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CASE NO.: Appeal (civil)  7170 of 2000

PETITIONER: ANZ Grindlays Bank Ltd @ Standard Chartered Grindlays Bank Ltd           

RESPONDENT: Union of India and others                                        

DATE OF JUDGMENT: 08/11/2005

BENCH: H.K. Sema & G.P. Mathur

JUDGMENT: J U D G M E N T

G.P. Mathur, J.

       This appeal, by special leave, has been preferred against the  judgment and order dated 19.6.2000 of the Bombay High Court by  which the Letters Patent Appeal filed by ANZ Grindlays Bank  Limited (hereinafter referred to as the ’Bank’) was dismissed and the  order dated 29.2.2000, passed by the learned single Judge dismissing  the writ petition filed by the Bank, was affirmed.  The present appeal  has been filed by ANZ Grindlays Bank Limited and the respondents  arrayed in the appeal are (1) Union of India, (2) All India Grindlays  Bank Employees Federation, and (3) All India Grindlays Bank  Employees Association.  During the pendency of the appeal in this  Court the entire share capital of ANZ Grindlays Bank Limited has  been acquired by Standard Chartered Bank Limited and consequently  an application (I.A. No. 3 of 2000) has been moved to change the  name of the appellant from ANZ Grindlays Bank Limited to Standard  Chartered Grindlays Bank Limited, which has been allowed. 2.      The Bank has branches all over the country and employs  approximately 1666 personnel commonly known as Award Staff in its  branches/offices in India.  The All India Grindlays Bank Employees  Association (third respondent) is recognized by the Bank and it  represents majority workmen of the Bank all over the country.  The  All India Grindlays Bank Employees Federation (second respondent)  represents the minority workmen of the Bank.  The terms and  conditions of the employment of the workmen of the appellant Bank,  popularly known as Award Staff, are governed by Shastri Award as  modified by Desai Award and the bipartite settlements entered into  between the Indian Banks Association and the Unions and Federations  representing the workmen in the banking industry.  Apart from these  industry wise bipartite settlements, the appellant-Bank also entered  into in-house bilateral settlement with second and third respondents  and these settlements are usually signed after every three years in  respect of certain allowances and benefits and other terms and  conditions of employment.  The third respondent the All India  Grindlays Bank Employees Association (for short the ’Association’)  represents over 66% of the workmen of the appellant-Bank.  The  Grindlays Bank Employees Union, Calcutta, an affiliate of the second  respondent All India Grindlays Bank Employees Federation (for short  the ’Federation’) represents nearly 13% of the workmen of the Bank  and the balance, who are not members of either of these unions are  represented by the second respondent the All India Grindlays Bank  Employees Federation. 3.      The case of the appellant is that the Federation (second  respondent) is in the habit of backing out from signing the settlement  at the last minute after having agreed to the terms thereof.  Since 1993  several settlements were entered into between the Bank, the

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Association (third respondent) and also Grindlays Bank Employees  Union, Calcutta.  However, on account of the recalcitrant attitude of  the Federation (second respondent), in the settlement entered into  under Section 18(1) of the Industrial Disputes Act, 1947 (for short the  ’Act’) a clause had to be incorporated for voluntary acceptance of the  terms and conditions of such settlements by non-members of the  Association (third respondent) with a view to extend the benefit of  such settlements to such of the non-members of the Association, who  are willing to accept the settlement. 4.      A strike notice dated 14.3.1996 was issued to the management  of the Bank by the Federation (second respondent).  Discussions were  held with all the parties and finally a settlement was arrived at  between the appellant-Bank and the Association (third respondent),  which was signed on 18.8.1996.  The Federation (second respondent),  however, backed out and refused to sign the settlement.  The  Federation then informed the Conciliation Officer (Central) on  19.8.1996 that it had not signed the settlement and that the signing of  the settlement by the Bank with the Association (third respondent)  amounted to unfair labour practice.  On 6.12.1997 Grindlays Bank  Employees Union, Calcutta, a constituent of the Federation (second  respondent) representing 13% of the workmen of the Bank accepted  the terms of the settlement dated 18.8.1996 by signing a separate  settlement dated 6.12.1997.  The settlement dated 18.8.1996 contained  the following clause: - "DURATION This settlement will come into force with effect from  August 18, 1996 and on various dates as specified under  different items contained in the settlement.  The same  shall be binding on the parties until December 31, 1998.   After December 31, 1998 and except in the case of ex- gratia system/payments all other terms and conditions  thereof shall continue to be binding on the parties until  the settlement is terminated by either party giving to the  other statutory notice as prescribed in law for the time  being in force. It is agreed that since the settlement shall be binding  between the parties to this settlement under Section 18(1)  of the Industrial Disputes Act, 1947, it will also be  binding on the affiliated units of All India Grindlays  Bank Employees’ Association and hence on their  members and thus the members shall automatically be  entitled to the benefits of this settlement and subject to  the obligations under this settlement.  However, any  other workmen who is not a member of any Union  affiliated to All India Grindlays Bank Employees’  Association shall also be bound by the terms and  conditions of this settlement and consequently entitled to  the benefits flowing out of this settlement if he/she  accepts this settlement by signing a receipt and the  format of the settlement enclosed with this settlement,  which will be made available to such employees. The benefits arising out of this settlement will be given  effect to by September 10, 1996."

The settlement itself contained a format in which the receipt had to be  given and the same is as under: - "To         The Manager         ANZ Grindlays Bank Limited. Sir,         The terms and conditions of the settlement dated  August 18, 1996 between the Management of ANZ  Grindlays Bank and their workmen represented by All  India Grindlays Bank Employees’ Association in respect  of the various demands have been perused by me.  I

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accept the settlement and the same will be binding on me.   I undertake to receive the benefits in terms of the  conditions set out in the settlement.  I, therefore, request  you to release the benefits accruing to me under the  same.         This may be construed as my receipt towards  payment/receipt of grant under the subject settlement. Sd/-             SIGNATURE" As a result of signing of the settlement by the Association (third  respondent) and the Calcutta Union, almost 99% of the Award Staff  signed the settlement and only 29 persons remained, who did not sign  the settlement and were objecting to the same.  However, according to  the Federation (second respondent) 60 persons have not signed the  settlement and are objecting to the same.  Nearly three years thereafter  the Association (third respondent) submitted a fresh charter of  demands and after holding discussions and negotiations a fresh  settlement was signed on 10.3.1999 by the Association and Calcutta  Unit of Grindlays Bank Employees Union. 5.      At the instance of All India Grindlays Bank Employees  Federation (second respondent) the Central Government, by order  dated 29.12.1997, made a reference under Section 10(1) of the Act for  adjudication by the Industrial Tribunal.  After issuance of a  corrigendum on 17.12.1998, the reference reads as under: - "Whether the terms of bipartite settlement dated  18.8.1996, between the management of ANZ Grindlays  Bank Limited, and All Indian Grindlays Bank Employees  Association which bound withholding of benefits of  settlement to workmen who are not members of All India  Grindlays Bank Employees Association until the  individual gives acceptance of the settlement in the given  format is legal and justified?  If not, to what relief are the  workmen entitled to?"

Feeling aggrieved by the aforesaid reference made by the Central  Government the ANZ Grindlays Bank filed a writ petition under  Article 226 of the Constitution before the Bombay High Court for  quashing and setting aside the same.  The writ petition was dismissed  by a learned single Judge and the appeal preferred against the said  decision before the Division Bench also failed.  The present appeal  has been filed by the Bank challenging the aforesaid orders. 6.      Mr. Gaurab Banerji, learned senior counsel for the appellant- Bank, has submitted that the reference made by the Central  Government is wholly redundant and it does not show what is the  precise demand of the Federation (second respondent) and how the  decision of the reference by the Industrial Tribunal if answered in  favour of the second respondent, would give any benefit to the said  respondent.  The language in which the reference has been couched  clearly shows that the Federation (second respondent) merely wants a  declaratory relief which by itself would be wholly ineffective and will  give no benefit to the Federation.  The settlement arrived at between  the Bank and the Association (third respondent) was under Section  18(1) of the Act and consequently it did not bind those who are not  parties to the settlement like the Federation (second respondent) and  thus the rights, if any, of the Federation were not affected in any  manner by the settlement.  Learned counsel has also submitted that the  Central Government had on two previous occasions refused to make a  reference and there being no change in circumstance there was no  occasion for reviewing the decision taken earlier and in making the  reference on 29.12.1997.  It has been further contended by Mr.  Banerji that the settlement made on 18.8.1996 had already worked  itself out and benefits had been given to the employees in terms  thereof.  The said settlement had been superseded by another  settlement on 10.3.1999.  If the settlement arrived at on 18.8.1996 is  held to be illegal or unjustified, it will result in causing serious injury

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to the appellant Bank as it will be impossible to recover back the  benefits which had already been given to the employees in terms of  the settlement. 7.      It may be mentioned at the very outset that the appellant-Bank  had entered into the settlement dated 18.8.1996 with the Association  (third respondent) and members of the Grindlays Bank Employees  Union, Calcutta, after holding discussions and negotiations.  The  settlement had not been entered into either before a conciliation  officer or labour court or industrial tribunal.  In view of Section 18(1)  of the Act the settlement was binding only upon the parties thereto.   Section 18 of the Act reads as under: - "18. Persons on whom settlements and awards are  binding.-- (1) A settlement arrived at by agreement  between the employer and workman otherwise than in the  course of conciliation proceeding 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  (3-A) of Section 10-A or an award of 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  Tribunal, as the case may be, records the opinion  that they were so 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."

A plain reading of the provisions of Section 18 would show that  where a settlement is arrived at by agreement between the employer  and the workman otherwise than in the course of conciliation  proceeding shall be binding on the parties to the agreement in view of  the clear language used in sub-section (1) thereof.  Sub-sections (2)  and (3) of Section 18 contemplate different situations where an  arbitration award has been given or a settlement has been arrived at in  the course of conciliation proceedings.  In M/s. Tata Chemicals Ltd.  vs. The Workmen employed under M/s. Tata Chemicals Ltd. AIR  1978 SC 828, it was held as under: -         "Whereas a settlement arrived at by agreement  between the employer and the workman otherwise than  in the course of conciliation proceeding is binding only  on the parties to the agreement, a settlement arrived at in  the course of conciliation proceeding under the Act is  binding not only on the parties to the industrial dispute  but also on other persons specified in Cls. (b), (c) and (d)  of sub-sec. (3) of S. 18 of the Act."

8.      The Federation (second respondent) not being party to the  settlement, it is obvious that the same is not binding upon it in view of

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sub-section (1) of Section 18 of the Act.  Thus the settlement dated  18.8.1996 did not affect the rights of the Federation (second  respondent) in any manner whatsoever and it can possibly have no  grievance against the said settlement.

9.      Mr. S.N. Bhat, learned counsel for the Federation (second  respondent), has submitted that under the settlement such employees  of the bank, who were not members of the Association (third  respondent), were required to give a receipt in writing in order to avail  of the benefits of the settlement and this was clearly illegal.  We are  unable to accept the submission made.  As already stated, the  settlement was arrived at between the Bank and the Association (third  respondent) and by virtue of sub-section (1) of Section 18 of the Act it  bound only the members of the Association (third respondent).   However, the Bank also extended the benefit of settlement to such  other employees, who were not members of the Association.  In order  to avail of the benefit they had to give a receipt that they were  accepting the settlement and the same shall be binding upon them and  the format of the receipt, which has been reproduced earlier, does not  contain any such term, which may be of detriment to them.  To protect  its interest the Bank was perfectly justified in asking for a receipt from  those employees, who were not members of the Association (third  respondent), but wanted to avail of the benefit of the settlement.   Therefore, we do not find anything wrong in the Bank asking for a  receipt from the aforesaid category of employees. 10.     The principal issue, which requires consideration, is whether  the Central Government was justified in making a reference to the  Industrial Tribunal in terms set out earlier.  Section 2(k) of the Act  defines "industrial dispute" and it means any dispute or difference  between employers and employers, or between employers and  workmen, or between workmen and workmen, which is connected with  the employment or non-employment or the terms of employment or  with the conditions of labour, of any person.  The definition uses the  word "dispute".  The dictionary meaning of the word "dispute" is: to  contend any argument; argue for or against something asserted or  maintained.  In Black’s Law Dictionary the meaning of the word  "dispute" is: a conflict or controversy, specially one that has given rise  to a particular law suit.  In Advance Law Lexicon by P. Ramanatha Iyer  the meaning given is: claim asserted by one party and denied by the  other, be the claim false or true; the term dispute in its wider sense may  mean the ranglings or quarrels between the parties, one party asserting  and the other denying the liability.  In Gujarat State Cooperative Land  Development Bank Ltd. Vs. P.R. Mankad and others (1979) 3 SCC 123,  it was held that the term dispute means a controversy having both  positive and negative aspects.  It postulates the assertion of a claim by  one party and its denial by the other. 11.     A plain reading of the reference made by the Central  Government would show that it does not refer to any dispute or  apprehended dispute between the Bank and the Federation (second  respondent).  It does not refer to any demand or claim made by the  Federation or alleged refusal thereof by the Bank.  In such  circumstances, it is not possible to hold that on account of the  settlement dated 18.8.1996 arrived at between the Bank and the  Association (third respondent), any dispute or apprehended dispute  has come into existence between the Bank and the Federation (second  respondent).  The action of the Bank in asking for a receipt from those  employees, who are not members of the Association (third  respondent) but wanted to avail of the benefit of the settlement, again  does not give rise to any kind of dispute between the Bank and the  Federation (second respondent).  Thus, the reference made by the  Central Government by the order dated 29.12.1997 for adjudication  by the Industrial Tribunal is wholly redundant and uncalled for. 12.     There is another aspect of the matter, which deserves  consideration.  The settlement dated 18.8.1996 had already worked  itself out and a fresh settlement had been arrived at between the Bank

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and the Association (third respondent) on 16.11.1999.  The members  of the Association (third respondent) and other employees, who  availed of the benefit of the settlement, have received payments in  terms thereof.  Some of the employees have already retired from  service.  Even if the settlement is set aside the Federation (second  respondent) would not gain in any manner as no enforceable award  can be given in its favour, which may be capable of execution.  On the  contrary the appellant-Bank would be a big loser as it will not only be  very difficult but almost impossible for the Bank to recover the  monetary benefits already paid to its employees under the settlement.   We are, therefore, of the opinion that the reference made by the  Central Government is wholly uncalled for and deserves to be set  aside.   13.     Mr. Bhat, learned counsel for the second respondent, has  submitted that this Court should not interfere with the order of the  Central Government making a reference under Section 10 of the Act,  as the appellant can ventilate its grievances before the Industrial  Tribunal itself and if the decision of the tribunal goes against the  appellant, the same may be challenged in accordance with law.   According to learned counsel the writ petition is pre-mature as the  appellant has got a remedy before the Tribunal to show that the  reference is either bad in law or is uncalled for.  We are unable to  accept the submission made.  It is true that normally a writ petition  under Article 226 of the Constitution should not be entertained against  an order of the appropriate Government making a reference under  Section 10 of the Act, as the parties would get opportunity to lead  evidence before the Labour Court or Industrial Tribunal and to show  that the claim made is either unfounded or there was no occasion for  making a reference.  However, this is not a case where the infirmity in  the reference can be shown only after evidence has been adduced.  In  the present case the futility of the reference made by the Central  Government can be demonstrated from a bare reading of the terms of  the reference and the admitted facts.  In such circumstances, the  validity of the reference made by the Central Government can be  examined in proceedings under Article 226 of the Constitution as no  evidence is required to be considered for examining the issue raised.

14.     In National Engineering Industries Ltd. vs. State of Rajasthan  and others (2000) 1 SCC 371, this Court held as under in para 24 of  the report: "It will be thus seen that High Court has jurisdiction to  entertain a writ petition when there is allegation that there  is no industrial dispute and none apprehended which  could be subject matter of reference for adjudication to  the Industrial Tribunal under Section 10 of the Act. Here  it is a question of jurisdiction of the Industrial Tribunal,  which could be examined by the High Court in its writ  jurisdiction. It is the existence of the industrial dispute  which would clothe the appropriate Government with  power to make the reference and the Industrial Tribunal  to adjudicate it."

15.     In view of the discussions made above it is manifestly clear that  there is no industrial dispute in existence nor there is any apprehended  dispute between the appellant-Bank and the Federation (second  respondent) and as such there is absolutely no occasion for making  any reference for adjudication by the Industrial Tribunal.  The  reference being wholly futile, the same deserves to be quashed. 16.     The appeal is accordingly allowed with costs.  The judgments  and orders of the learned single Judge dated 29.2.2000 and that of the  Division Bench of the High Court dated 19.6.2000 are set aside and  the reference made by the Central Government to the Industrial  Tribunal on 29.12.1997 is quashed.

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