JUDGMENT Hon’ble D.P. Singh, J.—Heard Shri Navin Sinha learned Senior Advocate assisted by Shri Arvind Verma for the petitioner, learned Standing Counsel for respondent Nos. 1, 2 and 3, Shri K.P. Agarwal, learned Senior Advocate assisted by Ms. Bushra Mariyam appearing for respondent Nos. 4 and 5 in the leading petition. Shri S.N. Verma, learned Senior Advocate assisted by Shri S.D. Singh appears for the petitioner in the connected petition, learned Standing Counsel and Shri K.P. Agarwal appear for the respondents. 2. This petition seeks quashing of the registration certificate granted to LML Mazdoor Ekta Sangathan, Kanpur, respondent No. 5, on the ground that it does not fulfil the requirements of law. 3. The facts as pleaded are that M/s. LML Limited, which is a Public Limited Company duly incorporated under the Companies Act (here-in-after referred to as the Establishment), has a workforce of about three thousand employees. The petitioner Union was registered in May, 1977 by the Registrar Trade Unions, Kanpur, under the Trade Unions Act, 1926 (here-in-after referred to as the Act) and claims to have a membership of about 2,500 employees of the Establishment and is functioning there since then and is espousing their cause through various settlements and agreements. 4. The Establishment declared a lock out at its factory with effect from 7.3.2006 on the ground of financial losses, operational problems etc. Persistent demands raised by the petitioner through various levels, bore fruit and it entered into tripartite settlements dated 24.7.2006 and 13.4.2007 with the Establishment and labour officials, which resulted in the lifting of the lock out with effect from 15.4.2007. In pursuance of the aforesaid tripartite settlements, the employees of the Establishment received not only their salary for the months of January and February, 2006 but also bonus for the year 2003-05 apart from some other benefits. In pursuance of the settlement, in spite of the fact that the rehabilitation of the Establishment is engaging attention of the B.I.F.R., where petitioner is representing the interest of the workers, the production in the factory has started in a phased manner and in terms of the settlement the employees are entitled for payment of lay-off compensation. Having come to know that the respondent Nos. Having come to know that the respondent Nos. 4 and 5, with the help of outsiders were trying to jeopardize the return of normalcy of the production activity, and with that end in view were seeking registration as a trade union in the name of laid off employees, they filed their detailed objections on several dates bringing to the notice of the Registrar that the respondent No. 5 did not fulfil the requirements laid-down in the Act and therefore, before registering them, their objections should be perused and if necessary, hearing be given to them. It is further pleaded that another Union namely LML Limited Mazdoor Union had approached this Court challenging an order of the Additional Labour Commissioner, Kanpur Region, Kanpur, which in effect was in furtherance of the aforesaid tripartite agreement dated 24.7.2006 for payment of wages for January and February, 2006 through writ petition No. 25445 of 2007 but a learned Single Judge of this Court after hearing the parties, dismissed the writ petition, holding that the settlement was for the benefit of the majority of the workmen and that the Union was trying to create obstacles in restoration of normalcy vide its order dated 25.5.2007. As the petitioner had authentic information that the Registrar would, without adverting to the objections raised by it and without objectively considering the requirements laid-down in the Act, would grant registration, approached this Court through writ petition No. 1357 of 2008. During the course of arguments on the said writ petition, the Court observed that the petition was premature as there was no occasion to apprehend that the Registrar would not consider the objections in the light of the requirement of the Act and thus, the said writ petition was withdrawn on 9.1.2008. Nevertheless, in spite of fresh objections filed on 15.1.2008, the impugned registration has been granted on 18.1.2008. Thus, the petition. 5. At the very threshold, Sri K.P. Agrawal, learned Counsel for the respondent Union has urged that the petitioner does not have any locus to challenge the grant of registration and it is acting against the interests of the workers and there is no impediment in the Act that more than one Union cannot be registered for a particular Establishment. 5. At the very threshold, Sri K.P. Agrawal, learned Counsel for the respondent Union has urged that the petitioner does not have any locus to challenge the grant of registration and it is acting against the interests of the workers and there is no impediment in the Act that more than one Union cannot be registered for a particular Establishment. He has relied upon a Single Judge decision of this Court rendered in the case of Raymond Synthetics Karmchari Sangh, Karchhana and another v. Registrar Trade Unions U.P. Kanpur and others, 1994 (68) F.L.R. 1090 to support his contention. 6. Let us first examine the issue of locus standi. 7. A perusal of the Act shows that the Registrar on being satisfied that the requirements laid-down in the Act have been met, is obliged to register it and there is no provision enabling an existing Union or the Management to claim a hearing before the registration is granted. Normally, only a person aggrieved is entitled to complain about an action if due to any illegality a resultant order visits him with some civil consequences. But, the Courts of late, as we will presently examine, have allowed even strangers to canvass violation of a law in an action which may not harm him directly. 8. The Apex Court in the case of Sai Chalchitra v. Commissioner, Meerut Mandal and others, (2005) 3 SCC 683 was confronted with a dismissal order of this Court where a writ petition challenging grant of a Video Parlour licence was challenged by a person holding a licence for screening films and this Court had rejected his petition only on the ground of locus saying that except for rivalry in trade, the petitioner had no locus to challenge the grant of licence to the other and it did not consider the illegalities pointed out. The Apex Court allowed the appeal and set aside the rejection order holding that the High Court ought to have considered the legal issues raised and since he was in the same trade, he should be heard on merits. The Apex Court allowed the appeal and set aside the rejection order holding that the High Court ought to have considered the legal issues raised and since he was in the same trade, he should be heard on merits. Further, the Apex Court in the Case of M.S. Jayaraj v. Commissioner of Excise, Kerala and others, (2000) 7 S.C.C. 552 after considering a large number of decisions on the question of locus, even though the person who approached the Court was not aggrieved party in the strict sense, set aside the order of the High Court holding that if an action or order was in violation of law, it should not be allowed to remain alive and operative solely on the ground that the person who filed the petition had no locus in the following words : “In the light of expanded concepts of the locus standi and also in view of the finding of the Division Bench of the High Court that the order of the Excise Commissioner was passed in violation of law, we do not wish to nip the motion out solely on the ground of locus standi. If the Excise Commissioner has no authority to permit a liquor shop owner to move out of the range (for which auction was held) and have his business in other range it would be improper to allow such an order to remain alive or operative on the sole ground that the person who filed the writ petition has strictly no locus standi. So we proceed to consider the contentions on merits.” 9. The petitioner, in the strict sense, cannot be said to be an aggrieved person, but considering the facts that it has been functioning in the Establishment as a registered and recognized Union for the last about 30 years and has been able to extract several benefits in favour of the employees, cannot be called a total stranger. It has already been noticed in the foregoing paragraphs that an earlier attempt by another Union was made before this Court to derail the process of normalcy, but this Court had held that the petitioner Union has been able to extract a tripartite settlement for the benefit of the majority of the workmen, and through another settlement, it has forced the lifting of the lock-out. There is no denial that out of the work force of 3,000, about 2,500 are members of the petitioner Union. Considering in entirety the aforesaid facts, it cannot be said that the petitioner has absolutely no interest especially when he has brought to the notice of the Court that certain requirements under the Act were prima facie lacking. More on this when we examine the amendment to the Act. 10. No doubt a learned Single Judge of this Court in the case of Raymond Synthetics (supra) has held that an existing Union has no right of hearing, but in the opinion of the Court, the ratio may not apply in the present case. In that case the ground for attacking the registration certificate was that the existing Union was not heard and there was violation of Section 5 of the Act. Though the Court held that hearing the existing Union was not necessary but it went on to hold that the existing Union was entitled to file its objection or make representation and the Registrar was expected to examine it and take action. In the present case, the petitioner not only filed detailed objections pointing out the illegalities but had earlier approached this Court apprehending illegal registration, but that petition was dismissed summarily as premature with the expectation that the Registrar would apply his mind before taking any action. Moreover, after the judgement in Raymond’s case (supra), the Act has undergone a sea-change. Apart from that, the foundational facts which form the basis of the arguments are not in dispute and the issue raised is purely a question of law. 11. The argument whether the petitioner has been acting against the interest of the workers, though is alien to the issue involved here, has to be considered, albeit briefly, because it has been raised as a ground for refusing to hear this petition. 12. The alleged gains which have been cited by the petitioner Union has been countered by the respondent Union. It is stated that tripartite settlements are a sell out as even the earned wages have not been paid and only a small number of workmen who were close to the petitioner Union, have been taken in employment and bonus has not been paid for 2005-07. It is stated that tripartite settlements are a sell out as even the earned wages have not been paid and only a small number of workmen who were close to the petitioner Union, have been taken in employment and bonus has not been paid for 2005-07. It is also cited that the lay-off compensation has also not been paid according to law for which they filed recovery cases, which are pending. 13. There is no denial that the two settlements were entered between the petitioner and the Management and which have been witnessed by the Additional Labour Commissioner, Kanpur. In pursuance thereof, at least two months wages have been given to the workmen, lock out lifted, bonus for 2003-05 paid and about 400 workmen have actually been taken back in active work. The tenor of the counter and document annexed thereto shows that the respondent Union claims that even this is against the interest of the workmen and is adamant that nothing short of total and complete payment had to be made. It is not denied that the factory remained under lock-out for about 15 months and no payments were made to the workmen. It is also not denied that the matter of rehabilitation of the Establishment is still engaging the attention of the B.I.F.R. where the scheme has yet not been finalized, but, in pursuance of the settlement dated 24.7.2006 wages were paid and in pursuance of the settlement dated 13.4.2007, the lock-out was lifted. As the wise would say “it is always better to have one in the hand than two in the bush”. Therefore, it cannot be said that the petitioner Union had sold out the interest of the workmen. To the contrary, it has been able to extract something for the majority of them. 14. Therefore, unless the registration of the respondent union has met with requirements of the Act, this petition cannot be thrown out only on the ground of locus, or otherwise refuse hearing to them. 15. Learned Counsel for the petitioner has urged that all the alleged members, including its office bearers, are neither engaged nor employed in the Establishment but the Registrar without applying its mind has granted the certificate of registration. 16. 15. Learned Counsel for the petitioner has urged that all the alleged members, including its office bearers, are neither engaged nor employed in the Establishment but the Registrar without applying its mind has granted the certificate of registration. 16. Before we proceed to test the argument, it would be appropriate to consider the Act as it stood prior to the amendment brought about by the amending Act 31 of 2001. Under the unamended Act any seven or more members could form a trade union in regard to any establishment whether they were employed there or not and if rules were in order in accordance with Section 5, the Registrar was obliged to register it. The registration could be cancelled only on the ground that it was obtained by fraud or mistake or the Union ceases to exist and an appeal lay against refusal, withdrawal or cancellation, in the case of Presidency Towns, to the High Court and in other cases to the assistant Judge of principal civil Court as appointed by the appropriate Government having jurisdiction of the area. It was also provided that at least half of the total number of the office bearers, subject to any orders of the Government otherwise, were required to be persons actually employed in the establishment with which the Union is connected. 17. The legislature, on the recommendations of the Trade Union Organizations made several important and far reaching amendments to Sections 4, 5, 6, 10 and introduced new Sections as 9A and 22. 17. The legislature, on the recommendations of the Trade Union Organizations made several important and far reaching amendments to Sections 4, 5, 6, 10 and introduced new Sections as 9A and 22. The necessity for introducing these amendments is reflected in its object and reason where it is stated : “......The thrust of the recommendations is aimed it reducing multiplicity of the Trade Unions,.....” With the aforesaid object, it introduced two provisos to Section 4 which provides the mode of registration, which are to the following effect : “Provided that no Trade Union of workman shall be registered unless at least 10% or one hundred of the workman, whichever is less, engaged or employed in the establishment or industry with which it is connected are the members of such Trade Union on the date of making of application for registration : Provided further that no Trade Union or workman shall be registered unless it has on the date of making application not less than 7 persons as its member, who are workman engaged or employed in the establishment or industry with which it is connected.” 18. The first proviso requires that at least 10% or 100 of the workmen who are members of that Union should be engaged or employed in the establishment. The second proviso stipulates that on the date of making the application, unless at least seven person who are members of the Union are engaged or employed in the establishment with which it is connected, it would not be registered. 19. The amendment also introduced Section 9-A to the effect that at all times the Trade Union shall continue to have not less than 10% or 100 of the workmen as members, subject to a minimum of seven, engaged or employed in the establishment. By adding sub-section (c) in Section 10, it authorises the Registrar to withdraw or cancel the registration of the Union, if it ceases to have less than the requisite number of members. The original Section 22 was replaced by a new section whereby not more than 1/3rd of the total number of office bearers or 5 whichever being less, were necessarily to be actually engaged or employed in the establishment to which it is connected. The original Section 22 was replaced by a new section whereby not more than 1/3rd of the total number of office bearers or 5 whichever being less, were necessarily to be actually engaged or employed in the establishment to which it is connected. A new explanation was added to the effect that retired or retrenched employee of the establishment would not be construed as outsiders for the purpose of the aforesaid section only. 20. From the aforesaid, it is evident that multiplicity of Union is sought to be avoided and the thrust is laid upon the requirement that the members should be employed or engaged in the establishment for which it is seeking its registration. Thus, it would be appropriate to keep in mind the aforesaid object and requirement while dealing with the argument. 21. In the counter affidavit filed on behalf of the respondent Union and also in the affidavit filed on behalf of the Registrar, it is not denied that all the members of the respondent Union including its officials are laid-off workmen. However, it is contended on their behalf that laid off workmen are employees of the Establishment and merely because there is a lay-off, their employment does not cease. 22. The question is whether a laid-off employee remains in employment and whether the relationship of master and servant continues? The term ‘lay off’ is not defined under the Act but the term owes its existence in labour laws to the Industrial Disputes Act where it has been defined. 23. A three Judge Bench of the Apex Court in the case of Priya Laxmi Mills Limited v. Mazdoor Mahajan Mandal, Baroda, 1977 (1) L.L.J. 22 was confronted with this precise issue and was considering the following question. “It is contented on behalf of the appellant that item No. 6 (ii) in Schedule III to the Act which deals with the unemployment of persons previously employed in the Industry concerned cannot govern a case of lay off. According to Counsel lay off is not unemployment since the relationship of master and servant is not snapped.” (Emphasis supplied) 24. The Bench refused to accept the contention in the following words : “We are unable to accept this contention. According to Counsel lay off is not unemployment since the relationship of master and servant is not snapped.” (Emphasis supplied) 24. The Bench refused to accept the contention in the following words : “We are unable to accept this contention. Lay-off is not defined in the Act but has been defined in Section 2(kkk) of the Industrial Disputes Act; “‘Lay-off’ (with its grammatical variations and cognate expressions) means the failure, refusal or liability of an employer on account of shortage of coal, power or raw material or the accumulation of stocks or the break down of the machinery or for any other reason to give employment to a workman whose name is borne on the muster roll of his industrial establishment and who has not been retrenched”. “Even according to the dictionary meaning, lay off means to discontinue work or activity; to dismiss or discharge temporarily. When workers are in employment and they are laid off, that immediately results in their unemployment, however temporary, and as such an unemployment will clearly come under item 6 (ii) in Schedule III of the Act.” 25. However, Sri Agrawal has strenuously urged that the above decision of the Apex Court does not lay down any binding precedent as it was considering a case of lock-out and not lay-off. He has relied upon a decision of the Apex Court rendered in the case of State of Rajasthan v. Ganeshi Lal, 2008 (116) F.L.R. 180, where it has been held that a decision is an authority for what it actually decides and not every observation found therein nor what logically flows from it cannot be the ratio decidendi and would not be a binding precedent. 26. That is the law, no doubt. 27. However, in the case of Priya Laxmi Mills (supra) the question before the Division Bench was precisely whether the workman was still in employment during lay-off? Which has already been quoted above. Therefore, it cannot be said that the Apex Court has casually made any observation. In fact, after applying its mind to the question raised before it and considering the provisions it has answered it. To the contrary, it would not be appropriate for this Court to ignore it on the ground that there is no elaborate discussion in the judgment. Therefore, it cannot be said that the Apex Court has casually made any observation. In fact, after applying its mind to the question raised before it and considering the provisions it has answered it. To the contrary, it would not be appropriate for this Court to ignore it on the ground that there is no elaborate discussion in the judgment. The Apex Court recently in the case of Special Deputy Collector v. N. Vasudeva Rao and others, 2008 AIR SCW 435 in paragraph 15, while confronted with a similar exercise by the Andhra Pradesh High Court, held “to say the least, the alleged distinguishing feature as pointed out by the High Court not to follow the judgment cannot be said to be graceful. It is clearly violative of the judicial discipline.” 28. A Full Bench of our Court in the case of L. Deep Chandra v. Lala Raghuraj, AIR 1977 All 370 had repelled the contention that certain observation of the Apex Court were obiter. Relying upon certain other decision it held “the only requirement is that the observation made by the Apex Court was not a stray observation but it was the considered opinion of the Supreme Court. From para 8 of the judgment in the Supreme Court decision, it is quite evident that the Supreme Court had applied its mind to the question and then had made the observation after considering the points urged before it”. 29. Another five Judge Full Bench of this Court in the case of Rana Pratap Singh v. State of U.P. and others, 1996 (Suppl.) A.W.C. 92 after considering large number of decisions of this Court as well as the Apex Court has held that judicial discipline and propriety must combine to curb any tendency on the part of any judge to brush aside any binding judicial precedent, which may not appeal to him, under the purported cover of the per incuriam label. 30. Once the question which fell for consideration before the three Judge Bench of the Apex Court and which is identical to the one which has been raised here, that ratio becomes binding because the Court applied its mind and answered it. It cannot be said that the Bench did not decide it or that it was a casual observation. 31. Once the question which fell for consideration before the three Judge Bench of the Apex Court and which is identical to the one which has been raised here, that ratio becomes binding because the Court applied its mind and answered it. It cannot be said that the Bench did not decide it or that it was a casual observation. 31. Further, a Division Bench of the Bombay High Court in Nutan Mills v. E.S.I. Corporation, AIR 1956 Bom 336 was confronted with an issue whether the employer was liable to pay special contribution to the Employees’ State Insurance Fund on the lay-off compensation paid to the employees. The celebrated Chief Justice of the Bombay High Court, Justice Chagla, examined the provisions of the E.S.I. and I.D. Act, posed the following question : “The question therefore to be decided narrows itself down to this : Whether on the employee being laid-off, the relationship of master and servant continues and the mutual rights and obligations which flow from such relationship also continue?” and after examining the Industrial Disputes Act in extenso, it answered the query in the following words : "The very term “lay-off” assumes and implies that the employer is not in a condition to offer employment to his employee and, therefore, he terminates his employment temporarily during the emergency and while that emergency continues the employee is unemployed." This position is further made explicit if we examine Section 22, which runs as under : “22. Proportion of office-bearers to be connected with the industry.—(1) Not less than one -half of the total number of the office-bearers of every registered Trade Union in an unrecognised sector shall be persons actually engaged or employed in an industry with which the Trade Union is connected : Provided that the appropriate Government may, by special or general order, declare that the provisions of this section shall not apply to any Trade Union or class of Trade Unions specified in the order. Explanation.—For the purposes of this sub-section, “unorganised sector” means any sector which the appropriate Government may, by notification in the official Gazette, specify. Explanation.—For the purposes of this sub-section, “unorganised sector” means any sector which the appropriate Government may, by notification in the official Gazette, specify. (2) Save as otherwise provided in sub-section (1), all office-bearers of a registered Trade Union, except not more than one-third of the total number of the office-bearers or five, whichever is less, shall be persons actually engaged or employed in the establishment or industry with which the Trade Union is connected. Explanation.—For the purposes of this sub-section, an employee who has retired or has been retrenched shall not be construed as outsider for the purpose of holding an office in a Trade Union. (3) No member of the Council of Ministers or a person holding an office of profit (not being an engagement or employment in an establishment or industry with which the Trade Union is connected), in the Union or a State, shall be a member of the executive or other office-bearer of a registered Trade Union.” 32. It signifies that all office bearers of a registered Trade Union, except not more than one-third or five, whichever is less, shall be actually employed in the Establishment. The explanation which qualifies sub-clause (2) only, makes it further clear that the majority of office bearers should actually be employed in the Establishment, and for the office bearers retirement or retrenchment would be meaningless. It is to be borne in mind that this explanation does not find place in Section 4 and does not qualify the proviso therein. 33. However, Mr. Agarwal has strenuously urged, relying upon a subsequent Division Bench of the Bombay High Court in Anusuyabai Vithal v. Mehta (J.H.), 1959 (2) LLJ 742, that the relationship does not cease to exist during lay-off. A bare perusal of the decision shows that though this question was posed by the parties, but the Bench refused to answer it, in the following words : “We do not think that it is necessary for us to express any definite opinion on this point in these cases.” In fact, it approved the decision in Nutan Mills (supra) in the penultimate paragraph of the report. 34. Mr. Agarwal is vehement that employees have a right to form more than one Union and it is their fundamental right under Article 19 (1) (c) and any restriction imposed on it, would make it illusory. 34. Mr. Agarwal is vehement that employees have a right to form more than one Union and it is their fundamental right under Article 19 (1) (c) and any restriction imposed on it, would make it illusory. In support thereof he has sought to rely upon several decisions, including the Constitution Bench decision in All India Bank Employees’ Association v. National Industrial Tribunal, 1961 F.L.R. 307. Under the Banking Companies Act, 1949, the banks were relieved from the obligation of disclosing their reserves and the extent of bad or doubtful debts. An issue arose whether the Bank could raise it as a defence in a case where it had refused to raise salary on the ground of lack of resources and the Union sought disclosure of the reserves. The Constitution Bench, though upheld the right to form a Union, but held that it would be subject to such laws which might regulate it and the validity of such laws could not be tested by reference to the criteria found in clause (4) of Article 19 in the following words : “We have, therefore, reached the conclusion that the right guaranteed by sub-clause (c) of clause (1) of Art. 19 does not carry with it a concomitant right that the unions formed for protecting the interests of labour shall achieve the purpose for which they were brought into existence, such that any interference to such achievement by the law of the land would be unconstitutional unless the same could be justified as in the interests of public order or morality. In our opinion, the right guaranteed under sub-clause (c ) of clause (1) of Art. 19 extends to the formation of an association and in so far as the activities of the association are concerned or as regards the steps which the union might take to achieve the purpose of its creation, they are subject to such laws as might be framed and that the validity of such laws is not to be tested by reference to the criteria to be found in clause (4) of Art. 19 of the Constitution.” 35. The nature of the requirements placed in the Act, especially by the amending Act No. 31 of 2001 do not impinge upon the right of the workmen to form one or more Unions, but it only regulates it so far as its registration is concerned. The nature of the requirements placed in the Act, especially by the amending Act No. 31 of 2001 do not impinge upon the right of the workmen to form one or more Unions, but it only regulates it so far as its registration is concerned. Even without registration under the Act, the Union is entitled to work for the benefit of its members and take proceedings even under the Industrial Disputes Act and allied laws. Therefore, it cannot be said that imposing certain conditions for registration, which have an avowed purpose, the right to form a union is rendered illusory or that those provisions are ultra vires. 36. It is, therefore, clear that when an employee is laid-off he becomes unemployed and the bond of master and servant is snapped though temporarily and the newly added proviso comes into play and thus the registration could not be said to be in accordance with the requirements of the Act. Since nearly all the members of the respondent Union are laid-off employees, therefore, the registration was granted dehors the Statute. 37. For the reasons above, this petition succeeds and is allowed and the impugned registration certificate dated 18.1.2008 is hereby quashed. In the circumstances of the case, no order as to costs. ————