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1997 DIGILAW 20 (KAR)

VEERAMANI v. PRESIDING OFFICER AND ANOTHER

1997-01-07

V.P.MOHAN KUMAR

body1997
( 1 ) THE petitioner seeks to quash the order passed by the first respondent in a proceeding under section 33-C (2) of the Industrial Disputes Act. The question raised by the petitioner is, whether a settlement entered into between the workers and employers' association, of which association the employer in question is a member, can be held to bind the employer treating him as a co-nomine party to the settlement. The factual materials are as follows : ( 2 ) THE petitioner herein, who allegedly is a member of Binny Karmikara Sangha which is the trade union of the workers of the second respondent industry, contends that a settlement had been entered into between the workers working in various textile mills in the Karnataka State and the Karnataka Textile Mills Association on September 18, 1979 (annexure "d" ). Clause 11 of the said agreement reads thus : "this settlement will be in force till December 31, 1980. However, the parties agree to resume discussions without prejudice to the rights of both the parties on or after October 1, 1980, on the demands referred to above. " ( 3 ) THE petitioner alleges that the discussion as contemplated therein re-commenced from february, 1982. It is stated by the petitioner that when the notice of the re-commenced proceedings were served on the second respondent, they wrote to the Commissioner of Labour in karnataka on March 3, 1982, in the following lines : "dear Sir, sub : Joint meeting - Regarding wage revision, etc. Ref : (1) G. O. No. SWL/15/lmw/77, dated July 7, 1978. (2) Memorandum of settlement on September 18, 1979. (3) Joint meeting held on January 15, 1982. We refer to your notice No. CWR/cr-7/80-81, dated February 5, 1982, and the series of discussions held before you between the representatives of the management and of the workmen in the textile industry in Karnataka over the workmen's demands for wage revision, etc. We recall to your kind attention to the statement entered into before you on November 23, 1981, under Section 12 (3) of the Industrial Disputes Act, 1947, between us and our workmen by which we averted a closure of the mills. Under the above settlement, there has been a revision of workload, work assignment and norms, reduced managing strength, etc. You may kindly recall that the settlement will be in force for 21/2 years from November 23, 1981. Under the above settlement, there has been a revision of workload, work assignment and norms, reduced managing strength, etc. You may kindly recall that the settlement will be in force for 21/2 years from November 23, 1981. This apart, the present financial position of the company cannot afford the luxury of any revision in wages, and would seriously affect the very existence of the Mills. We, therefore, wish to place on record that there cannot be any revision in wages or allowances during the period of the above settlement and, therefore, we will not be bound by any settlement that may be entered into before you as a result of the discussions above referred. Yours faithfully binny Limited (Sd.) director, DS : MK. " ( 4 ) NEVERTHELESS, in the proceedings of conciliation continued by the Commissioner of Labour, notice was again issued to the second respondent (vide annexure "g") pn June 21, 1983, intimating, inter alia, in the following lines : "you are hereby required to attend the proceedings either in person or through a person duly authorised under Section 36 of the Industrial Disputes (Mysore) Rules, 1957, to produce all relevant records, documents and evidence and to present all facts and circumstances of the case. " ( 5 ) IT is clear that the Commissioner of Labour desired from the participating parties an authorisation as contemplated under Section 36 of the Industrial Disputes Act. Section 36 read with Rule 37 of the Rules, makes it clear that a person can represent an employer in any negotiation/discussion and bind him only if he has specific authorisation. Hence, from this it is clear that even if an officer of the association intended to represent the second respondent at the discussion, he should be authorised in that behalf in Form F prescribed, so as to bind him in any manner. ( 6 ) THE petitioner then alleges that a settlement was arrived at on July 14, 1983. The same is produced as annexure "j". It is alleged that all the textile mills, who are members of the association, accepted the settlement except the second respondent. ( 7 ) THEREAFTER, the union of which the petitioner is a member, submitted a charter of demand, annexure "m', to the second respondent. The same is produced as annexure "j". It is alleged that all the textile mills, who are members of the association, accepted the settlement except the second respondent. ( 7 ) THEREAFTER, the union of which the petitioner is a member, submitted a charter of demand, annexure "m', to the second respondent. It included demand No. 4 which was a matter, according to the petitioner, with respect to which a settlement has been arrived at by annexure "j" settlement referred to above. When the second respondent declined to accept the same, the charter of demand was referred to the Conciliation Officer for conciliation. It is averred that he did not consider it fit to admit the above said demand No. 4 as, according to him, it was a matter already settled. The union, thereupon pointed out that since the management was contending that they are not bound by the settlement, the claim has also to be conciliated. But, as the conciliation Officer persisted and contended that the said demand cannot be conciliated, the union requested that conciliation may be taken up for all other demands except demand No. 4. The conciliation ended in a failure and was referred for adjudication before the Industrial tribunal. Demand No. 4 related to claim for ad hoc exgratia one time payment of Rs. 100 to each workman and increased payment of Rs. 26 per month to each workman commencing from July 1, 1983. Thereafter, the petitioner initiated the present proceedings under Section 33-C (2) of the industrial Disputes Act to recover the above said amount, namely, the amount covered by demand No. 4 referred to above. ( 8 ) THE contention of the management was that as the settlement is not binding on them, no amount is due to the claimants under the settlement and the present proceedings is not maintainable. By annexure "w" order, the application made by the petitioner has been rejected. The same is challenged in these proceedings. I have heard K. S. Subrahmanya, learned counsel for the petitioner, and Mr. K. Kasturi, learned counsel for the management, at length. By annexure "w" order, the application made by the petitioner has been rejected. The same is challenged in these proceedings. I have heard K. S. Subrahmanya, learned counsel for the petitioner, and Mr. K. Kasturi, learned counsel for the management, at length. ( 9 ) TO begin with, as can be seen from Annexure "g", dated June 21, 1983, the Commissioner of labour directed the parties to whom the said intimation was issued under Section 12 (1) of the act, to appear either in person or through a person who has been authorised to appear as contemplated under Section 36 of the Industrial Disputes Act. Section 12 (3) of the Industrial disputes Act contemplates arriving at a settlement and the Conciliation Officer for - warding the report of the settlement to the appropriate Government together with the memorandum of settlement signed by the parties to the dispute the Commissioner in this case had demanded an authorisation to be given to the person who intends to participate in the conciliation proceedings on behalf of the party to the dispute. Obviously, the obvious intention was that the person who represents must be in a position to bind the principal and could be in a position to sign the memorandum of settlement as contemplated under Rule 59 of the Rules on behalf of the principal. ( 10 ) RULE 59 provides that the memorandum of settlement shall be in Form H. It further provides that in the case of employer, it shall be signed by the employer himself or by his authorised agent. Only when the authorised agent signs the same, it becomes a settlement signed by the parties to the dispute as referred to in Section 12 (3 ). As long as there is no authorised agent and such an authorised agent does not sign the settlement on behalf of the party to the dispute, it has no binding effect on the party to the dispute. ( 11 ) IN this case, by a communication dated March 3, 1982, the second respondent intimated that they will not be bound by any settlement and they do not intend to participate in the conciliation proceedings. It means, they have expressly declared that not only that they will not participate, they will also have no authorised agent at the meeting to participate on their behalf. It means, they have expressly declared that not only that they will not participate, they will also have no authorised agent at the meeting to participate on their behalf. A. W.-2 examined has stated that the second respondent had not given any authorisation as demanded by the Conciliation Officer in annexure "g". As such, there was no authorised agent of the second respondent who could have signed the settlement, annexure "j", which could have bound the said respondent. For this short reason, it has to be held that the settlement, annexure "j", is not binding on the second respondent, the order impugned is hence correct. ( 12 ) MR. Subrahmanya contended that the settlement would bind the second respondent even in the absence of specific authorisation for more than one reason. Firstly, he contended that the association of which the second respondent was a member, had participated and it would have protected the interests of all its members. When that association signs the settlement, it should he treated as having been signed by an authorised agent. ( 13 ) I am afraid that this contention is very widely put and has to be rejected in toto. The second respondent is a member of the Karnataka Textile Mills Association is no doubt true. But, one does not know how that association can protect the interest of each of its members at the conciliation. The factual position of each member would vary from mill to mill. It will be impossible for an association to carry on discussion keeping in mind the factual interest of each and separate members. Besides, the binding nature of a settlement is brought about by operation of Section 12 (3) of the Industrial Disputes Act. This, in turn, contemplates the signing of the settlement by the parties to the dispute. Rule 59 has been framed under the statute laying down the mode of signing a settlement so as to bind the party to the dispute. This is only either the employer or its officer signings it or alternatively by an authorised agent. An agent can be authorised only by conforming to the requirement of Section 36 of the Act read with Rule 37 thereof. Unless the association conforms to all these requirements, it cannot be described as an authorised agent of the employer. Admittedly, the association did not possess the authorisation issued by the second respondent. An agent can be authorised only by conforming to the requirement of Section 36 of the Act read with Rule 37 thereof. Unless the association conforms to all these requirements, it cannot be described as an authorised agent of the employer. Admittedly, the association did not possess the authorisation issued by the second respondent. Its action, hence, cannot bind the second respondent. ( 14 ) THE further handicap is that Rule 37 of the Rules prescribes the form of authorisation. It reads thus : "form F (See rule 37) before (here mention the authority concerned) reference. . . . . . . . . . . . . . . . of. . . . . . . . . . . . . . . . workmen employer. In the matter of. . . . . . . . . . . . . . . I/we, hereby authorise Shri/sarvashree. . . . . . . . . . . . . . . . . . . . . . . . . . to represent me/us in the above matter. Dated this. . . . . . . day of 19. . . . . Signature of person (s) nominating the representative (s) : address : accepted signature of representative (s), address. " ( 15 ) THE said Rule makes it abundantly clear that the said authorisation is needed in any proceedings under the Act. Admittedly, no such, authorisation is given to the association by the second respondent. There is no general authorisation as well. Perhaps it would have been different had the association, after arriving at a settlement, convened the meeting of its members and taken specific approval in relation to the settlement. Admittedly, this is also absent in this case. Hence, the mere circumstances that the second respondent is a member of the association will not constitute the said association as the authorised agent within the meaning of Section 12 (3) of the Industrial Disputes Act read with Rule 59 thereof. ( 16 ) BESIDES, if the law commands that if a particular Act shall be done in a particular manner it has commanded, then it shall be done in that manner alone and in no other manner. ( 16 ) BESIDES, if the law commands that if a particular Act shall be done in a particular manner it has commanded, then it shall be done in that manner alone and in no other manner. The express mention of mode of authorising of an agent and providing that an authorised agent shall sign on behalf of the principal to bind him, excludes the operation of the general principles now sought to be invoked by the petitioner. In such cases, the rule expression unius est exclusio alterius would apply. ( 17 ) MR. Subrahmanya then contended that annexure "j" settlement is an industry-cum-region-wise settlement and as such, therefore, the said settlement should be held binding on the second respondent as well. I am afraid that this contention also has to fail. Uniform application of such a principle all over will always be beset with great hardship for both parties. Suppose a not affluent industrial establishment strikes a settlement with its workers on the basis of its surrounding, can an affluent establishment engaged in a similar industry, call upon its workers to accept the low terms of settlement, urging that the other settlement is an industry-cum-region-wise settlement ? That will obviously be disadvantageous to the workers of that establishment. There can also be a converse case as well. Therefore, the region-wise industry principle cannot be invoked indiscriminately and it has to be applied cautiously and taking into account all circumstances relating to the respective establishment. In this behalf, learned counsel cited the decision of the Supreme Court in Amalgamated Coffee Estates Ltd. v. Their Workmen (1965-II-LLJ-110), to contend that the principle of region-cum-industry settlement has been recognised by the Supreme Court as well. But this is not a correct submission. In that case, it was so done only because all others who were not parties to the proceedings consented to abide by the settlement. Therefore, the Supreme Court applied the principle of industry-cum-region-wise settlement. This is clear from the following passage in the judgment : "the settlement appears to us also to be a fair one. We are, therefore, of opinion that the two appeals should be decided in accordance with the settlement. Even though estates which were not parties to the settlement are prepared to abide by it. This is clear from the following passage in the judgment : "the settlement appears to us also to be a fair one. We are, therefore, of opinion that the two appeals should be decided in accordance with the settlement. Even though estates which were not parties to the settlement are prepared to abide by it. We think that in the interest of uniformity and industrial peace the settlement should bind all estates which were represented before the special Tribunal. " hence, I do not think that the said rule can be applied here. ( 18 ) THE next contention was made by the petitioner invoking the principle of estoppel. According to counsel, the second respondent had abided by annexure "d" settlement which was only an interim settlement preceding the final settlement, annexure "j". To this settlement also the second respondent was not a party but was represented by the association. Having held out that they will abide by the settlement being arrived at by the association, then the second respondent is now estopped from resiling from annexure "j" settlement which is in continuation of annexure "d" settlement. I do not think this is a case of applying the principle of estoppel. In this case, after annexure "g" notice was issued by the Conciliation Officer initiating proceedings in terms of Clause 11, the second respondent clearly stated that they would not be bound by any of the settlements arrived at in the conciliation. That is, there cannot be any misunderstanding of their stand after the said reply. In spite of the express stand taken in the said reply, the petitioner cannot contend that they continued to believe the state of affairs that existed prior to the reply and disowning will continue thereafter as well. The principle of estoppel has no field to operate. ( 19 ) MR. Subrahmanya contended that there is evidence to show that there has been substantial compliance with the requirement of Rule 59 by the second respondent. I do not think that there is any compliance, much less substantial compliance with the rule as contended by Mr. Subrahmanya. In this case there is no compliance with Rule 59 of the Rules at all to contend that there has been substantial compliance. I do not find that any grounds have been made out to interfere with the impugned order. The writ petition is accordingly dismissed.