1.

The petitioner, a Trade Union, has filed this petition under Artcles 226 and 227 of the Constitution of India with a prayer to set aside the order and decision dated 3-11-1999 of Assistant Commissioner of Labour, Nadiad whereby the dispute raised by the petitioner is not admitted in conciliation. The petitioner has also sought a direction directing the government to refer the dispute under the Industrial Disputes Act, 1947 (hereinafter referred to, for short, as "the Act"). 2. According to the petition, the workmen concerned had raised demands and disputes regarding service conditions before the respondent No. 2-employer-company through another Union. The dispute took a bitter turn resulting into go-slow and threats of strike and lock-out. It is alleged that the employer, with the consent and connivance of the other Union representing the workmen at that time, prepared a settlement, and without the terms and conditions of such settlement being explained to the workmen, obtained the signatures of the workmen on a blank sheet of paper which was afterwards attached to the settlement. The workmen were, according to the petition, given to understand that if they signed such papers, they would be allowed to resume duty. It is also alleged that the settlement was recorded by the Government Labour Officer without examining whether the settlement was just, legal, reasonable and valid. Thus, the allegations of mala fide and complicity of employer, the leaders of the other Trade Unions and the Government Labour Officer are made regarding the settlement in terms of which the workmen concerned have admittedly resigned and received payments by cheques. It is also alleged that as against the impression conveyed to the workmen that the industry was being closed, in reality, immediately after the settlement under which the workmen concerned had resigned from their services, the employer had restarted the manufacturing process through contractors and even employed some of the old hands. The settlement, purporting to be a "settlement" under Sec. 2(p) of the Act, was prepared on 21-9-1996 and signatures of the workmen on a blank paper subsequently annexed to it were obtained on 5-10-1996, according to the petition. 2.1 From amongst the workmen concerned in the dispute as above, 29 workmen approached this Court by way of Special Civil Application No. 4184 of 1997 which was disposed of on 30-3-1998 with the order as under :"It will be open for the petitioner to challenge the settlement before the appropriate forum under the Industrial Disputes Act. In view of this, nothing further is required to

be done in the matter as the petitioner has alternative remedy. Hence, rejected. Notice discharged." 2.2 Before that, by a legal notice dated 20-11-1996, the workmen had conveyed the grievance that the settlement dated 21-9-1996 was based on misrepresentation and it was illegal and by way of betrayal and unfair labour practice. The notice also alleged that the termination of service effected under the settlement was in violation of express mandatory provisions of the Act as also that the payments made to the workmen did not cover certain legal dues. On that basis, the demands for reinstatement with full back wages was placed before the management which did not even care to reply the notice according to the petition. 3. The settlement in question stated that, in the background of recurrent losses incurred by the company, it was proposed to close or sell away the industry and in such circumstances, a scheme for retirement of all the workmen was devised under which the workmen were promised payments against which they would submit their resignations and would stand relieved w.e.f. 30-10-1996, The major part of the payment, i.e. Rs. 60,000/- to each workman, was to be made by cheques and resignations were to take effect only after about a month and after realisation of the cheques. The settlement was signed by the representatives of the management and the other Trade Union representing the workmen at that time as also by the workmen concerned themselves. The cheques were issued in terms of the settlement and admittedly accepted and encashed by the workmen and after 20 days thereof, the above mentioned legal notice dated 20-11-1996 appears to have been issued mainly with the demand of reinstatement with full back wages. After dismissal of the special civil application filed by the workmen concerned as mentioned hereinabove, the petitioner-Trade Union appears to have moved the Assistant Labour Commissioner and Conciliation Officer for reference of the individual industrial disputes of the workmen concerned. Citing the aforesaid order of this Court, the petitioner represented before the Conciliation Officer that although the Court had granted liberty to challenge the settlement, it was open for the workmen to challenge the termination consequent to the settlement. Thus, in short, the demand and dispute agitated by the petitioner Union before the Conciliation Officer was admittedly and expressly for reinstatement of the workmen concerned with a request to make the order of reference under Sec. 10(1) of the Act. The petitioner Trade Union made a further representation vide its letter dated 26-4-1999 contending that the aforesaid settlement dated 21-9-1996 was illegal and by way of victimization and unfair labour

practice and the dispute of the petitioner to declare the same to be illegal was required to be referred along with the demand that the workmen discharged pursuant to the said settlement should be reinstated with full back wages. According to the representation, by that time, reference of dispute of the individual workman concerned was already refused on the ground that no dispute could be raised from the termination of service in terms of the binding settlement. This representation in the form of a charter of demand and justification thereof was pressed before the Conciliation Officer to invite his intervention and for initiation of the conciliation proceedings. As the respondentemployer did not remain present before the Assistant Commissioner of Labour during the meeting held by him, the petitioner insisted that the dispute may be admitted for conciliation and report of failure of the conciliation may expeditiously be submitted to the appropriate authority. It appears that, at this stage, some objections were raised on behalf of the respondent-employer in respect of the representative character of the petitioner Union, in response to which the petitioner submitted a further reply stating that the industrial dispute had arisen as defined in Sec. 2(k) of the Act. 4. In the impugned order dated 3-11-1999, the Assistant Commissioner of Labour, has taking note of the rival contentions, observed that the settlement in question under Sec. 2(p) of the Act bore the signatures of the Union representative as well as all the workmen concerned and that the employer had complied with the conditions of the settlement by paying monies due to all the workmen. It is also noted that the monies paid to the workmen were received and accepted without any protest or objection. That upon receipt of the payment in full and final settlement, the relationship between the employer and the workmen had come to an end in terms of the settlement. There was no dispute about the fact that the amounts due under the settlement were paid to and accepted by the workmen. It is also observed in the impugned order that change of Union cannot invalidate the settlement of which the workmen had already taken the advantage and the attempt at initiating fresh round of litigation by raising the demand of reinstatement was not reasonable and not in the interest of industrial peace. Thus, in the result, the demands and dispute of the petitioner Union were not even admitted for conciliation. 5. The relevant facts that emerge from the record, in chronological order, can be summarised as follows. On 18-9-1996 the workmen started go-slow and management threatened a lock-out according to a notice of the company. On 21-9-1996 the settlement was prepared in terms of which the workmen would submit their resignations against

payments of Rs. 2,500/- to Rs. 3,500/- in cash and by cheques dated 30-10-1996 of Rs. 60,000/-, with the condition that the resignations would take effect after realisation of the cheques and the effective date of termination shall be 30-10-1996. Some papers, including vouchers for payment, are admittedly signed by the workmen on 5-10-1996. The settlement is stipulated to be recorded before the Government Labour Officer or Assistant Commissioner of Labour on 23-10-1996 and the workmen were required to peacefully work upto 30-10-1996. Then, on 20-11-1996, a legal notice is issued, admittedly after the cheques being encashed and the workmen being relieved, with the demand to annul the settlement and reinstate the workmen with continuity of service and full backwages and to pay Rs. 5,000/- as the cost of the notice. The notice was received by the employer but not replied. 5.1 On 30-3-1998 this Court rejected the petition of 29 petitioner-workmen with liberty to challenge the settlement before the appropriate forum under the Act. By letter dated 15-12-1998, the petitioner-Union urged the Assistant Commissioner of Labour to refer the individual disputes of the workmen. On 3-2-1999 the authority declined to refer the disputes. On 26-4-1999 the petitioner-Union submitted the charter of demand with justification thereof. By letter dated 20-5-1999 the petitioner sought intervention of the Conciliation Officer. After holding a few meetings of the parties, the impugned order dated 3-11-1999, declining to admit the demands for conciliation, was passed. 6. With the above background of facts, the learned Counsel for the petitioner submitted that the dispute raised on behalf of the workmen essentially related to validity and genuineness of the settlement dated 21-9-1996. He submitted that the contents of the said settlement were never explained to the workmen and the signatures of the workmen were obtained without the workmen realizing that their services were to be terminated in terms of the settlement. It was further contended that the role of the Trade Union representing the workmen at that time as also the intervention of the Government Labour Officer were dubious and it was a right of the workmen to have the settlement annulled after appropriate adjudication which could be taken up by the Labour Court or Industrial Tribunal only if the dispute was referred. It was also submitted that the workmen concerned had, through the petitioner-Union, raised the demand for reinstatement on the premise that the termination of their services was brought about on the basis of a fraudulent settlement and in violation of the mandatory provisions of the Act. In such circumstances, according to the petitioner, the Conciliation Officer or the authority under the appropriate government had no power

and jurisdiction to decide either me issues of fact or the legal issues and refuse to refer the dispute upon being subjectively satisfied that the demands and disputes were illegal or unreasonable. 6.1 The judgment of the Supreme Court in the case of Mayurakshi Cotton Mills & Ors. v. Panchra Mayurakshi Cotton Mills Employees Union & Ors., reported in 2000 (2) CLR 449 : 2000 (3) SCC 446 was relied upon on behalf of the petitioner in support of the submission that whether a settlement is fair or unfair or valid cannot be examined in the absence of factual background in which the same was entered into. Relying upon the Full Bench judgment of the Supreme Court in National Engineering Industries Ltd. v. State of Rajasthan, reported in AIR 2000 SC 469, it was submitted that when there was a dispute that the settlement was not bona fide in nature or that it was arrived at either on account of misrepresentation or fraud, such settlement could be subject-matter of yet another industrial dispute, which an appropriate government may refer for adjudication after examining the allegations, as there is an underlying assumption that the settlement reached with the help of the conciliation officer must be fair and reasonable. It is, however, also observed in the said judgment that : "There can be many splinter groups each forming separate trade union. Under Sec. 4 of the Trade Unions Act, 1926 any seven or more members of a Trade Union can get the Trade Union registered under that Act. If every Trade Union having few members is to go on raising a dispute again and again, the very purpose of settlement is defeated. Once, there is a representative Union, which in the present case, is the Labour Union, it is difficult to see the role of the Workers Union. If there are number of Trade Unions registered under the Trade Unions Act, 1926 not entitled to be registered as representative Unions and if they raise disputes, industrial peace would be a far cry". It must be noted that the facts before the Court in mat case were that die employer company had entered into a tripartite settlement during the course of conciliation with its workers represented by three different Unions. One Union which was not a party to the settlement had raised its demands and the same being not referred by the government, it had filed a writ petition before the High Court which directed the government to decide the question, on the failure report of the Conciliation Officer, as to whether the dispute should be referred to or not. However, even before the decision of the High Court, the government made the reference of the dispute and upon the validity of such reference being challenged, and the challenge having failed before the learned

single Judge as well as the Division Bench of the High Court, the appeal was preferred before the Supreme Court mainly on the ground that there was no dispute which could be the subject-matter of a reference in view of the fact that all the workmen had taken advantage of the tripartite settlement and the Government had no jurisdiction to make the reference. The aggrieved Trade Union contended that the tripartite settlement was not valid as it was entered into on a Sunday, that all the demands raised by the Union were not covered by the settlement and that it was not entered into during the course of conciliation. Against the backdrop of these facts, it was argued that no individual workman or even a Union representing few workers who was not a party to the conciliation proceedings could challenge the validity of the settlement during its pendency. After holding that the settlement was valid and that the Industrial Tribunal could not have gone into the question of validly of reference, the Supreme Court found the reference of dispute itself to be bad as the government had not considered all the relevant considerations before making the reference and accordingly, the notification making the reference was also quashed. The learned Counsel for the petitioner also relied upon the judgment in Abad Dairy Dudh Vitran Kendra Sanchalak Mandal v. Abad Dairy & Ors., reported in 1999 SCC (L & S) 1079 to submit that even the preliminary question as to whether the appellants therein were workmen or not had to be referred. The judgment in Nar Singh Pal v. Union of India & Ors., reported in 2000 AIR SCW 1141 : 2000 (3) SCC 588 was relied upon to submit that mere encashment of cheques by the retrenched employees could not debar them from challenging the order tenninating their services. It must be noted that in the facts of that case, the workman was discharged from service after preliminary enquiry and the order of termination was found to be punitive and the payment and receipt of retrenchment compensation was considered in that context. 7. The learned Counsel for the respondent, defending the impugned order, submitted that factually it was proved beyond doubt before the authority that not only a fair and legal settlement between the employer and the workmen concerned was arrived at, but the terms thereof were carried out and executed insofar as the workmen had resigned and upon being relieved from service after conscious acceptance of the payments, the relationship of master and servant had come to an end. The workmen had not only consciously signed die settlement but taken full benefits under it. There was admittedly

a long period of about a month between the signing of the settlement and realisation of the cheques, only after which the resignations of the workmen had come into effect under the terms of the settlement. It left no room for doubt that the workmen had fully and finally settled all the disputes with the employer in terms of the settlement in presence of their Union representative as well as the Government Labour Officer. It was submitted that it was only an afterthought and about-turn by some of the workmen that an industrial dispute was sought to be raised through another Union which was nowhere on the scene when the settlement was arrived at and implemented. On that basis it was submitted that the Assistant Commissioner of Labour was fully justified in refusing to entertain and admit for conciliation a dispute which was sought to be raised from the settlement intended and executed to end all the disputes. It was, therefore, submitted that the so-called industrial dispute raised by the petitioner-Union was a patently frivolous dispute, the reference or entertainment of which was legally refused in exercise of the discretion vested in the Government under the express provisions of the Act. 7.1 The learned Counsel for the employer relied upon the Full Bench judgments of the Supreme Court in Bombay Union of Journalists & Ors. v. State of Bombay, AIR 1964 SC 1617 in support of his submission that Sec. 10(1) of the Act confers discretion on the government to refer or not to refer the dispute and for the exercise of such discretion even prima facie examination of the merits of the dispute cannot be excluded. If the claim made is patently frivolous or clearly belated the Government may refuse to make a reference. The judgment of the Apex Court in Secretary, Indian Tea Association v. Ajit Kumar Barat, 2000 AIR SCW 507 was relied upon to submit that a case for a writ of mandamus could be made out only if the government had taken into account any irrelevant consideration or foreign material in refusing to make a reference. Relying upon the judgment in T, N. Civil Supplies Corporation Workers' Union v. T. N. Civil Supplies Corporation, 2001 (4) SCC 469, it was also submitted that the Trade Union of employees could not challenge the impugned order when the employees concerned were not challenging the same. The headnotes of the judgment on the basis of which the submission is made are misleading.

8. The legal provision regarding making of a reference as contained in Sec. 10(1) of the Act is that, where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing, refer the dispute to a forum specified therein. The relevant provision as regards conciliation as contained in Sec. 12 is also couched in similar terms, according to which, where any industrial dispute exists or is apprehended, the Conciliation Officer may hold conciliation proceedings in the prescribed manner. Thus, the appropriate Government and the Conciliation Officer are clothed with the power on satisfaction of the condition that an industrial dispute exists or is apprehended. Even after satisfaction of that condition, making of a reference or holding of conciliation proceeding is in the discretion of the authority. The power and discretion are, however, required to be exercised reasonably and in a rational manner and not in an arbitrary or partisan manner. It is also wellsettled that the appropriate authority has no power and jurisdiction to examine the dispute on merits and decide the Us between the parties. The power and discretion only extend to deciding the question whether the dispute brought to its notice is an existing or apprehended industrial dispute and whether it is required to be referred. A prima facie examination of the merits of the dispute is not impermissible and in case the dispute is found to be patently frivolous or clearly belated or if its reference is inexpedient on consideration of other relevant and material facts, the Government may refuse to make a reference subject to compliance with the condition of recording and communicating to the parties concerned the reasons. 8.1 As observed by the Constitution Bench of the Supreme Court in State of Bombay v. K. P. Krishnan & Ors., AIR 1960 SC 1223, if the government comes to the conclusion that a prima facie case for reference has been made, then, it would be open for the government also to consider whether there are any other relevant or material facts which would justify its refusal to make a reference. The question as to whether a case for reference has been made out can be answered in the light of all the circumstances which would have a bearing on the merits of a case as welt as on the incidental question as to whether a reference should nevertheless be made or not. However, the discretion to consider all relevant facts has to be exercised bona fide and the final decision has to be based on a consideration of relevant facts and circumstances. It is also observed by the Apex Court that the government may be justified in refusing to make a reference if it is satisfied that the notice given is frivolous or vexatious or that reference would be inexpedient. Thus, though considerations of expediency cannot be excluded when Government considers whether or not it should exercise its powers to make a reference,

it would not be open to the Government to introduce and rely upon wholly irrelevant or extraneous considerations under the guise of expediency. But it may be open to inquire whether the dispute raises a claim which is very stale, or which is opposed to the provisions of the Act, or inconsistent with any agreement between the parties, and if the Government comes to the conclusion that the dispute suffers from infirmities of this character, it may refuse to make a reference with condition that the Government must always act and consider the question fairly and reasonably. In conclusion, it is further observed that the Act has been passed in order to make provision for the investigation and settlement of industrial disputes and if it appears that the investigation and settlement of any industrial dispute is prevented by the Government by refusal to make a reference on grounds which are wholly irrelevant and extraneous, a case for the issue of a writ of mandamus is clearly established. Relying upon the above judgment, this Court has, in Saurashtra Employees Union v. Sub-Divisional Officer, 2000 (2) GLR 1259, taken the view mat in case the claim made is patently frivolous or is clearly belated, the appropriate Government may refuse to make a reference. 8.2 As observed by the Supreme Court in Telco Convoy Drivers Mazdoor Sangh v. State of Bihar, AIR 1989 SC 1565, there may be exceptional cases in which the Government may, on a proper examination of the demand, come to a conclusion that the demands are either perverse or frivolous and do not merit a reference. The Government should however be very slow to attempt an examination of the demand with a view to declining reference and the Courts will always be vigilant whenever the Government attempts to usurp the powers of the Tribunal for adjudication of the valid disputes and that to allow the Government to do so would be to render Sec. 10 and Sec. 12(5) of the Act nugatory. It is also held by the Supreme Court in Jitendra Nath Biswas v. Mis. Empire of India & Ceylone Tea Co., AIR 1990 SC 255 that a printa facie examination of the merits cannot be said to be foreign to the enquiry which the appropriate government is entitled to make in dealing with a dispute under Sec. 10(1) of the Act. 9. In view of the facts of this case and the legal dicta on the issue, it has to be examined whether the Government has taken any extraneous material into consideration in making the impugned order, whether it has decided the lis between the parties and whether the dispute is patently frivolous and opposed to the provisions of the Act as also

inconsistent with the agreement between the parties. The answer to the first two questions can obviously be in the negative in the peculiar facts of this case and the third question lends itself to a positive answer. In the scheme of the industrial law, a settlement arrived at by the agreement of the parties is placed on the highest pedestal and considered to be an ideal resolution of industrial dispute as it is evolved by the parties themselves and no litigation is supposed to ensue. Therefore, in a clear case of settlement of an industrial dispute by an accepted agreement, it would be opposed to the provisions of the Act and inconsistent with the agreement to allow a fresh round of litigation. A fair and objective overview of the facts of this case leads to the prima fade conclusion that the parties to the dispute had settled the issues on mutually agreed and accepted terms and acted accordingly. After resignation and acceptance of the stipulated amounts under the settlement, neither the service nor any dispute survived and the allegations and claims of non-payment of all the dues or the allegation of violation of the mandatory provisions regarding retrenchment and closure were, ex facie, perverse and frivolous. In such circumstances, the observation in the impugned order that mere change of Union cannot vitiate a settlement clearly indicates that the dispute was reasonably found to be perverse and frivolous. As seen earlier, in the case of National Engineering Industries Ltd., (supra) before the Full Bench of the Supreme Court, wholesale reference of the disputes raised in the charter of demands was held to be bad and without application of mind where some of the disputes were already the subject-matter of a tripartite settlement. On the same basis, if, in the peculiar facts of this case, the authority has, after application of mind to the relevant and material facts, found the demand and dispute to be unreasonable, illegal and opposed to the provisions and policy of the Act, the same cannot be faulted. The workmen concerned, the reference of whose individual disputes for reinstatement was refused, have not challenged that decision. And the Government or the Conciliation Officer were not, in the facts of this case, obliged to refer or admit for conciliation the dispute after finding, on prima facie consideration of the relevant facts and circumstances, that the demands and dispute were frivolous and opposed to the provisions of the Act. In such circumstances, while upholding the impugned order dated 3-11-1999, the writ of mandamus or the directions as prayed in the petition cannot be issued and the petition deserves to be dismissed. Accordingly, the petition is rejected with no order as to costs. Notice is discharged.