G.S. DHARA SINGHversusE.K. THOMAS & ORS.

                          G.S. OHARA SINGH
A
                                  v.
                         E.K. THOMAS & ORS.

                             AUGUST 9, 1988

B          [E.S. VENKATARAMIAH AND M.M. DUTT, JJ.]

         Trade Unions Act, 1926: Sections 15 and 18 Trade Union-
    Worker resigning from membership-Whether entitled to ask for              ··'
    account and claim refund of amounts received by trade union fr.om
    management.                                                               ·'
c                                                                              '
         Civil Procedure Code.1908, Section 9.
         Central Trade Union Regulations 1938, Regulation ll(i).
         Civil suit by worker,,,....Against office bearers of Trade Union-
    Claiming refund_ of amounts received.by Union from management-
D   Maintainability of.

          The terms and conditions of service including the rates of wages
    and other allied matters were decided and settled through mutual
    negotiations between the trade union represented by respondent No. 3,
    its General Secretary and respondent No. 4, President of the Employers
E   Association. Respondent Nos. I and 2 were workers and were mem-
    bers of the trade union.

        Under an agreement entered into in October, 1973 an amount
  equivalent to IO paise out of every rupee earned by the workers was
  deducted by the management towards the gratuity fund and transferred
p to the trade union for and on behalf of the workers. Under another
  agreement a sum equivalent to IO paise per rupee in the wages of the
  workers was paid by the management to the trade union towards acci-
  dent benefit fund of which the ~orkers were the beneficiaries. The
  amounts so collected were entrusted to the petitioner, who was also the
  treasurer and custodian of these funds of the· tr~de union. The
G petitioner deposited. the amounts received by him in his personal name
  in his bank account, and no account of these amounts was rendered by
  him to the members of the trade union. He did not call any general body
  meeting and the members of the trade union could not ventilate their
  grievance regarding mismanagement of the funds.

H         In view of the aforesaid difficulty, 85 workers including Respon-
                                     258
                           G.S. DHARA v. E.K. THOMAS                        259

    dent Nos. 1 and 2 and three others resigned from this trade union on           A
    Jannary 13, 1976, and formed a separate trade onion of their own and
    registered the same under the Trade Unions Act, 1926.

           Respondent Nos. 1 & 2 and three other persons instituted five
    suits in the Munsiff Court against the petitioner and respondent No. 3
    for a decree directing the petitioner and respondent No. ,3 .to render an      B
    account of the amounts collected on their behalf from December, 1969
    towards the accident benefit fund and from October, 1973' towards the
    gratuity fund.

           The petitioner who was the President and the Treasurer of. the
    trade union resisted the suits and contended that since the plaintiffs had
    resigned and ceased to be members of the trade union they had no right
                                                                                   c
    to claim the refund of the sums due to them from out of the funds of the
    trade union and that the suits were not maintainable in the Civil Courts
    in view of the provisions of the Payment of Gratuity Act, 1972 and the
    Workmen's Compensation Act, 1923.
I
                                                                                   D
          All these suits were tried together 'and the Munsiff passed a pre-
    liminary decree against the petitioner and respondent No. 3 directing
    them to render an account of the amounts received by them, and
    further directed that each of the plaintiffs was entitled to get his propor·
    tionate share of the amount due to him from out of the total amount
    received by the petitioner and respondent No. 3.                               E

          The petitioner filed an appeal and the Additional Sub-Judge
    found that the petitioner and respondent No. 3 had received from the
    management amounts on behalf of the workmen, but held that the
    plaintiffs were not entitled to any decree at the hands of the Civil Court
    since the suits were not maintainable in view of the provisions of the         F
    Payment of Gratuity Act, 1972 and the Workmen's Compensation Act,
    1923..                   .

          Second Appeals were filed in the High Court by respondent Nos. 1
    & 2 and the High Court by-a common judgment set aside the judgment
    and decree passed by the First Appellate Court and restored the judg-          G
    ment and decree passed by the Trial Court.·

          In the appeal by Spe,cial Leave to this Court it was contended that
    the provisions of the Payment of Gratuity Act, 1972 and.the Workmen's
    Compensation Act, 1923 have debarred the filing of. the 1 suit, that
    respondent Nos. 1 & 2 could not claim the amount after resigning from          H
        260         SUPREME COURT REPORTS               [1988] Supp. 2 S.C.R.

A       the membership of the trade union as the said amounts formed part of
        the general fund of the trade union, and that only on the dissolution of
        the trade union its funds.could be distributed as per the rules of the
        trade union, and where the rules did not provide for the same, then the
        fund was liable to be distributed as per Rule ll(l) of the Central Trade
        Union Regulations, 1938.
B
              On the question: whether a member of the trade union is entitled
        to ask for an account and to claim refund of sums received by the trade
        union from the management for and on his behalf on his ceasing to be a
        member.

C             Dismissing the Special Leave Petition,

             HELD: I. The civil suits tiled by the workers-Respondent Nos. 1
        & 2 were not barred under the provisions of the Payment of Gratuity
        Act 1972 and the Workmen's Compensation Act, 1923. [264C]
D
        2. The amounts were received by the trade union from the
  employer concerned towards the gratuity and accident benefit to which
  the workers were entitled. There was no scheme drawn up by the trade
  union regarding the payment of the gratuity amount and the accident
  benefit fund received on behalf of the workmen to the workmen
  concerned. There was no agreement between the trade union and its
E members that the amount received towards gratuity .and accident
  benefit should form part of funds of the trade union. Any amount
  received for and on behalf of the members is liable to be refunded to the
  workmen concerned. [264D]

             In the instant Case, the amount which had been received on
F       behalf of Respondent Nos. 1 & 2 by the petitioner and Respondent No. 3
        had, therefore, to be refunded to them on their resignation from the
        membership of the trade union. [264E]

         3. There is no warrant for the view that only on the dissolution of.
   the trade union its funds could be distributed as per the rules of the
G trade union and that where the rules did not provide for the same, the
   fund was liable to he distributed as per Rule ll(l) of the Central Trade
  ·Union Regulations 1938. [264B]

             Balmer Lawrie Workers Union. Bombay and Anr. v. Balmer
        Lawrie and Co. Ltd. and Ors., [1985] 2 S.C.R. 492 distinguished.
    H
         G.S. OHARA v. E.K. THOMAS f:-'ENKATARAMIAH, J.l           261

      CIVIL APPELLATE JURISDICTION: Special Leave Petition                A
(Civil) No. 7506 of 1988.

     From the Judgment and Order dated 22.10.1987 of the Kerala
High Court in S.A. Nos. 527 of 1981and535 of 1?81.

     M.K. Ramamurthy, Mrs. C. Ramamurthy and M.A. Krishna-                B
murthy for the Petitioner.

     ·The Order of the Court was delivered by

      VENKATAR:AMIAH, J. The question involved in this petition is
whether a member of a trade union is entitled to ask for an account
and to claim refund of the sums received by the trade union from the
                                                                          c
management for and on his behalf on his ceasing to be a member of the
said trade union.                                             · ·

      Respondents ·1 and/2, E.K. Thomas and K.K .. S,urendran respec-
tively, were employees of a certain management which was the              D
member of the Cochin Railway Forwarding Agents Association whose
President is impleaded as Respondent No. 4 in this petition: The
management concerned was doing the business of a clearing agent in
the Cochin Harbour Terminus Railways Goods Shed. The respondents
 1 and 2 were working as head load workers. Some of the employees
working under the management concerned were members of a trade            E
union called Cochin Port Thozhilali Union (hereafter referred to as
'the trade union') whose General Secretary is impleaded as Respon-
dent No. 3 in this petition. The petitioner', G.S. Dhara Singh was the
President of the trade union. The terms and conditions of service
including the rates of wages and other allied matters relating to the
head load workers were decided and settled through mutual 'negotia-       F
tions between the trade union and Respondent No. 4. Under an agree-
ment entered into in October, 1973 an amount equivalent to 10 paise
out of every rupee earned by the workers was deducted by the man-
agement towards the gratuity fund and transferred to the trade union
for and on behalf of the workers. Under another agreement a sum
equivalent to 10 paise per rupee in the wages of the workers was paid     G
by the management to the trade union towards accident benefit fund of
which the workers were the beneficiaries. The amounts so collected
were entrusted to the petitioner, who was also the treasurer and custo-
dian of the funds of the trade union. It is alleged that the Petitioner
deposited the amounts so received by him in his personal r.ame in his
bank account. No account of the amoµnts so received by him was            H
     262       SUPREME COURT REPORTS              [1988] Supp. 2 S.C.R.

A rendered a.nd the members of the trade union found that it was not
    possible to keep control over the funds so received by the petitioner..
    The petitioner who was the President of the trade union did not call
    any general body meeting and thus the members of the trade union .
    could not ventila.te their grievance regarding the mismanagement of
    the funds received by the petitioner by democratic means. In view of
B the above difficulty faced by them 85 workers inCIUding Respondents 1
    & 2 and three others, namely, K.T. Raghavan, A.N. Joseph and K.J.
    Anthappan, resigned from the trade union on 13.1.1976 and formed a
    separate union of their own, which was registered under the Trade
    Unions Act. Thereafter Respondent Nos. 1 & 2, K.T. Raghavan,
    A.N. Joseph and K.J. Anthappan instituted five suits being Original
Ci: Suits Nos. 49 to 52 and 54 of 1977 on the file of the Munsiff, Cochin
    against the petitioner and Respondent No. 3 praying for a decree
    directing the petitioner and Respondent No. 3 to render an account of
    the amounts collected on their behalf from December, 1969 towards
    the accident benefit fund and from October, 1973 towards the gratuity ·
    at the rate of 10 paise per rupee \mder each head and to pay the
Ji) amounts due to them. Each of the plaintms in the said suits estimated
    the amount payable lei him at Rs. 3000. They also claimed f>1ture
    interest at 6 per cent per annum on the amounts found to be due to
    them till the date of payment.

        The petitioner, who was the President and Treasurer of the trade
E union took up various pleas denying his liability to render account and
  to refund the amount. One of the pleas raised by the petitioner was
  that since the plaintiffs had resigned and ceased to be the members of
  the trade union they had no right to claim the reftind of the sums due
  to them from out of the funds of the trade union and that if they
  rejoined the trade union they would be entitled for payment of
F gratuity and accident benefit when occasjon arose for payment of the
  same. He also pleaded that the suits were not maintainable in civil
  courts in view of the provisions of the Paym~nt of Gratuity Act, 1972
  and the Workmen's Compensation Act, 1923. 'On the basis of the pleas
  raised by the parties, the Trial Court framed two issues, in each of the
  suits namely, (i) whether the plaintiff could ask the petitioner and
erRespondent No. 3 to render art account of the amounts received by
  them and (ii) whether he was entitled to claim the refund of any
  amount. All the five suits were tried together and they were disposed
  of by a common Judgment dated 31.S,1979 by the learned Munsiff. By
  his judgment the Munsiff passed a preliminary decree against the
  petitioner and Respondent No. 3 directing them to render an account
H of the amounts received by them towards the accident benefit fund
             G.S. DHARA '· E.K. THOMAS [VENKATARAMIAH, J.]                  263

    from December 1969 to 16.11.1975 and towards gratuity from
                                                                                   A
    October, 1973 to 16.11.1975. The learned Munsiff further directed
    that each of the plaintiffs was entitled to get proportionate share of the
    amount due to him from out of the total amount received by the
    petitioner and Respondent No. 3. He further directed the plaintiffs to
    apply for a final decree for ascertaining the actual amount due to them
    111 accordance with the preliminary decree passed by him along with            B
    lu tu re interest at 6 per cent per annum from the date of suit tjll date of
    realization. Aggrieved by the judgment and decree passed by the
    learned Munsiff the petitioner filed two appeals in A.S. 122 of 1979
    and A.S. 124 of 1979 on the file of the Additional Sub-Judge, Cochin
    against the decrees passed by the Munsiff in favour of Respondent
    Nos. 1 and 2 respectively. After hearing the parties the learned Sub-          C
    Judge found that the petitioner and Respondent No. 3 had received
    from the management amounts on behalf of the workmen concerned
    towards gratuity and accident benefit fund but the plaintiffs were not
    entitled to the decree at the hands of the Civil Court since the suits
    were not maintainable in view of the provisions of the Payment of
    Gratuity Act, 1972 and the Workmen's Compensation Act, 1923 which              D
    provided for separate remedies. He accordingly set aside the decrees
    passed in favour of Respondent Nos. !_and 2 in the suits filed by them.
    Aggrieved by the common Judgment dated 21.8.1980 of the learned
    Additional Sub-Judge Respondent Nos. 1 and 2 filed Second Appeal
    No. 527 of 1981-F and Second Appeal No, 535 of 1981-G respectively
    on the file of the High Court of Kerala. The two second· appeals were          E
    heard together and the High Court by its common Judgment dated
    22.10.1987 set aside the judgment and decrees passed by the First
    Appellate Court and restored the judgment and decrees passed by the
    Trial Court. This Special _Leave Petition is filed by the.petitioner
    again.st the said common judgment of the High Court under Article
    136 of the Constitution of India.                                              f

           At the hearing of the Special Leave Petition the learned counsel
     for the petitioner stated and we think rightly that the ground on which
     the First Appellate Court had set aside the decrees passed by the Trial
    ·Court, namely, that the suits were barred.under the provisions of the
     Payment of Gratuity Act, 1972 and the Workmen's Compensation G
     Act, 1923 was unsustainable: But he, however, contended that since
r    the amounts had been realised by the petitioner and Respondent No. 3
     from the management under settlements which had been entered into
     through the trade union Respondents 1 and 2 could not claim the
     amount after resigning from the membership of the trade union as the
     said amounts formed part of the general fund- of the trade union '" H
    264         SUPREME COURT REPORTS               I1988] Supp. 2 S.C.K
A   which a member who had resigned had no right. The learned counsel
    further urged that since the amounts were made available to the trade
    union by the employer for the benefit of the members of the trade
    union on the happening of certain contingencies and since the resigna-
    tion from membership of the trade union was not one such contingency
    a member of a trade union who had resigned from the membership of
B   the trade union could not claim the amount. He further urged that only
    on the dissolution of the trade union its funds could be distributed as
    per the rules of the trade union and where the rules did not provide for
    the same then the fund was liable to be distributed as per rule 11(1) of
    the Central Trade Union Regulations, 1938.

C       We do not find that the petitioner is right in his contentions.
  Admittedly, the amounts were received by the trade union from the
  employer concerned towards the gratuity and accident benefit to
  which the workers were entitled. There was no scheme drawn up by
  the trade union regarding the payment of the gratuity amount and the
  accident benefit fund received on behalf of the Workmen to the work-
D men concerned. There was no agreement between the trade union and
  its members that the amount received towards gratuity and accident
  benefit should form part of funds of the trade union. Any amount
  received for and on behalf of the members is liable to be refunded to
  the workmen concerned. In the instant case the amount which had
  been received on behalf of Respondent Nos. 1 and 2 by the petitioner
E and Respondent No. 3 had, therefore, to be refunded to them on their
  resignation from the membership of the trade union. We do not find
  any tenable defence which the trade union could put forward in the
  circumstances of the case.

          On the question that the workmen concerned were entitled to
F   the amounts received on their behalf there is a concurrent finding of all
    the three courts in favour of the plaintiffs. The decision in Balmer
    Lawrie Workers' Union, Bombay and Anr. v. Balmer Lawrie and Co.
    Ltd. and Ors., [1985] 2 S.C.R. 492 is ofno assistance to the petitioner.
    In that case this Court was concerned with the validity of clause 17 of
    the Settlement, referred to therein, which read as follows:

                      "Arrears will be paid within two months from !!:e
                date of signing of the settlement. Further, the Company
                shall collect from each workman an amount equivalel)t to
                15% of the gross arrears payable to eacli employee under
                this settlement as contribution to the Union Fund and this
                Amount shall be paid to the Union within 3 days of the
         G.S. DHARA v. E.K. THOMAS [VENKATARAMIAH, J.]               265

            payment of arrears by Payee's Ale Cheque."
                                                   (emphasis added)

      The appellant in the above case which was a non-recognised
union had challenged the validity of clause 17, referred to above, on
the ground that it permitted a compulsory exaction not permitted by          B
the Payment of Wages Act from the arrears payable to the workmen.
This Court rejected the said contention since under clause 17 the
amount of 15% of the gross arrears received by the Union was to be
treated as contribution to the Union Fund and that the said clause was
a valid one.

     In the case before us the petitioner and Rdpondent No. 3 liave C
not shown that there was any such settlement between the manage-
ment and the trade union or a scheme prepared by the trade union
which was binding on the workmen under which the amounts received
towards the gratuity and the accident benefit fund on behalf of the
workmen would bec~me a part of the Union fund. '
                                                                             D
      We do not, therefore, find any ground to'interfere with the jtidg-..
ment of the High Court. This Special Leave Petition, therefore, fails
and it is dismissed.

N:V.K.                                                Petition dismissed.
                                                                             E