THE HONOURABLE MR.A.P.SHAH, THE CHIEF JUSTICEANDTHE HONOURABLE MR v. THE GOVERNMENT OF TAMIL NADU

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED 01.11.2007Coram:THE HONOURABLE MR.A.P.SHAH, THE CHIEF JUSTICEANDTHE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIANW.P.No.46429 of 2006METAL BOX INDIA LIMITEDA COMPANY REGISTERED AND EXISTINGUNDER THE COMPANIES ACT, 1956HAVING ITS REGISTERED OFFICE AT:Iind FLOOR, ALLAHABAD BANK BUILDING,17, PARLIAMENT STREET,NEW DELHI-110 001REPRESENTED BY ITSCHAIRMAN AND MANAGING DIRECTOR.. Petitionervs.1.THE GOVERNMENT OF TAMIL NADU, REPRESENTED BY THE SECRETARY, LABOUR AND EMPLOYMENT DEPARTMENT, FORT ST.GEORGE, CHENNAI.2.METAL BOX COMPANY WORKERS UNION (REG.No.179/TVR) REPRESENTED BY ITS PRESIDENT, NO./25/13, 3RD STREET, JEEVA NAGAR, NEW WASHERMENPET, CHENNAI-600 081.3.METAL BOX COMPANY EMPLOYEES UNION, (REG.NO.185) REPRESENTED BY ITS GENERAL SECRETARY NO.185 A, THIAGARAJAPURAM THANGAL, THIRUVOTTIYUR, CHENNAI-600 019.. RESPONDENTSPRAYER: The writ petition is filed under Article 226 of theConstitution of India praying for the issuance of the writ of certioraricalling for the records of the proceedings of the first respondent intheir reference made to the Industrial Tribunal vide G.O.(D) No.427dated 2.6.2006; and quash the said G.O.(D).No.427 dated 2.6.2006, thereference made therein and all further proceedings pursuant theretobefore the Industrial Tribunal. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner : Mr.T.V.Ramanujam, Senior counsel M/s B.F.S. LegalFor Respondent-1:Mr.P.Rajakalifulla Govt.PleaderFor Respondent-3 :Mr.K.M.Ramesh(ORDER OF THE COURT WAS MADE BY V.RAMASUBRAMANIAN, J.)The company Metal Box India Limited, whose management is thepetitioner in the present writ petition, was declared as a sick unit bythe Board for Industrial and Financial Reconstruction on 27.5.1988 andan Operating Agency was appointed. But before the finalisation of aScheme, the Chennai Unit of the company was reopened on 24.4.1989 andwas later locked out on 11.10.1992.2. A Scheme prepared by the Operating Agency on 3.10.2000,came to be approved by the Appellate Authority for Industrial andFinancial Reconstruction on 15.4.2002. But one of the Trade Unions ofthe workers of the company entered into a settlement with the managementon 28.11.2005, under Section 18 (1) of the Industrial Disputes Act,1947. On the said settlement, the Joint Commissioner of Labour initiatedtalks, but another Union challenged the initiation of proceedings, byway of a writ petition in W.P.No.1002 of 2006.3. On 18.1.2006, the settlement received the seal of approvalfrom the Joint Commissioner of Labour and came to be treated as asettlement under Section 12 (3) of the Act. As per the settlement, theworkers agreed to take compensation and surrender their claim for orlien on employment.4. The said settlement was challenged by the other Union inW.P.No.1787 of 2006. Pending the writ petition, the learned single Judgegranted interim stay and the same was challenged in writ appealsW.A.Nos.415 and 416 of 2006.5. The writ appeals were allowed by a common order dated27.4.2006, vacating the interim stay granted by the learned single Judgeand disposing of the writ petition, with a direction to the Governmentto refer the dispute to the Industrial Tribunal.6. In pursuance of the said order, the Government issued G.O.(D) No.427, Labour and Employment (A2) Department, dated 2.6.2006referring the following questions for adjudication by the IndustrialTribunal:-"1. Whether the claim of the Metal Box Union(Regd. No.179/TVR) that the settlement signed underSection 12 (3) of the Industrial Disputes Act, 1947Dated 18.1.2006 by the Joint Commissioner of Labour,Chennai is violative of provisions of Industrial https://hcservices.ecourts.gov.in/hcservices/ Disputes Act, 1947 and detrimental to the interest ofworkmen and therefore the settlement dated 18.1.2006should be set aside is justified?2. If not, to what relief the workers areentitled?"7. Aggrieved by the terms of the reference, the management hascome up with the present writ petition, contending that the terms ofreference are not in accordance with the spirit of the order passed bythe Division Bench in W.A.Nos.415 and 416 of 2006 dated 27.4.2006.8. We have heard Mr.T.V.Ramanujun, learned Senior Counsel forthe petitioner, Mr.P.Rajakalifulla, learned Government Pleader for thefirst respondent and Mr.K.M.Ramesh, learned counsel for the thirdrespondent.9. As seen from the affidavit in support of the writ petition,the grievance of the writ petitioner is not against the reference assuch. It is only with respect to the terms of the reference and themanner in which the terms of the reference are worded.10. The first issue referred to the Industrial Tribunal, bythe impugned Government Order is as to whether the settlement underSection 12 (3) is violative of the provisions of the Industrial DisputesAct and detrimental to the interests of the workmen and whether theclaim of one Union for setting aside the settlement is justified or not.The primary objection of the management to the framing of the issue isthat it does not encompass within itself, the background in which thesettlement was brought forth. The next objection is that if allowed tostand as such, the reference places the onus upon the parties to thesettlement to justify the settlement, whereas the onus should be uponthe party who challenges the settlement, to prove that it is violativeof the law.11. We have carefully considered the submissions. InW.A.Nos.415 and 416 of 2006, the Union opposing the settlement underSection 12 (3) raised three objections viz.,(i) that the Joint Commissioner of Labour did notindependently apply his mind to the fairness and reasonableness of thesettlement and did not assist in the arrival of the settlement;(ii) that the provisions of Section 25 (O) of the IndustrialDisputes Act, were not complied with; and (iii) that the Union was not given an opportunity.12. In answer to the first objection, the Division Bench heldin paragraph-12 of its judgment dated 18.4.2006 as follows:-"Therefore from the records, it is notpossible for us to arrive at a conclusion that thefourth respondent did not independently apply hismind to the fairness and reasonableness of thesettlement or that he denied opportunity to theUnions, the interest of whose members had been takeninto account." https://hcservices.ecourts.gov.in/hcservices/

13. The second objection relating to Section 25 (O) was notsustained by the Division Bench. With regard to the third objection, theDivision Bench held in paragraph-16 of its judgment as follows:-"It is not possible for us to come to theconclusion from these materials that there was no fairopportunity to the first respondent-Union or thatthere was no independent application of mind by thefourth respondent on the impugned settlement. Perhaps,the first respondent-Union may be able to establishthe same before the Tribunal, where the factualcontroversies can be laid to rest ........"14. From the findings recorded by the Division Bench asextracted above, it is clear that the dispute was directed to bereferred for adjudication to the Industrial Tribunal, for the purpose ofresolving certain factual controversies, viz., there was application ofmind on the part of the Joint Commissioner of Labour and whether a fairopportunity was given to the contesting Union, before the ConciliationOfficer put his seal of approval on the settlement. Therefore, the termsof reference could have been better worded, so as to avoid any confusionor controversy. In simple terms, the Government could have framed theissue in such a manner (i) as to whether the settlement under Section 12(3) was vitiated by non application of mind on the part of theConciliation Officer and by the failure to provide fair opportunity tothe opposing Union and (ii) as to what relief the workers are entitled,in the event of the settlement being found liable to be set aside, oneither of those grounds.15. Since the reference as framed, is not happily worded andhas given rise to a controversy even while attempting to resolveanother, the impugned Government Order is liable to be modified.Accordingly, the writ petition is allowed and the terms of reference tothe Tribunal shall stand modified as follows:-"(1) Whether the settlement under Section 12 (3) isvitiated by non application of mind on the part of theConciliation Officer and by his failure to provide fairopportunity to the opposing Union and is liable to be setaside?.(2) If so, to what relief the Members of the opposingUnion are entitled, in the light of the Scheme framed underthe Sick Industrial Companies (Special Provisions) Act?".The Industrial Tribunal shall dispose of the dispute within a period offour months from the date of receipt of a copy of this order. No costs.Sd/-Assistant Registrar/true copy/Sub Assistant RegistrarSvn https://hcservices.ecourts.gov.in/hcservices/ To1.THE SECRETARY,THE GOVERNMENT OF TAMIL NADU,LABOUR AND EMPLOYMENT DEPARTMENT,FORT ST. GEORGE, CHENNAI.1 cc to Mr. K.M. Ramesh, advocate SR.65926. WP No.46429 of 2006CK(CO)JJM(30/04/08)