employers and the Union for the purposes of welfare activities. (7) It is also agreed that the parties would follow for the future the recommendations of the Coal Wage Board by the Government. (8) The parties have agreed this to be in full and final settlement of the dispute over variation dearness allowance or implementation of the Wage Board terms. (9) The parties have agreed to bear their own expenses. (10) It is further agreed that with effect from 1-9-1972 since variation dearness allowance agreed to be paid viz., Rs. 2.13 ps. per head per day happens to be in tune with the recommendations of the Wage Board the same shall be started payment through Wage Registers straightaway from that period. (11) The Union has agreed to withdraw their strike notice in view of the settlement. These were all the terms of the settlement between the employer and the Workers Federation. As the Labour Court itself did not apply its judicial mind whether the said terms were fair and reasonable, we do not think it proper to express an opinion on this aspect of the case. These were all the terms of the settlement between the employer and the Workers Federation. As the Labour Court itself did not apply its judicial mind whether the said terms were fair and reasonable, we do not think it proper to express an opinion on this aspect of the case. We have already held earlier that the learned Member of the Labour Court failed to apply his judicial mind on a misapprehension. However, we may point out that the stipulation about forfeiture of the variation dearness allowance after a period of three months and distribution of the same between the employer and the Workers Federation would be a condition opposed into public policy. Ordinarily the workers have one year's time for claiming their wages under the various enactments and to curtail that period to three months and to provide for forfeiture of the wages after the period of three months would, in our opinion, be opposed to public policy and as such, contrary to section 23 of the Indian Contract Act and we would strike down any such stipulation, providing for forfeiture of the amount and curtailing the period for claiming wages. Such a condition can evidently not be allowed to be embodied either in the settlement or in the award to be passed on the basis of such settlement. Moreover, as regards the other conditions, it is for the Tribunal or the Labour Court to consider whether the award as a whole is fair and reasonable and from what date the arrears of variation dearness allowance should be granted to the workers. Three courses may be open to a Tribunal or a Labour Court under such circumstances. One is to see if all the parties to the lis became parties to the settlement. If that be not possible then the next step to be taken would be to examine the question whether the settlement arrived at between same parties should be made binding on other parties, who are not parties to the settlement. If a Labour Court or the Tribunal be satisfied that the settlement is fair and reasonable and grounds for making it binding on other parties, then the award might be passed on the basis of such settlement. The last course open to the Labour Court or the Tribunal would be to adjudicate regarding the dispute on merits. If a Labour Court or the Tribunal be satisfied that the settlement is fair and reasonable and grounds for making it binding on other parties, then the award might be passed on the basis of such settlement. The last course open to the Labour Court or the Tribunal would be to adjudicate regarding the dispute on merits. It is for the Tribunal to adopt step No. 2 or step No. 3 as the facts and circumstances of a case may warrant. As a result of the discussion aforesaid, we are clearly of the opinion, that as the matter was not considered by the Labour Court in its proper perspective with respect to stage No. 2 above, we quash the order impugned (Petitioners' Annexure-J) and remit the case to the Labour Court for a proper decision with advertence to the observations made by us above. Under the circumstances, we direct that there shall be no order as to costs of this writ petition, which shall be borne as incurred. The outstanding amount of the security deposit be refunded to the petitioners. I agree with my Lord the Chief Justice that this petition should be allowed in terms proposed by him in paragraph 17 of the Judgment. I would, however, like to add a few words of my own. From the order of reference dated 12th March, 1969 vide Annexure 'A', it is clear that the dispute between the employers of the New Chirimiri Ponri Hill Colliery and their workmen in respect of the matters specified in the schedule was referred to the Industrial Tribunal by the Central Government. Thus the entire body of workmen of the said colliery was a party to the dispute. From a perusal of the award, Annexure 'J' it appears that the learned Presiding Officer of the Tribunal was under the impression that the M. P. Colliery Workers Federation was competent to represent the entire body of workmen and was as such competent to enter into a settlement with the employers on behalf of all the workers as a whole. This is borne out by the following observations in the award: There is nothing to indicate as to how M. P. Colliery Workers Federation is incompetent to come to a fair settlement of the workers dispute with the management. This is borne out by the following observations in the award: There is nothing to indicate as to how M. P. Colliery Workers Federation is incompetent to come to a fair settlement of the workers dispute with the management. It is, however, clear that all the workers are not members of the Federation and in view of section 36(1) of the Industrial Disputes Act, 1947 the Federation was competent to represent only such workers as were members thereof. It was not disputed before us that the M. P. Koyala Mazdoor Panchayat has been in existence since 1964 and some of the workers of the Colliery are members of this union. This is also borne out by paragraphs of the judgment of this Court in Employers in relation to New Chirmiri Ponri Hill Colliery v. Their Workmen represented by the M. P. Koyala Mazdoor Panchayat 1969 M P L J 605. The learned Presiding Officer of the Tribunal seems to have assumed that the M. P. Koyala Mazdoor Panchayat was a rival union seeking to represent the same body of workers who were represented before him by the Federation. This would appear from the following observation in the award. I am not considering the claims of the rival Union for representing the workers. Thus the learned Presiding Officer seems to have thought it fit to base the award on the settlement arrived at between the employers and the Federation under an erroneous impression that the Federation was competent to represent the entire body of workers. It was apparently for this reason that the objections raised by the M. P. Koyala Mazdoor Panchayat in their written" statements vide Annexure 'G' and Annexure 'I' on behalf of some of the workers who are members thereof were not duly considered. There is nothing in the record to show that the objections raised by the Koyala Mazdoor Panchayat to the award were taken note of and considered by the learned Presiding Officer. The contention of the Panchayat was that some of the terms of the settlement which related to arrears of the variable dearness allowance were not favourable. There is nothing in the record to show that the objections raised by the Koyala Mazdoor Panchayat to the award were taken note of and considered by the learned Presiding Officer. The contention of the Panchayat was that some of the terms of the settlement which related to arrears of the variable dearness allowance were not favourable. One of the terms of the settlement was that the arrears payment will be kept open only for a period of three months from the date of commencement of the payment and in case any workman for any reason does not avail of the arrears within the stipulated time, the same would be deemed to have been forfeited and the same would be equally divided between the employers and the union for the purposes of welfare activities. There is apparently room for the workers to question this term of the settlement as unfair and it was for the learned Presiding Officer to consider the same. As pointed out by My Lord the Chief Justice, the award does not indicate application of mind to the terms, of the settlement which was necessary particularly because some of the workers through the Panchayat had raised objections thereto. It is no doubt true that it was the Federation which raised the dispute and took active steps to have it referred to the Tribunal for an award. It is also true that it took steps to come to a settlement with the employers, most of the terms of which are favourable to the workmen; but this does not preclude other workmen whom the Federation was not competent to represent, to question some of the terms of the settlement through their own trade union, namely, the Panchayat in this case. The learned Presiding Officer rightly made the M. P. Koyala Mazdoor Panchayat a party before it. The terms imposed by the learned Presiding Officer on the Panchayat to take part in the proceedings were not questioned before us ; but, in any case, it was necessary for the Tribunal to deal with alt the points raised by the Panchayat in regard to the settlement arrived at between the employers and Federation before basing the award on it. It was necessary for the Tribunal to consider all the terms of the settlement in order to arrive at a finding whether they were fair and reasonable. It was necessary for the Tribunal to consider all the terms of the settlement in order to arrive at a finding whether they were fair and reasonable. The learned Presiding Officer has, no doubt, stated that the terms of the settlement appear to be fair and reasonable; but this is a bald finding and there is nothing in the record to suggest that there was any application of mind to the terms of the settlement in the light of the objections raised by the Panchayat. I, therefore, agree that the award should be quashed and remitted back to the Tribunal for a fresh decision as proposed by My Lord the Chief Justice.