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PETITIONER: HERBERTSONS LIMITED

       Vs.

RESPONDENT: WORKMEN OF HERBERTSONS LIMITED AND ORS.

DATE OF JUDGMENT03/11/1976

BENCH: GOSWAMI, P.K. BENCH: GOSWAMI, P.K. CHANDRACHUD, Y.V. FAZALALI, SYED MURTAZA

CITATION:  1977 AIR  322            1977 SCR  (2)  15  1976 SCC  (4) 736  CITATOR INFO :  RF         1978 SC 982  (5)  D          1979 SC1196  (8,19)  R          1981 SC2163  (6)

ACT:              Industrial   Disputes  Act,  1947---S.   18--Settlement         under    s.     18(1)--Scope   of     Union    arrived    at         settlement--Individual workers--If should know implications.

HEADNOTE:             In  respect  of certain demands of the  workers  of  the         appellant  company  an Industrial Tribunal made  its  award.         When the Special Leave Petition of the appellant was pending         before  this  Court  the parties filed  consent  terms   for         staying  the award.  In the meantime the 3rd  respondent,  a         Trade Union, wrote to the employer that all the workers  who         were  members  of the 2nd respondent, also  a  Trade  Union,         resigned from that union and joined the 3rd respondent. ’The         employer  accordingly recognised the 3rd respondent  as  the         Trade  Union representing/he workers and  de-recognised  the         2nd respondent.             Under  s. 18(1) of the Industrial Disputes Act  the  em-         ployer entered into a settlement with the 3rd respondent  in         substitution  of the award pending before this Court.   When         the 3rd respondent sought to be substituted in place of  the         2nd  respondent in the Special Leave Petition, the  2nd  re-         spondent resisted the application claiming that it had still         the allegiance of 50 workmen of the company.  But this Court         added  the  3rd respondent as a respondent.  Since  the  2nd         respondent  claimed  to have some workers on  its  rolls  as         members  and  had not .accepted the settlement,  this  Court         passed  a preliminary order to the effect that "in  view  of         the fact that admittedly a large number of workmen  employed         by the appellant have accepted the settlement is it shown by         the  2nd  respondent union that the said settlement  is  not         valid and binding on its members and whether the  settlement         is fair and just."         Before  the  Tribunal the 2nd respondent did  not  lead  any         evidence  to  show ’the actual number of its  members.   The         Tribunal recorded its finding that respondent No. 2 had been         able to prove that the settlement was not valid and I  bind-

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       ing  on its members and was incomplete to that  extent.   It         was  contended by ’the 2nd respondent that even if the  set-         tlement  was binding on the company and the  3rd  respondent         representing  a  large  majority  of  workmen,  it  was  not         binding .on its members under s. 18(1).         Dismissing the appeal,             HELD: The settlement is fair and just.  The award of the         Tribunal  shall  be substituted by the  settlement  and  the         settlement shall be the substituted award.                                                              [24D]         (1) (a) When this Court called for a finding of the Tribunal         it was satisfied that if the settlement was fair and just it         would  allow  the parties to be governed by  the  settlement         substituting  the award.  The Wording of the issue  sent  to         the  Tribunal for a finding clearly shows that there was  an         onus  on the 2nd respondent to show how many workers of  the         appellant  were its members. Since a recognised  and  regis-         tered union had entered into. a voluntary settlement  this         Court  thought  that if the same was found to be.  just  and         fair that  could  be allowed to be binding on all the  work-         ers  even if a  very  small number of workers were not  mem-         bers of the majority union.  [20E-F]             (b)  In the instant case the numerical strength  of  the         members of the 2nd respondent, who are workers of the compa-         ny, would also have an  important bearing as to whether  the         settlement accepted by the majority of the workmen is to  be         considered  as  just and fair.  Not a single worker  of  the         company  claimed  before the Tribunal to be its  member  and         asserted that the settlement was         16         not  fair  and  just.  All the workers of  the  company  had         accepted the settlement and received the arrears and  emolu-         ments in accordance with the same  [20H]          (2) (a) The assumption of the Tribunal that the quantum  of         the  membership  of the 2nd respondent did not  call  for  a         finding  at all in view of this Court’s order is  incorrect.         The  Tribunal was conscious that under s. 18(1) the  settle-         ment  was  binding  on the company and  the  3rd  respondent         Union.   Yet  it examined the question whether  the  workers         voluntarily accepted  the  settlement knowing all the conse-         quences, which was a wrong approach. [21B-C]             (b) When a recognised union negotiates with an  employer         the workers as individuals do not come into the picture.  It         is not necessary that each individual worker should know the         implications  of  the settlement since a  recognised  union.         which  is  expected to protect the legitimate  interests  of         labour  enters  into a settlement in the best  interests  of         labour.  [21D]             (c)  Prima facie this is a settlement in the  course  of         collective  bargaining  and, therefore, is entitled  to  due         weight and consideration.  [21E]             (d)  Having regard to the totality of the terms  of  the         settlement it is difficult to hold that the terms are in any         way  unfair or unreasonable. An adjudication has to be  dis-         tinguished  from a voluntary settlement.  By the  settlement         labour has scored in some aspects and saved all  unnecessary         expenses in uncertain litigation.  The settlement cannot  be         judged  on  the touchstone of the  principles laid  down  by         this Court for adjudication.  [22D; 23D]             (3) There may be several factors that influence  parties         to come to a settlement as a phased endeavour in  collective         bargaining.   Once  cordiality is  established  between  the         employer  and  labour in arriving at a settlement  there  is         always  a  likelihood  of further advance in  the  shape  of         improved emoluments by voluntary settlement, avoiding  fric-

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       tion and unhealthy litigation.  This is the quintessence  of         settlement  which courts and Tribunals should  endeavour  to         encourage.[23E]          (4)  It is not possible to scan the settlement in bits  and         pieces  and hold some parts good and acceptable  and  others         bad.   Unless it can be demonstrated that the  objectionable         portion  is such that it completely outweighs all the  other         advantages gained, the Court will be slow to hold a  settle-         ment as unfair and unjust. the settlement has to be accepted         or rejected as a whole.              [24B]             In the instant case the 3rd respondent representing  the         large  majority of the workmen has stood by this  settlement         which  is a strong factor difficult to ignore. When a  union         backed by a large majority of workmen has accepted a settle-         ment  in  the course of collective  bargaining,  this  Court         would not interfere with the settlement.  [24C]

JUDGMENT:         CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1901 of 1970.             (From  the  Award  dated 4/6.3.1970  of  the  Industrial         Tribunal Maharashtra in Ref. (I.T.) No. 158/67, published in         Maharashtra Govt. Gazette, Part I-L dated 16-4-1970).             F.V.  Kaka, F.A.K. Faisulla Bhai, O.C. Mathur and  D.  N         Mishra for the Appellant.         F.D. Damania and B.R.Agarwala for Respondent No. 2.             Y.S.  Chitale, P.H. Parekh and Miss Manjit  Jelley,  for         Respondent No. 3.         The Judgment of the Court was delivered by             GOSWAMI, J.--This appeal by special leave brings forth a         rather  disquieting  feature of union  rivalry  whereby  the         significance of collective bargaining which is the forte  of         a union, is sought to be made         17         a  flop.   We say this in the absence of any  suggestion  of         mala  fides or of any other ulterior motive alleged by  .the         contending  union  on time part of the rival  union  or  its         principal officer who had negotiated a certain settlement on         behalf  of the workmen in substitution of  the award of  the         Industrial Tribunal out of which this appeal arose.         The  appellant before us is the employer, supported,  whole-         hog,  by  the Bombay General Kamgar  Sabha,  respondent  NO.         3.Respondent  No. 2 is the only contending union,  viz.,Mum-         baiMazdoor Sabha.             On  May 18, 1967, there was a :reference by the  Govern-         ment  of Maharashtra of an industrial dispute under  section         10(1)(d).of  the Industrial Disputes Act to  the  Industrial         Tribunal  for  adjudicating  eight  demands  such  as,  wage         scales, adjustment of. increments, classification of workmen         into  different  grades, dearness  allowance,  restropective         effect  of  the claim from 1st June,  1966,  gratuity,  sick         leave  and wages for Sundays and holidays when  called  upon         to .Work The dispute was between-the D& P Products (Private)         Limited, Bombay and their workmen.  A written statement  was         submitted  ’by  the Mumbai Mazdoor Sabha  (2nd  respondent),         claiming  to represent the majority of the workmen on:  July         25, 1967.  It appears that this written statement was signed         by V. S. Pandit as General Secretary.  The company submitted         their  written  statement   on August 17,  1967,  in  which;         inter alia, they pleaded. incapacity  to have greater burden         on  account of financial position.  It was stated  that  the         company had been making losses year after year since 1963-64             During the pendency of the dispute before the  Tribunal,         D  &  P  Products (Private) Limited  was  amalgamated  .with

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       Herbertsons  Ltd.  (the appellant) (hereinafter  to  be  de-         scribed  as-the company)  with effect from  1.10.1968  under         the  provisions  of the" Companies Act by an  order  of  the         Bombay High’ Court dated 6th January, 1969.             The  wage scales existing at the time. of the  reference         were  as follows :--         Unskilled                             Rs. 1.25-0.10-2.25         Semi-skilled                          Rs. 1.50-0.15-3.00         Dearness allowance Rs. 2.16 per day.         The demand of the workmen on the other hand was as follows.           Unskilled                 Rs. 1.50-0.15-3.00 per day           Semi skilled              Rs  1.75 0.20 3.75  "  "           Skilled                   Rs. 2.50-0.30-5.50  "  "           Highly skilled            Rs. 3.50-0.45.8.00  "  "         Dearness allowance "as paid to. the Bombay Textile Oper-         atives". 3--1458SCI/76         18             The Tribunal (Shri R.D. Tulpule) made its award on March         4,  1970.   As  regards the demand for  wages  and  dearness         allowance, the award of Tribunal was as follows :-           Grade I                   Rs             Plus Revised           (Unskilled)      1.30-0. 12-2.50         Textile dearness                                                    allowance.           Grade II           B (Semi-skilled)    1.40--0.15-3.20             do           A (Semi-skilled)    1-60-0.30-3.60              do           Grade III           1.80-0.20-2.80-0.25-4.80    do           (Skilled)             The  company preferred an application for special  leave         to  this Court on May 12, 1970, against the award.   On  May         25,  1970, certain consent terms for staying the award  were         filed by the parties without prejudice to the rights in  the         appeal  whereby the company agreed to pay Rs. 2.50 as  addi-         tional  dearness  allowance per day from  October  1,  1968.         This  Court admitted the special leave petition and   posted         the stay application for hearing on September  24, 1970,  on         which  date in modification of the earlier stay  order   the         parties  further agreed that from 1st September, 1970,  till         the  disposal  of the appeal, the total  dearness  allowance         would be calculated  at Rs. 5/- per day irrespective of  the         index figures.  On February 22, 1973, the company agreed  to         increase  the  dearness allowance further by 80  paise  with         effect from January 1, 1973.             From  June 1973 certain new developments took place.  On         June 7, 1973, a letter was received by the company from  the         3rd  respondent, Bombay General Kamgar Sabha,  stating  that         all  the  workers of the company had resigned from  the  2nd         respondent  union (Mumbai Mazdoor Sabha) and joined the  3rd         respondent union. On June 7, 1973, the 3rd respondent sent a         communication  to  the respondent No. 2 with a copy  to  the         company  enclosing  a letter signed by the  workers  stating         that   they had  resigned  from the 2nd   respondent  union.         On June 25, 1973, the 3rd respondent sent a reminder  to the         company to recognise the Bombay General Kamgar Sabha.  By  a         letter  dated 2nd/5th July, 1973, to the  President,  Bombay         General  Kamgar  Sabha, who was incidentally the  same  V.S.         Pandit  who had earlier submitted the written  statement  in         behalf  of  the Mumbai Mazdoor Sabha,  the  company  granted         recognition to the Bombay General Kamgar Sabha and  informed         the 2nd respondent of its derecognition.         On  October 18, 1973, the company entered into a  memorandum         of settlement with the Bombay General Kamgar Sabha which was         in substitution of the award which was pending appeal before         this Court. Copies of this settlement were forwarded to  the         Secretary to  the Government of Maharashtra, Industries  and

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       Labour  Department, the Commissioner of Labour,  the  Deputy         Commissioner of Labour and the Conciliation Officer.  It  is         common ground that this is a settlement under section 18 (1)         of the Industrial Disputes Act.             The  3rd respondent applied to this Court to be  substi-         tuted  if place of the 2nd respondent and the  Other  union.         The 2nd respondent         19         alone  resisted the application claiming that it  had  still         the  allegiance  of 50 workmen of the company.   This  Court         allowed  the Bombay General Kamgar Sabha to be added as  the         3rd respondent.             The  company also submitted a petition to this Court  to         decide  the appeal in terms of the memorandum of  settlement         dated  October 18, 1973.  This Court on December  19,  1974,         passed  the  following order :--                             "The number of workmen concerned in this                       industrial  dispute  is  210.   The  appellant                       employer  and the 3rd respondent  union  which                       claims  to have 193 members on its rolls  have                       entered into a settlement.  The 2nd respondent                       union which claims to have about 55 members on                       its rolls has not yet accepted the settlement.                       We   think  it  just, therefore, to  pass  the                       same kind of preliminary order that was passed                       in Amalgamated Coffee Estate vs. Their workmen                       in the following terms :--                             "In  view of the fact that admittedly  a                       large  number  of  workmen  employed  by   the                       appellant have accepted the settlement, is  it                       shown  by  the 2nd respondent union  that  the                       said  settlement is not valid and  binding  on                       its members and whether the settlement is fair                       and just?"                             "The  Industrial Tribunal,  Maharashtra,                       would  consider  the  issue  and  submit   its                       finding  within  two months  from  this  date.                       After  the  finding is  received,  the  appeal                       would  be  set  down  for  hearing.    Parties                       should be allowed  to  lead evidence."             When  the matter went back, it appears  that  respondent         No.  2 did not lead any evidence before the  Tribunal  (Shri         D.L.  Bhojwani). The company and the 3rd respondent, on  the         other hand, examined 7 witnesses including V.S. Pandit,  the         President  of  the 3rd respondent union.  Certain  documents         were  also  filed before the Tribunal by  the  parties.  The         Tribunal  after hearing the parties in due  course  recorded         its findings on September 9. 1975 and forwarded the same  to         this   Court.  The findings of the Tribunal recorded are  as         follows :--                             (1)  Respondent  2  the  Mumbai  Mazdoor                       Sabha has been able to prove that the Disputed                       Settlement  is  not valid and binding  on  its                       members.                             (2)    The   Disputed   Settlement    is                       incomplete to the extent mentioned above.                             (3)  The scheme of D.A. provided for  in                       the  Disputed  Settlement  in  so  far  as  it                       affects   workmen   at  or  just   above   the                       subsistence  level  is  not  fair,  just   and                       reasonable.                             (4) The rest of the Disputed  Settlement                       is fair, just and reasonable."         20         That is how this appeal has come up for bearing before us.

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           The  first  question that arises  for  consideration  is         whether the findings. of the Tribunal are sustainable.   The         appellant  and  respondent No. 3. with one voice,  have  as-         sailed  the findings 1 to 3 whereas the 2nd  respondent  has         supported all the findings.  It is strenuously submitted  by         the  2nd  respondent that there is no reason why  we  should         interfere with the findings of fact returned by the Tribunal         and  relying  upon  these it is further  contended  that  we         should hear the appeal on the merits ignoring the settlement         altogether.             Before we proceed further it is necessary to  appreciate         the implication of the order of this Court passed on  Decem-         ber 19, 1974, set out earlier.  This order was passed  after         hearing the parties for some time when the appeal was  first         called  for hearing on December 19, 1974. From the  recitals         in  the order it is apparent that the parties were  prepared         to  abide by the settlement if the same was fair  and  just.         We are not prepared to accept the position, as urged by  the         2nd  respondent, that even if the settlement is  binding  on         the parties executing the document, namely, the company  and         the  3rd  respondent representing a large  majority  of  the         workmen, since the same is not binding on the members of the         Mumbai  Majdoor  Sabha Union, howsoever  small  the  number,         under  section  18 (1) of the Industrial Disputes  Act,  the         appeal should be heard on merits. On the other hand, we take         the  view  that  after hearing the parties  this  Court  was         satisfied  when it had called for a finding of the  Tribunal         that if the settlement was fair and just it would allow  the         parties  to be governed by the settlement  substituting  the         award.  The wording of the issue sent to the Tribunal for  a         finding  clearly  shows that there was an onus  on  the  2nd         respondent  to show how many workers of the  appellant  were         their  members upon whom they could clearly assert that  the         settlement was not binding under section 18(1) of the Indus-         trial  Disputes Act.  It cannot be assumed that the  parties         were  not aware of the implications of section 18(1) of  the         Industrial  Disputes Act when the Court passed the order  of         December 19, 1974.  This Court would not have sent the  case         back only to decide the legal effect of section 18(1) of the         Industrial Disputes Act.  Since a recognised and  registered         union  had  entered into a voluntary settlement  this  Court         thought  that  if the same, were found to be just  and  fair         that could be allowed to be binding on all the workers  even         if  a very small number of workers were not members  of  the         majority union. It is only in that context that after  hear-         ing the parties the case was remanded to the Tribunal for  a         finding on the particular issues set out above.             The  numerical  strength of the members of the  2nd  re-         spondent, who are workers of the company, would also have an         important  bearing as to whether the settlement accepted  by         the majority of the workmen is to be considered as just  and         fair.  In that view of the matter we are unable to  appreci-         ate that the 2nd respondent did not choose it fit to produce         evidence  to  show the actual number of the workers  of  the         company  having  membership of the 2nd  respondent.   It  is         rather  odd that not a single worker of the company  claimed         before the Tribunal         21             to be a member of the 2nd respondent and to assert  that         the  settlement was not fair and just. This is  particularly         so  when  all the workers of the company have  accepted  the         settlement  and also received the arrears and emoluments  in         accordance with the same.             The Tribunal thought that the question of the quantum of         membership of the 2nd respondent did not call for a  finding

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       at  all  in view of 1his Court’s order.  As  observed  above         that  was not a correct assumption.  On the other  hand,  we         feel  that this view of the Tribunal has led it to  approach         the  matter in an entirely erroneous manner.   The  Tribunal         is,  rightly enough, conscious that under section 18 (1)  of         the  Industrial Disputes Act the settlement was  binding  on         the  company  and the members of the 3rd  respondent  union.         Even  so, the Tribunal devoted nearly half of its  order  in         scanning  the evidence given by the company  and  respondent         No.  3 to find out whether the terms of the  settlement  had         been explained by the President of the union to the  workmen         or  not  and whether the workers  voluntarily  accepted  the         settlement knowing all the "consequences".  This to our mind         is again an entirely wrong approach.             When a recognised union negotiates with an employer  the         workers as individuals do not come into the picture.  It  is         not  necessary that each individual worker should  know  the         implications  of  the settlement since a  recognised  union,         which  is  expected to protect the legitimate  interests  of         labour,  enters into a settlement in the best  interests  of         labour.  This would be the normal rule.  We cannot altogeth-         er rule out exceptional cases where there may be allegations         of  mala  fides, fraud or even corruption or  other  induce-         ments.  Nothing of that kind has been suggested against  the         President  of the 3rd respondent in this case.   That  being         the  position,  prima  facie, this is a  settlement  in  the         course of collective bargaining and, therefore, is  entitled         to due weight  and consideration.             It  is true that in the course of evidence given by  the         ’President as also by two workmen and other officers of  the         company  the Tribunal has found certain discrepancies.   For         example,  the President in the course  of  cross-examination         stated  that  since the workers had already agreed  he  only         tried  to improve upon the settlement by  negotiating  .with         the  company for 85% and 871/2% dearness allowances  instead         of 80% earlier agreed to by the workers on their own.  We do         not think that this admission by the President would  reduce         the  efficacy of the settlement or affect its validity.   It         may be that negotiations had been going on for some time and         even some important workers had been individually approached         by the management, but it is clear that the President of the         union  had  taken upon himself the  responsibility  for  the         settlement  upon  which he. on his own  turn,  succeeded  in         making  some effective improvements beneficial to the  Work-         men.  The Tribunal further made some observations that  Shri         Pandit  was actually unaware of the consequences that  would         ensure to the workmen as a result of the settlement  Reading         the  evidence of Shri Pandit as a whole. we,  however.  find         "hat  it  cannot be said that he was unaware of  the  conse-         quences.   We are also unable to hold that he had  knowingly         and deliberately suppressed the fact about the importance of         the consequences         22         to the workers if the settlement were accepted. As a  matter         of  fact it has been stated by the workmen. who  were  exam-         ined, that Shri Pandit did mention that they would lose  Rs.         12/-  to  Rs. 15/- in dearness allowance if  the  settlement         superseded the award. Mathematically this may not be correct         as perhaps, on account of the rise of consumer price  index,         the  loss in dearness allowance could have been even  double         the  figure given by the President.  That, however, per  se,         does not make the settlement unfair or unreasonable.             It is found by the Tribunal that in the matter of  wages         the  settlement  has given better terms and  that  the  same         cannot  be  said to be unfair.  The Tribunal has  stated  in

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       more than one place that the only objection to this  settle-         ment  levelled by the 2nd respondent is with regard  to  the         quantum  of dearness allowance.  While the award  has  given         the  Revised Textile dearness allowance, the settlement  has         substituted 86% and 871/2% of the Revised Textile  allowance         for the first and the second period respectively.  While the         award  is  for one year, subject to the  provisions  of  the         Industrial Disputes  Act, the settlement is for a period  of         three years.  Having regard to the totality of the terms  of         the settlement we are unable to agree with the Tribunal that         the terms are in any way unfair or unreasonable.             Besides,  the  settlement has to be  considered  in  the         light  of the conditions that were in force at the  time  of         the reference.  It will not be correct to judge the  settle-         ment  merely  in the light of the award  which  was  pending         appeal  before this Court.  So far as the parties  are  con-         cerned  there will always be uncertainty with regard to  the         result  of  the litigation in a  court  proceedings.   When,         therefore, negotiations take place which have to be  encour-         aged, particularly between labour and employer in the inter-         est  of general peace and well being, there is  always  give         and take.  Having regard to the nature of the dispute, which         was raised as far back as 1968, the very fact the  existence         of  a  litigation with regard to the same matter  which  was         bound  to take some time must have influenced both the  par-         ties  to come to some settlement.  The settlement has to  be         taken  as a package deal and when labour has gained  in  the         matter of wages and if there is some reduction in the matter         of  dearness allowance so far as the award is concerned,  it         cannot be said that the settlement as a whole is unfair  and         unjust.             There  are three categories of workers, permanent  work-         ers, listed casual workmen and certain other casual workmen.         It  is said that the third category of workmen are  employed         seasonally  for a period of 20 days or so.  Their number  is         also  said  to  be not more than 20 or 30.   The  terms  and         conditions relating to this category of casual workmen  were         left,  under the settlement, to be mutually decided  by  the         parties.  It  is because of this feature in  the  settlement         that  the Tribunal held that the settlement was  incomplete.         We are, however, informed that as a matter of fact by mutual         agreement  some terms have been settled even for this  third         category of casual workmen.   At any rate, because no  deci-         sion  was  arrived at with regard to this  small  number  of         seasonal  workmen, it cannot be said that the settlement  is         bad on that account.         23             The  Tribunal next dealt with the principles  applicable         in  granting  dearness  allowance to workers.  It  is  while         dealing  with  this part of the Tribunal’s award  that  Shri         Damania for the 2nd respondent sought to make a strong  plea         in  favour of sustaining the award by disregarding the  set-         tlement.  According to counsel the wage level of the workers         is  more or less at subsistence level and,  therefore,  cent         per  cent  neutralisation of the cost of living or,  at  any         rate,  95%  neutralisation should have  been  allowed  while         setting  dearness allowance. Since the Tribunal has  rightly         taken  that  settled principle into  consideration  and  the         settlement has departed from it, the same should be held  as         unjust and unfair to the workmen.             We  should  point out that there is  some  misconception         about this aspect of the case. The question of  adjudication         has to be distinguished from a voluntary settlement.  It  is         true  that this Court has laid down certain principles  with         regard  to the fixation of dearness allowance and it may  be

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       even  shown that if the appeal is heard the said  principles         have  been correctly followed in the award.  That,  however,         will be no answer to the parties agreeing to a lesser amount         under  certain  given  circumstances.   By  the  settlement,         labour  has scored in some other aspects and will  save  all         unnecessary  expenses in uncertain litigation.  The  settle-         ment,  therefore, cannot be judged on the touchstone of  the         principles  which are laid down by this Court for  adjudica-         tion.             There may be several factors that may influence  parties         to come to a settlement as a phased endeavour in the  course         of  collective bargaining.  Once cordiality  is  established         between the employer and labour in arriving at a  settlement         which operates well for the period that  is in force,  there         is  always a likelihood of further advances in the shape  of         improved  emoluments by voluntary settlement avoiding  fric-         tion and unhealthy litigation.  This is the quintessence  of         settlement  which courts and tribunals should  endeavour  to         encourage.   It is in that spirit the settlement has  to  be         judged  and not by the yardstick adopted in scrutinising  an         award  in adjudication.  The Tribunal fell into an error  in         invoking the principles that should govern in adjudicating a         dispute regarding dearness allowance in judging whether  the         settlement was just and fair.             Mr. Damania has drawn our attention to several  authori-         ties of this Court with regard to the principles of fixation         of dearness allowance including the recent decision of  this         Court in Killick Nixon Limited v. Killick & Allied Companies         Employees  Union  and earnestly submitted that  there  is  a         "peremptive necessity" to grant cent per cent or at any rate         95%  neutralisation  of  the  cost  of  living  as  dearness         allowance  (5th principle of Killick Nixon  Limited  supra).         Even the Tribunal has relied upon the above decision.   But,         as  we  have  pointed out, that is not the  correct  way  to         decide  whether a settlement voluntarily arrived at  by  the         parties is just and fair.  The matter would have been  abso-         lutely  different  if on the face of it the  settlement  was         highly unconscionable or grossly unjust.  Even according  to         the Tribunal, the reduction of the dearness allowance to 85%         and  871/2%  from cent per cent is  the  only  objectionable         feature to enable it to hold that that part of the         (1)[1975] Supp. S.C.R. 453.         24         settlement  is unjust and unfair.  The Tribunal  found  that         all  other  terms  of the settlement were  "fair,  just  and         reasonable".             It  is not possible to scan the settlement in  bits  and         pieces  and hold some parts good and acceptable  and  others         bad.   Unless it can be demonstrated that the  objectionable         portion  is such that it completely outweighs all the  other         advantages  gained the Court will be slow to hold a  settle-         ment as unfair and unjust. The settlement has to be accepted         or  rejected as a whole and we are unable to reject it as  a         whole  as unfair or unjust.  Even before this Court the  3rd         respondent representing admittedly the large majority of the         workmen  has stood by this settlement and that is  a  strong         factor which it is difficult to ignore. As stated  elsewhere         in  the  judgment, we cannot also be oblivious of  the  fact         that  all workmen of the company have accepted  the  settle-         ment.  Besides, the period of settlement has  since  expired         and we are informed that the employer and the 3rd respondent         are  negotiating  another settlement with  further  improve-         ments.   These  factors,  apart from what  has  been  stated         above, and the need for industrial peace and harmony when  a         union  backed by a large majority of workmen has accepted  a

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       settlement  in  the  course of  collective  bargaining  have         impelled us not to interfere with this settlement.             That  being  the position, we unhold the  settlement  as         fair and just and order that the award of the Tribunal shall         be  substituted by  the settlement dated October  18,  1973.         The  said  settlement shall be the substituted  award.   The         appeal  is disposed of accordingly.  There will be no  order         as to costs.         B.P.R.                                                Appeal         dismissed.         25