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PETITIONER: JHAGRAKHAN COLLIERIES (P) LTD.

       Vs.

RESPONDENT: SHRI  G. C. AGARWAL, PRESIDING OFFICER,  CENTRAL  GOVERNMENT

DATE OF JUDGMENT28/11/1974

BENCH: SARKARIA, RANJIT SINGH BENCH: SARKARIA, RANJIT SINGH ALAGIRISWAMI, A.

CITATION:  1975 AIR  171            1975 SCR  (2) 873  1975 SCC  (3) 613  CITATOR INFO :  R          1978 SC 828  (14,18)  D          1981 SC2163  (7)

ACT: Industrial  Disputes Act Sections 2(P)  and  18-Conciliation agreement  arrived  at  in  proceedings  otherwise  than  as required  under  the  Act-Acceptance of  the  settlement  by conduct by workmen not parties to settlement-Effect. Industrial  Disputes  Act,  Sections  10(1)  and  33-C  (2)- Settlement  during pendency of proceedings under  sec.  33-C (2)-Settlement, if terminates the proceedings.

HEADNOTE: The  three collieries owned by the appellant company  employ over 4,200 workmen.  At the relevant time, there were  three Trade  Unions functioning at the collieries  namely,  Madhya Pradesh  Koyla Mazdoor Panchayat, Azad Koyla  Shramik  Sabha and Madhya Pradesh Colliery Workers’ Federation. At  the  material  time, the  Panchayat,  according  to  the allegations  of  the Company, had about 75 per cent  of  the workers  on  its  rolls.  This Union  conducted  a  complete strike for 57 days in the months of March and April 1968  at the collieries.  The Central Wage Board for Mining  Industry by  its  award  recommended  payment  of  Variable  Dearness Allowance  (V.D.A.), correlated to the cost of living  index prevailing  from time to time.  The Company  accepted  those recommendations.   The  workers represented by  the  various Unions,  on  the basis of the Wage Board’s  award,  demanded V.D.A.  at  the rate of Rs. 1.47 per day  with  effect  from April 1, 1968 while the Company was paying it at the rate of Re.  1. 1 1 per day.  The Company refused to pay  more  than Re.  1.  11  per  day.  Thereupon,  in  December  1968.  the Federation.   which   had  a  membership  of   169   workers (Respondents  4  to  173) made  an  application  before  the Central  Labour Court-cum-Industrial Tribunal Jabalpur  (the Labour  Court) under s. 33-C(2) of the  Industrial  Disputes Act  for  determination of the amount of V.D.A. due  to  the workers.  The Company submitted its Written Statement on May 13,  1969,  challenging the jurisdiction of  the  court  and raised other legal objections. In  consequence of the notice of strike under Sec. 22(1)  of the Act by the Panchayat, the conciliation proceedings to be

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under s. 22 read with sec. 12(1) of the Act were held by Mr. B. D. Sharma.  Assistant Labour Commissioner.  In the course of these conciliation proceedings besides other matters, the dispute  relating to V.D.A. was settled.  Subsequent to  the signing  of the conciliation agreement, the company filed  a supplementary  statement  before the Labour Court  that,  in view  of  the  settlement,  the  application  filed  by  the Federation  had become infructuous.  The stand taken by  the workers Was that the settlement was not in accordance.  with the  provisions  of the Act.  The Labour  Court  tried  this issue as a preliminary issue.  It held that Shri Sharma  was not  a duly appointed ,conciliation officer on the ’date  on which the settlement was arrived at and consequently, it did not  put  an end to the dispute pending  before  the  Labour Court.   The Writ Petition filed by the Company in the  High Court impugning the order of the Labour Court was dismissed. Hence this appeal by special leave. It  was  contended for the appellant-(i) Assuming  that  the settlement in question was not a settlement in the course of conciliation  proceedings and binding under s. 18(3) of  the Act,  it  was  still a settlement binding  on  the  workmen, including  respondents 4 to 173 herein, when 99 per cent  of the total workmen had accepted the terms of the  settlement, including  V.D.A;  (ii) The Labour  Court’s  order  refusing permission  to  the appellant Company to  lead  evidence  to prove  the  implementation and acceptance of  the  aforesaid settlement  by 99 per cent of the workers, was violative  of the principles of natural justice, and  (iii)     There   is nothing  in  the Act which prohibits the employers  and  the workmen 874 from  entering  into  a settlement during the  pendency   of proceedings      under  S. 33 C(2)  the Act.  On  the  other hand,  settlements inter se between the parties have  always been preferred by this Court to the  adjudicatory process. HELD (i) A perusal of sec. 18 of the Act makes it clear that a  settlement  at-rived  at in the  course  of  conciliation proceedings is binding not only On the actual parties to the industrial  dispute  but also on the  heirs,  successors  or assigns  ,of  the  employer on the one  hand,  and  all  the workmen  in  the establishment, present or  future.  on  the other.   Thus  had Mr. B. D. Sharma been  a  duly  appointed Conciliation  Officer,  the  settlement arrived  at  in  the conciliation  proceedings, duly conducted by him under  sec. 12,  would  have  been binding on the  entire  body  of  the workers.  Since the finding of the High Court to the effect, that the settlement between the Panchayat and the management cannot  be deemed a, settlement arrived at in the course  of conciliation   proceedings   under  the  Act,   now   stands unassailed,  sub-sec.  (3) of sec. 18 cannot be  invoked  to make  it binding on Respondents 4 to 173 represented by  the Federation.  An implied agreement by acquiescence or conduct such as acceptance of a benefit under an agreement to which  the worker acquiescing or accepting the benefit was not a  party being out-side the purview of the Act is not binding on such a worker either under sub-sec.     (1) or under sub sec. (3) of sec. 18 of the Act.  It follows, therefore, that, even if 99% of the workers have impliedly accepted the agreement  by drawing  V.D.A.  under it, it will not-whatever  its  effect under  the general law-put an end to the dispute before  the Labour  Court  and make it functus officio  under  the  Act, [878C-E; 879A-B] (ii) The refusal of the Labour Court to allow the  appellant to lead evidence at this stage, has not caused any prejudice to the appellant.  The issue decided as a preliminary  issue

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involved  a  question of law which could be decided  on  the basis  of material on record.  Furthermore, the decision  of the Labour Court neither debars the appellant from  bringing on record evidence relevant to the issues which still remain to  be decided, nor does it rule out the agreement  for  all purposes. [879C-E] ’ (iii)     In East India Coal Company Ltd., Benares Colliery, Dhanbad v. Rameshwar and ors. [1968] 1 L.L.J. 6, this  Court held that although the scope of s. 33C(2) is wider than that of  sec.  33  C(1),  cases  which  would  appropriately   be adjudicated under sec. 10(1) are outside the purview of sec. 33C(2).   The provisions of S. 33-C are broadly speaking  in the nature of executing provisions.  The jurisdiction of the Labour Court, in the present case, is not only circumscribed by  sec.33-C(2)  but the matter also is yet at  the  initial stage.  The controversy between the parties still remains to be determined on merits. [880F & G] Amalgamated  Coffee Estates Ltd. and Ors. v.  Their  workmen and  Ors. [1965] 11 LLJ 110 discussed and The  Sirsilk  Ltd. and  Ors. v. Govt. of Andhra Pradesh and Anr, [1964]  S.C.R. 448, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1968 of 1972. Appeal  by Special Leave from the Judgment and  Order  dated the  4th  August 1971 of the Madhya Pradesh  High  Court  in Misc.  Petition No. 41 of 1970- O.   P.  Malhotra, O. C. Mathur, and R. N. Mishra,  for  the Appellant. M.   K. Ramamurthi and J. Ramamurthi for Respondents Nos 14. 25. 31. 46. 47, 59, 61, 68, 70, 72, 76, 79, 80, 83, 84.  89. 90. 93. 95, 96, 102, 126 and 129. The Judgment of the Court was delivered by SARKARIA, J.This appeal by special leave is directed against the  judgment, dated August 4, 1971, of the  Madhya  Pradesh High Court 875 whereby the apPellant’s Writ Petition under Articles 226 and 227 of the Constitution was dismissed. The  appellant  is  the Jhagrakhan Collieries  (P)  Ltd.,  a Company  incorporated under the Indian Companies  Act.   The Company  owns  three  collieries in  Jhagrakhan  in  Surguja District  of Madhya Pradesh.  These collieries  employ  over 4,200 workmen.  At the relevant time there were three  Trade Unions functioning at the collieries, namely, (1) Madhya Pradesh Koyla Mazdoor Panchayat (for short, the  ’Panchayat’ );  (2) Azad Koyla Shramik Sabha (for short,  the  ’Sabha’), (3) Madhya Pradesh Colliery Workers’ Federation (for  short. the Federation) At  the  material  time, the  Panchayat,  according  to  the allegations  of  the Company, had about 75 per cent  of  the workers  on  its  rolls.  This Union  conducted  a  complete strike for 57 days in the months of March and April 1968  at the  collieries.   The Central Wage Board  for  Coal  Mining Industry  by  its  award  recommended  payment  of  Variable Dearness  Allowance (for short, V.D.A.), correlated  to  the cost  of  living index prevailing from time  to  time.   The Company   accepted  these  recommendations.    The   workers represented by *,he various Unions, on the basis of the Wage Board’s  award demanded V.D.A. at the rate of Rs.  1.47  per day  with  effect from April 1, 1968 while the  Company  was paying  it  at the rate of Rs. 1. 11 per day.   The  Company refused  to pay more than Rs. 1.11 per day.   Thereupon,  in

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December 1968. the Federation, which had a membership of 169 workers  (Respondents 4 to 173 herein) made  an  application before  the  Central  Labour  Court-cum-Industrial  Tribunal Jabalpur (for short, the Labour Court) under Section 33-C(2) of  the Industrial Dispute-,; Act (for short the ’Act’)  for determination  of the amount of V.D.A. due to  the  workers- The Company submitted its written statement on May 13. 1969, challenging  the jurisdiction of the court and raised  other legal objections. On October 4, 1969, the Panchayat served a notice of  strike under Section 22(1) of the Act on the Company together  with a charter of 29 demands and threatened to strike on or after November  7,  1969  if  their  demands  were  not  conceded. Thereupon.  the counciliation Proceedings purporting  to  be under  s. 22 read with s. 12(1) of the Act were held by  Mr. B.  D. Sharma, Assistant Labour Commissioner (C) Shahdol  on the  21st  and 22nd October. 1969.  In the course  of  these conciliation proceedings on October 22, 1969, besides  other matters.  the  dispute relating to V.D.A. was  settled.   On October  22,  1969, the Assistant Labour  Commissioner  (Mr. Sharma) sent a report together with a copy of the settlement to the Government, as required by Section 12(3) of the  Act. Subsequent  to the signing of this  conciliation  agreement, dated  October 22, 1969. the Company filed  a  supplementary statement  on November 5, 1969, submitting that in  view  of the said settlement, the application under s. 33C(2) of  the Act  filed by the Federation, had become  infructuous.   The Labour 876 Court  by  its order, dated December 20,  1969  framed  this additional  issue  : "Whether the claim  stands  settled  by ’reason of settlement dated 22-10-1969, if any". On  behalf of the workers several objections were raised  to the enforceability of. this settlement, Their ultimate stand was  that  the  settlement was not in  accordance  with  the provisions  of the Act, inasmuch as it had not been  brought about  in proceedings before a duly  appointed  Conciliation Officer.  The Labour Court tried this issue as a preliminary issue.   It held that Shri Sharma was not a  duly  appointed Conciliation Officer on the date on which the settlement was arrived  at, and consequently, it did not put an end to  the dispute pending before the Labour Court. To  impugn  this  order of the  Labour  Court,  the  Company through its agent and Mining Engineer filed a Writ  Petition under  Article  226 and 227 of the  Constitution,  which  as stated before, was dismissed by the High Court.  Hence  this appeal. Mr. Malhotra, learned Counsel for the appellant raised three points in the course of his arguments before us :               (1)   In  holding that the  settlement,  dated               October  22, 1969 was not a settlement in  the               course of conciliation proceedings, the courts               below have misconstrued Section 4 of the Act ,               inasmuch  as, they have relied only upon  sub-               section  (1) and have not taken  into  account               its   sub-section   (2)   and   the   relevant               notification thereunder.               (2)   (a)  Assuming  that  the  settlement  in               question was not a settlement in the course of               conciliation proceedings and binding under  s.               18(3)  on the Act, it was still  a  settlement               binding on the workman, including  respondents               4 to 173 herein, when 99 per cent of the total               workmen   had  accepted  the  terms   of   the               settlement, including V.D.A.

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             (b)   The   Labour  Court’s   order   refusing               permission  to the appellant Company  to  lead               evidence  to  prove  the  implementation   and               acceptance of the, aforesaid settlement by  99               per cent of the workers, was. violative of the               principles of natural justice.               (3)   There  is  nothing  in  the  Act   which               prohibits  the employee and the  workmen  from               entering into a settlement during the pendency               of proceedings under s.   33-C(2) of the  Act.               On  the  other  band,  settlements  inter   se               between the parties have always been preferred               by this Court to the adjudicatory process. Subsequently, however, Mr. Malhotra withdrew his  contention with regard to point No. (1) and requested the Court not  to give any finding thereon.  We, therefore, refrain from going into the same.                             877 For points (2) and (3), Mr. Malhotra placed reliance on  two decisions of this Court, namely : Amalgamated Coffee Estates Ltd. and ors. v. Their workmen and others(1) and The Sirsilk Ltd. and ors. v. Government of Andhra Pradesh and anr.(2) Before  dealing  with  the  points  canvassed,  it  will  be appropriate  to examine the relevant provisions of the  Act. Section 2(p) of the Act defines settlement to mean-               "  a  settlement arrived at in the  course  of               conciliation   proceedings  and   includes   a               written  agreement  between the  employer  and               workmen  arrived  at  otherwise  than  in  the               course of conciliation proceeding ’where  such               agreement  has  been  signed  by  the  parties               thereto  in such manner as may  be  prescribed               and  a  copy  thereof has  been  sent  to  (an               officer  authorised  in this  behalf  by)  the               appropriate  Government and  the  conciliation               officer." As  analysis  of. the above definition would  show  that  it contemplates  only two kinds of settlement (i) A  settlement arrived  at in the course of conciliation,proceedings  under the  Act and (ii) a written agreement between  the  employer and  the workmen arrived at otherwise than in the course  of conciliation  proceedings.  But a written agreement  of  the latter  kind  in order to fall within  the  definition  must satisfy two more conditions, namely : (a) it must have  been signed by the parties thereto in the prescribed manner,  and (b)  a copy thereof must have been sent to  the  authorities indicated in s. 2(p). The effect of a settlement of the first kind is indicated in subsection (3) and that of the second in sub-s. (1) of s. 18 of the Act.  The material part of s. 18 reads               "18)1)  A settlement arrived at  by  agreement               between  the  employer and  workmen  otherwise               than in the course of conciliation proceedings               shall  be  binding  on  the  parties  to   the               agreement.               (2)   Subject to the provisions of sub-section               (3),  an  arbitration award which  has  become               enforceable shall be binding on the parties to               the  agreement  who referred  the  dispute  to               arbitration."               (3)   A settlement arrived at in the course of               conciliation proceedings under this Act (or an               arbitration   award   in  a   case   where   a               notification  has  been  issued  under   ,sub-               section (3A) of Section (10A) or (an award  of

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             a Labour Court, Tribunal or National Tribunal)               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, (arbitrator) (Labour  Court,               Tribunal or National               (1) [1965] 11 LLJ 110.               (2) [1964]S.C.R. 448.               878               Tribunal),  as  the case may be,  records  the               opinion that they were summoned without proper               cause;               (c)   where a party referred to in clause  (a)               or clause (b)   is  an  employer,  his  heirs,               successors  or  assigns  in  respect  of   the               establishment to which the dispute relates;               (d)   where a party referred to in clause  (a)               or  clause  (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    become   employed   in    that               establishment or part." It is clear from a perusal of Section 18, that a  settlement arrived  at  in the course of  conciliation  proceedings  is binding  not  only on the actual parties to  the  industrial dispute but also on the heirs, successors or assigns of  the employer  on  the  one  hand, and all  the  workmen  in  the establishment,   present  or  future,  on  the  other.    In extending  the  operation of such a  settlement  beyond  the parties thereto, sub-section (3) of the Section departs from the  ordinary  law  of  contract and  gives  effect  to  the principle  of  collective bargaining.  Thus, had Mr.  B.  D. Sharma  been  a  duly appointed  Conciliation  Officer,  the settlement arrived at in the conciliation proceedings,  duly conducted  by him under Section 12, would have been  binding on the entire body of the workers including Respondents 4 to 173  represented  by  the Federation. and  others  who  ’are members  of the Sabha.  Since the finding of the High  Court to the effect that the settlement between the Panchayat  and the management cannot be deemed to be settlement arrived  at in the course of conciliation proceedings under the Act, now stands  unassailed. the aforesaid sub-section (3) cannot  be invoked  to  make it binding on Respondents 4 to  173.   The question  remains  :  Can  it  be  enforced  against   these Respondents  by virtue of sub-section (1) of the  Section  ? This  further  narrows  down into the  issue  :  Were  these respondents parties and signatories to the agreement between the  management  and  the Panchayat ?  The  answer  to  this question is undoubtedly in the negative. Even  Mr.  Malhotra has conceded that at the time  when  the settlement  was  arrived  at  on  October  22,  1969,  these respondents  and the members of the Sabha. were not  Parties to  it.   But his argument is that subsequently  by  drawing V.D.A. in  accordance  with the  settlement,  99%  of  the workers have accepted the settlement which, in  consequence, would  be as effective against them as if they were  parties to it. The  argument  is  attractive but does  not  stand  a  close examination. We  have already noticed that according to the scheme of  s. 18, read with s. 2(d), an agreement, made otherwise than  in

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the  course of conciliation proceedings, to be a  settlement within the meaning of                             879 the  Act  must be a written agreement signed in  the  manner prescribed  by the Rules framed under the Act.   As  rightly pointed  out  by  Mr. Ramamurthy, learned  Counsel  for  the Respondents an implied agreement by acquiescence, or conduct such as acceptance of a benefit under an agreement in  which the  worker acquiescing or accepting the benefit was  not  a party  being outside the purview of the Act, is not  binding on such a worker either under sub-section (1) or under  sub- section  (3) of s. 18.  It follows, therefore, that even  if 99%  of  the workers have impliedly accepted  the  agreement arrived at on October 22, 1969, by drawing V.D.A., under it, it will not-whatever its effect under the general law-put an end  to  the  dispute before the Labour Court  and  make  it functus officio under the Act. The  refusal of the Labour Court to allow the  appellant  to lead evidence at this stage, has not caused any prejudice to the  appellant.   The issue decided as a  preliminary  issue involved  a question of law which could be decided  on  the, basis  of material on record.  For its it was not  necessary to prove that 99% of the workers had accepted the  agreement dated October 22, 1969.  Even on an assumption of that  fact in favour of the Company, the claim before the Labour  Court could  not be deemed to have been settled qua respondents  4 to 173. Furthermore. the decision of the Labour Court neither debars the  appellant from bringing on record evidence relevant  to the  issues; which still remain to be decided, nor  does  it rule  out  the  agreement dated October 22,  1969,  for  all purposes.   Indeed,  the  Labour Court  has  in  its  order, towards  the end, expressly said that the settlement,  dated October 22,_ 1969, can be binding under s. 18 (1) of the Act between the contracting parties. In  view  of  the above, we would  negative  contention  (2) canvassed by Mr. Malhotra. This  takes us to the third contention.  Assuming  that  the Act  does  not inhibit the employers and  the  workmen  from arriving at a settlement during the pendency of  proceedings under  s. 33-C(2) of the Act, such a settlement,  not  being one  arrived  at in the course of  conciliation  proceedings would  be enforceable only against the parties thereto.   In the  present case, Respondents 4 to 173 and others who  were not parties to the settlement dated October 22, 1969,  would not be bound by it. In  the  case of Amalgamated Coffee Estates  Ltd.  v.  Their workmen  (supra) cited by Mr. Malhotra, pending the  appeals by  the management before this Court, the subject-matter  of the  award were settled between most of the managements  and most of their employees represented by ’certain Unions.   An application was made requesting the Court to dispose of  the appeals  in  terms of such settlement.  It  was  opposed  on behalf  of some of the employees.  This Court called  for  a finding from the Industrial Tribunal on this issue 880               "In  view of the fact that admittedly a  large               number  of workmen employed by the  appellants               have  accepted payments consistently with  the               terms   of  the  agreements  set  up  by   the               employers.  in their present petition,  is  it               shown   by  the  respondents  that  the   said               agreement is not valid and binding on them ?" The  Tribunal  submitted the finding that  in  every  estate payments  were  made  in terms of the  settlement  and  such

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payments  were  voluntary  and  knowingly  accepted  by  the workmen.  It also held that the terms of the settlement were fair.   This  Court  accepted the finding  of  the  Tribunal holding that "the settlement appears to us also to be a fair one".   It  therefore, decided the appeals in terms  of  the settlement.  It  will  be seen that the decision in  Amalgamated  Coffee Estates  case  (supra) stands on its own facts.   There  the appeals  arose,  out of an award of the  Special  Industrial Tribunal  for plantations in a dispute between  228  coffee, tea  and rubber estates in South India and  their  employees referred  to  it under S. 10(1) whereas the  instant  appeal arises out of proceedings under S. 33-C(2) for the  recovery of  money  on the basis of the Wage Board’s  award  and  the dispute,  if  any,  is about the computation  of  V.D.A.  in implementation  of that award.  The scope of S.  33-C(2)  is not the same as that of s. 10(1) of the Act.  In East  India Coal  Company Ltd.  Banares Colliery, Dhanbad  v.  Raweshwar and  Ors.(1) this Court held that although the scope  of  s. 33-C(2)  is wider than that of a 33-C(1), cases which  would appropriately be adjudicated under S. 10(1) are outside  the purview  of  S.  33 C(2).  The provisions of  S.  33-C  are, broadly speaking, in the nature of executing provisions. An  appeal  being a rehearing of the  case,  in  Amalgamated Coffee  Estates’  case,  the jurisdiction of  the  Court  to decide  the dispute in a just manner was  co-extensive  with that  of  the  Tribunal to which it was  referred  under  s. 10(1).  This Court found in agreement with the report of the Tribunal that the settlement arrived at between the most  of the Unions representing most of the workers and the  manage- ments  was  fair  and conducive  to  industrial  peace,  and therefore, it was just and appropriate to decide the dispute and dispose of the appeals in terms of the settlement. In the case before us, the jurisdiction of the Labour  Court is  not only circumscribed by s 33-C(2) but the matter  also is  yet at the initial stage.  The controversy  between  the parties  still  remains  to be determined  on  merits.   We. therefore,  do not think it necessary to say  anything  more with  regard to contention No. 3 than what we  have  broadly indicated above. For the foregoing reasons, the appeal fails and is dismissed with costs. Appeal Dismissed. V.M.K. 1.   [1968] 1 L.L. J. 6.                             881