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PETITIONER: TATA ENGINEERING & LOCOMOTIVE CO. LTD.

       Vs.

RESPONDENT: THEIR WORKMEN

DATE OF JUDGMENT16/10/1981

BENCH: KOSHAL, A.D. BENCH: KOSHAL, A.D. ERADI, V. BALAKRISHNA (J) MISRA, R.B. (J)

CITATION:  1981 AIR 2163            1982 SCR  (1) 929  1981 SCC  (4) 627        1981 SCALE  (3)1587  CITATOR INFO :  RF         1986 SC1830  (60)

ACT:      Industrial  Disputes  Act,  1947-Section  18(1)-Workmen signed a  settlement-Union claimed  that the declaration was forged and  fictitious-Burden of proof on whom lay- Workmen, if could claim the settlement was unjust and unfair.

HEADNOTE:      In conciliation  proceedings in relation to the demands of one of the two unions (known as Sanghatana) of workers of the appellant-company  a  settlement  wat  reached.  At  the instance  of  the  second  union  (Telco  Union)  which  was dissatisfied with  the settlement,  the Government  referred the dispute to the tribunal. Before the tribunal the company contended that  since 564  out of 635 daily rated workers to whom the  settlement reached  by the Sanghatana related, had assented to it, the dispute no longer survived.      Rejecting the  Telco Union’s  is  contention  that  the settlement  was   vitiated  by  duress,  coercion  or  false promises, the  tribunal held  that it  was  binding  on  the parties under  section 18 (1) read with section 2 (p) of the Industrial Disputes Act. The tribunal, however, held that it had not  been proved  by either  party as to how many of the 564 workmen,  who  had  assented  to  the  settlement,  were members of  the Sanghatana. Although the tribunal found that the settlement  was just  and fair  in most  aspects it held that an  increase in  the additional  daily wages was called for in  respect of  certain categories  and  calculated  the increase separately  for each grade. The tribunal refused to act upon the settlement.      Allowing the appeal, ^      HELD: The  declaration signed  by 564  workers  of  the company constituted  presumptive proof  of the fact that the signatories to  it were  all members  of the Sanghatana when they signed  it. In  the absence of any evidence that any of the signatories  to the  declaration was  not one of the 635 workers or  that any  signature appearing in the declaration was forged  or fictitious  the assertion  of each  signatory that he  was a member of the Sanghatana is to be presumed to

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be correct  until it is shown to be false. The onus to prove the falsity  of the  assertion in the case of any particular workman rested  on the  Telco Union which made no attempt to discharge the  burden. Out  of 635  workmen, 564  signed the declaration. The  fact that  400 workmen later on challenged the settlement only leads to the inference that at least 329 workmen changed sides afterwards.                                              [932 H; 933A-C] 930      The conclusion  of the tribunal that the settlement was not just  and fair  is unsustainable.  The settlement  as  a whole was  just and fair. If the settlement had been arrived at by  a vast  majority of  the concerned workmen with their eyes open  and was accepted by them in its totality, it must be presumed to be just and fair and not liable to be ignored while deciding  the reference  merely because a small number of workers were not parties to it or refused to accept it or because the  tribunal was  of the  opinion that  the workers deserved marginally  higher emoluments  than they themselves thought they  did. The question whether a settlement is just and fair  has to  be answered  on the  basis  of  principles different from those which come into play when an industrial dispute is under adjudication. [933 G-H]      Herbertsons Limited v. Workmen of Hetbertsons Limited & others, [197-/] 2 S.C.R. 15 followed.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1484 of 1971.      Appeal by  special leave  from the Award dated the 1971 of the Industrial Tribunal Masharashtra, Bombay in Reference No.  I.T.   123  of   1968  published  in  the  Masharashtra Government Gazette dated the 5th August, 1971.      M.C. Bhandare  and Dr.  Y.S. Chitale, O.C. Mathur, K.J. John and J.S. Sinha, for the Appellant.      Jitendra Sharma  and Janardan Sharma for Respondent No. 1.      K. Rajendra Choudhary for Respondent No. 2.      The Judgment of the Court was delivered by      KOSHAL, J.  This is  an appeal by special leave against an award  dated 30th April, 1971 of the Industrial Tribunal, Masharashtra (the Tribunal, for short), deciding a reference made to  it under  clause (d) of sub-section I of section 10 of the  Industrial Disputes Act (hereinafter called the Act) requiring adjudication  of demands  raised by the workmen of the  Tata   Engineering  and   Locomotive  Company   Limited (Machine Tools Division), Chinchwad (hereinafter referred to as the company).      2. The  facts leading to this appeal may be briefly set out. The  Company came  into existence under an order passed by the  High Court  of Masharashtra  on the  27th June, 1966 directing amalgamation  of two  pre-existing  concerns,  one having the same name as the Company and another known as the Investa Machine 931 Tools and  Engineering  Company.  After  the  amalgmation  a section A  of the workers of the Compay formed a union known as Telco Kamgar Union (for short, the Telco Union) which was registered as  such on  the 2nd  June, 1967, but which, even before that,  submitted a  charter of demands to the Company on the  I st  May, 1967.  Subsequently other  workers of the Company established  another union  named the  Telco  Kamgar Sanghatana  (hereinafter   called  the   Sanghatana)   which

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presented another  set of demands to the Company on the 29th September, 1967.  A settlement  was reached  in conciliation proceedings in  relation to the demand last mentioned on the 3rd october,  1967. Being  dissatisfied with the attitude of the Assistant  Labour Commissioner,  Poona who  acted as the Conciliation officer,  the Telco  Union approached the State Government  who   made  the  reference  culminating  in  the impugned award.      3. The  reference was  received by  the Tribunal on the 22nd March,  1968 and  was pending adjudication when, on the 18th  February,  1970,  the  Company  filed  in  application (Exhibit C-10) stating that a settlement (Exhibit C-10A) had been reached  between it  and  the  Sanghatana  on  the  7th February 1973, that the same had been assented to by 564 out of  635   daily-rated  workmen,  that  the  dispute  pending adjudication  before  the  Tribunal  related  only  to  that category of workmen and that it did not survive by reason of the settlement.      Settlement Exhibit  C-10A was  challenged by  the Telco Union through  an application  (Exhibit  U-1)  made  to  the Tribunal on  the 14th  April, 1970  and signed by 400 daily- rated workmen who professed to be members of that Union with the allegation  that it  had been brought about by coercion, duress and false promises.      In these  circumstances, the  Tribunal addressed itself to the controversy regarding the legality and binding nature of the settlement. In that behalf its findings were:      (a)  There was  no evidence  of  the  settlement  being           vitiated  by   any  duress,   coercion  or   false           promises. It  was, therefore, both legal and fully           binding on  the parties, thereto under sub-section           (I) of  section 18 read with clause (p) of section           2 of the Act.      (b)  No attempt  had been  made by  either party to the           reference to  prove as  to how  many  of  the  564           workmen 932           who had assented to the settlement were members of           the Sanghatana.      (c)  Those of  the 564  workmen aforesaid  who were not           members of  the Sanghatana  were not  bound by the           settlement in  as much  as they  were not  parties           thereto  but   had  ratified   or   accepted   the           settlement only  after it  had been  reached;  and           such ratification  and acceptance  does  not  make           them parties to the settlement for the purposes of           the Act.      The Tribunal,  therefore, proceeded to find out whether the settlement was just and fair and although it found it to be so  in most  aspects, it  was  of  the  opinion  that  an increase in  the additional  daily wage  was called  for  in respect of each of the 7 grades of daily rated workmen. That increase was  calculated by it separately for each grade and varies from Rs. 7.80 to Rs. 12.90 per month. By the impugned award it  declared accordingly,  refusing to  act  upon  the settlement although the same had been held by it to be legal and binding on the parties to it.      4.   After hearing  learned counsel for the parties, we have come  to the  conclusion that finding (b) above set out cannot be  sustained. It  is not disputed before us that the settlement dated  7th February,  1970 was arrived at between the Company  on the one hand and the Sanghatana on the other and also  that it was assented to by the said 564 workmen by means of  a document  (Exhibit S-8) bearing their signatures underneath a declaration which reads:

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         "We, the following workers, who are members of the      Telco Kamgar  Sanghatana, hereby  sign individually  on      the settlement,  which has  been agreed upon and signed      under Section  2 (p)  of the  Industrial Disputes  Act,      1947. The  terms and  conditions of  the settlement are      acceptable to me and are binding on me."                                         (emphasis supplied).      It is  no body’s  case that  any of  the signatories to this declaration was not one of the said 635 workers or that any of  the signatures  appearing underneath the declaration was forged  or fictitious.  And if that be so, the assertion by each signatory to the declaration that he was a member of the Sanghatana  has to  be  taken  at  its  face  value  and presumed to  be correct  until it  is shown to be false. The Onus 933 to prove  the falsity  of the  assertion in  the case of any particular A  workman thus rested heavily on the Telco Union but it  made no  attempt to  discharge the same. It has been urged on  its behalf that the very fact that 400 workmen had challenged the  settlement claiming  to be  members  of  the Telco Union showed that the declaration made earlier was not correct. Now  it is true that out of a total of 635 workmen, 564 signed  the declaration  and later on 400 challenged the settlement. The  only reasonable  inference to be drawn from that circumstance  would, however,  be  that  at  least  329 workers changed  sides in  between the 18th of February 1970 and  the   14th  of   April,  1970.  lt  cannot  be  further interpreted to mean, in the absence of any other evidence on the point,  that the  declaration, when  made, was false. In this view  of the  matter we  must hold that the declaration constitutes  presumptive   proof  of   the  fact   that  the signatories to  it were  all members  of the Sanghatana when they signed it.      5. The correctness of finding (a) has not been assailed before us  on behalf  of either  party and  in view  of  the provisions of  sub- L)  section (1) of section 18 of the Act that finding must be upheld so that settlement dated the 7th February 1970  would be  binding on  all  workers  who  were members of  the Sanghatana as on that date including the 564 workers who signed the declaration. Consequently finding (c) which is unexceptionable in so far as it goes, loses all its relevance and we need take no further notice of it.      6. The  conclusion reached  by the  Tribunal  that  the settlement was  not just and fair is again unsustainable. As earlier pointed  out, the  Tribunal itself  found that there was nothing wrong with the settlement in most of its aspects and all  that was  necessary was  to marginally increase the additional daily  wage. We  are clearly  of the opinion that the approach  adopted by  the Tribunal  in dealing  with the matter was  erroneous. If the settlement had been arrived at by a  vast majority of the concerned workers with their eyes open and  was also aecepted by them in its totality, it must be presumed to be just and fair and not liable to be ignored while deciding  the reference  merely because a small number of workers  (in this case 71, i.e., 11.18 per cent) were not parties to  it or  refused to  accept  it,  or  because  the Tribunal was  of  the  opinion  that  the  workers  deserved marginally higher  emoluments than  they themselves  thought they did.  A settlement  cannot be  weighed  in  any  golden scales and  the question  whether it is just and fair has to be answered  on the basis of principles different from those which come into play when an 934 industrial dispute is under adjudication. In this connection

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we cannot  do better  than quote extensively from Herbertson Limited v.  Workmen of  Herbertson  Limited  and  Others,(1) wherein Goswami, J., speaking for the Court observed.           "Besides, the  settlement has  to be considered in      the light  of the  conditions that were in force at the      time of  the reference. It will not be correct to judge      the settlement  merely in  the light of the award which      was pending  appeal before  this Court.  So far  as the      parties are  concerned there will always be uncertainty      with regard  to the result of the litigation in a Court      proceeding. When,  therefore, negotiations  take  place      which  have  to  be  encouraged,  particularly  between      labour and  employer, in  the interest of general peace      and well  being there  is always  give and take. Having      regard to  the nature  of the dispute, which was raised      as far  back as 1968, the very fact of the existence of      a litigation  with regard  to the same matter which was      bound to  take some  time must have influenced both the      parties to  come to some settlement. The settlement has      to be  taken as  a package  deal and  when  labour  has      gained in  the matter  of wages  and if  there is  some      reduction in the matter of dearness allowance so far as      the award  is concerned,  it cannot  be said  that  the      settlement as a whole is unfair and unjust.      ...  ...  ...  ...  ...  ...  ...  ...  ...  ...           We  should   point  out   that   there   is   some      misconception  about  this  aspect  of  the  case.  The      question of adjudication has to be distinguished from a      voluntary settlement.  It is  true that  this Court has      laid  down   certain  principles  with  regard  to  the      fixation of dearness allowance and it may be even shown      that if  the appeal  is heard  the said principles have      been correctly  followed in  the award.  That, however,      will be  no answer  to the parties agreeing to a lesser      amount  under   certain  given  circumstances.  By  the      settlement, labour has scored in some other aspects and      will  save   all  unnecessary   expenses  in  uncertain      litigation. The settlement, therefore, cannot be judged      on the  touch-stone of  the principles  which are  laid      down by this Court for adjudication. 935           There may  be several  factors that  may influence      parties to  a settlement  as a  phased endeavour in the      course of  collective bargaining.  Once  cordiality  is      established between the employer and labour in arriving      at a settlement which operates well for the period that      is in  force, there  is always  a likelihood of further      advances  in   the  shape  of  improved  emoluments  by      voluntary settlement  avoiding friction  and  unhealthy      litigation. This  is  the  quintessence  of  settlement      which  courts   and  tribunals   should  endeavour   to      encourage. It  is in  that spirit the settlement has to      be  judged   and  not   by  the  yardstick  adopted  in      scrutinising an  award in  adjudication.  The  Tribunal      fell into  an error  in invoking  the  principles  that      should  govern  in  adjudicating  a  dispute  regarding      dearness allowance  in judging  whether the  settlement      was just and fair.      ... ... ... .... .... .... .... ... ... ... ... ...           It is  not possible to scan the settlement in bits      and pieces  and hold some parts good and acceptable and      others bad.  Unless it  can be  demonstrated  that  the      objectionable  portion   is  such  that  it  completely      outweighs all  the other  advantages gained  the  Court      will be slow to hold a settlement as unfair and unjust.

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    The settlement  has to  be accepted  or rejected  as  a      whole and  we are  unable to  reject it  as a  whole as      unfair or  unjust.  Even  before  this  Court  the  3rd      respondent representing  admittedly the  large majority      of the workmen has stood by this settlement and that is      a strong  factor which  it is  difficult to  ignore. As      stated elsewhere  in the  judgment, we  cannot also  be      oblivious of  the fact  that all workmen of the company      have accepted  the settlement.  Besides, the  period of      settlement has  since expired  and we are informed that      the employer  and the  3rd respondent  are  negotiating      another settlement  with  further  improvements.  These      factors, apart from what has been stated above, and the      need for  industrial peace  and harmony  when  a  union      backed by  a large  majority of  workmen has accepted a      settlement in  the course of collective bargaining have      impelled us not to interfere with this settlement."      The principles  thus enunciated  fully govern the facts of the  case in  hand, and,  respectfully following them, we hold that the 936 settlement dated  the 7th  February 1970 as a whole was just and fair.      7. There  is no  quarrel with the argument addressed to us on  behalf of  the workers  that mere  acquiescence in  a settlement or  its acceptance by a worker would not make him a party  to the  settlement for the purpose of section 18 of the Act  (vide Jhagrakhan  Collieries (P)  Ltd. v. Shri G.o. Agarwal, Presiding  officer, Central  Government  Industrial Tribunal-cum-Labour Court,  Jabalpur and  others, (I)  It is further unquestionable  that a minority union of workers may raise an  industrial dispute  even if  another  union  which consists of  the majority  of them  enters into a settlement with the  employer (vide Tata Chemicals Ltd. v. Its Workmen, (o), But  then here  the Company  is not raising a plea that the 564  workers became  parties to the settlement by reason of their  acquiescence in  or  acceptance  of  a  settlement already arrived  at or  a plea  that the  reference  is  not maintainable because  the  Telco  Union  represents  only  a minority  of  workers.  On  the  other  hand  the  only  two contentions raised by the Company are:-      (i)  that the  settlement is  binding on all members of           the Sanghatana  including the  564 mentioned above           because the Sanghatana was a party to it, and      (ii) that the  reference is  liable to  be answered  in           accordance with the settlement because the same is           just and fair.      And both  these are  contentions which  we  find  fully acceptable for reasons already stated.      8. In  the result  the appeal succeeds and is accepted. The impugned award is set aside and is substituted by one in conformity with the settlement. There will be no order as to costs. P.B.R.                                 Appeal allowed. 937