http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 8  

PETITIONER: THE ASSOCIATED CEMENT COMPANIES LTD.

       Vs.

RESPONDENT: THEIR WORKMEN

DATE OF JUDGMENT: 03/03/1960

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. SARKAR, A.K. GUPTA, K.C. DAS

CITATION:  1960 AIR  777            1960 SCR  (3) 157  CITATOR INFO :  R          1960 SC1012  (5)  D          1969 SC 306  (11)

ACT: Industrial Dispute-Award-Notice, of Termination-Whether  can be  given by minority union-Industyial Disputes  Act,  1947, (14 Of 1947), ss. 18, 19(6).

HEADNOTE: The  appellant’s workmen were represented by a Union  called Kamdar Mandal Cement Works, Porbandar.  The registration  of the  said union was cancelled and that led to the  formation of two Unions, the Cement Kamdar Mandal and Cement Employees Union.  The Cement Kamdar Mandal gave two notices one  after another  to  the  appellant,  purporting  to  terminate  two previous  awards, wherein the defunct union represented  the workmen.  Thereafter the Mandal presented fresh demands  and the dispute was referred to the Tribunal.  The second union, the  Cement Employees’ Union which represented the  majority of  the appellant’s workmen at Porbandar had been  impleaded in  the  proceedings.   The  appellant  raised   preliminary objections before the Tribunal against the competency of the reference  inter  alia  on  the ground  that  the  award  in question  by which the parties were bound had not been  duly terminated under s. 19(6) of the Act in as much as the union which purported to terminate the said award represented only a  minority  of workmen bound by it.  The  Tribunal  by  its interlocutory judgment found against the appellant. The  dispute between the parties centres round the  question as  to  who can issue the notice terminating  the  award  on behalf of workmen who are bound by the award as a result  of s.  18 of the Act.  The question therefore for  decision  is whether a registered trade union representing a minority  of workmen  governed by an award can give notice to  the  other party intimating its intention to terminate the award  under s. 19(6) of the Industrial Disputes Act, 1947. Held,  that  the effect of s. 18 is that an  award  properly made by an industrial tribunal governs the employer and  all those who represent him under s. 18(c) and the employees who are parties to the dispute and all those who are included in s.  18(b) and (d).  On a fair and reasonable reading  of  s.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 8  

19(6), the true position is that, though the expression "any party bound by the award" refers to all workmen bound by the award,  notice to terminate the said award can be given  not by  an individual workman but by a group of  workmen  acting collectively either through their union or otherwise, and it is  not  necessary  that  such a  group  of  workmen  acting collectively either through their union or otherwise, should represent the majority of workmen bound by the award.   Thus it  is open to a minority of workmen or a minority union  to terminate 158 the  award  by which they, along with other  employees,  are bound  just  as  much  as it is open to  them  to  raise  an industrial dispute under the Act. The   Central  Provinces  Transport  Services   Limited   v. Raghunath  Gopal  Patwardhan,  [1956]  S.C.R.  956  and  The Newspapers  Limited v.The State Industrial Tribunal, U.  P., [1957] S.C.R. 754, referred   to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 404 of 1958. Appeal  by special leave from the decision dated  March  10, 1958,  of the Industrial Tribunal, Rajkot,  in  Adjudication Case No. 67 of 1955. M.   C.  Setalvad, Attorney-General for India, R. J.  Kolah, S.  N. Andley, J. B.  Dadachanji, Rameshwar Nath and  P.  L. Vohra, for the appellants. Janardan Sharma, for respondent No. 2. 1960.  March, 3. The Judgment of the Court was delivered by GAJENDRAGADKAR, J.-Can a registered trade union representing a  minority of workmen governed by an award give  notice  to the  other party intimating its intention to  terminate  the award  under S. 19(6) of the Industrial Disputes Act XIV  of 1947  (hereinafter  called  the Act)?   That  is  the  short question  which arises for decision in the  present  appeal. In  answering  the said question it would  be  necessary  to examine  the  scheme of the Act and to  ascertain  the  true meaning.  and effect of s. 19(6) on its fair and  reasonable construction.  The controversy thus raised undoubtedly  lies within a narrow compass; but before addressing ourselves  to the  merits  of the dispute, it is necessary  to  state  the material facts which led to the present proceedings. The present appeal has been brought before this Court by the Associated Cement Companies Limited (hereinafter called  the appellant)  against  their workman (hereinafter  called  the respondents),  and  it  arises from  an  industrial  dispute between  them  which was referred for  adjudication  to  the Industrial  Tribunal  for  the State of  Saurashtra  by  the Saurashtra  Government under s. 10(1) of the  Act.   Several items of demand presented by the respondents constituted the subject-matter  of the reference.  When the  tribunal  began its proceedings the appellant raised four preli- 159 minary  objections against the competence of  the  reference itself.   The  tribunal heard parties on  these  preliminary objections,  and by its interlocutory judgment delivered  on March  10, 1958, it has found against the appellant  on  all the  points.   In the result it set down the  reference  for further   hearing  on  the  merits.   It  is  against   this interlocutory judgment and order that the appellant has come to  this  Court by special leave.  Out of  the  four  points urged  by  the appellant as preliminary  objections  we  are concerned  with  only one in the present  appeal,  and  that

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 8  

relates  to the incompetence of the reference on the  ground that  the award in question by which the parties were  bound has  not  been  duly terminated under s. 19(6)  of  the  Act inasmuch as the union which purported to terminate the  said award represents only a minority of workmen bound by it. The  circumstances  under which this contention  was  raised must  now  be  stated in some detail.  The  appellant  is  a limited  company  and  owns  and runs  a  number  of  cement factories spread out in different States in India as well as in  Pakistan.  It has a factory at Porbandar in  Saurashtra. The  factory  is known as the Porbandar  Cement  Works.   An industrial  dispute  arose  between the  appellant  and  the respondents in 1949 and it was referred for adjudication  to the  industrial tribunal on March 22, 1949.  This  reference ended  in an award made on September 13,  1949.   Thereafter the  said  award  was terminated by the  appellant;  and  on disputes  arising  between it and  the  respondents  another reference was made to the same tribunal for adjudication  of the  said  disputes.  A second award was made  on  July  24, 1951,  by which the earlier award with slight  modifications was ordered to continue in operation.  In the proceedings in respect of both the references the appellant’s workmen  were represented  by  their Union called  Kamdar  Mandal,  Cement Works,  Porbandar.  It appears that the registration of  the said union was cancelled on July 2,1954, and that led to the formation  of  two unions of the  appellant’s  workmen,  the Cement Kamdar Mandal which was registered on 160 July  7,  1954, and the Cement Employees’  Union  which  was registered on September 18, 1954. The  Cement  Kamdar Mandal gave notice  to  the  appellant’s manager  on September 23, 1954, purporting to terminate  the first  award  pronounced  on  September  13,  1949,  at  the expiration  of two months’ notice from the date of the  said communication.   By  another  letter  written  on   December 20,1954,  the same union purported to terminate  the  second award pronounced on July 24, 1951, in a similar manner.   On November  22, 1954, the said Mandal presented fresh  demands most of which were covered by the two previous awards.   The said  demands were referred to the Conciliation Officer  for conciliation but the efforts at conciliation failed., and on receiving  a failure report from the officer the  Saurashtra Government made the present reference purporting to exercise its  jurisdiction  under  s.  10(1)(c)  of  the  Act.    The appellant’s  case is that the Cement kamdar Mandal  was  not authorised  to terminate either of the two awards  under  s. 19(6)  of  the Act, that the second award is thus  still  in operation, and so the reference is invalid. Meanwhile it appears that the Cement Employees’ Union, which represents  the  majority  of  the  appellant’s  workmen  at Porbandar, instead of giving notice of termination under  s. 19(6)  raised disputes with the appellant and the same  were referred   to   the  Conciliation   Officer.    Efforts   at conciliation  having failed the conciliation officer made  a failure   report  to  the  Government  of  Saurashtra;   the Saurashtra  Government,  however, did not  refer  the’  said dispute  for adjudication.  In the present proceedings  this Union  has been impleaded and it has supported  the  demands made   by  the  Cement  Kamdar  Mandal;  in   other   words, notwithstanding  the  rivalry between the  two  Unions,  the demands  made  by the minority union were supported  by  the majority union, and in fact, in the appeal before us, it  is the  latter union that has appeared to contest  the  appeal. The  tribunal has dealt with the point of law raised by  the appellant  under s. 19(6) on the assumption that the  Cement

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 8  

Kamdar Mandal which purported to terminate the awards  under the said section represents the minority 161 of the workmen employed at Porbandar, and we propose to deal with the point raised in the appeal on the same assumption.  The  main sections which fall to be considered  in  dealing with  the dispute are ss. 18 and 19 as they stood  in  1954. Section  18  provides, inter alia, that an award  which  has become  enforceable shall be( binding on (a) all parties  to the  industrial dispute, (b) all other parties  summoned  to appear in the proceedings as parties to the dispute,  unless the  Board  or  tribunal, as the case may  be,  records  the opinion that they were so summoned without proper cause, (c) where  a  party  referred to in cl. (a) or  cl.  (b)  is  an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates, and (d) where  a party  referred  to  in cl. (a) or cl. (b)  is  composed  of workmen, all persons who were employed in the  establishment or  part of the establishment, as the case may be, to  which the  dispute  relates on the date of the  dispute,  and  all persons   who   subsequently   became   employed   in   that establishment  or  part.  It is thus clear  that  though  an industrial  dispute may be raised by a group of workmen  who may  not  represent  all or even the  majority  of  workmen, still,  if the said dispute is referred to  the  industrial, tribunal for adjudication and an award is made, it binds not only the parties to the dispute or other parties summoned to appear   but   all  persons  who  were   employed   in   the establishment  or who would be employed in future  are  also governed by the award ; in other words, the effect of s.  18 is  that  an award properly made by an  industrial  tribunal governs  the employer and all those who represent him  under s.  18(c) and the employees who are parties to  the  dispute and all those who are included in s. 18(b) and (d). Section 19 prescribes the period of operation of settlements and  awards.   Section 19(3) provides that an  award  shall, subject  to  the  provisions  of  this  section,  remain  in operation for a period of one year.  This is subject to  the provisos  to suubs. (3) as well as to sub s. (4) but we  are not  concerned  with  the said  provisions.   Section  19(6) provides  that notwithstanding the expiry of the  period  of operation under 21 162 sub-s.  (3)  the award shall continue to be binding  on  the parties  until a period of two months has elapsed  from  the date on which the notice is given by any party bound by  the award to the other party or parties intimating its intention to  terminate the award.  The effect of this sub-section  is that  unless the award is duly terminated as provided by  it shall continue to be binding notwithstanding the  expiration of  the period prescribed by sub-s. (3).  This  position  is not  in  dispute.  The dispute between the  parties  centers round   the  question  as  to  who  can  issue  the   notice terminating the award on behalf of workmen who are bound  by the  award as a result of s. 18 of the Act.  What  the  sub- section  requires  is that a notice shall be  given  by  any party bound by the award to the other party or parties.   To whom  the  notice  should  be given  may  not  present  much difficulty.   Where the award is sought to be terminated  on behalf  of the employees the notice has to be given  to  the employer  and that is the party entitled to receive  notice. Then,  as  to  "  the parties " to  whom  also  notices  are required  to  be given, it may perhaps be that  the  parties

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 8  

intended  are those joined under s. 10, sub-s. (5) or  under s.  18, sub-s. (2) or are otherwise parties to the  dispute; but with that aspect of the question we are not concerned in the  present  appeal, because notice has been given  to  the appellant and all the workmen concerned in the dispute  have appeared  before  the tribunal through  the  two  respective unions.  The question with which we are concerned and  which is  not easy to determine is the true interpretation of  the word  "  any  party bound by the award ".  We  have  already noticed  the effect of s. 18, and we. have seen how wide  is the circle of persons who are bound by the award as a result of the said section. , Literally construed, any party  bound by the award may mean even a single employee who is bound by the  award,  and  on  this  literal  construction  even  one dissatisfied  employee  may  be  entitled  to  give   notice terminating  the  award.   On  the other  hand,  it  may  be possible to contend that any party in the context must  mean a party that represents the majority of the persons bound by the award. 163 Terminating the award is a serious step and such a step  can be  taken by a party only if it can claim to  represent  the will  of  the  majority  on that  point.   It  is  for  this construction that the appellant contends before us. In  construing  this  provision  it  would  be  relevant  to remember that an industrial dispute as defined by s.   2(k) of the Act means any dispute or difference between employers and employers, or between employers and workmen, or  between workmen  and workmen which is connected with the  employment or  non-employment, or the terms of employment, or with  the conditions  of  labour  of  any  person.   This   definition emphatically brings out the essential characteristics of the dispute  with which the Act purports to deal.  The  disputes must  relate  to  the  terms  of  employment  or  with   the conditions  of  labour  and they  must  arise,  inter  alia, between   workmen  and  their  employer.    Ordinarily,   an individual dispute which is not sponsored by the union or is otherwise  not  supported  by any group of  workmen  is  not regarded  as an industrial dispute for the purposes  of  the Act.  A provision like that contained in s. 33A is of course an  exception  to  this  rule.   The  basis  of   industrial adjudication  recognised by the province of the Act  clearly appears  to  be that disputes between  employers  and  their employees  would be governed by the Act where such  disputes have  assumed  the character of an industrial  dispute.   An element  of  collective bargaining which  is  the  essential feature  of  modern  trade  union  movement  is  necessarily involved in industrial adjudication.  That is why industrial courts  deal with disputes in relation to  individual  cases only  where  such  disputes  assume  the  character  of   an industrial  dispute  by  reason of the fact  that  they  are sponsored by the union or have otherwise been taken up by  a group or body of employees.  In The Central Provinces Trans- port Services Limited v. Raghunath Gopal Patwardhan (1) this Court  has  observed that " the  preponderance  of  judicial opinion is clearly in favour of the view that an  individual dispute  cannot  per  se be an industrial  dispute  but  may become one if taken up by a (1)  [ 1956] S.C.R. 956. 164 trade  union  or a number of persons ".  These  observations have  been cited with approval by this Court in the case  of The Newspapers Limited v. The State Industrial Tribunal,  U. P.  Having regard to this aspect of the matter it  would  be difficult to hold that "any party bound by the award " can

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 8  

include an individual workman, though speaking literally he is a party bound by the award. In our opinion, there- fore,  the  said  expression cannot  include  an  individual workman. We oughtto  add  that this  position  is  fairly conceded by’.Sharma for the respondents. That takes us tothe   question   as   to   whether   the expression  "  any party bound by the award "  must  mean  a union  representing the majority of the workmen bound by  it or  a  group of workmen constituting  such  majority  acting otherwise  than  through the union.  The  expression  "  any party  bound  by  the  award  "  obviously  refers  to,  and includes,  all persons bound by the award under s. 18.   The learned Attorney-General has urged before us that we  should construe  s. 19(6) so as to preclude a minority  of  workmen bound by the award from disturbing the smooth working of the award  and thereby creating an industrial dispute.  When  an award is made it binds the parties for the statutory  period under  s. 19(3); and even after the expiration of  the  said period  it continues to be binding on the parties  under  s. 19(6) unless it is duly terminated.  The policy of the  Act, therefore,  appears  to be that the smooth working.  of  the award even after the prescribed statutory period should  not be disturbed unless the majority of the workmen bound by  it feel  that it should be terminated and fresh demands  should be  made.  If a minority of workmen or a minority  union  is allowed  to  terminate  the  award  it  would  lead  to  the anomalous  result  that  despite  the  willingness  of   the majority  of workmen to abide by the award the minority  can create disturbance and raise an industrial dispute and  that cannot  be within the contemplation of the Legislature  when it  enacted s. 19(6) of the Act.  That in substance  is  the argument  urged  before us; thus presented the  argument  no doubt appears prima facie attractive; (1)  [1957] S.C.R 754. 165 but, in our opinion, it would be unreasonable to accept this construction and impose the limitation of the majority  vote in the matter of the termination of the award. The  effect  of  imposing such a limitation  would,  in  our opinion, seriously prejudice the interests of the employees. It  is  well-known  that the trade union  movement  in  this country  cannot yet claim to cover all employees engaged  in several  branches of industry.  Membership of the  important trade  unions  no doubt shows an  appreciable  increase  and progress, but the stage when trade unions can claim to  have covered  all employees or even a majority of them has  still not  been  reached.   If the majority  rule  for  which  the appellant  contends is accepted and s. 19(6) is  accordingly construed,  termination  of the award would,  we  apprehend, become  very difficult, if not impossible, in a  very  large number  of cases.  It is in this context that the effect  of s. 18 has to be borne in mind.  As we have already indicated the  class  of employees bound by the award under s.  18  is very  much wider than the parties to the industrial  dispute in which the award is made; the said class includes not only all the persons employed in the establishment at the date of the award but it covers even the subsequent employees in the said  establishment.  It is, therefore, obvious that if  the majority  rule is adopted very few awards, if any, could  be terminated because very few unions would be able to claim  a majority  of  members on their rolls, and in  their  present stage of Organization in very few cases would a majority  of workmen  be able to meet, decide and act together  otherwise than  through their unions.  That is why the  majority  rule would  very seriously prejudice the rights of  employees  to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 8  

terminate  awards  when  they  feel that  they  need  to  be modified or changed.  That is one aspect of the matter which cannot  be  ignored in construing the material words  in  s. 19(6). There  is  another  aspect of the  question  which  is  also relevant   and  which,  in  our  opinion,  is  against   the construction  suggested by the appellant.  We  have  already noticed that an industrial dispute can be raised by a  group of workmen or by a union even 166 though neither of them represent the majority of the workmen concerned;  in other words, the majority rule on  which  the appellant’s   construction   of   s.   19(6)   is   based-is inapplicable in the matter of the reference of an Industrial dispute  under s. 10 of the Act.  Even a minority  group  of workmen  can make a demand and thereby raise  an  industrial dispute  which  in  a  proper case  would  be  referred  for adjudication  under  s.  10.  It  is  true  that  an   award pronounced  on such reference would bind all  the  employees under s. 18; but logically, if an industrial dispute can  be raised  by a minority of workmen or by a minority union  why should  it  not  be  open to. a minority  of  workmen  or  a minority  union  to terminate the award which is  passed  on reference made at their instance ? The anomaly to which  the learned    Attorney-General   refers   has   no    practical significance.  If the majority of workmen bound by the award desire   that  the  award  should  continue  and  needs   no modification,  they may come to an agreement in that  behalf with  their  employer,  and  adopt such  course  as  may  be permissible under the Act to make such agreement  effective. However  that may be, we are satisfied that both  logic  and fairplay  would justify the conclusion that it is open to  a minority  of  workmen or a minority union to  terminate  the award  by which they, along with other employees, are  bound just  as  much as it is open to hem to raise  an  industrial dispute  under  the  Act.  hat is  the  view  taken  by  the industrial tribunal in he present case and we see no  reason to differ from it. It  appears  that when this question was argued  before  the tribunal the appellant strongly relied on rule 83 framed  by the Government of Bombay under s. 38 of the Act; and it  was urged that the said rule is consistent with the construction sought  to  be placed by the appellant on s. 19(6).   It  is conceded  that  at  he relevant time this rule  was  not  in force;  and so it s strictly not applicable to  the  present proceedings. hat being so, we do not propose to consider the argument based on the said rule and to examine the  question as  to  whether  the rule really  supports  the  appellant’s construction,  and, if yes, whether it would be valid.   The question raised before us must obvi- 167 ously be decided on a fair and reasonable construction of s. 19(6)  itself, and the rule in question, even if  applicable would  not be material in that behalf.  We accordingly  hold that, on a fair- and reasonable construction of s. 19(6) the true  position  is that, though the  expression  "any  party bound  by  the  award" refers to all workmen  bound  by  the award,  notice to terminate the said award can be given  not by  an individual workman but by a group of  workmen  acting collectively either through their union or otherwise, and it is  not  necessary that such a group or  the  union  through which it acts should represent the majority of workmen bound by the award. In the result the appeal fails and is dismissed with costs. Appeal dismissed.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 8