M/S. JAINHIND ROADWAYSversusMAHARASHTRA RAJYA MATHADI TRANSPORT AND GENERAL KAMGAR UNION AND ORS.

A                            MIS. JAINHIND ROADWAYS
                                            v.
        MAHARASHTRA RANA MATHADI TRANSPORT AND GENERAL
                    KAMGAR UNION AND ORS.

                                 SEPTEMBER 30, 2005
B
                     [ARIJITPASAYAT ANDC.K. THAKKER,JJ.]


           Industrial Disputes Act, 1947-Jndustrial Dispute-Settlement between
C employer and employee-Plea to pass award in view of settlement-Fairness
     of settlement not questioned-Plea not accepted by the Courts below-On
     appeal, held: Award to be passed in view of settlement as no issue was raised
     regarding fairness of the settlement.

           An award passed by Industrial Tribunal was challenged before High
D Court. The reference was remanded by High Court to the Tribunal holding
     that the Tribunal instead offtxing fair wages had fixed minimum wages. During
     pendency of the disputes before the Tribunal, workmen entered into
     settlements with the employers and request was made to dispose of the
     reference accordingly. The plea was opposed by the Union leaders. Tribunal
     did not accept the plea of settlement holding the same not being fair and'"fixed
E    wages which according to it were fair. Writ Petition challenging the same
     was dismissed by Single Judge of High Court holding that the settlement was
     not fair. Appeal thereagainst was dismissed by Division Bench of High Court.
     Hence the present appeals.

           Disposing of the appeals, the Court
F
           HELD: 1. There was no issue raised regarding fairness of the
     settlement. The Tribunal as well as the High Court came to conclusion without
     any material that settlements were not fair. There has to be a specific reference
     in this issue which was not there before the Tribunal and in any event no
     material was placed or any positive stand taken by any workman. [827-GI
G
           National Engineering Industries ltd. v. State of Rajasthan-and Ors.,
     [20001 1 SCC 371 and State of Uttaranchal v. Jagpal Singh Tyagi irr Civil
     Appeal No. 6505 of 2004 decided on 31st August, 2005, relied on.

           The Sirsilk ltd. and.Ors. v. Government of Andhra Pradesh and Anr.,
II                                         820
JAINHINDROADWAYSr.MAHARASHTRARAJYAMATHADITRANSPORT(PASAYAT,J.] 821

(19641 2 SCR 448 and The Stafe of Bihar v. D.N. Ganguly and Ors., (1959)          A
SCR 1191, referred to.

      2. Tribunal dealt with two cases by treating them at par with other cases
though there was no settlement in those cases. The Tribunal shall deal with
these two cases separately. [828-DI
                                                                                  B
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4377 of2005.

     From the Judgment and Order dated 16.4.2003 of the Bombay High
Court in A. No. 652 of2002 in W.P. No. 676of1999.

      With C.A. Nos. 4378, 4379, 4380, 4381, 4382, 4383, 4384, 4385, 4386, 4393, C
4394, 4395, 4396, 4397, 4401and4402 of2005.

     Vinod Bobde, L.Nageshwar Rao, Nikhil M. Sakhardande, Anand Mishra,
A.V. Palli and Ms. Rekha Palli for the Appellant.

     Dr. R.S. Kulkarni, Jamshed Bey, Parmanand Gaur and Ms. Ruby Singh D
Ahuja for the Respondents.

      Sushi! Karanjkar, Anil Padiyar and Venkateswara Rao Anumolu for
Intervenor.

      The Judgment of the Court was delivered by                                  E
      ARIJIT PASAYAT, J. All these appeals have a common matrix in a
judgment rendered by a Division Bench of the Bombay High Court dismissing
the appeals filed by the present appellants which were filed against judgments
of learned Sirigle Judge.
                                                                                  F
      Factual background needs. to be noted in brief:

       Around 1980 the All-India Transport Employees Association (in short
'association') raised dispute relating to certain general demands including
pay-scales, dearness allowance etc. In relation to employees employed with
various transporters having establishment all over India. The dispute was G
referred by the appropriate Government on 12th August, 1981 under Section
 IO(l)(d) of the Industrial Disputes Act, 1947 (in short 'the Act') for adjudication.
Initially the reference was in respect of 259 employers. Subsequently, by a
corrigendum issued on 25.2.1982 116 more employers were included in the
reference. A common award was made by the Industrial Tribunal on 12th H
    822                    SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A November, 1986. Award was challenged by some of transporters and the
    union representing some of the workmen by filing writ petitions. By common
    judgment dated I Ith November, 1992 the writ petitions were disposed of by
    the High Court remanding the reference to the Industrial Tribunal. The High
    Court found that the Tribunal instead of fixing fair wages had fixed minimum
    wages as the wages payable to the concerned workmen. When the matter was
B   taken by the Tribunal afresh, all the 28 transporters and the workmen appeared
    before the Industrial Tribunal. Two unions which are respondent nos. I and
    2 herein appeared before the Tribunal taking the stand that they were
    representing the workmen. While the matter was pending before the Indus~ial
    Tribunal it was brought to the notice of the Tribunal that the concerned
C   workmen had entered into settlements with the employer-transporters and
    request was made to dispose of the reference accordingly. This plea was
     resisted by the respondent nos. I and 2-unions. The Tribunal did not accept
    the settlement by holding as follows;

                "The settlement if arrived with coercive under influence, by fraud
D           or by corrupt practices and adopting malajide and by inducement
            then it spould be examined ...... In these settlement the basic wages are
            fixed at the rate of minimum wages as notified in 20th July 1994 giving
            increments. In these settlements there is no dearness allowance agreed
            between the workers and employer respectively. Even the demand of
            transfer subject to consultation with union has not been agreed. In
E           other words during the pendency and at the final stage of the
            proceeding these settlements have arrived and given goodbye to all
            the demands ... If these settlements are accepted then in other words
            the minimum wages are allowed to be paid. As the lordship in W.P.
            has observed that the Tribunal has to fix fair wages, and not the
F           minimum wages. The Government machinery has to fix the minimum
            wages and not the Tribunals or court of law, to fix the minimum
            wages."

         The Tribunal fixed the wages which according to it were the fair wages.
    The award was assailed by filing writ petitions in the High Court under Article
G   226 of the Constitution of India, 1950 (in short 'the Constitution').

           Before the learned Single Judge in certain cases the affidavits of the
    workers concerned were filed stating that the dispute with the employer was
    settled and they were agreeable to che wages settled under the settlement.
    The learned Single Judge, however, was of the view that the Tribunal's
H   judgment did not warrant interference as the Tribunal was bound to answer
JAINHINDROADWA YS 1•. MAHARASHTRARAJYA MATHAD! TRANSPORT[PASAYAT,J.] 823

the reference in tenns of the order of the High Court. Appeals were preferred      A
before the Division Bench. By the impugned common judgment they were
dismissed.

       In support of the appeals, learned counsel for the appellants submitted
that the approach of the Tribunal and the High Court is clearly erroneous. The
concerned workmen never questioned fairness or tenns of the settlement. The B
respondent nos. I and 2-union who had no locus standi to raise any dispute
made some suggestions in that regard. As a matter of fact, there was no
material placed before the Tribunal to show that the settlements were tainted.
It is a settled position in law that where question is raised about the fairness
of a settlement a separate industrial dispute is contemplated. In the absence C
of any material or reference the Tribunal was not justified in holding that the
settlements were not legal. The vulnerability of the Tribunal's award and the
judgments of the learned Single Judge and the Division Bench is apparent
from the fact that in respect of one transporter-employer the settlement
providing for identical scales of a wages was accepted. No reason has been
indicated by the Tribunal as to why a departure was made in the case of the D
appellants. With regard to the locus standi of respondent nos. 1 and 2 it is
pointed out that in the writ petitions before the High Court a clear plea was
taken that they had no locus standi to represent the workmen. Specific
reference was made to the following averments:

        "10. The petitioners state that none of their employees are members        E
        of either the Respondent No. I or the Respondent No. 2 nor were
        Respondents No. 1 and 2 in existence in 1981.

        11. The Petitioners state that the All India Transport Employees
        Association has ceased to exist and in the aforesaid reference, the
        Respondent No. 1 and 2 Union caused their appearance claiming to           F
        represent the employees of all the Transport Operators."

      It is pointed out in the counter-affidavit filed before the High Court the
stand of the present respondent nos. 1 and 2 can be culled out from the
following statement:
                                                                                   G
       "With reference to paragraph 1 to 11, I say that no comments are
       called out."

      In response, learned counsel for the respondent nos. I and 2 submitted
that under industrial Jaw the role of the union is clearly recognized. They
symbolize collective bargaining for the welfare of its members. It is submitted H
    824                    SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A that well recognized principle in law is that if a settlements is factually found
    to have been arrived at with coercion, undue influence or fraud or by corrupt
    practice or adopting malafides or by inducement then the Tribunal can by
    examining the factual position ignore the settlements. It is further submitted
    that the factual position clearly shows that the possibility of an adverse
B   decision may have operated as a positive force for the so-called settlement.

          The effect of settlement has been considered by this Court in several
    cases. In The Sirsilk Ltd. and Ors. v. Government of Andhra Pradesh and
    Anr., (1964) 2 SCR 448 it was observed at page 453 as follows:

            "The contention on behalf of the appellant in the alternative is this.
c           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
D           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
E           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 character of the provision contained ins. 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. 18(1 ). Ordinarily there should be no difficulty about the
F
            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 would make the award
            in accordance with the settlement."

G         Similarly in The State of Bihar v. D.N Ganguly and Ors., (1959] SCR
     1191 it was observed as follows:

            "It is, however, urged that if a dispute referred to the industrial
            tribunal under section 10(1) is settled between the parties, the only
            remedy for giving effect to such a compromise would be to cancel the
H           reference and to take the proceedings out of the jurisdiction of the
 JAINHINDROADWAYSv.MAHARASHTRARAJYAMATIIAD!TRANSPORT[PASAYAT,J.l 825

         industrial tribunal. This argument is based on the assumption that the A
        .industrial tribunal would have to ignore the settlement by the parties
         of their dispute pending before it and would have to make an award
         on the merits inspite of the said settlement. We are not satisfied that
         this argument is well-founded. It is true that the Act does not contain
         any provisions specifically authorising the industrial tribunal to record
         a compromise and pass an award in its terms corresponding to the B
         provisions of order XXIIII, r. 3, of the Code of civil procedure. But 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. We have already indicated that amicable settlements of C
         industrial disputes which generally lead to industrial peace and harmony
         are the primary objects of this Act. Settlements reached before the
        conciliation officers or boards are specifically dealt with by sections
         12(2) and 13(3) and the same are made binding under section 18. There
        can, therefore, be no doubt that if an industrial dispute before a
        tribunal is amicably settled, the tribunal would immediately agree to D
        make an award in terms of the settlement between the parties. It was
        stated before us at the bar that innumerable awards had been made
        by industrial tribunals in terms of the settlements between the parties.
        In this connection we may incidentally refer to the provisions of
        section 7(2)(b )of the Industrial Disputes (Appellant Tribunal) Act, E
         1950 (XL VIII of 1950), which expressly refer to an award or decision
        of an industrial tribunal made with the consent of the parties. It is true
        that this Act is no longer in force; but when it was in force, in
        providing for appeals to the Appellate Tribunal set up under the said
        Act, the legislature had recognized the .making of awards by the
        industrial tribunals with the consent of the parties. Therefore, we F
        cannot accept the argument that cancellation of reference would be
        necessary in order to give effect to the amicable settlement of the
        dispute by the parties pending proceedings before the industrial
        tribunal."

       Whether the settlement is tainted or unfair has to be decided if specific G
reference is made on .that aspect. In National Engineering Industries Ltd.
v. State of Rajasthan and Ors., [2000] I SCC 371 at para 24 it was observed
as follows:-

       "It will be thus seen that the High Court has jurisdiction to entertain   H
    826                   SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A         a writ petition when there is an allegation that there is no industrial
          dispute and none apprehended which could be the subject-matter of
          reference for adjudication to the Industrial Tribunal under Section 10
          of the Act. Here it is a question of jurisdiction of the Industrial
          Tribunal, which could be examined by the High Court in its writ
          jurisdiction. It is the existence of the Industrial Tribunal (sic dispute)
B         which would clothe the appropriate Government with power to make
          the reference and the Industrial Tribunal to adjudicate it. If there is
          no industrial dispute in existence or apprehended the appropriate
          Government lacks power to make any reference. A settlement of dispute
          between the parties themselves is to be preferred, where it could be
c         arrived at, to industrial adjudication, as the settlement is likely to lead
          to more lasting peace than an award. Settlement is arrived at by the
          free will of the parties and is a pointer to there being goodwill between
          them. When there is a dispute that the settlement is not bona fide in
          nature or that it has been arrived at on account of fraud,
          misrepresentation or concealment of facts or even corruption and
D         other inducements it could be the subject-matter of yet another
           industrial dispute which an appropriate Government may refer for
          adjudication after examining the allegations as there is an underlying
          assumption that the settlement reached with the help of the Conciliation
          officer must be fair and reasonable. A settlement which sought to be
E         impugned has to be scanned and scrutinized. Sub-sections (I) and (3)
          of section 18 divide settlements into two calegories, namely, ( 1) those
          arrived at outside the conciliation proceedings, and (2) those arrived
          at in the course of conciliation proceedings. A settlement which
          belongs to the first category has a limited application in that it merely
           binds the parties to the agreement but the settlement belonging to the
F          second category has an extended application since it is binding on all
          the parties to the industrial disputes, to all others who were summoned
           to appear in the conciliation proceedings and to all persons employed
           in the establishment or part of the establishment, as the case may be,
           to which the -dispute related on the date of the dispute and to all
           others who joined the establishment thereafter. A settlement arrived
G
           at in the course of conciliation proceedings with a recognized majority
           union will be binding on all workmen of the establishment, even those
           who belong to the minority union which had objected to the same.
           The recognized union having the majority of member is expected to
           protect the legitimate interest of the labour and enter into a settlement
H          in the best interest of the labour. This is with the object to uphold the
  JAINH!NDROADWAYSi'.MAHARASHTRARAJYAMATHAD!TRANSPORT[PASAYAT,J.l 827

         sanctity of settlement reached with the active assistance of the A
         Concillation Officer and to discourage an individual employee or a
         minority union from scuttling the settlement. When a settlement is
         arrived at during the conciliation proceedings it is binding on the
         members of the Workers' Union as laid down by Section 18(3)(d) of
         the Act. It would ipso facto bind all the existing workmen who are all B
         parties to the industrial dispute and who may not be, members of
         unions that are signatories to such settlement under Section 12(3) of
         the Act. The Act is based on the principle of collective bargaining for
         resolving industrial disputes and for maintaining industrial peace.
         "This principle of industrial democracy is the bedrock of the Act," as
         pointed out in the case of P. Virudhachalam v. Lotus Mills, [1998] l C
         sec 650. In all these negotiations based on collective bargaining the
         individual workman necessarily recedes to the background. Settlements
         will encompass all the disputes existing at the time of the settlement
         except those specifically left out."

      The position was recently examined in State of Uttaranchal v. Jagpal D
 Singh Tyagi Civil Appeal No. 6505 of 2004 decide on 3 lst August, 2005. It
 was held as follows:

              "Learned counsel for the appellant State submitted that there was
         nothing on record to show that there any pressure put on the
         respondent employee or that undue influence was exercised. The               E
         conclusion was arrived at without pleadings in this regard. For the
         first time in the counter affidavit filed before the High Court, stand to
         that effect was taken. Without any material to support the contention,
         the High Court held that the settlement was not proper and in order
         to frustrate the order passed by the High Court, the same was arrived        F
         at. The effect of the affidavits and the undertaking was totally ignored."

         We find there was really no issue raised regarding fairness of the
  settlement. The Tribunal as well as the High Court came to conclusions
  without any material that settlements were not fair. As noted in National
  Engineering case (supra) and State of Uttarancha/'s case (supra) there has G
· to be a specific reference in this issue which was not there before the Tribunal
  and in any event no material was placed or any positive stand taken by any·
  workman.

       In the aforesaid background the orders of the learned Single Judge and
 the Division Bench of the High Court as well as that of the Tribunal are set H
    828                    SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A aside. The Tribunal shall decide the matter within six months from the date
    of receipt of a copy of the judgment. If however, a competent person raises
    a dispute regarding fairness of the settlement within a month from today
    before the appropriate Government with a copy of our judgment the same
    shall be examined within two months from the date the dispute is raised. It
    shall take a decision whether a reference is called for. We make it clear that
B   we have not expressed any opinion on the desirability or otherwise of making
    the reference.

        Needless to say while deciding the question both on the desirability of
  making the reference or answering the reference the appropriate Government
C and the Tribunal, as the case may be, shall examine the locus standi of person
  seeking reference and/or the acceptability of the stand.

         At this juncture it is to be noted that the Tribunal dealt with the cases
    which are the subject-matter of CA Nos. 4381 and 4382 of 2005, by treating
    them at par with other cases though there was no settlement in those cases.
D   The Tribunal shall deal with these tow cases separately.

          The appeals are accordingly disposed of with no order as to costs.

    K.K.T.                                                 Appeals disposed of.