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2002 DIGILAW 900 (AP)

Chitavalsah Jute Mills v. Government Of A. P.

2002-07-22

L.NARASIMHA REDDY

body2002
L. NARASIMHA REDDY, J. ( 1 ) THIS writ petition involves the question as to the scope and ambit of Section 10-B of the Industrial Disputes Act (AP Amendment) (for short the ID Act ). ( 2 ) THE petitioner (Chitavalsah Jute Mills) is a Division of M/s. Willard India Limited, a registered Company. It is an Industry undertaking manufacture of jute bags and products. Omitting the other minor particulars, the facts that constituted the cause of action for filing the writ petition are as under: -- The petitioner has a membership of its Workers of 5504 reckoned as on 1-3-1990. In accordance with the provisions of the Trade Unions Act, elections were held for the purpose of recognition of majority on 21-1-1991, as per the directions of the Commissioner of Labour. In that election, the 2nd respondent-Union emerged as a majority Union having secured 2429 votes against 1902 votes secured by the 3rd respondent-Union. The 2nd respondent has raised certain demands through letter dated 24-9-1991. It appears that they have gone on strike and the petitioner, in turn, had declared lockout. Conciliation proceedings ensued with the participation of the petitioner, the 2nd respondent and the Conciliation Officer. Ultimately, a settlement dated 12-8-1992 under Section 12 (3) of the ID Act was arrived at. With this, the demands/disputes raised by the 2nd respondent stood settled and the settlement was implemented. In view of the settlement, the strike was called off, the lockout was lifted and the Industry started working with effect from 13-8-1992. ( 3 ) HOWEVER, on 1-9-1992, the rival Union i. e. , the 3rd respondent herein, issued a strike notice expressing its reservations about the utility of some of the items of settlement arrived at between the petitioner and the 2nd respondent. Anticipating industrial unrest in the petitioner industry, as well as in the area, the 1st respondent i. e. , the Government of Andhra Pradesh, in exercise of its powers under Section 10-B of the ID Act, issued orders contained in G. O. Rt. No. l2399 dated 28-11-1992, directing that: (A) the terms and conditions as applicable to the workers of the petitioner-Industry before the settlement dated 12-8-1992 shall be restored; and (b) the strike by the workers and lockout by the Management are prohibited for a period of one year. No. l2399 dated 28-11-1992, directing that: (A) the terms and conditions as applicable to the workers of the petitioner-Industry before the settlement dated 12-8-1992 shall be restored; and (b) the strike by the workers and lockout by the Management are prohibited for a period of one year. ( 4 ) SUBSEQUENT to the G. O. , the Industry started working and industrial peace emerged. However, on the ground that the petitioner did not make the payment of wages in accordance with the conditions that prevailed before the settlement dated 12-8-1992, prosecution was launched against the petitioner. Hence, the present writ petition. ( 5 ) THE petitioner challenged the orders in G. O. Rt. No. 2399 dated 28-11-1992 as being ultra vires the provisions of Section10-B as amended by AP Act 32 of 1997 and Section 12 of the ID Act. ( 6 ) RESPONDENTS 3 and 4, which are rival Unions at the relevant point of time, filed counter affidavits. They narrated the circumstances under which the settlement dated 12-8-1992 was arrived at and the orders in G. O. Rt. No. 2399 dated 28-11-1992 came to be issued. In effect they support the orders of the State Government. ( 7 ) SRI K. Srinivasa Murthy, learned counsel for the petitioner, submits that the 2nd respondent was a Union, which has been recognised as the majority Union in accordance with the provisions of the Trade Unions Act, settlement dated 12-8-1992 was arrived at after prolonged discussions with the participation of the Government authorities and that the same was binding not only upon the members of the Union, who had participated in the discussion, but on the remaining workers also. As long as the settlement was in force, it was not open to the rival trade Unions or for the Government to ignore the same. It is his further contention that the impugned order is contrary to the provisions of Section 10-B of the ID Act and, at any rate, once there is a valid settlement under Section 12 (3) of the ID Act, the same cannot be set at naught by a notification or order issued under Section 10-B of the Act. It is his further contention that the impugned order is contrary to the provisions of Section 10-B of the ID Act and, at any rate, once there is a valid settlement under Section 12 (3) of the ID Act, the same cannot be set at naught by a notification or order issued under Section 10-B of the Act. ( 8 ) THE learned Advocate General, appearing for the 1st respondent, submits that the powers conferred on the Government under Section 10-B of the ID Act are wide and as long as an order is passed in terms of the same, the fact that some of the terms and conditions of the previous settlement are ignored, cannot be construed as setting aside the settlement. It is his contention that the very purpose of enacting Section 10-B was to arm the State Government with necessary powers to ensure industrial peace and uninterrupted production and it is in the discretion of the State Government to stipulate such conditions as are needed to achieve these objects. ( 9 ) SRI Nuthalapati Krishna Murthy, learned Counsel for the 3rd respondent, has adopted the arguments of the learned Advocate General. The first question that calls for consideration in this writ petition is as to whether the impugned order is in accordance with the provisions of Section 10-B of the ID Act. Section 10-B was introduced into the ID Act through A. P. Act 32 of 1987 with effect from 27-7-1987. It reads as under: 10-B. Power to issue order regarding terms and conditions of service, etc,-- (1) Notwithstanding anything contained in this Act, if in the opinion of the Statement, it is necessary or expedient so to do, for securing the public safety or convenience or the maintenance of public order or supplies and services essential to the life of the community or for maintaining employment or maintaining industrial peace, it may by a general or special order, make provision, -- (a) for requiring employers, workmen or both to observe for such period as may be specified in the order, such terms and conditions of employment as may be determined in accordance with the order; and (b) for prohibiting, subject to the provisions of the order, strikes or lockouts generally or a strike or lockout in connection with any industrial dispute. (2)IN case any industrial dispute is raised in respect of any provisions in the order of the State Government made under sub-section (1) within a period of three months of the order, it shall be referred by the State Government for adjudication to an Industrial Tribunal or Labour Court and the order shall lapse when the award of the Tribunal or Labour Court becomes enforceable; Provided, that the reference of the industrial dispute to adjudication shall not have the effect of staying operation of the order. "this section enables the 1st respondent to issue general or specific orders if, in its opinion, it is necessary or expedient for securing public safety or convenience or maintenance of public order or supplies or for maintenance of industrial peace, etc. Such orders may provide for the terms and conditions for employment {1 (a)} and for prohibition of strike or lockout {1 (b)}; for a specified period. The petitioner did not dispute the validity of the impugned order in so far as it has prohibited strike or lockout for a period of one year. The dispute is only about that part of the order, which has directed that the terms and conditions as applicable to the workers of the petitioner-Industry before the operation of the settlement dated 12-8-1992, shall be restored. The attack in this regard is two fold, viz. , that it is contrary to the scope and ambit of Section 10-B (1) and Section 12 (3) of the ID Act. The relevant portion of the impugned order reads as under:- Now, therefore, in exercise of the powers conferred by clause (a) of sub section (1) of section 10-B of thei. D. Act 1947 (Central Act XIV of 1947) as amended by the I. D. (A. P. Amendment) Act 1987 (A. P. Act 32 of 1987) the Government hereby determines that the terms and conditions as applicable to the workers of Chittivalasa Jute Mills before the operation of the settlement dated 12-8-1992 shall be restored. " ( 10 ) A plain reading of Sub Section (1) (a) of Section 10-B indicates that the orders that may be passed by the State Government may provide for requiring the employer or workman or both to observe (I) such terms and conditions of employment as may be determined in accordance with the order; (ii) for such period as may be specified in the order. ( 11 ) WHILE the period for which the terms and conditions are required to be observed may be specified by the orders itself, such terms and conditions of employment are required to be determined in accordance with the order. The difference of the roles to be assigned to the order passed by the State Government for these two purposes is easily discernable from the language itself. While, as regards time for which the order shall be in force, the order itself may specify; the terms and conditions of employment are to be determined in accordance with the order. It thereby suggests that so far as the terms and conditions are concerned, the order contemplated under Section 10-B has to provide the guidelines or the procedure to be followed in fixing the terms and conditions. The difference of the language employed for these two purposes is rather significant. ( 12 ) THE learned Advocate General submits that the terms and conditions of employment to be followed by the employers or workmen or both can be specified or stipulated under the order itself and no separate exercise needs to be undertaken. He submits that it is for this reason, and it is in this context, that the impugned order itself has stipulated the conditions to be observed by the petitioner and the respondents-Unions. This submission of the learned Advocate General would have been acceptable, had the legislation employed the same language as regards stipulation of terms and conditions, as it did for stipulation of the period. It is not so. The terms and conditions of employment are required to be "determined in accordance with the order". This is different from "specified in the order", which is used in the context of period. ( 13 ) THE natural meaning that should be given to the expression "determined in accordance with the order" contemplates two situations. The first is that the orders specified in this expression are supposed to indicate the procedure or parameters in accordance with which the terms and conditions of employment be determined. This naturally supposes that a separate exercise be undertaken to determine the said terms and conditions in accordance with the order. Therefore, it is not permissible to stipulate the terms and conditions under the order referred to in the said expression itself. These two are to be separate exercises. This naturally supposes that a separate exercise be undertaken to determine the said terms and conditions in accordance with the order. Therefore, it is not permissible to stipulate the terms and conditions under the order referred to in the said expression itself. These two are to be separate exercises. The second aspect is determination , which is required to be undertaken in accordance with the order. Wherever the process of determination is involved, it comprises of two elements, viz. , examination and choice. It commences with examination of the subject matter. This may yield to number of choices. The process of determination concludes with the adoption of a choice. The process and nature of examination may differ from case to case depending upon whether the proceedings are judicial, quasi judicial or administrative. But once it is required to be undertaken, the process of determination will be incomplete without these two steps. ( 14 ) WHERE an authority is empowered to determine through an order as distinguished from "in accordance with the order" to be passed by it, the authority is supposed to have undertaken the exercise of examination and what it does, when it passes the order is that, it announces the choice it has chosen. Where, however, the determination is to be in accordance with such order, the examination of the matter and expression of choice thereafter is an exercise to be undertaken subsequent to the said order. In the former case, no separate exercise needs to be undertaken, while in latter, it is so. In such cases, the language employed is different. The scheme contemplated under Section 10-B (1) (a) having regard to the language employed therein, fits into the latter category. ( 15 ) THE difference as to these two aspects can be demonstrated by a comparison of the provisions under the Act itself. Just as the A. P. state Legislature has introduced Section 10-B, the Tamilnadu Legislature also has introduced a separate provision under Section 10-B through its Act 36 of 1982. Sub Section (1) of Section 10-B of A. P. Amendment as well as Tamilnadu Amendment are in para materia. Just as the A. P. state Legislature has introduced Section 10-B, the Tamilnadu Legislature also has introduced a separate provision under Section 10-B through its Act 36 of 1982. Sub Section (1) of Section 10-B of A. P. Amendment as well as Tamilnadu Amendment are in para materia. So far as Sub Section (1) (a) is concerned, the relevant provision in these two Sections read as under: A. P. PROVISION TAMILNADU PROVISION for requiring employers, workmen or both to observe for such period as may be specified in the order, such terms and conditions of employment as may be determined in accordance with the order; for requiring the employers or workmen or both to observe such terms and conditions of employment as may be specified in the order or as may be determined in accordance with the order, including payment of money by the employer to any person who is or has been a workman; It is evident that the Tamilnadu Provision provides two alternatives. It enables the State Government to specify the terms and conditions through the order itself or to provide for determination of the same in accordance with the order. The argument of the learned Advocate General as well the impugned order would have certainly fitted into the AP Provision, had it been in the same terms as the Tamilnadu Provision. Unfortunately, it is not so. So far as the State of Andhra Pradesh is concerned, the terms and conditions were required to be determined in accordance with the order that may be passed by the State Government under Section 10-B. The provision does not enable the Government to specify the terms and conditions, in the order itself. To that extent, the impugned order runs contrary to the express provisions of Section 10-B of the ID Act, as it apples to the State of A. P. This view conforms to and accords with the grammatical as well as contextual interpretation of the provisions. The second question is about the competence of the State Government in over-riding an existing settlement, while passing order under Section 10-B of the ID Act. ( 16 ) AS observed earlier, on 12-8-1992, a settlement was arrived at between the petitioner, on one hand, and the 2nd respondent, which is the majority Union, on the other, in accordance with the provisions of the Act. ( 16 ) AS observed earlier, on 12-8-1992, a settlement was arrived at between the petitioner, on one hand, and the 2nd respondent, which is the majority Union, on the other, in accordance with the provisions of the Act. The contention of the petitioner that this settlement squarely fits into Section 12 of the ID Act is not contradicted. Under Section 18 (3) of the ID Act, a settlement so arrived at, shall be binding not only on the parties to the dispute, but also on all workmen and all persons who are employed in the establishment or part of the establishment, as the case may be, to which the dispute relates to. ( 17 ) THE submission made on behalf of the petitioner is that the State Government is not empowered to ignore or annul the settlement arrived at under Section 12 of the ID Act. Admittedly, through the impugned order, the settlement arrived at on 12-8-1992 is sought to be ignored and the STATUS QUO ANTE prior thereto is sought to be restored. This is nothing short of making the settlement ineffective, at least as long as the impugned is operative. Not only that. For the violations, the petitioner is sought to be prosecuted for its continued adherence to the settlement. One of the important objects sought to be achieved under the ID Act is to ensure that the industrial disputes are resolved amicably. Depending on the circumstances, number of procedures are stipulated for bringing about settlements. These include Conciliation, Arbitration and Adjudication. Irrespective of the procedure adopted, the outcome is a settlement. Once such a settlement emerges as a result of any of the processes referred to above, Section 18 mandates that it shall be binding not only on the parties, but others also, depending on the procedure, which is employed in arriving at such settlement. The object is to ensure that industrial relations are not disturbed on the basis of occasional dissensions by the aggrieved parties. Section 10-B is enacted to meet certain emergency situations. It is too difficult to imagine that invocation of provisions under Section 10-B would bring the operation of the other provisions of the Act to a grinding halt. The object is to ensure that industrial relations are not disturbed on the basis of occasional dissensions by the aggrieved parties. Section 10-B is enacted to meet certain emergency situations. It is too difficult to imagine that invocation of provisions under Section 10-B would bring the operation of the other provisions of the Act to a grinding halt. ( 18 ) THE learned Advocate General, placing reliance upon the non-obstanti clause contained in Section 10-B, submits that the power of the State Government is so wide as to ignore any settlement also. It is his contention that having regard the circumstances under which the powers under Section 10-B are to be invoked, the existing settlements may have to be ignored. It is also his contention that if any one is aggrieved by the steps taken under Section 10-B, a remedy is provided under Sub Section (2), wherein a dispute in that regard can be raised and be referred to Industrial Tribunal or Labour Court. ( 19 ) THE non obstanti clause cannot be said to have empowered the State Government to ignore the settlement, which is arrived at in accordance with the provisions of the Act. ( 20 ) ORDINARILY, whenever an industrial dispute exists, the same is required to be settled as per Section 12. The strikes and lockouts, if declared, are to be dealt with under the relevant provisions. Section 10-B paves the way for the State Government to by-pass this procedure and straightaway step-in, in certain extra ordinary circumstances. The non obstanti clause would empower the State Government to exercise its powers under Section 10-B, which by their very nature run contrary to the normal procedure prescribed under the ID Act. Such a procedure, by no stretch of imagination, can be said to have clothed the State Government with the power to set at naught, the existing valid settlement, which can be over-come only through the process of adjudication or by a subsequent settlement. The procedure contemplated under Sub-Section (2) of Section 10-B relates to the disputes that may arise as a result of the determination that may take place in accordance with the order, but not in relation to the validity or otherwise of the settlements, which were in vogue before the order under Section 10-B came to be passed. The procedure contemplated under Sub-Section (2) of Section 10-B relates to the disputes that may arise as a result of the determination that may take place in accordance with the order, but not in relation to the validity or otherwise of the settlements, which were in vogue before the order under Section 10-B came to be passed. Once a settlement is arrived at in accordance with the procedure prescribed by the Act, any person aggrieved thereby can challenge the same only in accordance with the procedure prescribed therefor. Substantial sanctity and validity is attached to settlements. Their binding nature is provided for specifically. Such being the situation, the settlement, which is otherwise binding, cannot be ignored. ( 21 ) THEREFORE, the impugned order in G. O. Rt. No. 2399 dated 28-11-1992 cannot be sustained, as it runs contrary to the provisions of Section 10-B (1) (a) as well as Sections 12 and 18 of the ID Act. The impugned order is set aside in so far as it made the settlement dated 12-8-1992 inoperative. In all other aspects, it is upheld. Accordingly, any prosecution launched against the petitioner on the allegation of violation of the terms and conditions referred to above, shall abate. ( 22 ) THE writ petition is allowed to the extent indicated above. There shall be no order as to costs.