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PETITIONER: THE SIRSILK LTD. AND OTHERS

       Vs.

RESPONDENT: GOVERNMENT OF ANDHRA PRADESH & ANOTHER

DATE OF JUDGMENT: 20/03/1963

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. GAJENDRAGADKAR, P.B. GUPTA, K.C. DAS

CITATION:  1964 AIR  160            1964 SCR  (2) 448  CITATOR INFO :  R          1968 SC 224  (2,3)  R          1973 SC2281  (18)  R          1975 SC 171  (9)  R          1978 SC 982  (7)  R          1981 SC1660  (7)  RF         1988 SC1089  (16)

ACT: Industrial Dispute-Award sent to Government by the Tribunal- Settlement  between parties thereafter-Government,  if  must publish  the  Award-Conflict between Award  and  settlement- Resolution of-Industrial disputes Act, 1947 (14 of 1947) ss. 2 (p),17,18, 19.

HEADNOTE: The facts of the three appeals are similar and the questions of  law involved are identical.  Industrial disputes  having arisen between the appellants and their workmen the disputes were   referred  for  adjudication.   After   the   Tribunal forwarded their Awards to the Government the parties in each dispute came to settlement.  Thereafter letters were sent to the  Government requesting them to withhold the  publication of  the Awards.  The Government replied that under s. 17  of the  Act it was mandatory for the Government to publish  the Awards  and they could not withhold publication.   Thereupon writ  petitions were filed before the High Court under  Art. 226 of the Constitution praying that the Government might be directed  to withhold the publication.  The High Court  held that since the provisions of s. 17 of the Act were mandatory it  was not open to the High Court to issue writs as  prayed for and rejected, the petitions.  The present appeals are by way of certificate granted by the High Court. The main contentions in the appeals were that the provisions of  s. 17 were not mandatory but were only directory and  in the  alternative that even if they were mandatory  some  via media  had  to be found in view of the conflict  that  would arise  between  an  award published under s. 17  (1)  and  a settlement  which was binding under s. 18 (1) and  therefore where  there was a settlement which was binding under s.  18 (1)  it would be open to the Government not to  publish  the award.  It was con. tended on behalf of the respondent  that

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if  the  argument of the appellants was  accepted  it  would create  a  difficult  situation in as much as  it  would  be possible  for  one party or the other to  represent  to  the Government that the settlement had been arrived at  449 as  a result of fraud, misrepresentation or undue  influence and corruption etc. Held,  that  it is clear on a reading of s. 17  and  s.  17A together that the intention behind s. 17 (1) is that a  duty is  cast  on Government to publish the award  within  thirty days of its receipt and the provision for its publication is mandatory  and not merely directory.  When an  agreement  at has  been arrived at between the parties, though not in  the course   course  of conciliation proceedings, it  becomes  a settlement  as per the definition under s. 2 (p) and  s.  18 (1) lays down that such a Settlement shall be binding on all the parties to it. If a situation like the one in the present case arises which may lead to a conflict between a settlement under s. 18  (1) and  an  award binding under s. 18 (3) on  publication,  the only  solution  is to withhold the award  from  publication. This would not in any way affect the mandatory nature of the provisions in s. 17 (1) for the Government would  ordinarily have  to  publish the award but for  the  special  situation arising in such cases. If  any  dispute  arises as to the  binding  nature  of  the settlement  on  grounds of fraud or  misrepresentation  etc. that   would  be  another  industrial  dispute,  which   the Government  may  refer  for  adjudication  and  if  such   a settlement is found not to be binding under s. 18 (1) of the Act it will always be open to the Government to publish  the Award which it had withheld. State  of  Bihar  v. D. N. Ganguly, [1959] S.  C.  R.  1191, referred to.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos.  220,  423 and 424 of 1962. Appeals  from the judgment and order dated January 12,  1960 and  August  19, 1960 of the Andhra Pradesh High  Court,  in Writ Appeals Nos. 120 and 57 of 1960. S.K.  Bose and B. P. Maheshwari, for the appellant(in C.  A. No. 220 of 1962). M.C. Setalvad, S. K. Bose and Sardar Bahadar,     for    the appellants (in C. As.  Nos. 423 & 424 of  1962). K.  R. Chaudhuri and P. D. Menon, for respondent No,  1  (in all the appeals). 450 1963.  March 20.  The judgment of the Court was delivered by WANCHOO  J.-These  three appeals on certificates  raise  the same  question and will be dealt with together.  It will  be enough  to refer to the facts of one appeal only  i.e.,  No. 220, to understand the point arising for decision, the facts in the other appeals being similar. Briefly  the  facts  in appeal No. 220  are  that  an  order referring  certain  disputes between the appellant  and  its workmen was made to the Industrial Tribunal, Andhra  Pradesh on June 6, 1956.  The tribunal sent its award to  Government in September, 1957.  Under s. 17 of the Industrial  Disputes Act,  No. XIV of 1947 (hereinafter referred to as the  Act), the award has to be published by the appropriate  government within a period of thirty days from the date of its  receipt by  the government in such manner as the  government  thinks

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fit.   Before,  however, the Government  could  publish  the award under s. 17, the parties to the dispute which had been referred  for  adjudication  came to  a  settlement  and  on October  1, 1957, a letter was written to Government  signed jointly  on  behalf  of  the  employer  and  the   employees intimating  that the dispute, which had been pending  before the  tribunal,  had been settled and a request was  made  to Government  not  to  publish  the  award.   The  Government, however, expressed its inability to withhold the publication of the award, the view taken by the Government being that s. 17 of the Act was mandatory and the Government was bound  to publish  the  award.  Thereupon the  appellants  filed  writ petitions  before  the  High Court under  Art.  226  of  the Constitution praying that the Government may be directed not to publish the award sent to it by the industrial  tribunal. The High Court held that s. 17 was mandatory and it was  not open to Government to withhold  451 publication  of  an  award  sent  to  it  by  an  industrial tribunal.   Therefore it was not open to the High  Court  to direct the Government not to publish the award when the  law enjoined  upon  it to publish it. The  writ  petitions  were thereforedismissed.There   were   then   application    for certificats  which were granted and that is how  the  matter has come up before us. The main contention on behalf of the appellants before us is that  s. 17 of the Act when it provides for the  publication of  an  award  is  directory  and  not  mandatory.   In  the alternative, it is contended that even if s. 17 is mandatory some via media has to be found in view of the conflict  that would arise between an award published under s. 17 (1) and a settlement  which  is binding under S.  18(1),and  therefore where there is a settlement which is binding tinder s.  18(1 )  it  would be open to the Government not  to  publish  the award in these special circumstance. We are of opinion that the first contention on behalf of the appellants, namely, that the publication of the award  under s.  17 (1) is directory cannot be accepted.  Section 17  (1) lays down that every award shall within a period of  thirty) days  from  the  date  of its  receipt  by  the  appropriate government  be published in such manner as  the  appropriate government  think  fit.  The use of the word  "shall"  is  a pointer to s. 17(1 ) being mandatory, though undoubtedly  in certain circumstances the word "shall" used in a statute may be equal to the word "may".  In the presentcase however it seems to us that when the word "shall" was used in s.  17(1) the intention was to give a mandate to Government to Publish the  award within the time fixed therein.  This is  enforced by  the  fact that sub-s. (2) of s. 17  provides  that  "the award  published under Sub- section (1) shall be  final  and shall not be called in question by any 452 court   in  any  manner  whatsover".   Obviously  when   the legislature  intended the award on publication to be  final, it could not have intended that the Government concerned had the power to withhold publication of the award.  Further  s. 17A  shows  that whatever power the Government  has  in  the matter of an award is specifically provided in that section, which  allows  the Government in  certain  circumstances  to declare that the award shall riot become enforceable on  the expiry  of  thirty days from the date  of  its  publication, which under s. 17 A is the date of the enforceability of the award.   Section 17-A also envisages that the award must  be published though the Government may declare in certain  con- tingencies  that it may not be enforceable.  Subsection  (2)

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of  s. 17A also gives power to Government to make  an  order rejecting or modifying the award within ninety days from the date  of its publication.  It is clear therefore reading  s. 17  and s. 17A together that the intention behind S. 17  (1) is  that a duty is cast on Government to publish  the  award within thirty days of its receipt and the provision for  its publication is mandatory and not merely directory. This however does not end the matter, particularly after the amendment  of the Act by Central Act XXXVI of 1956 by  which s.  18  (1)  was  introduced in the  Act.   Section  18  (1) provides  that a settlement arrived at by agreement  between the  employer  and workmen otherwise than in the  course  of conciliation  proceeding shall be binding on the parties  to the  agreement.  -’Settlement"  is defined in s.  2  (p)  as meaning   a  settlement  arrived  at  in  the   course   ’or 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 the appropriate Government and the conciliation  453 officer.  When such an agreement has been arrived at, though not in the course of conciliation proceedings, it becomes  a settlement  and s. 18 (1) lays down that such  a  settlement shall be binding on the parties thereto.  Further s. 18  (3) provides that an award which has become enforceable shall be binding on all parties to the industrial dispute and others. Section  19  (1)  provides  that  a  settlement  comes  into operation  on such date as is agreed upon by the parties  to the  dispute, and if no date is agreed upon, on the date  on which the memorandum of settlement is signed by the  parties to the dispute.  In the present case the settlement that was arrived at between the parties to the dispute was signed  on October  1, 1957, and as it had not fixed any date  for  its coming into force, it became operative from October 1,  1957 itself  and was binding on the parties to the agreement  who were also before the industrial tribunal and would be  bound by the award after its publication. The contention on behalf of the appellant in the alternative is this.  It is said that the main purpose of the Act is  to maintain peace between the parties in an industrial concern. Where  therefore  parties  to  an  industrial  dispute  have reached  a settlement which is binding under s. 18 (1),  the dispute between them really comes to an end.  In such a case it  is  urged  that the settlement arrived  at  between  the parties should be respected and industrial peace should  not be  allowed to be disturbed by the publication of the  award which  might be different from the settlement.  There is  no doubt  that a settlement of the dispute between the  parties themselves  is to be preferred, where it can be arrived  at, to  industrial adjudication, as the settlement is likely  to lead  to more lasting peace than an award, as it is  arrived at by the free will of the parties and is a pointer to there being goodwill between them.  Even though this may be so, we have still to reconcile the mandatory 454 character  of the provision Contained in s. 17 (1)  for  the publication of the award to the equally mandatory  character of  the binding nature of the settlement arrived at  between the  parties  as provided in s. Is  (1).   Ordinarily  there should  be  Do  difficulty  about  the  matter,  for  if   a settlement has been arrived at between the parties while the dispute  is pending before the tribunal, the  parties  would file  the  settlement before the tribunal and  the  tribunal

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would make the award in accordance with the settlement.   In the  State  of Bihar v. D. N. Ganguly (1), dealing  with  an argument urged before this Court that where a settlment  has been  arrived at between the parties, village an  industrial dispute  is pending before a tribunal, the only  remedy  for giving  effect to such a settlement would be to  cancel  the reference,  this Court observed that though the Act did  not contain   any   provision   specifically   authorising   the industrial tribunal to record a compromise and pass an award in its terms corresponding to the provisions of O. XXIII, r. 3  of’  the  Code  of Civil  Procedure,  it  would  be  very unreasonable  to assume that the industrial  tribunal  would insist  upon  dealing with the dispute on  the  merits  even after  it  is informed that the dispute  has  been  amicably settled between the parties, and there can be no doubt  that if  a  dispute before a tribunal is ambicably  settled,  the tribunal  would immediately agree to make an award in  terms of  the settlement between the parties.  In that  case  this Court  dealt  with  what would happen if  a  settlement  was arrived at while the matter was pending before the tribunal. The  difficulty  arises  in the  present  case  because  the proceedings before the tribunal had come to an end, and  the tribunal  had  sent  its  award  to  Government  before  the settlement  was arrived at on October 1, 1957.  There is  no provision in the Act dealing with such a situation’ just  as there  was  no    provision  in  the  Act  dealing  with  the situation which arose where the parties came (1) [1959] S. C.R. 1191  455 to  an  agreement while the dispute was pending  before  the tribunal.   This Court held in Ganguly’s case (1),  that  in such a situation the settlement or compromise would have  to be filed before the tribunal and the tribunal would make  an award   thereupon   in  accordance  with   the   settlement. Difficulty, however, arises when the matter has gone  beyond the  purview of the tribunal as in the present  case.   That difficulty  in  our opinion has to be resolved in  order  to avoid  possible conflict between s. 18 (1 ) which makes  the settlement arrived at between the parties otherwise than  in the course of conciliation proceeding binding on the parties and the terms of an award which are binding under s. 18  (3) on publication and which may not be the same as the terms of the settlement binding under s. 18 (1).  The only way in our view  to  resolve the possible conflict  which  would  arise between a settlement which is binding under s. 18 (1) and an award   which  may  become  binding  under  s.  18  (3)   on publication is to withhold the publication of the award once the Government has been informed jointly by the parties that a  settlement binding under s. 18 (1) has been  arrived  at. It  is true that s. 17 (1) is mandatory and  ordinarily  the Government  has  to  publish  an award sent  to  it  by  the tribunal ; but where a situation like the one in the present cases  arises  which  may  lead  to  a  conflict  between  a settlement under s. 18 (1) and an award binding under s.  IS (3)  on  publication, the only solution is to  withhold  the award  from publication.  This would not in our  opinion  in any  way affect the mandatory nature of the provision in  s. 17 (1), for the Government would ordinarily have to  publish the  award  but for the special situation  arising  in  such cases. The matter may be looked at in another way The reference  to the  tribunal  is for the purpose of resolving  the  dispute that  may have arisen between employers and  their  workmen. Where a settlement (1)  [1959] S. C. R. 1191

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456 is  arrived at between the parties to a dispute  before  the tribunal  after the award has been submitted  to  Government butbefore  its  publication, there is in fact  no  dispute left to be resolved by the publication of the award.In  such a case, the award sent to Government mayvery  well   be considered to have become infructuous and so the  Government should  refrain  from publishing Such an  award  because  no dispute ramains to be resolved by it. It is however urged that the view we have taken may create a difficulty  inasmuch as it is possible for one party or  the other to represent to the Government that the settlement has been  arrived at as a result of fraud, misrepresentation  or undue  influence or that it is not binding as the  workmen’s representative   had  bartered  away  their  interests   for personal considerations.  This difficulty, if it is a diffi- culty,  will  always  be  there  even  in  a  case  where  a settlement  has  been  arrived  at  ordinarily  between  the parties  and  is  binding under s. 18 (1),  even  though  no dispute has been referred in that connection to a  tribunal. Ordinarily,  however,  such difficulty should not  arise  at all,  if  we read ss. 2 (p), 18 (1) and 19 (1)  of  the  Act together.  Section 2 (p) lays down what a settlement is  and it  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 the appropriate  govern- ment   and   the  conciliation  officer".    Therefore   the settlement has to be signed in the manner prescribed by  the rules and a copy of it has to be sent to the Government  and the  conciliation  officer.  This should  ordinarily  ensure that the agreement has been arrived at without any of  those defects  to  which  we  have referred above,  if  it  is  in accordance  with  the rules.  Then s. 18 (1)  provides  that such  a settlement would be binding between the parties  and v. 19 (1) provides  457 that  it shall come into force on the date it was signed  or on the date on which it says that it shall come into  force. Therefore  as  soon’  as  an  agreement  is  signed  in  the prescribed manner and a copy of it is sent to the Government and  the conciliation officer it becomes binding at once  on the parties to it and comes into operation on the date it is signed or on the date which might be mentioned in it for its coming into operation.  In such a case there is no scope for any  inquiry by Government as to the bona fide character  of the   settlement  which  becomes  binding  and  comes   into operation  once it is signed in the manner provided  in  the rules  and  a  copy  is  sent  to  the  Government  and  the conciliation  officer.   The settlement having  thus  become binding   and  in  many  cases  having  already  come   into operation,  there  is  no  scope  for  any  inquiry  by  the Government as to the bona fides of the settlement.  In  such a  case in view of the possibility of conflict  between  the settlement in view of its binding nature under s. 18 (1) and an award which might become binding on publication under  s. 18 (3), the proper course for the Government is to  withhold the  award from publication to avoid this conflict.  If  any dispute  of  the nature referred to above arises  as  to  a. settlement, that would be another industrial dispute,  which the Government may refer for adjudication and if on such  an adjudication the settlement is found not to be binding under s.  18  (1)  of  the  Act it will  always  be  open  to  the Government then to publish the award which it had  withheld,

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though we do not think that such instances are likely to  be anything  but extremely rare.  We are therefore  of  opinion that  though  s. 17 (1) is mandatory and the  Government  is bound to publish the award received by it from an industrial tribunal,  the situation arising in a case like the  present is  of  an exceptional nature  and  requires  reconciliation between s. 18 (1) and s. t8 (3), and in such a situation the only way to reconcile the two provisions is to withhold  the publication of the award, as a binding 458 settlement  has  already come into force in order  to  avoid possible  conflict between a binding settlement under s.  18 (1)  and  a  binding  award under s.  18  (3).   In  such  a situation we are of opinion that the Government ought not to publish  the  award  under  s. 17 (1)  and  in  cases  where government is going to publish it, it can be directed not to publish the award in view of the binding settlement  arrived at  between the parties under s. 18 (1) with respect to  the very  matters which were the subject-matter of  adjudication under the award.  We therefore allow the appeals and  direct the  Government not to publish the awards sent to it by  the industrial  tribunal in these cases in view of  the  binding nature  of  the settlements arrived at between  the  parties under  s. 18 (1) of the Act.  In the circumstances we  order the parties to bear their own costs.                                  Appeals allowed.