Gujarat High Court
Bharat Textile Works vs Workmen Of Bharat Textile Works And Anr. on 5 July, 1993
Equivalent citations: (1995)ILLJ922GUJ
JUDGMENT R.A. Mehta, J.
1. The short question involved in this petition filed by the employer is whether the industrial dispute referred by the Government for adjudication could have been referred or not.
2. The contention of the petitioner employer is that there is no notice of termination of the previous settlement and therefore, the reference is barred. On the other hand, it is submitted that the previous settlement was operative till March 31, 1987 and the charter of demand has been submitted on April 2, 1987 and thereafter several dates were fixed before the conciliation officer and on August 27, 1987 the matter was adjourned for negotiations for settlement and time was granted till September 10, 1987 and the conciliation officer had further recorded that "within this period if'the settlement is not arrived at, it is agreed by the parties that the case shall be admitted for conciliation proceedings". On September 10, 1987 the employer filed his reply and objections and written submissions raising a preliminary question that in absence of the termination for settlement, the demands cannot be raised. On September 17, 1987 the Union filed its reply to the preliminary objections in presence of the representative of the employer. A copy of the reply of the Union is also endorsed to the employer and on the next date i.e. September 19, 1987 both the sides made their submissions in the conciliation proceedings and the conciliation Officer recorded that both sides had made their submissions and the decision would be intimated. After 2 months, on November 19, 1987 the Conciliation Officer admitted the demands for conciliation and fixed the date of further hearing on December 3, 1587. On that date Union was present but the employer was not present and hence; the matter was adjourned to December 10, 1987. Again on that date the employer was not present and the conciliation officer recorded that the employer was absent and the union was present. As there was no possibility of conciliation, the conciliation had resulted in failure. On January 20, 1988 the conciliation officer made a failure report and the Government made the impugned reference on June 8, 1988. Before the Labour Court also the employer raised the same contentions by an application Ex.8 and that has also been dismissed by the Labour Court by its order dated March 31, 1989.
The employer has challenged the order of reference by the Government as well as the order passed by the Labour Court, holding that the reference was competent.
2A. The learned counsel for the petitioner employer has strongly relied on the provisions of Section 19(2) of the Industrial Disputes Act. Section 19(1) and (2) of the Industrial Disputes Act reads as follows:-
"Section 19(1)--A settlement shall come 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 the settlement is signed by the parties to the dispute.
(2) Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months from the date on which the memorandum of settlement is signed by the parties to the dispute, and shall continue to be binding on the parties after the expiry of the period aforesaid until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement."
On the basis of these provisions, the learned counsel submits that the settlement is binding not only up to March 31, 1987 the period agreed upon by the parties, but continues to be binding on the parties even after the expiry of the said period and until expiry of two months from the date on which the notice in writing of the intention to terminate such a settlement is given by one of the parties to the other party or parties to the settlement. It is submitted that though the period of settlement was up to March 31, 1987, it continues to be binding to the parties until there is a written notice terminating the settlement and no charter of demand could have been raised during the subsistence of such a settlement. The charter of demand was given on April 2, 1987 and admittedly there was no notice of termination of the settlement.
3. The learned counsel for the employer has also submitted that the Labour Court has committed error in holding that no formal notice of termination was necessary and that the subsequent conduct of the parties and special facts of the case and not challenging the reference before the High Court, lead to the conclusion that the preliminary objection of the employer was not tenable and the absence of formal written notice was not fatal as both the parties had knowledge that there was termination of settlement.
4. On behalf of the workmen, the learned counsel has submitted that the settlement is operative till March 31, 1987 and the charter of demand is issued thereafter on April 2, 1987 and the employer had not raised any contention about want of any written notice of termination of the settlement and the employer had participated in the conciliation proceedings for settlement and had agreed that if the settlement could not be arrived at, the dispute be admitted in conciliation. Even after such agreement when the employer had raised the preliminary contention on September 10, 1987 the Union had given a reply on September 17, 1987. That reply is at pages 63 to 65 of the paper book. In the reply it is mentioned that there were nine dates of preliminary hearing before the conciliation Officer and the employer had been negotiating (sic) with the Union and had agreed that if the negotiations failed, the dispute be admitted in conciliation proceedings. On September 10, 1987, for the first time the preliminary objection was raised. In paragraph 5 of the reply it is stated that the previous settlement was operative till March 31 1987 and therefore, the Union had given a notice of termination of the settlement on April 2, 1987 and therefore, the charter of demand was issued on April 2, 1987. There is no such actual notice of April 2, 1987 of termination of the settlement on record. It does not appear to be on the record of the Labour Court also and does not seem to have been referred before the conciliation Officer also. The employer has categorically denied that there was any such written formal notice of settlement dated March 2, 1987 and no such notice was received by the employer.
5. The Union also stated the placing of the charter of demand in writing can be treated as written notice for termination of settlement and such termination of settlement can be gathered from the correspondence and a reference was made on Supreme Court judgment and the High Court judgments. It was also stated that the charter of demand was issued on April 2, 1987 and the parties were called for preliminary discussion by the Conciliation Officer on June 17, 1987, and by that time two months had already passed and therefore the Union requested that the conciliation proceedings be taken further rejecting the preliminary issue. The Conciliation Officer admitted the dispute for conciliation two months after this reply dated September 17, 1987. It is therefore submitted by the Union that this letter of September 17, 1987 produced in the conciliation proceedings and endorsed and given to the employer would clearly amount to a written notice of termination of the settlement and the Conciliation Officer has admitted the dispute for conciliation two months after this date on September 19, 1987 and the Government has made the reference long thereafter on June 18, 1988 after the failure report dated January 20, 1988.
6. The learned counsel for the petitioner has relied on the judgment of the Supreme Court in the case of Western India Match Company v. Workmen (1970-II-LLJ-256). In paragraph 8, the Supreme Court observed that (p.262) no reference is contemplated by Section 19 of the I.D. Act when the dispute is a dispute in respect of which there is an agreement of settlement between the parties. It is submitted that in the present case until the settlement is terminated, no industrial dispute arises.
7. The learned counsel also placed reliance in the case of Employers of Thungabhadra Industries Ltd. v. The Workmen (1973-II-LLJ-283)(S.C). In that case the State Government had referred a dispute for the adjudication on July 25, 1968 and an objection was raised before the Industrial Tribunal that there was a previous award of the Tribunal in I.D.No. 20/57 and the said award has not been terminated and therefore, the action of the State Government was incompetent. The earlier award dated September 26, 1958 was published in the Gazette on October 30, 1958, On March 8, 1968 a charter of demand was served on the management. A strike notice was also given on March 8, 1968 for indefinite strike from April 15, 1968. The workmen actually went on strike from that date. The Conciliation Officer started conciliation proceedings on April 30, 1968 and the strike was withdrawn and one of the terms of agreement was that the general demand should be taken up in conciliation. The conciliation failed and the reference was made to the Tribunal.
The Supreme Court held that mere serving of charter of demand would not by itself show that the Union had terminated the previous award, neither the factor of workers going on strike subsequently nor the fact of employer's participation in conciliation proceedings was of any relevance and it was held that the intention to terminate the award with reference to a particual date must be established.
Relying upon this judgment the learned counsel for the petitioner submitted that the charter of demand had been issued without terminating the previous settlement and the workers having gone on strike and the management having participated in the conciliation proceedings, do not furnish any ground for holding that there is termination of the previous settlement. The termination has to be with reference to a particular date. There is no such termination by the charter of demand. The charter of demand is silent on this aspect. The judgment in the case of Workmen of Western India Match Co. Ltd v. Western India Match Co. Ltd. 1962-I-LLJ-661 at p. 665 was also considered and the Supreme Court had observed as follows, (p. 665):
"The said decision of this Court did not accept the position that the mere making of demands, without anything more, will amount to a termination of a previous award. On the other hand, ignoring the charter of demands as well as the various representations made by the union, this Court in the said decision held that the letter dated April 8, 1957, written by the union had the effect of giving notice to the management about termination of the settlement. It was after fixing this date as the date of termination of the settlement, this Court further held that the reference made by the State Government long after the expiry of two months from the said date, was competent"
The learned counsel for the petitioner also strongly relied on the decision of the Supreme Court in the case of the Indian Link chain Manufacturers Ltd. v. The workmen (1971-II-LLJ-581). The relevant paras are paragraphs 9 to 12. The Supreme Court observed that while it is no doubt true that a notice must be in writing, such a notice can be inferred from correspondence between the parties. The case of Cochin State Power Light Corporation Ltd. v. Its workmen (1964-II-LLJ-100)(SC) was also referred. In that case a demand dated October 14, 1959 contained reference to the previous settlement and it was stated therein that the Union had on October 13, 1959 resolved to terminate the existing settlement and to submit the charter of demand to the management and then followed the charter of demand and the contention that this charter cannot put an end to the settlement as there was no reference of termination of the settlement, was negated and Wanchoo J., observed that "there is however, no form prescribed tor terminating settlement under Section 19(2) of the I.D.Act and all that has to be seen is whether the provisions of Section 19(2) are complied with and in substance a notice given as required thereunder". The Western India Match Co. case (supra) was also referred and considered as follows.
"The facts in the Workmen of Western India Match Company Ltd. v. The Western India Match Co. Ltd. (supra) were that during the pendency of negotiations the Union by a letter had asked the company to treat the charter of demands as notice under Section 19(2) of the Act without first terminating the earlier settlement and an Award and the company had agreed to refer the matter in dispute to the adjudication of a Tribunal. But nonetheless it was contended that when there was no notice or termination of settlement in the charter of demand, the subsequent reference in a letter that it should be terminated as from the charter of demand, was not valid. This contention was however, negatived on the ground that a formal notice under Section 19(2) of the Act was immaterial inasmuch as the presentation of the charter of demands filed by a letter amounted to a notice of termination of settlement."
Considering the judgment of Western India Match Co. (Supra), at paged on 256 the Supreme Court held in that case that though no such formal notice was given in the earlier correspondence the letter on April 8, 1957 written by the Union should itself be construed as a notice within the meaning of Section 19(2) and therefore, the Tribunal had jurisdiction to adjudicate upon the plaint, as the reference was made by the State of Government long after the expiry of two months from April 8, 1957. The Supreme Court also added that it is true that though a written notice can be spelled out of the correspondence there must be a certainty regarding the date on which such a written notice can be construed to have been given because a settlement notwithstanding such notice continues to be in force for a period of two months from that date.
8. In the case of Shukla Manseta Industries Pvt. Ltd. v. The Workmen, (1977-II-LLJ-339)(S.C) the question was of the validity of a notice terminating the settlement issued in advance. The notice terminating the settlement on the expiry of the agreed period and it was held that (P.344) there was no bar to give advance intimation to terminate the settlement, provided a period of 2 months from the date of the notice must end on the date of the expiry of the settlement and not before it and therefore, the reference was held not to be incompetent.
In the aforesaid judgment, the Supreme Court further observed that (P.344) in an Industrial matter we are not prepared to subject a notice under Section 19(2) to the irksome vagaries or tyranny of technicalities of a notice under Section 106 of the Transfer of Property Act. Relying on this judgment, it is submitted that written notice terminating the settlement is necessary.
8-A. As a result of the consideration of the above referred judgment, it can be easily seen that though a written notice terminating the settlement is necessary before an Industrial dispute can be referred for adjudication, there is no insistence on any formal or prescribed mode of termination. If there is any correspondence from which termination can be culled out with reference to a particular date, that can be treated as a notice terminating the settlement. Such termination can even be an advance termination issued before the expiry of the settlement. It can be simultaneous or as a part of the charter of demand and it can be culled out even from subsequent correspondence as was done in the Western India Mutch Co.,s Case (supra). In that case also there was no notice of termination and a simple charter of demand was issued and when an objection was raised by the employer, on the absence of termination of the previous settlement, the Union had given a reply that the charter of demand so be treated as termination of the settlement. The Supreme Coutt upheld that letter as the notice terminating the settlement. In the present case on September 10, 1987 the employer had raised this contention before the conciliation officer and the Union had given by its reply dated September 17, 1987 and also endorsed the same addressed to the employer and therein it was stated that the charter of demand can be treated as termination of the settlement and it is long thereafter that in June, 1988 the reference was made. Even the Conciliation Officer had admitted the dispute in conciliation two months after that date of termination of the settlement. It can be clearly seen that by the letter of September 17, 1987, the Union has clearly manifested its intention in writing that the previous settlement was terminated and from that date and from that letter, the employer could have been under any illusion or impression that the settlement still survived.
9. The learned counsel submitted that this letter was not addressed to the petitioner employer, but was addressed to the Conciliation Officer and it cannot be treated as a notice to the employer. This is an argument which is to be rejected out-right. It has no merit in it. That letter addressed to the Conciliation Officer is also given to the employer and it is endorsed to by the employer. The requirement of written notice is not subject to such condition of technicality or formality.
The learned Counsel also submitted that the Labour Court has not passed its judgment on this count it is true that the Labour Court has come to its conclusion on other grounds namely expiry of settlement and efflux of time and other conduct of the party, but the respondent Union is not in any manner estopped from supporting the conclusion of the Labour Court on any ground. In view of the fact that the letter dt. September 17, 1987 can be treated as notice of termination of the settlement and the reference having been made two months after the expiry of that date, the reference is competent. Hence, this petition fails and is dismissed. Rule is discharged with no order as to costs.