H. N. NAGAMOHAN DAS, J. ( 1 ) IN this petition, the petitioner has called in question the award dated 30-7-1999 in ID. No. 2 of 1993 passed by the Industrial Tribunal at bangalore. ( 2 ) PETITIONER is engaged in the manufacture of ayurvedic medicines. Upto 1993, the petitioner entered into settlements on wage structure and other service conditions of workmen with Bangalore Mazdoor Sangh (hereinafter called the 'sangha') which was the recognised Union and the last settlement was signed on 18-4-1990. This settlement was to expire on 30-10-1992. In 1992, a section of the workers formed respondent-Union (hereinafter called the 'union' ). Thus, by October 1992, there came to be two groups i. e. , the Sangha and the respondent-Union. ( 3 ) THE Union submitted a charter of demands on 30-10-1992 and on 7-12-1992. The petitioner did not consider the demands of Union and the matter was taken to conciliation. During the pendency of conciliation proceedings, the petitioner entered into a settlement with the Sangha on 19-5-1993. The conciliation proceedings ended in failure. The government of Karnataka referred the dispute as per the order dated 13-9-1993 to the Industrial Tribunal, Bangalore (hereinafter called the 'tribunal') and the same came to be registered as I. D. No. 2 of 1993. Before the Tribunal, the Union filed claim statement inter alia contending that 126 workmen out of 211 are the members of Union who constitute majority and that they are legally entitled to submit fresh charter of demands. The charter of demands submitted by the Union are all genuine, bona fide, and in the interest of all the workmen. The petitioner and the Sangha hand-in-glove entered into a settlement on 19-5-1993. This settlement dated 19-5-1993 is less favourable to the workmen and that the same is illegal. The petitioner in his counter-statement contends that the Union had no majority of workmen as its members. As per the check off system, the Sangha enjoyed the majority support of workmen and after negotiations, the settlement was arrived on 19-5-1993. This settlement is accepted by majority workmen as the same was fair, proper and reasonable. ( 4 ) BEFORE the Tribunal, the Union examined one witness as W. W. 1 and got marked Exhibits W. 1 to W. 17. The petitioner examined two witnesses as M. W. 1 and M. W. 2 and got marked Exs. M. 1 to M. 22. ( 4 ) BEFORE the Tribunal, the Union examined one witness as W. W. 1 and got marked Exhibits W. 1 to W. 17. The petitioner examined two witnesses as M. W. 1 and M. W. 2 and got marked Exs. M. 1 to M. 22. The tribunal on appreciation of oral and documentary evidence on record passed an award on 30-/-1999 holding that the settlement dated 19-5-1993 as not fair and proper and proceeded to fix revision of wages and other allowances. The petitioner being aggrieved is now before this court questioning the impugned award. ( 5 ) SRI S. N. Murthy, learned Senior Counsel for petitioner contends that as on 1993, the Union had not enjoyed the support of majority workmen and therefore, there was no obligation on the part of petitioner to negotiate with the Union and to enter into a settlement with them. The Union has not placed any evidence to demonstrate that majority workmen are its members. By following check off system, it was found that the Sangha enjoyed the support of majority workmen and after negotiations the petitioner entered into settlement with the Sangha on 19-5-1993 and as such the same is fair, reasonable and valid. It is contended that merely because the conciliation proceedings at the instance of Union are pending, the same is not a bar to the petitioner to sign the settlement with the Sangha which enjoyed the support of majority workmen. It is contended that the reasoning of the Tribunal that all the previous settlements are signed before the conciliation officer and the one in question ought to have been signed before the conciliation Officer is bad in law and that the same is unsound. ( 6 ) IT is further contended that the Tribunal committed an error in not considering the fact that during 1993 the petitioner was paying highest wages in the Industry. The Tribunal failed to consider Ex. M. 10 the price index and Ex. M. 21, a comparative chart of wages in other industries and the petitioner. It is contended that the Tribunal committed an error in not following the principle of region-cum-industry basis settlement. ( 7 ) SRI S. N. Murthy, learned Senior Counsel further contends that all workmen except 26 have signed the settlement and have taken the benefit under the settlement dated 19-5-1993. It is contended that the Tribunal committed an error in not following the principle of region-cum-industry basis settlement. ( 7 ) SRI S. N. Murthy, learned Senior Counsel further contends that all workmen except 26 have signed the settlement and have taken the benefit under the settlement dated 19-5-1993. Even these 26 workmen have taken 70% of the benefit under the settlement by virtue of an interim order passed by the Tribunal. Prior to 19-5-1993, the petitioner signed the settlement with the Sangha and they are not in dispute. Subsequent to 19-5-1993, the petitioner entered into four settlements with the Sangha and the Union and they are not in dispute. The only dispute is the settlement dated 19-5-1993. The Tribunal failed to consider these aspects. Reliance is placed on the following decisions: herbertsons Limited v Workmen of Herbertsons Limited and others, AIR 1977 SC 322 : (1976)4 SCC 736 : (1976) 33 FLR 398 (SC ). Mis. Tata Engineering and Locomotive Company Limited v their Workmen, AIR 1981 SC 2163 : (1981)4 SCC 627 : (1981) 43 FLR 354 (SC) mangalore Ganesh Beedi Works, Mysore and Others v Workmen represented by Secretary, Mangalore Ganesh Beedi Workers and allied Beedi Factories Workers Association, Mysore, 2004 (5) Kar. L. J. 443 (DB) : 2004-III-LLJ-228 (Kar.) (DB ). Deepak Industries Limited and Another v State of West Bengal and Others, 1975-I-LLJ-293 (Cal. ). Workmen of Hindustan Motors Limited v Hindustan Motors limited and Another, (1962)5 FLR 350 (SC ). Workmen of Jeesop and Company Limited v Jeesop and company Limited and Others, (1964)8 FLR 12 (SC ). Kamani Metals and Alloys Limited v Their Workmen, AIR 1967 SC 1175 : 196/-II-LLJ-55 (SC): (1967)15 FLR 1 (SC ). ( 8 ) PER contra, Sri K. Subba Rao, learned Senior Counsel for respondent-Union contends that as on October 1993, the Union enjoyed the support of majority workmen. On 30-10-1993, the Union submitted charter of demands. Again on /-12-1992, the Union submitted another charter of demands. Since the petitioner did not consider the charter of demands submitted by the Union, the matter was taken to conciliation officer. During the pendency of conciliation proceedings, the petitioner signed the settlement with the Sangha on 19-5-1993 with a mala fide intention to frustrate the attempt of Union. Again on /-12-1992, the Union submitted another charter of demands. Since the petitioner did not consider the charter of demands submitted by the Union, the matter was taken to conciliation officer. During the pendency of conciliation proceedings, the petitioner signed the settlement with the Sangha on 19-5-1993 with a mala fide intention to frustrate the attempt of Union. It is contended that the petitioner did not want any secret ballot and therefore, the settlement dated 19-5-1993 is an outcome of collusion. He justifies the impugned award. ( 9 ) IT is further contended that under the settlement dated 19-5-1993, the workmen derived a meagre benefit though the petitioner earned fabulous profits. It is contended that though 185 workmen out of 211 have taken the benefit under the settlement dated 19-5-1993, the Union is not barred from questioning the fairness and reasonableness of the settlement. He" justifies the impugned award and reliance is placed on the following decisions.- food Corporation of India Staff Union v Food Corporation of india and Others, AIR 1995 SC 1344 : 1995 Supp. (1) SCC 678 : 1995-II-LLJ-272 (SC) 1999 AIR SCW 468; m/s. Tata Chemicals Limited v Workmen, AIR 1978 SC 828 : (1978)3 SCC 42 : 1978-II-LLJ-22 (SC) nar Singh Pal v Union of India and Others, AIR2000 SC 1401 : (2000)3 SCC 588 : 2000-I-LLJ-1388 (SC ). Workmen of Subong Tea Estate v Outgoing Management of subong Tea Estate and Another, AIR 1967 SC 420 : 1964-I-LLJ-333 (SC ). National Textile Workers' Union and Others v P. R. Ramakrishnan and Others, AIR 1983 SC 759 : (1983)1 SCC 228 . Petlad Turkey Red Dye Works Company Limited v Dyes and chemical Workers' Union, AIR 1960 SC 1006 : 1960-I-LLJ-548 (SC) kamani Metals and Alloys Limited's case, supra; calcutta Insurance Limited Company v Workmen, AIR 1967 SC 1286 : 196/-II-LLJ-1 (SC ). 1969-I-LLJ-7. ( 10 ) HEARD arguments on both the sides. Perused the entire writ papers. The following points will arise for my consideration.- (1) Whether the respondent-Union is estopped from questioning the settlement when majority of the members of union have taken the benefit under the settlement? (2) Whether the settlement dated 19-5-1993 signed by petitioner and Sangha is fair and proper? (3) Whether the Tribunal is right in fixing the revised pay scale and other benefits in the impugned award? (2) Whether the settlement dated 19-5-1993 signed by petitioner and Sangha is fair and proper? (3) Whether the Tribunal is right in fixing the revised pay scale and other benefits in the impugned award? on Point No. 1.- ( 11 ) IT is not in dispute that during the pendency of proceedings before the Tribunal all workmen except 26 out of 211 have taken the benefit under the settlement dated 19-5-1993 by accepting the terms of settlement. The Supreme Court of India in Tata Chemicals Limited's case, held as under:"19. Accordingly, the theory of implied agreement by acquiescence sought to be built up on behalf of the appellant on the basis of the acceptance of the benefits flowing from the agreement even by the workmen who were not signatories to the settlement is of no avail to the appellant-Company and cannot operate as an estoppel against the Sangh or its members". In the case of Nar Singh Pal, the Supreme Court held as under.-"13. The Tribunal as also the High Court, both appears to have been moved by the fact that the appellant had encashed the cheque through which retrenchment compensation was paid to him. They intended to say that once retrenchment compensation was accepted by the appellant, the chapter stands closed and it is no longer open to the appellant to challenge his retrenchment. This, we are constrained to observe, wholly erroneous arid was not the correct approach. The appellant was a casual labour who had attained the 'temporary" status after having put in ten years' of service. Like any other employee, he had to sustain himself, or, may be, his family members on the wages he got. On the termination of his services, there was no hope left for payment of salary in future. The retrenchment compensation paid to him, which was only a meagre amount of Rs. 6,350/-, was utilised by him to sustain himself. This does not mean that he had surrendered all his constitutional right in favour of the respondents. Fundamental Rights under the Constitution cannot be bartered away. They cannot be compromised nor can there be any estoppel against the exercise of Fundamental Rights available under the Constitution. As pointed out earlier, the termination of the appellant from service was punitive in nature and was in violation of the principles of natural justice and his constitutional rights. Such an order cannot be sustained". They cannot be compromised nor can there be any estoppel against the exercise of Fundamental Rights available under the Constitution. As pointed out earlier, the termination of the appellant from service was punitive in nature and was in violation of the principles of natural justice and his constitutional rights. Such an order cannot be sustained". The Supreme Court in the case of Workmen of Subong Tea Estate, has held as under.- further the technical plea that the concerned workmen are estopped from challenging the validity of the retrenchment as they had accepted retrenchment compensation should not be entertained as such technical pleas are not generally entertained in industrial adjudication. Apart from this, in the instant case the concerned workmen had immediately protested against their retrenchment on the very next day. Hence, the acceptance of retrenchment compensation by the concerned workmen could not operate as a bar so as to prevent them from challenging the validity of the retrenchment itself. ( 12 ) IN view of the law laid down by the Supreme Court it is a constitutional right of workmen to question the fairness and validity of settlement. Such a right of workmen is not taken away when the workmen accepted the benefit under the settlement. It is unfair and unreasonable to expect a workmen to fight for their rights without accepting the benefit under the settlement. The workmen for their financial compulsions and also due to inordinate delay in the disposal of disputes before the Courts are forced to take the benefit under the settlement. It is not in dispute that 26 workmen have taken 70% of the benefit under the settlement dated 19-5-1993 pursuant to an interim order passed by the Tribunal. These 26 workmen are the members of respondent-Union who have not taken the remaining 30% benefit under the settlement. Therefore, the Union is not estopped from contesting the fairness and validity of settlement. Accordingly, Point No. 1 is answered against the petitioner and in favour of the respondent-Union. Point No. 2.- ( 13 ) THE Supreme Court of India in Food Corporation of India Staff union's case, held as hereunder:"collective bargaining is the principal raison d'etre of the trade unions. Accordingly, Point No. 1 is answered against the petitioner and in favour of the respondent-Union. Point No. 2.- ( 13 ) THE Supreme Court of India in Food Corporation of India Staff union's case, held as hereunder:"collective bargaining is the principal raison d'etre of the trade unions. However, to see that the trade union, which takes up the matter concerning service conditions of the workmen truly represents the workmen employed in the establishment, the trade uion is first required to get itself registered under the provisions of Trade Unions Act, 1926. This gives a stamp of due formation of the trade union and assures the mind of the employer that the trade union is an authenticated body; the names and occupation of whose office-bearers also become known. But when in an establishment, be it one registered trade unions, the question as to with whom the employer should negotiate or enter into bargaining assumes importance, because if the trade union claiming this right be one which has as its members minority of the workmen/employees, the settlement, even if any arrived between the employers and such a union, may not be acceptable to the majority and may not result in industrial peace. In such a situation with whom the employer should bargain, or to put it differently who should be the sole bargaining agent, has been a matter of discussion and some dispute. The 'check off system' which once prevailed in this domain has lost its appeals; and so, efforts are on to find out which other system can foot the bill. The method of secret ballot is being gradually accepted. All concerned would, however, like to see that this method is so adapted and adjusted that it reflects the correct position as regards membership of the different trade unions operating in one and the same industry, establishment or undertaking". (emphasis supplied) ( 14 ) IN National Engineering Industries Limited v State of Rajasthan and Others, AIR 2000 SC 469 : (2000)1 SCC 371 : 2000-I-LLJ-247 (SC ). the Supreme Court held as hereunder:" (25 ). . . . A settlement which is sought to be impugned has to be scanned and scrutinized. Sub-sections (1) and (3) of Section 18 divide settlements into two categories, namely, (1) those arrived at outside the conciliation proceedings; and (2) those arrived at in the course of conciliation proceedings. the Supreme Court held as hereunder:" (25 ). . . . A settlement which is sought to be impugned has to be scanned and scrutinized. Sub-sections (1) and (3) of Section 18 divide settlements into two categories, namely, (1) those arrived at outside the conciliation proceedings; and (2) those arrived at in the course of conciliation proceedings. A settlement which belongs to the first category has limited application in that it merely binds the parties to the agreement but the settlement belonging to the second category has extended application since it is binding on all the parties to the industrial disputes, to all others who were summoned to appear in the conciliation proceedings and to all persons employed in the establishment or part of the establishment, as the case may be, to which the dispute related on the date of the dispute and to all others who joined the establishment thereafter. A settlement arrived at in the course of conciliation proceedings with a recognised majority union will be binding on all workmen of the establishment, even, those who belong to the minority union which has objected to the same. Recognised union having majority of members is expected to protect the legitimate interest of labour and enter into a settlement in the best interest of labour. This is with the object to uphold the sanctity of settlement reached with the active assistance of the Conciliation Officer and to discourage an individual employee or minority union from scuttling the settlement. When a settlement is arrived at during the conciliation proceedings it is binding on the members of the workers' Union as laid down by Section 18 (3) (d) of the Act. It would ipso facto bind all the existing workmen who are all parties to the industrial dispute and who may not be members of unions that are signatories to such settlement under Section 12 (3) of the act. Act is based on the principle of collective bargaining for resolving industrial disputes and for maintaining industrial peace. "this principle of industrial democracy is the bedrock of the Act", as pointed out in the case of P. Virudhachalam v Management of lotus Mills, (1998)1 SCC 650 : 1998 AIR SCW 145 : AIR 1998 SC 554 : 1998 Lab. 1c. 834 (SC ). In all these negotiations based on collective bargaining individual workman necessarily recedes to the background. "this principle of industrial democracy is the bedrock of the Act", as pointed out in the case of P. Virudhachalam v Management of lotus Mills, (1998)1 SCC 650 : 1998 AIR SCW 145 : AIR 1998 SC 554 : 1998 Lab. 1c. 834 (SC ). In all these negotiations based on collective bargaining individual workman necessarily recedes to the background. Settlements will encompass all the disputes existing at the time of the settlement except those specifically left out". (emphasis supplied) ( 15 ) IT is clear from the above referred decision of Supreme Court that the principal of Industrial democracy is the bed rock of the Industrial disputes Act. To maintain industrial peace, collective bargaining is a must. When there are more than one Union in an industry, the check off system which once prevailed in this domain has lost its appeals and the method of secret ballot is being gradually accepted. Keeping these principles in view, it is to be examined, whether the settlement dated 19-5-1993 is fair and proper. ( 16 ) IT is not in dispute that the settlement signed on 18-4-1990 by the petitioner and the Sangha was to expire on 30-10-1992. By October 1992 the Union claimed that they enjoy the support of majority workmen of 126 out of 211 workmen. On the other hand, Sangha claimed that they enjoy the support of 123 workmen out of 211 workmen. The Sangha and the Union placed charter of demands. It is also not in dispute that the petitioner did not consider the charter of demands submitted by the union and therefore the matter was taken to conciliation. M. W. 1 in his evidence admits that he is aware about the letter given by Union to the conciliation officer about the majority character of their Union and requesting the management to conduct a secret ballot. It is not in dispute that all the previous four settlements before 1993 are all signed before the conciliation officer. Under these circumstances in all fairness the petitioner ought to have adopted the method of secret ballot to find out as to who enjoys the majority support of workmen. The check off method adopted by the petitioner is undemocratic and opposed to principles of collective bargaining. Therefore, the procedure adopted to sign the settlement dated 19-5-1993 is unfair and not proper. The check off method adopted by the petitioner is undemocratic and opposed to principles of collective bargaining. Therefore, the procedure adopted to sign the settlement dated 19-5-1993 is unfair and not proper. Accordingly, Point No. 2 is answered against the petitioner and in favour of the Union. On Point No. 3.- ( 17 ) THE Supreme Court in M/s. Tata Engineering and Locomotive company Limited's case, held that a settlement cannot be weighed in any golden scales and the question whether it is just and fair has to be answered on the basis of principles different from those which come into play when an industrial dispute is under adjudication. In the case of workmen of Hindustan Motors, the Apex Court has held that ordinarily it is desirable to have as much uniformity as possible in the wage scales of different concerns of the same industry working in the same region. There may be difference in financial capacities, but where there is no such obstacle, the same wage rates for the different concerns in the same industry in the same region should be secured. On the one hand, this tends to the maintenance of industrial peace in the entire region and on the other hand it puts the different companies or industry on more or less equal footing in their production struggle. In the case of Workmen of Jeesop and Company Limited, the supreme Court held as hereunder.-"it is well-settled that wages including wage scales are fixed on region-cum-industry basis, and one of the reasons behind this principle is that concerns of more or less of the same standing in the same industry should have as nearly as possible same wages so that they might stand on a par with one another in the matter of competition. Otherwise if disparate rates of wages are fixed in a particular concern, which are much higher than the prevailing rates of wages in concerns of similar standing in the same industry, it will be put at a disadvantage when it conies to compete in the market in the sale of its product. It is for this reason that when scales of pay are being fixed that Tribunals look at what are called comparable concerns in framing wage structure". The Supreme Court in Kamani, Metals and Alloys Limited's case, has held as hereunder.-". . . . It is for this reason that when scales of pay are being fixed that Tribunals look at what are called comparable concerns in framing wage structure". The Supreme Court in Kamani, Metals and Alloys Limited's case, has held as hereunder.-". . . . that fixation or revision of scales of wages, pay or dearness allowance must not be out of tune with the wages etc. , prevalent in the industry or the region. This is always desirable so that unfair competition may not result between an establishment and another and diversity in wages in the region may not lead to industrial unrest". ( 18 ) FROM the above decision it is clear that principle of industry-cum- region is adopted while fixing wage revision of workmen. This principle is necessary for maintenance of industrial peace and further it prevents unfair competition and industrial unrest. This principle holds the domain of fixing wage revision. ( 19 ) IN the light of the above referred principles the impugned award of the Tribunal fixing wage revision is to be examined. The Tribunal in para 20 of the impugned award concluded as under.-". . . . . . But the fact in the case is that both the I party workmen as well as the II party management have miserably failed to produce sufficient materials in the case before this Court in assisting the Court to have a comparable figure to formulate wage structure or a reasonable wage structure except making huge claim by the I party workmen, and the management contending that they are not in a position to meet the demands because of financial constraints". The Tribunal having held that there is no sufficient material on record ought not to have fixed the wage revision. There is no basis for the tribunal in fixing wage revision. Therefore, the award of the Tribunal fixing wage revision is arbitrary and the same is on surmises and not supported by any material on record. ( 20 ) DURING 1993 the petitioner was paying highest wages in the industry in the region. This fact is evident from Ex. M. 21 the comparative statement as hereunder: ( 21 ) THE Union has not disputed the contents of Ex. M. 21 the comparative statement. The Union has not placed any other evidence to show that the petitioner was paying lesser wages than other industries in the region. This fact is evident from Ex. M. 21 the comparative statement as hereunder: ( 21 ) THE Union has not disputed the contents of Ex. M. 21 the comparative statement. The Union has not placed any other evidence to show that the petitioner was paying lesser wages than other industries in the region. In the settlement dated 19-5-1993 there is an increase of wages from Rs. 315/- to Rs. 330/- per workman per month and the same is the highest in the region. The Tribunal failed to consider this documentary and oral evidence on record and hence the impugned award fixing wage revision is bad in law and contrary to evidence on record. ( 22 ) SRI K. Subba Rao, learned Senior Counsel for the Union contends that the industries mentioned in Ex. M. 21 are not comparable industries. The petitioner is an ayurvedic manufacturing company and the other industries in Ex. M. 21 are all manufacturing allopathic medicines and therefore they are different. This submission of the learned Senior Counsel is not acceptable to me. All the Industries mentioned in Ex. M. 21 including the petitioner are manufacturers of medicines for human consumption and they are to be taken as pharmaceutical Industry. The Industries mentioned in Ex. M. 21 are multi-national companies and they are not smaller Industries compared to petitioner. ( 23 ) IT is contended that petitioner has not produced the balance-sheet and profit and loss account and therefore, an adverse inference has to be drawn against the petitioner for fixation of wage revision. The financial capacity of petitioner is relevant if the petitioner is paying less than other industries in the region. It is not in dispute that in 1993 wages paid to the workmen in the petitioner's Industry was higher in the region. Further, in the settlement dated 19-5-1993 higher wages are paid than the wages paid under the earlier settlement. Therefore, the production of balance-sheet and profit and loss accounts are not relevant and no adverse inference can be drawn against the petitioner. For the reasons stated above Point Mo. 3 is answered in negative. ( 24 ) SUBSEQUENT to 1993, four settlements are signed by the petitioner, the Sangha and the Union. The only dispute is in respect of settlement dated 19-5-1993. The petitioner was paying highest wages in 1993 when compared to other Industries in the region. For the reasons stated above Point Mo. 3 is answered in negative. ( 24 ) SUBSEQUENT to 1993, four settlements are signed by the petitioner, the Sangha and the Union. The only dispute is in respect of settlement dated 19-5-1993. The petitioner was paying highest wages in 1993 when compared to other Industries in the region. Even in the settlement dated 19-5-1993 there was increase of wages ranging from Rs. 315/- to Rs. 330/- per workman per month. The fact that the workmen except 26 workmen have signed the settlement and had taken the benefit shall not be ignored. Even, the 26 workmen have taken 70% benefit under the settlement. Subsequent to 19-5-1993 the petitioner, Sangha and the union signed four settlements and industrial peace is prevailing. For these reasons I hold that the revision of wages in the settlement dated 19-5-1993 as fair and reasonable. ( 25 ) FOR the reasons stated above, the following order.- (1) Writ petition is allowed in part; (2) The impugned award dated 30-/-1999 in ID. No. 2 of 1993 passed by the Industrial Tribunal, Bangalore, insofar as it relates to fixation of wage revision and other allowances alone is hereby quashed; (3) No costs. --- *** --- .