COOPER ENGINEERING LIMITED v. D. M. ANEY & Ors.

On May 16, 1967, the third respondent, Serva Shramik Sanghatana, through its General Secretary, made a demand that all workmen should be r.aid dearness allowance at the rate 6 paise per day for every point of rise over 17 points of the Poona Consumer Price Index Number with effect from January 1; !967. On October 3, 1967, the third respondent issue.ct two notices to the appellant-company. By the first notice, it terminated the settlement dated July 6, 1963, entered into between the appellant and the Chemical Engineering and Metal Workers Union and the second respondent. representing the workmen. The second notice terminated the settlements dated February 4, 1965, April !. 1965 Nov· ember I, 1966 and May 13, 1967 entered into between the appellant and the second respondent. Both the notices stated that the previous settle ments are terminated under section 19(2) read 'with rule 83 of It was also mentioned that the letters of Industrial Disputes Act, 194 7. October 3. 1967, are to be treated as two months notice. It will be seen that by these two notices, the settlements dated July 6. 1963, November !, 1966 and May 13, 1967 have been terminated. Conciliation proceedings appear to have been initiated. The appel lant in its letter to the Deputy Commissioner of Labour dated July 2, 1968. has stated that the interim relief granted by the Wage Board has been already implemented by the appellant. It gave a further assurance that it will implement the final recommendations of the Wage Board, as accepted by the Central Government. On November 30, 1968, fresh . demands for dearness allowance were made by the third respondent. The Wage Board made its final recommendations to the Central Govern· ment. The exact date is not very clear, but it is given differently as December 23, 1968 or January 3, 1969. As the appellant did not comply with the demands of the third respondent and as conciliation proceedings failed, the State Government referred the dispute for ad judication on January 25, 1969. Item 1 related to the dearness allow ance to be paid to the monthly rated staff. Demand No. 2 related to the dearness allowance regarding the daily rated workmen. The third question referred related to the dismissal of the fourteen workmen men tioned in the order and payment of dearness allowance to them. It was this order of reference that was challenged by the appellant before the High Court in proceedings under Article 226. We have fairly exhaustively given the details about the vadous settlements to give the background of the dispute between the appellant and its work men. The first conte!1tion of Mr. Shroff, learned counsel for the appel lant, was that the thrrd respondent, which represents only a minority of the workmen, has no right to terminate agreements dated November l, 1966 and May 13, 1967, entered into by the Associafion, the second c D E F G H 244 SUPREME COURT REPORTS [ 1974] 1 s.c.R. respondent, repr·osenting the majority of the workmen. As these agree ments were subsisting and operating and were binding on all the work men, they can be terminated only as contemplated under section 19(7) of th·o Industrial Disputes Act, 1947 (hereinafter to be referred to as the Act). When the settlements were subsisting, the order passed by the State Government referring the disputes covered by those settle ments, is invalid. On behalf of the State Government, Mr. Bhandare, learned counsel, has stated that the question whether the third respondent represented, on the relevant date, the majority of the workmen bound by ~he settle ments, can be investigated only by the Tribunal. The State Government had taken the view that the entire settlement relates only to the interim refief and, therefore, the question of terminating the agreements by any union does not arise. The counsel further pointed out that the view taken by the State Government regarding the nature of the settlements was a possible view and, therefore, it had power <o refer the disputes for adjudication under section 10(1) of the Act. Though there has been a very elaborate consideration by the High Court regarding the competency of the third respondent to terminate the settlements, its ultimate decision is rested on a constrnction of lhe two settlements dated November 1, 1966 and Maiy 13, 1967. According to the High Cour't, it is abundantly _clear on a reading of the various clauses in the two settlements that they related to payment of wa!les including dearness allowance, which had the character of an lntenm relief, as awarded by the Wage Board. It is the further view of the High Court that when the final recommendations of the Wage Board .arc made, the workmen were at liberty to raise demands regarding wages and dearness allowance legally payable to them. The agreement, if at all, was not to raise any dispute pending the final recommendations of the Wage Board. We have ourselves gone through the various clauses in the two settle ments and we are in entire agreement with the view of the High Court. As there has been a very elaborate discussion by the High Court and as we entirely agree with its reasoning, we do not propose to cover the ground over again. As we are now on the limite!I question regarding the competency of the State Government to make the reference, it must be held that the State Government's view that the settlements related only to the ;nterim relief is a possible one in the circumstances of this case- Hence, we cannot say that the reference made by the State Gov ernment was incompetent.· We express no opinion on the question regarding the right of the third respondent to terminate the two agreements in question because there is a controversy as to whether, at the relevant date, the third res pondent represented the majority of the workmen bound by •.!J.ese agree ments. The claim of the third respondent is that it represented the majority of such workmen. The Tribunal, when it adjudicates the dis pute, will have to investigate the question when considering the points co11ered by the settlements as well as the question whether those settle ments have been properly terminated, when the reference was made by the State Government. A 8 c D E F G H COOPER ENGINEERING LTD. v. D. M. ANEY (Vaidialingam, 1.) 245 A B c D E .G In this view, we are not referring to the relevant provisions of the Act; nor do we deal with the decisions cited on both sides. The.further contention that is taken by Mr. Shroff is based upon the decisions of this Court in Union of India & Ors. v. Mis lndo·Afghan Agencies Ltd. ( 1) and Century Spinning & Manufacturing Company Ltd. and Anr. v. The Ulhasnagar Municipal Council and Anr. (") According to Mr. Shroff, the Minister for Labour of Maharashtra, at a meeting of the employers and representatives of the employees, held on September 9, 1965, stated : "The Government of Maharashtra would not refer disputes on wages and dearness allowance to adjudication in the case of engineering establishments covered by the Wage Board, if the concerned employer agreed to implement the recommen dations, interim as well as final, of the Central Wage Board, as accepted by the GoYernment of India." On the basis of this statement of the Minister, the appellant implemen ted the interim relief and also assured the authorities concerned that it will implement tile final rcommendations of the Wage Board. As the appellant has acted on the representations made by the Minister to its prejmlice, the reference of the dispute for adjudication was not justified. Mr. Shroff referred us to the letter dated September 24, 1965, written to the conccrn~d Minister for Labour by the India'l Engineering Asso ciation (Western Region) and Engineering Association of India (Wes tern Region) Bombay. This letter refers to the statement made by the Minister on September 9, 1965. He also invited our attention to the letter dated July 2, 1968, written by the appellant to the Deputy Com In that letter, the appellant had stated missioner of Labour, Poona. that it had agreed with its workers to implement the interim relief gran ted by the Wage Board. The appellant gave an assurance to the De puty Commissioner of Labour, Bombay, that it will implement the recommendations of the Wage Board for engineering industries, as accepted by the Central Government. The Act gives power to the State Government to refer a dispute for adjudication. As to how far, by a Minister making a statement, the Government can be relieved of its obligation under the Act, is a debatable question. It is, however, not necessary for us to go into .this aspect in this particular case. None of the settlements entered mto by the appellant with its workmen gives any indication that the said settlements were being made in view of the statement made by the Minister. On the other hand, we have already pointed out that evevy one of the settlements is preceded by a demand made by the union con cerned. It is really in the interest of industrial peace that the appe1lant appears to have entered into those settlements. Therefore, the deci sions relied on by Mr. Shroff do not apply in this case. Lastly, Mr. Shroff contended that th~ State Gov~rnment declined to make a reference in the case of the Indian Hume Pipe Co. Ltd. spe eifically on the ground that the said company had implemented the in- JI U) [1968] (2) S. C.R. 366. (2) [1970](3)S.C.R.854. 246 SUPREME COURT REPORTS ( 1974) 1 s.C.R. terim recommendations of the Wap Board and that it was also pre pared to implement its final recommendations. But in the case of the appellant, the State Government made the reference and as such there has been discrimination. It is no doubt true that in the letter dated June 8, 1968, sent by the State Government to Indian Hume Pipe Co. Ltd., the Government states that it is not making a reference regarding the dispute between the said company and its workmen. The reason for not making the reference is also stated to be the implementation by the company of the interim recommendations of tne Wage Board and its preparedness to implement the final recommendations also. We find, however, from the judgment of the High Court that this ques•i-in of discrimination with special reference to the Indian Hume Pipe ..:ompany Ltd. has not been argued by the appellant. The infer ence under such circumstances is that such a contention was not pressed before the High Court. Hence we decline to go into that question. c Jn the result, the appeal fails and is dismissed. There will be no order as to costs. As the Reference i' qf the year 1969, the Tribunal is directed to dispose of the matter expeditiously. G.C. Appeal dismissed.