http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10  

PETITIONER: INDIAN OXYGEN LTD.

       Vs.

RESPONDENT: THE WORKMEN AS REPRESENTED BY INDIAN OXYGEN KARAMCHARI UNION

DATE OF JUDGMENT09/01/1979

BENCH: SHINGAL, P.N. BENCH: SHINGAL, P.N. KAILASAM, P.S.

CITATION:  1979 AIR 1196            1979 SCR  (2) 911  1979 SCC  (3) 291  CITATOR INFO :  R          1980 SC 125  (4)

ACT:      U.P. Industrial  Disputes Act,  1947 (28  of 1947)  Ss. 2(f), 3(d),  4K, 6B,  6I, 7(ii)-Industrial dispute-Tests for calling a dispute an "industrial dispute" -Establishment had a union  affilated to  a  Federation  and  a  non-affiliated union-Employer  entered   into  settlement  with  affiliated union-Non-affiliated union  not a  party to such settlement- Dispute raised  by a non-affiliated union on the same point- If an industial dispute.

HEADNOTE:      Industrial Disputes  Act, 1947  (14  of  1947)  S.  18- Applicability of.      The appellant  company  had  its  establishments  in  a number of  States in  the country.  In its  establishment at Kanpur there  were two  unions, one  of which,  the  Shramik Sangh, was  affiliated to  the Federal  Union comprising  of some of the trade unions in the various establishments while the other, the Karamachari Union, was not. A demand relating to revision  of dearness  allowance among others, was raised by both  the Unions  at Kanpur.  The Shramik  Sangh and  the appellant entered  into a settlement. Karamchari Union which was not  a party  to the  settlement, made an application to the State  Government to constitute a conciliation board for reference of  the dispute. The Board was constituted. In the meantime,  however,  to  bring  the  settlement  within  the purview of  the U.P.  Industrial Disputes  Act  the  Shramik Sangh applied  for  the  constitutation  of  a  conciliation board.  A   conciliation  board   was  constituted  and  the memorandum of  settlement arrived at between the parties was registered even  though the dispute on the same point raised by the  Karamchari Union was pending before the Conciliation Board all  the while.  The dispute  raised by the Karamchari Union was,  therefore, referred  to a Tribunal under s 4K of the Act.      The Tribunal  rejected the  appellant’s contention that it had no jurisdiction to adjudicate on the dispute.      On appeal  to this  Court it  was contended that it was implicit in  the various  provisions of  the U.P. Act that a settlement arrived at before a Conciliation Board by a Union

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10  

of the  majority of  workmen was  binding on all the workmen and that  in the  absence of  a provision  like s. 18 of the Industrial Disputes Act, 1947 it was not permissible for the Karamchari Union  to contend  that the settlement would bind only the  members of  the Shramik  Sangh and  in  any  event reference  of   the  dispute   to  a  Tribunal  was  without jurisdiction.      Dismissing the appeal, ^      HELD: 1.  The State  Government rightly  took the  view that the  controversy raised  by the Karamchari Union was an industrial dispute. [922 G-H]      2. A  reading of  the relevant  provisions of  the U.P. Industrial Disputes  Act, 1947,  clearly shows that there is nothing in the Act to require that the dispute 912 or difference  should be  raised by  all the  workmen of the industry, or  by everyone  of them, or even by a majority of them. It  is  enough  if  the  controversy  is  between  the employer on  the one side and workmen on the other. There is also nothing  in the Act to require that the workmen raising the controversy should form a majority of the employees, the reason being  that where  it is  found that  the controversy affects, or  will affect,  the interests  of  workmen  as  a class, the law envisages that, in the interest of industrial peace, it should be examined and decided in one of the modes provided by it. [917 D-F]      3. An individual dispute cannot, however, be said to be an industrial  dispute unless  the other  workmen  associate themselves with  it. No  hard and fast rule can be laid down to decide when and by how many workmen an industrial dispute could be  raised within the meaning of the Act, or whether a minority union or even an unrecognised union, could raise an industrial dispute.  It is  enough if  there is  a potential cause of  disharmony which  is likely to endanger industrial peace, and  a substantial  number of workmen raise a dispute about it,  for then  it is  permissible to  view  it  as  an industrial dispute  within the meaning of clause (1) of s. 2 of the Act, and to refer it for adjudication to a tribunal.                                                    [917 F-H]      4. The settlement arrived at with the Federal Union did not bind  the Karamchari  Union as  it was not a party to it and was  not affiliated  to the Federal Union. Section 18 of the Central  Act provides  that a  settlement arrived  at by agreement between  the parties  otherwise than in the course of conciliation  proceedings shall be binding on the parties to the agreement. [918 E]      5. Moreover, the settlement arrived at with the Shramik Sangh  was  under  the  provisions  of  the  U.P.  Act  and, therefore, s.  18 of  the Central  Act had  no  application. There is no provision similar to it in the U.P. Act. [918 G]      6. There  was no occasion for invoking s. 7 of the U.P. Act. That  section is  mainly intended to serve the purposes contemplated by s. 3 of the Act, namely, securing the public safety or  convenience or the maintenance of public order or supplies and services essential to the life of the community or for  maintaining employment  etc. It  cannot therefore be said that  the settlement  arrived at  by the  Sangh  became binding on  all workmen including the Karamchari Union which was not  a party  to it  nor is there any other provision in the Act  or the  Rules making  the settlement binding on the Karamchari Union.  Nor again  can it be said that s. 3(d) of the U.P.  Act justifies  the argument  that merely because a union, consisting  of a  majority of  workers, can represent all  the   workmen,  the  settlement  arrived  at  before  a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10  

conciliation board  would bind  those who are not parties to it. [919 B, C, F-G]      7. In  the absence  of any prohibitory provision in the Act it  cannot be  said that  the State  Government  had  no jurisdiction to  make a general reference under s. 4K of the U.P. Act  merely  because  the  settlement  was  made  by  a majority union  and was  binding on  the Shramik  Sangh. The Tribunal has  found it  as a  fact that the Karamchari Union represented a  substantial number  of  the  workmen  of  the company at Kanpur, and there is no reason why they should be debarred from  raising a  dispute for the benefit of all the workmen as  a class. It is well recognised, that "collective bargaining" can  take place  between the employer and a bona fide labour union and there is nothing on the record to show that the Karamchari Union was not a bona fide union. [920 A- C] 913      In the  instant case the Shramik Sangh entered into the settlement  in   collusion  with   the   company   and   the Conciliation Board  finalised the settlement even though the Karamchari Union’s  dispute was still pending. No effort was made to  make it  a party  to the  proceedings. Although, to begin with,  a both  the Shramik  Sangh and  the  Karamchari Union were  opposed to  the settlement earlier arrived at by the Federal  Union the  Shramik Sangh  changed its stand and endorsed the  settlement of  the Federal  Union when  it was placed on  the notice  board. The  Tribunal also  found as a fact that  the settlement  was not  even put  on the  notice board of  the company.  In these  circumstances if the State Government had decided to make a reference of the dispute to the Tribunal  it could not be said that it did not apply its mind to  the controversy or committed an illegality in doing so. [920 H-921 C]      8. Even  assuming that  the earlier settlements were in the nature  of a package deal arrived at between the company and the  Federal Union  it cannot be said that there was any legal bar  to the  reference of  the dispute  regarding  one particular item  of the package deal for adjudication by the tribunal so as to vitiate the reference. The company brought this aspect  of the matter specifically to the notice of the State Government. The point does not, however, relate to the jurisdiction or  the maintainability  of the reference under s. 4K  for it  is essentially  a matter  for the  Tribunal’s examination with due regard to the evidence before it. [921- F-G]      Herbertsons Ltd.  v. Workmen of Herbertsons Ltd. & Ors. [1977] 2  SCR 15  and New  Standard Engg.  Co. Ltd. v. M. L. Abhyankar & Ors., [1978] 1 L.L.J. 487; held inapplicable.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2335 of 1978.      Appeal by  Special Leave  from the  Judgment and  Order dated  14-7-78   of  the   Industrial   Tribunal   U.P.   in Adjudication Case No. 15/77.      F. S.  Nariman, O.  C. Mathur  and D.  N. Misra for the Appellant. M.  K. Ramamurthi,  Jitendra Sharma  and Janardan Sharma for the Respondent.      The Judgment of the Court was delivered by      SHINGHAL J.-This  appeal by  special leave  is directed against the  order of  Industrial  Tribunal  (III)  U.P.  at Kanpur dated  July 14,  1978,  deciding  the  following  two preliminary issues  which were  raise by  the Indian  Oxygen

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10  

Ltd. (hereinafter referred to as the Company)           "(1) Whether present  dispute is not an industrial                dispute in the light of the objections raised                by the  employers in  paragraph (1)  of their                written Statement? 914           (2)  Whether the present Order of Reference is bad                in law  in the light of the objections raised                by the  employers in  paragraph (1)  of their                Written Statement?"      The  Company   employed  some   5400  workmen   in  its establishment in  West Bengal,  Bihar, U.P.,  Assam, Punjab, Delhi,  Maharashtra,  Gujarat,  Tamilnadu,  Andhra  Pradesh, Karnataka and  Kerala. There  were several  recognised trade unions of  the workmen.   The All-India Federation of Indian Oxygen Employees  Union  (hereinafter  referred  to  as  the Federal Union)  was the recognised federation of some of the trade unions  from 1973  onwards. The  Indian Oxygen Shramik Sangh (hereinafter  referred to as the Shramik Sangh), which represented some of the workmen at Kanpur, was affiliated to the Federal  Union. There  was another  union known  as  the Indian Oxygen  Karamchari Union  (hereinafter referred to as the Karamchari  Union) which was registered much earlier but its constitution  was revised  because of  the merger of two other unions  in it  and was  approved by  the Registrar  of Trade Unions  on May  10, 1978.  It was  not a member of the Federal Union.      The Federal  Union  raised  a  charter  of  demands  in February 1973  of all  India nature  and  a  settlement  was arrived at  on June  22, 1973, according to which the demand for revision of pay scales was to be taken up for discussion at a mutually convenient date. A similar settlement was made with the Shramik Sangh on November 22, 1973. It was followed by negotiations  and an  order was made for the constitution of a  Conciliation Board  under section  3(d)  of  the  U.P. Industrial Disputes  Act, 1947  (hereinafter referred  to as the U.P.  Act). A  memorandum of  settlement was drawn up on April 30, 1974 between the Company and the Shramik Sangh. It was agreed,  interalia, that the question of revision of the dearness allowance  of the  Kanpur unit  employees would  be negotiated by  the Company  with the Federal Unit and/or the Union on or before April 1, 1975.      In  the   meantime,  the   Karamchari  Union   made  on application on  January 23,  1975, for the constitution of a Conciliation Board  under section  3(d) of  the U.P. Act and the Board  was constituted  by an  order dated  January  30, 1975. The  Company raised  objections to the constitution of the Board  on February  24, 1975,  but the  proceedings were commenced by  the Board  on February 26, 1975, and March 19, 1975 was fixed for appearance. The Company however proceeded with its  efforts for  a settlement  with the Federal Union, and entered  into a  settlement with it on June 30, 1975. In order to  bring it  under the  purview of  the U.P. Act, the Shramik Sangh applied on 915 July 18,  1975, for the constitution of a Conciliation Board under that  Act and  a Conciliation Board was constituted on July 29, 1975. A memorandum of settlement about the dearness allowance was  drawn up with the Shramik Sangh on August 27, 1975; in  accordance with  rule 5A  of the  U.P.  Industrial Disputes Rules,  1957, in  Form IA,  even though the dispute regarding the  variable dearness  allowance, which  had been raised by  the Karamchari Union earlier, was pending all the while. The settlement with the Shramik Sangh made a specific reference to  the all-India  Federation settlement which had

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10  

been made on June 30, 1975. That settlement with the Federal Union was in fact annexed to the settlement with the Shramik Sangh and was treated as a settlement under the U.P. Act.      The dispute  regarding the  variable dearness allowance which had  been  raised  by  the  Karamchari  Sangh  by  its application dated January 23, 1975 for the constitution of a Conciliation Board, did not however bear fruit. Moreover the settlement which  had been  reached between  the Company and the Federal  Union was  opposed by the Shramik Sangh and the Karamchari Sangh. The Conciliation Officer did not therefore pass  an   order  for  the  registration  of  the  aforesaid settlement. The  Shramik Sangh,  which had  claimed dearness allowance according  to the  Kanpur cost  of  living  index, however changed  its stand and, as has been stated, it filed a memorandum  of the  settlement on  August 27,  1975. These facts are not in dispute before us.      It was in these circumstances that the State Government made an order on May 23, 1977, referring the dispute between the Company  and the Karamchari Sangh for adjudication under section 4K  of the  U.P. Act.  The precise matter of dispute was the  question whether  the dearness allowance payable by the Company to its workmen should be revised and linked with the consumer  price index  for  the  industrial  workers  at Kanpur computed  by the  Labour Bureau  at Simla and, if so, from what date and with what other details.      The Company  filed a  written  statement  in  which  it raised preliminary  objections to the maintainability of the reference. That  gave rise to the two issues mentioned above and as  they have  been found  against the  Company  by  the impugned order  of the Tribunal, it has come up in appeal to this Court.      It has  been argued by Mr. Nariman, learned counsel for the Company,  that it  is implicit in the various provisions of the  U.P. Act  that a  settlement  arrived  at  before  a Conciliation Board, by a union of a majority of the workmen, is binding  on all the workmen. Reference in this connection has been made to the Preamble and sections 916 2(t), 3(d),  6B, 6-1, 7(ii) of the U.P. Act, rules 5A and 40 and Forms  1A and III of the U.P. Industrial Disputes Rules, and to  clauses (4)  and (8)  of the order dated December 3, 1957 made under section 3(d) of the U.P. Act. It has further been argued  that the  power to  enforce a  settlement under section 7 of the U.P. Act shows that the settlement is meant to be  binding on  all the  workmen. It has also been argued that once  a valid settlement is made, it is not permissible to refer  a dispute  (covered by  it) for  adjudication.  An attempt has  been  made  to  support  that  contention  with reference to some decisions. Learned counsel has gone to the extent of  arguing that as there is no provision in the U.P. Act similar to sub-sections (1) and (3) of section 18 of the Industrial Disputes  Act, 1947,  (hereinafter referred to as the Central  Act), it  is not permissible for the Karamchari Union to  contend that  the settlement  which had  been made with the  Shramik Sangh  will bind only the workmen who were members of  that Sangh.  In the  alternative,  it  has  been argued  that   the  State   Government  did   not  have  the jurisdiction to  make a  valid reference under section 4K of the U.P.  Act as  the demand for variable dearness allowance had been  settled through  the Shramik Sangh in respect of a majority of  the workmen  of the Kanpur unit and was binding on the  members of  that Union. Then it has been argued that the settlement which had been made with the Federal Union on June 30,  1975 was  by itself  and independently of the U.P. Settlement (with  the Shramik  Sangh),  a  settlement  under

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10  

section 18(1)  of the  Central Act  and was  binding on  the members of  the Shramik  Sangh as  it was  affiliated to the Federal  Union   and  for   that  reason  also  it  was  not permissible to  make a reference for adjudication in respect of all  the workmen  including those  who  belonged  to  the Shramik  Sangh.   It  has   further  been  argued  that  the settlement of  June 30,  1975 with  the Federal  Union would have  been   operative  even   without  the   Shramik  Sangh settlement and  section 18(1)  of the  Central Act  would be applicable to  it as  it was  not a  settlement  during  the course of  conciliation proceedings  and was  binding on the Federal Union  under section 36(1)(a) and (b) of the Central Act and  it was not  permissible to make a general reference covering even the workmen belonging to a union affiliated to the Federal  Union. It  has been  urged that  the  reference should have  been restricted  to those  workmen who were not governed  by  the  settlement  of  June  30,  1975  or  that settlement should also have been referred to the Tribunal if it was felt by the State Government that it was not valid or fair. Lastly,  it has  been argued  that the  settlements of June 30,  1975 and  August 27,  1975 were  in the  nature of package  deals   arising  out   of  collective   and  mutual bargaining and a reference relating to one term of the deals 917 was invalid. Reference for this proposition has been made to Herbertsons Limited  v. Workmen  of Herbertsons  Limited and others(1)  and   New  Standard  Engg.  Co.  Ltd.  v.  M.  L. Abhayankar and others(2).      Thus  the  question  for  consideration  before  us  is whether  the   State  Government   had  the   authority   or jurisdiction to  make the  order dated  May 23,  1977, under section 4K  of the  U.P. Act referring the dispute regarding variable  dearness   allowance  for   adjudication  to   the Tribunal. The two issues before the Tribunal related to that basic question  and it  will be sufficient for us to examine it in  the facts  and circumstances of this case and the law bearing on it.      Section 4K  of the  U.P. Act  provides that  where  the State Government  is of  opinion that any industrial dispute exists or  is apprehended,  it may  refer the dispute or any matter appearing  to be  connected with,  or relevant to the dispute to  a Tribunal.  Clause (1) of section 2 of that Act defines an  industrial dispute  to  mean,  inter  alia,  any dispute or difference between employers and workmen which is connected with the terms of their employment. The expression "workmen" has  been defined  in clause  (z) of  section 2 to mean, speaking  generally,  "any  person"  employed  in  any industry in the capacity mentioned therein. There is nothing in the  Act to require that the dispute or difference should be raised  by all  the workmen  of the industry, or by every one of  them, or even by a majority of them. It is enough if the controversy  is between the employer on the one side and workmen on  the other.  So also, there is nothing in the Act to require  that the  workmen raising the controversy should form a  majority of  the employees. The reason appears to be that where it is found that the controversy affects, or will affect,  the  interest  of  workmen  as  a  class,  the  law envisages that,  in the  interest of  industrial  peace,  it should be  examined and decided in one of the modes provided by it. An individual dispute cannot however be said to be an industrial  dispute  unless  of  course  the  other  workmen associate themselves  with it.  No hard  and fast  rule  can possibly be  laid down  in such circumstances to decide when and by  how many workmen an industrial dispute can be raised within the  meaning of the Act, or whether a minority union,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10  

or even  an unrecognised  union,  can  raise  an  industrial dispute. It  is enough  if there  is a  potential  cause  of disharmony which is likely to endanger industrial peace, and a substantial  number of  workmen raise  a dispute about it, for then  it is  permissible to  take the view that it is an industrial dispute  within the  meaning  of  clause  (1)  of section 2  of the U.P. Act, and to refer it for adjudication to a  Tribunal. Reference  in this connection may be made to the Tribunal’s finding 918 of fact  that  although  the  Karamchari  Union  was  not  a recognised union  and it  was not  a member  of the  Federal Union, it  had a  "substantial  number  of  workmen  of  the concern as its members." We have no doubt therefore that the State Government  rightly took the view that the controversy raised by the Karamchari Union was an industrial dispute.      It cannot  be gainsaid  that the dispute in the present case was  raised by  the Karamchari  Union and  they made an application for  the constitution of a Conciliation Board as far back  as January 23, 1975, and the Board was constituted on January  30, 1975.  It will  be recalled that the Company filed its  objections before the Board on February 24, 1975, and the  Board fixed March 19, 1975 for their consideration. It is  not in  controversy before  us that  the conciliation effort met  with failure, and the point for consideration is whether the  State Government  lost  its  power  to  make  a reference under section 4K of the U.P. Act merely because of the settlement  dated June  30, 1975 between the Company and the Federal  Union under  the Central Act and the settlement dated August  27, 1975  between the  Company and the Shramik Sangh in the conciliation proceedings under the U.P. Act.      Section 18  of the  Central Act  deals with the binding effect of  settlements and  awards. Sub-section  (1) of that section provides  that a  settlement arrived at by agreement between the  employer and  workmen  otherwise  than  in  the course of  conciliation proceeding  shall be  binding on the parties to  the agreement.  The settlement  dated  June  30, 1975, with  the Federal  Union did  not therefore  bind  the Karamchari Union  as it  was not  a party  to it and was not affiliated to the Federal Union.      It is  true that  the Shramik Sangh made an application for the  constitution of  a Conciliation  Board on  July 18, 1975, and  a Board was constituted on July 29, 1975. That in fact led  to a  settlement with  the Shramik Sangh on August 27, 1975.  But that  took place  under the provisions of the U.P. Act  and  Mr.  Nariman  has  himself  pointed  out  the proceedings in  fact took  place under  rule 5A  of the U.P. Industrial  Disputes  Rules,  1957  and  the  memorandum  of settlement was  prepared in  Form 1-A.  Sub-section  (3)  of section 18  of  the  Central  Act  could  not  therefore  be attracted to  that settlement  and  there  is  no  provision similar to it in the U.P. Act.      We have  gone through section 7(ii) of the U.P. Act and the rules  made thereunder,  as  well  as  the  order  dated December 31, 1957, on which much reliance has been placed by Mr. Nariman.  Clause (ii)  of section 7 deals with the power of the State Government to 919 enforce, by  order in the prescribed manner, for such period as may  be specified,  the whole or any part of an agreement reached in  conciliation proceedings  between the parties to an industrial  dispute. But  the  section,  it  appears,  is mainly intended to deal with an order passed under any other enactment, and  is meant  to serve the purposes contemplated in section  3, namely,  for securing  the public  safety  or

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10  

conveniences or  the maintenance of public order or supplies and services  essential to  life of  the community,  or  for maintaining employment  etc. It has not been urged before us that there  was any  such occasion for invoking section 7. A mere reference  to that section cannot therefore sustain the argument that  the settlement  dated August 27, 1975, became binding on all workmen including the Karamchari Union, which had nothing  to do  with it  and was not even a party to it, and that  the Union was precluded from raising an industrial dispute  and   the  State   Government  was  precluded  from referring it  for adjudication  under section 4K of the U.P. Act. Rule  5A of  the U.P. Industrial Disputes Rules and the preparation of  the memorandum  of settlement  in  Form  1-A could not therefore justify the argument to the contrary. So also, a  reference to  Form III  of the Rules which provides that a person who contravenes or attempts to contravene, any provision of  the State  Government’s order shall be liable, on conviction,  to fine  or to  imprisonment  not  exceeding three years  or both,  is hardly  of any  avail for  obvious reasons. In  fact Mr.  Nariman has  not found it possible to support  his  argument  about  the  binding  nature  of  the settlement dated  August 27,  1975, on  the basis  of such a penal provision in a form appended to a set of Rules, and we need not examine it any further.      We have  gone through  the order  which has  been  made under section  3(d) of the U.P. Act, on paragraph 8 of which considerable reliance has been placed by Mr. Nariman. It was made on  December 31,  1957, and  was to remain in force for one year  under paragraph  15. Even  otherwise, paragraph  8 merely makes  provision for  impleading  other  workmen,  or concerns, or  a union,  in proceedings before a Conciliation Board. It  provides that  it would  be enough  to implead  a union covering  the majority  of such  "concern or workmen". But such a provision cannot justify the argument that merely because a  union consisting  of a  majority of  workers  can represent all  the  workmen,  the  settlement  made  in  the Conciliation Board  will bind  those who  are not parties to it.      As regards the alternative argument of Mr. Nariman that as the  settlement dated  August 27,  1975, was  made  by  a "majority union",  it was,  at  any  rate,  binding  on  the members of the Shramik Sangh, and 920 that the  State Government  had no  jurisdiction to  make  a general reference  under section 4K of the U.P. Act, it will be sufficient  to say  that no  such bar  could possibly  be raised in  the absence  of any  prohibitory provision in the law. As has been stated, the Tribunal has found it as a fact that the  Karamchari Union  represented a substantial number of the  workmen of  the Company  at Kanpur,  and there is no reason why  they should  be debarred  from raising a dispute for the  benefit of  all the  workmen as a class. It is well recognised,  and   cannot  be   disputed,  that  "collective bargaining" can  take place  between the employer and a bona fide labour  union, and  there is  nothing on  the record to show that the Karamchari Union was not a bona fide union. In fact it  may well  be said  that as the Shramik Sangh was an affiliated unit of the Federal Union, it was not permissible for it  to make the application dated July 18, 1975, for the constitution of  a Conciliation Board to resolve the dispute and to  enter into the memorandum of settlement dated August 27, 1975.  The Tribunal  has examined  the file  (No.391  of 1975)  of  the  Conciliation  Board  case  relating  to  the industrial dispute raised by the Karamchari Union on January 23, 1975, about the payment of the dearness allowance to the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10  

workers of  the Kanpur  unit according to the cost of living index for  industrial workers at Kanpur, and the file of the other conciliation  case relating  to  the  similar  dispute raised by the Shramik Sangh on July 18, 1975, and has stated the factual position as follows-           "It  is  clear  from  the  latter  file  that  the      management of  the  Kanpur  unit  of  the  Company  had      applied on 29-7-75 to the Regional Conciliation Officer      for the  registration of the settlement reached between      the company  and the  All India  Federation  of  Indian      Oxygen Employees  Unions on  30-6-75 but  on account of      the pendency  of C.B.  Case No.391/75  some information      was asked  to be  furnished by  the company  which  the      company  did  not  furnish.  On  the  other  hand,  the      representatives of  the Shramik  Sangh and  the  Kanpur      unit  of  the  company  appeared  before  the  Regional      Conciliation Officer, Kanpur on 27-8-75 and submitted a      brief memorandum of settlement making applicable to the      Kanpur unit  the  settlement  which  had  been  reached      between the company and the Federation on 30-6-75."      It will thus appear that the Shramik Sangh entered into the settlement  dated August  27, 1975 in collusion with the Company  and   that  the   Conciliation  Board  allowed  the memorandum of  settlement to  be filed  and  finalised  even though the Karamchari Union’s dispute dated January 23, 1975 was pending and no effort was made to make it a 921 party to the proceedings which were taken at the instance of the Shramik  Sangh. It  is important  to  remember  in  this connection that  although the settlement which had been made by the  Federal Union  on June  30, 1975 was opposed by both the Unions  when it  was placed  on the  notice board of the Kanpur unit, the Shramik Sangh changed its stand and filed a memorandum of  settlement on  August 27,  1975 endorsing the settlement which  had been  made with  the Federal  Union on June 30,  1975. The  Tribunal has  also stated  it as a fact that the  settlement dated  August 27, 1975 was not even put on the notice board of the Company. If, therefore, the State Government decided to make a reference of the dispute to the Tribunal in  these circumstances,  it cannot be said that it did not  apply its  mind to  the controversy or committed an illegality in doing so.      It has  to be  appreciated that  it would not have been practicable for  the State Government to exclude the workmen who were  members of  the Shramik Sangh (at Kanpur) from the scope of  the reference under section 4K of the U.P. Act and to confine  the dispute to the rest of the workmen, for that might have  given rise  to one pay structure for one section of the  workmen (represented  by the  Karamchari Union)  and another for  the other  workmen (represented  by the Shramik Sangh). At any rate, this was not a matter at the threshold, and is essentially for the Tribunal to examine on the merits of the controversy.      We have  also considered  the  other  argument  of  Mr. Nariman that  as the  settlements dated  June 30,  1975  and August 27,  1975 were  in the  nature of  package deals, and arose out  of collective  bargaining, it was not permissible for the State Government to make a reference to the Tribunal about one  item of  that deal,  namely, that relating to the variable  dearness   allowance.  Our   attention   in   this connection  has   been  invited  to  the  statement  of  the Company’s Personnel  Manager V.  John in which reference has been made to the nature and the contents of the package. The point does  not however  relate to  the jurisdiction  or the maintainability of  the reference  under section  4K of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10  

U.P. Act,  for it is essentially a matter for the Tribunal’s examination with  due regard  to the  evidence before it. It appears from the record that the Company brought this aspect of the  matter specifically  to  the  notice  of  the  State Government in  its representation  dated April 20, 1976, and it cannot be said that it was not before the Government when it made  the impugned order of reference dated May 23, 1977. At any  rate, it  cannot be said that there is any legal bar to the  reference of  the dispute  regarding one  particular item of a 922 package deal  for adjudication  by the  Tribunal  so  as  to vitiate the reference at the threshold.      We have  gone through  the two  cases which  have  been cited by  Mr. Nariman  in this  connection. Herbertsons Ltd. (supra) was  a case where all the workers of the Company had accepted the  settlement and  received the  arrears and  the emoluments according  to it.In  fact it was in the facts and circumstances of  that case  that this  Court took  the view that it  was not possible to scan the settlement in bits and pieces and  hold some  parts good  and acceptable and others bad. Even  so, this  Court expressed  the view  that if  the objectionable part  was shown  to  outweigh  all  the  other advantages, the  Court would  be slow to hold the settlement unfair and unjust. Herbertsons is therefore no authority for the argument  that a  part of  a package  deal cannot be the subject matter  of  a  reference  for  adjudication  by  the Tribunal. New  Standard Engineering Co. Ltd (supra) was also a different case, for there the justness and fairness of the settlement was  examined with  reference to the situation as it stood  on the  date on  which it  was arrived  at, and it cannot also  avail the  argument of  Mr. Nariman  about  the illegality of  a reference  merely because  it relates  to a part of a package deal. That is essentially a matter for the Tribunal to  examine  and  adjudge  on  the  merits  of  the reference.      Lastly, Mr.  Nariman has  argued that as the members of the Karamchari Union accepted the benefits of the settlement which had been made with the Federal Union on June 30, 1975, they were  precluded from  obtaining the  order of reference dated May  23, 1977.  The argument  is  futile  because  the Tribunal has  specifically stated  in its order under appeal that even  the settlement  dated August 27, 1975 was not put on the  Company’s notice  board and  the emoluments  of  the workmen were  increased from  July 1975. It has further been stated that  the members  of the  Karamchari Union "took the increase but under protest vide the Union’s letter dated 28- 7-75  which   is  annexure   D  to   the  Workmen’s  written statement."      There is  thus no force in the argument which have been advanced for  the purpose  of showing  that the  settlements dated June  30, 1975  and August 27, 1975 debarred the State Government from making the impugned order of reference dated May 23,  1977 under  section 4K  of the U.P. Act or that the dispute was  not an  industrial dispute  and the  order  was otherwise bad in law. The appeal fails and is dismissed with costs. N.V.K.                                     Appeal dismissed. 923