MANU/GJ/0639/2011

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

Special Civil Application No. 4709 of 2011
Decided On: 10.05.2011
Appellants: IPCL Employees Association
Vs.
Respondent: Reliance Industries Ltd. and Ors.
Hon'ble Judges/Coram:
H.K. Rathod, J.
Counsels:
For Appellant/Petitioner/Plaintiff: B.A. Desai, learned Sr. Adv., S.D. Suthar, learned Adv.
and N.K. Majmudar, learned Adv. for N.K. Majumdar, Adv. learned Adv. for Petitioner 1
For Respondents/Defendant: K.B. Trivedi, learned Adv. General, K.D. Gandhi, learned
Adv. forNanavati Associates for Respondent 2
Case Note:
Labour and Industrial - Legality of Award - Sections 2(p) and 18(1) of
Industrial Disputes Act, 1947 - Present petition filed against order by which
Industrial Tribunal had accepted settlement arrived between Respondent No.
1 to Respondent no. 3 and consequently rejected objection of Petitioner Union
- Held, considering facts of present case, during pendency of reference in
respect to industrial disputes between parties under Sections 2(p) and 18(1)
of Act settlement arrived between parties being private settlement which
signed by 98% employees accepting entire terms of settlement and thereafter
it had been produced before Industrial Tribunal and then Industrial Tribunal,
had recorded it and after scrutinizing it found to be just, fair, reasonable and
in interest of workman - Therefore, settlement which recorded by Industrial
Tribunal and award passed in terms of settlement then such award passed on
settlement covered by Section 18(3) of Act and having binding effect of award
to all parties to industrial dispute as per Section 18(3)(d) of Act and also it
binding to all parties who were employees in establishment or part thereof on
date of dispute and all persons who become subsequently employed in
establishment or part thereof as per Section 18(3)(d) of Act - Entire
settlement as whole was binding to all employees because Industrial Tribunal
had passed award in terms of settlement and Petitioner Association and other
2% employees were not entitled to seek challenge on ground that
implementation of award with reserve treating part of terms as binding
thereof and part was of not binding - Therefore, such challenge which had
been made by Petitioner Association before this Court was considered to be
half hearted challenged and could not be entertained by this Court when
overall settlement had been accepted by 98% employees voluntarily with
open eyes working with employer - Hence, there was no substance in present
petition - Accordingly, present petition dismissed
JUDGMENT
H.K. Rathod, J.

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1 . Heard learned senior advocate Mr. B.A. Desai with learned advocate Mr. Suthar for
learned advocate Mr. NK Majmudar appearing on behalf of Petitioner IPCL Employees
Association through General Secretary, learned Advocate General Mr. K.B. Trivedi with
learned advocate Mr. K.D. Gandhi appearing for Nanavati Association for Respondent
No. 1 on Caveat.
2 . The present petition was heard by this Court on 2/5/2011. Thereafter, matter was
kept reserved for judgment. In this petition, Petitioner Association has challenged award
passed by Industrial Tribunal No. 1, Baroda exh 26 in reference IT No. 95/2009 dated
7/2/2011. The Industrial Tribunal No. 1, Baroda has accepted settlement arrived
between Respondent No. 1 Reliance Industries Ltd, Respondent No. 2 IPCL Employees
Union and Respondent No. 3 Petrochemicals Employees Union vide exh 14 and found to
be just, proper, fair and reasonable. Therefore, in terms of aforesaid settlement exh 14,
award has been passed and disposed of reference in terms of settlement and such terms
of settlement is binding to the parties, which considered to be a part of present award.
No order has been passed for cost.
3 . Before, I began with submission made by both learned senior advocates, it is
necessary to consider following observations made by Honorable Mr. Justice Holmes
and Honorable Abraham Lincoln, which are as under:
"Justice Holmes: One of the eternal conflicts out of which life is made up is that
between the efforts of every man to get the most he can for his services, and
that of a society, disguised under the name of Capital, to get his services for
the least possible return. Combination on the one side is patent and powerful.
Combination on the other is necessary and desirable counterpart, if the battle is
to be carried on in a fair and equal way."
Abraham Lincoln: "You cannot bring about prosperity by discouraging thrift;
You cannot help the wage - earner by pulling down the wage payer;
You can not help the poor by destroying the rich'
You can not help men permanently by doing for them what they could and
should do for themselves."
The industrial harmony, is, "'industrial peace' and 'industrial harmony' may
have the same meaning; but we are inclined to think that the concept of
industrial peace is somewhat negative and restrictive. It emphasises absence of
strife and struggle. The concept of industrial harmony is positive
comprehensive and it postulates the existence of understanding cooperation
and a sense of partnership between the employers and employees. That is why
we prefer to describe our approach as one in quest of industrial harmony."
The Social Justice, is, "The concept of social justice is not narrow, or one sided,
or pedantic, and is not confined to industrial adjudication alone. Its sweep is
comprehensive. It is founded on the basic ideal of socio economic equality and
its aim is to assist the removal of socio economic disparties and inequalities;
nevertheless in dealing with industrial matters, it does not adopt a doctrinaire
approach and refuses to yield blindly to abstract notions, but adopts a realistic
and pragmatic approach. It, therefore, endeavours to resolve the competing
claims of employers and employees by finding a solution which is just and fair
to both parties with the object of establishing harmony between capital and

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 labour, and good relationship. (See: Per Gajendragadkar, J., Cotton Spinning
and Weaving Mills Co. Ltd v. Labour Appellate Tribunal (1963) II LLJ 436 (S.C.)
Social justice is a dynamic device to mitigate the sufferings of the poor,
weak, dalits, tribals and deprived sections of the society and to elevate
them to the level of equality to live a life with dignity of person. Social
justice is not a simple or single idea of a society but is an essential part
of complex social change or relieve the poor etc. from handicaps,
penury to ward off distress and to make their life livable, for greater
good of the society at large. In other words, the aim of social justice is
attain substantial degree of social, economic and political equality,
which is the legitimate expectation and constitutional goal. Social
security, just and humane conditions of work and leisure to workman
are part of his meaningful right to life and to achieve self expression of
his personality and to enjoy the life with dignity. (See: K. Ramaswamy
J., in Air India Statutory Corporation v. United Labour Union and Ors.
(1971) I LLJ 1113 (S.C.)
4 . Along with present petition, certain documents are produced on record while
annexing same with petition by Petitioner Association. The order of reference made by
Labour Commissioner dated 27/7/2009 for referring industrial disputes for adjudication
to Industrial Tribunal, Baroda. The copy of settlement/memorandum of settlement
executed between Respondent No. 2 Company and Respondent Nos. 3 and 4 Unions.
The copy of objections submitted by Petitioner Association dated 10/12/2010. The copy
of application dated 14/12/2010 preferred by Respondent No. 2 Company and
Respondent No. 3 and 4 Unions. The copy of objection/submission dated 21/12/2010
and detailed submission dated 25/1/2011 in opposing settlement by Petitioner Union.
The copy of detailed reply dated 30/12/2010 and 25/1/2011 of Respondent No. 1
Company and copy of present award in question and copy of notification dated
14/2/2011. The above referred documents are placed on record of present petition by
Petitioner.
5 . Learned senior advocate Mr. B.A. Desai raised contention before this Court that
Industrial Tribunal, Baroda misdirected in respect to question of law and failed to
exercise jurisdiction and not properly appreciated contention raised by Petitioner
Association while relying upon settlement which is not legal it violates Section 18 Sub-
Section 1 and Section 2(p) of I.D. Act, 1947.
6. He submitted that Industrial Tribunal, Baroda has wrongly applied Section 18(3) of I.
D. Act, 1947 and made it applicable to all employees which is not permissible under
law. He emphasized his submission to the effect that merely 98% employees have
signed undertaking subsequent to settlement, therefore, such declaration by employees
not being part of settlement. The settlement has been published on notice board and
produced it calling to employees to accept or not to accept benefits depend upon
individual expectation of concerned employees or not. The said settlement having
prospective effect but past period, lump sum amount has been given to existing
employees but living those died or retired and obtained VRS, for that, there is no
provision is made in settlement and also no benefit is given to such past employees. He
submitted that no notice has been given to heirs or legal representatives of such person
who died prior point of time and also obtained v. prior point of time.
7 . The present settlement is covered other two references, being reference No.
111/2009 and reference No. 59/2009. The reference No. 111/2009 is pending for

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dispute of expectation of employer Company being demand raised by employer.
However, he has made clear before this Court that both these references are still
pending before Industrial Tribunal No. 2, Baroda and same has been disposed of by
Industrial Tribunal No. 1 Baroda in present award, which is under challenged. The
present reference No. 95/2009 was pending before Industrial Tribunal No. 1, where
award is passed. The Industrial Tribunal, Baroda has committed error in considering
fact and issue, which are not referred for adjudication in reference No. 95/2009.
8 . He submitted that demands relating to reference No. 111/2009 and 59/2009 are
including in present settlement arrived in reference No. 95/2009. He submitted that
Industrial Tribunal, Baroda has committed gross error and misdirected itself relying
upon decision of Apex Court in case of Herbertsons Ltd v. The workmen of Herbertsons
Ltd and Ors. AIR 1977 SC 322.
9 . He distinguished above referred decision of Apex Court that in case of Herbertsons
Ltd, it was a case of recognized Union but in this case Respondent No. 3 and 4 are not
recognized Unions but merely representing employees even they are not majority Union.
Therefore, Herbertsons Ltd., case of Apex Court is not applicable to facts of this case.
1 0 . He relied upon decision of Apex Court in case of Workmen of M/s Delhi Cloth
General Mills Ltd v. Management of M/s Delhi Cloth General Mills MANU/SC/0335/1969
: AIR 1970 SC 1851. He submitted that statute and rules thereunder prevails over
settlement and relying upon it, he also says that Section 18 Sub-Section 1 is binding to
signing person of settlement.
11. He submitted that Industrial dispute which referred for adjudication being reference
No. 95/2009, has been raised by all three Unions jointly. Therefore, Petitioner
Association is a party to dispute which has been ignored by Industrial Tribunal, Baroda.
However, he has made clear before this Court that reasonable opportunity of hearing
was given to Petitioner Association by Industrial Tribunal, Baroda.
12. He relied upon one recent decision of this Court in case of United Phosphors Ltd v.
Commissioner of Labour 2010 (II) CLR 1045. He also submitted that such settlement is
against industrial peace because it binds signing person and Petitioner Employee
Association has not signed settlement. Therefore, such settlement is not binding to
Petitioner Association and its members.
1 3 . He submitted that Industrial Tribunal has committed gross error in jumping to
conclusion that merely 98% employees have signed undertaking and accepted
settlement, that itself can not be considered that settlement is just and proper because
subsequent acquiesced has no meaning because it is irrelevant.
1 4 . According to his submission, first settlement arrived between Respondent No. 1
Company with Respondent Nos. 3 and 4. Thereafter, undertaking has been obtained
from employees. Therefore, such undertaking to accept settlement by employees is
become irrelevant. The settlement covered dispute reference No. 111/2009 and 59/2009
that go beyond scope of terms of reference. Therefore, Industrial Tribunal has no
jurisdiction to record settlement exh 14, which covered industrial dispute, which are not
referred for adjudication to concerned Industrial Tribunal. In such circumstances,
justness and fairness of settlement can not be examined by Industrial Tribunal, Baroda.
If settlement is legally not valid, then question of justness and fairness does not require
to be examined by Industrial Tribunal, Baroda.
1 5 . Therefore, he submitted that Industrial Tribunal has committed gross error in

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including reference Nos. 111/2009 and 59/2009 in its award based on settlement.
Therefore, Industrial Tribunal has avoided adjudication on merits and failed in
exercising jurisdiction.
16. He submitted that industrial dispute Act, 1947 is not provided for such settlement
and award which has been published by Assistant Commissioner of Labour is contrary
to Rules 31(A) read with Section 17 - 17A of I. D. Act, 1947.
17. He submitted that in eye of law, there is no publication at all of award in question
in accordance with law. Therefore, it is not legal award, which can enforceable by
Company against employees. However, Respondent No. 1 Company is implementing
award but also implementing other demand of reference Nos. 111/2009 and 59/2009,
that is a clear case of violation of statutory provisions.
18. Therefore, he submitted that implementation of award in question is to be stayed
and whatever benefits has been extended in favour of such employees, may be
considered interim relief and let Industrial Tribunal may adjudicate entire dispute on
merits which has been referred for adjudication, so long status quoted is to be granted
not to be implemented award in question.
1 9 . He submitted that during pendency of aforesaid two references being Nos.
111/2009 and 59/2009, service condition has been changed without complying with
provisions of Section 33 and Section 9(A) of I. D. Act, 1947. He submitted that after
settlement is arrived and before award is passed, 1500 employees on 13/12/2010 have
opposed settlement but all have accepted subsequently means acquiesced. The
Petitioner Association is not minority Union but it is oldest Union.
2 0 . He submitted that when settlement arrived between parties, at that occasion,
Petitioner Association having 900 membership but after settlement, it has been
increased upto 1100. Accordingly, submission has been made in detailed in writing
before Industrial Tribunal by Petitioner Association. Even though, submission which has
been made by Petitioner Association has not been properly dealt with by Industrial
Tribunal, Baroda.
21. In short his submission is that Industrial Tribunal has committed gross error in
recording settlement/accepting settlement placed before Industrial Tribunal exh 14 by
Respondent No. 1 Company and Respondent Nos. 3 and 4, wherein without obtaining
signature of Petitioner Association, who are party to reference, which has been arrived
being 2(p) Settlement read with Section 18 Sub-Section 1 of I. D. Act, 1947, is binding
only signing persons not other person. However, Industrial Tribunal, Baroda has
recorded such settlement and giving effect to such settlement as award under Section
18 Sub-Section 3 is binding to all employees working with Respondent No. 1 Company
including it binding also to Petitioner Association. Except that no other submission is
made by learned senior advocate Mr. Desai before this Court and no other decision has
been relied by him before this Court.
22. Learned Advocate General Mr. KB Trivedi submitted that initially settlement arrived
between Respondent No. 1 Company and Respondent Nos. 3 and 4 Union under Section
2(p) and 18 Sub-Section 1 on 30/11/2010 signed by all parties of settlement except
Petitioner Association. This settlement has been produced on record by signing parties
exh 14 with a prayer to record settlement and to pass award in terms of settlement.
23. He submitted that once settlement arrived between parties under Section 2(p) and
18 Sub-Section 1, it binding to signing persons. A moment it has been placed on record

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before Industrial Tribunal in pending reference then stage of Section 18 Sub-Section 1
has gone and matter is at large before Industrial Tribunal to examine legality and
validity of settlement and also justness and fairness of settlement, which has been
rightly examined by Industrial Tribunal, Baroda while considering facts that out of total
employees 2456/-, 98% employees comes to 2418 have signed undertaking while
accepting each terms of settlement including members of Executive Committee of
Petitioner Association. He relied and referred upon page 120, 131 and 135 of petition.
He also relied upon one decision of Apex Court in case of Herbertsons Limited v.
Workmen MANU/SC/0299/1976 : 1976 (4) SCC 736 and relied upon para 21, 24 and 25
from decision.
2 4 . He relied upon another decision of Apex Court in case of Tata Engineering and
Locomotive Co. Ltd MANU/SC/0332/1981 : 1981 (4) SCC 627 para 8 and 9. He also
submitted that recent decision of this Court in case of United Phosphorous Ltd v.
Commissioner of Labour and Ors. 2011 Lab IC 1006. After referring para 9, 9/1, he
submitted that this decision is not applicable to facts of this case, because in that
decision, this Court has considered order of reference made by Appropriate Government
challenged by Company and opposed by Union. Therefore, this was not decision where
question of settlement is whether just and fair or not examined by this Court.
25. Learned senior advocate Mr. B.A. Desai while giving answer to submission made by
learned Advocate General as referred above, relied upon page 119 and 120
memorandum of settlement and pointed out that Section 18(1) has been applied which
binding to parties to settlement and Petitioner is not a party to settlement. Therefore,
such settlement can not be binding to Petitioner Union/Association though Petitioner
Association was a party to reference 95/2009. Therefore, in absence of Petitioner
Association or in absence of signature of Petitioner Association, Industrial Tribunal can
not pass an award which binding other than parties means Petitioner Association. He
submitted that Section 18 Sub-Section 3 ingredient/condition are not satisfied because
initially private settlement can not consider to be an industrial settlement binding to all
employees.
26. He again submitted that award is not published according to statutory Rules 31 A
read with Section 17A of Industrial Disputes Act, 1947. Learned Advocate General Mr.
KB Trivedi submitted that this settlement is having effect from 1/1/2007 and referring
clause/item No. 17(2) of settlement at page 130.
27. I have considered submissions made by both senior learned advocates. I have also
perused all annexures which are attached to petition and also perused award passed by
Industrial Tribunal in reference No. 95/2009 dated 7/2/2011. The memorandum of
settlement is placed on record at page 119 Annexure B dated 30/11/2010. This
settlement arrived between parties under Section 2(p) read with Section 18(1) of I. D.
Act, 1947. Therefore, Section 2(p), Section 18(1), Section 18(3) and Section 12(3) are
quoted as under:
Section 2(p): "settlement" means a settlement arrived at in the course of
conciliation proceeding and includes a written agreement between the employer
and workmen arrived at otherwise than in the course of conciliation proceeding
wherein such agreement has been signed by the parties thereto in such manner
as may be prescribed and a copy thereof has been sent to (an officer authorized
in this behalf by) the appropriate Government and the conciliation officer.
Section 18(1): A settlement arrived at by agreement between the employer and

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 workman otherwise than in the course of conciliation proceeding shall be
binding on the parties to the agreement.
"Section 18(3): A settlement arrived at in the course of conciliation proceedings
under this Act (or an arbitration award in a case where a notification has been
issued under Sub-section (3A) of Section 10(A) or (an award (of a Labour
Court, Tribunal or National Tribunal) which has become enforceable) shall be
binding on-
(a) all parties to the industrial dispute;
(b) all parties summoned to appear in the proceedings as parties to the
dispute, unless the Board, (arbitrator) (Labour Court, Tribunal or
National Tribunal), as the case may be, records the opinion that they
were so summoned without proper cause;
(c) where a party referred to in Clause (a) or Clause (b) is an
employer, his heirs, successors or assigns in respect of the
establishment to which the dispute relates;
(d) where a party referred to in Clause (a) or Clause (b) is composed
of workmen, all persons who were employed in the establishment or
part of the establishment, as the case may be, to which the dispute
relates on the date of the dispute and all persons who subsequently
become employed in that establishment or part.
Section 12(3): If a settlement of the dispute or of any of the matters in dispute
is arrived at in the course of the conciliation proceedings the conciliation officer
shall send a report thereof to the appropriate Government (or an officer
authorized in this behalf by the appropriate Government) together with a
memorandum of the settlement signed by the parties to the dispute.
28. The said settlement is having objectives as mentioned in terms No. 1 at page 123,
which is as under:
OBJECTVIVES:
1 . 1 To optimize resources and maximize productivity in order to
produce quality products at reasonable and affordable cost, to achieve
all round efficiency and inculcate World Class Safety culture in the
Company.
1.2 To bring and promote a conducive work culture that is prerequisite
for the progress of the organization and maintaining organizational
discipline. Also to ensure value addition by Employees commencement
with fair compensation.
1.3 To strengthen bilateral relationship and trust between Management
and Non Supervisory Employees.
1 . 4 To Promote and maintain harmonious and productive Industrial
Relations.
29. This settlement is having applicability as per terms No. 2, which is as under:

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 APPLICABILITY:
The provisions of this Settlement shall be applicable to:
2.1 All permanent Non Supervisory Employees (i.e. Workmen)
who are on the regular payroll of the Company on the date of
signing of the Settlement and who submit the duly signed
undertaking cum declaration form as at Annexure I.
2.2 The terms of the Settlement shall also apply to all such
Non Supervisory employees who may hereafter join on the
regular pay roll of the company.
2 . 3 This settlement shall not be applicable to Apprentices,
Learners, Trainees, Temporary, Casual and Non Supervisory
Employees under suspension or any person employed by the
Contractor/s.
30. The period of settlement having effect from 1/12/2010 and will remain in force for
a period of four years and six months upto 31/5/2015. The non supervisory employees
shall be entitled to receive benefits under this settlement. The amount of benefit under
settlement shall comprise of increase in basic wages, allowances and consequential
benefits arising out of same. In said settlement, one time lump sum amount has been
paid to employees to eligible Non Supervisory Employees, who are on the payroll of
company on the date of signing of its settlement. The lump sum amount as mentioned
at Annexure (V) as discussed and decided in item No. 17 of settlement at page 130, is
as under:
17. ONE TIME LUMP SUM PAYMENT:
17.1 It is agreed to pay a one time lump sum amount (Not to be
reckoned for PF and any other benefit) for the period from 01/01/2007
to 30.6.2010 to eligible Non Supervisory employees who are on the
rolls of the company on the date of signing of this settlement. Amount
of Lump sum is mentioned at Annexure V.
17.2 However, one time lump sum amount will be payable to Non
Supervisory Employees who died, superannuated or promoted to
supervisory cadre during the period from 01.01.2007 to the date of
signing of the settlement proportionately for the period they were on
the rolls of the Company as Non Supervisory employee. This amount of
lump sum so arrived shall be payable to all eligible Non Supervisory
employees based on actual attendance and shall not be considered as
wages/pay for any purpose whatsoever.
It is also necessary to consider item No. 19 which relating to general condition at page
131, is as under:
19. GENERAL:
19.1 Any overdue installments of loan advances remaining outstanding
or any other dues of the company, against any employee either in
full/part shall be recovered from lump sum payment or arrears payable
on account of this settlement.

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 19.2 The demands contained in the Charter of Demand raised by the
Unions which are not specifically mentioned in this settlement, shall be
deemed to have been settlement/withdrawn. Any other issues/disputes
pertaining to service conditions involving financial implications or
otherwise, raised by the signatory Unions relating to Charter of
Demands and pending before the conciliation officer or any other
Adjudicating Authorities shall also stand settled/withdrawn.
19.2.1 Parties agree to submit the settlement to honorable Industrial
Tribunal where proceedings are pending in IT Ref. No. 95/09, IT Ref
No. 111/09 and IT Ref. 59/09 to obtain award.
31. The parties have settled disputes, for that, two settlement arrived separately, one is
discussed as referred above and second is relating to productivity, manning pattern and
work practice Annexure (IV) page 138 dated 30/11/2010.
32. The award passed by Industrial Tribunal No. 1, Baroda vide exh 26 is at page 409
in reference IT No. 95/2009. The industrial dispute referred for adjudication by
appropriate Government on 27/7/2009. On behalf of Petitioner Association, one
representative Mr. J. D. Majmudar had appeared before Industrial Tribunal and made
their submission before Industrial Tribunal, Baroda. The statement of claim has been
field before Industrial Tribunal, Baroda exh 5 by Union. The Respondent No. 1 company
has filed reply vide exh 9. The settlement which has been arrived between parties
except Petitioner Association was sent to Industrial Tribunal, Baroda by all parties
through registered post. The same has been recorded vide exh 10 by Industrial
Tribunal, Baroda. The Petitioner Union/Association has raised objections exh 11 and
submitted that this settlement is not binding to them and this settlement may not be
recorded because it is against interest of employees, those who are working with
Respondent No. 1 Company. It is being a private settlement, Petitioner Association can
not be bifurcated from this settlement and denied or ignored benefits to employees for a
period from 2007 to 2010. The Respondent No. 1 Company has produced settlement
vide exh 12. Thereafter, both Union Respondent No. 3 and 4 have also produced
settlement with an application to record it and to pass award in respect to pending
reference and to disposed of reference in terms of settlement vide exh 14. Vide exh 14,
an application made by Respondent No. 1 Company and Respondent No. 3 and 4 both
Unions to record it and to disposed of reference in terms of settlement. The reference
No. 111/2009 is pending relating expectation of employers Company and reference No.
59/2009 is relating to claim of bonus. The copy of this settlement has been sent to
various statutory authorities as required under provision of I. D. Act, 1947. According to
Annexure 1 of settlement, this settlement is binding to employees, who gave declaration
and undertaking to Respondent No. 1 Company. Only on those persons, this settlement
is binding. The said settlement is published in Gujarati and English language and in a
various place of plant as well as understanding of this settlement has been given to all
workmen, those who are working with Respondent No. 1 Company. According to
Respondent No. 1 company and Respondent No. 3 and 4 Union that in pursuance to
Annexure I, declaration and undertaking received upto 11/12/2010 by 2383 employees
out of 2456 employee, which beyond 96% employees for accepting terms of settlement
while giving declaration and undertaking to Respondent No. 1 company. The
Respondent No. 1 company has paid one time lump sum amount to such employees
who have accepted it as well as also extended benefits of present settlement, which is
just and fair and accepted by 96% employees working in Non Supervisory Category with
Respondent No. 1 company. This settlement has been arrived with purpose and object
to maintain industrial peace and harmony and also in interest of working class at large.

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33. The Petitioner Association Union has filed his objection vide exh 15 and written
submission made exh 20 before Industrial Tribunal, Baroda. The Petitioner Association
has raised only a legal contention against settlement that Petitioner Association has not
signed the settlement. This settlement is under Section 18 Sub-Section 1, binding to
concerned parties only being a private settlement. Therefore, entire dispute which has
been referred for adjudication can not be disposed of in terms of settlement because
more than 130 demands are referred for adjudication. The Petitioner Association has
also raised contention that certain matter (items) of settlement is out side scope of
reference. Therefore, can not be recorded it and if this settlement is recorded then it
amounts to binding all employees working with Respondent No. 1 Company in Non
Supervisory category under Section 18 Sub-Section 3 of I. D. Act, 1947. This settlement
is not made applicable to employees, those who have been left job in the year 2007 and
retired and obtained v. During pendency of reference, service condition of employees
can not be altered by employer. This settlement is also including two other references
being IT Nos. 111/2009 and 59/2009 relating to claim of bonus and relating to
expectation of employer company. Therefore, one settlement can not cover three
references. Such kind of conditional settlement is binding to employees those who have
given declaration and undertaking. Therefore, settlement is objected by Petitioner
Association. The statement of claim filed by all three Unions. Now Petitioner Association
can not be by pass by other parties to the settlement, it also change the system of
giving Dearness allowance, medical facilities and other service benefits.
3 4 . Against that vide exh 21, written argument has been produced on record by
Respondent No. 1 Company. The Respondent No. 1 Company has relied upon facts that
this being a just and fair settlement accepted by more than 98% employees of Non
Supervisory category working with Respondent No. 1 Company. This settlement is on
the principles of give and take, which has been accepted by almost employees except
2% and it also having object to maintain industrial peace and harmony for long period
in industry. Therefore, initial settlement arrived between parties under Section 18 Sub-
Section 1 read with Section 2(p) of I. D. Act can be placed before Industrial Tribunal to
test justness and fairness then to record it, which binding to all employees those who
are working in Non Supervisory category of Respondent No. 1 Company. Therefore, it
can not consider to be private settlement, once it is produced before Industrial Tribunal
by respective parties. The settlement covered other dispute that itself can not consider
to be settlement being a unjust and unfair. According to Respondent No. 1 Company,
handsome amount and service benefits have been given in favour of each employee in
settlement, those who are working with Respondent No. 1 company in Non Supervisory
category.
35. After pleading has been over by respective parties in para 9, Industrial Tribunal has
given detailed reasoning in support of its conclusion. The Industrial Tribunal has
discussed entire facts as well as decision of Apex Court in case of Herbertson Ltd v.
Workmen reported in 1977 SCC 48 Lab and Service page 48. The important facts has
been considered, that in entire reply, objection and written submission made by
Petitioner Association, no where contention has been raised by Petitioner Association
that this settlement, which arrived between parties is malafide, fraud, based on
corruption and misrepresentation. The Industrial Tribunal has also considered that
Petitioner Association has not demonstrated before Industrial Tribunal that how this
settlement is not just and fair and contrary to interest of employees. For that, no such
pleadings are found in written statement, objection and written submission made by
Petitioner Association before Industrial Tribunal.
36. The Industrial Tribunal has also considered one another decision of Apex Court in

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case of Tata Engineering and Locomotive Co. Ltd reported in 1982 (1) LLN 28, where
also similar circumstances has been discussed by Apex Court. The Apex Court has
considered that when most of employees have accepted terms of settlement with open
eyes, then it should have to be presumed that such settlement is just and fair. Merely,
some of employees have objected it, does not mean that such settlement is found to be
unjust and unfair. In case of Tata Engineering & Locomotive Co. Ltd, similar facts have
been discussed by Industrial Tribunal and Industrial Tribunal has also considered one
another decision in case of Amalgamated Coffee Estates Ltd. and Ors. v. Theirs
Workmen and Ors reported in MANU/UP/0042/1965 : 1965 (I) LL J 110. The Industrial
Tribunal has also considered aforesaid decision, which has been relied by Respondent
No. 1 Company and also considered that when most of employees means majority
employees have accepted settlement while submitting declaration and undertaking, then
it must have to be considered that it is a voluntarily acceptation of settlement by each
employee because there is no allegation has been made by Petitioner Association
against employer that this declaration and undertaking has been obtained by coercive
method or by adopting unfair tactic by employer. The Industrial Tribunal has considered
that once 98% employees have accepted settlement with open eyes on the principles of
give and take service benefits including lump sum amount, which has been paid and
extended in favour of such employees then such settlement can not consider to be
unjust and unfair. Merely one Union has objected it, who is not party to settlement only
on that ground, such settlement can not consider to be unfair and unjust. The Industrial
Tribunal has also considered one decision of Apex Court in case of Sirsilk and Ors. v.
Government of Andhra Pradesh reported in 1963 (II) LL J 674 as well as considering
decision of Bombay High Court in case of Airlines Cabin Screw Association v. Indian
Airlines Corporation and Ors. reported in MANU/MH/0132/1986 : 1987 (I) LL J 285 and
another decision of Bombay High Court in case of All Employees Association v. V.V.F.
Ltd reported in 2002 (4) LLM 266, in case of Tata Consultancy Engineering and
Associates Staff Ltd Union and Tata Sons Ltd reported in 2002 (1) LLM 781.
37. After considering above referred decisions, which have been relied by Respondent
No. 1 Company, Industrial Tribunal has come to conclusion that even minority Union, if
it is not accepted terms of settlement then also Industrial Tribunal has jurisdiction to
examine justness and fairness of settlement in light of facts that majority employees
have accepted it with open eyes and against that there is no allegation made by
Petitioner Association that such declaration and undertaking obtained by employer by
adopting coercive method and by other illegal measures. Therefore, merely Petitioner
Association has not signed the settlement that itself is not enough to declare that
settlement is unjust and unfair. The said settlement has been accepted by executive
members of Petitioner Association and obtained benefits as per settlement and not
objected it while filing declaration and undertaking submitted to Respondent No. 1
Company.
38. Learned Advocate General Mr. KB Trivedi has brought to notice of this Court that
this being a package deal having effect from 1/7/2010 and lump sum amount about
more than Rs. 60 Crores has been paid to concerned employees. The thirty eight
Executive members of Petitioner Association has also accepted lump sum amount, those
who have not signed declaration and undertaking in Rs. 80 Lacs, which have been paid
to such employees having executive members of Petitioner Association. Therefore,
according to learned Advocate General Mr. Trivedi, for implementing settlement in
question no discrimination has been made while paying amount as per settlement to
concerned employees by company. This amount has been paid to 38 employees of
Executive members of Petitioner Association which comes to Rs. 80 Lacs in March,
2011. The arrears has been paid to concerned employees as per terms of settlement

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between December, 2010 to January, 2011. The settlement is dated 30/11/2010 but pay
has been revised w.e.f. 1/7/2010. This being a package deal accepted settlement by
2418 employees including executive members of Petitioner Association.
3 9 . He submitted that this being principles of give and take between parties while
keeping object in mind to maintain industrial peace and harmony and security of service
of each employees with Respondent No. 1 Company.
40. Learned Advocate General Mr. KB Trivedi has submitted that Petitioner Association
has not led any oral evidence to justify their stand and to establish it that settlement is
unjust and unfair. Learned Advocate General Mr. Trivedi has submitted that in such
circumstances, if majority employees are accepted settlement and except 2% no
objection has been raised by any other employees including two Unions Respondent
Nos. 3 and 4, then such negative attitude, stand, conduct and approach of Petitioner
Association should not have to be encouraged by this Court, otherwise it adversely
affects to right of majority workers and it also adversely affects industrial peace and
harmony and also it affects production of Respondent No. 1 company.
41. The Industrial Tribunal has also considered one important decision on the subject
which is having identical cases in case of KCP Ltd reported in 1996 (2) LLN 970 where
only twelve employees, those who are not accepting settlement. In that case, Apex
Court has decided that settlement is bound to them also, merely objected settlement by
twelve employees, out of twenty nine, Apex Court has held that such settlement can not
consider to be unjust and unfair because some of the employees are objected it.
4 2 . The Industrial Tribunal has also considered case of National Engineering Co ltd
reported in 1999 (4) LLN 1185. The Apex Court has considered that two type of
settlement are there under Section 2(p) of I. D. Act, 1947, one is being private
settlement and another is settlement during conciliation proceeding. The binding effect
have been given factually but once private settlement is recorded by Conciliation officer
or by Industrial Tribunal and if it is considered by independent authority and examine
justness and fairness of settlement and recorded it, then such settlement is having
complete binding effect to cover all employees working with company. The Industrial
Tribunal has examined in detail contention raised by Petitioner Association in para 12
and 13. The Industrial Tribunal has recorded one important fact that nine office bearers
of Petitioner Association has also given consent submitted declaration and also given
undertaking and accepted benefits under settlement. The Industrial Tribunal has also
considered merits of matter and examined terms of settlement and what benefit is made
available under particular settlement by concerned employers which has been discussed
in detail in respect to each and every item.
43. Ultimately, Industrial Tribunal has come to conclusion that such kind of settlement
can not cover each and every demand raised by Union but it covers demand mostly
which are relating service benefits where principles of give and take applied.
Accordingly, Industrial Tribunal has come to conclusion that expectation of company
demand is also considered in present settlement while granting benefits in favour of
concerned employees. The Industrial Tribunal has come to conclusion after appreciating
facts which are on record that 98% employees have accepted terms of settlement.
Therefore, it can not consider to be unjust and unfair. Exh 22 produced by company,
where nine employees of BMS, who are Office bearers of Petitioner Union have accepted
terms of settlement. Exh 25 statement produced by company where lump sum amount
is already paid in Bank account of each employee as per statement and none employee
has objected such payment made by company in righting to Respondent No. 1

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Company. The Industrial Tribunal has appreciated important facts that out of 98%
employees, those who have been accepted settlement submitted declaration and signed
undertaking, none employees go before Industrial Tribunal and deposed that signature
of such employee has been obtained by employer while adopting coercive measures,
fraud and malafide or misrepresentation of fact made by Company. Therefore, there was
no evidence at all produced by Petitioner Association before Industrial Tribunal that this
settlement is malafide obtained by fraud and result of misrepresentation made by
company and whatever subsequent reaction of Petitioner Association is result of change
their mind because of passage of time as considered by Apex Court in case of Tata
Engineering & Locomotive reported in MANU/SC/0332/1981 : 1981 4 SCC 627.
Therefore, once settlement is accepted by 98% employees and no allegation has been
made by Petitioner Association against company that this signature obtained by them
using method of misrepresentation or adopting coercive method or fraud or malafide
then Industrial Tribunal has rightly accepted entire settlement being just, fair and
reasonable. For that, According to my opinion, Industrial Tribunal has not committed
any error which would require interference by this Court while exercising power under
Article 227 of Constitution of India.
44. The contention which has been raised by Petitioner Association has been properly
dealt with by Industrial Tribunal, Baroda in para 16, 17 and 18. In para 19, Industrial
Tribunal has discussed it that it is not necessary that in respect to each demand referred
for adjudication it must require settlement. The Industrial Tribunal has to consider while
examining terms of settlement whether this settlement is a result of adopting method of
coercive, corruption and malafide by Company or not? It is a case of collective
bargaining with two Unions having majority workers with them and also considered
principles of give and take. Therefore, it is not necessary to adjudicate disputes referred
by appropriate Government. The Industrial Tribunal has rightly relied upon case of
Harbertson and Tata Engineering and in case of KCP Ltd of Apex Court reported in 1996
(2) LLN 970. The Industrial Tribunal has also rightly appreciated decision of Apex Court
in case of National Engineering reported in 1999 (4) LLN 1185. If settlement is not
arrived by means of cheating to employees denying legal right and service benefits to
them while misrepresenting facts before workers by company and there is no coercive
method adopted by employer and it is not a malafide and based on fraud then naturally
reaction would be that such settlement is must be presumed to be just, fair and
reasonable. That decision has been given by Apex Court in case of National Engineering,
which has been rightly relied by Industrial Tribunal, Baroda.
4 5 . For that, Industrial Tribunal Baroda has not committed any error which would
require interference by this Court. The contention which has been raised by learned
senior advocate Mr. Desai can not be accepted. It is necessary to note that learned
senior advocate Mr. Desai even before this Court appearing for Petitioner Association
has not demonstrated that how settlement is unjust and unfair except legal submission
made by him before this Court. The genuineness of settlement is not challenged by
Petitioner Association before Industrial Tribunal, Baroda and before this Court. It is not
case of the Petitioner Association before this Court that this settlement is bad because
signatures have been obtained by adopting coercive measures and based on fraud as
well as result of misrepresentation of fact made by Company. The Petitioner Association
has also not able to point out to this Court that benefit which has been extended in
favour of employees working in Non Supervisory category with Company as per
settlement is meager amount and it adversely affects livelihood, security and
withdrawing existing service benefits and it is not at all in the interest of workers. So,
settlement in short not challenged by Petitioner Association on merits and even justness
and fairness is also not in challenged except legal aspect which has been pointed out by

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learned senior advocate Mr. Desai before this Court. The real fact being an undisputed
between parties that 98% employees of Non Supervisory category working with
Respondent company have voluntarily accepted terms of settlement while giving
undertaking and declaration to Respondent No. 1 company to each employees in
pursuance to present settlement, which has been rightly implemented in Toto by
Respondent No. 1 company in favour of each employee who has given declaration and
undertaking while accepting terms of settlement including nine office bearers of
Petitioner Association. This suggest itself and prove that settlement is really just, fair,
reasonable and therefore contentions relied by learned senior advocate Mr. Desai can
not be accepted that this settlement is not legal and valid.
4 6 . The legal contention raised by learned advocate Mr. Desai that 30/11/2010
settlement is under Section 2(p) read with Section 18(1) of I. D. Act, 1947 being a
private settlement not binding to Petitioner Association but merely signature of
Petitioner Association is not obtained or Petitioner Association has not signed
settlement, then it hurts ego of Petitioner Association, which creates legal fight
unnecessarily before this Court. Under provisions of Industrial Dispute Act, 1947 when
private settlement is permissible between parties and that private settlement is accepted
by 98% employees while submitting declaration and signing undertaking and accepting
each and every terms of settlement, then that private settlement is binding to signing
persons. According to legal provisions, before producing settlement by parties exh 14,
98% employees have signed it. The private settlement is permissible under law.
Therefore, present settlement is binding to 98% employees of Non Supervisory category
working with Respondent No. 1 Company. The industrial dispute which has been raised
in favour of 100% employees by three Unions being reference No. 95/2009 which has
been settled with two Unions and 98% employees then it placed before Industrial
Tribunal inviting award in reference 95/2009 with a requests to pass an award and
disposed of reference on the basis of consent terms arrived between parties. This can
not consider that Industrial Tribunal, Baroda has no jurisdiction to record such private
settlement arrived between parties which represented 98% employees working with
Respondent company in non supervisory category. Therefore, such private settlement
remained private till it has been signed by respective parties of settlement. A moment
matter has been settled between parties, it is open for parties in pending reference to
invite award on the basis of terms of settlement. At that occasion, it is not necessary
that each party to reference must sign in settlement. In Industrial Law, real party is
"Workman" not "Union". Because Union is only espousing cause of workman while
raising industrial dispute under provisions of Industrial Dispute Act, 1947. The
Industrial Tribunal has also kept open right of Petitioner Association that in case if other
references are pending before any other Industrial Tribunal, for that, concerned parties
may approach to Industrial Tribunal concerned and invite award. But only on the ground
that because of present settlement recorded including demand out side terms of
settlement, then this can not consider to be beyond the scope of reference. The
settlement, therefore, accepted by Industrial Tribunal, Baroda being a just, fair and
reasonable and in interest of workers for maintaining industrial peace and harmony,
which resulted to accelerate production process and income of Industry, which
ultimately give better service benefits and security to concerned employees, those who
are working with Company.
47. The contention raised by learned senior advocate Mr. Desai that this award is not
properly published by appropriate Government on 14/2/2011. He submitted that under
Rule 31(A) State Government must have to be published award under provisions of
Section 17 and 17A of Industrial Disputes Act, 1947. The relevant rules 31(A), Section
17 and Section 17(A) are quoted as under:

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 Rule 31(A): Publication of report of award, etc - (1) Within thirty days of the
date of receipt of the report of a Board or award of a Labour Court or Tribunal
by it, the State Government,-
(a) shall, if it considers that having regard to the importance of such
report or award, its publication in the Official Gazette is necessary,
cause it to be published in the Official Gazette
(b) if it considers that the report or award is not sufficiently important
it may cause a copy thereof together with a notification under Section
17 to be forwarded to the Board or a Court or Tribunal, as the case may
be, for publication on the notice board at its office.
(2) Where the report or award is published in the official Gazette or on notice
board of the Board, Court or tribunal, the State Government shall at the time of
such publication forward a copy thereof to the parties to the dispute, and where
the report or award is published on notice, board of the Board, Court or
Tribunal, such Board, Court or Tribunal shall inform the State Government and
the parties concerned of the such publication on the notice board.
Section 17:(1) Every report of a Board or Court together with any minute of dissent
recorded therewith, every arbitration award and every award of a Labour Court, Tribunal
or National Tribunal shall, within a period of thirty days from the date of its receipt by
the appropriate Government, be published in such manner as the appropriate
Government thinks fit.
(2) Subject to the provisions of Section 17A, the award published under Sub-section (1)
shall be final and shall not be called in question by any Court in any manner
whatsoever.) Section 17(A). Commencement of the award:
(1) An award (including an arbitration award) shall become enforceable on the
expiry of thirty days from the date of its publication under Section 17:
Provided that -
(a) if the appropriate Government is of opinion, in any case
where the award has been given by a Labour Court or Tribunal
in relation to an industrial dispute to which it is a party; or
(b) if the Central Government is of opinion, in any case where
the award has been given by a National Tribunal,
that will be inexpedient on public grounds affecting national economy or social
justice to give effect to the whole or any part of the award, the appropriate
Government, or as the case may be, the Central Government may, by
notification in the Official Gazette, declare that the award shall not become
enforceable on the expiry of the said period of thirty days.
(2) Where any declaration has been made in relation to an award under the
proviso to Sub-section (1), the appropriate Government or the Central
Government may, within ninety days from the date of publication of the award
under Section 17, makes an order rejecting or modifying the award, and shall,
on the first available opportunity, lay the award together with a copy of the
order before the Legislature of the State, if the order has been made by a State

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 Government, or before Parliament, if the order has been made by the Central
Government.
(3) Where any award as rejected or modified by an order made under Sub-
section (2) is laid before the Legislature of a State or before Parliament, such
award shall become enforceable on the expiry of fifteen days from the date on
which it is so laid, and where no order under Sub-section (1), the award shall
become enforceable on the expiry of the period of ninety days referred to in
Sub-section (2).
(4) Subject to the provisions of Sub-section (1) and Sub-section (3) regarding
the enforceability of an award, the award shall come into operation with effect
from such date as may be specified therein, but where no date is so specified it
shall come into operation on the date when the award becomes enforceable
under Sub-section (1) or Sub-section (3), as the case may be)
The Section 17 of I. D. Act, give powers to appropriate Government to publish award in
such manner as thinks fit subject to provisions of Section 17A of Industrial Disputes
Act, 1947. In light of this provisions Rules 31A, Section 17, and Section 17A, in this
case, appropriate Government has delegated powers initially in favour of Labour
Commissioner for publication of award. Thereafter, it has been delegated in favour of
Assistant Commissioner of Labour to publish such award as required under Section 17
as per notification dated 12/3/2003. Accordingly, powers have been rightly exercised by
Assistant Commissioner of Labour, Baroda under Section 17 as per power delegated to
concerned authority.
48. Therefore, contention raised by learned senior advocate Mr. Desai that award in
question is not properly published by Appropriate Government can not be accepted
because it is merely a procedural aspect how to publish it. For that, under notification
dated 12/3/2003, powers have been given to Assistant Commissioner of Labour to
publish award, which has to be notified under Rules 31(A) sub Rule 2 on notice board
of Industrial Tribunal concerned. Therefore, contention against procedural aspect can
not be accepted. Even though, this procedural aspect will not adversely affect
enforceability of award once it is published under Section 17 of I. D. Act, 1947 in
question which is already implemented in favour of concerned employees by
Respondent company.
49. The decision which has been relied and considered by Industrial Tribunal as well as
also relied by Advocate General Mr. KB Trivedi in case of Tata Engineering and
Locomotive Co. Ltd v. Their Workmen, reported in MANU/SC/0332/1981 : AIR 1981 SC
2163. The relevant discussion made in para 5 to 7 are quoted as under:
5. The correctness of finding (a) has not been assailed before us on behalf of
either party and in view of the provisions of Sub-section (1) of Section 18 of
the Act that finding must be upheld so that the settlement dated the 7th Feb.,
1970 would be binding on all workers who were members of the Sanghatana as
on that date including the 564 workers who signed the declaration.
Consequently finding (c) which is unexceptionable insofar as it goes, loses all
its relevance and we need take no further notice of it.
6. The conclusion reached by the Tribunal that the settlement was not just and
fair is again unsustainable. As earlier pointed out, the Tribunal itself found that
there was nothing wrong with the settlement in most of its aspects and all that
was necessary was to marginally increase the additional daily wage. We are

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clearly of the opinion that the approach adopted by the Tribunal in dealing with
the matter was erroneous. If the settlement had been arrived at by a vast
majority of the concerned workers with their eyes open and was also accepted
by them in its totality, it must be presumed to be just and fair and not liable to
be ignored while deciding the reference merely because a small number of
workers (in this case 71, i.e., 11.18 per cent) were not parties to it or refused
to accept it, or because the Tribunal was of the opinion that the workers
deserved marginally higher emoluments than they themselves thought they did.
A settlement cannot be weighed in any golden scales and the question whether
it is just and fair has to be answered on the basis of principles different from
those which come into play when an industrial dispute is under adjudication. In
this connection we cannot do better than quote extensively from Herbertsons
Limited v. Workmen of Herbertsons Limited MANU/SC/0299/1976 : (1977) 2
SCR 15 : AIR 1977 SC 322, wherein Goswami, J., speaking for the Court
observed (at p. 327 of AIR): "Besides, the settlement has to be considered in
the light of the conditions that were in force at the time of the reference. It will
not be correct to judge the settlement merely in the light of the award which
was pending appeal before this Court. So far as the parties are concerned there
will always be uncertainty with regard to the result of the litigation in a Court
proceeding. When, therefore, negotiations take place which have to be
encouraged, particularly between labour and employer, in the interest of
general peace and well being there is always give and take. Having regard to
the nature of the dispute, which was raised as far back as 1968, the very fact of
the existence of a litigation with regard to the same matter which was bound to
take some time must have influenced both the parties to come to some
settlement. The settlement has to be taken as a package deal and when labour
has gained in the matter of wages and if there is some reduction in the matter
of dearness allowance so far as the award is concerned, it cannot be said that
the settlement as a whole is unfair and unjust.
We should point out that there is some misconception about this aspect of the
case. The question of adjudication has to be distinguished from a voluntary
settlement. It is true that this Court has laid down certain principles with regard
to the fixation of dearness allowance and it may be even shown that if the
appeal is heard the said principles have been correctly followed in the award.
That, however, will be no answer to the parties agreeing to a lesser amount
under certain given circumstances. By the settlement, labour has scored in
some other aspects and will save all unnecessary expenses in uncertain
litigation. The settlement, therefore, cannot on the touch-stone of the principles
are laid down by this Court for adjudication.
There may be several factors that may influence parties to come to a settlement
as a phased endeavour in the course of collective bargaining. Once cordiality is
established between the employer and labour in arriving at a settlement which
operates well for the period that is in force, there is always a likelihood of
further advances in the shape of improved emoluments by voluntary settlement
avoiding friction and unhealthy litigation. This is the quintessence of settlement
which Courts and Tribunals should endeavour to encourage. It is in that spirit
the settlement has to be judged and not by the yardstick adopted in scrutinising
an award in adjudication. The Tribunal fell into an error in invoking the
principles that should govern in adjudicating a dispute regarding dearness
allowance in judging whether the settlement was just and fair.

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 "It is not possible to scan the settlement in its bits and pieces and hold some
parts good and acceptable and others bad.
Unless it can be demonstrated that the objectionable portion is such that it
completely outweighs all the other advantages gained the Court will be slow to
hold a settlement as unfair and unjust. The settlement has to be accepted or
rejected as a whole and we are unable to reject it as a whole as unfair or
unjust. Even before this Court the 3rd Respondent representing admittedly the
large majority of the workmen has stood by this settlement and that is a strong
factor which it is difficult to ignore. As stated elsewhere in the judgment, we
cannot also be oblivious of the fact that all workmen of the company have
accepted the settlement. Besides, the period of settlement has since expired
and we are informed that the employer and the 3rd Respondent are negotiating
another settlement with further improvement. These factors, apart from what
has been stated above, and the need for industrial peace and harmony when a
union backed by a large majority of workmen has accepted a settlement in the
course of collective bargaining have impelled us not to interfere with this
settlement."
The principles thus enunciated fully govern the facts of the case in hand, and,
respect following them, we hold that the settlement dated the 7th Feb., 1970 as
a whole just and fair.
7 . There is no quarrel with the argument addressed to us on behalf of the
workers that mere acquiescence in a settlement or its acceptance by a worker
would not make him a party to the settlement for the purpose of Section 18 of
the Act (vide Jhagrakhan Collieries (P.) Ltd. v. G. C. Agarwal,
MANU/SC/0304/1974 : (1975) 2 SCR 873 : AIR 1975 SC 171. It is further
unquestionable that a minority union of workers may raise an industrial dispute
even if another union which consists of the majority of them enters into a
settlement with the employer (vide Tata Chemicals Ltd. v. Its Workmen,
MANU/SC/0276/1978 : (1978) 3 SCR 535 : AIR 1978 SC 828). But then here
the company is not raising a plea that the 564 workers became parties to the
settlement by reason of their acquiescence in or acceptance of a settlement
already arrived at or a plea that the reference is not maintainable because the
Telco Union represents only a minority of workers. On the other hand the only
two contentions raised by the company are:
(i) that the settlement is binding on all members of the Sanghatana
including the 564 mentioned above because the Sanghatana was a
party to it, and
(ii) that the reference is liable to be answered in accordance with the
settlement because the same is just and fair.
And both these are contentions which we find fully acceptable for reasons
already stated.
50. In case of K.C.P. Ltd v. Presiding Officer and Ors. reported in MANU/SC/1634/1996
: 1996 (10) SCC 446. The relevant discussion made in para 17 to 21 and 23 to 26 are
quoted as under:
17. Having given our anxious consideration to these rival submissions, we find
that the terms of the settlement cannot be considered to be in any way ex facie,

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unjust or unfair and that the said settlement consequently must be held to be
binding on these contesting workmen also.
1 8 . It has to be kept in view that the industrial dispute was raised by
Respondent No. 2 - union on behalf of all the 29 workmen who were dismissed
from service by the Appellant company. It was an industrial dispute as defined
by Section 2(k) of the Act raised by the Union on behalf of its members.
Respondent Nos. 3 to 14 were at the relevant time, members of the union and
even till date they continue to be the members of the sponsoring union. This
was not a reference raised by a dismissed employee as per Section 2-A of the
Act. Consequently, as per Section 36 of the Act, it was Respondent No. 2 Union
which was in charge of the proceedings and could represent all the 29
dismissed workmen on whose behalf the dispute was raised by it. When the
said union having considered the pros and cons of the situation, entered into
the settlement on behalf of all the workmen for whom it had taken cudgels
unless the said settlement was found to be ex facie, unjust or unfair it could not
be gone behind by these Respondents who can be said to be parties to the
same through their representative union-Respondent No. 2. In this connection a
reference is also required to be made to Section 18(1) of the Act which lays
down as under:
A settlement arrived at by agreement between the employer and
workmen otherwise than in the course of conciliation proceeding shall
be binding on the parties to the agreement.
19. It is not in dispute that the settlement arrived at by Respondent No. 2 -
union with the Appellant company was not in the course of conciliation
proceedings. Therefore, it would be binding to the parties to the agreement,
namely, the Appellant company on the one hand and Respondent No. 2- union
representing all the 29 dismissed employees, who were its members and on
whose behalf it had raised the industrial dispute under Section 2(k) of the Act,
on the other.
20. Section 2(p) of the Act defines a settlement to mean a settlement arrived at
in the course of conciliation proceedings and includes a written agreement
between the employer and workmen arrived at otherwise than in the course of
conciliation proceedings where such agreement has been signed by the parties
thereto in such manner as may be prescribed and a copy thereof had been sent
to an officer authorised in this behalf by the appropriate Government and the
Conciliation Officer.
21. It is also not in dispute that parties to the settlement were the Appellant
company on the one hand and Respondent No. 2- union on the other, which
acted on behalf of all the 29 dismissed workmen for whom reference was
pending in the Labour Court. It was duly signed by both these parties. Under
these circumstances, Respondent Nos. 3 to 14 also would be ordinarily bound
by this settlement entered into by their representative union with the company
unless it is shown that the said settlement was ex facie, unfair, unjust or mala
fide. No such case could be even alleged much less made out by the dissenting
Respondent Nos. 3 to 14 before the trial Court. It is interesting to note that
before the Labour Court the only argument put forward on behalf of Respondent
Nos. 3 to 14 was that they were not parties to the settlement and therefore, , it
was not binding on them. Once it is kept in view that the entire industrial

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dispute was raised by Respondent No. 2 union on behalf of all the 29 dismissed
workmen and as it was not an industrial dispute covered by Section 2-A
whereunder individual dismissed workman could come in the arena of contest,
it could not be held, as wrongly assumed by the Labour Court that this
settlement was not entered into under Section 18(1) of the Act by these
dissenting workmen when the Respondent-union did represent them from
beginning to end and is still representing them as they are members of the
union even at present. In the case of Ram Prasad Vishwakarma v. The
Chairman, Industrial Tribunal MANU/SC/0215/1960 : (1961) 3 SCR 196 :AIR
1961 SC 857, a Bench of three Hon'ble Judges of this Court had an occasion to
consider the effect of a settlement entered into by the union of workmen which
had espoused the cause of its members by raising an industrial dispute under
Section 2(k) of the Act and the further question whether under these
circumstances an individual workman had any independent locus stand in
proceedings before the reference Court. Rejecting the contention on behalf of
the individual workman, it was observed by Das Gupta, J. speaking for the
Court that the concerned workman was not entitled to separate representation
when already represented by the Secretary of the union which espoused his
cause. A dispute between an individual workman and an employer cannot be an
industrial dispute as defined in Section 2(k) of the Act unless it is taken up by a
union of workmen or by a considerable number of workmen. When an
individual workman becomes a party to a dispute under the Act he is a party,
not independent of the union which has espoused his cause. It was further
observed that although no general rule can be laid down in the matter, the
ordinary rule should be that representation by an officer of the trade union
should continue throughout the proceedings in the absence of exceptional
circumstances justifying other representation of the workmen concerned.
2 2 . It is true that the said decision was rendered prior to the insertion of
Section 2-A in the Act by which individual workmen were also given a right to
raise industrial dispute in case of discharge, dismissal or retrenchment or
otherwise termination of service. It is also true that the present controversy has
arisen after the coming into operation of Section 2-A but as noted earlier the
industrial dispute raised for 29 dismissed workmen was raised by the union-
Respondent No. 2 under Section 2(k) of the Act and there was no reference
under Section 2-A of the Act, so far as Respondent Nos. 3 to 14 are concerned.
23. In the case of Herbertsons Ltd. v. Workmen of Herbertsons Ltd., AIR 1977
SC 322, another Bench of three learned Judges of this Court considered the
effect of a settlement arrived at by recognised union of majority of workers
pending appeal to Supreme Court. It was observed by Goswami, J., speaking
for the Court that when a recognised union negotiates with an employer the
workers as individuals do not come into the picture. It is not necessary that
each individual worker should know the implications of the settlement since a
recognised union, which is expected to protect the legitimate interests of labour
enters into a settlement in the best interests of labour. This would be the
normal rule. There may be exceptional cases where there may be allegations of
mala fide, fraud or even corruption or other inducements. But in the absence of
such allegations a settlement in the course of collective bargaining is entitled to
due weight and consideration.
2 4 . In connection with the justness and fairness of the settlement it was
observed that this has to be considered in the light of the conditions that were

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in force at the time of the reference. When, therefore, negotiations take place
which have to be encouraged, particularly between labour and employer in the
interest of industrial peace and well-being, there is always give and take. The
settlement has to be taken as a package deal and when labour has gained in the
matter of wages and if there is some reduction in the matter of dearness
allowance so far as the award is concerned, it cannot be said that the
settlement as a whole is unfair and unjust. It was further observed that it is not
possible to scan the settlement in bits and pieces and hold some parts good
and acceptable and others bad. Unless it can be demonstrated that the
objectionable portion is such that it completely outweighs all the other
advantages gained, the Court will be slow to hold a settlement as unfair and
unjust. The settlement has to be accepted or rejected as a whole.
25. It was to be kept in view that under the scheme of labour legislations like
the Act in the present case, collective bargaining and the principle of industrial
democracy permeate the relations between the management on the one hand
and the union which reports to collective bargaining on behalf of its members-
workmen with the management on the other. Such a collective bargaining
which may result in just and fair settlement would always be beneficial to the
management as well as to the body of workmen and society at large as there
would be industrial peace and tranquility pursuant to such settlement and which
would avoid unnecessary social strife and tribulation on the one hand and
promote industrial and commercial development on the other hand. Keeping in
view the aforesaid salient feature of the Act the settlement which is sought to
be impugned has to be scanned and scrutinised. Settlement of labour disputes
by direct negotiation and collective bargaining is always to be preferred for it is
the best guarantee of industrial peace which is the aim of all legislations for
settlement of labour disputes. In order to bring about such a settlement more
easily and to make it more workable and effective it may not be always possible
or necessary that such a settlement is arrived at in the course of conciliation
proceedings which may be the first step towards resolving the industrial dispute
which may be lingering between the employers and their workmen represented
by their unions but even if at that stage such settlement does not take place
and the industrial disputes gets referred for adjudication, even pending such
disputes, the parties can arrive at amicable settlement which may be binding to
the parties to the settlement unlike settlement arrived at during conciliation
proceedings which may be binding not only to the parties to the settlement but
even to the entire labour force working in the concerned organisation even
though they may not be members of the union which might have entered into
settlement during conciliation proceedings. The difference between the
settlement arrived at under the Act during conciliation proceedings by parties
and the settlement arrived at otherwise than during conciliation proceedings
has been succinctly brought out by the decision of this Court in Barauni
Refinery Pragatisheel Shramik Parishad v. Indian Oil Corporation Ltd.
MANU/SC/0318/1990 : (1991) 1 SCC 4 : AIR 1990 SC 1801, wherein Ahmadi,
J. (as His Lordship then was) spoke for the Court to the following effect:
Settlements are divided into two categories, namely, (i) those arrived
at outside the conciliation proceedings (Section 18(1)) and (ii) those
arrived at in the course of conciliation proceedings (Section 18(3)). A
settlement which belongs to the first category has limited application in
that it merely binds the parties to the agreement. But a settlement
arrived at in the course of conciliation proceedings with a recognised

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 majority union has extended application as it will be binding on all
workmen of the establishment, even those who belong to the minority
union which had objected to the same. To that extent, it departs from
the ordinary law of contract. The object obviously is to uphold the
sanctity of settlements reached with the active assistance of the
Conciliation Officer and to discourage an individual employee or a
minority union from scuttling the settlement. There is an underlying
assumption that a settlement reached with the help of the Conciliation
Officer must be fair and reasonable and can, therefore, safely be made
binding not only on the workmen belonging to the union signing the
settlement but also on the others. That is why a settlement arrived at in
the course of conciliation proceedings is put on par with an award
made by an adjudicatory authority.
26. As in the present case the settlement arrived at between the parties was not
during conciliation proceedings, it would remain binding to parties to the
settlement as per Section 18(1) of the Act. But as we have seen above,
Respondent No. 2 union while entering into that settlement acted on behalf of
all the 29 dismissed workmen who were its members including the present
Respondent Nos. 3 to 14 who are also its members as noted earlier. We have
also seen earlier that the Labour court had erred in taking the view that
Respondents 3 to 14 were not parties to the said settlement as individually they
had no locus standi and they were represented by their union Respondent No. 2
which had signed the settlement on behalf of its members for whom the dispute
was raised by the union. Nothing could be alleged by Respondents 3 to 14 to
the effect that the said settlement was in any way unjust or unfair or was a
mala fide one. There were no exceptional circumstances to reject this
settlement qua even the contesting Respondents. However, as learned Counsel
for the Respondent-workmen tried faintly to suggest to the effect we have
carefully gone through the circumstances which are brought on record which
had led to the settlement. It may be noted that about 500 workmen had done
on strike and that had resulted in the lock-out by the Appellant company and
ultimately disciplinary action was initiated against 29 workmen who had
indulged into various acts of misconduct. It is for these 29 workmen who were
ultimately dismissed from service that the Respondent-union had raised a
dispute under Section 2(k) of the Act on their behalf. Earlier the remaining
workmen had gone on strike for nearly 5 months. Ultimately, the strike was
withdrawn; lock-out was lifted and a broad understanding was reached between
the Appellant company and the workmen represented by their union whereby it
was agreed that 29 workmen, who were dismissed, would be either given Rs.
75,000/- as compensation or reinstatement with continuity of service without
back wages and the concerned workmen should express apology for mis-
conduct and also assure good conduct in future.
In case of GMDC Employees Union v. Gujarat Mineral Devp. Corporation reported in
2002 (2) GLH 523. The relevant discussion made in para 27 to 33 are quoted as under:
27. As indicated earlier, it is very clear that majority of the workman working
as daily rated labourers through their Sangh entered into various agreement to
solve their labour disputes. They entered into agreements, and therefore, it
cannot be said that any dispute survives now.
2 8 . One has to remember that this is a matter governed by the provisions

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contained in the Industrial law and the ID Act. How a settlement is to be
considered is an important aspect to be borne in mind. When there is a
settlement arrived at between the management and a recognised union having
majority of the workmen, and if the settlement is just, fair and binding, whether
interference by the Court is called for or not is required to be considered.
2 9 . It is required to be noted that a settlement in the course of collective
bargaining is entitled to due consideration. As pointed out by the Apex Court in
the case of HERBETSONS LIMITED v. WORKMEN reported in AIR 1977 SC 322,
the justness and fairness of a settlement has to be consider in the light of the
conditions that were in force at the time of the reference. So far as the parties
are concerned, there will always be uncertainty with regard to the result of the
litigation in a court proceedings. When, therefore, negotiations take place which
have to be encouraged, particularly between labour and employer in the interest
of general peace and well being, there is always give and take. The settlement
has to be taken as a package deal and when labour has gained in the matter of
wages and if there is some reduction in the matter of dearness allowance so far
as the award is concerned, it cannot be said that the settlement as a whole is
unfair and unjust.
3 0 . In the above case (HERBETSONS), the Court further pointed out that a
settlement cannot be judged on the touchstone of the principles applicable in
adjudicating disputes by the Tribunal.
3 1 . The Apex Court further pointed out that it is not possible to scan the
settlement in bits and pieces and hold some parts good and acceptable and
other bad. Unless it can be demonstrated that the objectionable portion is such
that it completely out weighs all the other advantages gained, the Court will be
slow to hold a settlement as unfair and unjust. The settlement has to be
accepted or rejected as a whole.
3 2 . Mr. Patel, learned advocate submitted that merely because 10% of the
workmen are not agreeable the settlement does not seize to be just and fair. He
relied on the decision of the Apex Court in the case of M/S. TATA ENGG. &
LOCOMOTIVE v. THEIR WORKMEN reported in MANU/SC/0332/1981 : AIR 1981
SC 2163. The Apex Court, in paragraph 6 pointed out as under:
...If the settlement had been arrived at by a vast majority of the
concerned workers with their eyes open and was also accepted by them
in its totality, it must be presumed to be just and fair and not liable to
be ignored while deciding the reference merely because a small number
of workers (in this case 71, i.e. 11.18 per cent) were not parties to it or
refused to accept it, or because the Tribunal was of the opinion that the
workers deserved marginally higher emoluments than they themselves
thought they did. A settlement cannot be weighed in any golden scales
and the question whether it is just and fair has to be answered on the
basis or principles different from those which come into play when an
industrial dispute is under adjudication.
32.1 In this paragraph, the Apex Court has also referred to the
judgment in the case of HERBETSONS, which we have referred
hereinabove.
33. In the instant case, as majority of the workman, i.e. more than 90% of the

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 daily rated workmen, have signed the settlement, in our opinion, the same must
be accepted and it cannot be said that there is any dispute pending to be
decided now by the Court till the settlement is in force.
In case of ITC Ltd Workers' Welfare Association and Anr. v. Management of ITC Ltd and
Anr. reported in MANU/SC/0071/2002 : 2002 (3) SCC 411. The relevant para 14 to 24
are quoted as under:
14. In answering the reference the industrial adjudicator has to keep in the
forefront of his mind the settlement reached under Section 12(3) of the
Industrial Disputes Act. Once it is found that the terms of the settlement
operate in respect of the dispute raised before it, it is not open to the Industrial
Tribunal to ignore the settlement or even belittle its effect by applying its mind
independent of the settlement unless the settlement is found to be contrary to
the mandatory provisions of the Act or unless it is found that there is non-
conformance to the norms by which the settlement could be subjected to
limited judicial scrutiny. This is infact the approach of the Tribunal in the
instant case. The High Court which examined the issue from a different angle as
well was, in our view, justified in affirming the award of the Tribunal.
1 5 . As the settlement entered into in the course of conciliation proceedings
assumes crucial importance in the present case, it is necessary for us to
recapitulate the fairly well settled legal position and principles concerning the
binding effect of the settlement and the grounds on which the settlement is
vulnerable to attack in an industrial adjudication. Analysing the relative scope
of various clauses of Section 18, this Court in the case of Barauni Refinery
Pragatisheel Shramik Parishad v. Indian Oil Corporation Ltd.
MANU/SC/0318/1990 : 1991 (1) SCC 4) succinctly summarized the position
thus:
Settlements are divided into two categories, namely, (I)those arrived at
outside the conciliation proceedings (Section 18(i) and (ii) those
arrived at in the course of conciliation proceedings (Section 18(3)). A
settlement which belongs to the first category has limited application in
that it merely binds the parties to the agreement. But a settlement
arrived at in the course of conciliation proceedings with a recognised
majority union has extended application as it will be binding on all
workmen of the establishment, even those who belong to the minority
union which had objected to the same. To that extent it departs from
the ordinary law of contract. The object obviously is to uphold the
sanctity of settlements reached with the active assistance of the
Conciliation officer and to discourage an individual employee or a
minority union from scuttling the settlement. There is an underlying
assumption that a settlement reached with the help of the conciliation
Officer must be fair and reasonable and can, therefore, safely be made
binding not only on the workmen belonging to the union signing the
settlement but also on the others. That is why a settlement arrived at in
the course of conciliation proceedings is put on par with an award
made by an adjudicatory authority.
1 6 . In General Manager, Security Paper Mill v. R.S. Sharma
MANU/SC/0326/1986 : AIR 1986 SC 954, E.S. Venkataramiah, J. Speaking for
the Court explained the rationale behind Section 18(3) thus:

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 Even though a Conciliation Officer is not competent to adjudicate upon
the disputes between the management and its workmen he is expected
to assist them to arrive at a fair and just settlement. He has to play the
role of an adviser and friend of both the parties and should see that
neither party takes undue advantage of the situation. Any settlement
arrived at should be a just and fair one. It is on account of this special
feature of the settlement Sub-section (3) of Section 18 of the Industrial
Disputes Act, 1947 provides that a settlement arrived at in the course
of conciliation proceeding under that Act shall be binding on (I) all
parties to the industrial dispute, (ii) where a party referred to in Clause
(i) is an employer, his heirs, successors, or assigns in respect of the
establishment to which the dispute relates and (iii) where a party
referred to in Clause (i) is comprised of workmen, all persons who
were employed in the establishment or part of the establishment as the
case may be to which the dispute relates on the date of the dispute and
all persons who subsequently become employed in that establishment
or part. Law thus attaches importance and sanctity to settlement arrived
at in the course of a conciliation proceeding since it carries a
presumption that it is just and fair and makes it binding on all the
parties as well as the other workmen in the establishment or the part of
it to which it relates as stated above.
17. Admittedly, the settlement arrived at in the instant case was in the course
of conciliation proceedings and therefore it carries a presumption that it is just
and fair. It becomes binding on all the parties to the dispute as well as the
other workmen in the establishment to which the dispute relates and all other
persons who may be subsequently employed in that establishment. An
individual employee cannot seek to wriggle out of the settlement merely
because it does not suit him.
18. The next principle to be borne in mind is that in a case where the validity
of the settlement is assailed, the limited scope of enquiry would be, whether
the settlement arrived at in accordance with Sub-section (1) to (3) of Section
12, is on the whole just and fair and reached bonafide. An unjust, unfair or
malafide settlement militates against the spirit and basic postulate of the
agreement reached as a result of conciliation and, therefore, such settlement
will not be given effect to while deciding an industrial dispute. Of course, the
issue has to be examined keeping in view the presumption that is attached to
the settlement under Section 12(3).
19. In Herbertsons Limited v. The Workmen MANU/SC/0299/1976 : 1976 (4)
SCC 736), this Court called for a finding on the point whether the settlement
was fair and just and it is in the light of the findings of the Tribunal that the
appeal was disposed of. Goswami, J. speaking for the three-Judge Bench made
it clear that the settlement cannot be judged on the touch stone of the
principles which are relevant for adjudication of an industrial dispute. It was
observed that the Tribunal fell into an error in invoking the principles that
should govern the adjudication of a dispute regarding dearness allowance in
judging whether the settlement was just and fair. The rationale of this principle
was explained thus:
There may be several factors that may influence parties to come to a
settlement as a phased endeavour in the course of collective

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 bargaining. Once cordiality is established between the employer and
labour in arriving at a settlement which operates well for the period
that is in force, there is always a likelihood of further advances in the
shape of improved emoluments by voluntary settlement avoiding
friction and unhealthy litigation. This is the quintessence of settlement
which courts and tribunals should endeavour to encourage. It is in that
spirit the settlement has to be judged and not by the yardstick adopted
in scrutinizing an award in adjudication.
20. The line of enquiry whether settlement was unfair and unjust in K.C.P. Ltd.
v. Presiding Officer and Ors. MANU/SC/1634/1996 : 1996 (10) SCC 446, was
adopted by a three-Judge Bench of this Court speaking through Majmudar, J. It
was observed at paragraph 21 that "under these circumstances, Respondents 3
to 14 also would be ordinarily bound by this settlement entered into by their
representative Union with the Company unless it is shown that the said
settlement was ex facie, unfair, unjust or mala fide". The Court came to the
conclusion that the settlement cannot be characterised to be unfair or unjust. It
was further observed that "once this conclusion is reached it is obvious that
another industrial dispute should have been disposed of in the light of this
settlement". It was reiterated in the case of M/s. Tata Engineering and
Locomotive Co. Ltd. v. Their Workmen MANU/SC/0332/1981 : AIR 1981 SC
2163), that "a settlement cannot be weighed in any golden scales and the
question whether it is just and fair has to be answered on the basis of
principles different from those which come into play when an industrial dispute
is under adjudication". Earlier, it was observed:
If the settlement had been arrived at by a vast majority of the
concerned workers with their eyes open and was also accepted by them
in its totality, it must be presumed to be just and fair and not liable to
be ignored while deciding the reference merely because a small number
of workers (in this case 71, i.e., 11.18 per cent) were not parties to it
or refused to accept it, or because the Tribunal was of the opinion that
the workers deserved marginally higher emoluments than they
themselves thought they did.
2 1 . Another principle which deserves notice is the one firmly laid down in
Herbertsons case (supra). It was emphasised that the settlement has to be
taken as a package deal and it should not be scanned 'in bits and pieces' to
hold some parts good and acceptable and others bad. Then, it was observed:
unless it can be demonstrated that the objectionable portion is such
that it completely outweighs all the other advantages gained, the Court
will be slow to hold a settlement as unfair and unjust. The settlement
has to be accepted or rejected as a whole and we are unable to reject it
as a whole as unfair or unjust.
22. Having noted that the only objectionable feature of the settlement as found
by the Tribunal was reduction of dearness allowance from cent per cent to 85
per cent, it was held that, that part of the settlement cannot be held to be
invalid or inoperative. This proposition laid down in Herbertsons case was
reiterated in K.C.P. Ltd. case (supra), approvingly citing the said decision. The
passages in Herbertsons case were quoted in extenso and approved by the
three-Judge Bench in TELCO case (supra) as well.

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 2 3 . What follows from a conspectus of these decisions is that a settlement
which is a product of collective bargaining is entitled to due weight and
consideration, more so when a settlement is arrived at in the course of
conciliation proceeding. The settlement can only be ignored in exceptional
circumstances viz. if it is demonstrably unjust, unfair or the result of mala fides
such as corrupt motives on the part of those who were instrumental in effecting
the settlement. That apart, the settlement has to be judged as a whole, taking
an overall view. The various terms and clauses of settlement cannot be
examined in piecemeal and in vacuum.
24. Viewed in the light of these principles, it cannot be said that the settlement
in the present case which is otherwise valid and just suffers from any legal
infirmity merely for the reason that one of the clauses in the settlement extends
the benefits of life pension scheme only to the employees retiring after a
particular date i.e. 24.8.1986. Exclusion of workmen retiring before that date is
no ground to characterise the settlement as unjust or unfair. Of course, the
allegations of mala fides such as corrupt motives have not been levelled against
anyone and that aspect becomes irrelevant here.
In case of Herbertsons Ltd v. The workmen of Herbertsons Ltd and Ors reported in AIR
1977 SC 322. The relevant discussion made in para 15, 17, 18, 21, 22, 24, 25 and 27
are quoted as under:
15. Before we proceed further it is necessary to appreciate the implication of
the order of this Court passed on December 19, 1974, set out earlier. This order
was passed after hearing the parties for some time when the appeal was first
called for hearing on December 19, 1974. From the recitals in the order it is
apparent that the parties were prepared to abide by the settlement if the same
was fair and just. We are not prepared to accept the position, as urged by the
2nd Respondent, that even if the settlement is binding on the parties executing
the document, namely, the company and the 3rd Respondent representing a
large majority of the workmen, since the same is not binding on the members
of the Mumbai Majdoor Sabha Union, howsoever small the number, under
Section 18(1) of the Industrial Disputes Act, the appeal should be heard on
merits. On the other hand, we take the view that after hearing the parties this
Court was satisfied when it had called for a finding of the Tribunal that if the
settlement was fair and just it would allow the parties to be governed by the
settlement substituting the award. The wording of the issue sent to the Tribunal
for a finding clearly shows that there was an onus on the 2nd Respondent to
show how many workers of the Appellant were their members upon whom they
could clearly assert that the settlement was not binding under Section 18(1) of
the Industrial Disputes Act. It cannot be assumed that the parties were not
aware of the implications of Section 18(1) of the Industrial Disputes Act when
the Court passed the order of December 19, 1974. This Court would not have
sent the case back only to decide the legal effect of Section 18(1) of the
Industrial Disputes Act. Since a recognised and registered union had entered
into a voluntary settlement this Court thought that if the same, were found to
be just and fair that could be allowed to be binding on all the workers even if a
very small number of workers were not members of the majority union. It is
only in that context that after hearing the parties the case was remanded to the
Tribunal for a finding on the particular issues set out above.
17. The Tribunal thought that the question of the quantum of membership of

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the 2nd Respondent did not call for a finding at all in view of 1his Court's
order. As observed above that was not a correct assumption. On the other
hand, we feel that this view of the Tribunal has led it to approach the matter in
an entirely erroneous manner. The Tribunal is, rightly enough, conscious that
under Section 18(1) of the Industrial Disputes Act the settlement was binding
on the company and the members of the 3rd Respondent union. Even so, the
Tribunal devoted nearly half of its order in scanning the evidence given by the
company and Respondent No. 3 to find out whether the terms of the settlement
had been explained by the President of the union to the workmen or not and
whether the workers voluntarily accepted the settlement knowing all the
"consequences". This to our mind is again an entirely wrong approach.
1 8 . When a recognised union negotiates with an employer the workers as
individuals do not come into the picture. It is not necessary that each individual
worker should know the implications of the settlement since a recognised
union, which is expected to protect the legitimate interests of labour,enters into
a settlement in the best interests of labour. This would be the normal rule. We
cannot altogether rule out exceptional cases where there may be allegations of
mala fides, fraud or even corruption or other inducements. Nothing of that kind
has been suggested against the President of the 3rd Respondent in this case.
That being the position, prima facie, this is a settlement in the course of
collective bargaining and, therefore, is entitled to due weight and consideration.
21. Besides, the settlement has to be considered in the light of the conditions
that were in force at the time of the reference. It will not be correct to judge the
settlement merely in the light of the award which was pending appeal before
this Court. So far as the parties are concerned there will always be uncertainty
with regard to the result of the litigation in a court proceedings. When,
therefore, negotiations take place which have to be encouraged, particularly
between labour and employer in the interest of general peace and well being,
there is always give and take. Having regard to the nature of the dispute, which
was raised as far back as 1968, the very fact the existence of a litigation with
regard to the same matter which was bound to take some time must have
influenced both the parties to come to some settlement. The settlement has to
be taken as a package deal and when labour has gained in the matter of wages
and if there is some reduction in the matter of dearness allowance so far as the
award is concerned, it cannot be said that the settlement as a whole is unfair
and unjust.
2 2 . There are three categories of workers, permanent workers, listed casual
workmen and certain other casual workmen. It is said that the third category of
workmen are employed seasonally for a period of 20 days or so. Their number
is also said to be not more than 20 or 30. The terms and conditions relating to
this category of casual workmen were left, under the settlement, to be mutually
decided by the parties. It is because of this feature in the settlement that he
Tribunal held that the settlement was incomplete. We are, however, informed
that as a matter of fact by mutual agreement some terms have been settled
even for this third category of casual workmen. At any rate, because no
decision was arrived at with regard to this small number of seasonal workmen,
it cannot be said that the settlement is bad on that account.
24. We should point out that there is some misconception about this aspect of
the case. The question of adjudication has to be distinguished from a voluntary

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 settlement. It is true that this Court has laid down certain principles with regard
to the fixation of dearness allowance and it may be even shown that if the
appeal is heard the said principles have been correctly followed in the award.
That, however, will be no answer to the parties agreeing to a lesser amount
under certain given circumstances. By the settlement, labour has scored in
some other aspects and will save all unnecessary expenses in uncertain
litigation. The settlement, therefore, cannot be judged on the touchstone of the
principles which are laid down by this Court for adjudication.
2 5 . There may be several factors that may influence parties to come to a
settlement as a phased endeavour in the course of collective bargaining. Once
cordiality is established between the employer and labour in arriving at a
settlement which operates well for the period that is in force, there is always a
likelihood of further advances in the shape of improved emoluments by
voluntary settlement avoiding friction and unhealthy litigation. This is the
quintessence of settlement which courts and tribunals should endeavour to
encourage. It is in that spirit the settlement has to be judged and not by the
yardstick adopted in scrutinising an award in adjudication. The Tribunal fell into
an error in invoking the principles that should govern in adjudicating a dispute
regarding dearness allowance in judging whether the settlement was just and
fair.
27. It is not possible to scan the settlement in bits and pieces and hold some
parts good and acceptable and others bad. Unless it can be demonstrated that
the objectionable portion is such that it completely outweighs all the other
advantages gained the Court will be slow to hold a settlement as unfair and
unjust. The settlement has to be accepted or rejected as a whole and we are
unable to reject it as a whole as unfair or unjust. Even before this Court the 3rd
Respondent representing admittedly the large majority of the workmen has
stood by this settlement and that is a strong factor which it is difficult to
ignore. As stated elsewhere in the judgment, we cannot also be oblivious of the
fact that all workmen of the company have accepted the settlement. Besides,
the period of settlement has since expired and we are informed that the
employer and the 3rd Respondent are negotiating another settlement with
further improvements. These factors, apart from what has been stated above,
and the need for industrial peace and harmony when a union backed by a large
majority of workmen has accepted a settlement in the course of collective
bargaining have impelled us not to interfere with this settlement.
51. I have considered reasoning given by Industrial Tribunal, Baroda. The Industrial
Tribunal Baroda has considered each and every objection raised by Petitioner
Association and also considered terms of settlement arrived between parties Respondent
Nos. 1, 3 and 4. The Industrial Tribunal has applied mind that what benefit is available
to employees according to terms of settlement. The legal aspect has been also taken
into account by Industrial Tribunal that in respect to rest of two references being No.
111/2009 and 59/2009, which are not disposed of by Industrial Tribunal, Baroda along
with present reference No. 95/2009, but that remained pending and it is open for
parties to approach to concerned Industrial Tribunal, where reference is pending to
invite award in terms of settlement but in present award dispute in respect to two
reference as referred above has not been disposed of. Therefore, it can not consider
that present award is beyond scope of terms of reference. The Industrial Tribunal has
also considered various decisions on the subject and each decision has been considered
with application of mind and also considered important aspect that merely Petitioner

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Association has not signed settlement which is not necessary when settlement has been
arrived between parties under Section 2(p) and Section 18(1) of Industrial Disputes Act,
1947. Once Section 2(p) settlement arrived between parties placed on record before
Industrial Tribunal inviting award in terms of settlement and such settlement is accepted
by majority of workers about 98% those who are concerned in pending dispute then
question of having objections raised before Industrial Tribunal by Petitioner Association
can not be accepted. Because there is no demonstration has been made by Petitioner
Association that how settlement is unjust, unfair and unreasonable. On merits no
contention has been raised by Petitioner Association before Industrial Tribunal. The
Industrial Tribunal has also rightly considered that out of 98% employees none has
made complaint to Industrial Tribunal that their signatures have been obtained by
adopting coercive measures, fraud, malafide and based on misrepresentation of fact.
Therefore, presumption of Industrial Tribunal is that 98% employees of Non
Supervisory category working with Company has voluntarily signed declaration and
undertaking including nine Office Bearers of Petitioner Association exh 22. Therefore,
employees who voluntarily signed settlement accepted it and submitted declaration and
undertaking to Company. On that basis, Company has extended benefits in favour of
each employee then to doubt bonafide of Respondent No. 3 and 4 Union with
Respondent No. 1 Company can not be accepted. The Petitioner Association has doubted
bonafide of Company as well as Respondent Nos. 3 and 4 Union but that contention can
not be accepted in absence of specific evidence, which has not been led by Petitioner
Association before Industrial Tribunal.
52. In case of General Manager, Security Paper Mill, Hoshangabad v. R.S. Sharma and
Ors. reported in MANU/SC/0326/1986 : 1986 Lab I C 667. The relevant para 5 is quoted
as under:
5. The expression 'settlement' is defined in Section 2(p) of the Industrial
Disputes Act, 1947. It means a settlement arrived at in the course of
conciliation proceeding and also includes a written agreement between
employer and workmen arrived at otherwise than in conciliation proceeding
where such agreement has been signed by the parties thereto in such manner
as may be prescribed and a copy thereof has been sent to an officer authorised
in this behalf by the appropriate Govt. and the Conciliation Officer. A distinction
is made in the Industrial Disputes Act, 1947 between a settlement arrived at in
the course of conciliation proceeding and a settlement arrived at by agreement
between the employer and workmen otherwise than in conciliation proceeding
both as regards the procedure to be followed in the two cases and as regards
the persons on whom they are binding. Section 12 of the Industrial Disputes
Act, 1947 lays down the duties of Conciliation Officer. Under Sub-section (1) of
Section 12 where any industrial dispute exists or is apprehended, the
Conciliation Officer is required to hold conciliation proceedings in the
prescribed manner. By Sub-section (2) thereof he is charged with the duty of
promptly investigating the dispute and all matters affecting the merits and the
right settlement thereof for the purpose of bringing about the settlement of the
dispute and he is required to do all necessary things as he thinks fit for the
purpose of inducing the parties to come to a fair and amicable settlement of the
dispute. If a settlement of the dispute or of any of the matters in dispute is
arrived at in the course of the conciliation proceedings the Conciliation Officer
shall send a report thereof to the appropriate Government or an officer
authorised in that behalf by the appropriate Government together with a
Memorandum of Settlement signed by the parties. Even though a Conciliation
Officer is not competent to adjudicate upon the disputes between the

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 management and its workmen he is expected to assist them to arrive at a fair
and just settlement. He has to play the role of an adviser and friend of both the
parties and should see that neither party takes undue advantage of the
situation. Any settlement arrived at should be a just and fair one. It is on
account of this special feature of the settlement Sub-section (3) of Section 18
of the Industrial Disputes Act, 1947 provides that a settlement arrived at in the
course of conciliation proceeding under that Act shall be binding on (i) all
parties to the industrial dispute, (ii) where a party referred to in Clause (i) is an
employer, his heirs, successors, or assigns in respect of the establishment to
which the dispute relates and (iii) where a party referred to in Clause (i) is
comprised of workmen, all persons who were employed in the establishment or
part of the establishment as the case may be to which the dispute relates on the
date of the dispute and all persons who subsequently become employed in that
establishment or part. Law thus attaches importance and sanctity to a
settlement arrived at in the course of a conciliation proceeding since it carries a
presumption that it is just and fair and makes it binding on all the parties as
well as the other workmen in the establishment or the part of it to which it
relates as stated above. But in the case of a settlement not arrived at in the
course of the conciliation proceeding it has to be in writing and signed by the
parties in the prescribed manner and a copy thereof should be sent to the
officer authorised by the appropriate Government in this behalf and to the
Conciliation Officer. Such a settlement arrived at by agreement between the
employer and workmen otherwise than in the course of conciliation proceedings
is binding only on the parties to the agreement as provided in Section 18(1) of
the Industrial Disputes Act, 1947. Such a settlement is not binding on the other
workmen who are not parties to the settlement.
53. The declaration and undertaking is to be given by each individual employees which
is at page 135 is quoted as under:
DECLARATION AND UNDERTAKING
TO,
The Site President
Reliance Industries Limited
Vadodara Manufacturing Division
Sir,
I...PL No...hereby declare that I have read and understood/expalained by my
colleagues, the contents in full of the Settlement dated 30.11.2010 regarding
wage revisions and the also the settlement dated 30.11.2010 regarding medical
benefits along with annexures thereof entered into between the Company i.e.
Reliance Industries Limited, VMD and unions i.e. IPCL Employees' union
(AITUC) and Petrochemicals Karmachari Union (INTUC) under the provisions of
the Industrial Disputes Act.
I hereby declare that I have also read the contents of the settlements displayed
at various notice boards/ location of VMD and understood the benefits of the
settlements and terms and conditions mentioned therein.
I being the employee of the company accept both the settlement and undertake
to abide by all terms of the said settlements.

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 I now request the Company to extend to me full benefits of the settlements as
applicable to me.
Signature of the employees

Name of the employee:

PL No. :
Date:
Witness:
Signature of the employee:
Name of the employee:
PL No. :
Date:
54. It is necessary to note that Union is not a real party to industrial dispute referred
for adjudication by appropriate Government. The Union has espoused cause of
industrial disputes raised by workman and sent demand notice on behalf of workman to
employer. Thereafter, conciliation proceeding due to intervention made by Conciliation
Officer is to be started or commenced. Therefore, in industrial dispute real party is
"Workmen". The Industrial Dispute which referred for adjudication in facts of this case
page 60 dated 27/7/2009 i.e. an industrial disputes between Reliance Industries Ltd,
Baroda and its workmen. Therefore, each workman is a party to industrial dispute which
referred for adjudication to Industrial Tribunal, Baroda. The roll of Union is only
representing workmen before Industrial Tribunal as if lawyer engaged by client to
represent their case before Court of law. The Union is authorized by workmen to raise
industrial disputes on their behalf and accordingly Union is representing case of
workmen before Industrial Tribunal, Baroda. Therefore, real party in industrial dispute
referred for adjudication is concerned "Workmen not Union". The definition of Industrial
Dispute given in Section 2(k) of Industrial Disputes Act, 1947, is as under:
Section 2(k): "industrial dispute" means any dispute or difference between
employers and employers, or between employers and workmen, or between
workmen and workmen, which is connected with the employment or non
employment or the terms of employment or with the conditions of labour, of
any person.
55. The above referred definition suggests that industrial disputes means any dispute or
difference between employer and workmen, which is connected with employment and
non employment or a terms of employment or with the conditions of Labour, of any
person. In this case, industrial dispute raised by three Unions but in all the three
reference No. 95/2009, 111/2009 and 59/2009 real party are concerned workmen
working with Respondent No. 1 Company. Therefore, appropriate Government has
referred industrial dispute for adjudication to Industrial Tribunal and industrial Tribunal
under Section 10 Sub-Section 4 also have jurisdiction to adjudicate and shall confine its

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adjudication to those point which has been referred for adjudication and matter
incidental thereto. Therefore, Section 10 Sub-Section 4 is quoted as under:
"Section 10(4): Where in an order referring an industrial dispute to (a Labour
Court, Tribunal or National Tribunal) under this section or in a subsequent
order, the appropriate Government has specified the points of dispute for
adjudication, (the Labour Court or the Tribunal or the National Tribunal, as the
case may be,) shall confine its adjudication to those points and matters
incidentally thereto.)
The Conciliation Officer after receiving demand notice through Union in respect
to industrial dispute under Section 12 Sub-Section 2 shall for purpose of
bringing about a settlement of dispute, without delay, investigate the dispute
and all matters affecting the merits and right settlement thereof and may do all
such things as he thinks fit for the purpose of inducing parties to come to a fair
and amicable settlement of the dispute. If the settlement arrived at in course of
Conciliation proceeding then Conciliation Officer shall send a report thereof to
appropriate Government under Section 12 Sub-Section 3. Similarly, where
industrial dispute has been referred to Industrial Tribunal, for adjudication
under Section 15, it shall hold its proceeding expeditiously and shall submit its
award to Appropriate Government. As per Section 20 Sub-Section 3, when
proceeding before Tribunal shall deemed to have commenced on the date of
reference and such proceeding shall be deemed to have concluded on the date
on which award becomes enforceable under Section 17A. Section 17 suggests
that every award of Industrial Tribunal shall within a period of thirty days from
date of its receipt by appropriate Government to be published in such manner
as Appropriate Government thinks fit. Therefore, manner how to publish award
that manner is to be decided by appropriate Government means procedure to
publish award is to be determined by appropriate Government. As per Section
17A, commencement of award shall become enforceable on expiry of 30 days
from date of its publication under Section 17. In this case, award has been
published by appropriate Government on 14/2/2009 as per page 429 and 430.
This award is required to be published by Secretary, Industrial Tribunal, Baroda
on or before 1/3/2011 on notice board of Industrial Tribunal, Baroda.
Therefore, notification under Section 17 is already issued by appropriate
Government and same has been enforceable under Section 17A Sub-Section 1
of Industrial Dispute Act, 1947. A moment an award has been published under
Section 17A Sub-Section 1, then under Section 20 Sub-Section 3, proceeding of
reference pending before Industrial Tribunal shall be deemed to have
concluded.
In Industrial Law, there is no barred providing private settlement to be arrived
during pendency of Conciliation proceeding. Similarly, there is no barred
provide to have private settlement during pendency of reference under Section
10(1)(d) of Industrial Disputes Act, 1947 before Industrial Tribunal, Baroda.
So, it is clear from provisions of Section 12 and Section 10(1)(d) that during
pendency of conciliation proceeding and also during pendency of reference
proceeding, private settlement arrived between parties has not be prohibited or
having any barred for such private settlement. So, during pendency of
conciliation proceeding or reference proceeding if parties to the industrial
dispute arrived private settlement as required under Section 2(p) of Industrial
Dispute Act, 1947 then such settlement can be placed before either Conciliation
Officer, where dispute is pending or before Industrial Tribunal, where reference

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 is pending. In such circumstances, in both cases, either conciliation Officer or
Industrial Tribunal must have to accept such private settlement arrived between
parties to be taken on record and to examine whether such settlement is just,
fair, reasonable and in interest of workers or not? If Conciliation
Officer/Industrial Tribunal satisfied after examining settlement that such
settlement is just, fair, reasonable and in the interest of workers, then such
settlement must have to be recorded by Conciliation Officer or Industrial
Tribunal. The Conciliation Officer or Industrial Tribunal after receiving
settlement arrived between parties being private settlement can not insist to
ignore it and say that matter will decide or adjudicate according to dispute
raised and referred for adjudication to Industrial Tribunal.
Similarly, in facts of this case, during pendency of reference proceeding, two
Unions representing workmen who is real party as arrived at private settlement
under Section 2(p) and Section 18(1) of Industrial Disputes Act, 1947.
Therefore, this settlement being a private settlement published by employer on
notice board of Company and given understanding to each employee working
with employer. Thereafter, each individual employee has signed declaration and
undertaking while accepting terms of settlement as per page 135. After
obtaining such declaration and undertaking from each employee, settlement
was placed on record before Industrial Tribunal with a prayer to record such
settlement and pass an award in terms of settlement. At that occasion,
Petitioner Association who has not signed settlement as objected it, for that,
reasonable opportunity of hearing was given by Industrial Tribunal, Baroda to
Petitioner Association. After examining each and every terms of settlement and
also considering objections raised by Petitioner Association, Industrial Tribunal
has kept in mind that this private settlement has been accepted in Toto by 98%
employees working in Non Supervisory category with employer. Therefore,
considering facts that such settlement is found to be just, fair, reasonable and
in the interest of workers. Therefore, same has been recorded by Industrial
Tribunal with application of mind and then to pass award according to
settlement produced by parties.
In light of aforesaid facts, view taken by Division Bench of Delhi High Court in case of
Hindustan Housing Factory Employees' Union v. Hindustan Housing Factory Ltd reported
i n 1971 (II) LL J 222. The relevant observations made by Delhi High Court in para 35
and 36, which are quoted as under:
"35. The question regarding the power of the Industrial Tribunal to make an
award in terms of a compromise arrived at between the parties came for
consideration before the Supreme Court in State of Bihar v. D.N. Ganguli
(1958) 15 F. J. R. 118, where it was urged that if a dispute referred to the
Industrial Tribunal under Section 10(1) was settled between the parties, the
only remedy for giving effect to such a compromise would be to cancel the
reference and to take the proceedings out of the jurisdiction of the Industrial
Tribunal. This was almost a direct challenge to the authority of the Tribunal to
make an award in terms of the compromise between the parties. The argument
was repelled. Gajendragadkar. J., who wrote the judgment of the Court, said
This argument is based on the assumption that the Industrial Tribunal
would have to ignore the settlement by the parties of their dispute
pending before it and would have to make an award on the merits in
spite of the said settlement. We are not satisfied that this argument is

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 well founded. It is true that the Act does not contain any provision
specifically authorizing the Industrial Tribunal to record a compromise
and pass an award in its terms corresponding to the provisions of
Order XXIII, Rule 3, of the Code of Civil Procedure. But it would be
very unreasonable to assume that the Industrial Tribunal would insist
upon dealing with the dispute on the merits even after it is informed
that the dispute has been amicable settled between the parties. We
have already indicated that amicable settlements of industrial disputes
which generally lead to industrial peace and harmony are the primary
objects of this Act. Settlements reached before the Conciliation Officers
or Boards are specifically dealt with by Section 12(2) and 12(3) and
the same are made binding under Section 18. There can, therefore, be
no doubt that if an industrial dispute before a Tribunal is amicably
settled, the Tribunal would immediately agree to make an award in
terms of the settlement between the parties.
In view of this clear pronouncement of the Supreme Court it hardly seems
necessary to refer to a few other cases to which out attention was invited by
Shri. V. S. Desai, learned Counsel for the company.
36. We are, therefore, clearly of the opinion that a consent award is as good an
award as an award made by the Tribunal after contest and is to be treated as an
award within the meaning of Section 2(b) and not as a settlement defined in
Section 2(p). We are also of the opinion that so long as the compromise
embodied in the award resolves the disputes between the parties which had
been referred to the Tribunal for adjudication and is not tainted with fraud,
collusion, coercion or undue influence, it continues to remain binding on the
parties unless it is terminated in the manner provided by sub -Section (6) of
Section 19 of the Act.
56. Learned senior advocate Mr. Desai submitted relying upon one decision of Apex
Court in case of Workmen of M/s Delhi Cloth General Mills ltd v. The Management of
M/s Delhi Cloth and General Mills reported in MANU/SC/0355/1969 : 1972 (I) LL J 99,
where Apex Court appears to have taken diametrically opposite view holding that during
Conciliation proceedings or after a failure of conciliation proceedings, parties can not
arrive at a private settlement and clothe it with a binding effect even on the members of
Union which entered the settlement.
57. The observation which has been made by Apex Court in aforesaid decision, which
has been relied by learned senior advocate Mr. Desai appearing for Petitioner are clearly
contradictory to ratio of Sirsilk Ltd reported in MANU/SC/0140/1963 : 1963 (II) LL J 647
and also contradictory to ratio of Amalgamated Coffee estate reported in 1985 (II) LL J
110.
5 8 . In Sirsilk case, it was pointedly stated that as soon as agreement is signed in
prescribed manner and copy of it is sent to Government and Conciliation Officer, it
becomes binding at once on the parties to it and comes into operation on the date it
was signed. Applying this rule, it would appear that settlement became binding on the
date it was signed. The requirement of Section 2(p) to send copy of settlement to
conciliation officer was also obviously complied with. Hence, settlement was in
accordance with law and was binding under Section 18 Sub-Section 1 on the workmen
who were parties to it, particularly workmen concerned who at the time of settlement
himself was President of Union. In this connection, it is relevant to note that Section 18

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Sub-Section 1 makes an agreement between employer and workmen otherwise than in
course of Conciliation proceeding, binding on the parties to agreement. In other words,
if workman concerned himself enters into private agreement with employer, that will
make agreement binding on him. The workman in this case, therefore who was a party
to settlement was also bound by settlement. The observation of the Court that in case of
Delhi Cloth as referred above that when dispute is referred to Conciliation Officer,
parties can not claim absolute freedom of contract to arrive at settlement is not borne
out by the statute of Industrial Disputes Act, 1947. The Industrial Dispute Act does not
postulate any reference to Conciliation Officer of any Industrial Dispute. The
Conciliation proceeding in public utility service, as in this case, commence when a
notice of strike is received by the Conciliation Officer, and where no settlement is
arrived at, they are deemed to have concluded when failure report of Conciliation
Officer is received by Appropriate Government. It is nowhere provided in the Industrial
Disputes Act or Rules that during pendency of Conciliation Proceedings or after failure
report of such proceeding the parties are barred from arriving at private settlement. If
there is no bar to private settlement after an award has been made, as in Sirsilk case
and even after publication of award as in Amalgamated Coffee Estate, much less can
there be a bar to such a settlement during the pendency of conciliation proceedings or
after the failure of such proceedings means pending industrial dispute before Industrial
Tribunal. Therefore, view taken by Apex Court in case of Workmen of M/s Delhi Cloth as
referred above that parties can not arrive at private settlement after Conciliation Officer
had commenced Conciliation proceedings or after failure of such proceedings, is,
therefore, neither warranted by statute nor by precedent. The further observations of
Apex Court in case of the Workmen of M/s Delhi Cloth as referred above that provision
of Section 18 Sub-Section 1 do not vest in parties is unfettered freedom to settle the
dispute as they please and clothe it with a binding effect, is on same reasoning equally
unwarranted in law.
59. A Division Bench of Patna High Court in Rohtas Industries Ltd v. Presiding Officer,
Industrial Tribunal, Bihar reported in 1977 Lab I.C. 147(Patna), has taken view that
Tribunal has complete jurisdiction to decide whether settlement which has been arrived
at between "the parties to the industrial disputes" was arrived at bona fide and as to
how far the settlement would bind the workman concerned. It has been further
observed that Tribunal "would take into consideration the settlement while passing the
final award by it." it may perhaps be permissible for Tribunal to go into question of
bona fides of a settlement. But to say that the Tribunal will take such settlement into
consideration while passing the final award will bring a conflict between settlement
which is binding under Section 18(1) and award which will be binding under Section
18(3). In Sirsilk Ltd case, Supreme Court prohibited publication of award with a view to
avoid such a conflict. The High Court does not appear to have appreciated ratio of that
decision of Supreme Court and contented itself merely by saying that "this decision also
has no application to present case." The Court has perhaps confused a compromise
between the parties before the Tribunal in the course of the adjudication proceedings
and the agreement which partakes the character of a settlement arrived between the
employer and workman otherwise than in the course of conciliation proceedings after
complying with the requirements of law. Such settlement, if arrived at genuinely and
bona fide, will become binding on the parties under Section 18(1) and the Tribunal will
have to accept it as it is and cannot deviate from it.
60. In Blue Star Ltd. v. K.S. Khurana reported in MANU/DE/0546/1992 : 1994 II LL J
590 (Delhi), pending adjudication, the parties had jointly filed an application bringing
to the notice of the Labour Court that a private settlement had been arrived at between
them to the effect that he workman will be reinstated without back wages or

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allowances. As a matter of fact, pursuant to the settlement the workman had even
joined the duty. But the Labour Court did not pass an order on the application for a
period of two years. Then the workman filed an application before the Labour Court
seeking the relief of back wages based on an alleged oral agreement and the Labour
Court proceeded to enquire into the claim. In a writ petition filed by the employer for
prohibiting Labour Court from proceeding with the enquiry, a single Judge of the Delhi
High Court held that the Labour Court could not adjudicate upon the question which
stood settled by the settlement because after the settlement the adjudication had
become infructuous. The learned Judge further observed that since there was no
explanation from the workman as to why there is delay of two years in seeking the
relief of back wages, the workman had acquiesced and estopped from raising any
dispute.
61. Therefore, contentions raised by learned senior advocate Mr. Desai relying upon
Apex Court decision in case of Workmen of M/s Delhi Cloth as referred above can not be
accepted by this Court.
62. Similarly, considering facts of present case, during pendency of reference in respect
to industrial disputes between parties under Section 2(p) read with Section 18 Sub-
Section 1 of Industrial Disputes Act, 1947 settlement arrived between parties being
private settlement which signed by 98% employees accepting entire terms of settlement
and thereafter it has been produced before Industrial Tribunal Baroda and then
Industrial Tribunal, Baroda has recorded it and after scrutinizing it found to be just, fair,
reasonable and in interest of workman. Therefore, settlement which recorded by
Industrial Tribunal, Baroda and award is passed in terms of settlement then such award
passed on settlement covered by Section 18 Sub-Section 3 and having binding effect of
award to all parties to industrial dispute as per Section 18 Sub-Section 3(d) and also it
binding to all parties who are employees in establishment or part thereof on the date of
dispute and all persons who become subsequently employed in establishment or part
thereof as per Section 18 Sub-Section 3(d).
63. The contention raised by learned senior advocate Mr. Desai that Industrial Tribunal
can not jump from private settlement to giving binding effect of such settlement under
Section 18 Sub-Section 3(d) of Industrial Dispute Act, 1947. The entire settlement as
whole is binding to all employees because Industrial Tribunal has passed an award in
terms of settlement and Petitioner Association and other 2% employees are not entitled
to seek challenge on the ground that implementation of award with reserve treating part
of terms as binding thereof and part is of not binding.
64. Therefore, such challenge which has been made by Petitioner Association before
this Court is considered to be half hearted challenged and can not be entertained by this
Court when overall settlement has been accepted by 98% employees voluntarily with
open eyes working with employer.
65. The Apex Court in case of New Standard Engineering Co. Ltd v. N.L. Abhayankar
and Anr. reported in MANU/SC/0277/1978 : AIR 1978 SC 982, which judgment is also
considered by Industrial Tribunal, Baroda while dealing with settlement and passing
award. The relevant observation made in para 7, 10 to 12 are quoted as under:
7 . Settlement of labour disputes by direct negotiation or settlement through
collective bargaining is always to be preferred for, as is obvious, it is the best
guarantee of industrial peace which is the aim of all legislation for the
settlement of labour disputes. In order to bring about such a settlement more

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easily, and to make it more workable and effective, it is no longer necessary,
under the law, that the settlement should be confined to that arrived at in the
course of a conciliation proceeding, but now includes, by virtue of the definition
in Section 2(p) of the Act, a written agreement between the employer and the
workmen arrived at otherwise than in the course of a conciliation proceeding
where such agreement has been signed by the parties in the prescribed manner
and a copy thereof has been sent to the authorised officers. Rule 58 (2) of the
Industrial Disputes (Central) Rules, 1957, prescribes the manner of signing the
settlement and it is not in dispute before us that this requirement has been
complied with. The other relevant provision is that contained in Section 18(1)
of the Act which specifically states that a settlement arrived at by agreement
between the employer and the workmen otherwise than in the course of
conciliation proceedings shall be binding on the parties to the agreement. In
fact it has clearly been held by this Court in Sirsilk, Ltd. v. Government of
Andhra Pradesh, MANU/SC/0140/1963 : (1963) 2 Lab L J 647 : AIR 1964 SC
160, that as soon as an agreement is signed in the prescribed manner and a
copy of it is sent to the officers concerned, it becomes binding on the parties
and comes into operation on the date it is signed, or on the date mentioned in
it for its coming into operation. We have therefore to examine the arguments of
counsel for the parties with due regard to these provisions of the law.
10. The question of justness and fairness of a settlement should, in a case like
this, be examined with reference to the situation as it stood on the date on
which it was arrived at i.e. on July 31, 1973. As has been stated, the award was
made on November 29, 1972 but it was under challenge in the High Court on
the Company's petition under Articles 226 and 227 of the Constitution. It has
been pointed out by Mr. Kaka, and has not been disputed by Mr. Chitaley, that
one of the grounds of challenge was the contention that the Tribunal had not
made a proper comparison of the wages and the dearness allowance on
"industry-cum-region basis" even though it was enunciated by this Court in
Greaves Cotton and Company, Ltd. v. Their Workmen MANU/SC/0169/1963 :
(1964) 5 SCR 362 : AIR 1964 SC 689. It cannot therefore be said that the
award was not at all in jeopardy, at the time of the settlement.
11. It is well known that the possibility of an adverse decision by the Court
operates as a positive force in favour of deliberate and careful effort by both
parties to settle their dispute through direct negotiations. And we have no
doubt that it is that force which has brought about the settlement under
consideration. Then there is the further fact that, as has been stated by the
Tribunal, the workmen were liable, in the event of the success of the Company,
to a refund of the amounts which had already been paid to them on that
understanding.
12. Moreover, as has been found by the Tribunal, out of 1328 workmen who
were in the Company's service on July 31, 1973, 995 workmen have signed the
settlement and have also accepted their dues thereunder, and 242 workmen
have accepted their dues under the settlement by actually signing the receipts
though they have not signed the settlement. It will also be recalled that 910
workmen who left the Company between Jan. 1, 1968 and July 31, 1973 have
also accepted their dues under the settlement. As has been stated the
settlement was made with Bhartiya Kamgar Sena (Respondent No. 3) which
represented a very large majority of the workmen of the Company. It is a
significant fact that the bona fides of that Union have not been challenged

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 before us. There is therefore no reason why the Tribunal's finding that the
settlement is just and fair should not be accepted.
In case of Amalgamated Coffee Estates Ltd., v. Their Workmen reported in 1965 II LL J
110, similar aspect has been examined by Apex Court, which is as under:
These two appeals by Special leave arise of an award of the special industrial
tribunal for plantation, Coimbatore in a dispute between 228 coffee, tea and
rubber estates and their employees. The dispute began in 1952 and was finally
referred for adjudication to the special tribunal in January 1954. The items in
dispute were classified under three categories, one referring to the staff only,
the second referring to the workmen and the third to both the staff and
workmen. The award was pronounced on 15 September 1956 and thereafter
there were two applications for special leave which have given rise to these
appeals. Appeal No. 541 is by a large number of estates involved in the dispute
while appeal No. 543 is by Silver Cloud Estate only. Pending the hearing of the
appeals, it was urged that the dispute had been compromised. Consequently an
application was made to this Court on 19 July, 1962 to dispose of the appeals
in terms of the said settlement. It was, however, argued on behalf of some of
the Respondents workmen that they were not bound by the settlement, though
it was not in dispute that a settlement had been arrived at between the estates
and a large number of the employees who had accepted payments consistently
with the terms of the settlement. It was however, urged that the settlement was
not legally binding on the Respondents because some of the unions which
represented the employees did not participate in the negotiation of the
settlement and were not parties to it. It was also urged that the mere
acceptance by the workmen of payment consistently with a terms of the
settlement did not necessarily show that they knew the effect of their
acceptance of the said payments or that they had voluntarily and knowingly
agreed to the terms of the said settlement. This matter came up before this
Court on 9 and 10 December 1963 and in view of this dispute between the
parties about the settlement, this Court framed an issued in the following
terms:
"In view of the fact that admittedly a large number of workmen
employed by the Appellants have accepted payments consistently with
the terms of the agreements set up by the employers in their present
petition, is it shown by the Respondents that the said agreement is not
valid and binding on them?
The Industrial Tribunal, Madras, thereafter went into the issue which
this Court sent down for decision and its finding is that in every estate
payments were made in terms of the Madras settlement and such
payments were voluntarily and knowingly accepted by the workmen. It
also came to the conclusion that the settlement was fair settlement
having regard to the basic facts of the dispute between the parties.
Finally the tribunal held that Silver Cloud Estate which is the Appellant
in a appeal No. 543 was not party to the settlement.
On the return of this finding the matter was again set down for hearing
and then an application was made on behalf of Silver Cloud Estate on
16 December 1964, in which it was stated that as a large majority of
the managements had accepted the settlement, the Appellant was also

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 prepared to abide by the final decision of this Court in Civil Appeal No.
541 of 1961. The two unions which were concerned with Silver Cloud
Estate are Respondents 2 and 27 and notice of this application was
given to these unions. It may be mentioned that hose unions were
parties to the settlement with reference to other estates. Notice has
been served on the two unions and they have not appeared to object
and have apparently no objection to Civil appeal No. 543 being decided
in the same manner as Civil Appeal No. 541 on the basis of settlement.
An objection was raised o behalf of some of the Respondents that the
finding of the tribunal on the issue sent down to it was incorrect. But it
has not been seriously pressed. We have considered that finding and
are of opinion that the tribunal has carefully considered the issue sent
down to it and there is no reason to disagree with its conclusion.
The settlement appears to us also to be a fair one. We are therefore of
opinion that the two appeals should be decided in accordance with the
settlement. Even those estates which were not parties to the settlement
are prepared to abide by it. We think that in that in the interest of
uniformity and industrial peace the settlement should bind all estates
which were represented before the special tribunal.
We therefore order that the two appeals be decided in accordance with
the settlement. We therefore substitute annexure A to the application
dated 19 July 1962 in place of the award so far as the workmen (other
than staff) are concerned. We also substitute annexure C to the
application dated 19 July 1962 in place of the award so far as the staff
is concerned. In the circumstances, we pass no order as to costs."
66. The division Bench of Patana High Court in case of The Workmen of M/s Indian
Cable Company Ltd v. M/s Indian Cable Company ltd and Ors reported in 1973 Lab IC
208. The relevant discussion made in para 7 and 8 are quoted as under:
7 . Mr. Ghose, however strongly contended that Tribunal exceeded its
jurisdiction in giving effect to the settlement dated the 20th March 1969,
arrived at between the Indian Cable Company Ltd and rival group inspite of the
objection filed by R. N. Chaudhary, who according to Mr. Ghose, was the duly
elected the General Secretary of the Workers Union. His alternative submission
was that in any view of the matter the Tribunal ought to have gone into the
matter and decided as to which of the parties real represented the Workers
Union. It seems to me that the submission of learned Counsel is no real
consequence. In first place, the decision of this Court in Second Appeal No. 663
of 1964 was confined to the year 1961. Nothing has been brought to our notice
that on 28th March, 1969, when the matter was pending before the Tribunal, R.
N. Chaudhary was the General Secretary of the Union for 1969. Moreover the
duty of the Tribunal was not to decide as to which of the two groups was really
representing the workers but to see as to whether the compromise placed
before it was reasonable and fair. It can not be said that this finding has been
arrived at by the Tribunal without hearing all the parties concerned including R.
N. Chaudhary Petitioner No. 1 in this application and thus no grievance can be
made of the fact that the Petitioner had no opportunity to place his case before
the Tribunal. As already stated, in the instance case the Tribunal gave an
opportunity to all the parties concern including Petitioner No. 1 to appear

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 before it and, after considering various aspects of the argument came to the
conclusion that the said settlement was reasonable, fair and in interest of all
the parties concerned. It is no doubt true that a compromise can only bind
those to are parties to it but in such contingency the Tribunal had option to
adopt it as a part of its award after considering as to whether it was proper
from the point of view of all the workmen concerned in the dispute, and for that
purpose it should hear all the parties concerned, which it did (vide, (1960) 2
LAB L J 556 (MAD), Coimbatory District Mill Workers Union v. Dhanlaxmi Mills
Ltd Tiruppur). In the instant case, the Tribunal had gone into the various
aspects of the argument and after a close scrutiny has come to the conclusion
that it is fair, reasonable and just to all parties concerned. A similar view was
expressed in Maria Soams v. Common Wealth Hosiery Factory. Balmatta 1968 2
LAB L J 438 : 1968 LAB IC 1329 (Mys)) wherein it was held - "it is now well
settled rule and principles that and award can be based even upon settlement
entered into between the management and one of the two unions, if there be
more than one, where the settlement appears to be fair and no force in the
submission of learned Counsel. It is accordingly overruled.
8 . It may also be stated that the agreement which has been accepted by the
Tribunal is dated 20th March 1969 and it become effective from the 1st of June,
1969 for three years. The memorandum of settlement filed before the Supreme
Court is dated the 1st January, 1970, and it had to come into force from the
10th October, 1969 for a period of five years. It was admitted before us that the
memorandum of settlement filed before the Supreme Court superseded the
earlier agreement filed before the Tribunal. A comparison of the two
agreements makes it clear that the one made before the Tribunal remained in
force only for four months and nine days, but for all this small period also the
award of the Tribunal does not appear to me to be unreasonable or perverse as
it the contention of the learned Counsel for the Petitioners.
67. In case of I. T. C. Ltd, Workers Welfare Association and Anr v. The Management of
ITC Ltd reported in MANU/SC/0071/2002 : AIR 2002 SC 937. The relevant discussion
made in para 14 to 23 are as under:
14. In answering the reference the industrial adjudicator has to keep in the
forefront of his mind the settlement reached under Section 12(3) of the
Industrial Disputes Act. Once it is found that the terms of the settlement
operate in respect of the dispute raised before it, it is not open to the Industrial
Tribunal to ignore the settlement or even belittle its effect by applying its mind
independent of the settlement unless the settlement is found to be contrary to
the mandatory provisions of the Act or unless it is found that there is non-
conformance to the norms by which the settlement could be subjected to
limited judicial scrutiny. This is infact the approach of the Tribunal in the
instant case. The High Court which examined the issue from a different angle as
well was, in our view, justified in affirming the award of the Tribunal.
1 5 . As the settlement entered into in the course of conciliation proceedings
assumes crucial importance in the present case, it is necessary for us to
recapitulate the fairly well settled legal position and principles concerning the
binding effect of the settlement and the grounds on which the settlement is
vulnerable to attack in an industrial adjudication. Analysing the relative scope
of various clauses of Section 18, this Court in the case of Barauni Refinery
Pragatisheel Shramik Parishad v. Indian Oil Corporation Ltd.

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MANU/SC/0318/1990 : 1991 (1) SCC 4 succinctly summarized the position
thus:
Settlements are divided into two categories, namely, (i) those arrived
at outside the conciliation proceedings (Section 18(i) and (ii) those
arrived at in the course of conciliation proceedings (Section 18(3)). A
settlement which belongs to the first category has limited application in
that it merely binds the parties to the agreement. But a settlement
arrived at in the course of conciliation proceedings with a recognised
majority union has extended application as it will be binding on all
workmen of the establishment, even those who belong to the minority
union which had objected to the same. To that extent it departs from
the ordinary law of contract. The object obviously is to uphold the
sanctity of settlements reached with the active assistance of the
Conciliation officer and to discourage an individual employee or a
minority union from scuttling the settlement. There is an underlying
assumption that a settlement reached with the help of the conciliation
Officer must be fair and reasonable and can, therefore, safely be made
binding not only on the workmen belonging to the union signing the
settlement but also on the others. That is why a settlement arrived at in
the course of conciliation proceedings is put on par with an award
made by an adjudicatory authority.
In General Manager, Security Paper Mill v. R.S. Sharma (MANU/SC/0326/1986 :
AIR 1986 SC 954), E.S. Venkataramiah, J. Speaking for the Court explained the
rationale behind Section 18(3) thus:
Even though a Conciliation Officer is not competent to adjudicate upon
the disputes between the management and its workmen he is expected
to assist them to arrive at a fair and just settlement. He has to play the
role of an adviser and friend of both the parties and should see that
neither party takes undue advantage of the situation. Any settlement
arrived at should be a just and fair one. It is on account of this special
feature of the settlement Sub-section (3) of Section 18 of the Industrial
Disputes Act, 1947 provides that a settlement arrived at in the course
of conciliation proceeding under that Act shall be binding on (I) all
parties to the industrial dispute, (ii) where a party referred to in Clause
(i) is an employer, his heirs, successors, or assigns in respect of the
establishment to which the dispute relates and (iii) where a party
referred to in Clause (i) is comprised of workmen, all persons who
were employed in the establishment or part of the establishment as the
case may be to which the dispute relates on the date of the dispute and
all persons who subsequently become employed in that establishment
or part. Law thus attaches importance and sanctity to settlement arrived
at in the course of a conciliation proceeding since it carries a
presumption that it is just and fair and makes it binding on all the
parties as well as the other workmen in the establishment or the part of
it to which it relates as stated above.
17. The next principle to be borne in mind is that in a case where the validity
of the settlement is assailed, the limited scope of enquiry would be, whether
the settlement arrived at in accordance with Sub-section (1) to (3) of Section
12, is on the whole just and fair and reached bonafide. An unjust, unfair or

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malafide settlement militates against the spirit and basic postulate of the
agreement reached as a result of conciliation and, therefore, such settlement
will not be given effect to while deciding an industrial dispute. Of course, the
issue has to be examined keeping in view the presumption that is attached to
the settlement under Section 12(3).
18. In Herbertsons Limited v. The Workmen MANU/SC/0299/1976 : 1976 (4)
SCC 736), this Court called for a finding on the point whether the settlement
was fair and just and it is in the light of the findings of the Tribunal that the
appeal was disposed of. Goswami, J. speaking for the three-Judge Bench made
it clear that the settlement cannot be judged on the touch stone of the
principles which are relevant for adjudication of an industrial dispute. It was
observed that the Tribunal fell into an error in invoking the principles that
should govern the adjudication of a dispute regarding dearness allowance in
judging whether the settlement was just and fair. The rationale of this principle
was explained thus:
There may be several factors that may influence parties to come to a
settlement as a phased endeavour in the course of collective
bargaining. Once cordiality is established between the employer and
labour in arriving at a settlement which operates well for the period
that is in force, there is always a likelihood of further advances in the
shape of improved emoluments by voluntary settlement avoiding
friction and unhealthy litigation. This is the quintessence of settlement
which courts and tribunals should endeavour to encourage. It is in that
spirit the settlement has to be judged and not by the yardstick adopted
in scrutinizing an award in adjudication.
19. The line of enquiry whether settlement was unfair and unjust in K.C.P. Ltd.
v. Presiding Officer and Ors. MANU/SC/1634/1996 : 1996 (10) SCC 446), was
adopted by a three-Judge Bench of this Court speaking through Majmudar, J. It
was observed at paragraph 21 that "under these circumstances, Respondents 3
to 14 also would be ordinarily bound by this settlement entered into by their
representative Union with the Company unless it is shown that the said
settlement was ex facie, unfair, unjust or mala fide". The Court came to the
conclusion that the settlement cannot be characterised to be unfair or unjust. It
was further observed that "once this conclusion is reached it is obvious that
another industrial dispute should have been disposed of in the light of this
settlement". It was reiterated in the case of M/s. Tata Engineering and
Locomotive Co. Ltd. v. Their Workmen MANU/SC/0332/1981 : AIR 1981 SC
2163), that "a settlement cannot be weighed in any golden scales and the
question whether it is just and fair has to be answered on the basis of
principles different from those which come into play when an industrial dispute
is under adjudication". Earlier, it was observed:
If the settlement had been arrived at by a vast majority of the
concerned workers with their eyes open and was also accepted by them
in its totality, it must be presumed to be just and fair and not liable to
be ignored while deciding the reference merely because a small number
of workers (in this case 71, i.e., 11.18 per cent) were not parties to it
or refused to accept it, or because the Tribunal was of the opinion that
the workers deserved marginally higher emoluments than they
themselves thought they did.

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 2 0 . Another principle which deserves notice is the one firmly laid down in
Herbertsons case (supra). It was emphasised that the settlement has to be
taken as a package deal and it should not be scanned 'in bits and pieces' to
hold some parts good and acceptable and others bad. Then, it was observed
"unless it can be demonstrated that the objectionable portion is such that it
completely outweighs all the other advantages gained, the Court will be slow to
hold a settlement as unfair and unjust. The settlement has to be accepted or
rejected as a whole and we are unable to reject it as a whole as unfair or
unjust."
21. Having noted that the only objectionable feature of the settlement as found
by the Tribunal was reduction of dearness allowance from cent per cent to 85
per cent, it was held that, that part of the settlement cannot be held to be
invalid or inoperative. This proposition laid down in Herbertsons case was
reiterated in K.C.P. Ltd. case (supra), approvingly citing the said decision. The
passages in Herbertsons case were quoted in extenso and approved by the
three-Judge Bench in TELCO case (supra) as well.
2 2 . What follows from a conspectus of these decisions is that a settlement
which is a product of collective bargaining is entitled to due weight and
consideration, more so when a settlement is arrived at in the course of
conciliation proceeding. The settlement can only be ignored in exceptional
circumstances viz. if it is demonstrably unjust, unfair or the result of mala fides
such as corrupt motives on the part of those who were instrumental in effecting
the settlement. That apart, the settlement has to be judged as a whole, taking
an overall view. The various terms and clauses of settlement cannot be
examined in piecemeal and in vacuum.
23. Viewed in the light of these principles, it cannot be said that the settlement
in the present case which is otherwise valid and just suffers from any legal
infirmity merely for the reason that one of the clauses in the settlement extends
the benefits of life pension scheme only to the employees retiring after a
particular date i.e. 24.8.1986. Exclusion of workmen retiring before that date is
no ground to characterise the settlement as unjust or unfair. Of course, the
allegations of mala fides such as corrupt motives have not been levelled against
anyone and that aspect becomes irrelevant here.
68. In this case, settlement is produced on record at page 120 under Section 2(p) read
with Section 18 Sub-Section 1 of Industrial Disputes Act, 1947 dated 30/11/2010
between I.P.C.L. Vadodara v. President, I.P.C.L. Employees Union. This settlement is
signed by all parties as required under Section 2(p) of Industrial Disputes Act, 1947.
This settlement is out side conciliation proceeding and this settlement is not arrived
during course of conciliation proceeding. Therefore, Section 12(3) is not applicable in
fact of this case, but it is relevant that this settlement has been arrived during
adjudication of pending references before Industrial Tribunal, Baroda being No.
95/2009. The private settlement if arrived under Section 2(p) read with Rules 62 part
(VII). According to Rule 62 of Industrial Disputes Gujarat Rules 1966 settlement arrived
at in course of Conciliation proceedings or otherwise shall be in form No. (xvi). The
settlement shall be signed by in case of employer by employer himself or his authorized
agent and in case of workman either by President or Secretary or such other Officers of
Trade Union and in case of workman, where settlement is arrived at between employer
and his workman otherwise than in course of Conciliation proceedings before
Conciliation Officer, parties to settlement shall jointly send copy thereof to Secretary to

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Government of Gujarat Education and Labour Department, Ahmedabad, Commissioner
of Labour and Dy. Commissioner of Labour, Ahmedabad and Conciliation Officer
concerned. Therefore, Rule 62 (VII) has been fully complied with by Respondent No. 1
Company and two other Unions as Respondent Nos. 3 and 4. The form No. (XVI) under
Rule 62 as referred above also required to send copy to Conciliation Officer in local area
concerned, Commissioner of Labour, Ahmedabad, Deputy Commissioner of Labour and
Secretary to Government of Gujarat Education and Labour Department, Gandhinagar.
The settlement dated 30/11/2010 arrived between parties which has been placed before
Industrial Tribunal, Baroda is fully complied with Rule 62 and Form No. (XVI).
Therefore, it is a legal and valid settlement arrived under Rules 62 read with Form No.
(XVI). The private settlement arrived between parties otherwise than in conciliation
proceeding, copy of this settlement was send to Conciliation Officer. Therefore, legal
formalities under Rule 62 read with Form No. (XVI) has been fully complied with by
Respondent Nos. 1, 3 and 4 and copy of this settlement was sent to concerned statutory
authorities. That said fact has been specifically made clear by Respondent Company as
discussed in para 6 by Industrial Tribunal, Baroda vide exh 12 and 14. Therefore,
settlement in question produced before Industrial Tribunal, Baroda is legal and valid
settlement arrived under Section 2(p) of Industrial Disputes Act, 1947. In such
circumstances, if valid settlement is produced before Industrial Tribunal, where dispute
is pending then it is a duty of Industrial Tribunal must have to accept such valid
settlement and to examine in case of having objections by other parties whether
settlement is just, fair and reasonable or not? The award is published under Section 17
and after a period of 30 days it become enforceable under Section 17A of Industrial
Dispute Act, 1947. If this settlement is challenged by Petitioner Association before this
Court that this settlement is unfair and unjust then it give rise to any other industrial
disputes for that Petitioner Association can raise dispute under provisions of Industrial
Disputes Act, 1947 to the effect that this settlement is not just, fair and reasonable. So,
once settlement is recorded by Industrial Tribunal considering it just, fair and
reasonable and passed an award on the basis of settlement which award is published
and thereafter 30 days is over from date of publication then it becomes enforceable and
under Section 17 Sub-Section 2 such award is final and can not be challenged to any
Court of Law. Therefore, if Petitioner Association having any objection against this
settlement for giving rise to any other industrial dispute against this settlement but
challenged before this Court in writ petition under Article 226 and 227 of Constitution of
India, this Court can not entertain such challenged made by Petitioner Association. It is
also not case of Petitioner Association that copy of this settlement is not send to other
Statutory authority.
69. This aspect in facts in detailed examined by Apex Court in case of Sirsilk Ltd v.
Government of A. P. and Anr reported in MANU/SC/0140/1963 : AIR 1964 SC 160 along
with to examine further question while reading Section 17 and 17A together and held it
that both provisions are mandatory and not accordingly directory. The certain relevant
observation made by Apex Court which also applied to facts of this Case. Therefore, it is
reproduced as under in para 4 to 8:
4 . We are of opinion that the first contention on behalf of the Appellants,
namely, that the publication of the award under Section 17(1) is directory
cannot be accepted. Section 17(1) lays down that every award shall within
period of thirty days from the date of its receipt by the appropriate government
be published in such manner as the appropriate government thinks fit. The use
of the word "shall" is a pointer to Section 17(1) being mandatory, though
undoubtedly in certain circumstances the word "shall" used in a statute may be
equal to the word "may". In the present case, however it seems to us that when

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the word "shall" was used in Section 17(1) the intention was to give a mandate
to Government to publish the award within the time fixed therein. This is
enforced by the fact that Sub-section (2) of Section 17 provides that "the award
published under Sub-section (1) shall be final and shall not be called in
question by any court in any manner whatsoever". Obviously when the
legislature intended the award on publication to be final, it could not have
intended that the Government concerned had the power to withhold publication
of the award. Further Section 17A. shows that whatever power the Government
has in the matter of an award is specifically provided in that section, which
allows the Government in certain circumstances to declare that the award shall
not become enforceable on the expiry of thirty days from the date of its
publication, which under Section 17-A is the date of the enforceability of the
award. Section 17-A also envisages that the award must be published though
the Government may declare in certain contingencies that it may not be
enforceable. Sub-section (2) of Section 17-A also gives power to Government
to make an order rejecting or modifying the award within ninety days from the
date of its publication. It is clear therefore reading Section 17 and Section 17-A
together that the intention behind Section 17(1) is that a duty is cast on
government to publish the award within thirty days of its receipt and the
provision for its publication is mandatory and not merely directory.
5 . This however does not end the matter, particularly after the amendment of
the Act by Central Act XXXVI of 1956 by which Section 18(1) was introduced in
the Act. Section 18(1) provides that a settlement arrived at by agreement
between the employer and workmen otherwise than in the course of conciliation
proceeding shall be binding on the parties to the agreement. "Settlement" is
defined in Section 2(p) as meaning a settlement arrived at in the course of
conciliation proceeding and includes a written agreement between the employer
and workmen arrived at otherwise than in the course of conciliation proceeding
where such agreement has been signed by the parties thereto in such manner
as may be prescribed and a copy thereof has been sent to the appropriate
Government and the conciliation officer. When such an agreement has been
arrived at though not in the course of conciliation proceedings, it becomes a
settlement and Section 18(1) lays down that such a settlement shall be binding
on the parties thereto. Further Section 18(3) provides that an award which has
become enforceable shall be binding on all parties to the industrial dispute and
others. Section 19(1) provides that a settlement comes into operation on such
date as is agreed upon by the parties to the dispute, and if no date is agreed
upon, on the date on which the memorandum of settlement is signed by the
parties to the dispute. In the present case the settlement that was arrived at
between the parties to the dispute was signed on October 1, 1957, and as it
had not fixed any date for its coming into force, it became operative from
October 1, 1957 itself and was binding on the parties to the agreement who
were also before the industrial tribunal and would be bound by the award after
its publication.
6. The contention on behalf of the Appellant in the alternative is this. It is said
that the main purpose of the Act is to maintain peace between the parties in an
industrial concern. Where therefore parties to an industrial dispute have
reached a settlement which is binding under Section 18(1), the dispute between
them really comes to an end. In such a case it is urged that the settlement
arrived at between the parties should be respected and industrial peace should
not be allowed to be disturbed by the publication of the award which might be

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different from the settlement. There is no doubt that a settlement of the dispute
between the parties themselves is to be preferred where it can be arrived at to
industrial adjudication, as the settlement is likely to lead to more lasting peace
that an award, as it is arrived at by the free will of the parties and is a pointer
to there being goodwill between them. Even though this may be so, we have
still to reconcile the mandatory character of the provision contained in Section
17(1) for the publication of the award to the equally mandatory character of the
binding nature of the settlement arrived at between the parties as provided in
Section 18(1). Ordinarily there should be no difficulty about the matter, for if a
settlement has been arrived at between the parties while the dispute is pending
before the tribunal, the parties would file the settlement before the tribunal and
the tribunal would make the award in accordance with the settlement. In State
of Bihar v. D.N. Ganguly, MANU/SC/0111/1958 : 1959 SC R 1191 : A I R 1958
S C 1018 dealing with an argument urged before this Court that where a
settlement has been arrived at between the parties while an industrial dispute is
pending before a tribunal, the only remedy for giving effect to such a
settlement would be to cancel the reference, this Court observed that though
the Act did not contain any provision specifically authorising the industrial
tribunal, to record a compromise and pass an award in its terms corresponding
to the provisions of O. XXIII, Rule 3 of the Code of Civil Procedure, it would be
very unreasonable to assume that the industrial tribunal would insist upon
dealing with the dispute on the merits even after it is informed that the dispute
has been amicably settled between the parties, and there can be no doubt that
if a dispute before a tribunal is amicably settled, the tribunal would immediately
agree to make an award in terms of the settlement between the parties. In that
case this Court dealt with what would happen if a settlement was arrived at
while the matter was pending before the tribunal. The difficulty arises in the
present case because the proceedings before the tribunal had come to an end,
and the tribunal had sent its award to Government before the settlement was
arrived at on October 1, 1957. There is no provision in the Act dealing with
such a situation just as there was no provision in the Act dealing with the
situation which arose where the parties came to an agreement while the dispute
was pending before the tribunal. This Court held in Ganguly's case
MANU/SC/0111/1958 : 1959 S C R 1191: (AIR 1958 S C 1018) that in such a
situation the settlement or compromise would have to be filed before the
tribunal and the tribunal would make an award thereupon in accordance with
the settlement. Difficulty however rises when the matter has gone beyond the
purview of the tribunal as in the present case. That difficulty in our opinion has
to be resolved in order to avoid possible conflict between Section 18(1) which
makes the settlement arrived at between the parties otherwise than in the
course of conciliation proceeding binding on the parties and the terms of an
award which are binding under Section 18(3) on publication and which may not
be the same as the terms of the settlement binding under Section 18(1). The
only way in our view to resolve the possible conflict which would arise between
a settlement which is binding under Section 18(1) and an award which may
become binding under Section 18(3) on publication is to withhold the
publication of the award once the Government has been informed jointly by the
parties that a settlement binding under Section 18(1) has been arrived at. It is
true that Section 17(1) is mandatory and ordinarily the Government has to
publish an award sent to it by the tribunal; but where a situation like the one in
the present cases arises which may lead to a conflict between a settlement
under Section 18(1) and an award binding under Section 18(3) on publication,

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the only solution is to withhold the award from publication. This would not in
our opinion in any way affect the mandatory nature of the provision in Section
17(1), for the Government would ordinarily have to publish the award but for
the special situation arising in such cases.
7. The matter may be looked at in another way. The reference to the tribunal is
for the purpose of resolving the dispute that may have arisen between
employers and their workmen. Where a settlement is arrived at between the
parties to a dispute before the tribunal after the award has been submitted to
Government but before its publication, there is in fact no dispute left to be
resolved by the publication of the award. In such a case, the award sent to
Government may very well be considered to have become infructuous and so
the Government should refrain from publishing such an award because no
dispute remains to be resolved by it.
8 . It is however urged that the view we have taken may create a difficulty
inasmuch as it is possible for one party or the other to represent to the
Government that the settlement has been arrived at as a result of fraud,
misrepresentation or undue influence or that it is not binding as the workmen's
representative had bartered away their interests for personal considerations.
This difficulty, if it is a difficulty, will always be there even in a case where a
settlement has been arrived at ordinarily between the parties and is binding
under Section 18(1), even though no dispute has been referred in that
connection to a tribunal. Ordinarily however such difficulty should not arise at
all, if we read Section 2(p), 18(1) and 19(1) of the Act together. Section 2(p)
lays down what a settlement is and it includes "a written agreement between
the employer and workmen arrived at otherwise than in the course of
conciliation proceeding where such agreement has been signed by the parties
thereto in such manner as may be prescribed and a copy thereof has been sent
to the appropriate Government and the conciliation officer." Therefore, the
settlement has to be signed in the manner prescribed by the rules and a copy of
it has to be sent to the Government and the conciliation officer. This should
ordinarily ensure that the agreement has been arrived at without any of those
defects to which we have referred above, if it is in accordance with the rules.
Then Section 18(1) provides that such a settlement would be binding between
the parties and Section 19(1) provides that it shall come into force on the date
it was signed or on the date on which it says that it shall come into force.
Therefore, as soon as an agreement is signed in the prescribed manner and a
copy of it is sent to the Government and the conciliation officer it becomes
binding at once on the parties to it and comes into operation on the date it is
signed or on the date which might be mentioned in it for its coming into
operation. In such a case there is no scope for any inquiry by Government as to
the bona fide character of the settlement which becomes binding and comes
into operation once it is signed in the manner provided in the rules and a copy
is sent to the Government and the conciliation officer. The settlement having
thus become binding and in many cases having already come into operation,
there is no scope for any inquiry by the Government as to the bona fides of the
settlement. In such a case in view of the possibility of conflict between the
settlement in view of its binding nature under Section 18(1) and an award
which might become binding on publication under Section 18(3), the proper
course for the Government is to withhold the award from publication to avoid
this conflict. If any dispute of the nature referred to above arises as to a
settlement, that would be another industrial dispute, which the Government

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may refer for adjudication and if on such an adjudication the settlement is
found not to be binding under Section 18(1) of the Act it will always be open to
the Government then to publish the award which it had withheld, though we do
not think that such instances are likely to be anything but extremely rare. We
are, therefore, of opinion that though Section 17(1) is mandatory and the
Government is bound to publish the award received by it from an industrial
tribunal, the situation arising in a case like the present is of an exceptional
nature and requires reconciliation between Section 18(1) and Section 18(3),
and in such a situation the only way to reconcile the two provisions its to
withhold the publication of the award, as a binding settlement has already come
into force in order to avoid possible conflict between a binding settlement
under Section 18(1) and a binding award under Section 18(3). In such a
situation we are of opinion that the Government ought not to publish the award
under Section 17(1) and in cases where Government is going to publish it, it
can be directed not to publish the award in view of the binding settlement
arrived at between the parties under Section 18(1) with respect to the very
matters which were the subject-matter of adjudication under the award. We
therefore allow the appeals and direct the Government not to publish the
awards sent to it by the industrial tribunal in these cases in view of the binding
nature of the settlements arrived at between the parties under Section 18(1) of
the Act. In the circumstances we order the parties to bear their own costs.
8 2 . In case of State of Bihar v. D.N. Ganguly and Ors. reported in
MANU/SC/0111/1958 : AIR 1958 SC 1018. The relevant observation made in
para 13 is quoted as under:
"13. It is, however, urged that if a dispute referred to the industrial tribunal
under Section 10(1) is settled between the parties, the only remedy for giving
effect to such a compromise would be to cancel the reference and to take the
proceedings out of the jurisdiction of the industrial tribunal. This argument is
based on the, assumption that the industrial tribunal would have to ignore tile
settlement by the parties of their dispute pending before it and would have to
make an award on the merits in spite of the said settlement. We are not
satisfied that this argument is well-founded. It is true that the Act does not
contain any provision specifically authorising the industrial tribunal to record a
compromise and pass an award in its terms corresponding to the provisions of
Order XXIII, Rule 3 of the Code of Civil Procedure. But it would be very
unreasonable to assume that the industrial tribunal would insist upon dealing
with the dispute on the merits even after it is informed that the dispute has
been amicably settled between the parties. We have already indicated that
amicable settlements of industrial disputes which generally lead to industrial
peace and harmony are the primary object of this Act. Settlements reached
before the conciliation officers or( boards are specifically dealt with by Section
12(2) and 13(3) and the same are made binding under Section 18. There can,
therefore, be no doubt that if an industrial dispute before a tribunal is amicably
settled, the tribunal would immediately agree to make an award in terms of the
settlement between the parties. It was stated before us at the bar that
innumerable awards had been made by industrial tribunals in terms of the
settlements between the parties. In this connexion we may incidentally refer to
the provisions of Section 7(2)(b) of the Industrial Disputes (Appellate Tribunal)
Act, 1950 (XLVIII of 1950), which expressly refer to an award or decision of an
industrial tribunal made with the consent of the parties. It is true that this Act is
no longer in force; but when it was in force, in providing for appeals to the

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Appellate Tribunal set up under the said Act, the legislature had recognised the
making of awards by the industrial tribunals with the consent of the parties.
Therefore, we cannot accept the argument that cancellation of reference would
be necessary in order to give effect to the amicable settlement of the dispute
reached by the parties pending proceedings before the industrial tribunal."
83. Before this Court, learned senior advocate Mr. Desai has not raised any
contention that this settlement is not arrived under Rules 62 read with Section
2(p) of Industrial Disputes Act, 1947.
84. It is necessary to note that Respondent Nos. 3 and 4 both Unions have
signed settlement. The Petitioner Association has not challenged or doubted
bonafide of either Respondent Nos. 3 and 4 Unions. No allegation is made by
Petitioner Association against any office bearers of Respondent Nos. 3 and 4.
There is no allegation of collusion of Respondent Nos. 3 and 4 with Respondent
No. 1 Company. In absence of that, it is clearly established that settlement
arrived between parties which are placed before Industrial Tribunal, Baroda that
was genuine, bonafide settlement arrived between parties. There is no
allegation is made against Respondent No. 1 company by Petitioner Association
that Company has adopted unfair labour practice while arriving at settlement.
The Petitioner Association has also not challenged legality and validity of
present settlement before this Court even before Industrial Tribunal, Boroda.
So, this settlement is fully satisfied legal requirement under Section 2(p),
18(1), Rule 62 and Form No. (XVI). The copy of this settlement has been sent
to all Statutory authority including Conciliation Officer concerned. For that,
there is no challenged made by Petitioner Association. No workman who has
accepted settlement and benefits approach to Industrial Tribunal making
grievance about benefits and settlement. Similarly, recently in case of D. G. P.
Windsor India Ltd since renamed as Windsor v. Kawil Kamdar Association
reported in 2011 (1) GLR 769. This Court has examined question that when
withdrawal of references pending before Industrial Tribunal pursuance to
settlement between Management and Unions. The industrial dispute in reference
was espoused by workman through Union though same pertaining to particular
workman. This Court has held that it is always open for body of workman. So
espousing dispute to arrive at settlement with management and withdrawal of
references. The order passed by Industrial Tribunal decline permission for
withdrawal of reference has been quashed by this Court. Before this Court, in
aforesaid decision, it was an admitted fact that almost all workmen have
accepted settlement and they have also made an affidavit giving their consent
for withdrawal of references. The application for withdrawal of these references
were signed by almost all workmen and only objection has been raised by
President of Union. That aspect has been considered by this Court and it has
been held that when almost all workmen have agreed for withdrawal of
references pursuant to settlement arrived at between workmen and
management. Therefore, Industrial Tribunal has not justified in rejecting an
application moved by Petitioner employer for withdrawal of three references.
The aforesaid decision is almost covered identical facts of present case because
in facts of present case 98% employees have signed settlement and accepted
benefits and some of office bearers of Petitioner Association though not signed
it but accepted benefits and this settlement is extended by Company
Respondent No. 1 in favour of each employee irrespective of facts whether they
have signed or not signed, or accepted or not accepted? Therefore, in light of
this back ground, challenged by Petitioner Association against award passed by

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Industrial Tribunal, Baroda based on settlement can not be entertained by this
Court otherwise it goes to against basic principles of collective bargaining
which is really object and purpose of Industrial Law.
Therefore, according to my opinion, Industrial Tribunal, Baroda has rightly
accepted settlement and passed an award in terms of settlement. For that
Industrial Tribunal, Baroda has not committed any error which would require
interference by this Court. This Court is having very limited jurisdiction under
Article 227 of Constitution of India. This Court can not act as an Appellate
authority which aspect recently has been considered by Apex Court in case of
Harjinder Singh v. Punjab State Warehousing Corporation reported in
MANU/SC/0060/2010 : 2010 (1) Scale 613. The relevant para 10 and 11 are
quoted as under:
"10. We have considered the respective submissions. In our opinion,
the impugned order is liable to be set aside only on the ground that
while interfering with the award of the Labour Court, the learned Single
Judge did not keep in view the parameters laid down by this Court for
exercise of jurisdiction by the High Court under Articles 226 and/or 227
of the Constitution - Syed Yakoob v. K.S. Radhakrishnan and Ors.
MANU/SC/0184/1963 : AIR 1964 SC 477 and Surya Dev Rai v. Ram
Chander Rai and Ors. MANU/SC/0559/2003 : 2003 (6) SCC 675. In
Syed Yakoob's case, this Court delineated the scope of the writ of
certiorari in the following words:
"The question about the limits of the jurisdiction of High Courts
in issuing a writ of certiorari under Article 226 has been
frequently considered by this Court and the true legal position
in that behalf is no longer in doubt. A writ of certiorari can be
issued for correcting errors of jurisdiction committed by
inferior courts or tribunals: these are cases where orders are
passed by inferior courts or tribunals without jurisdiction, or is
in excess of it, or as a result of failure to exercise jurisdiction.
A writ can similarly be issued where in exercise of jurisdiction
conferred on it, the Court or Tribunal acts illegally or properly,
as for instance, it decides a question without giving an
opportunity, be heard to the party affected by the order, or
where the procedure adopted in dealing with the dispute is
opposed to principles of natural justice. There is, however, no
doubt that the jurisdiction to issue a writ of certiorari is a
supervisory jurisdiction and the Court exercising it is not
entitled to act as an appellate Court. This limitation necessarily
means that findings of fact reached by the inferior Court or
Tribunal as result of the appreciation of evidence cannot be
reopened or questioned in writ proceedings. An error of law
which is apparent on the face of the record can be corrected by
a writ, but not an error of fact, however grave it may appear to
be. In regard to a finding of fact recorded by the Tribunal, a
writ of certiorari can be issued if it is shown that in recording
the said finding, the Tribunal had erroneously refused to admit
admissible and material evidence, or had erroneously admitted
inadmissible evidence which has influenced the impugned
finding. Similarly, if a finding of fact is based on no evidence,

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 that would be regarded as an error of law which can be
corrected by a writ of certiorari. In dealing with this category
of cases, however, we must always bear in mind that a finding
of fact recorded by the Tribunal cannot be challenged in
proceedings for a writ of certiorari on the ground that the
relevant and material evidence adduced before the Tribunal
was insufficient or inadequate to sustain the impugned finding.
The adequacy or sufficiency of evidence led on a point and the
inference of fact to be drawn from the said finding are within
the exclusive jurisdiction of the Tribunal, and the said points
cannot be agitated before a writ Court. It is within these limits
that the jurisdiction conferred on the High Courts under Article
226 to issue a writ of certiorari can be legitimately exercised
(vide Hari Vishnu Kamath v. Syed Ahmad Ishaque
MANU/SC/0095/1954 : 1955 (1) SCR 1104, Nagandra Nath
Bora v. Commissioner of Hills Division and Appeals Assam
MANU/SC/0101/1958 : 1958 SCR 1240and Kaushalya Devi v.
Bachittar Singh MANU/SC/0219/1959 : AIR 1960 SC 1168.
It is, of course, not easy to define or adequately describe what
an error of law apparent on the face of the record means. What
can be corrected by a writ has to be an error of law; hut it
must be such an error of law as can be regarded as one which
is apparent on the face of the record. Where it is manifest or
clear that the conclusion of law recorded by an inferior Court
or Tribunal is based on an obvious mis-interpretation of the
relevant statutory provision, or sometimes in ignorance of it, or
may be, even in disregard of it, or is expressly founded on
reasons which are wrong in law, the said conclusion can be
corrected by a writ of certiorari. In all these cases, the
impugned conclusion should be so plainly inconsistent with the
relevant statutory provision that no difficulty is experienced by
the High Court in holding that the said error of law is apparent
on the face of the record. It may also be that in some cases,
the impugned error of law may not be obvious or patent on the
face of the record as such and the Court may need an argument
to discover the said error; but there can be no doubt that what
can be corrected by a writ of certiorari is an error of law and
the said error must, on the whole, be of such a character as
would satisfy the test that it is an error of law apparent on the
face of the record. If a statutory provision is reasonably
capable of two constructions and one construction has been
adopted by the inferior Court or Tribunal, its conclusion may
not necessarily or always be open to correction by a writ of
certiorari. In our opinion, it is neither possible nor desirable to
attempt either to define or to describe adequately all cases of
errors which can be appropriately described as errors of law
apparent on the face of the record. Whether or not an
impugned error is an error of law and an error of law which is
apparent on the face of the record, must always depend upon
the facts and circumstances of each case and upon the nature
and scope of the legal provision which is alleged to have been
misconstrued or contravened.

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 1 1 . In Surya Dev Rai's case, a two-Judge Bench, after threadbare
analysis of Articles 226 and 227 of the Constitution and considering
large number of judicial precedents, recorded the following
conclusions:
(1) Amendment by Act 46 of 1999 with effect from 1-7-2002 in
Section 115 of the Code of Civil Procedure cannot and does not
affect in any manner the jurisdiction of the High Court under
Articles 226 and 227 of the Constitution.
(2) Interlocutory orders, passed by the courts subordinate to
the High Court, against which remedy of revision has been
excluded by Code of Civil Procedure Amendment Act 46 of
1999 are nevertheless open to challenge in, and continue to be
subject to, certiorari and supervisory jurisdiction of the High
Court.
(3) Certiorari, under Article 226 of the Constitution, is issued
for correcting gross errors of jurisdiction i.e. when a
subordinate court is found to have acted (i) without jurisdiction
-- by assuming jurisdiction where there exists none, or (ii) in
excess of its jurisdiction -- by overstepping or crossing the
limits of jurisdiction, or (iii) acting in flagrant disregard of law
or the rules of procedure or acting in violation of principles of
natural justice where there is no procedure specified, and
thereby occasioning failure of justice.
(4) Supervisory jurisdiction under Article 227 of the
Constitution is exercised for keeping the subordinate courts
within the bounds of their jurisdiction. When a subordinate
court has assumed a jurisdiction which it does not have or has
failed to exercise a jurisdiction which it does have or the
jurisdiction though available is being exercised by the court in
a manner not permitted by law and failure of justice or grave
injustice has occasioned thereby, the High Court may step in to
exercise its supervisory jurisdiction.
(5) Be it a writ of certiorari or the exercise of supervisory
jurisdiction, none is available to correct mere errors of fact or
of law unless the following requirements are satisfied: (i) the
error is manifest and apparent on the face of the proceedings
such as when it is based on clear ignorance or utter disregard
of the provisions of law, and (ii) a grave injustice or gross
failure of justice has occasioned thereby.
(6) A patent error is an error which is self-evident i.e. which
can be perceived or demonstrated without involving into any
lengthy or complicated argument or a long-drawn process of
reasoning. Where two inferences are reasonably possible and
the subordinate court has chosen to take one view, the error
cannot be called gross or patent.
(7) The power to issue a writ of certiorari and the supervisory
jurisdiction are to be exercised sparingly and only in

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 appropriate cases where the judicial conscience of the High
Court dictates it to act lest a gross failure of justice or grave
injustice should occasion. Care, caution and circumspection
need to be exercised, when any of the abovesaid two
jurisdictions is sought to be invoked during the pendency of
any suit or proceedings in a subordinate court and the error
though calling for correction is yet capable of being corrected
at the conclusion of the proceedings in an appeal or revision
preferred there against and entertaining a petition invoking
certiorari or supervisory jurisdiction of the High Court would
obstruct the smooth flow and/or early disposal of the suit or
proceedings. The High Court may feel inclined to intervene
where the error is such, as, if not corrected at that very
moment, may become incapable of correction at a later stage
and refusal to intervene would result in travesty of justice or
where such refusal itself would result in prolonging of the lis.
(8) The High Court in exercise of certiorari or supervisory
jurisdiction will not convert itself into a court of appeal and
indulge in reappreciation or evaluation of evidence or correct
errors in drawing inferences or correct errors of mere formal or
technical character.
(9) In practice, the parameters for exercising jurisdiction to
issue a writ of certiorari and those calling for exercise of
supervisory jurisdiction are almost similar and the width of
jurisdiction exercised by the High Courts in India unlike English
courts has almost obliterated the distinction between the two
jurisdictions. While exercising jurisdiction to issue a writ of
certiorari, the High Court may annul or set aside the act, order
or proceedings of the subordinate courts but cannot substitute
its own decision in place thereof. In exercise of supervisory
jurisdiction the High Court may not only give suitable
directions so as to guide the subordinate court as to the
manner in which it would act or proceed thereafter or afresh,
the High Court may in appropriate cases itself make an order in
supersession or substitution of the order of the subordinate
court as the court should have made in the facts and
circumstances of the case."
A reading of the impugned order shows that the learned Single Judge
did not find any jurisdictional error in the award of the Labour Court.
He also did not find that the award was vitiated by any error of law
apparent on the face of the record or that there was violation of rules
of natural justice. As a matter of fact, the learned Single Judge rejected
the argument of the corporation that termination of the Appellant's
service falls within the ambit of Section 2(oo)(bb) of the Act, and
expressed unequivocal agreement with the Labour Court that the action
taken by the Managing Director of corporation was contrary to Section
25G of the Act which embodies the rule of last come first go.
Notwithstanding this, the learned Single Judge substituted the award of
reinstatement of the Appellant with compensation of Rs. 87,582/- by
assuming that Appellant was initially appointed without complying with

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 the equality clause enshrined in Articles 14 and 16 of the Constitution
of India and the relevant regulations. While doing so, the learned
Single Judge failed to notice that in the reply filed on behalf of the
corporation before the Labour Court, the Appellant's claim for
reinstatement with back wages was not resisted on the ground that his
initial appointment was illegal or unconstitutional and that neither any
evidence was produced nor any argument was advanced in that regard.
Therefore, the Labour Court did not get any opportunity to consider the
issue whether reinstatement should be denied to the Appellant by
applying the new jurisprudence developed by the superior courts in
recent years that the court should not pass an award which may result
in perpetuation of illegality. This being the position, the learned Single
Judge was not at all justified in entertaining the new plea raised on
behalf of the corporation for the first time during the course of
arguments and over turn an otherwise well reasoned award passed by
the Labour Court and deprive the Appellant of what may be the only
source of his own sustenance and that of his family."
Apex Court has also considered similar question in case of Jai Singh and Ors. v.
Municipal Corporation of Delhi and Anr. With Municipal Corporation of Delhi v.
Sh. Jai Singh and Ors. AIR 2010 SCW 5968. Relevant para 25 of said judgment
is quoted as under:
25. Undoubtedly, the High Court has the power to reach injustice whenever,
wherever found. The scope and ambit of Article 227 of the Constitution of India
had been discussed in the case of The Estralla Rubber v. Dass Estate (P) Ltd.
MANU/SC/0558/2001 : (2001) 8 SCC 97wherein it was observed as follows:
The scope and ambit of exercise of power and jurisdiction by a High
Court under Article 227 of the Constitution of India is examined and
explained in a number of decisions of this Court. The exercise of power
under this article involves a duty on the High Court to keep inferior
courts and tribunals within the bounds of their authority and to see that
they do the duty expected or required of them in a legal manner. The
High Court is not vested with any unlimited prerogative to correct all
kinds of hardship or wrong decisions made within the limits of the
jurisdiction of the subordinate courts or tribunals. Exercise of this
power and interfering with the orders of the courts or tribunals is
restricted to cases of serious dereliction of duty and flagrant violation
of fundamental principles of law or justice, where if the High Court
does not interfere, a grave injustice remains uncorrected. It is also well
settled that the High Court while acting under this article cannot
exercise its power as an appellate court or substitute its own judgment
in place of that of the subordinate court to correct an error, which is
not apparent on the face of the record. The High Court can set aside or
ignore the findings of facts of an inferior court or tribunal, if there is no
evidence at all to justify or the finding is so perverse, that no
reasonable person can possibly come to such a conclusion, which the
court or tribunal has come to.
In our opinion, the High Court committed a serious error of jurisdiction in
entertaining the writ petition filed by MCD under Article 227 of the Constitution
of India in the peculiar circumstances of this case. The decision to exercise

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jurisdiction had to be taken in accordance with the accepted norms of care,
caution, circumspection. The issue herein only related to a tenancy and
subletting. There was no lis relating to the ownership of the land on which the
superstructure or the demised premises had been constructed. The whole issue
of ownership of plot of land No:2, Block-B, transport area of Jhandewalan
Estate, Desh Bandhu Gupta Road, Karol Bagh, New Delhi is the subject matter
of a civil suit being Suit No: 361 of 1980 in the High Court of Delhi. The High
Court, therefore, ought not to have given any opinion on the question of
ownership.
In MA Azim v. Maharashtra State Road Transport Corporation 2011 I CLR 283, it
has been observed by Bombay High Court as under in para 11 and 12:
11. At this stage, it would be appropriate to refer to few important judgments
of Hon'ble Supreme Court and this Court laying down therein the scope to
entertain petition under of Article 226 and 227 of the Constitution of India. The
Hon'ble Supreme Court in a case of "Nagendra Nath Bora and Anr. v.
Commissioner of Hills Division and Appeals, Assam and Ors., reported in
MANU/SC/0101/1958 : AIR 1958 SC 398" in para No. 30 held thus:
30. the powers of judicial interference under Article 227 of the
Constitution with orders of judicial or quasi-judicial nature, are not
greater than the powers under Article 226 of the Constitution. Under
Article 226, the power of interference may extend to quashing an
impugned order on the ground of a mistake apparent on the face of the
record. But under Article 227 of the Constitution, the power of
interference is limited to seeing that the tribunal functions within the
limits of its authority.
Yet in another case, in a case of "Surya Dev Rai v. Ram Chander Rai, reported
in MANU/SC/0559/2003 : AIR 2003 SC 3044" the Hon'ble Supreme in its
conclusion held:
(5) Be it a writ of certiorari or the exercise of supervisory jurisdiction,
none is available to correct mere errors of fact or of law unless the
following requirements are satisfied: (i) the error is manifest and
apparent on the face of the proceedings such as when it is based on
clear ignorance or utter disregard of the provisions of law, and (iii) a
grave injustice or gross failure of justice has occasioned thereby.
(6) A patent error is an error which is self-evident, i.e., which can be
perceived or demonstrated without involving into any lengthy or
complicated argument or a long-drawn process of reasoning. Where
two inferences are reasonably possible and the subordinate court has
chosen to take one view the error cannot be called gross or patent.
(7) The power to issue a writ of certiorari and the supervisory
jurisdiction are to be exercised sparingly and only in appropriate cases
where the judicial conscience of the High Court dictates it to act lest a
gross failure of justice or grave injustice should occasion. Care, caution
and circumspection need to be exercised, when any of the abovesaid
two jurisdictions is sought to be invoked during the pendency of any
suit or proceedings in a subordinate court and error though calling for
correction is yet capable of being corrected at the conclusion of the

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 proceedings in an appeal or revision preferred there against and
entertaining a petition invoking certiorari or supervisory jurisdiction of
High Court would obstruct the smooth flow and/or early disposal of the
suit or proceedings. The High Court may feel inclined to intervene
where the error is such, as, if not corrected at that very moment, may
become incapable of correction at a later stage and refusal to intervene
would result in travesty of justice or where such refusal itself would
result in prolonging of the lis.
(8) The High Court in exercise of certiorari or supervisory jurisdiction
will not covert itself into a Court of Appeal and indulge in re-
appreciation or evaluation of evidence or correct errors in drawing
inferences or correct errors of mere formal or technical character.
And in a case of Babulal S/o. Navalmal Pipada v. Dropadbai W/o. Manohar Gore
and Ors. reported in 2010 (5) Mh. LJ, this Court has held thus:
One cannot be oblivious of the parameters required to be observed for
the purpose of exercising supervisory jurisdiction under Article 227 of
the Constitution of India. Unless it is demonstrated that the impugned
judgment suffers from vice of perversity, arbitrariness or is rendered
without considering material evidence or is rendered on the basis of no
material interference with the finding of Courts/Tribunals is
impermissible. The writ jurisdiction cannot be invoked for
reappreciating of the evidence or for the purpose of rectification of
minor errors committed by the Tribunals. Unless it is demonstrated that
the view taken by the MRT is per se against the settled principles of
law, it is difficult to interfere with the findings recorded by the
Tribunals below.
Therefore, it is clear from the pronouncements of Supreme Court and
this Court which are referred supra that the Writ Jurisdiction cannot be
invoked for reappreciating the evidence or for the purpose of
rectification a minor errors committed by the Tribunals. Supervisory
jurisdiction under Article 227 cannot be invoked unless it is
demonstrated that the impugned judgments suffers from the vice of
perversity, arbitrariness or is rendered without considering material
evidence or is rendered on the basis of no material evidence or is
rendered on the basis of no material, interference with the findings of
Courts/Tribunals is impermissible. Therefore, in light of above, it is
relevant to summarized here in below the findings recorded by the
Labour Court on the basis of evidence brought on record by the parties.
70. In view of above observations made by this Court after considering submissions
made by both learned senior advocates and reasoning given by Industrial Tribunal,
according to my opinion, contention raised by learned senior advocate Mr. Desai can
not be accepted.
71. Hence, there is no substance in present petition. Accordingly, present petition is
dismissed summarily. No order as to costs.

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