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Case Number

Writ Appeal No. 347 of 1965

Attorney(S)

For the Appellant: Government Pleader
For the Respondent: 1 to 3 P. K. Kurien
For the Respondent: 4

Judges

M.S Menon, C.J
S. Velu Pillai, J.

Acts

sub-section (3) of Section 18 of the Industrial Disputes Act, 1947 Sub-section (3) of Section 18
SECTION 12 INDUSTRIAL DISPUTES ACT 1947
INDUSTRIAL DISPUTES ACT 1947
(a), (b), (c) and (d) of sub-section (3). Section 18(3)(d)
sub-sections (1) and (3) of Section 18
part5. Sub-section (1) of Section 18
Indian Trade Unions Act, 1926,

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Smart Summary

Structured Summary of the Opinion (O.P. No. 3107 of 1964)

Factual and Procedural Background

The appellants are the monthly rated workmen of Messrs Pierce Leslie and Company Limited, Cochin, represented by the Cochin Commercial Employees' Association, Cochin (petitioners in O.P. No. 3107 of 1964). The respondents include the Labour Commissioner and Chief Conciliation Officer, Kerala State, Trivandrum (1st respondent), the District Labour Officer and Conciliation Officer, Always (2nd respondent), the Deputy Labour Officer and Conciliation Officer, Cochin (3rd respondent), and the General Manager of Pierce Leslie and Company Limited, Cochin (4th respondent).

Two registered trade unions (both under the Indian Trade Unions Act, 1926) raised largely similar demands for the monthly rated workmen of the company: the Mercantile Employees' Association, Calicut (demands made 2 March 1964) and the Cochin Commercial Employees' Association (demands made 28 March 1964).

A settlement (Ext. P-17, dated 21 November 1964) was reached between the company and the workmen represented by the Mercantile Employees' Association in the course of conciliation proceedings. The central procedural dispute is whether that settlement (Ext. P-17) is binding on the monthly rated workmen represented by the Cochin Commercial Employees' Association as well.

The writ appeal challenges the binding nature of Ext. P-17. The court observed that the Mercantile Employees' Association was not impleaded as a party in the original petition or in the present appeal. The appeal was ultimately dismissed, with no order as to costs; the court also left open the question of entertaining a fresh petition with all necessary parties impleaded.

Legal Issues Presented

Whether Ext. P-17 (the settlement dated 21 November 1964, arrived at in the course of conciliation proceedings) is binding on the monthly rated workmen of the company who are represented by the Cochin Commercial Employees' Association by virtue of sub-section (3) of Section 18 of the Industrial Disputes Act, 1947.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Ramnagar Cane and Sugar Co. Ltd. v. Jatin Chakravorty, (1961) 1 Lab LJ 244; AIR 1960 SC 1012	Distinction between sub-sections (1) and (3) of Section 18 of the Industrial Disputes Act: Section 18(3) gives extended operation to a settlement arrived at in conciliation proceedings, making it binding on categories of persons listed in clauses (a)–(d), including all persons employed in the establishment on the date of the dispute and those subsequently employed.	The court invoked this authority to explain the extended operation of settlements reached in conciliation proceedings and to frame the legal question whether Ext. P-17, if properly a settlement under s.18(3), would bind workmen represented by the Cochin association even if they were not members of the union that participated in the conciliation.
Bata Shoe Co. (P.) Ltd. v. D.N. Ganguly & Others, (1961) 1 Lab LJ 303; AIR 1961 SC 1158	The rationale for the extended operation of s.18(3): a settlement reached during conciliation proceedings is to be regarded as having the conciliation officer's concurrence and therefore as reasonable and fair.	The court relied on this authority to explain why s.18(3) operates beyond immediate parties—because conciliation proceedings, with the conciliation officer's involvement, are intended to produce settlements considered fair and therefore binding on a wider class. The court then assessed whether those procedural safeguards (participation/concurrence) were present in the making of Ext. P-17.

Court's Reasoning and Analysis

The court applied the text of Section 18(3) of the Industrial Disputes Act, 1947 and the Supreme Court authorities cited to examine whether Ext. P-17 qualified as a settlement "arrived at in the course of conciliation proceedings" within the meaning of that sub-section.

Key analytical steps undertaken by the court (as reflected in the opinion):

The court accepted the established principle (from authority) that settlements reached in conciliation proceedings have extended operation and can bind persons who were employed at the date of the dispute and those subsequently employed.
The court emphasized that the term "settlement" (within s.18(3)) implies concurrence of the disputants and the involvement of the conciliation mechanism contemplated by the Act; merely arriving at an agreement in the course of some discussions does not automatically convert it into a statutory settlement unless the procedural requirements and the element of concurrence are satisfied.
The court referred to Section 12 of the Industrial Disputes Act (duties of conciliation officers), including the duty to investigate and to send a memorandum of settlement signed by the parties to the appropriate authority. This statutory framework was used to test whether conciliation proceedings, properly so-called, had produced Ext. P-17.
The court reviewed the documentary record concerning the conciliation process: Ext. P-14 (letter dated 3 Oct 1964) and Ext. P-15 (letter dated 24 Oct 1964) which invited both associations and the manager to conferences, and Ext. P-16 (telegram dated 15 Nov 1964) to the Cochin Commercial Employees' Association stating "Pierce Leslie Dispute Conference Proposed 18th Cancelled."
It was admitted (and the court noted) that the Cochin Commercial Employees' Association was neither invited nor permitted to be present at the conference table at which Ext. P-17 was evolved and signed. Thus the court was unable to conclude that Ext. P-17 was a settlement arrived at in conciliation proceedings conducted in accordance with the Act.
The court further observed that it could only decide the question properly in the presence of the Mercantile Employees' Association (which participated in the settlement): that association was not made a party in the original petition or in the appeal, and hence the court lacked the necessary adversarial posture to determine the full effect of Ext. P-17 on persons represented by the Cochin association.

On this basis, the court concluded that it could not hold Ext. P-17 to be a binding settlement under Section 18(3) as regards the Cochin Commercial Employees' Association's members, given the procedural deficiencies and the absence of the Mercantile Employees' Association as a party to the litigation before it.

Holding and Implications

APPEAL DISMISSED

Direct effects and consequences:

The writ appeal was dismissed by the court.
In the circumstances of the case there was no order as to costs.
The court expressly noted that the question whether a fresh petition with all necessary parties impleaded should be entertained was not for present determination, and that the dismissal of this appeal would not, by itself, constitute a bar to the consideration and disposal of any such fresh petition filed with the necessary parties.

The opinion does not purport to lay down any novel legal principle beyond the application of existing statutory text and the precedents cited; the decision is limited to the facts and procedural posture of this case and does not indicate that a new precedent has been created.

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Monthly-Rated Workmen Of M/S. Pierce Leslie & Co. Ltd., Cochin-1 v. Labour Commissioner And Chief Conciliation Officer, Kerala State, Trivandrum And Others

JUDGMENT

1. The petitioners in O.P No. 3107 of 1964*—the monthly rated workmen of Messrs Pierce Leslie and Company Limited Cochin represented by Cochin Commercial Employees' Association, Cochin—are the appellants before us. The first respondent is the Labour Commissioner and Chief Conciliation Officer. Kerala State, Trivandrum, the second is the District Labour Officer and Conciliation Officer. Always, the third is the Deputy Labour Officer and Conciliation Officer. Cochin, and the fourth is the General Manager of Pierce Leslie and Company Limited, Cochin.

2. Certain demands—mostly identical in character were raised by the Cochin Commercial Employees' Association, Cochin, as well as by the Mercantile Employees' Association, Calicut, in respect of the monthly rated workmen of the company Both the associations are trade unions registered under the Indian Trade Unions Act, 1926. The demands of the Cochin Commercial Employees Association were made on the 28th March, 1964 The demands of the Mercantile Employees' Association were made over three weeks earlier, on the 2nd March, 1964.

3. A settlement was arrived at between the company and the workmen represented by the Mercantile Employees' Association in the course of conciliation proceedings. The settlement is embodied in Ext. P-17, dated the 21st November, 1964

4. The question for determination is whether Ext. P-17 is binding on the monthly rated workmen of the company represented by the Cochin Commercial Employees' Association as well in view of sub-section (3) of Section 18 of the Industrial Disputes Act, 1947 Sub-section (3) of Section 18 says that a settlement arrived at in the course of conciliation proceedings under that Act is binding not only on all parties to the industrial dispute but also on “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”

5. Sub-section (1) of Section 18 provides that a settlement arrived at by agreement between an employer and his workman, otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement. The full text of sub-section (3) of that section is as follows:—

“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 10A 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 other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, the arbitrator, the 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 per-tons 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.”

6. The Supreme Court dealt with the difference between sub-sections (1) and (3) of Section 18 as follows in Ramnagar Cane and Sugar Co. Ltd. v. Jatin Chakravorty, (1961) 1 Lab LJ 244 : (AIR 1960 SC 1012):

“Section 18(1) provides 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; whereas S. 18(3) provides that a settlement arrived at in the course of conciliation proceedings which has become enforceable shall be binding on all the parties specified in Cls. (a), (b), (c) and (d) of sub-section (3). Section 18(3)(d) makes it clear that, where a party referred to in Cl. (a) or (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, would be bound by the settlement. In order to bind the workmen it is not necessary to show that the said workmen belong to the union which was a party to the dispute before the conciliator. The whole policy of S. 18 appears to be to give an extended operation to the settlement arrived at in the course of conciliation proceedings, and that is the object with which the four categories of persons bound by such settlement are specified in S. 18, sub-sec. (3)”

7. The reason for the extended operation, apparently is the fact that the presence and participation of the conciliation officer will ensure a fair and proper settlement in Bata Shoe Co. (P.) Ltd. v. D.N Ganguly & Others, (1961) 1 Lab LJ 303 : (AIR 1961 SC 1158), the Supreme Court said:

“As we read this provision—Section 18—we feel that the legislature when it made a settlement reached during the course of conciliation proceedings binding not only on the parties thereto but also on all present and future workmen intended that such settlement was arrived at with the assistance of the conciliation officer and was considered by him to be reasonable and therefore had his concurrence.”

8. There can be no doubt, in the light of the wording of Section 18 and the decisions of the Supreme Court mentioned above, that a settlement arrived at in the course of conciliation proceedings has an extended operation beyond the parties to that settlement. But that does not mean that any agreement arrived at in the course of conciliation proceedings without the concurrence of all the disputants is a settlement as contemplated by that section. The very word “settlement” will postulate such a concurrence.

9. In the present case the disputants were the company on the one hand and the monthly rated workmen represented by the Cochin Commercial Employees' Association and the monthly rated workmen represented by the Mercantile Employees' Association on the other. If all three of them were parties to Ext. P-17, then the settlement would have been binding as one arrived at in conciliation proceedings not only on the three of them but also on those indicated in sub-sections (3)(c) and (3)(d) of Section 18 of the Act. The. Infirmity as regards Ext. P-17 is that all the three disputants were not parties either to that document or to the conciliation proceedings which culminated in that document.

10. Section 12 of the Industrial Disputes Act, 1947, deals with the duties of conciliation officers. Sub-section (2) of that section provides.

“The conciliation officer shall, for the purpose of bringing about a settlement of the dispute, without delay, investigate the dispute and all matters affecting the merits and the right settlement thereof and do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.”: and sub-section (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 authorised in this behalf by the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute”

11. The Indian Trade Unions Act, 1926, permits more than one association of workmen in the same establishment and does not endow any one of those associations with a monopoly of the right of representation on the basis of superior strength of its membership or for any other reason. There can be no doubt, therefore that both the Cochin Commercial Employees' Association and the Mercantile Employees' Association can co-exist and agitate separately or together on behalf of their respective membership.

12. Whether we consider the dispute raised by the Cochin Commercial Employees' Association and the Mercantile Employees' Association as one in view of the identity of most of the demands made or as separate because of the independent character of the two trade unions and their different member ship; it seems to be clear that both the associations should have been permitted to participate in the conciliation proceedings under Section 12 of the Industrial Disputes Act, 1947 And this is apparently the basis on which the Labour Commissioner and Chief Conciliation Officer proceeded in the beginning.

13. Ext. P-14 is a letter from the Labour Commissioner and Chief Conciliation Officer, dated the 3rd October, 1964 it refers to the demands made by both the associations and is addressed to both of them and the manager of the company at Cochin it reads as follows:—

“Sub Demands of the Associations—Bonus, revision of wages, dearness allowance, etc.—dispute in—

I propose to hold a conference of the parties to the above dispute at 10 a.m on 19th October, 1964, in my office at Trivandrum. Please make it convenient to attend the conference without fail.”

14. Ext. P-15 is another letter from the same officer, dated the 24th October, 1964 that letter also refers to the demands made by both the associations and is addressed to both of them and the manager of the company at Cochin it reads as follows:—

“Sub-Demands of the Associations—Bonus, revision of wages dearness allowance etc.—dispute in—

I propose to hold a conference of the par lies to the above dispute at 10 a.m on 18-11-1964 in the District Labour Office, Always, Please make it convenient to attend the conference without fail”

15. Ext. P-16 is a telegram, dated the 15th November, 1964, from the Labour Commissioner and Chief Conciliation Officer to the Cochin Commercial Employees' Association. It is in the following terms:

“Pierce Leslie Dispute Conference Proposed 18th Cancelled”

16. There was no further communication from the Labour Commissioner and Chief Conciliation Officer to the Cochin Commercial Employees' Association. It is admitted that association was neither invited nor permitted to be present at the conference table at which the settlement embodied in Ext. P-17 was evolved and signed.

17. In these circumstances it may be difficult to say that the settlement is a settlement in the course of conciliation proceedings conducted in accordance with the provisions of the Industrial Disputes Act, 1947.

18. We can decide the question however, only in the presence of the Mercantile Employees' Association. That association has not been made a party either in the original petition from which this appeal arises or in this appeal before us

19. It must follow that this Writ Appeal should be dismissed and we do so. In the circumstances of the case, however, there will be no order as to costs.

20. The question whether a fresh petition, with all the necessary parties impleaded, car of should be entertained is not a matter for present determination. We make it clear, however, that if and when such a petition is filed, the dismissal of this appeal will not by itself constitute a bar to the consideration and disposal of that petition.

FK/JHS/D.V.C

21. Appeal dismissed.

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