AUTOMOBILE PRODUCTS OF INDIA EMPLOYEES UNIONversusASSOCIATION OF ENGINEERING WORKERS, BOMBAY AND ORS.

            AUTOMOBILE PRODUCTS OF INDIA EMPLOYEES UNION
                                                                                      A
                                  v.
             ASSOCIATION OF ENGINEERING WORKERS, BOMBAY
                               AND ORS.
 ----                                 MARCH 27, 1990
                                                                                      B
                       [KULDIP SINGH AND P.B. SAWANT, JJ.]

                  Maharashtra Recognition of Trade Unions & Prevention of
            Unfair Labour Practice Act, 1971: Sections 10-15 and 19-Trade
            Union seeking recognition-Duty of Industrial Court-Secret ballot-
            Not the method for granting recognition.
                                                                                      c
 --                Labour Law-Trade Union-Recognition of-Matter of utmost
            interest to all workmen in the undertaking, industry and society-Mere
            satisfaction of membership qualification-No ground.

 -,>-              Practice and Procedure: Consent of parties to follow procedure
            which is against mandatory provisions of statute-Cannot cure the
                                                                                      D

            illegality.

                   The fourth respondent, a company had two factories in the State of
              Bombay. The first respondent-Union obtained a certmcate of recogni-
             tlon from the Industrial Court under section 12 of the Maharashtra E
              Recognition of Trade Unions & Prevention of Unfair Labour Practices
    ~         Act, 1971 for one of the company's undertakings. While it was acting as
             such recognised union, many of the workers claimed that they had
              resigned from the said union and formed a new union, the appelblat- ..

--- ..,
~
              Union had it registered on January 7, 1981.

                    The Appellant-Union made an application to the Industrial Court
                                                                                       F

              under Section 13(l)(ii) on October 9, 1981 for cancellation of the
              recognition of the first respondent-Union on the grond that the latter's
              membership in the undertaking had fallen below 30 per cent of the total
             strength or workmen in the undertaking for the preceeding six months .
            . The allegations were refuted by the first respondent-Union and it was G
             further contended that its membership was more than 30 per cent for
             the relevant period.

      .;;        Another application was submitted by the appellant-Union on
            March 1, 1982 for cancellation of the recognition of the first res-
            pondent-Union under Sectionl3(1)(ii) alleging that the recognition was    H

                                              177
    178                     SUPREME COURT REPORTS              [ 1990] 2 S.C.R.

    obtained by misrepresentation and/or fraud, and that it was also
A
    granted recognition by mistake. The Industrial Court rendered the
    relief in favour of the appellant-Union, but the said decision was set
    aside by the High Court, and confirmed by this Court.

          After sometime the appellant-Union moved an application under
B   ~ection 14 for being registered itself as a recognised union in place of the
    first respondent-Union on the ground that it had the largest member-
    ship of the workers in the undertaking, i.e. about 69% of the total
    strength. This claim was contested by the first respondent-Union, in its
    reply, and it was pleaded that it had a membership of 1400 workers.
    Details of membership were furnished by the parties with their plead-
    ings and an application was made by the appellant-Union to the Indust-
C   rial Conrt to hold an enquiry under section 12(2) by directing the
    Investigating Officer to verify the membership of both the Unions.

          The Industrial Court thereupon gave directions to the Investigat-
    ing Officer appointed under the Act to investigate the membership of
o   both the Union.

          While the investigation was in progress, both the Unions submit-
    ted draft proposals to the following effect:

          (1) The issue pertaining to recognition of any of the Unions be deci-
E   ded by secret ballot and the Investigating Officer be directed to conduct the
    same ballot; (2) The union which would have the majority of the votes
    would be treated as recognised trade union and the one which fails to
    get the majority would not raise any technicality or objection and (3)
    The union which fails to secure majority in the ballot would raise no
    objection for the period of three years to the union thus declared as the
F   recognised union.

           The Industrial Court directed the Investigating Officer to hold a
    secret ballot in the premises of the Company and the employees who
    were entitled to vote in the ballot were those who were on the rolls of the
    Company on July 1, 1985. A secret ballot was held and the appellant'.
G   Union secured 798 votes whereas the first respondent-Union secured 780
    votes.

          The first respondent-Union submitted objections contending that           _j-
    the cut-off date of July 1, 1985 was not correct as the employees who
    were in employment of the Company and whose services were intermit-
H   tently interrupted were not given an opportunity to exercise their votes •


                                    •
               AUTOMOBILE PRODUCTS v. ASSN. OF ENGG. WORKERS               179

     The Industrial Court disposing of the aforesaid objection, held that
                                                                                 A
     since there was an agreement between the two unions, the procedure
     adopted to grant recognition to the union under the Act was a valid one,
     and granted the reqnest of the appellant-Union for cancellation of the
     recognition of the respondent-Union under section 13(l)(VII) of the
     Act, and as a consequence of the recognition, granted recognition to the
     appellant-Union in place of the first respondent-Union under section 14     B
     of the Act, and granted the necessary certificate of recognition.

           Writ petitions were filed in the High Court under Article 227 of
     the Constitution by two workers of the first respondent-Union, contest-
     ing the aforesaid order of the Industrial Court, and they were allowed.
     The High Court relying on its earlier decision in Maharashtra General
     Kamgar Union, Bombay v. Mazdoor Congress, Bombay & Ors.,                    c
     [1983] Mah. L.J. 147, set aside the order of the Industrial Court.
>-        In the appeals to this Court on the question: whether the proce-
     dure adopted by the Industrial Court for granting recognition to the
     appellant-Union was illegal.                                                D

           Dismissing the appeals, this Court,

           HELD: 1. The order of the Industrial Court granting recognition
     under the Act to the appellant-Union by following the method of ballot
     is prima facie, illegal being in breach of the provisions of the Act. The   E
     High Court had, therefore rightly interfered with the said order. [19281

           Maharashtra General Kamgar Union, Bombay v. Mazdoor Con-
     gress, Bombay & Ors., [1983] M.L.J. 147, approved.

           2. Section 14 lays down the procedure for recognition of the other    F
     union when there is already a recognised union in the field. The condi-
     tions precedent to making such application are; (i) a period of at least
     two years must have elapsed since the day of the registration of the
     recognised union; (ii) a period of one year should have elapsed since the
     date of disposal of the previous application for recognition of such
     union; (iii) the union must have satisfied the conditions necessary for     G
     recognition specified under section 11; and in addition; (iv) its member-
     ship during the whole of the period of six calendar months immediately
     preceding the calendar month in which such application is made must
     have been larger than the membership of the recognised union; (v) the
     provisions of Section 12 (which also include the conditions specif'Ied in
     Section 19), are satisfied. If, however, the Court comes to the conclu-     H
    180                    SUPREME COURT REPORTS               [1990] 2 S.C.R.

A   sion that any of the other unions has the largest membership of emp-
    loyees and such other union has also notified to the Court its claim to be
    registered as a recognised union and that such other union also satisfies           ,,- -
    the necessary conditions, the Court will grant recognition to the other
    union. [ISSB, C-G]

B
            3. The recognition or derecognition of a union under the Act is
    n'lt a matter which concerns only the -contesting unions or its members.
    It is a matter of utmost importance to the interests of all the workmen in
    the undertaking concerned and to the industry and society in general.
    No union is entitled to be registered as a recognised union under the Act
    merely because it satisfies the membership qualification. h90D-E]
c
          4. The Industrial Court is forbidden from granting recognition to
    a union whatever its membership, if the Court is satisfied that it is
    disqualified for reasons mentioned under section 12(5) and 12(6) or does
    not satisfy the conditions mentioned in section 19. [190E]                       ___..____
D
           In the instant case what was done by the Industrial Court, was to
    permit the registration of the union as a recognised one by a method
    which was clearly alien to the Act. The Court in effect allowed the
    parties to circumvent the provisions of the Act and by adopting a simp-
    listic method directed that whoever command a majority of votes of the
E   employees voting on a particular day, would be entitled to the statuts of
    the recognised union. The Court thus ignored in particular the mandat-
    ory provisions of Sections 10, 11, 12, 14 and 19 of the Act. Not only
    that, the Court also failed to fmd out whether any of those workers who
    voted were members of any of the two unions at any time including on
    the day of the ballot. What had to be found out was the exclusive
F   membership of the contesting unions continuously over the specified
    period the overlapping membership being ignored. [191D-G]


           5. The consent of the parties to follow a procedure which is
    against the mandatory provisions of the Act, _cannot_ cure the illegality.
G   To permit the parties by consent to substitute a procedure of their own is in
    effect to permit them to substitute the provisions of the Act. [19JG, H; 192A]


          [Matter remanded to Indnstrial Court for disposal according to               y.
    law.] [192B]
H
      AUTOMOBILE.PRODUCTS v. ASSN. OF ENGG. WORKERS [SAWANT,J.J           181
                                                                          -------
          CIVIL APPELLATE JURISDICTION: Civil Appeals Nos.                      A
     1597-98 of 1988.                ·
~.        From the Judgment and Order dated 3 .3 .1988 of the Bombay
     High Court in W.P. Nos. 1409 & 1776 of 1986.
           Dr. Y~S. Chitaley and Mrs. Urmila Sirur for the Appellant.
           Ahok K. Gupta, S.J. Deshmukh, Ms. Vrinda Grover and Ms.t B
      Bina Gupta forRespondent Nos. 1to4.   .         ·
           The Judgment of the Court was delivered by
          SAWANT, J. The present appeals arise out of a battle for
     recogmtion between the rival trade unions in proceedings under the
     Maharashtra Recognit.ion of Trade Union & Prevention of Unfair             C
     Labour, Pract.ices Act, 1971 (hereinafter referred to as the 'Act').
             2. The fourth respondent-Company has two factories, one at
       Bhandup, Bombay employing about 1700 workers and the other at
       Aurangabad employing about 1000 workers. The first respondent-
     . Union, viz., the Association of Engineering Workers, Bombay              D
       obtained a certificate of recognit.ion from Industrial Court, Thane
       under Section 12 of the Act, on April 7, 1977 for the Company's under-
       taking at Bhandup. While the first respondent-Union was acting as
       such recognised union, many of the workers claimed that they had
       resigned from the said· Union and formed a new union called the
       Automobile Products of India Employee's Union which is the appel-        E
      !ant-Union and registered it on January 7, 1981 under the Trade
       Unions Act, 1926. On October 9, 1981, the appellant-Union made an
       application to the Industrial Court, Thane under Section 13(l)(ii) of
      the Act for cancellat.ion of the recognition of the first respondent-
      Union on the ground that the latter's membership in the Bhandup
       Undertaking had fallen below 30 per cent of the total strength of        F
      workmen in that Undertaking for the preceding six months. In its reply
      dated November 16, 1981, the first respondent-Union refuted the alle-
      gation in the application and contended that its membership was more
       than 30 per cent for the relevant period ..The appellant-Union on
      March 1, 1982 submitted yet another application for cancellat.ion of
      recognition of the first respondent-Union-this t.ime under Section        G
       13(1)(i) of the Act alleging that the recognition was obtained by the
      first respondent-Union by misrepresentation and[or fraud; and.that it
      was granted recognit.ion ·also by mistake. The· Industrial Court
      rendered the relief in favour of the appellant-Union. However, the
      said decision was set aside by the High Court and the decision of the
      High Court was upheld by this Court. Here ended the first skirmish.       H
    182                    SUPREME COURT REPORTS             [ 1990] 2 S.C.R.

A        3. The appellant-Union thereafter started the seconnd battle-
  this time for its own recognition under Section 14 of the Act and the
  present appeals are an outcome of the said proceedings. On July 29,             ·y
  1982, the appellant-Union filed an application under Section 14 of the
  Act for being registerd itself as a recognised union in place of the first
  respondent-Union on the ground that it had the largest membership of
B the workers ia the Bhandup undertaking, viz., 1036 out of a total of
  1700 workers, i.e., about. 69% of the total stength. The first res-             /
  pondent-Union in its reply of October 7, 1982 contested the appellant-
  Union's claim and pleaded that it had a membership of about 1400                _t..
  workers. Both the appellant-Union and ·the first respondent-Union                .,..
  furnished with their pleadings the details of their membership. On
  August 19, 1985, ·the appellant-Union made an application to the
C Industrial _Court to hold an inquiry under Section 12(2) of the Act by
  directing the investigating officer to verify the membership of both the
  Unions. On September'5, 1985, the Industrial Court gave directions to
  the Investigating Officer appointed under the Act to assist the Court,         __.......
  to investigate the membership of both the Unions ..
D
        . -'4. While the Investigating Officer was in the process of verifying
    the memberships of the two Unions, suggestions were made for decid-
    ing by secret ballot as to which of the Unions' commanded the majo-
    rity.- As per the suggestion, the first respondent-Union on December
    19, 1985 submitted a draft proposal to the Industrial Court as follows:
E
           1. The issue pertaining to recognition of any of the unions be
           decided by secret ballot and the Investigating Officer be directed
           to conduct the same ballot. :

            2. The Union which would have the majority of the votes would
F         - be treated as recognised trade union and the one which fails to
            get the majority would not raise any technicality or objection. ·

           3. The union which thus fails to secure majority in the ballot
           would raise no objection for the period of three years to the
           union thus decalred as the reeog'!ised union.
G
    The appellant-Union also submitted its draft proposal, at the same
    time, in more or less the same terms. On the same dayJ i.e.,December
    19, 1985, the Industrial Court passed an order directing the Investigat-          'r-.
    ing Officer to hold a secret ballot in the premises of the Company .
  . within 30 days from the date of the order'. The employees who were
H entitled to vote in the ballot were those who were on the rolls of the
      AUTOMOBILE PRODUCTS v. ASSN. OFENGG. WORKERS [SAWANT,J.J 183

      Company on July I, 1985, those who joined employment of the
                                                                                  A
      Company, thereafter, being disentitled to do so. Accordingly, a secret
      ballot was held on January 4, 1986. The result of the ballot showed that
      in all 1585 workers voted, but only 1578 ballot papers were valid. The
      appellant-Union secured 798 votes whereas the first respondent-Union
      secured 780 votes. The Investigating Officer submitted his report to
      the Industrial Court on January 21, 1986. On January 30, 1986, the          B
      first respondent submitted its objections contending that the cut-off
      date of July 1, 1985 was not correct as the employees who were in
)'    employment of the Company and whose services were intermittently
      interrupted were not given an opportunity to exercise their votes, and
      that there should have been a proper notification with regard to the
      date of voting so that the employees who were away could have exer-
      cised their votes. On February 10, 1986, the Industrial Court passed an     c
      order granting recognition to the appellant-Union in place of the first
      respondent-Union, under Section 14 of the Act after disposing of the
      objec.tions raised by the first respondent-Union. The Industrial Court
      held that since there was an agreement between the two unions, the
      procedure adopted to grant recognition to the union under the Act was       D
      a valid one. The Industrial Court also held that there was no substance
      in the objections of the first respondent-Union that by treating July 1,
      1985 as the cut-off date, the workers who were otherwise entitled to
      vote were deprived of their right to vote and also that the notice of the
      ballot which was given to the workers was proper one. The Industrial
      Court further granted the request of the appellant-Union for cancella-      E
      tion of the recognition of the respondent-union. under Section
      13(l)(vii) of the Act as a consequence of the recognition of the
      appellant-Union. On February 11, 1986, the Industrial Court granted
      a certificate of recognition to the appellant-Union under Section 14 of
      the Act.
                                                                                  F
            5. Against the said decision, two writ petitions were filed in the
      Bombay High Court under Article 227 of the Constitution of India,
      one, viz., Writ Petition No. 1409 of 1986 by two workers who were
      members of the first respondent-Union and the other, viz., Writ Peti-
      tion No. 1776 of 1986 by the first respondent-Union. In both the peti-
      tions, it was alleged tbat the Industrial Court had violated the provi-     G
      sions of the Act relating to the grant of recognition of the Union by
      adopting a procedure which was not sanctioned by it and which was,
-1'   therefore, illegal and invalid. Reliance was placed for this purpose on
      a decision of the Bombay High Court in Maharashtra General Kamgar
      Union, Bombay v. Mazdoor Congress, Bombay & Ors., [1983) M.L.J.
      147. The appellant-Union contested both the petitions contending that       H
    184                   SUPREME COURT REPORTS           [1990] 2 S.C.R.

    the petitioners there were estopped from challenging the procedure
A
    which was adopted by the Industrial Court by consent of the first
    respondent-Union. The High Court by its impugned decision allowed
    both the writ petitions and set aside the order of the Industrial Court
    mainly relying upon its earlier decision in Maharashtra General
    Kamgar Union, Bombay case (supra). The present appeals are
B   directed against the impugned decision passed in both the said writ
    petitions.

        6. What, therefore, falls for our consideration in these appeals is
  whether the procedure adopted by the the Industrial Court for grant-
  ing recognition to the appellant-Union was illegal. To appreciate the
  answer, it is necessary first to appreciate the object and the scheme of
c the Act. As has been stated in the Preamble of the Act, the State
  Government had appointed a committee called the "Committee on
  Unfair Labour Practices" for indentifying certain activities of
  employers and workers and their organisations which should be
  treated as unfair labour practices and for suggesting actions to be
D taken against the employers and employees or their organisations for
  engaging in such unfair labour practices. The Government, after con-
  sidering the report of the Committee, was of the opinion that to deal
  with the unfair labour practices, it was necessary among other things,
  to provide for the recognition of trade unions for facilitating collective
  bargaining, and to state their rights and obligations, to confer certain
E powers on them and to provide for certain consequences for indulging
  in unfair labour practices.

        7. It is further a common knowledge that although since long
  there was a strong demand from some sections for recognising the
  bargaining agent of the workmen by a ballot secret or otherwise, the "!
F National Labour Commission did not countenance it for certain
  obvious rasons. It was felt that the elective element would introduce
  unhealthy trends which would be injurious to the trade union move-
  ment, to industrial peace and stability endangering the interests of the
  workers, the employers and the society as a whole. It was feared, and
  from what has become almost a normal feature today, we can say
G rightly, that the elective element will encourage the growth of
  mushroom unions just on the eve of election outbidding each other in
  promising returns to the workers merely to assort supremacy and
  unmindful of the health of the industry leading eventally to unwar- '!-
  ranted industrial strife, stoppage of production and even closure of the
  establishment with a consequent loss of production and employment.
H It was, therefore, thought prudent in the interests of stable industrial
            AUTOMOBILE PRODUCTS v. ASSN. OF ENGG. WORKERS [SA WANT, J.J 185


             relations and industrial peace to evolve a mechanism whereby the
            bargaining agent on behalf of the workers will have a durable stability     A

- .....     as such agent, with a guarantee of uninterrupted loyalty of its members
            and an unquestionable representative character over a ce1tain period
            of time, That is why the concepts such as "recognised union" or
            "representive union" emerged and along with it the machinery to
            determine it. The mechanism necessarily involved a process by which         B
            the workers who claimed that they were speaking through their bar-
            gaining agent had the responsibility to maintain their support to it over
            a reasonable period of time. This could be ensured by them by con-
      )     tinuing their membership of the union over a specific period. The
            continuation of their membership of the union concerned over a
            period ensured that their association with the bargaining agent was of
            a steady and durable character and their allegiance and loyalty to it       c
            were not of a fleeting moment but were born of a proper evaluation of
            all facts. It is in the light of this background that we have to examine
            the scheme of the Act so far as it relates to the recognition and dere-
  >-        cognition of the Unions.
                                                                                        D
                  8. Chapter III of the Act deals with the recognition of unions,
            whereas Chapter IV deals with their obligations and rights. Chapter
            VI deals, among other things, with unfair labour practices on the part
            of the recognised unions and Chapter VII gives powers to Courts to
            declare certain acts of recognised unions as unfair labour practices.
            Chapter VIII gives to the Courts the power to punish and Chapter IX,        E
  ~
            to impose penalty on the recognised unions. The privileges given to
            the recognised unions and the obligations and responsibilies cast on
            them are also considerable.

      -,_         Chapter III which deals with the recognition of unions makes it
            clear in Section 10 that the said Chapter shall apply to every undertak-    F
            ing where fifty or·more employees are employed, or were employed on
            any day of the preceding 12 monthis. If the number of employees
            employed in the undertaking at any time falls below 50 continuously in
            a period of one year, the Chapter ceases to apply to such undertaking.
            Section 11 of the Chapter then states the procedure for recognition of
            union. A union which is desirous of being registered as a recognised        G
            union for any undertaking has to make an application to the Industrial
            Court for the purpose, However, for making such application, the
            Union must have not less than 30 per cent of the total number of
    ~
            employees in that undertaking as its members for the whole of the
            period of six calendar months immediately preceding the calendar
            month in which it makes the application. The Industrial Court then has      H
    186                     SUPREME COURT REPORTS                [ 1990] 2 S.C.R.

A   to dispose of the application as far as possible within three mont,.'.S from the
    date of the receipt of the application if all th,~ concerns of the under-
    taking are situated in the same local area; and in any other case, within
    four months.

         Section 12 then lays down the manner in which the Industrial
B
  Court will proceed to enquire into the application and grant recogni-
  tion. On receipt of the application, the Industrial Court has to make a
  preliminary scrutiny of it to find out that it ;,, in order. The Court then
  has to ca.use a notice to be displayed 0n the notice board of the under-
  taking for which the recognition is sought, stating therein that the
  Court intends to consider the said application on a date specified in the
c nr1tice, and also calling upon the other union or unions, if any, in the
  undertaking as well as the employers and employees affected by the
  proposal for recognition, to show cause within a prescribed period as
  to why recognition should not be granted to the applicant-union. If
  after considering the objections, if any received, and if after holding
  such enquiry in the matter as it deems fit, the Industrial Court comes
D
  to the conclusion that the applicant-union satisfies the condition stated
  in Section 11, viz., among other things, that it has a membership of not
  less than 30 per cent for the relevant period and that it also satisfies the
  conditions which are specified in Section 19 of the Act, the Court
  grants recognition to the applicant-union and issues a certificate of
  such recognition to it. On the other hand, if the Court comes to the
E conclusion that any of the other unions has the largest membership of
  employees and the said other union has notified to the Court its claim
  to be registered as a recognised union and if that other union also
  satisfies the requisite conditions of Section 11 and 19 of the Act, the
   Court has to grant recognition to the said other union. It is necessary,
   at this stage to state the conditions laid down in Section 19 which are
F necessary to be complied with by a union for recognition. Section 19,
   which appears in Chapter IV dealing with the obligations and rights of
   recognised unions, lays down that the union which seeks recognition
   under the Act has to provide in its rules the following matters, and                ---·--
   those matters have to be duly observed by it, viz., (i) the membership
   subscription of the union should not be less than fifty paise per month;
G (ii) the Executive Committee of the union must meet at intervals of not
   more than three months; (iii) all resolutions passed by the Executive
   Committee or the general body of the union have to be recorded in a
   minute book kept for the purpose; and (iv) the union's accounts have
   to be audited at least once in each financial year by an auditor
   appointed by the State Government.
H
          AUTOMOBILE PRODUCTS v. ASSN. OFENGG. WORKERS [SA WANT, J.] 187

                 Section 12 then states that at any time there shall not be more
                                                                                        A
           than one recognised union in respect of the same undertaking. The
          section also enjoins upon the Court not to recognise any union, if it is
          not satisfied that the application for its recognition is not made bona
          fide in the interest of the employees but is made in the interest of the
          employer and to the prejudice of the interest of the employees. So also
          the section mandates the Court not to recognise any union if at any           B
          time within six months immediately preceding the date of the applica-
          tion for recognition, the applicant-union has instigated, aided or
          assisted the commencement or continuation of a stike which is deemed
   1      to be illegal under the Act

                Section 13 provides for cancellation of the recognition of the
          union and suspension of its rights as a recognised union. It states that if
                                                                                        c
          the Industrial Court is satisfied after holding an enquiry in the matter
          that:

>--               (i) the union was recognised under mistake, misrepresentation
                      or fraud, or                                                      D

                  (ii) the membership of the union has for a continuous period of
                       six calendar months fallen below the minimum required
                       under Section 11 for its recognition, viz., 30 per cent of the
                       total strength of the employees; or
                                                                                        E
-.I..            (iii) the recognised un~on has, after its recognition, failed to
                       observe the conditions specified in Section 19; or

                 (iv) the recognised union is not being conducted bona fide and is
                      being conducted in the interest of employer to the prejudice
    f-.               of the interest of the employees; or                              F

                  (v) it has instigated, aided or assisted the commencement or
-~
                      continuation of a strike which is deemed to be illegal under
                      the Act; or

                 (vi) its registration under the Trade Unions Act, 1926 is cancel-      G
                      led; or

               (vii) another union has been recognised in place of the union
          recognised under the said Chapter, it would cancel its recognition.

          The Industrial Court is also given the power to suspend the rights of the     H
    188                    SUPREME COURT REPORTS             [1990] 2 S.C.R.

    recognised union for some specified period and it may not proceed to
A   cancel the recognition, if it is satisfied that the former course is in the
    circumstances, a proper one.

         Section 14 with which we are concerned then lays down the proce-
    dure for recognition of other union when there is already a recognised
B   union in the field. It states that any union can make an application for
    being registered as a recognised union in place of a recognised union
    which is already registered as such for the undertaking. Such other
    union can make an application on the ground that it has the largest
    membership of employees employed in the undertaking. The conditions
    precedent to making such application, however, are that:
c          (i) a period of at least two years must have elapsed since the day
               of the registration of the recognised union;

           (ii) a period of one year should have elapsed since the date of
                disposal of the previous application for recognised of such
D               union;

          (iii) the union must have satisfied the conditions necessary for
                recognition specified under Section 11; and in addition,

          (iv) its membership during the whole of the period of six calendar
E              months immediately preceding the calendar month in which
               such application is made must have been larger than the
               membership of the recognised union;

           (v) the provisions of Section 12 (which also include the condi-
               tions specified in Section 19), are satisfied.
F
         If, however, the Court comes to the conclusion that any of the
    other unions has the largest membership of employees and such other
    union has also notified to the Court its claim to be registered as a
    recognised union and that such other union also stisfies the necessary
    conditions, the Court will grant recognition to the other union.
G
          Section 15 provides for re-recognition of the union whose recogni-
    tion has been cancelled on the ground that it was recognised under a
    mistake or on the ground that its membership had for a continuous
    period of six calendar months fallen below the minimum required under
    Section 11, viz., belo": 30%. Such an application can be made by the
H   derecognised union after three months from the date of its derei;ogni-
AUTOMOBILE PRODUCTS v: ASSN. OF ENGG. WORKERS [SA WANT, J.J             189

tion. On such application being made, the provisions of Sectiond 11 and
12 referred to above would apply to it as they applied to an application       A
made for the union's initial recognition. However, this section also
makes it clear that if the recognition of the union had been cancelled on
ahy other ground, it cannot apply for re-recognition within a period of
one year from the date of such derecognition save with the permission of
the Court.                                                                     B

       Section 16 states that even if the recognition of union is cancelled,
it will not relieve the union or any of its members from any penalty or
liability incurred under the Act prior to such cancellation. Section 18
provides for recognition of unions for more than one undertaking.
Section 20 which appears along with Section 19, 21and23 in Chapter IV
dealing with the obligations and rights of recognised unions, among            c
other things, deals with the right of a recognised union and of such
officers and members of the office-staff and members of the recognised
union, as may be authorised by or under rules made by the State
Government. Those rights include the right:
                                                                               D
      (a) to collect sums payable by members to the union on the
      premises, where wages are paid co them;

      (b) to put up or cause to be put up a notice-board on the premises
    · of the undertaking in which its members are employed and to affix
      or cause to be affixed notice thereon;                                   E

      (c) for the purpose of the prevention or settlement of an indust-
      rial disputes-

            (i) to hold discussions on the premises of the undertaking
            with the employees concerned, or its members                       F

            (ii) to meet and discuss with the employer or any person
            appointed by him in that behalf the grievances of
            employees;

            (iii) to inspect, if necessary, any place in the undertaking       G
            where any employee is employed;

      ( d) to appear on behalf of any employee or employees in any·
      domestic or departmental enquiry.

      The section also makes it clear that it is only the recognised union,    H
    190                    SUPREME COURT Rt'PORTS            [1990] 2 S.C.R.

A when thereis one, which shall have the right to appoint its nominees to
  represent workmen on the Works Committee constituted under Section
  3 of the Indistrial Disputes Act, 1947 and it is only the recognised union
  which shall have the right to represent in certain proceedings under the .
  said Act, and that the decisions arrived at or order made in such
  proceedings shall be binding on all the employees in such undertaking,
B and to that extent the provisions of the said Act shall stand amended.
  Section 21 then states that when there is a recognised union, no
  employee in the undertaking shall be allowed to appear or act or allow
  to be represented in any proceedings relating to unfair labour practices
  specified in Items 2 and 6 of Schedule IV of the Act except through the
  recognised union. The only exception to this rule is in the case of the
C undertakings governed by the Bombay Industrial Relations Act where
  the representatives of the employees under Section 30 of that Act are
  given the special privilege. It is not necessary to deal with the other
  provisions of the Act.

         9. It is thus clear that the recognition or derecognition of a union
D under the Act is not a matter which concerns only the contesting unions
  or its members. It is a matter of utmost importance to the interests of all
    the workmen in the undertaking concerned and to the industry and
  society in general. No union is entitled to be registered as a recognised
  union under the Act merely because it satisfies the membership qualifi-
  cation. The Industrial Court is forbidden from granting recognition to a
E union whatever its membership, if the Court is satisfied that it is disqual-
  ified for reasons mentioned under Section 12(5) and 12(6) or does not
  satisfy the conditions mentioned in Section 19. A period of two years
  must further have elapsed since the registration of the recognised union,
  if there is one, before an application for recognition of a new union is
  entertained. A union whose recognition is cancelled on the ground
F specified in clause (ii) of Section 13 cannot make a fresh application for
  a period of three months, and if its recognition is cancelled on any other
  ground it cannot make a fresh application for recognition for a period of
  one year from the date of the cancellation in the latter case without the
  permission of the Court. In addition to the membership qualification,
  therefore, the Court has also to satisfy itself that the applicant-union is
G not disentitled to recognition or to apply for recognition, under the
  other provisions of the Act.

        10. As regards the membership qualification itself, the Act
  enjoins that for being recognised, the applicant-union must have firstly
  a membership of a minimum of 30 per cent of the employees of the
H und~rtaking for the whole of the period of at least six calendar months
    AUTOMOBILE PRODUCTS v. ASSN. OF ENGG. WORKERS [SA WANT. J.] 191


    preceding the month in which the application for recognition is made.
    When the applicant-union seeks recognition for itself by displacing the          A
    existing recognised union, the applicant-union has, in addition, to
    satisfy that not only it had 30 per cent of the membership during the six
    calendar months immediately preceding the calendar month in which it
    made its application, but had also a larger membership during the said
    period than the membership of the recognised union. Even with regard             B
    to membership, therefore, what has to be satisfied by the concerned
    union is not only its minimum qualifying membership but also its com-
    peting superority in it over a continuous specified period. What should
)   further be not lost sight of is the paramount fact that it is the member-
    ship of the workmen of the union over a period vouched by the relevant
    documents and not their vote on a particular day which under the Act
    gives the Union its representative character. lt is its representative           c
    character determined by such membership that gives a union a right to
    make the application for recognition. However overwhelming there-
    fore the vote may be in its favour in a ballot, it will not entitle a union to
    recognition under the Act. the recognition by ballot or by any method
    other than that laid down in the Act is, therefore, alien to the Act.            D

          11. The facts in the present case would reveal that what was done
    by the Industrial Court was to permit the registration of the union as a
    recognised one by a method which was clearly alien to the Act. The
    Court in effect allowed the parties to circumvent the provisions of the
    Act and by adopting a simplistic method directed that whoever com-               E
    manded a majority of votes of the employees voting on a particular day,
    would be entitled to the status of the recognised union. In effect,
    therefore, the Court ignored in particular the mandatory provisions of
    Sections JO, 11, 12, 14 and 19 of the Act. Not only that, but by adopting
    this method, the Court also failed to find out whether any of those
    workers who voted were members of any of the two unions at any time              F
    including on the day of the ballot. This is apart from the fact that what
    has to be found out is the exclusive membership of the contesting unions
    continuously over the specified period, the overlapping membership
    being ignored.

          12. The consent of the parties to follow a procedure which is              G
    against the mandatory provisions of the Act, cannot cure the illegality.
    For reasons which we have indicated earlier the legislature did not opt
    for the ballot as a method for determining the representative character
    of the union and laid down an elaborate procedure with necessary
    safeguards, to do so. In the circumstances, to permit the parties by
    consent to substitute a procedure of their own is in effect to permit them       H
    192                    SUPREME COURT REPORTS             [1990] 2 S.C.R.

A to substitute the provisions of the Act.

        13. Hence, we are of the view that the order of the Industrial
  Court granting recognition under the Act to the appellant-Union by
  following the method of ballot is prima facie illegal being in breach of
B the provisions of the Act. The High Court had, therefore, rightly
  interfered with the said order by relying on its earlier decision in the case
  of the Maharashtra General Kamgar Union, (supra). In the result, the
  appeals fail and are dismissed. The matter is remanded to thelndustrial
  Court for disposal according to law. It is, however, made clear that if
  there are any settlements which have been arrived at between the
  appellant-Union and the respondent-Company, they will be allowed to
C run their full course. The appellant-Union will not enter into any
  settlement during the pendency of the present proceedings and if any
  settlement is to be entered into, it should be done only with the consent
  of the respondent-Union which has not lost its recognition as.yet. There
  will be no order as to costs.                              · ·
D   N.V.K.                                                Appeals dismissed.
                                                                       /