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PETITIONER: TATA CHEMICALS LTD.

       Vs.

RESPONDENT: ITS WORKMEN

DATE OF JUDGMENT23/03/1978

BENCH: SINGH, JASWANT BENCH: SINGH, JASWANT KRISHNAIYER, V.R.

CITATION:  1978 AIR  828            1978 SCR  (3) 635  1978 SCC  (3)  42  CITATOR INFO :  D          1981 SC2163  (7)

ACT: Industrial Disputes Act 1947-Sec. 2(k)(P), 18-Settlement not arrived at otherwise than in course of conciliation  whether binds all workmen--Whether accepting benefit of a settlement amounts to acquiescence-Whether Govt. can refer a dispute at the instance of a minority union. Industry cum region-If no comparable concern in the region.

HEADNOTE: The  appellant, a_Public Limited Company has its factory  at Mithapur  in  the State of Gujarat. it was carrying  on  its dealings with Sangh which was. a recognised Union till 25-1- 1973.  Later on Employees Union came to be recognised  under the  Code of Discipline, in view of the fact that it had  55 per  cent of the total number of employees as  its  members. The  appellant accorded recognition to the  Employees  Union with  effect  from 25-1-1973.  On  18-6-1973  the  Employees Union  submitted  a charter of demands  which,  inter  alia, included a demand for dearness allowance at 100 per cent  of Ahmedabad Cotton Textile rate.  Meanwhile, on 9-7-1973,  the Sangh   representing  800  workmen of  the  concern   also submitted its charter of demands which included a demand for dearness  allowance  as paid to the workmen  of  the  Cotton Textile  Industry.  The appellant arrived at,  an  agreement with the Employees Union in respect of the demands submitted by  the latter.  It was agreed between the parties that  the settlement  would  remain in force for a period of  3  years with effect from 1st January, 1974.  On 21-1-1975 the  State Government made a reference to the Industrial ’tribunal  for adjudication of the dispute raised by the Sangh.  Before the Industrial Tribunal the Employees Union questioned the right of  Sangh  to raise the demand with regard to  the  variable dearness  allowance as also the right of the Govt. to  refer the demand for adjudication.  Later on, the Employees  Union abandoned its initial stand and supported the demand of  the Sangh  on  the  ground  that the  appellant  had  made  huge profits.   The  appellant  contended that  in  view  of  the settlement with the Employees Union, the Sangh was precluded from  raising  any dispute which was the subject  matter  of reference  to the Tribunal.  It also contended that  as  the

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benefit accruing from the settlement had been and was  being taken by all the workmen the reference was incompetent.  The demand  for variable dearness allowance was also opposed  by the  appellant on the ground that the employees  were  being paid    dearness   allowance   in   accordance   with    the recommendation of the Central Wage Board. On  an  examination  of  the  material  adduced  before  the Tribunal  it  came  to the  conclusion  that  the  appellant Company  was a flourishing and a highly integrated  chemical complex  of  long standing whose profits  were  continuously rising;  that no other unit in the Heavy Chemicals  Industry in   the  region  could  be  favorably  compared  with   the appellant.  Company; that the industries in other parts  of. Gujarat  which are included in the list of  Heavy  Chemicals Factories governed by Wage Board were paying 100 per cent of the dearness allowance linked to by Ahmedabad cost of living index.   The Tribunal awarded dearness allowance  I  varying from  85  per cent to 95 per cent of the  Ahmedabad  Textile dearness allowance.               In  an appeal by special leave, the  appellant               contended               (1)  In  view  of  the  settlement  with   the               Employees  Union which covered the demand  for               variable dearness allowance and the fact  that               the  benefit accruing from the settlement  was               taken  by  the  entire body  of  workmen,  the               reference  by the State Government as  regards               variable  dearness allowance was invalid,  and               the Tribunal had no jurisdiction to adjudicate               upon the same. 536               (2)  The  Tribunal has erred in  ignoring  the               industry-cum-region principle while fixing the               variable dearness allowance.               The respondent contended               (1)  The settlement did not cover  the  demand               regarding    variable    dearness    allowance               sponsored by the Sangh.               (2)  In  any event, the  said  settlement  was               binding  only on the parties thereto  and  the               Sangh not being a signatory to the  settlement               was not bound by it.               (3) It was open to a minority Union to sponsor               the demand and for the, Government to make the               reference on the basis of such demand.               (4) Since there were no comparable concerns in               the  region the Industrial Tribunal was  right               in  taking  into  consideration  the  dearness               allowance  paid by concerns in other parts  of               Gujarat. Dismissing the appeal HELD:     1.  An analysis of section 2(p) of the  Industrial Disputes  Act, 1947 which defines settlement and section  18 of  the  Act  show that a settlement  which  is  arrived  at otherwise than in the course of conciliation proceedings is. binding  only  on  the parties to the  settlement  who  have subscribed to it in the prescribed manner. [541 E-F, 542 E] Bata  Shoe Co. (P) Ltd. v. D. N. Ganguly and Ors., [1961]  3 S.C.R. 308, referred to. Ramnagar Cane and Sugar Co. Ltd. v. Jatin Chakravorty & Ors. [1960]  3 S.C.R. 966 and The Jhagrakhan Collieries (P)  Ltd. v. Shri G. C. Agrawal, Presiding Officer, Central Government Industrial  Tribunal-cum-Labour  Court, Jabalpur  and  Ors., [1975] 3 S.C.C. 613, referred to. 2.  In the present case since the agreement was not  arrived

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at  in the course of conciliation it could not bind any  one other than the parties thereto.  The fact that the Employees Union  which  had  been duly recognised under  the  Code  of Discipline  arrived  at  the agreement  with  the  appellant Company  could not operate as a legal impediment in the  way of the Sangh which was not a party to the agreement to raise a  demand  or dispute with regard to the  variable  dearness allowance  limited  to  Ahmedabad cost of  living  index  or affect  the validity of the reference by the  Government  or the  jurisdiction of the Court to go into the dispute.  [543 E-F] 3. A minority union can validly raise an industrial  dispute is clear from section 2(k) [543 G] Dharampal    Premchand   v.   M/s.    Dharampal    Premchand (Saughandhi) [1965] 3 S.C.R. 394; relied on. 4.  The acceptance of benefit under an agreement by  workers who  are  not  parties to the  agreement  cannot  amount  to acquiescence.   Even  if  99 per cent of  the  workers  have impliedly accepted the agreement it will not put an end  to. the  dispute  before the Labour Court and  make  it  functus officio. [544 C-D] Jhagrakhan  Collieries  (P)  Ltd. v.  Shri  G.  C.  Agrawal, Presiding  Officer, Central Government Industrial  Tribunal- cum-Labour  Court, Jabalpur and Ors., [1975] 3  S.C.C.  613, relied on. 5.  It  is a matter of common knowledge that the  spiral  of prices  has been constantly rising and the basket  of  goods and  services has been costing more and more  day  after-day since  the  out-break of the Second World War  in  September 1939.   The  appellant Company holds a  unique  position  in Heavy Chemicals in 537 the region.  It is for this that the Industrial Tribunal was constrained  to  turn to similar industries in  Gujarat  and found that Sarabhai Chemicals Baroda was the nearest similar industry which can legitimately serve as comparable concern. [544 F, 545 A-B] Ahmedabad  Mill  Owners’  Association etc.  v.  The  Textile Labour Association, [1966] 1 S.C.R. 382, relied on. 6. When there is a large disparity between the two  concerns engaged in the same line of business in a region with  which the  Industrial Court is dealing it is not safe to  fix  the same  wage  structure for the large flourishing  concern  of long standing as obtains in a small struggling concern. [546 A-B] Bengal  Chem’  ;cat  and Pharmaceutical Works  Ltd.  v.  Its Workmen  & Anr., [1969] 1 I.L.J. 751 a p. 758, French  Motor Car  Company  Ltd. v. Their workmen, [1962]  2  L.L.J.  744; relied on. 7.  It cannot also be lost sight of that with the  march  of time   narrow  concept ,of  industry-cum-region  is   fast changing  and too much importance cannot be attached to  the region.   The  modern trends in industrial law seem  to  lay greater accent on the similarity of industry rather than  on the region. [546 B-C] Workmen of New Egerton Woollen Mills v. New Egerton  Woollen Mills and Ors., [1969] 2 L.L.J. 782, relied on. 8.  As in the instant case, there was no comparable  concern engaged  in  the  line of business similar to  that  of  the appellant in the Saurashtra region, the ’Industrial Tribunal did  not commit any error in taking into, consideration  for the  purposes  of  comparison  Dearness  Allowance  paid  by Sarabhai  Chemicals  and  other  concerns  of  the  like  or approximate  like magnitude in other parts of the ’State  of Gujarat. [546 E]

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JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  2160  of 1977. (Appeal by Special Leave from the Award dated 21-2-77 of the Industrial Tribunal Gujarat in Reference I.T. No. 13 of 1975 published  in the Gujarat Govt.  Gazette dated 17th  March’, 1977). G. B. Pai, O. C. Mathur & K. J. John for the appellant. V.  M. Tarkunde, K. L. Hathi, P. C.Kapur & S. C.  Patel  for the respondent. The Judgment of the Court was delivered by JASWANT SINGH.  J. This appeal by special leave is  directed against the award dated February 21, 1977 of the  Industrial Tribunal Gujarat in reference No. 13 of 1975 made on January 21,  1975, by the Government of Gujarat in exercise  of  its powers  under section 1O (1) (d) of the Industrial  Disputes Act. 1947 (XIV of 1947) (hereinafter, called ’the Act’)  for adjudication  of the dispute relating to five demands  ,viz. Washing Allowance, Woollen Jersey Unclean Allowance,  Trans- port Allowance and Variable Dearne is Allowance linked  with Ahmedabad  cost  of  living  index  and  adequate   dearness allowance  ,equal  to that of textile workers  of  Ahmedabad (which  is 100 neutralisation) sponsored by the.   Chemicals Kamdar  Sangh,  Mithapur (hereinafter referred  to  as  ’the Sangh). Briefly  stated, the facts leading to the appeal are  :  The appellant .is a public limited company registered under  the Indian Companies .Act and has its factory at Mithapur in  he State  of  Gujarat.   As per its  practice  and  policy  of recognising and negotiating with the Union 538 enjoying  the support of largest number of its  workers,  it carried  on  its  dealings with the  Sangh  (which  was  the recognised  union) till January 25, 1973 when the  Assistant Commissioner  of Labour, Ahmedabad declared as a  result  of the  verification  made  by him  that  the  ’rata  Chemicals Employees’ Union (hereinafter referred to as ’the Employees’ Union) was entitled to be recognised under the Code of  Dis- cipline in view of the fact that 55% of the total number  of the employees of the concern were its members and addressed a communication to the appellant requesting it to  recognise the  said  union.   Pursuant  to  this  communication,   the appellant accorded recognition to the Employees’ Union  with effect  from January 25, 1973.  Thereupon the Sangh filed  a Special Civil Application challenging the aforesaid order of the  Assistant Commissioner of Labour in the High  Court  of Gujarat which was summarily rejected vide order dated  April 3, 1973.  On June 18, 1973, the Employees Union submitted  a charter  of  demands to the appellant which  included  inter alia  a demand for dearness allowance at 100%  of  Ahmedabad Cotton Textile Rate popularly known as the Textile  Dearness Allowance.   In respect of these demands,  the  Conciliation Officer  summoned a consolatory meeting for July  26,  1973. Meanwhile on July 9, 1973, the Sangh representing about  800 workmen  of the concern submitted tile aforesaid charter  of demands before the management which also included a  demand for Dearness Allowance as paid to the workers of the  Cotton Textile Indus try.  The charter also contained an intimation to  the  management of the Sangh’s intention  to  resort  to strike  for  realisation of its  demands.   As  negotiations between the parties for an amicable settlement did not prove fruitful,  the  Sangh  wrote to  the  Conciliation  Officer,

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Rajkot, on July 17, 1973 requesting him to intervene.  After preliminary   discussions   with  both  the   parties,   the Conciliation  Officer admitted the case for conciliation  on August  30, 1973.  As the conciliation proceedings  held  by him from time to time between September 7, 1973 and November 6, 1973 (to which the Employees’ Union was also made a party at  its  request) did not lead to a settlement  between  the parties,.  the  Conciliation Officer submitted  his  Failure Report to the State Government on December 14, 1973. on even 1  date,  the  appellant arrived at an  agreement  with  the Employees’ Union in respect of the demands submitted ’by the latter  on  behalf  of its daily rated and  monthly  rated members  including clerical staff.  It was  agreed  ’between the parties to this settlement that it would remain in force for  a period of three years with effect from January  1974. A  notice with regard to the settlement with  the  Employees Union was put up on general notice board by the appellant on December   17,  1973.   On  Janaury  21,  1975,  the   State Government  made,  as already stated, ’a  reference  to  the Industrial   Tribunal  for  adjudication  of   the   dispute respecting  the aforesaid demands raised by the Sangh.   In the  course  of the reference  proceedings,  the  Employees’ Union adopted a nebulous and shifting stand.  In its anxiety to  maintain  its status as the  recognised  majority  union having the sole right of collective bargaining and  settling industrial  disputes, it insisted in the first  instance  on its  right  to actively participate in the  proceedings  and inter  alia questioned the right of the Sangh to  raise  the demand  with  regard  to V.D.A.. as also the  right  of  the Government to refer the demand for adjudication 539 alleging  that earlier in 1968 when it raised a  demand  for 100% Textile Dearness Allowance, the Sangh resisted the same and entered into a settlement with the appellant Company  on July  31,  1969  for  a period  of  five  years.   Later  on abandoning its initial stand, it supported the demand of the Sangh  averring that having regard to the huge profits  made by  the appellant Company over the years, the  workmen  were entitled  to payment of Dearness Allowance not only  on  the lines  of the Textile Dearness Allowance but a still  higher Allowance  like  that of the employees in  the  Bombay  Head Office of the appellant Company In the written statement filed by it, the appellant  Company not only challenged the locus standi of the Employees’ Union to  raise any demand on behalf of the workmen or to  support the  demands raised by the Sangh in view of  the  aforesaid- settlement dated" December 14, 1973 but also maintained that in  view  of the said settlement which continued  to  be  in operation, the Sangh was precluded from raising any  dispute in respect of the demands which are the subject of reference to the Tribunal for adjudication.  It further contended that as the benefit accruing from the settlement had been and was being   taken  by  all  the  workmen,  the   reference   was incompetent   and  the  Tribunal  had  no  jurisdiction   to adjudicate upon’ the demands incorporated therein.  While it resisted the first four demands raised by the Sangh on  mere technicalities,  with  regard  to the  demand  for  Variable Dearness  Allowance, the appellant company averred  that  in view  of  the fact that all the employees  were  being  paid Dearness Allowance in accordance with the recommendation  of the   Central  Wage  Board  for  the  Heavy  Chemicals   and Fertiliser Industry and that neutralisation in the  increase in  cost of living under the said scheme of payment in  case of  group-1  factories  was  not  cent  per  cent  but   was equivalent to 92 per cent, the demand for Variable  Dearness

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Allowance  was not valid.  The appellant further urged  that in the matter of fixtion of Dearness Allowance, the  formula of  Industry-cum-Region was to be adhered to and  the  total pay  packet of the comparable concerns in the region had  to be taken into consideration. On  an  examination  of  the  material  adduced  before   it including  the facts and figures relating to  the  appellant Company’s  investments, reserves, production, percentage  of wages  of workers, profits and declared dividends etc.,  the Industrial   Tribunal  came  to  the  conclusion  that   the appellant  Company was a very flourishing and highly  integ- rated chemical complex of long standing, whose profits  were continually  rising;  that  no  other  unit  in  the   Heavy Chemicals  Industry  in  the  region  could  he   favourably compared with the appellant Company so far as the extent and nature  of production, business and financial capacity  were concerned;  that  the industries in other parts  of  Gujarat like  Sarabhai Chemicals, Baroda, Anil  Starch,  Ahmedabad,, Alembic  Chemicals Works, Baroda, Attul Products Bulsar  and Ahmedabad Manufacturing & Calico Printing Co. Ltd.  Chemical Division, Ahmedabad which were included in the list of heavy chemicals  factories covered by Wage Board were  paying  100 per cent of the Dearness Allowances linked to the  Ahmedabad cost of living index number known as 540 Textile  Dearness  Allowance and that the total  pay  packet which  was being paid to the workers of Mithapur  where  the prices  of essential commodities were  comparatively  higher than  at  any  other place in the  district  like  Jamnagar, Dharangadhra, ProbandaBhavnagar was much less than  Sarabhai Chemical,  Baroda, and disallowing the objections raised  by the  appellant Company and considering the Textile  Dearness Allowance as a scientific formula faithfully reflecting  the rise and fall in the consumer price index for working  class which  afforded  maximum protection to  the  workmen,in  the lowest  basic  wage slab adopted the same,  and  inter  alia directed  the appellant Company to pay to all the  concerned employees  including  the daily rated workmen  in  different categories  in  Grades  I, III, V, VI, VII &  VIII  and  the monthly  rated  clerical, technical  and  supervisory  staff falling  in  Grades V, VI & VII uniform  Dearness  Allowance varying   from  85%  of  the Ahmedabad  Textile   Dearness Allowance  (old) to 95 % of the Ahmedabad  Textile  Dearness Allowance as before the old revision phased over a period of three  years beginning from February 1, 1975 that is to  say at  85% from February 1, 1975 to December 31, 1976  and  95% from January 1, 1977 and onwards. Appearing on behalf of the appellant, Mr. Pai has  addressed us  only in regard to the Sangh’s demand and the  Tribunal’s award  in  respect of Variable Dearness Allowance.   HO  has contended  that  regard  being  had to  the  fact  that  the aforesaid  settlement  dated December 14, 1973  between  the appellant Company and the Employees Union covered the demand regarding  V.D.A.  sponsored by the Sangh  and  the  benefit accruing from the settlement was taken by the entire body of workmen, the aforesaid reference by the State Government  as regards  the  V.D.A.  was invalid and the  Tribunal  had  no jurisdiction  to adjudicate upon the same,.  He has  further urged  that in fixing the V.D.A., the Tribunal has erred  in ignoring  the  industry-cum-region principle which  is  well recognised in the industrial world. Mr.  Tarkunde  has,  on  the  other  hand,  urged  that  the aforesaid  settlement dated December 14, 1973 did not  cover the demand regarding V.D.A. sponsored by the Sangh; that  in any  event,  the  said settlement was binding  only  on  the

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parties  there  and the Sangh not being a signatory  to  the settlement, it was perfect.y open to it even though it was a minority union to sponsor the demand in question and to  the Government  to make the reference. He has further  contended that  there being no comparable concern in the  region,  the Industrial  Tribunal was right in taking into  consideration the Dearness Allowance paid by Sarabhai Chemicals and  other concerns in other parts of Gujarat Five  questions  arise for consideration in  this  case.-(1) Whether  the  settlement of December 14,  1973  covered  the demand with respect to Variable Dearness Allowance sponsored by   the $angh, (ii) whether the aforesaid reference by  the Government  was  invalid  and the  Industrial  Tribunal  was incompetent  to  make  the  award  in  question  during  the currency  of settlement arrived at by the  Employees’  Union which had been duly recognised under the Code of Discipline, (iii)  whether the acceptance of the benefits  flowing  from the aforesaid settlement not 541 only  by the members of the Majority Union but also  by  the members  of  the Sangh operated as an implied  agreement  by acquiescence and debarred the Sangh from raising the demand, (iv)  whether  it was legal and proper for the  Tribunal  to link  the  scheme of Dearness Allowance with  the  Ahmedabad Dearness Allowance when the recommendation of the Wage Board set  up for the industry in 1968 for adoration of All  India Consumer Price Index as the basis of Dearness Allowance  had been  accepted and was being implemented and (v) whether  in fixing  the Dearness Allowance, the Industrial Tribunal  was justified  in  going  beyond  the  region  and  taking  into consideration  for  the purpose of comparison  the  Dearness Allowance  paid by Sarabhai Chemicals and other concerns  in other parts of the State. Before  dealing with these points, we consider it  necessary and proper to refer to a few provisions of the Act.               Clause  (p)  of section 2 of the  Act  defines               "settlement" as under               "2.(p) ’settlement’ means a settlement arrived               at  in the course of  conciliation  proceeding               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." An analysis of the above mentioned clause would show that it envisages  two  categories of settlement.-(i)  a  settlement which is arrived at in the course of conciliation proceeding i.e. which is arrived at with the assistance and concurrence of  the Conciliation officer who is duty bound to promote  a right settlement and to. do everything he can to induce  the parties  to  come to a fair and amicable settlement  of  the dispute.  See The Bata Shoe Co. (P) Ltd. v. D. N. Ganguly  & Ors.(1)  and (ii) a written agreement between  employer  and workman   arrived  at  otherwise  than  in  the  course   of conciliation proceeding. For the validity of the second category of settlement, it is essential that the parties thereto should have subscribed to it  in the prescribed manner and a copy thereof should  have been  sent  to an officer authorised in this behalf  by  the appropriate Government and the Conciliation Officer. The   consequences  of  the  aforesaid  two  categories   of settlement wh ich are quite distinct are set out in  section

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18 of the Act which reads as under               "18. (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. (1) [1961] 13 S.C.R.308. 17-277 SCI/78 542 (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 proceeding 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 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  proceeding 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 are 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  bare perusal of the above quoted section would show  that whereas  a  settlement arrived at by agreement  between  the employer  and  the workmen 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 clauses (b), (c) and (d) of sub-section (3)  of  section 18 of the Act.  We are  fortified  in  this conclusion by a decision of this Court in Ramnagar Cane  and Sugar Co. Ltd. v. Jatin Chakravorty & Ors. (1) where it  was held as follows               "When an industrial dispute is thus raised and               is decided either by settlement or by an award               the  scope  and  effect of  its  operation  is               prescribed by s. 18 of the Act.  Section 18(1)               provides  that  a  settlement  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; whereas S. 18(3) provides  that               a  settlement  arrived at. in  the  course  of               conciliation  proceedings  Which  has   become               enforceable  shall  be  binding on  all  the               parties  specified in cls. (a), (b), (c),  and               (d)  of sub-s. (3).  Section 18 (3) (d)  makes               it clear that, where a party referred (1) [1960] 3 S.C.R. 960. 543               to  in cl. (a) or (b) is composed of  workmen,               all   persons   who  are   employed   in   the

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             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, would be bound by  the               settlement.  . . . . . . In order to bind  the               workmen  it is not necessary to show that  the               said workmen, belong to the Union which was  a               party  to the dispute before the  conciliator.               The  whole  policy of s. 18 appears to  be  to               give  an extended operation to the  settlement               arrived  at  in  the  course  of  conciliation               proceedings, and that is the object with which               the  four categories of persons bound by  such               settlement  are  specified in s. 18  ,  sub-s.               (3)." Similar  view  seems to have been held by  another  Division Bench of this Court in The Jhagrakhan Collieries (P) Ltd. v. Shri  G. C. Agarwal, Presiding Officer,  Central  Government Industrial Tribunal-cum-Labour Court, Jabalpur & Ors.(1) The   legal  position  emerging  from   the   aforementioned provisions of the Act being clear, we now proceed to  tackle the questions set out above. As  the  first two questions are inseparably linked  up,  we propose  to deal with them together.  Although, prima  facie there  seems to be considerable force in the  Sangh’s  stand that paras 2.3, 3.1, 3.2 and 3.3 of the aforesaid  agreement of December 14, 1973 arrived at between the Employees’ Union and  the appellant Company related only to the  special  pay and  did not cover the Sangh’s demand for Variable  Dearness Allowance  linked to the Ahmedabad cost of living index,  we do  not consider it necessary ;to go into this question,  as the  said  agreement not having been arrived at  during  the course of a conciliation proceeding, it could not, according to  section  18(1) of the Act bind any one  other  than  the parties  thereto.  A fortlori, the fact that the  Employees’ Union  which  hod  been duly recognised under  the  Code  of Discipline  arrived  at  the aforesaid  agreement  with  the appellant Company would not operate as a legal impediment in the   way  of  the  Sangh (which was  not  a  party  to  the agreement)to  raise a demand or dispute with regard  to  the Variable  Dearness  Allowance linked to  Ahmedabad  cost  of living index  or affect the validity of the reference by the Government or the jurisdiction of the Industrial Tribunal to go into the dispute.  The conclusion  that a minority  union can  validly raise an industrial dispute gains support  from section 2(k) of the Act which does not restrict the ambit of the  definition of ’industrial dispute to a dispute  between an employer and a recognised majority union but takes within its  wide sweep,any dispute or difference  between  employer and  workmen including a minority union of workmen which  is connected   with  employment  or  terms  of  employment   or conditions of labour of workmen as well as the  observations made  by  this Court in M/s.  Dharampal  Premchand  v.  M/s. Dharampal Premchand (Saughandhi) (1)  [1975] 3 S.C.C.613. (2)  [1965] 3 S.C.R.394 544 It  may also be relevant to mention in this connection  that both  the counsel for the Employees’ Union and  the  counsel for  the  appellant Company admitted before  the  Industrial Tribunal that the aforesaid agreement had been terminated by two  months’ notice (See p. 39 of the Industrial  Tribunal’s Award).   We have, therefore, no hesitation in holding  that neither  the Sangh was precluded from raising the demand  or

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the dispute, nor was the Government debarred from making the reference nor was the Industrial Tribunal’s competence to go into the dispute and make the award affected in any  manner. The first two questions are decided accordingly. Re  :  Question  No.  3 :-This question  is  no  longer  res integra.   In Jhagrakhan Collieries (P) Ltd. v. Shri  G.  C. Agarwal,  Presiding Officer, Central  Government  Industrial Tribunal-cum-Labolur   Court,   Jabalpur  &   Ors.   (supra) Sarkaria,  J.  speaking  for the  Bench  observed  that  "an implied  agreement  by acquiescence, or by conduct  such  as acceptance  of  a benefit under an agreement  to  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 subsection (1) or  under  sub-section (3) of section 18.  It follows, therefore,’ that even if 99% of the workers have impliedly accepted the agreement arrived at by drawing V.D.A. under 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." Accordingly, the theory of implied agreement by acquiescence sought  to  be built up on behalf of the  appellant  on  the basis  of  the acceptance of the benefits flowing  from  the agreement  even by the workmen who were not  signatories  to the  settlement is of no avail to the appellant Company  and cannot  operate  as  an estoppel against the  Sangh  or  its members. Re  :  Question No. 4 : It is a matter of  common  knowledge that  the spiral of prices has been constantly  rising,  and the  basket of goods and services has been costing more  and more  day after day since the outbreak of the  Second  World War in September, 1939.  It is equally well known and indeed is  not  disputed that in the relevant years the  prices  of essential  commodities  and cost of living  have  been  com- paratively  higher at Mithapur that at other places  in  the districts like Jamnagar, Dharangadhra, Porbandar,  Bhavnagar etc.  and  the appellant Company had  not  been  maintaining uniform standard of Dearness Allowance, and had been  paying higher Dearness Allowance to the workmen in its Head  Office at  Bombay than to its workmen at Mithapur.  The  statistics extracted from various annual reports etc. exhibited in the case  particularly  Exhibit  13(6)  go  to  show  that   the appellant Company which, was established more th in 40 years ago besides being a highly integrated chemical complex based on  the  solar  evaporation ’of sea water in  India  is  the largest  solar salt producing concern in the country.   ’The statistics also show that production of soda ash in  diverse forms  by  the appellant Company for the relevant  years  is considerably higher than the combined production of soda ash of  Dharangadhra Chemicals and Saurashtra Chemicals-the  two other  concerns  in the Saurashtra region.   The  statistics also establish that there is no other 545 heavy   Chemicals  Concern  in  the  region  which  can   be favorably compared to the appellant Company in so far as the nature,  and extent of business, capital outlay,  percentage of  gross  and  net  profits,  strength  of  labour   force, reserves,  dividends  on Equity Share  prospects  of  future business are concerned.  As in Chart (Exh. 13(26) shows that the  percentage  of wages in the appellant  Company  is  the lowest   amongst   the  seven  companies   listed   therein. Considering all the relevant factors which are to be born in mind  in fixing the Dearness Allowance, it is  evident  that the  appellant  Company  holds a unique  position  in  heavy chemicals in the region.  It is in these circumstances  that the  Industrial Tribunal was constrained to turn to  similar

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industries  in  Gujarat  and  found  in  the  light  of  the aforesaid  guiding factors that Sarabhai  Chemicals,  Baroda was  the nearest similar industry which  could  legitimately serve   as  a  comparable  concern.   The  statistics   also establish  that  besides Sarabhai  Chemicals,  Baroda,  Anil Starch,  Ahmedabad, Alembic Chemicals Works,  Baroda,  Attul Products,  Bulsar  and Ahmadabad  Manufacturing  and  Calico Printing  Co. Ltd. which are included in the list  of  heavy chemical  factories  covered by the Wage Board  were  paying 100%  of Textile Dearness Allowance to its workmen.   It  is also evident from Exhibit 23 that the total pay packet  paid to Mithapur ,workers was much less as compared to the  total pay   packet   of  the  workers  in   other   chemical   and pharmaceutical  companies  alluded to in  Exhibit  23.   The material  on the-record also makes it abundantly clear  that the appellant  Company has been making huge profits over the years and its financial position is so stable that it  could not  only give Variable Dearness Allowance on the  basis  of what  was being paid to the workmen in the Textile  Industry but could pay even higher allowance as was being paid to its workmen  in  the Head Office at Bombay.  The  Tribunal  was, therefore,  justified in linking the  Dearness-Allowance  in ,question  to  the Textile Dearness Allowance  paid  to  the industrial workers at Ahmedabad which is based on the Report of   Family  Living  Survey  among  industrial  Workers   at Ahmedabad,  1958-59,  complied  as a  result  of  the  joint investigation carried on in a rational and scientific manner by  several  institutions viz.  Labour Bureau,  Ministry  of Labour   &  Employment.   Government  of  India,    clinical Advisory   Committee  on  Cost  of  Living   Index   Numbers consisting  of representatives of the Ministry of  Labour  & Employment,   Food   and   Agriculture   Finance,   Planning Commission,  the  National Sample  Survey  Directorate,  the Department  of  Statics  (C.S.O),  the  Indian   Statistical Institute and the Reserve Bank of India etc. leading to  the construction of Consumer Price Index Number for the  working class  which  was  accepted as reliable  by  this  Court  in Ahemedabad Mill Owners Association etc.v.The Textile  Labour Association.(1)  We  are,  therefore, of  the  opinion  that notwithstanding the implementation of he recommendations  of the  Wage Board, there was nothing wrong a )out the  linking of the scheme of the Dearness Allowance with the Ahemedabad Cost  of  Living  Index ,Number known  as  Textile  Dearness Allowance as before the revision in 1974. Re : Question No. 5 : This takes us to determination of  the last (1)  [1966] 1 S.C.R. 382. 546 question.  The decision of this Court in Bengal Chemical and Pharmaceutical works Ltd. and Its Workmen & Anr(1) no  doubt shows  that  in ,fixing wages and  Dearness  Allowance,  the Industry  cum-region  formula is inter alia to  be  kept  in view.   At  the same time, it has to be borne in  mind  that there  can  be  no comparison  between  a  small  struggling concern and a large flourishing unit.  It follows therefore, that  when  there  is  a large  disparity  between  the  two concerns  engaged in the same line of business in a  region with  which the industrial Court is dealing is  not safe  to fix  the same wage structure for the large flourishing  con- cern  of  long  standing as obtains in  a  small  struggling concern.  (See  French  Motor Car  Company  Ltd.  and  Their Workmen(2).   It cannot also be lost sight of that with  the march of time, the narrow concept of Industry-cum-Region  is fast charging and too much importance cannot be attached  to region.   The  modem trends in industrial law  seem  to  lay

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greater accent on the similarity of industry rather than  on the region.  It was observed by this Court in Workmen of New Egerton  Woollen  Mills  and New  Egerton  Woollen  Mills  & Ors.(3)  that where there are no comparable concerns in  the same  industry  in  the region, the  Tribunal  can  look  to concerns  in other industries in the region  for  comparison but  in  that  case. such concern should be  as  similar  as possible  and  not disproportionately  large  or  absolutely dissimilar.  On the parity of reasoning, it is reasonable to conclude that where there are no comparable concerns engaged in similar industry in the region, it is permissible for the Industrial  Tribunal  or  Court  to  look  to  such  similar industries  or industries as nearly similar as  possible  in adjoining  or  other  region in  the  State  having  similar economic conditions. As  in  the  instant case there was  no  comparable  concern engaged  in   the line of business similar to that  of  the appellant  Company in the Surashtra region,  the  Industrial Tribunal.  did  not,  in our opinion, commit  any  error  in taking into consideration for the purpose of comparison ,the Dearness  Allowance  paid by Sarabhai  Chemicals  and  other concerns  ,-of  the like or approximately Eke  magnitude  in other parts of the State of Gujarat.  For the foregoing reasons, we do not find any force in this appeal  which  is  dismissed with costs  quantified  at  Rs. 2,000/-.                                   Appeal dismissed, P.H.P. (1)  [1969] 1 L.L.J. 751, 758 (2)  [1962] 2 L.L.J. 744. (3)  [1969] 2 L.L.J. 782. 547