Bombay High Court
Bansilal Kishorilal Sahu vs Akola Mazdoor Sangh on 9 November, 2004
Equivalent citations: (2005)IILLJ761BOM, 2005(2)MHLJ526
Author: V.C. Daga
Bench: V.C. Daga
JUDGMENT
1. A compulsory deduction of 5% amount out of the compensation awarded under the modified Voluntary Retirement Scheme is the subject matter of the challenge in the present petition.
Some of the material facts of the present case briefly enumerated are as under :
2. Savatram Ramprasad Spinning and Weaving Mills, Akola i.e. the 3rd respondent which was established 100 years back lost its glory and the consequent losses became inevitable. The textile mill became unviable and therefore, the respondent No. 4 National Textile Corporation under the provisions of the Sick Industrial Undertaking Act, 1957 took over the assets of the said 3rd respondent mill. Consequently, the liabilities of the workers was also taken over. After taking over the said textile mill it was not possible for National Textile Corporation to rum the said textile unit without reorganization of the work force. In the 3rd respondent mill, there were around 450 workers. Many of them formed a work force of badli workers and some were about to achieve the age of superannuation. In view of the nationalisation of the textile mills, the said textile mills was restarted and even on restarting, the textile mill work force was required to be reduced otherwise it was unviable unit and would have resulted in closing down of the said mill. In view thereof it became difficult and almost impossible to provide work for all the workers.
3. In the aforesaid circumstances, a settlement was entered into by and between the respondent No. 3 and representative union introducing a scheme of voluntary retirement. The said voluntary retirement scheme was introduced under the negotiations of the Deputy Commissioner of Labour in the conciliation proceedings. The said settlement which was arrived at by a between the recognised union and the 3rd respondent mill. Clause 5 of the said voluntary retirement scheme stipulated as under :
"This agreement dated 28-12-1992 shall be valid.
Under the voluntary retirement scheme, 5% amount from the retirement benefits of the persons giving resignation shall be payable. This Agreement is signed on 28-12-1992.
Under the aforesaid clause, it was provided that under the voluntary retirement scheme those workers who avail of the benefit will be paid the amount after deduction of 5% to be contributed to the said recognised union. It seems that under the said scheme, large number of workers opted for voluntary retirement scheme.
4. The matter did not end there. It seems that a further retrenchment by way of voluntary retirement became necessary for the purpose of running the said 3rd respondent mill and accordingly on 23rd January, 2002 a modified version of the voluntary retirement scheme was introduced. The said scheme is modified version of the original settlement which was arrived at on 28th December, 1992. Under the said modified version of the voluntary retirement scheme, a detail compensation package was provided for by the respondent Nos. 3 and 4 to the workers who avail of the said modified voluntary retirement scheme. On 24th March, 2004 the Central Government accepted the said scheme of voluntary retirement. The respondent No. 3 and 4 while paying compensation package under the modified voluntary retirement scheme continued to deduct 5% of the amount for contribution towards the union in accordance with the original settlement of 1992 arrived at by and between the company and the recognised union.
5. This deduction under the modified version of the voluntary retirement scheme has been the subject matter of challenge in the present petition. The present petition has been filed by few of the workers who availed of the said voluntary retirement scheme against the recognised union contending that the deduction of 5% under the settlement in favour of the union from the compensation package of the workers is illegal, unlawful and must be quashed and set aside and directions should be given to the respondent Nos. 3 and 4 to refund the said 5% of the deducted amount of contribution.
6. Learned counsel for the petitioner has contended that the deduction of the said amount by the company is contrary to law, illegal and therefore the same is liable to be set aside. It is his contention that under the provisions of Section 6 Sub-section (ee) of the Trade Union's Act, 1926 what is permitted to be deducted is only the subscription amount and no other amount and therefore deduction of 5% made from the pay packet of voluntary retirement scheme is unlawful and not permissible by law.
7. Learned counsel for the petitioner also relied upon the provisions of Section 16 of the Trade Union Act, 1926 which inter alia contemplates deduction by a trade union for the political purposes. The said provisions of Section 6(ee) and Section 16 reads as under :
(ee) "the payment of a minimum subscription by members of the Trade Union which shall not be less than --
(i) one rupee per annum for rural workers;
(ii) three rupees per annum for workers in other unorganised sectors; and
(iii) twelve rupees per annum for workers in any other case."
16. Constitution of a separate fund for political purposes. -- (1) A registered Trade Union may constitute a separate fund from contributions separately levied for or made to that fund from which payments may be made for the promotion of the civic and political interests of its members in furtherance of any of the objects specified in Sub-section (2).
(2) The objects referred to in Sub-section (1) are :
(a) the payment of any expenses incurred either directly or indirectly by a candidate or prospective candidate for election as a member of any legislative body constituted under the Constitution or of any local authority before during or after the election in connection with his candidature or election or
(b) the holding of any meeting or the distribution of any literature or documents in support of any such candidate or prospective candidate; or
(c) the maintenance of any person who is a member of any legislative body constituted under (the Constitution) or for any local authority; or
(d) the registration of electors or the selection of a candidate for any legislative body constituted under (the Constitution) or for any local authority or
(e) the holding of political meetings of any kind or the distribution of political literature or political documents of any kind.
(2A) In its application to the State of Jammu and Kashmir, references in Sub-section (2) to any legislative body constituted under the Constitution shall be construed as including references to the Legislature of that State. (3) No member shall be compelled to contribute to the fund constituted under Sub-section (1) and a member who does not contribute to the said fund shall not be excluded from any benefits of the trade union or placed in any respect either directly or indirectly under any disability or at any disadvantage as compared with other members of the trade union (except in relation to the control or management of the said fund) by reason of his not contributing to the said fund and contribution to the said fund shall not be made a condition for admission to the trade union."
8. On the basis of the aforesaid provision, learned counsel has vehemently urged before us that the deduction of 5% by the respondent Nos. 3 and 4 under the said settlement dated 28th December, 1992 is illegal as it does not provide for any such contribution. He has further urged before us that the deduction of 5% is in fact a contribution for political purpose and thus unless there is a separate agreement, it is prohibited under the provisions of Section 16 of the Trade Union Act, 1926.
9. In support of the aforesaid contention, learned counsel has relied upon the judgment of the Apex Court , G.S. Dhara Singh v. E.K. Thomas that , State Bank of India Staff Association v. State Bank of India, , Shramik Utkarsh Sabha v. Raymond Woolen Mills Ltd. and Ors. On the basis of the aforesaid judgments, he has vehemently contended that deduction of 5% is illegal as according to him save and except the subscription the trade union is not entitled to deduct any amount whatsoever irrespective of any settlement between the respondent Nos. 3 and 4 and/or trade union. He has further contended that even if there is any such settlement the same is not binding on the petitioners herein and therefore the deduction of 5% is patently illegal, unlawful and is liable to be so declared and consequently the petitioners are entitled to refund of such illegal deductions.
10. Alternatively, learned counsel for the petitioner has contended that even assuming that deduction under the said settlement is binding upon the parties, then also the same applies to the voluntary retirement scheme which was introduced in 1992 and not to the modified scheme. He has further contended that in view of the fact that modified version of the voluntary retirement scheme was introduced in 2003 and such modified version of the voluntary retirement scheme does not contain any such clause for the deduction of 5% and therefore it is not permissible for the respondent Nos. 3 and 4 to effect deduction of any amount on the basis of the earlier settlement of 1992. Learned counsel for the petitioner has also contended that the petitioners are not the members of the union and therefore they cannot be made subject of any such deduction as provided for under the said settlement by and between the union and respondent No. 3 and management. The learned counsel has therefore submitted that the said deduction is liable to be refunded and the petitioner is entitled to the benefit of the said amount.
11. On the other hand, learned counsel for the respondents-union has contended that the petitioner is not member of the trade union and as such are not entitled to file the present writ petition. On the merits of the case, learned counsel for the respondents has submitted that the settlement was entered into by and between the recognised union and the company in the course of conciliation proceedings and therefore the said settlement is valid and binding for all the workmen whether they are party to the said settlement and/or members of such union or not. Learned counsel for the respondent Nos. 1 and 2 has further submitted that the benefit of voluntary retirement scheme has been introduced for the first time under the said settlement. Thus the petitioners herein who seek to avail of the benefits under the said settlement are not entitled to challenge the obligation created under the said settlement of paying 5% of the contribution amount to the trade union. Learned counsel for the respondent Nos. 1 and 2 has however strongly contended that insofar as the modified voluntary retirement scheme is concerned, it is also part and parcel of the said settlement. He further contends that for the first time the voluntary retirement scheme was introduced in 1992 pursuant to the settlement and the said scheme has been modified from time to time and therefore the said modified scheme does not cease to be part and parcel of the original settlement under which the first voluntary retirement scheme was introduced. In the submissions of the learned counsel for the respondent Nos. 1 and 2 the contentions raised by the petitioner therefore ought to be rejected. Learned counsel for the respondent Nos. 1 and 2 has however submitted that the present petition is devoid of any merit and therefore the same should be dismissed.
12. On a plain reading of Section 6(ee) and Section 16 of the Trade Union Act, 1926 on which strong reliance has been placed by the petitioner, we are of the opinion that the said provision has no relevance whatsoever in the facts of the present case. Undoubtedly, it is true that under Section 6(ee) a provision is made for deduction of the subscription amount. However, Section 6(ee) does not have a prohibition clause prohibiting any other deductions under the settlement as and by way of contribution. We are also of the opinion that Section 16 prohibits only political deductions unless there is a special fund created for the said purpose. In our view, the present deduction is not for any political contribution by the trade union and therefore Section 16 has no application. In our view, Section 16 will apply only if there is a contribution effected by a trade union for any political purposes which requires a separate fund for the same. This is not a case of any political contribution. In the present case, the trade union is seeking a deduction of 5% towards their own activities including providing for better working condition to the workers. In the present case, the trade union is claiming 5% deduction under the settlement arrived at by and between a recognised union and the respondent Nos. 3 and 4. The said settlement is binding on all the workers. We are also of the opinion that the contention of the learned counsel for the petitioner that the said deduction tantamounts to political contribution is devoid of any merit and we reject the same.
13. We are also equally not impressed by the submissions of the learned counsel for the petitioner that the modified version of voluntary retirement scheme does not provide for 5% deduction and therefore the deduction so effected by and under the settlement dated 28th December, 1992 is illegal and unlawful. It is an admitted position that the present scheme is a modified version of the original scheme prepared pursuant to the settlement dated 28th December, 1992. Thus, the provisions for the voluntary retirement scheme is governed by the main settlement arrived at by and between the parties dated 28th December, 1992 and by a passage of time keeping in mind changing circumstances the voluntary retirement scheme is modified by the management from time to time. The pay packet has been worked out under the modified scheme and in our opinion publication of such a modified version of voluntary retirement scheme, does not cease to become part and parcel of the original settlement dated 28-12-1992 which is arrived at by and between the respondent Nos. 1, 2 and 3. The judgments which are relied upon by the learned counsel for the petitioner has no relevance to the facts and circumstances of the present case. None of the aforesaid judgment deals with any of the issues arises for determination in the present case.
13-A. We shall however, deal with each of the said judgments referred to by the petitioners hereunder :
The first judgment relied upon by the learned counsel for the petitioner is in the case of Balmer Lawrie Workers Union, Bombay v. Balmer Lawrie and Co. Ltd. . Learned counsel for the appellant has vehemently contended before us by relying upon the said judgment that save and except as and by way of subscription, no other deductions are permissible under the statute. He has specifically relied upon para 27 of the said judgment which reads as under :
"The contention is that where members who form a union pay the membership fee and receive the benefits or advantages of being members of the union yet persons who are not members of the union without their consent were forced to part with their earnings as if paying a lax which is compulsory. If the same is held permissible under Section 20(2)(b) either the section will be constitutionally invalid or that part of the settlement being severable would be illegal and invalid qua non members. On the face of it the contention appears to be attractive but anyone who has some understanding and appreciation of the working of a trade union would be able to fully appreciate the provision like the one under discussion. Though unfortunate, it is notorious that in some cases resorting to strike has by itself become an industry and the unions invest in the strike by sustaining morale of the workmen when during the strike the employer would deny wages. In case of genuine grievances and forced strike the workmen unable to stand up for want of wherewithal or cushions, the trade union may help them sustain their vigour by some monetary assistance during the period of strike. When the strike ends in a settlement or where even without a strike benefits under a settlement are made re-active and the arrears are required to be paid under the settlement naturally the union in order to vigorously carry on its activities free from financial constraints would expect the workmen for whose benefit the dispute was raised which on settlement may bring in monetary benefits to reimburse itself. As the members and non members are entitled to equal treatment under the settlement both can be asked as a condition of settlement to part with a portion of the benefits towards union activities. Such deductions can neither be said to be compulsory exaction nor a tax. Therefore, such a provision of deduction at a certain rate as agreed between the parties for payment to the union the same being with the consent and as part of overall settlement would neither be improper nor impermissible nor illegal."
14. In our view, firstly this judgment has no application in the facts of the present case. That was a case where subscription was sought to be deducted even from those workers who are not members of the union. Secondly, even in that judgment, the said deduction is upheld on the ground that the said amount is required for legitimate activities of the union and the ultimate beneficiaries of the activities of the union are the workers themselves. It has been held therein that member and non-members of the union are entitled to equal treatment under the settlement. Thus, both can be asked on the basis of conditions of settlement to part with portion of the benefits towards the union's activities. It was held therein that the deductions can neither be said to be compulsory exaction nor a tax. In our view, the judgment on the contrary runs contrary to the argument made by the learned counsel for the petitioner because, the view which we have taken that 5% deduction are permissible in view of earlier settlement between the parties and it confers the benefits of voluntary retirement scheme to the workers is in consonance with the judgment of the Apex Court in the aforesaid case.
15. Learned counsel thereafter relied upon the judgment in the case of State Bank of India Staff Association v. State Bank of India, . On a plain reading of the said judgment, we do not see any resemblance with the issues raised in the present case. That judgment pertained to the representation of the employee before the management and the issue whether an employee who cease to be in employment can represent another employees. The judgment considered Sub-clause (e) of Section 6 and not Sub-clause (ee) of Section 6 which is the issue at hand. In view thereof, in our view, the judgment has no application to the facts of the present case.
16. Learned counsel for the petitioner has thereafter relied upon the judgment of the Apex Court in G.S. Dhara Singh v. E.K. Thomas, . That was a case in which the gratuity amount was retained by the union and not paid over to the workers. Learned counsel for the petitioner has relied upon para 5 of the said judgment which reads as under :
"We do not find that the petitioner is right in his contentions. Admittedly, the amounts were received by the trade union from the employer concerned towards the gratuity and accident benefit to which the workers were entitled. There was no scheme drawn up by the trade union regarding the payment of the gratuity amount and the accident benefit fund received on behalf of the workmen to the workmen concerned. There was no agreement between the trade union and its members that the amount received towards gratuity and accident benefit should form part of funds of the trade union, Any amount received for and on behalf of the members is liable to be refunded to the workmen concerned. In the instant case, the amount which had been received on behalf of respondent Nos. 1 and 2 by the petitioner and respondent No. 3 had therefore to be refunded to them on their resignation from the membership of the trade union. We do not find any tenable defence which the trade union could put forward in the circumstances of the case."
In the said judgment, the finding has been given by the Apex Court that there was no agreement between their union and that the amount received towards gratuity and extention benefits are forming part of the fund of the trade union and therefore it was held that the amount has to be returned to the workers concerned once he has resigned from the membership of the trade union. We are not considering any such case in the present case. In the present case, the petitioner workers are obtaining the benefits of the settlement and thus they are liable to make payment in accordance with the said settlement. In para 6 of the aforesaid judgment, while relying upon the earlier decision in Balmer Lawrie case (supra) the court has held that if the settlement permits such deduction between the management and trade union or a scheme is prepared by the trade union which is binding on the worker then such deductions are permissible in law. In view thereof, we are of the view that in the aforesaid judgment of G.D. Dhara Singh (supra) it is clear that if the settlement permits a deduction then the deductions are legal, valid and permissible in law.
17. Learned counsel for the petitioner thereafter relied upon the judgment in the case of Utkarsh Sabha v. Raymond Ltd. . The aforesaid judgment also pertains to the representations of the workmen and that has nothing to do with the challenge to the deduction as in the present case. In view thereof, we are of the opinion that the said judgment do not apply to the facts of the present case at all and thus in our view, the said judgment has no relevance whatsoever.
18. In the light of the aforesaid position in law, we are of the view that even by taking into consideration the judgment of the Apex Court particularly in the case of Balmer Lawrie on the deductions made by the management in accordance with the terms of the settlement is legal, valid and permissible in law.
19. In view of the aforesaid position in law, we are not inclined to accept the submissions of the learned counsel for the petitioner that the deduction of 5% should be declared as illegal and unlawful. It is a settled law that the settlement arrived at in conciliation proceedings by and between the parties is binding on all the workers. It is also equally settled position of law that a person who seeks to derive the benefits of the settlement also correspondingly is bound by the obligations provided in the said settlement. It is not open for any person including the petitioner to derive the benefits of the settlement but refuse to honour the obligation contained therein. In our view, the deduction of 5% is legal, valid and justified and binding on the petitioner. In view thereof, we do not find any substance in the contention of the learned counsel for the petitioner and we reject the same.
20. In the aforesaid view, we dismiss the writ petition. However, there shall be no order as to costs.