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Madhya Pradesh High Court · body

1973 DIGILAW 88 (MP)

Bhilai Steel Employees Association, Bhilai v. A. W. Kanmadikar Judge, Industrial Court, Madhya Pradesh, Indore

1973-08-24

G.P.SINGH, M.L.MALIK

body1973
ORDER G.P. Singh, J. This order shall dispose of Miscellaneous Petitions Nos. 421 and 460 of 1972. These two petitions under Articles 226 and 227 of the Constitution are directed against two orders of the Industrial Court, Indore, passed on August 5, 1971 and April 17, 1972. The facts are that the Bhilai Steel Plant, which is an undertaking of Hindustan Steel Limited (a company in the public sector), introduced an incentive bonus scheme with effect from December 1, 1961 for some categories of workmen which in 1964 was extended to certain other categories. The workmen's demand, however, was that the scheme should be applied to all employees who are directly and indirectly contributing in the production and that the same should be made applicable from December 1, 1961. The Steel Workers Union, which is the representative union of employees, therefore, after the usual notice of change and failure of negotiations and conciliation, made a reference to the Industrial Court under section 52 of the Madhya Pradesh Industrial Relations Act, 1960, for arbitration of the following industrial dispute: Whether all categories which are directly and/or indirectly contributing in the production bonus scheme such as ministerial staff, B.T.I. Staff and others should be brought within the scheme and paid incentive (production) bonus with retrospective effect i.e. with effect from 1-12-1961 of the appropriate group. During the pendency of the said reference, a committee called the Joint Wage Negotiating Committee consisting of representatives of employers and employees in the steel industry was constituted at the national level for a final settlement on the wage structure and other conditions of service of employees in the industry. An agreement was reached by this committee which was incorporated in a memorandum of agreement dated October 27, 1970. Under clause 2-4 of this agreement it was decided to set up a Standardization Committee for completing the work of standardization. Clause 6-1 of the agreement deals with Incentive/Production bonus and it reads as follows: 6-1 Incentive/Production Bonus. The workers representatives demand that incentive/production bonus should be paid to all the employees and on the revised wages. The employers do not accept this contention and they have further stated that the industry is unable to undertake the additional financial burden on account of incentive/production bonus payment unless there is a rise in the level of productivity. The workers representatives demand that incentive/production bonus should be paid to all the employees and on the revised wages. The employers do not accept this contention and they have further stated that the industry is unable to undertake the additional financial burden on account of incentive/production bonus payment unless there is a rise in the level of productivity. However, it is agreed that: (a) Some marginal increase in incentive bonus on account of the revision of the schemes at the current level of productivity cannot be ruled out. (b) In the meanwhile incentive production bonus shall continue to apply as hitherto to those employees who are covered by such schemes. The question of extension of incentive bonus scheme to other categories of workers will be referred to Standardization Committee set up under clause 2-4 of the Agreement. (c) In case any worker in the bonus group is transferred to non-bonus group his total emoluments including the average incentive bonus earned by him during the preceding twelve months will be protected. On April 29, 1971 an application was made before the Industrial Court on behalf of Bhilai Steel Plant narrating the agreement reached by the Joint Wage Negotiating Committee at the national level and alleging that the terms of that agreement have been accepted by an agreement reached between the parties to the reference, i. e. the management and the Steel Workers Union. Copies of the two agreements were annexed to the application. It was contended in the application that the subject-matter of the reference was fully covered by the said agreements and that (he dispute no longer survived. It was prayed in the application that the reference be brought to an end on the ground that it had become in fructuous in view of the agreement reached between the parties. In the alternative it was prayed that an award in terms of clause 6-1 of the agreement (quoted earlier) be passed. Copy of this application was given to the Secretary of the Union who used to appear in the reference for the union and the union was asked to file its reply to the application. In the alternative it was prayed that an award in terms of clause 6-1 of the agreement (quoted earlier) be passed. Copy of this application was given to the Secretary of the Union who used to appear in the reference for the union and the union was asked to file its reply to the application. No reply was, however, filed by the union and the Industrial Court by its order passed on August 5, 1971 accepted the Statements made in the application and held that an agreement has been reached between the parties that the question of extension of incentive bonus be referred to the Standardization Committee and that the reference has become in fructuous. On this reasoning the Industrial Court rejected the reference. Three applications were then filed before the Industrial Court under section 71 of the Act for review of the order passed on August 5, 1971. Two of these applications were on behalf of the Steel Workers Union one was filed through Mohanlal Bakliwal its President and the other through a counsel. The third application for review was filed by a trade union bearing the name "Bhilai Steel Employees Association" and two workers, namely, A. R. Kumar and V. Venkatarao. It is noteworthy that in none of these applications the factual existence of the agreement between the management and the Steel Workers Union on the lines of the agreement reached by the Joint Wage Negotiating Committee was disputed. These review applications were dismissed by the Industrial Court by a common order passed on April 17, 1972. These two miscellaneous petitions were then filed in this Court for quashing the orders of the Industrial Court rejecting the reference and dismissing the review applications, and for directing the said Court to proceed with the reference. Miscellaneous Petition No. 421 is by the Bhilai Steel Employees Association, a registered trade union, and A. R. Kumar, a workman. Miscellaneous Petition No. 460 is on behalf the Steel Workers Union through its President Mohanlal Bakliwal and N. P. Sharma, a workman. Before proceeding to examine the contentions raised on behalf of the petitioners, it is convenient to dispose of a preliminary objection raised on behalf of the respondent. Miscellaneous Petition No. 460 is on behalf the Steel Workers Union through its President Mohanlal Bakliwal and N. P. Sharma, a workman. Before proceeding to examine the contentions raised on behalf of the petitioners, it is convenient to dispose of a preliminary objection raised on behalf of the respondent. The objection is that a trade union, which is not a representative union, and workmen have no locus standi to file any petition under Article 226 when the representative union was a party before the Industrial Court. It is also submitted that Mohanlal Bakliwal was not President of the Steel Workers Union, which is the representative union, at the time when Miscellaneous Petition No. 469 was filed and, therefore, he was not competent to file that petition on behalf of the said union and, in law, there is no petition before the Court by the representative union. Reliance in support of the preliminary objection is placed on two cases of the Supreme Court viz. Girja Shankar Kashiram v. The Gujrat Spinning & Weaving Co. Ltd. S C L J Vol. 1 p. 237 and Textile Labour Association v. Ahmedabad Mill Owners Association 1970 (3) S C C 890. We will assume for the sake of argument that Mohanlal Bakliwal was not President of the representative union at the relevant time and that, therefore, there is no petition before us on behalf of the representative union of employees. The topic of appearance on behalf of employee is dealt with in sections 26, 27 and 28 of the Act. Section 26 provides that save as provided in section 28 no employee shall be allowed to appear or act "in any proceeding under the Act" except through the representative of the employees. Under section 27 the following are entitled to act and appear as the representative of employees in the order of preference specified below: (i) a Representative Union for the industry; (ii) any union of which the employee of such industry is a member; (iii) Labour Officer. Section 28 permits a Labour Court, Industrial Court etc. if it considers it expedient for the ends of justice to permit an individual, whether an employee or not to appear in any proceeding before it. Section 28 permits a Labour Court, Industrial Court etc. if it considers it expedient for the ends of justice to permit an individual, whether an employee or not to appear in any proceeding before it. The scheme of these sections goes to show that they provide for representation of employees in any proceeding under the Act and in any such proceeding an employee himself cannot appear and the Representative Union for the industry to which he belongs has a preferential right of representation, but the Industrial Court or the Labour Court has a discretion to permit an employee to appear before it, in the interest of justice. Now, a proceeding under Articles 226 and 227 of the Constitution cannot be said to be a proceeding under the Act. A petition under Articles 226 and 227 is an original proceeding in the High Court, though it may seek for quashing of an order of the Industrial Court or Labour Court made in a proceeding taken under the Act. Such a proceeding in the High Court is quite independent of the original controversy and cannot be understood to be a continuance of the proceeding taken before the Industrial Court; see Ramesh v. Gendalal 1966 M P L J 777 (S C) : A I R 1966 S. C. 1445 p. 1449 (para 16). Therefore, sections 26 to 28 of the Act, which govern the mode of representation of employees in a proceeding under the Act, cannot apply to a proceeding begun by a petition under Articles 226 and 227 of the Constitution in the High Court. If the petitioners are affected by the order of the Industrial Court, they will have sufficient interest to move the High Court for interference under Articles 226 and 227. It is not disputed before us that A. R. Kumar and N. P. Sharma who are petitioner No. 2 in these petitions are employees in the Bhilai Steel Plant and are affected by the order of the Industrial Court. They have, therefore, sufficient interest to file these petitions. It is not disputed before us that A. R. Kumar and N. P. Sharma who are petitioner No. 2 in these petitions are employees in the Bhilai Steel Plant and are affected by the order of the Industrial Court. They have, therefore, sufficient interest to file these petitions. It may be here pointed out that the Industrial Court has a discretion to permit an individual employee to appear and the appearance of employees individually is not altogether banned even in a proceeding under the Act, Therefore, it would not be proper to hold that individual workmen cannot apply under Articles 226 and 227 for setting aside an order of Industrial Court even though they are adversely affected by it. In Sital Sukhiram v. Central Government Industrial Tribunal 1969 M P L J 33, the argument was that an individual worker is not competent to challenge an award having regard to section 36 of the Central Act. In rejecting this argument a Division Bench of the High Court observed: Admittedly the petitioner here is one of the Badli workers whose claim for permanent employment in the colliery was specifically referred to the Tribunal. His contention is that this dispute was not determined by the Tribunal in accordance with the Act. In our opinion, the petitioner is a person aggrieved by the impugned order and he is entitled to move this Court for the issuance of a writ in its extra-ordinary jurisdiction. This view does not in any way run counter to the decision in West Bengal Press Workers' and Employees' Union v. Art Union Printing Works A I R 1962 Cal. 649 to the effect that a union of workmen, if aggrieved by an award, may also take like action. We may add that the provisions of section 36 of the Act are restricted in operation to proceedings under the Act and do not come in the way of a workman aggrieved by an award invoking the jurisdiction of this Court under Articles 226 and 227 of the Constitution. These observations, on a parity of reasoning, support our conclusion that an individual worker who is aggrieved by an award or order passed under the Madhya Pradesh Act can invoke the jurisdiction of the High Court under Articles 226 and 227. The two Supreme Court cases relied upon by the learned counsel for the respondent are distinguishable. These observations, on a parity of reasoning, support our conclusion that an individual worker who is aggrieved by an award or order passed under the Madhya Pradesh Act can invoke the jurisdiction of the High Court under Articles 226 and 227. The two Supreme Court cases relied upon by the learned counsel for the respondent are distinguishable. These cases arose under the Bombay Industrial Relations Act, 1947. Section 32 of the Bombay Act contains a proviso that no individual shall be permitted to appear in any proceeding in which a Representative Union has appeared as the representative of employees. There was a similar proviso in section 28 of the Madhya Pradesh Act which was omitted by Act 32 of 1963. In Girja Shankar Kashiram's case a proceeding was started by some employees under section 42 (4) of the Bombay Act. The representative union of employees appeared and got the proceeding dismissed on the basis of a compromise with the employers. There was an appeal by some of the employees to the Industrial Court which was dismissed. The employees then filed a petition under Article 227 in the Bombay High Court which was summarily rejected. In an appeal by special leave the Supreme Court confirmed the order of the High Court and held that the Bombay Act intends that "where a representative union appears in any proceeding under the Act even though that proceeding might have commenced by an employee, the Representative Union alone can represent the employee and the employee cannot appear or act in such proceeding." Now, Girja Shanker's case merely decides that as the representative union had appeared, the individual employees were not competent to file an appeal before the Industrial Court. The case does not hold that the individual employees had no locus standi to file a petition in the High Court under Article 227. Their petition failed because the order of the Industrial Court was correct that they had no right of appeal to the Industrial Court which is a proceeding under the Act. In the case of Textile Labour Association two appeals were filed in the Supreme Court against an award made under the Bombay Act. One appeal was by the Representative Union and the other by some workmen. The Representative Union thereafter entered into a compromise with the employers. The appeal filed by the Representative Union was decided in terms of the compromise. One appeal was by the Representative Union and the other by some workmen. The Representative Union thereafter entered into a compromise with the employers. The appeal filed by the Representative Union was decided in terms of the compromise. The appeal filed by the workmen was dismissed on the ground that the compromise entered into by the Representative Union was binding on them. Neither of these cases, which arose under the Bombay Act, hold that individual workmen have no locus standi to file a petition under Articles 226 and 227. Further, as already stated, under the Bombay Act the proviso in section 32 creates a complete ban for appearance of employees when a Representative Union has entered appearance, but the corresponding proviso in section 28 of the Madhya Pradesh Act has been omitted by Act 32 of 1963 and the Industrial Court has discretion to permit the appearance of an employee even when a Representative Union has entered appearance in a proceeding under the Act. For the reasons stated above, we reject the preliminary objection raised by the learned counsel for the respondent. Now, coming to the argument addressed on behalf of the petitioners, the first contention is that there was in fact no agreement between the management and the Steel Workers Union as was represented by the management before the Industrial Court. It is argued that by certain resolutions of the General Council of the Union it was decided that office bearers of the union will not be competent to enter into any agreement with the management without prior approval of the Council and that every agreement will be signed by the President of the union. It is further argued that the agreement dated November 20, 1970 (Annexure R-II in M. P. No. 421), which was relied upon by the Industrial Court for rejecting the reference, was signed only by the Secretary of the union and had not been approved by the General Council, therefore, it cannot be held to be an agreement reached between the management and the union. These arguments have been refuted on behalf of the respondents and it has been contended that the petitioners are not entitled to raise the question as to the existence and legal validity of the agreement as these questions were not raised before the Industrial Court. These arguments have been refuted on behalf of the respondents and it has been contended that the petitioners are not entitled to raise the question as to the existence and legal validity of the agreement as these questions were not raised before the Industrial Court. We have already stated that the agreement arrived at between the management and the Steel Workers Union (Annexure R-II in M. P. No. 42)) and the agreement reached by the Joint Wage Negotiating Committee (Annexure R-IB in M. P. No. 421) were produced before the Industrial Court when the application dated April 29, 1971 was made in that Court praying that the reference be brought to an end or an award be made in terms of the agreement. A copy of this application was furnished to the Secretary of the Union who appeared in the Industrial Court for the Union and the union was required to file a reply on April 30, 1971. No reply to the application was filed on behalf of the union though the case was again adjourned to May 25, 1971 and then to June 14, 1971 and lastly to August 2, 1971 to enable the union to file a reply. On August 2, 1971 no one appeared for the union and the Industrial Court accepted the allegations made in the application regarding the agreement and rejected the reference. It will thus be seen that the union had ample opportunity to challenge the existence and validity of the agreement before the Industrial Court, but that was not done. Even in the three review applications which were later filed the existence and validity of the agreement were not disputed. In the circumstances, it is not now open to the petitioners to contend in these writ petitions that the agreement was not properly arrived at and did not bind the Union. In our opinion, we must proceed on the footing that the agreement (Annexure R-II) of November 20, 1971 was arrived at between the management and the Steel Workers Union as was alleged before the Industrial Court by the management in the application dated April 29, 1971. In our opinion, we must proceed on the footing that the agreement (Annexure R-II) of November 20, 1971 was arrived at between the management and the Steel Workers Union as was alleged before the Industrial Court by the management in the application dated April 29, 1971. The next contention raised by the learned counsel for the petitioners is that having regard to section 33 of the Act which deals with agreements, an agreement has to be arrived at within seven days (or within such further time as may be allowed by the parties) from the notice of change, or within two months from the completion of conciliation proceedings, and that no agreement is contemplated after the industrial dispute is referred to the Industrial Court for arbitration under section 52 as the reference takes place only when the conciliation proceedings fail and the Conciliator certifies that the dispute is not capable of being settled by conciliation. This argument wrongly assumes that section 33 is exhaustive of the agreements contemplated by the Act and it overlooks the clear implication of section 98 that an agreement can be reached during the pendency of a reference. Section 98 reads as follows: Order, decision or award to be in terms of agreement between employer and Representative Union-If any agreement is arrived at between an employer and Representative Union who are parties to any industrial dispute pending before an arbitrator, Labour Court, the Industrial Court or a Board, the order, decision or award in such proceeding shall be made in terms of such agreement, unless the arbitrator, Labour Court, Industrial Court or the Board is satisfied that the agreement was in contravention of any of the provisions of this Act or the consent of either party to it was caused by mistake, representation, fraud undue influence, coercion or threat. The section, which will be further examined by us later in this order, clearly contemplates that parties may come to an agreement during the pendency of a reference and the reference will then be determined in accordance with the agreement. We have, therefore, no hesitation in rejecting the argument that no agreement can be reached during the pendency of a reference on the matters covered by the reference. We have, therefore, no hesitation in rejecting the argument that no agreement can be reached during the pendency of a reference on the matters covered by the reference. Then it is contended that the agreement contemplated by section 98 is one which terminates the dispute pending in the reference and as the agreement in the instant case did not terminate the dispute but only provided another machinery for its adjudication, the agreement could not be acted upon by the Industrial Court and it was not open to it to terminate the reference. In cases arising under the Central Act where there is no corresponding provision like section 98 of the Madhya Pradesh Act it has been held by the Supreme Court that on an amicable settlement of an industrial dispute pending before a tribunal, the tribunal should make an award in terms of the settlement between the parties ; State of Bihar v. D. N. Ganguly A I R 1958 S.C. 1018, and that after a settlement by the parties there is no dispute left to be decided by the tribunal; Sirsilk Ltd. v. Government of Andhra Pradesh A I R 1964 S. C. 160. There is, however, a difference of opinion on the question whether an agreement which merely provides for adjudication of a dispute by private arbitration and which does not itself state the terms on which the dispute is settled can terminate a reference. In Sital Sukhiram v. Central Government Industrial Tribunal a Division Bench of the High Court held that such an agreement does not terminate the reference. But in Nowrozabad Colliery Mazdoor Sangh v. P. Jeejeebhov 1969 M P L J 611 another Division Bench took a contrary view and the earlier case was somehow distinguished. Had we been dealing with a case under the Central Act, we may have thought it advisable to refer the matter to a larger bench. The case with which we are now concerned arises under the State Act which unlike the Central Act contains a specific provision in section 98 to cover cases of agreements made during the pendency of a reference and it is on the construction of this section that the question argued must be answered. We have earlier quoted the section. The case with which we are now concerned arises under the State Act which unlike the Central Act contains a specific provision in section 98 to cover cases of agreements made during the pendency of a reference and it is on the construction of this section that the question argued must be answered. We have earlier quoted the section. It is a provision analogous to Rule 3 of Order 23 of the Code of Civil Procedure, but its language in one aspect is materially different. An agreement to fall within rule 3 of Order 23 must be one by which a suit "has been adjusted wholly or in part," unless the suit is adjusted by the agreement itself, it cannot be recorded under that rule and no decree can be passed on it; see Janimal v. Girdharidas 1956 M P L J 53 : A I R 1957 Nag. 47, p. 52. But this condition of adjustment of dispute by the agreement does not find place in section 98 and we cannot import it by implication. All that this section requires is that there should be an agreement between the employer and the Representative Union who are parties to industrial dispute and the tribunal concerned should be satisfied that the agreement is not in contravention of any provision of the Act and consent of either party to it is not vitiated by mistake, fraud etc. The section does not require that the agreement must be one which itself finally determines the dispute. In our opinion, the section does not exclude an agreement by which the parties decide upon the machinery by which the dispute is to be settled thereby bringing an end to the reference pending before the tribunal. Such an agreement is not prohibited by any provision of the, Act and if consent to it is not obtained by fraud, mistake etc., the tribunal before which the industrial dispute is pending must give effect to it. In the instant case the industrial dispute pending before the Industrial Court related to the question of extension of incentive bonus scheme to other categories of workers not already covered by it. In the instant case the industrial dispute pending before the Industrial Court related to the question of extension of incentive bonus scheme to other categories of workers not already covered by it. By the agreement entered into between the employer and the Representative Union who were parties to this dispute it was agreed that the question of extension of incentive bonus scheme to other categories of workers will be referred to Standardization Committee set up under the agreement. The parties thus decided upon the machinery by which the dispute pending before the Industrial Court was to be settled and thereby impliedly agreed that the came be not settled by the Industrial Court. There were, therefore, the terms of the agreement and the Industrial Court in rejecting the reference only passed an order in terms of the agreement as is required by section 98. The Industrial Court was perfectly justified in doing so as the existence and validity of the agreement were not disputed and no question of fraud etc. was raised before it. It was lastly argued that the reference before the Industrial Court included the dispute whether the existence of incentive bonus scheme should be with retrospective effect from December 1, 1961 and this matter is not covered by the agreement and, therefore, to this extent the reference should have continued. In our opinion, this argument proceeds upon a misconception. The agreement does not negative the authority of the Standardisation Committee, which is to decide the question of extension of bonus scheme, to hold that the scheme be extended retrospectively. It would be open to the Standardisation Committee to provide for extension of the scheme prospectively or retrospectively. No restriction is placed by the agreement on the power of the committee in this matter. Therefore, it is not correct to say that the question of retrospective extension of scheme is not covered by the agreement. The petitions fail and are dismissed. There shall, however, be no order as to costs. The security amounts shall be refunded to the petitioners. Petition dismissed.