Karnataka High Court
National Textile Corporation (Apkk And ... vs National Textiles Corporation ... on 12 July, 2006
Equivalent citations: 2006 (5) AIR KAR R 372
Author: Anand Byrareddy
Bench: Anand Byrareddy
ORDER Anand Byrareddy, J.
1. The petitioner seeks to challenge the award of the Industrial Tribunal, Bangalore (hereinafter referred to as 'the Tribunal' for brevity) holding that employees of the petitioner working in its showrooms are entitled to parity in wages and other benefits on par with employees of its Divisional Office.
2. The petitioner states that it is a Government company incorporated under the Companies Act, 1956. It is a subsidiary of National Textile Corporation (hereinafter called "NTC" for brevity). The NTC has 9 region-wise subsidiaries, the petitioner is one of them, controlling textile mills situated in the states of Andhra Pradesh, Karnataka, Kerala and the Union Territory of Mahe. There are 4 mills in Karnataka under the petitioner. There is a marketing Division in the petitioner Corporation. The service conditions of the employees working in the Corporate office, Textile Units and the Marketing Division are said to be distinct and separate from inception. This is reflected in the industrial settlements entered into, from time to time, as between the management and the trade unions. The respondent represents employees working in the showrooms in Karnataka.
3. The Marketing Division of the petitioner Corporation is registered separately under the Shops and Establishments Act, 1961. The Service conditions of all the employees working in the Marketing Division in all the States controlled by the petitioner Corporation is one and the same. The present dispute pertains to the Marketing Division. There is a federation of Unions consisting of the NTC showroom Employees Union, Karnataka, NTC Marketing Division Employees Union, Andhra Pradesh and NTC Marketing Division Employees Association, Kerala, consisting of 305 members in all. The respondent Union has a strength of 20 members.
4. The Federation has negotiated various wage settlements since 1979. The Federation had placed a Charter of Demands dated 6.7.1994 consisting of 20 demands in respect of employees working in the Marketing Division including those in Karnataka. The first respondent had come into being in 1993 with a strength of 26 members, now reduced to 20, since six erstwhile members had accepted the settlement signed by the majority union and had resigned from the membership of the first respondent
5. When the Charter of Demands of the Federation dated 6.7.1994, was pending consideration, the respondent Union had placed another Charter of demands dated 20.8.1994. The conciliation Officer had initiated proceedings with regard to this later Charter of Demands. The petitioner brought to the notice of the Conciliation Officer that negotiations were on between the majority union and the management and that the conciliation be postponed. And after discussions with the Management an amicable settlement was recorded under a Memorandum of Settlement dated 17.11.1995, under Section 2(p) of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act' for brevity).
6. Notwithstanding the above, the Conciliation Officer had proceeded with the dispute raised by the respondent and had reported failure of conciliation to the State Government. The State Government by an order dated 30.8.1995, referred the following disputes for adjudication to the Industrial Tribunal.
I. Whether the employees working in the Show Rooms of National Textile Corporation are justified in placing the following demands on the management:
1) That the disparity in the pay scales between the employees working in the Show Rooms and those working in the Divisional Office be removed and pay scales recommended by the Fourth Pay Commission be extended to the employees working in the Show Rooms also;
2) That a promotion policy be framed as the management has been transferring the employees arbitrarily;
3) That the scales incentive be calculated by taking into consideration the scales of the entire Show Rooms put together instead of individual sales pertaining to each Show Room;
4) That the posts available in the Divisional Office be filled up from among the employees working in each Show Room;
5) That interim relief of Rs. 1,000/- per month be provided to Show Room employees and that the sales incentive be increased to 5% of retail sales;
6) That the wholesale incentive be increased to 3%;
7) That Tea allowance, Cash allowance and Decoration allowance be increased to Rs. 150/-, Rs. 200/- and Rs. 150/- respectively;
8) That the allowance paid during the Special Festival sales be increased from Rs. 10/- per day, Rs. 30A per day and mat the discount sales be increased to 90 days;
9) That during May June the employees shall be paid a sum of Rs. 3,000/- towards educational loans and that it shall be recovered in 10 equal installments;
10) That time bound promotion be given to the employees once in 5 years;
11) That the Show Room employees be provided training in marketing and at least 20% of the employees working in the Show Rooms be given such benefit every year.
II. If not, to what relief the workmen are entitled to?
And on consideration of the pleadings, evidence and arguments before it the Tribunal passed an Award dated 30.7.2001, allowing the reference and thereby extending all the benefits enjoyed by the employees working in the Divisional Office to the members of the respondent Union working in Showrooms. It is this, which is under Challenge.
7. Shri. Pradeep S. Sawkar for M/s. Sundarswamy and Ramadas, for the petitioner, contends that the Tribunal has failed to consider the objection as regards the maintainability of the reference. In that, the respondent is a minority Union. The majority Union having placed a Charter of Demands on 6.7.1994 and the same having been amicably settled on 17.11.1995 to the satisfaction of the majority of the workmen. The minority Union though possessed of a right ought not to have been permitted to raise a dispute in respect of service conditions governing the entire community of workman who were already party to a settlement. The Tribunal ought to have held that the minority Union was also bound by the settlement of 17.11.1995.
8. It is contended that it is settled law that when a majority Union has entered into settlement, even outside conciliation proceedings, the members of the minority Union are bound by it. In this regard, the counsel places reliance on the following authorities:
(a) Tata Engineering and Locomotive Co. Ltd. v. Their Workmen AIR 1991 SC 2163;
(b) Amalgamated Coffee Estates v. Workman 1965 (2) LLJ 110 (SC);
(c) Herbertsons Limited v. Workman AIR 1977 SC 322;
(d) New Standard Engineering Company Limited v. M.L. Abahayankar 1978-I-LLJ 487 (SC);
(e) 1973 2 LLJ 144 (SC) Workman of Government Silk Weaving Factory, Mysore v. Presiding Officer, I.T. Bangalore;
(f) KCP limited v. Presiding Officer :
(g) National Engineering Industries limited v. State of Rajasthan 2000 (1)LLJ 247 (SC).
It is further contended that prior to the coming into being of the Respondent Union, a Federation, which represented the workmen had raised a claim for parity in service benefits as was claimed by the respondent. The dispute had been adjudicated and the Tribunal had rejected the claim. This was challenged before the High Court of Karnataka by way of a writ petition in W.P.No. 21434/96, which was dismissed as on 15.12.2000. Therefore, the present dispute was barred on the principle of res judicata. The Tribunal has glossed over this material objection.
9. Further, it is contended, similar issues had been raised by other employees seeking parity in respect of the petitioner and other subsidiaries before the Supreme Court and this Court. The Supreme Court had passed an order directing the Government to constitute a National Industrial Tribunal (hereinafter referred to as the NIT for brevity) to adjudicate upon the same. The Government of India constituted the NIT by an order dated 25.10.1989 and referred all the pending disputes for adjudication. After a detailed examination of the matter, the Tribunal rejected the reference, thereby the claim made by the workmen for parity was rejected. These findings were before the Supreme Court pending consideration. And further, a few employees of the Mills working in the Corporate Office had filed writ petitions before this Court in W.P.Nos. 8352-61/2000. And, on the petitioner appraising this Court of the constitution of NIT and the consequent developments - this Court had dismissed the petition as on 15.11.2000. The Tribunal has not considered the above aspects in entertaining the reference.
10. It is contended that having regard to the material placed on record - in the final analysis the petitioner is not even financially sound to meet the demands raised by the respondent Union.
11. Reliance is placed on the following authorities in support of the contentions:
Tata Engineering and Locomotive Co. Ltd. v. Their Workmen : A settlement was accepted by the majority of workmen and it cannot be weighed in any golden scales to test whether it is just and fair and it cannot be ignored because a minority union were not parties to it, or refused to accept it.
Chairman, SBI and Anr. v. All Orissa State Bank Officers' Association and Ors. : To highlight the difference between an individual dispute and a collective dispute.
President, Labour Organisation of HAL, Karnataka v. Management of Hindustan Aeronautics Ltd., Bangalore 2005 LAB.I.C 3653:
The Workmen of Government Silk Weaving Factory, Mysore v. The Presiding Officer, Industrial Tribunal Bangalore and Ors. 1978-II-LLJ 144:
New Standard Engineering Co. Ltd. v. M.L. Abhyankar and Ors. 1978-I-LLJ487:
Mangalore Ganesh Beedi Works, Mysore, and Ors. v. Workmen rep. by Secretary, Mangalore Ganesh Beedi Workers & Allied Beedi Factories Workers Association, Mysore 2004-III-L.L.J. 228:
12. Per contra, the counsel for the respondent Shri. D. Leelakrishnan, would contend that in so far as the first contention of the petitioner that the Memorandum of Settlement dated 17.11.1995 entered into between the petitioner and the Federation, would bind the respondents as well, is a contention, which is not tenable, for, even according to the petitioners, the said agreement is not necessarily binding on the respondents. He would submit that the Settlement which is entered into under Section 2(p) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act' for brevity) and from a reading of Sub-section (1) of Section 18 of the Act, the same would not be binding on the respondents. He would also rely upon Ex.M7. Clause 15 thereof spells out that those employees who are not signatories to the settlement, but who would want to have the benefit of the settlement, would have to give an undertaking in writing that they would abide by the terms of the settlement and therefore, by the very express terms of the settlement, it cannot be held binding on the respondent. He would also place reliance on the judgment in the case of Tata Chemicals Ltd. and Workmen 1978-II-LL.J. 22, wherein, while deciding the question whether the acceptance of benefits of the settlement by members of a minority union would operate as implied agreement by acquiescence and debar that union from raising a demand, the Supreme Court has held that an agreement which is not arrived at during the course of conciliation proceedings and in terms of Section 18(1) of the Industrial Disputes Act, 1947, would not bind any one other than the parties thereto. The fact that (sic) recognised Union had arrived at the agreement with the employer company, could not operate as a legal impediment in the way of the Union which was not a party to the agreement, to raise a demand or dispute with regard to a demand, which was not the subject matter of the earlier agreement and has concluded that an implied agreement by acquiescence, or by conduct such as acceptance of a benefit under an agreement to which the worker acquiescing or accepting the benefit was not a party, being outside the purview of the Act, would not be binding on such a worker. And, even if 99% of the workers have impliedly accepted the agreements arrived at, it will not - whatever its effect under the general law - put an end to the dispute before the Labour Court and make it functus officio under the Act. And therefore, the theory of implied agreement by acquiescence sought to be built up on behalf of the appellant, could not be said to be against the workmen, who are not signatories to the agreement And further he would submit that the case law relied upon by the petitioner in this regard, is not in respect of private settlement as contemplated under Section 18(1) of the Act and therefore, would have no application in the light of the law laid down by the Supreme Court as above.
13. In so far as the contention that the demand raised by the respondents were subject matter of earlier proceedings and therefore, the claims of the workmen would be barred by res judicata is concerned, he would submit that this is an incorrect proposition and the claim for Dearness Allowance and variable Dearness Allowance and utilisation of higher cost of living in terms of Clause 18 of Ex.M7, clearly spells out that the agreement would remain in force till 31.8.1988 that is, four years from 1.9.1994 and that no demand having financial implication will be raised by the Federation during the agreement period and by virtue of the same, the agreement could not be held to be conclusive, nor the proceedings which have been initiated pursuant to any demands raised by the majority union, could be held against them. He would further contend that the petitioner is not in a position to plead the doctrine of res judicata as it envisages a final decision in a matter between the same parties concerning the same subject matter. The present respondent Union was not in existence and has come into existence at a later point of time and therefore, the plea of res judicata would not be tenable. And further, the reference which has been rejected as contended by the petitioner, was confined only to the dearness allowance and therefore, it could not be said that the subject matter of earlier reference and the present reference are one and the same.
14. He would also contend that Section 11 of the Code of Civil Procedure, cannot be extended to industrial disputes. He would place reliance on the following judgments:
Workmen of Balmer Lawrie and Co. v. Balmer Lawrie & Co. 1964-I-LLJ. 380 ; Wherein it has been observed that while considering the question of revision of wages scales, the technical consideration of res judicata should not be allowed to hamper the discretion of industrial adjudication.
National Textile Corporation (APKKM) Ltd. v. Sree Yellamma Cotton, Woollen and Silk Mills Staff Association [2001] 2 LRI 998: for the proposition that in an appropriate case, though the legal position is that during the subsistence of a settlement, it is not open to any of the parties to raise a dispute. But in an appropriate case, the Government may make a reference under the Act on the ground mat since the time a settlement was entered into there has been material change in the circumstances.
He also places reliance on the case of R. Raveendran v. Quilon Commercial and Industrial Employees Association (UTUC) and Ors. 1993-I-L.L.J. 990: In support of the proposition that since the Act provides for the period for which an award shall remain in force and unlike a civil court decree, the award under the Industrial Disputes Act, 1947, cannot be considered to be conclusive between the parties, as it is limited to the duration for which it remains in force and it is futile to contend that the findings in an award would operate as res judicata in a subsequent award.
15. And further, on merits, Shri. Leelakrishnan would contend that the show-room workmen represented by the respondents are discriminated against and this is in violation of Article 12 read with Article 34(d) of the Constitution of India. He would also submit that when Central Pay Rules are applied to the Central Clerical staff of the petitioner, there is no reason why it should not be extended to the respondents and the respondents being paid minimum wages which is required in so far as unorganised sector is concerned, there is an irrational classification as between the respondents and the employees of the Corporate Office.
16. By way of reply, the counsel for the petitioner, would contend that in the case of Bombay Gas Company Limited v. Jagannath Pandurang and Ors. 1975-II-LLJ. 345 the Supreme Court has held that the doctrine of res judicata would be applicable to all litigations and that it could be applied to proceedings under the Payment of Wages Act.
He would also place reliance on the judgment in the case of Sulochana Amma v. Narayanan Nair : in support of the contention that Section 11 of the Code of Civil Procedure is to be read in combination and harmony with Explanation VIII. The result is that an order of issue which had arisen directly or substantially between the parties or their privies and decided finally by a competent Court or tribunal, though of limited or special jurisdiction, which includes pecuniary jurisdiction, will operate as res judicata in a subsequent suit or proceeding, notwithstanding the fact that such Court of limited or special jurisdiction was not a competent Court to try the subsequent suit.
17. On these rival contentions, the first contention of the petitioner that the Memorandum of Settlement dated 17.11.1995 would bind the respondents is not tenable, in the light of the judgment of the Supreme Court in Tata Chemicals Ltd. and Workmen 1978-II-2 LLJ 22. And, on the second issue whether the reference was barred by res judicata and whether the doctrine could be applied to natural justice, the Supreme Court has held that it is well established that although the entire Civil Procedure Code is not applicable to industrial adjudication, the principles of res judicata laid down under Section 11 CPC are applicable including the principles of constructive res judicata - Workmen v. Straw Board Mfg. Co. Ltd. .
State of U.P. v. Nawab Hussan : The dismissal of a writ petition challenging disciplinary proceedings on the ground that the charged officer had not been afforded reasonable opportunity to meet the allegations against him, operated as res judicata in respect of the subsequent suit in which the order of dismissal was challenged on the ground that it was incompetently passed. The Supreme Court held that it may be that the same set of facts may give rise to two or more causes of action. If in such a case a person is allowed to choose and sue upon one cause of action at one time and to reserve the other for subsequent litigation, that would aggravate the burden of litigation. Courts have therefore treated such a course of action as an abuse of its process.
And the Supreme Court, in the case of Pondicherry Khadi A Village Industries Board v. P. Kulothangan : has held that the principle of res judicata operates on the court. It is the courts which are prohibited from trying the issue which was directly and substantially in issue in the earlier proceedings between the same parties, provided the court trying the subsequent proceeding is satisfied that the earlier court was competent to dispose of the earlier proceedings and that the matter had been heard and finally decided by such court.
In Executive Engineer, Zilla Parishad Engineering Division and Anr. v. Digambara Rao and Ors. : has followed the judgment in Pondicherry Khadi & Village Industries Board v. P. Kulothangan in holding that general principle of res judicata would apply to industrial adjudication. However, in so far as the claim of the respondents for variable clearness allowance and seeking parity with the Corporate employees of the petitioner, could not be over-turned on the plea of res judicata on the facts and circumstances of the present case and notwithstanding the plea of financial burden and inability of the petitioner to satisfy any claim of the respondents.
18. Accordingly, the petition is dismissed.