Andhra HC (Pre-Telangana)
Neelimarla Jute Mills Co. Ltd. Rep. By ... vs Govt. Of A.P., Department Of Labour, ... on 12 June, 2001
Author: E. Dharma Rao
Bench: E. Dharma Rao
ORDER E. Dharma Rao, J.
1. Mr. R.H. Kumar, President of M/s. Nellimarla Jute Mills Company Limited, Calcutta, filed this writ petition to issue a writ of mandamus directing the respondents 1 to 4 to restrain outside leaders from participating in the negotiations meetings between the petitioner company and its workmen before the Labour Department and to restrain Sri P. Prasad from entering the petitioner factory or anywhere near the premises of the petitioner factory within the vicinity of 500 meters and pass such other orders which are deemed fit and proper in the circumstances of the case.
2. It is submitted that the petitioner company is registered under the Company Act in the year 1939 and carries on the business of manufacturing jute goods at its jute mill situated at Nellimarla in the State. The mill is situated at a predominantly industrially backward area and engaging 6000 workers within the local area of Nellimarla and surrounding villages and the mills caters to the needy. The jute mill is providing employment either directly or indirectly to the surrounding population. It is further submitted that due to various factors, as such glut in jute industry, occasional shortage of raw material, acceleration in the price of raw jute, power cuts and labour unrest, etc. the petitioner company suffered heavy losses and the total capital of the company has been eroded. Therefore, the petitioner company became industrially sick within the meaning of Sec.3(1)(o) of the Sick Industrial Companies (Special Provisions) Act and on a reference under section 15 of the Sick Industrial Companies (Special Provisions) Act, the Board for Industrial and Financial Reconstruction (BIFR), New Delhi declared the petitioner company as a sick industrial company and it has taken every step for revival of the unit. The BIFR has nominated Special Director as per the provisions of the Sick Industrial Companies (Special Provisions) Act. It is submitted that the installed capacity of the petitioner company is 120 MT per day and if the unit has to become a viable unit and survive, as per the standard norms the production should not be less than 110 MT per day.
3. It is further submitted that the Deputy Commissioner of Labour, Visakhapatnam, on 5-1-1996 held election to the office bearers of Nellimarla Jute Mill Karmika Sangham and declared the election results declaring Mr. P. Prasad (Kagada), 6th respondent herein, of IFTU elected with 2934 votes against S. Gangadhar Reddy who secured 2313 votes, that the term of the office bearers is for a period of two years from 5.1.1996 to 4.1.1998 and the next election was scheduled to be held on 5.1.1998 and though the term of office of the 6th respondent was over, neither fresh elections were held nor extension endorsement was obtained from the workmen for the extension of his term. It is further stated that there has been a memorandum of settlement entered between the Management and workmen under section 12(3) of the Industrial Disputes Act to step up production on par with the viable units of the industry on 3.1.1998. Accordingly, the unit has achieved the target of 106.76 MT per day production in the past but it never achieved the said production on par with the other viable units of the industry even after the settlement entered on 3.1.1998 and increase in payment of wages. IFTU agreed to take steps to increase productivity, modernisation, promote discipline and reduce absentism and combat practices on the part of the workmen which hampers production and disturbs industrial relations. But the workmen at the behest and provocation of 6th respondent have resorted to agitational methods like dharna, stoppage of work, go slow and lightening strike every time and by 27.12.1999 the sick unit was further crippled and the petitioner company has put up several notices calling upon the workmen to adhere to the settlement terms and to step up production and save the sinking unit in the larger interest of the industry and workmen, which went in vain. On the other hand, the petitioner company increased the salary of the workmen in terms condition 12(3) of the settlement dated 3.1.1998 with an expectation that the workmen would increase the productivity in terms of the above settlement. But due to the malafide actions of the 6th respondent, and at his instigation, the workmen resorted to conduct dharnas, stoppage of work, go slow tactics, lightening strike and therefore, brought the production to standstill and, therefore, the petitioner company was constrained to declare the suspension of uneconomic operation of the sick unit as a last resort with effect from 6.00 a.m. on 27.12.1999. But the 6th respondent, has forcibly and illegally took possession of the mill and ran it without there being any personnel of the Management and by such running of the mill, he has caused loss to the plant and machinery and finished products by producing substandard products without specifications. This fact was brought to the notice of the Labour Department through letter dated 25-7-2000 that the 6th respondent has no locus standie or authority to participate in the negotiations as he is not a workmen of the industry and that he has been threatening the Management at every meeting that he would not allow the mill to run without his leadership or his participating in the negotiations. The petitioner has relied on a judgment of the Supreme Court in SBI Staff Association & Another Vs. SBI , wherein it was held that under section 3 and 36 of the Industrial Disputes Act an honorary/temporary member or a private individual is not entitled to represent the workmen in the matter of participation in the negotiations between the Management and the workmen. Therefore, for the reasons above stated, the petitioner prays to issue a writ of mandamus against the respondents 1 to 3 restraining the 6th respondent from participating in the negotiations between the petitioner company and its workmen before the Labour Department and to further restrain the 6th respondent from entering into the petitioner factory or anywhere near the petitioner factory premises within the vicinity of 500 meters.
4. In reply to the above averments made by the petitioner company, the 6th respondent, who was arrayed in his personal capacity filed counter affidavit stating that he was elected as President of the 5th respondent Sangham and he was Present from January, 1996 and also for subsequent periods. He further submitted that there is another union byname Sramikasangham which was formed in 1988 and the Labour Department recognized their union and that there was tri-party agreement among their union, writ petition and the Labour Officer in January, 1998. It is further submitted that their Union had been representing the day today grievances of the workers to the petitioner and also Labour Department. It is further submitted that the General Manager of the petitioner and their Union representing the workers participation in the meetings held by the Honourable Minister for Labour on 11-4-2000, 13-7-200, 19.8.2000 and 20-8-2000, that he also represented the Commissioner of Labour in the Joint Meeting held by the Commissioner of Labour, Andhra Pradesh on 26th and 28th August, 2000 at Hyderabad. It is further stated that when the petitioner insisted for personal undertaking from the workmen in 1993 as condition precedent to enter the factory, it was challenged by their Union and he filed writ petition before this court which was quashed as unfair labour practice(). It is further submitted that he had been sincerely devoting himself to the cause of workmen that is why he was impleaded personally as 6th respondent seeking injunct8on from entering into the factory premises and participating in the negotiations which is motivated and this writ petition is filed with an ulterior motive to stifle the voice of working class and it is an unfair labour practice. He further submitted that he is President of the Workers Union of Petitioner company, President of Workers Union of Eluru Jute Mill and 2 other unions of Hugli Jute Mill and East Coast Jute Mill located at Vizianagaram District and Uma Jute Mill at Kothavalasa of Vizianagaram District and also A.p. Fibres Jute Mill at Saluru, Vizianagaram District and other Textile Industies. This respondent is silent about the judgment of the Supreme Court in SBI Staff Association's case, relied on by the petitioner.
5. The Superintendent of Police, Vizayanagaram District -4th respondent herein filed counter affidavit. Except saying that in view of the prevailing situation in the factory area the local police is watching the situation insofar as it relates to law and order and whenever the situation warrants action, they will certainly take necessary action against the persons who violates the rules relating to law and order. It is further submitted that the petitioner does not deserve any specific order from the 4th respondent in connection with the relief sought for in the writ petition.
6. On the basis of the above stated facts and circumstances of the case, the learned counsel for the petitioner submitted that as held by the Supreme Court in SBI Staff Association's case the 6th respondent who is not a worker and whose term of office as Honorary President of the Workers union has expired, cannot participate in the negotiations held before the Labour Department. The Standing Orders deal with the conditions of service of the employees and the same are not applicable to the facts and circumstances of the case. It is also submitted that the Standing Orders are framed under the Industrial Employment (Standing Orders) Act, 1946 for the employees of Nellimarla Jute Mills Company Limited, who are workers as defined in the Factories Act.
7. Section-A of the Standing Order deals with the application and scope of the Standing Orders. It says that the Petitioner Company and its workmen are subject to the Standing Order regulating the conditions of service which shall come into force in accordance with Section 7 of the Industrial Employment (Standing Orders) Act, 1946. The objects of the Nellimarla Jute Mills Karmika Sangham, which is a Trade Union is to organise and unite the workers employed in the Jute Mill at Nellimerla into a union and to regulate their relations which their employers; to secure to the members fair conditions of life and service; to try to redress their grievances; to try to prevent any reduction in wages, and if possible to obtain an advance; to endeavour to settle disputes between employers and employees amicably so that a cession of work may be avoided; etc...etc.., Rule 3 deals with admission of ordinary member. It says that any worker employed in the Nellimarla Jute Mill Company Limited and who has attained the age of 15 years shall be entitled to become an ordinary member of the union on payment of a monthly subscription of Rs.0.25 Ps. provided that he agrees to abide by the Rules and bye-laws that may be made by the Union from time to time. Rule 4 deals with admission of honorary members. It says that persons who hare not eligible to become ordinary members of the Union may be admitted as honorary members of the Union for purposes of being elected or co-opted to the Managing Committee and they shall be honorary members of the Union during the period of their office, subject to the provisions of Section 22 of the Trade Unions Act, 1926, their number shall not exceed 50%. Apartfrom that, Rule 19(a) deals with the functions of Honorary President. The Honorary President will act as a legal adviser in the union. Rule 19(b) deals with Working President. It says that the Working President will act as a President in the absence of the President of the Union in respect of the Union affairs.
8. According to the learned counsel for the petitioner, there is no rule in the Standing Orders of the Company enabling the Honorary President to participate in the negotiations/meetings which are held and conducted before the Labour Department between the workmen and the petitioner. In the absence of any such rules enabling the 6th respondent to participate in the negotiations on behalf of the 5th respondent, he cannot participate in the negotiations. He further submitted that the Supreme Court has considered the scope and ambit of Sections 3 and 36 of the Industrial Disputes Act which are analogous to Sections 6 and 22 of the Trade unions Act in the SBI Staff Association's case and, therefore, the ruling of the Supreme Court is squarely applicable to the facts of this case.
9. On the other hand, the learned counsel for the 6th respondent submitted that the Honourable Supreme Court was never called upon to consider the issue and render a decision directly and, therefore, any observation made by the Supreme Court which is not connected to the subject matter or on which the Honourable Supreme Court was never called upon to decide the issue and, therefore, it could not be treated as a law laid down by the Supreme Court and it cannot be applied to the facts and circumstances of the case. He further submitted that if the relief sought for by the petitioner in this writ petition is granted, it leads to serious repercussions and no Honorary President of the Trade Union will be allowed to participate in the negotiations between the employer and the workmen in future and it may lead to anomalous situation and the grievances of the workers cannot be properly represented in the negotiations/meetings. He further contended that there is no provision in the Code of Discipline or Standing Orders prohibiting Honorary President of a Trade Union of the Company participating in the negotiations.
10. I have gone through the entire material placed before me and the Judgment of the Supreme Court in SBI Staff Association's case. The brief facts of this case are that on 16-10-1994, M.R. Awasthy, was elected as General Secretary of the Staff Association for a period of three years in accordance with the bye-laws and constitution of the Staff association and the said election of the General Secretary was further confirmed by the Central Committee meeting held on 19-11-1994 by reason of which MR Awasthy had a legitimate right to represent the Staff Association. The SBI had about 16000 workmen-employees of the Circle Management, but the Assistant General Manager (Personnel) of the SBI, Lucknow, by his impugned letter dated 3.5.1995, communicated to MR Awasthy, General Secretary, that in view of the advice received from the Central office, the Management shall not negotiate with MR Awasthy, on any matter of the Union/Association as MR Awasthy had already retired from the Bank on 31-1-1995. The legality and propriety of the said letter was under challenge before the Honourable Supreme Court in this case under Article 32 of the Constitution of India.
11. The Supreme Court having regard to the contentions raised therein, has observed that to forge efficiency in the Public Utility Services like the Bank and with a view to present and remove causes of friction and to forge harmony between the employer and the workmen in day-to-day working of the establishment and to promote measures for securing amity and good relations between them, Their Lordships proposed the parties at the Bar to also go into the legality of the election of MR Awasthy as General Secretary and his continuance as such even after his retirement from service on 31.1.1995 and the parties were required to address on the same besides the legality/ propriety of the impugned letter dated 3-5-1995 issued by the respondent to negotiate with MR Awasthy, as representative of the Union/Staff association and the parties have submitted written submissions.
12. Section 6 of the Trade Union Act contemplates two essential requirements, firstly, the executive of the Trade Union must be constituted in accordance with the provisions of the Act and unless it is so constituted in Trade Union shall not be entitled to the registration under the Act and secondly the Rules of such a Trade Union shall provide for the matters enumerated in clauses (a) to (j) of Section 6. Further Clause (e) to Sec.6 provides for admission of Honorary Members (office bearers) also in accordance with section 22 of the Act. That being so, the Rules of the Trade Union according to clause (e) of Section 6 should provide for the admission of ordinary members who shall be persons actually engaged or employed in the industry with which the trade Union is connected and also to provide for the admission of number of Honorary or Temporary Members as office bearers as required by section 22 of the Act with a view to form the executive of the Trade Union. A reading of Sec.22 would show that it mandates that at least one half of the total number of office bearers of the Trade Union should be persons actually engaged or employed in an industry with which the Trade Union is connected. That means, the number of actually employed office-bearers should in no case be less than half of the total number of office bearers. The provisions contained in Sec.6 and 22 of the Act relate to the registration of a Trade Union and constitution of the executive of the said union. The provisions of Sec.6 and 22indicate that an Ordinary or a Temporary Member may be an office bearer, but they nowhere provide that such a member shall also have a right to negotiate with the Management or the Management would be under an obligation to negotiate with an Office-bearer of the Union who is no longer in the employment of the industry to which the Trade Union is connected.
13. The Supreme Court also considered Section 36 of the Industrial Disputes Act in terms of which a workman is entitled to be represented in any proceedings under the Act by any member of the executive or other office-bearers of a registered Trade Union, even though he is no longer in the employment of the industry. Section 3 of the Indusdtrial Disputes Act provides for the constitution of a Works Committee consisting of the representatives of the employers and workmen engaged in the establishment. Their Lordship further observed that it is significant to note that it clearly provides that the representatives of the workmen shall be chosen in the prescribed manner from amongst the workmen engaged in the establishment and in consultation with the Trade Union, if any, registered under the Indian Trade Unions Act, 1926. Under the Industrial Disputes Act, the Works Committee so constituted is enjoined with the duty to promote measure for securing and preserving amity and good relations between the employer and workmen and, to that end to common upon the matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters. It, therefore, become clear that under the Industrial Disputes act, the representatives of the workmen have to be chosen only from amongst the workmen already engaged in the establishment and not an outsider or an ex-workmen of the establishment concerned or any other person. It would, therefore, not be correct to contend that having regard to the provisions of Sec. 36 read with Section 3 of the Industrial Disputes Act, an honorary/temporary member or a private individual is entitled to represent the workmen in the matters. While referring to the provisions of Section 36 of the Industrial Disputes Act, the provisions of Section 3 of the said Act cannot be overlooked or ignored. Their Lordships further observed that the provisions of Trade Unions Act, 1926 have to be harmonised with the relevant provisions of the Industrial Disputes Act and it has also to be kept in view that the Industrial Disputes Act is a much later Act which besides other matters, specifically concentrates on harmonious relations between the employer and the workmen, the dispute between the two and the settlement thereof by negotiations with the assistance of their respective representative.
14. On the basis of the above facts and circumstances of the case, the Supreme Court, after exhaustively considering the provisions of both Trade Unions Act and the Industrial Disputes Act, has held that a representative has to be chosen only from amongst the workmen already employed in the establishment and not an outsider or an Ex-Workman engaged in the establishment. In the present case also, the Workers Union have framed Rules in consonance with clause (c) of Sec.6 read with Sec. 22 of the Trade Unions Act and registered their Union. Rule 4 provides for admission of Honorary Members. The persons who have not become ordinary members of the Union may be admitted as Honorary Members of the Union for the purpose of being elected or co-opted to the Managing Committee and they shall be Honorary Members of the Union during the period of their office. Rule l9(a) enables the Honorary President to act as a legal adviser in the Union. Therefore, there is no provision in the Rules of the Trade Union enabling the Honorary President to participate in the negotiations, but permitted him to act as a Legal Adviser in the Union. If any Rule is framed by the Trade Union permitting the Honorary President to participate in the negotiations, it is contrary to Sec.3 and 36 of the Industrial Disputes Act and ruling of the Supreme Court. Therefore, the contention of the learned counsel for the 6th respondent that if the Honorary President is not permitted to participate in the negotiations between the petitioner and 5th respondent, it will have serious repercussions, cannot be accepted. The Works Committee of the representatives of the employer and the workmen engaged in the establishment, is enjoined with the duty to promote measures for securing and preserving amity and good relations between the employer and workmen and to that end to comment upon the matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters. It, therefore, becomes clear that under the Industrial Disputes Act, the representatives of the Workmen have to be chosen only from amongst the workmen already engaged in the establishment and not an outsider or an ex-workman of the establishment concerned or any other person. In terms of the ratio laid down by the Supreme Court in SBI Staff Association's case, under the Industrial Disputes Act, the workmen are certainly entitled to have their representatives, who are working in the industry, in consultation with the Trade Union, to represent their grievances and participate in the negotiations before the Labour Department between representatives of the employer and the employees. But the Honorary President, who is not an employee or even an Ex-employee of the Jute Mill, has no right to participate in the negotiations held by the Labour Department in terms of Sec.36 read with Sec.3 of the Industrial Disputes Act. Therefore, I am thoroughly satisfied that the 6th respondent, who is not a workman or even Ex.-workman of the petitioner establishment, but Honorary President of the 5th respondent Union, has no right of any nature to participate in the negotiations which will be conducted by the Labour Department between the representatives of the petitioner and its workmen, but it is the 5th respondent Trade Union, who are workmen of the petitioner establishment, enjoined with the duty to promote measure for securing and preserving amity and good relations between the employer and workmen and, to that end to comment upon the matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters and not the 6th respondent, who is neither an employee of the petitioner jute mill nor its Ex-Employee.
15. Therefore, following the Judgment of the Supreme Court and in terms of the Rules framed by the Trade Union of the 5th respondent, in consonance of clause (c) of Sec.6 read with Sec. 22 of the Trade Unions Act, I have no hesitation in holding that the 6th respondent who is a Honorary President of the 5th respondent Union, cannot represent and participate in the negotiations going to be held between the representatives of the petitioner and 5th respondent union to ventilate their grievances, inasmuch as the representatives of the workmen shall be chosen in the prescribed manner from amongst the workmen engaged in the petitioner jute mill under section 3 read with sec.36 of the Industrial Disputes Act.
16. The writ petition is accordingly allowed. No order as to costs.