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Madhya Pradesh High Court · body

1997 DIGILAW 276 (MP)

Sanyukt Koyla Mazdoor Sangh v. General Manager, Western

1997-05-07

S.K.KULSHRESTHA

body1997
JUDGMENT S.K. Kulshrestha, J. 1. In this petition the petitioner challenges the award dated August 14, 1989 of the Joint Chief Labour Commissioner (Central) and Arbitrator under Code of Discipline, passed by him in Reference No. 2 of 1988 on the ground that the arbitration agreement, having not been forwarded to the appropriate Government and the Conciliation Officer and having not been published in the official gazette, as required by Sub-section (3) of Section 10A of the Industrial Disputes Act, 1947, stood vitiated by non- compliance of the mandatory provision. 2. The learned counsel appearing for the Respondent No. 1 while not disputing that the agreement was not published as required by the said provision has submitted that the said award was not arbitrament on a reference of an industrial dispute to an arbitrator under Section 10A of the Industrial Disputes Act, 1947. But the matter was referred to the arbitrator under the Code of Discipline in industry which was framed as per tripartite conclusions 42-62 and it being a private arbitration, it was not necessary to follow the procedure prescribed by Section 10A of the Industrial Disputes Act. 3. The objection of the learned counsel for the respondents appears quite misconceived as such an agreement which affects the interest of large number of employees could never be a private agreement outside the scope of Section 10A of the I. D. Act. A similar controversy was raised before this Court in K.P. Singh and another v. S.K. Gokhale and Anr. (1970-I-LLJ-125) and the Division Bench while repelling the said contention had made the following observations in paragraphs 9 and 10 of the Judgment: "9. the learned counsel for respondent 2, however, urged that this was not a reference of an indutrial dispute to an arbitrator under Section 10A of the Industrial Disputes Act, 1947. It was urged that the dispute was referred to the arbitrator under the Code of Discipline in Industry, which was farmed as per Tripartite Conclusions, 1942-1962, a publication by the Government of India, Ministry of Labour and Employment, vide Appendix VIII at p. 220 of the said book . Therefore, it was urged that this being a private arbitration and not one under Section 10A of the Act it was not necessary to follow the procedure prescribed by different Sub-sections of the said Section. We are unable to appreciate this line of argument. Therefore, it was urged that this being a private arbitration and not one under Section 10A of the Act it was not necessary to follow the procedure prescribed by different Sub-sections of the said Section. We are unable to appreciate this line of argument. The Industrial Disputes Act specifically con-templates settlement of disputes through conciliation, arbitration and adjudication though Tribunals and not to leave the contending parties to settle the same by strikes and lock- outs. It would be futile to contend that an arbitration agreement between an employer and an employee regarding an industrial dispute would be a private agreement outside the scope of Section 10A of the Act. We are unable to accede to that contention for the simple reason that the Industrial Disputes Act does not contemplate any private arbitrations in respect to questions of public importance involving industrial disputes. If that had been the intent of the legislature, Sub-section (5) of Section 10A of the Act would not have excluded the operation of the Arbitration Act, 1940. Thus we feel that the present arbitration agreement could not be a private arbitration agreement but same necessarily was under Sub-section (1) of Section 10A of the Act specially when form 'C' prescribed for such an agreement was used by the parties. 10. We may further observe that accepting this line of argument would amount to rendering the provision of the special enactment nugatory, thereby allowing the parties to contract out of the statutory provisions and such private agreements in respect of industrial disputes based on contracting out of the statutory provisions would in our opinion, be void under Section 23 of the Indian Contract Act. For these reasons we feel that the arbitration agreement in question can only be interpreted to have been entered into under Sub-section (1) of Section 10A of the Act and not otherwise. Therefore necessarily the provisions of the Arbitration Act, 1940, would be wholly inapplicable." 4. From the above decision of this Court, it is clear that the agreement in the present case involving interest of a large number of employees could never be a private agreement and the parties cannot be allowed to contract out of the statutory provisions in respect of the industrial disputes and the agreement would thus be refer-rable to Section 10A of the Industrial Disputes Act only. 5. 5. Corning now to the question of the validity of the award on the ground that the requirement of Sub-section (3) of Section 10A of the Industrial Disputes Act was not complied with as the same was not published in the official gazette, suffice would be to refer to the decision of the Supreme Court in Karnal Leather Karamchari Sanghatan v. Liberty Footwear Company, (1989-II-LLJ-550), in which while considering the nature of the requirement their Lordships made the following observations in para 27 : "27. Now look at the provisions of Sub-section (3). It is with respect to time for publication of the agreement. But publication appears to be not necessary for validity of the agreement. The agreement becomes binding and enforceable as soon as it is entered into by the parties. Publication is also not an indispensable foundation of jurisdiction of the arbitrator. The jurisdiction of the arbitrator stems from the agreement and not by its publication in the Official Gazettee. Why then publication is necessary? Is it an idle formality ? Far from it, it would be wrong to construe Sub-section (3) in the manner suggested by counsel for the appellant. The Act seeks to achieve social justice on the basis of collective bargaining. Collective bargaining is a technique by which dispute as to conditions of employment is resolved amicably by agreement rather coercion. The dispute is settled peacefully and voluntarily although reluctantly between labour and management. The voluntary arbitration is a part of infra-structure of dispensation of justice in the industrial adjudication. The arbitrator thus falls within the rainbow of statutory Tribunals. When a dispute is referred to arbitration, it is, therefore, necessary that the workers must be made aware of the dispute as well as the arbitrator whose award ultimately would bind them. They must know what is referred to arbitration, who is their arbitrator and what is in store for them. They must have an opportunity to share their views with each other and if necessary to place the same before the arbitrator. This is the need for collective bargaining and there cannot be collective bargaining without involving the workers. The union only helps the workers in resolving disputes with their management but ultimately it would be for the work- ers to take decision and suggest remedies. This is the need for collective bargaining and there cannot be collective bargaining without involving the workers. The union only helps the workers in resolving disputes with their management but ultimately it would be for the work- ers to take decision and suggest remedies. It seems to us, therefore, that the arbitration agreement must be published before the arbitrator considers the merits of the dispute. Non compliance of this requirement would be fatal to be arbitral award." 6. In the present case also it is an admitted position that the agreement was not published as required and, therefore, the award cannot be sustained. 7. In the result award is set aside and it is directed that the appropriate Government shall first comply with the requirement of Sub-sec-tion(3) of Section 10A of the Industrial Disputes Act and then refer the dispute in accordance with law. There shall, however, be no order as to costs.