C.S. Mohan vs The Director, The Management of Siruguppa Sugars and Chemicals Ltd. and Others

Ashok B. Hinchigeri, J.—The petitioner has called into question the order, dated 22.02.2014 (Annexure-S) passed by the Industrial Tribunal, Bangalore on I.A. No. VI in I.D. No. 155/2011.

The facts of the case in brief are that the Government, on the failure of the conciliation proceedings, referred the industrial dispute to the Tribunal with the following points of dispute:

The respondent No. 1 herein (second party in the proceedings before the Tribunal) filed I.A. No. VI invoking Section 11 of the Industrial Disputes Act, 1947 (''I.D. Act'' for short) to direct 379 workmen who claim to have authorized the petitioner to represent them in the said reference to deposit the entire amounts received by them from the respondent No. 1. It is the case of the respondent that upon entering the settlement with the respondent No. 2 and the individual workmen, the individual workmen received the financial benefit and voluntarily agreed to relieve themselves from the services of the first respondent Management by submitting their resignations. It is the petitioner''s contention that the said settlements are not lawful and that they are extracted under duress. It is the further case of the petitioner that with or without the settlement, the closure cannot be effected without obtaining the permission for the same from the Government.

Sri C.S. Mohan, the party-in-person submits that the first respondent Management did not put forth the demand for the refund of the amounts by the workmen, in the conciliation proceedings. Therefore, when the matter is referred to the Industrial Tribunal, the first respondent Management is not justified in filing the I.A. No. VI for a direction to the 379 workmen to deposit the amounts, which they had received under the settlement in question. He submits that such a demand has come to be made after five long years from the date of disbursement of the benefits.

Sri Mohan submits that the order of reference made by the Government is not challenged by the respondents. When they have not challenged the order of reference, they cannot seek the closure of the reference proceedings by insisting for the depositing of amounts.

He submits that this Court in W.P. No. 33702/2009, filed by the petitioner, has passed the order, dated 11.02.2011 (Annexure-H). This Court has held that an employee even after deriving the benefit under a settlement is also entitled to question the same in accordance with law. He submits that in W.P. No. 47139/2004 disposed of on 10.02.2009 has expressed the considered view that no settlement would have any effect on the compliance with the statutory requirements. This view is also affirmed by the Division Bench, by its judgment, dated 23.11.2009 passed in W.A. No. 1409/2009. He further submits that the S.L.P. challenging the said order of the learned Single Judge and the Division Bench was also dismissed. He submits that another Division Bench, headed by the then Acting Chief Justice, by its judgment, dated 12.12.2011 passed in W.A. No. 3779/2005 is also pleased to hold that the settlement arrived at between the management and workmen would not obviate the compliance with the provisions of Section 25-O of the I.D. Act. On the challenge being raised to the said Division Bench judgment, the Apex Court dismissed the S.L.P. filed by the management in the said case.

He relies on the Hon''ble Supreme Court''s judgment in the case of M/s. OSWAL AGRO FURNACE LTD. AND ANOTHER vs. OSWAL AGRO FURNACE WORKERS UNION AND OTHERS reported in AIR 2005 SC 1551. It is held therein that the obtaining of the prior permission from appropriate Government for the closure of an industrial undertaking is mandatory notwithstanding the settlement arrived at between the employer and the workmen in the course of the conciliation proceedings.

He submits that the Tribunal has passed the impugned order relying on a decision passed in an inapplicable case, where the issue involved was the voluntary retirement.

He also relies on the decision of the Himachal Pradesh High Court in the case of RANI DUTT vs. STATE OF HIMACHAL PRADESH reported in LLJ 2008-3-795 to advance the submission that a minority union or an unregistered union can also represent the workmen and raise the industrial dispute on behalf of the Union. He also brings to my notice the decision of the Hon''ble Supreme Court in the case of Tata Chemicals Ltd. Vs. The Workmen represented by Chemicals Kamdar Sangh, AIR 1978 SC 828 : (1978) 36 FLR 339 : (1978) LabIC 637 : (1978) 2 LLJ 22 : (1978) 3 SCC 42 : (1978) 3 SCR 535 to urge the contention that the industrial dispute cannot be restricted to the dispute between the employer and the recognized majority union. It includes the dispute between the employer and the workmen including their minority union.

He sought to draw support from the Apex Court''s judgment in the case of The Jhagrakhan Collieries (P) Ltd. Vs. Shri G.C. Agrawal, Presiding Officer, Central Government Industrial Tribunal-Cum-Labour Court, Jabalpur and Others, AIR 1975 SC 171 : AIR 1974 SC 171 : (1975) 30 FLR 115 : (1975) 1 LLJ 163 : (1975) 3 SCC 613 : (1975) 2 SCR 873 : (1975) 7 UJ 22 to buttress his submission that an implied agreement by acquiescence or conduct such as acceptance of a benefit under an agreement to which the worker acquiescing or accepting the benefit was not a party, being outside the purview of the Act, is not binding on such a worker either under sub-section (1) or under sub-section (3) of Section 18 of the I.D. Act.

He relies on the Apex Court''s judgment in the case of TATA CHEMICALS (supra) and contends that the acceptance of benefits flowing from the settlement even by workmen, who were not signatories to it, does not act as an estoppel against the minority union raising the same demands.

Per contra, Sri Anand, learned counsel appearing for the respondent No. 1 submits that the orders of interlocutory applications in the pending matter before the Tribunal are not amenable to be challenged by way of writ petitions. He submits that the petitioner has indeed taken time to comply with the impugned order. On the granting of time and the failure of the petitioner to comply with the order even within the extended period, this petition is filed.

He brings to my notice the Apex Court''s judgment in the case of Man Singh Vs. Maruti Suzuki India Ltd. and Another, (2011) 131 FLR 1 : (2011) 9 JT 558 : (2011) 4 LLJ 295 : (2011) LLR 1009 : (2011) 9 SCALE 390 wherein the directions for the depositing of amounts taken under the voluntary retirement scheme was challenged. The Apex Court held that the workmen cannot retain the benefit, if they want to prosecute their claims before the Labour Court. He has also relied upon the Apex Court''s judgment in the case of Ramesh Chandra Sankla Etc. Vs. Vikram Cement Etc., AIR 2009 SC 713 : (2008) 8 JT 1 : (2008) 10 SCALE 112 : (2008) 14 SCC 58 : (2009) 1 SCC(L&S) 706 wherein it is held that a writ court has to take into account balancing interests and equities.

He submits that the authorities relied upon by the petitioner have no application for the facts of this case. The authorities are in the context of the application for permission for closing down an industrial undertaking. In the instant case, the application for permission itself was withdrawn by the respondent Management. The learned counsel takes serious exception to the petitioner not bringing to the notice of this Court that earlier 45 workmen had initiated similar proceedings and the first respondent had filed I.A. No. V (akin to I.A. No. VI in the instant case). The Labour Court had directed to deposit the amounts taken under the settlement. It was made clear that the failure thereof would disentitle them to prosecute the dispute. He submits that the said 45 workmen are also claiming to be the members of the petitioner Union. At this juncture, Sri Mohan the petitioner party-m-person quickly joins the issue with Sri Anand and submits that the Misc. Petition seeking for recalling the said order is filed as it is passed on the basis of the order, dated 07.06.2013.

Sri V.S. Nayak, learned counsel for the respondent No. 2 submits that the petitioner has not pointed out one error in the impugned order. He submits that the Tribunal has passed the well considered order. He submits that not even one workman has any grievance over the settlement arrived at.

In the course of rejoinder, Sri Mohan submits that the dispute arises from a statutory violation. He submits that the amounts disbursed under the settlement in question are substantially recovered and certificates for the recovery of the balance amounts, are already issued.

The submissions of the learned counsel have received my thoughtful consideration. I see considerable force in the submissions of petitioner-party-m-person that the minority Union or unregistered Union can represent the workmen and raise the industrial dispute. But nothing turns on such a submission, as the Tribunal has not passed the impugned order on the ground that the petitioner is a minority Union or an unregistered Union.

The question that falls for my consideration is whether the Industrial Tribunal''s order directing 379 workmen to deposit the amounts received by them from the first respondent Management towards the full and final settlement of all their claims, pursuant to which they voluntarily agreed to relieve themselves from the services of the first respondent Management is sustainable?

Despite the painstaking endeavours made by the petitioner-party-m-person, I find that all the authorities relied upon by him lay down the position that the settlement arrived at between the employer and the workmen would not prevail over the statutory requirements prescribed by Sections 25N and 25-O of the I.D. Act. It is no more res integra that no settlement can be arrived at in violation of any statutory provision. The Industrial Tribunal has also not dismissed or rejected the reference on the grounds that the settlements in question are legal or that the pre-requirements of closing down the industrial undertaking are complied with. It has only directed the workmen to deposit the amounts which, they received under the settlement. It is difficult to find fault with such interlocutory order. The workmen cannot contend that the settlements were obtained under duress, but still retain the benefits received thereunder. In all fairness, they have to first deposit the amounts which they have received and thereafter contend that they were forced to sign the settlement memorandums. It is also relevant to note that the Tribunal has not given any direction for the depositing of amounts with interest. The direction is only for depositing the amounts which the workmen have received. The ratio decidendi in the case of Man Singh (supra) is that a direction to the workman to deposit in Court the amounts received by him under the voluntary retirement scheme cannot be termed as unjust, inequitable or improper, as it would be not equitable to allow the workman to retain the benefits he received towards the retirement, if he wants to prosecute his claim before the Labour Court; only the imposition of interest was held to be harsh and unwarranted.

In the case of Ramesh Chandra Sankla (supra), the Hon''ble Supreme Court has this to say in para. 89 of its decision:-

"89. From the above cases, it clearly transpires that powers under Articles 226 and 227 are discretionary and equitable and are required to be exercised in the larger interest of justice. While granting relief in favour of the applicant, the Court must take into account balancing interests and equities. It can mould relief considering the facts of the case. It can pass an appropriate order which justice may demand and equities may project. As observed by this Court in Shiv Shankar Dal Mills and Others Vs. State of Haryana and Others, AIR 1980 SC 1037 : (1980) 2 SCC 437 : (1980) 1 SCR 1170 : (1980) 12 UJ 55 , Courts of equity should go much further both to give and refuse relief in furtherance of public interest. Granting or withholding of relief may properly be dependent upon considerations of justice, equity and good conscience."

As rightly observed by the Tribunal, the issue relating to closure is not even remotely connected with the points of dispute referred for adjudication. The Tribunal is required to decide the validity of settlement notwithstanding the requirement relating to the closure. It is seized of the issue as to whether the settlements are extracted under duress.

I also notice with concern that the 45 workmen had earlier initiated similar proceedings and in the said proceedings, the Labour Court had directed them to deposit the amounts received under the settlement. As of now, the said order has remained undisturbed. Those 45 workmen are also said to be the members of the petitioner Union. Nothing is whispered about these developments in the memorandum of the writ petition. These material facts ought not to have been withheld from the Court.

Be it as it may, this petition is hit by the principle of res judicata insofar as 45 workmen are concerned. As far as the other workmen are concerned, I do not find any good reason as to why they should be given treatment different from the one given to the 45 workmen.

The submission of the petitioner-party-m-person that the amounts disbursed under the settlement are substantially recovered is to be given the weightage that it deserves. If the amounts are already recovered from the workmen, they are required to produce the supporting documents before the Tribunal. The Tribunal is bound to give the deduction for the same.

Further, I am of the considered view that some more time has to be granted to the petitioner to furnish the documents in support of its claim that the amounts are already recovered from the petitioner and to deposit the balance amounts. I also deem it necessary to direct the Tribunal not to disburse the amounts, to be deposited, to the first respondent Management. The amounts so deposited are to be kept in a fixed deposit in any nationalized bank for a period of four months.

In the result, I pass the following order:-

(i) The challenge to the order, dated 22.2.2014 (Annexure-S) passed by the Industrial Tribunal, Bangalore on I.A. No. VI in I.D. No. 155/2011 is negatived.

(ii) One month''s time is given to the petitioner and/or 379 workmen to deposit the amounts, which they have received under the settlements in question. If those amounts or any portion thereof are already recovered from them, they shall produce the supporting documents; and the Tribunal shall give the deduction for the same. It is made clear, at the risk of repetition, that only those portions of the amounts which have remained unrecovered are required to be deposited.

(iii) If the petitioner or those of the 379 workmen, who default in paying the amounts as directed hereinbefore, it/they shall be disentitled to prosecute the reference further.

(iv) The amounts to be deposited shall be kept in a fixed deposit for a period of four months. If some workmen deposit and if some others do not deposit, the Labour Court shall take up the reference of the former for enquiry and adjudication while dropping the cases of the latter for non-compliance.

(v) The amounts deposited, if any, shall not be disbursed to the first respondent Management. Whether such amounts are to be returned to the workmen or to be released to the first respondent Management would obviously depend on the outcome of the reference proceedings.

This petition is accordingly disposed of. No order as to costs.