Bajaj Auto Limited vs State of Maharashtra & Ors

The appeal is filed to challenge the decision

given by the learned Single Judge of this Court in Writ

Petition No.2596/2011 and also the order made by the

second respondent, the Registrar appointed under the

Trade Unions Act, 1926 on 13-12-2010. The application

made by the present appellant, a company on 17-3-2007,

for cancellation of the certificate of registration granted to

respondent No.3, a Trade Union on 15-12-2003 under the

provisions of the Trade Unions Act, 1926 (hereinafter

referred to as "the Act") is rejected by the Registrar. The

order of the Registrar is confirmed by the learned Single

Judge of this Court. Both the sides are heard.

In the application made by the Trade Union,

respondent No.3 for registration it was contended that the

Trade Union was to work for the workers from all

industries of Maharashtra. The application was signed by

8 persons, who included 4 office bearers. It was informed

to the Registrar that as on the date of the application the

Trade Union had 1525 members. The applicants on the

application other than the office bearers were also

members of the Trade Union. In Schedule "A" information

was given that the members were the ex employees of the

present appellant-company. In Schedule "B" it was

informed that litigation was pending between the

members and the appellant company.

The submissions made in the present

proceeding and also which were made before the learned

Single Judge and also the Registrar show that it was

admitted for the Trade Union in the past before the

Registrar and the learned Single Judge that the Trade

Union was formed by the employees who were terminated

by the appellant-company and it was working for those

employees only.

The appellant-company had prayed for invoking

the powers given under section 10(b) of the Act and

cancel the registration certificate granted in favour

respondent No.3. The main contentions of the appellant

are as follows :-

(i) Under section 4(1) of the Act, Trade Union needs to have at least ten per cent or one hundred of the workmen, whichever is less, engaged or employed in the establishment or industry with which it is connected are the members of such Trade Union on the date of making application for registration but respondent No.3 was not having single member in employment either with the appellant-management or with other establishment on the date of registration.

(ii) In the application submitted for registration the names of only eight members were given and these eight members were former temporary employees of the appellant-company and on the date of application not a single member of the Trade Union was employed in the establishment with which the Trade Union was claiming to be connected. All the members who were said to be connected with the Trade Union were already terminated by the appellant management prior to the date of application filed for registration.

(iii) As per the provision of section 22(2) of the Act, two-third of the office bearers of the Trade Union need to be the employees actually working in the factory or establishment with which the Union claimed to be legally connected but not a single office bearer of the Trade Union was on the establishment of the appellant-company on the date of the application filed for registration. In annual returns submitted by the Trade Union for the year 2003, the total number of members was shown as 410 but in the annual returns submitted for the year 2004 the number was shown as 1525.

Many other contentions were made but the main

contention was as follows :

"Neither the office bearers nor the members of the Trade Union were engaged or employed by the appellant-company on the date of the application filed for registration."

The submissions made for the respondent -

Trade Union in this Court and also before the learned

Single Judge and before the Registrar show that the

aforesaid contentions were contested by Trade Union by

making following two contentions :-

(i) The appellant has no locus standi and the Registrar could not have entertained the application for cancellation of registration; and,

(ii) The office bearers and other members of the Trade Union were ex-employees of the appellant- company and on the date of the application filed for registration, references filed by them to challenge the orders of termination were pending and so they need to be treated as the employees for the purpose of registration of Trade Union.

LOCUS STANDI

For considering this objection of the Trade

Union the provision of section 10 of the Act needs to be

seen. The provision is as under :-

"10. Cancellation of Registration : A certificate of registration of Trade Union may be withdrawn or cancelled by the Registrar -

(a) on the application of the Trade Union to be verified in such manner as may be prescribed, or

(b) if the Registrar is satisfied that the certificate has been obtained by fraud or mistake, or that the Trade Union has ceased to exist or has wilfully and after notice from the Registrar contravened any provision of this Act or allowed any rule to continue in force which is inconsistent with any such provision, or has rescinded any rule providing for any matter, provision for which is required by section 6 ."

The learned counsel for the Trade Union placed

reliance on some observations made by the Apex Court in

the case reported as 2015 (3) LJSOFT (S.C.) 204 = 2015

(2) AIR BOM R (S.C.) 278 (R.G. D''souza vs. Poona

Employees Union & Anr). The facts of this reported case

show that the person who wanted the cancellation of the

registration was the President of the Trade Union when

the application for registration was submitted. There was

some dispute between this Trade Union and another

Union like Bhartiya Kamgar Sena and it was pending

before the Industrial Court. He contended that the

registration was obtained by fraud, mistake or

misrepresentation. In view of the facts of that matter,

following observations were made by the Apex Court at

paragraph 15.

"15. As per Section 10 of the Act, the Certificate of Registration of a Trade Union may be withdrawn or cancelled by the Registrar of Trade Union either on application of a Trade Union inviting the attention of the Registrar of Trade Unions or the Registrar may suo moto take cognizance under the said section. There is no mention in the said provision about cancellation of Registration of Trade Union on application by any other person. The said section permits the Authority to cancel the registration of the trade union if, it is obtained by fraud or mistake, but does not permit the Authority to cancel the certificate of registration if, the same is granted by mistake due to incorrect assessment or non- application of mind or mechanical act on the part of the Authority."

On the basis of the aforesaid observations the

learned counsel for the Trade Union submitted that the

point of locus standi was considered by the Apex Court

and it was held that the person not named in section 10

has no locus standi to file application under section 10 .

On the aforesaid point the learned counsel for

the appellant-company placed reliance on the decision of

the Apex Court reported as AIR 1979 SC 734 ( S.K. Gupta

v. K.P. Jain ). This case was decided by three Hon''ble

Judges of the Apex Court when the case of R. G. D''souza

was decided by two Hon''ble Judges of the Apex Court. In

paragraph 16, the Apex Court has laid down that in view

of the object behind and the wording of the Act when

(authority like Registrar or) the Court can act suo moto, it

is immaterial as to who drew the attention of the Court to

a situation which necessitated the intervention of the

(authority or the) Court. The facts of the reported case

were different but the observations made by the Apex

Court are clearly applicable for interpretation of the

provisions like provision of section 10 of the Act.

Provision of section 10(a) and (b) show that there is word

"or'' between clause (a) and clause (b) and it shows that if

it is brought to the notice of the Registrar that the

certificate was obtained by fraud or mistake or other

circumstance mentioned in clause (b) of section 10 is in

existence and the Registrar is satisfied about it then the

certificate can be withdrawn or cancelled by the Registrar.

The learned counsel for the appellant-company placed

reliance on some observations made by the learned Single

Judge of Allahabad High Court in the case reported as

2008 (118) FLR 221 (M/s. Lohia Machines (LML)

Karamchari Sangh v. Registrar, Trade Unions, State of

U.P.). In that case also the relief of quashing of the

registration certificate was claimed on the ground that the

union was not fulfilling the requirements of law. The

learned Single Judge considered the situation which will

be created due to improper registration of Trade Union.

Reliance is placed on one more decision reported as

(1979) I LLJ 448 AP ( Tirumala Tirupati Devasthanam vs

Commissioner of Labour ). The Division Bench of the

Andhra Pradesh High Court in the situation where the

employer was interested in getting cancellation of

registration made observation that it cannot be said that

the applicant had no locus standi to question the order of

registration of the union by the Registrar if it was the

contention that it was contrary to the provision of the

Trade Unions Act . In the present matter also this Court

holds that for considering the grounds raised by the

appellant-company, the Registrar was entitled to entertain

the application and so the appellant has the locus standi

in the matter. Requirements for Registration of Trade Union / for cancellation of the registration :

In the Act the procedure for registration of a

Trade Union is given and definition of Trade Union is

given in section 2(h) . The definition runs as under:

2.(h) "Trade Union" means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions:

Provided that this Act shall not affect -

(i) any agreement between partners as to their own business;

(ii) any agreement between an employer and those employed by him as to such employment; or

(iii) any agreement in consideration of the sale of the goodwill of a business or of instruction in any profession, trade or handicraft."

The aforesaid definition shows that all the

persons employed in trade or industry are included in it

and there is no restriction as such which can be found in

any other labour legislature. The object clause shows that

it is made to provide for the registration of Trade Unions

and in certain respects to define the law relating to

registered Trade Unions. These things need to be kept in

mind for the decision of the present matter.

Under the Act Registrars are appointed and

they are invested with the power of registration. Section

8 deals with registration and it runs as under :

"8. Registration.- The Registrar, on being satisfied that the Trade Union has complied with all the requirements of this Act, in regard to registration, shall register the Trade Union by entering in a register, to be maintained in such form as maybe prescribed, the particulars relating to the Trade Union contained in the statement accompanying the application for registration."

The aforesaid provision shows that subjective

satisfaction of the Registrar is involved but the action of

the Registrar is apparently administrative action. For

consideration of the matter, the Registrar is expected to

consider as to whether the Trade Union has complied with

all the requirements of the Act in regard to the

registration and no other party is expected to be heard on

that point at the time of registration. It can be said that

whether the Registrar had before him the material to

ascertain as to whether the Trade Union had compiled

with all the requirements of the Act can be looked into

subsequently under other provisions of the Act.

In sections 4 and 5 of the Act, the procedure is

laid down for making application for registration. In the

present matter there is no dispute that the description of

the eight applicants given in the application was correct.

In the proceeding filed for cancellation by the appellant-

company it is admitted that all these persons were ex-

employees of the company and so there is no need to go

into details of the requirements given under section 5 of

the Act. The provision of section 4 is as under :

"4. Mode of registration.- (1) Any seven or more members of a Trade Union may, by subscribing their names to the rules of the Trade Union and by otherwise complying with the provisions of this Act, with respect to registration, apply for registration of the Trade Union under this Act:

Provided that no Trade Union of workmen shall be registered unless at least ten per cent or one hundred of the workmen, whichever is less, engaged or employed in the establishment or industry with which it is connected are the members of such Trade Union on the date of making of application for registration:

Provided further that no Trade Union of workmen shall be registered unless it has on the date of making application not less than seven persons as its members, who are workmen engaged or employed in the establishment or industry with which it is connected.

(2) Where an application has been made under sub- section (1) for the registration of a Trade Union, such application shall not be deemed to have

become invalid merely by reason of the fact that, at any time after the date of application, but before the registration of the Trade Union, some of the applicants, but not exceeding half of the total number of persons who made the application, have ceased to be members of the Trade Union or have given notice in writing to the Registrar dissociating themselves from the application."

Section 4 shows that at least 7 members of a

Trade Union need to sign on the application which is to be

made to the Registrar. The first proviso to section 4 shows

that it needs to be shown by the applicants that at least

ten per cent or one hundred of the workmen, whichever is

less must be the members of the Trade Union, if it is in

respect of a particular establishment or company with

which it is connected. The second proviso shows that

there is further restriction that the Trade Union must be

having, on the date of the application, not less than seven

persons as its members who are workmen engaged or

employed in the establishment or industry with which it is

connected. The provision of section 4(2) shows that it is

with regard to the applicants who have signed on the

application and in the circumstance mentioned in this

provision the Registrar is not expected to treat the

application as invalid if at least fifty per cent of the

applicants are still insisting for registration by contending

that they are still members of the Trade Union.

The learned counsel for the appellant submitted

that the amendment made in the Act which came into

force with effect from 9-1-2002 also needs to be

considered as the requirements for registration are

increased after this amendment. The provisions to which

attention of this Court was drawn are section 9-A and

section 22 . Sections 9-A and 22 run as under.

"9-A. Minimum requirement about membership of a Trade Union.- A registered Trade Union of workmen shall at all times continue to have not less than ten per cent or one hundred of the workmen, whichever is less, subject to a minimum of seven, engaged or employed in an establishment or industry with which it is connected, as its members."

"22. Proportion of office-bearers to be connected with the Industry.- (1) Not less than one half of the total number of the office-bearers of every registered Trade Union in an unorganised sector shall be persons actually engaged or employed in an industry with which the Trade Union is connected.

Provided that the appropriate Government may, by special or general order, declare that the provisions of this section shall not apply to any Trade Union or class of Trade Unions specified in the order.

Explanation.- For the purposes of this section, "unorganised sector" means any sector which the

appropriate Government may, by notification in the Official Gazette, specify.

(2) Save as otherwise provided in sub-section (1), all office-bearers of a registered Trade Union, except not more than one-third of the total number of the office-bearers or five, whichever is less, shall be persons actually engaged or employed in the establishment or industry with which the Trade Union is connected.

Explanation.- For the purposes of this sub-section, an employee who has retired or has been retrenched shall not be construed as outsider for the purpose of holding an office in a Trade Union.

(3) No member of the Council of Ministers or a person holding an office of profit (not being an engagement or employment in an establishment or industry with which the Trade Union is connected), in the Union or a State, shall be a member of the executive or other office-bearer of a registered Trade Union."

The provision of section 22 sub section (2) of

this section needs to be considered as the Trade Union is

said from organized sector. It shows that at least two-third

office bearers of the Trade Union need to be such persons

who are actually engaged or employed in the

establishment or industry with which the Trade Union is

connected. It is already observed that the employer-

appellant is not disputing that the office bearers were

employees of the appellant though in the past. The

explanation to section 22(2) needs to be kept in mind as

for the purpose of section 22(2) an employee who is

retired or who has been terminated shall not be construed

as outsider for the purpose of holding office in a Trade

Union. This provision is in addition to the requirements

mentioned in section 4 of the Act as it relates to office

bearers. In the application, the contents of which are

mentioned in section 5 of the Act, the names of office

bearers are also required to be mentioned and so it can be

said that even at the time of registration the condition or

requirement given in section 22(2. of the Act applies

along with the explanation given to it. Thus in respect of

the office bearers who were mentioned in the application

it can be said that they were covered by the explanation.

For making these observations there are more reasons

which are being quoted hereinafter. Similarly, the number

of members of the Trade Union was given in the

application year-wise and the appellant is not disputing

that this figure was more than ten per cent of the total

number of employees of the appellant - company.

It is not disputed that on the day when the

application was filed for registration of the Trade Union

the litigation was pending in the Industrial Court in the

form of references filed in respect of the members of this

Trade Union. They had specifically contended that the

employer had adopted unfair labour practice and by using

rotation system for about 10 years the employer had not

made them permanent employees. They had claimed that

their termination was illegal and they ought to have been

absorbed as permanent employees.

It is not disputed that almost all the employees,

who were terminated that way had worked for about 10

years as temporary workers and they succeeded in the

proceedings filed by them. The first group of the

employees succeeded, the claim of that group came to be

finally allowed by the Apex Court in the year 2004. The

decision is reported as (2004) 9 SCC 488 ( Bajaj Auto Ltd.

v. Bhojane Gopinath D .). One more group succeeded in

this Court in the year 2013 and the decision given by this

Court was endorsed by the Apex Court in the case

reported as (2013) 5 SCC 691 ( Bajaj Auto Ltd. v. Rajendra

Kumar Jagannath Kathar). Such complaints were filed

right from the year 1997 and on the date of the

application filed for registration some references were

decided and some were pending. It was submitted that

some references are still pending. Only due to the final

orders made by the Apex Court in the matters, it can be

said their entitlement to get reinstatement came to an

end. As they succeeded to prove that the appellant had

engaged in unfair labour practice they ought to have been

absorbed they got compensation. Further period after the

date of termination was considered by the Apex Court for

calculating the lump sum amount of compensation. Thus,

the rights of the employees were alive to get

reinstatement as against the appellant-company and the

rights came to an end only after the decision given by the

Apex Court. It needs to be mentioned that some

references are still pending. These circumstances need to

be considered in the present matter as the appellant-

company contended that these employees were

terminated in the year 1997 and they were not engaged or

employed on the establishment or the industry of the

appellant-company on the relevant date. This Court holds

that those terminated employees were workers for the

purpose of this Act. In view of these circumstances, this

Court holds that it cannot be said that the requirements of

aforesaid provision of the Act were not complied with on

the relevant date and the authority, Registrar committed

mistake in giving certificate of registration in favour of

the respondent - Trade Union.

Section 10(b) shows that the Registrar needs to

be satisfied that the certificate was obtained by fraud or

mistake in a matter like present one. Relevant facts are

already mentioned and they show that before the

Registrar, the Trade Union had fairly admitted that they

wanted to agitate the aforesaid issue and the litigation of

those members was already pending. This Court has

already referred the contentions made by the appellant-

company before the Registrar in that regard. Thus,

nothing was hidden from the Registrar by the Trade

Union. Similarly, it cannot be said that the Registrar

committed mistake either of fact or law in giving

certificate of registration. The ground, mistake mentioned

in section 10(b) appears to be connected to the act of

Trade Union due to the wording "obtained" used in section

10(b) of the Act. But in view of the requirements of the

registration mentioned above, it can be said that the

Registrar is expected to consider the ground of mistake of

law or fact if raised the matter even if it has no apparent

connection with the act of Trade Union.

The learned Senior Counsel for the appellant

heavily relied on the observations made by the learned

Single Judge of Allahabad High Court in the case of M/s

Lohia Machines (cited supra) on the present point also.

The learned Single Judge of Allahabad High Court

considered the provisions of sections 4, 8, 9, 22 and 9-A and

held that the laid off employees become unemployed and

relationship of master and servant gets snatched and so

the laid off employees cannot fall under the category of

requisite number of employees who need to be members

of Trade Union as per provisions of section 4 of the Act.

The learned Single Judge further held that the explanation

which is appended to section 22(2) of the Act is not there

in section 4 of the Act and due to that reason the

concession given in section 22(2) explanation, already

quoted, is not available to the members who need to be

employees on the date of application as per section 4 of

the Act. For making such observations the learned Single

Judge placed reliance on some observations made by the

Hon''ble Apex Court in the case reported as Priya Laxmi

Mills Limited v. Mazdoor Mahajan Mandal, Baroda

(1977) 14 SCLJ 37 (SC). Some observations were made

by the Apex Court in that case in relation to the

interpretation of the provisions of the Industrial Disputes

Act, other Act, and not in relation to the rights of the

employees or ex-employees which can be found in the

enactment like the present one to form association or

Trade Union and get it registered. This right is connected

with fundamental right of the citizens to form association

or Trade Union and so the interpretation made in other

context or other provisions of labour laws cannot be used

for interpretation of the provisions of the Act. The object

behind the Act is different. So, with due respect to the

view taken by the learned Single Judge of the Allahabad

High Court, this Court holds that those observations

cannot be used against the respondent-Trade Union in the

present matter.

The provision of Article 19(1)(c) of the

Constitution of India confers on all citizens a fundamental

right to form association or union. By the Act the right to

form Trade Union was recognised even before the

Constitution of India came into force. The Constitution has

given such right as a fundamental right to the citizens of

this country. This aspect needs to be kept in mind while

interpreting the provisions of the Act.

The relevant portion of Article 19 of the

Constitution of India is as under:

"19. Protection of certain rights regarding freedom of speech, etc. - (1) All citizens shall have the right -

(a) ....

(b) ....

(c) to form associations or unions or co-operative societies.

(d) . . . .

(e) . . . .

(g) . . . .

(2) . . . .

(3) . . . .

(4) Nothing in sub-clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the sovereignty and integrity of India or public order or

morality, reasonable restrictions on the exercise of the right conferred by the said sub-clause."

In the case reported as (2011) 9 SCC 286 ( A.P. Dairy

Development Corporation Federation v. B. Narasimha

Reddy ), the Apex Court has discussed the aforesaid

portion of Article 19 and it is observed by the Apex Court

that all the citizens have right to form association of their

choice (underlined by us) voluntarily, subject to

reasonable restrictions imposed by law. At para No.26

following observations are made :

"26. Therefore, the freedom guaranteed under Article 19(1)(c) is not restricted merely to the formation of the association, but to the effective functioning of the association so as to enable it to achieve the lawful objectives."

The aforesaid Article which gives fundamental right to the

citizens of this country and the observations made by the

Apex Court show that for effective functioning of the

association/union if registration is necessary, registration

needs to be allowed. In a case like the present one if

registration is not allowed, the Union will not be able to

achieve its lawful objectives. In the present matter it

cannot be said that the objective of the Union which is

already quoted was unlawful. When in section 22 of the

Act the scope which is already discussed is also given,

though it may be to the office bearers, it needs to be kept

in mind that, that scope is much wider than what the

members of the present Union are claiming. In view of

these circumstances and as it is a fundamental right, it is

difficult to accept that there should be strict compliance of

the provision of section 4 of the Act. In the case like

present one, ex-employees who want to enforce their right

by proving that they were illegally terminated and they

have right of reinstatement, they need to be treated as the

employees, the persons described in section 4 of the Act.

From the practical angle also present case

needs to be seen. If on the date of the registration of the

present Union, there were two registered Unions but of

the permanent employees of the appellant-company, those

registered Unions will not be interested to espouse the

cause of the members of the respondent-Union. As already

observed, the members of the respondent-Union cannot be

compelled to join the Union of permanent employees who

may have adverse interest against the temporary

employees. The members of the respondent-Union had

worked for more than 10 years as temporary employees

and in view of the facts of the present matter there was no

other alternative before them than to come together and

form the Union like the respondent-Union. If the

registration of such Union is denied, ordinarily it will

amount to preventing such ex-employees from formation

of Union which can act effectively. In view of the fact that

it is a fundamental right of such persons, the construction

which will give benefit to such persons needs to be

accepted as that construction will be only the rational

construction.

At the time of interpretation of the provisions of

the Act it also needs to be kept in mind that after the

registration, the Trade Union gets many rights under

many labour laws like Maharashtra Recognition of Trade

Unions and Prevention of Unfair Labour Practices Act,

1971. It is required to be kept in mind that the employees

or the ex-employees who cannot approach court for any

reason can get the protection of such Trade Union as the

Trade Union, which is registered, can take appropriate

steps for protecting the rights and interests of employees

and also ex-employees. Further, the Trade Union if

registered can represent all the employees in such

undertaking. In section 10(b) of the Act it is provided that

registration can be cancelled if Trade Union has ceased to

exit or when the registered Trade Union fails to comply

with the conditions laid down in the aforesaid provisions.

For all these reasons this Court holds that the employer, in

ordinary course, is not expected to object the registration

of such Trade Union.

The learned counsel for the respondent,

registered Trade Union placed reliance on some

observations made by the Apex Court in the case reported

as (2015 (2) AIR BOM R (S.C.) 278 (R.G. D''souza vs.

Poona Employees Union & Anr) (cited supra). In this case

the Apex Court has laid down in paragraphs 17, 18 and 19

that if certificate of registration is granted by the

Registrar by mistake, due to incorrect assessment on non

application of mind or mechanical act on the part of the

authority, that circumstance is not covered by section 10

of the Act. There cannot be dispute over this proposition.

In the present matter, different point is raised by the

appellant like non fulfillment of conditions mentioned in

sections 4 and 22 of the Act for allowing registration of

Trade Union. In view of the aforesaid discussion this Court

has no hesitation to observe that there are no merits in

the Letters Patent Appeal and though the reasons are not

exhaustively given by the learned Single Judge, the

learned Single Judge has not committed any error in

deciding the matter against the appellant. In the result,

the appeal stands dismissed. Pending civil applications

stand disposed of.