In re. Ramakrishna Kulwantrai Steels (P) Limited and Enfield India Limited and Their Workmen and another

V. Ramaswami, J.—V. Ramaswami J : W.P. 1380 of 1976:�In respect of payment of (sic) for the accounting (sic) that (sic) with 1st December, 1974, a dispute arose between the management of Enfield India Limited. (sic) and their Workmen represented by Enfield Employees'' Union and the Assistant Commissioner of Labour (Conciliation) Madras, held conciliation proceedings. As a result of the conciliation takes the parties arrived at what they termed as a settlement on 28th February, 1976. Cl.1 of the said settlement is as follows:

Both parties agree to settle the issue of bonus for the accounting year ending 31st February, 1974 by leaving it to the decision of the Asst. Commissioner of Labour (Conciliation) Madras, and he decision in this issue will be final and binding on the parties.

This was signed by the representative of the managements and the representatives of the workers union. The Asst. Commissioner of Labour, in his proceedings, 28th February, 1976, referred to this agreement as a memorandum of settlement arrived at under S. 12 (3) of the Industrial Disputes Act, 1947 (hereinafter called the Act). In pursuance of this agreement, the parties to the dispute were heard by the Asst. Commissioner of Labour on 2nd March, 1976 and he passed an award on 18th March, 1976. The award directed that the issue of bonus for the accounting year 1974 shall be settled on the basis of payment of Rs. 17 lakhs as bonus. It is to quash this award W.P. 1380 of 1976 was filed under Art. 226 of the Constitution of India. It may be mentioned at this stage that the petitioner in the affidavit originally filed in support of the writ petition raised two alternative contentions-firstly, the reference to the arbitrator was not under S. 10A of the Act but it was only an informal arbitration and that therefore, he had no jurisdiction to decide an industrial dispute at such informal arbitrations notwithstanding the consent of the parties. Alternatively he contended that on the assumption that it is a reference to arbitration under S. 10A, the arbitrator should have insisted upon compliance with the provisions of S. 10A before entering upon his duties. He had raised a number of other contentions on merits with which we are not concerned.

In the counter-affidavit filed by the respondent it was contended that since the Asst. Commissioner of Labour acted only as an informal arbitrator and not as an arbitrator with statutory status under S. 1-A, no writ will be against his award. It was also contended that the provisions of the Arbitration Act 1940 also would not apply as it is an industrial arbitration when the matter came up for bearing before Mohan, J., the learned Judge considered that because of conflict of decisions on the maintainability of a petition under Art. 226 of the Constitution of India to quash the award of this nature it would be desirable that the case is decided by a full Bench. Accordingly, the matter has come before us.

Subsequent to the order of reference but before the petition came up before us for hearing the management filed a M.P. 1751/76 praying for permission to amend the affidavit filed in support of the writ petition by raising certain additional grounds In the additional grounds it was contended that an Industrial dispute could be resolved only by settlement or adjudication or arbitration under the Industrial Disputes Act and the Act contemplates arbitration under S. 10A thereof Since the Assistant Commissioner of Labour had to decide the dispute by virtue of the settlement dated 28th February, 1976 he could have acted only as an arbitrator under S. 10A. This contention is denied by the 1st respondent workers union in the counter-affidavit and they reiterate the contention that it was an informal private arbitration failing outside the provisions of S. 10A, as well as the Arbitration Act.

Before us, the learned counsel for the petitioner did not advance any argument that the reference to arbitration was outside S. 10A of the Act and that it was only an informal arbitration which was the original contention that was raised in the affidavit. But he bad argued that the arbitrator could have acted and acted only under S. 10A and that, therefore, the writ petition is maintainable. It is not disputed by the learned counsel for the respondent that if the reference to arbitration is construed as one under S. 10A the award made thereunder was amenable to writ jurisdiction under Art. 226 of the Constitution. In fact, this position is settled, in view of the decision of the Supreme Court in Rohtas Industries Ltd. and Another Vs. Rohtas Industries Staff Union and Others, We have permitted the learned counsel for the petitioner to raise the contention that the reference to arbitration was under S. 10A as that is the real question that arises in the writ petition. It may also be mentioned that even in the original affidavit the petitioner had raised a contention that the arbitrator should have insisted upon compliance with the provisions of S. 10A before entering upon his duties. This could only be on the basis that S. 10A was applicable. Therefore, we consider that even in the original affidavit this question was raised, though not in specific and express terms. Therefore, we have to decide the question whether the terms of settlement arrived at before the Assistant Commissioner of labour during conciliation proceedings on 28th February, 1976 which have been settled as extracted above, amounts to an agreement to refer the dispute to arbitration within the meaning of S. 10A of the Act.

It was contended by the learned counsel for the petitioner that the terms of settlement amounted only to an agreement to refer the dispute to arbitration within the meaning of S. 10A. Per contra, the learned counsel for the respondents contended that the parties did not deliberately want to avail themselves of the statutory arbitration under S. 10A but agreed to refer the mater to informal arbitration outside S. 10A and this is clear from the fact that the agreement was not in the form prescribed, nor the procedure prescribed under S. 10A was followed. We are unable to agree with the contention of the learned counsel for the respondents. The dispute between the parties related to the payment of bonus and, therefore, it is an industrial dispute. An industrial dispute could be resolved under the Act by a settlement in the course of conciliation proceedings under S. 12 (3) or by a settlement arrived at by agreement between the parties otherwise than in the course of conciliation proceedings by adjudication, on a reference under S. 10 or by arbitration by referring the dispute to an arbitrator as provided under S. 10A.

S. 10A (1) of the Act reads as follows :

Where any industrial dispute exists or is apprehended and the employer and the workmen agree to refer the disputes to arbitration, they may, at any time before the disputes has been referred under S. 10 to a Labour Court or tribunal or National Tribunal, by a written agreement, refer the disputes to arbitration and the reference shall be to such person or persons including the presiding Officer of a "Labour Court or tribunal or National Tribunal as an arbitrator or arbitrators as may be specified in the arbitration agreement.

It is seen from this provision that at any time before the dispute has been referred under S. 10, the parties could agree to refer the dispute to arbitration. The terms of settlement arrived at during the conciliation proceedings in this case did not settle the dispute relating to bonus. Therefore, the agreement entered into by the parties on 28th February, 1976 to settle the issue of bonus by leaving it to the decision of the Assistant Commissioner of Labour did not amount to a settlement during conciliation proceedings under S. 12 (3) of the Act, and it would clearly amount only to an agreement to refer the dispute to arbitration. The agreement dated 28th February, 1978 refers to the parties to the dispute, the persons representing the management, the persons representing the union, the dispute between the parties and says that the decision of the arbitrator will be final and binding on the parties. This is signed by persons representing the employers and the workmen and it is attested by the Assistant Commissioner of Labour, who is the arbitrator.

R.26 of the Tamil Nadu Industrial Disputes Rules, 1958 provides that an arbitration agreement for the reference of an industrial dispute to an arbitrator shall be made in the Form D. The memorandum of settlement signed on 28th February, 1976 substantially complied with all the requirements of Form D except that there was no reference to the total number of workmen employed in the undertaking affected and the estimated number of workmen affected or likely to be affected by the dispute. These two requirements need not be mentioned in this particular case since the dispute related to bonus and all the workmen employed in Enfield India Limited, Tiruvottyur, will be affected or likely to be affected by the dispute. It is thus seen that the memorandum signed on 28th July, 1976 compiled with all the requirements of S. 10A (1) and (2) of the Act. We are also of the view that an agreement entered into during conciliation proceedings between the management and the workers union regarding an industrial dispute is an agreement, to refer dispute to arbitration under S. 10A, for, the Act does not contemplate arbitration of an industrial dispute outside S. 10A. In the face of S. 10A (5) excluding the application of Arbitration Act, 1940 to arbitrations under S. 10A, it would be very doubtful whether private agreements in respect of industrial disputes contracting out of the statutory provisions of S. 10A would be permissible at all in law. The argument that in the instant case the arbitration agreement was not forwarded to the Government or the other officers referred to in sub-S.(3) of S. 10A and that the agreement or the award also was not published in the Gazette showed that the parties deliberately did not want to avail the provisions of S. 10A, could not be accepted as that will amount to putting the cart before the horse. The Government comes into the picture only after the arbitration agreement had been entered into under S. 10A (1) and signed by the parties as required under S. 10A (2). If once that is done, there is a valid arbitration agreement and non-compliance with the other provisions of S. 10A or any other provision in the Act relating to publication of the award will not invalidate or take the arbitration agreement itself outside the purview of S. 10A. We must also keep it in view that the dispute in this case related to bonus affecting the entire body of workers. An agreement to refer to arbitration of that Industrial dispute could not be considered as one falling outside S. 10A.

A similar view was taken by the Mysore High Court in Workmen of Madras Woodland Hotel v. K. Srinivasa Rao 42 F.I.R. 223. In that case, during conciliation proceedings the parties agreed that the question relating to back wages payable in respect of three workmen should be left to the decision of the Conciliation Officer whom they treated as arbitrator. An award was made by the arbitrator and that was questioned by the workers. It was contended on behalf of the management that the award was of a private arbitrator, that it was not given under S. 10A and that, therefore, such an award could not be the subject matter of a petition under Art. 226 of the Constitution. It was also contended that the fact that the agreement was not published as required under S. 10A(3) and that the award also was not published as required under S. 10A(4), showed that the award was not one made under S. 10A and it could be treated as an award under the Arbitration Act. Rejecting this argument it was held by the Division Bench of the Mysore High Court that the agreement to refer to arbitration was one under S. 10A and that a petition under Art. 226 would lie.

A similar view was taken by the Orissa High Court in Singh (K.P.) and Another Vs. Gokhale (S.K.) and Another, the Madhya Pradesh High Court held that the Industrial Disputes Act does not contemplate any private arbitration in respect of industrial disputes and that an arbitration agreement between the management and the workmen could not be a private arbitral on agreement but it should necessarily be under S. 10A. The learned Judges further held that accepting the argument that the agreement to refer the dispute was to a private arbitrator outside S. 10A would amount to allowing the parties to contract out of the statutory provisions rendering the provisions of the special enactment nugatory and such agreements would be void under S. 23 of the Indian Contract Act.

These decisions, therefore, support our view that the arbitration agreement could be interpreted only as having been entered into under S. 10A(1) of the Act and not otherwise. As already stated, if the arbitration was under S. 10A the award made thereunder is clearly amenable to correction under Art. 226 of the Constitution of India. We answer the reference accordingly. The matter will now go before the single Judge for disposing the writ petition on merits. No order as to costs.

W.P. 5829 of 1973 :�Order of the Court made by V. Ramaswmi, J.�In view of our Judgment in W.P.1380/78 holding that a writ petition is maintainable this writ petition also is referred to the learned single Judge for disposal on merits. There will be no order as to costs. W.P. 5829 of 1973: 18th January, 1980�Pursuant to the opinion of the Full Bench the case was posted before Ramanujam J. and in view of the settlement, dated 11th September, 1979 agreed to between the Management and the workmen under S. 12 (3) of the I.D. Act the said settlement was recorded and an order was passed incorporating Cls.1 to 16 of the said settlement in the Order - Ed.]