http://JUDIS.NIC.

IN SUPREME COURT OF INDIA Page 1 of 13

Vs.

RESPONDENT:
THE MANAGEMENT OF LOTUS MILLS & ANR.

DATE OF JUDGMENT: 09/12/1997

BENCH:
S.B. MAJMUDAR, M. JAGANNADHA RAO.

ACT:

HEADNOTE:

JUDGMENT:
J U D G M E N T
S.B. Majmudar, J :
A short but an interesting question arises for
consideration in this appeal by certificate granted by the
High Court of Judicature at Madras under Article 133(1) of
the Constitution of India. It reads as under :-
"Whether an individual workman governed by the
Industrial Disputes Act, 1947 (hereinafter referred to as
’the Act’) can claim lay-off compensation under Section 25C
of the Act despite a settlement arrived at during
conciliation proceeding under Section 12(3) of the Act by a
union of which he is not a member and when such settlement
seeks to restrict the right of lay-off compensation payable
to such workman as per the first proviso to Section 25-C of
the Act."
A few relevant facts leading to these proceedings
require to be stated at the outset :-
BACKGROUND FACTS :
The five appellants before us were employed at the
relevant time under Respondent No.1 in various departments.
Respondent No.1 was running a textile mill wherein the
appellants were employed. The said textile mill remained
closed due to financial crisis from 8.8.1976 to 31.1.1978.
The workmen of the mill raised a dispute pertaining to lay-
off during the aforesaid period and claimed appropriate
wages for the said period. In the conciliation proceedings a
settlement was arrived at between the parties on 28.2.1977.
Five unions representing all the workmen took part in the
conciliation proceedings. A settlement was arrived at in
these proceedings between the management on the one hand and
the unions on the other. In clause 6 of the settlement, it
was provided that lay-off compensation would be paid for
the days during which the mill did not function and marked
as "no work". It was also agreed that the compensation would
be paid after January 1981 in instalments and the question
as to the number of instalments would be decided by both
parties on mutual discussion in January 1980. Though it was
agreed under that settlement in January 1980, the workers
insisted upon immediate payment of compensation and raised
another dispute, Consequently, the earlier settlement lost
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its efficacy. Again in the matter was referred to the
conciliation officer who held negotiation. Different unions
representing various categories of workmen took part in the
negotiation. The union representing the present appellants
also took part in the said negotiation. Ultimately a fresh
settlement was arrived at during conciliation proceedings as
per Section 12(3) of the Act on 5.5.1980. Out of five unions
representing the workmen of Respondent No.1 - Textile Mill,
four unions signed the said settlement but the union
representing the appellants did not think it fit to sign the
same. The relevant terms of the aforesaid settlement under
Section 12(3) of the Act in connection with the payment of
lay-off compensation read as under :-
"TERMS OF SETTLEMENT "
1. It is agreed that this
settlement shall be applicable to
all permanent employees of the
Mills except
(a) Watchman
(b) Electrical Department workers
(c) Staff
in respect of whom a separate
settlement has been signed.
2. It is agreed that in respect of
the period 8.8.1976 to 7.8.1977,
all workers who were laid off
during that period shall be paid
lay-off compensation for the first
forty-five days of lay off and that
no compensation shall be payable in
respect of the days of lay-off
after the expiry of the first
forty-five days.
3. In is further agreed that in
respect of the period 9.8.1977 to
31.1.1978, all workmen who were
laid-off during that period shall
be paid lay off compensation for
the first forty-five days of lay-
off and that no compensation shall
be payable in respect of the days
of lay-off after the expiry of the
first forty five days.
4. In addition to the lay-off
compensation payable under Clauses
(2) and (3) above each permanent
workman shall be paid an ex-gratia
sum which shall be calculated as
follows :
The total of the compensation
amount payable to each permanent
worker under clauses (2) and (3)
above and the ex-gratia amount
shall be equal to 67% of the total
lay-off compensation payable for
him in respect of all the days of
lay-off during the period 8.8.1976
to 31.1.1978."
It is not in dispute appellants were in paragraph 1 of
the settlement, meaning thereby they were covered by the
said settlement. The question is as to whether they would be
bound by the settlement and the terms regarding the payment
of retrenched lay-off compensation, when their union did not
sign the said settlement. The appellants on the ground that
their union had not signed the settlement, filed application
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under Section 33C(2) of the Act for computing the
appropriate lay-off compensation payable to them as per
Section 25C of the Act. The Labour Court after hearing the
parties allowed the said application on the ground that the
appellants individually had not entered into any agreement
with the management and consequently the proviso to Section
25C of the Act would not come in their way and, therefore,
they were entitled to be paid 50% lay-off compensation for
the entire period during which they were laid-off i.e. from
8.8.1976 to 31.1.1978 and the term of the settlement under
Section 12(3) arrived at during compensation at 67% of the
permissible statutory lay-off compensation would not be
binding on the appellants. Accordingly, the amounts payable
to the appellants were computed by the Labour Court and were
directed to be paid by Respondent No.1 by its Order dated
30.1.1982. Respondent No.1 carried the matter in Writ
Petition being No. 2962 of 1982 in the Madras High Court.
The Court by its impugned judgment dated 11.8.1989 held that
the settlement arrived at during conciliation proceeding
under Section 12 (3) was binding to all the workmen being
parties to industrial dispute as per Section 18(3) of the
Act and consequently the said settlement could be treated as
an agreement arrived at between all the workmen as per the
first proviso to Section 25C and, therefore, the appellants
could not claim anything more than what was permissible and
payable to them as per the binding terms of the settlement
dated 5.5.1980. The writ petition of Respondent No.1 was,
therefore allowed and the claim petition under Section
33C(2) as moved by the appellants was dismissed. However,
while dismissing the same, the High Court granted a
certificate under Article 133(1) of the Constitution for
leave for appeal to this Court and that is show this appeal
was filed in this Court and has reached the final hearing
before us.
CONTENTIONS ON BEHALF OF THE APPELLANTS :
Learned counsel for the appellants vehemently contended
that Section 25C is in Chapter VA of the Act and it
represents a complete code in itself. that the statutory
right given to the workmen under Section 25C of Chapter Va
cannot be whittled down, save and except by an agreement
entered into between the workmen concerned and the employer
as provided by the first proviso to Section 25C of the Act.
But before the provisions of the said proviso are attracted,
it should be shown that the workman who has a statutory
right under Section 25C has willingly agreed to give up his
right by entering into such an agreement with the right by
entering into such an agreement with the employer. That such
an agreement was independent of any settlement contemplated
under Section 12(3) of the Act which could have any binding
effect under Section 18(3) of the Act. It was submitted that
on a conjoint reading of Sections 25C and 25J, it has to be
held that any inconsistent in any other part of the Act
itself would not whittle down the right to receive lay-off
compensation as guaranteed to the workman under Section 25C
of the Act and consequently the settlement arrived at under
Section 12(3) of the Act would not have any adverse effect
on the right of the appellants who admittedly had not
entered into any independent agreement with the management
curtailing their right under Section 25C of the Act to
receive 50% statutory compensation during the entire lay-off
period. The contesting Respondent No.1 being served has not
though it fit to appear in these proceedings.
STATUTORY SCHEME :
In order to appreciate the aforesaid contentions
canvassed by counsel for the appellants, it will be
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necessary to have a look at the statutory scheme of the Act.
The act is enacted for resolving industrial disputes
between workmen and employer which would have pernicious
effect on industrial peace and industrial production and
which would in their turn adversely affect the economy of
the Nation as a whole. The act is enacted to make provisions
for the investigation and settlement of industrial disputes
for the investigation and settlement of industrial disputes
and for certain other purposes mentioned in the Act. Under
the Act, the principal bargaining, (2) Mediation and
conciliation, (3) Investigation, (4) Arbiration, and (5)
Adjudication, The scheme of the Act shows that adjudication
is to be resorted to as the last alternative. Before any
matter is referred for adjudication under Section 10 of the
Act, there should be an attempt for conciliation. As laid
down by this Court in Herbertsons Ltd. vs. The Workmen of
Herbetsons Ltd. & Ors. (AIR 1977 SC 322) any settlement
between the employer and the employees is placed on a higher
pedestal that an ward passed after adjudication. It is easy
to visualise that individual workmen have by themselves
scant bargaining power. Therefore, their disputes have to be
highlighted by their bargaining agents, namely, their unions
representing the body of workmen so that the bargaining
power of individual workmen can get strengthned. As per
Section 36 of the Act, a workman who is a party to a dispute
shall be entitled to be represented in any proceeding under
this Act by any member of the executive or other office
bearer of a registered trade union of other office bearer of
a registered trade union of which he is a member. The
machinery of the Act envisages resolution of industrial
disputes and conflicts at the grassroot level by
conciliation by which settlement can be arrived at between
the employer and the workmen and industrial peace can be
achieved and industrial strife can be put to an end. The Act
envisages two types of settlements between the warring
groups of employer and employees. As defined by Section 2(P)
of the Act, "settlement" means a settlement arrived at in
the course of conciliation proceeding and includes a written
agreement between the employer and workmen arrived at
otherwise than in the course of conciliation proceedings
where such agreement has been signed by the parties thereto
in such manner as may be prescribed and a copy thereof has
been sent to an officer authorised in this behalf by the
appropriate Government and the conciliation officer. Thus,
a settlement which is based on a written agreement between
the parties can be arrived at either in conciliation
proceedings or even outside conciliation proceedings between
the representatives of the workmen on the one hand and the
management on the other. But even if such written agreement
signed by the parties is arrived at outside conciliation
proceeding, it would become a settlement, once the
prescribed procedure as envisaged by Section 2(p) is
followed. So far as settlements arrived at in the course of
conciliation proceedings are concerned, Section 12 of the
Act deals with such settlements. As laid down by Section
12(1) where any industrial dispute exists or is apprehended,
the conciliation officer may, or where the dispute relates
to a public utility service and a notice under Section 22
has been given shall, hold conciliation proceedings in the
prescribed manner Sub-section (2) of Section 12 enjoins upon
him for the purpose of bringing about a settlement of the
dispute, without delay to investigate the dispute and all
matters affecting the merits and the right settlement
thereof and to make all efforts as he thinks fit for the
purpose of inducing the parties to come to a fair and
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amicable settlement of the dispute. Then follows sub-section
(3) of Section 12 under which settlement in the present case
saw the light of the day. It reads as under :-
"12 (3). If a settlement of the
dispute or of any of the matters in
dispute is arrived at in the course
of the conciliation proceedings,
the conciliation officer shall send
a report thereof to the appropriate
Government or an officer authorised
in this behalf by the appropriate
Government together with a
memorandum of the settlement signed
by the parties to the dispute".
Sub-sections (4) and (5) of Section 12 lay down that if
no settlement is arrived at, the conciliation officer shall
submit a full report to the appropriate Government which if
satisfied that there is a case for reference of the dispute
to a Board, Labour Court, Tribunal or National Tribunal, as
the case may be, may make such a reference and shall record
and communicate to the parties concerned its reasons
therefore. So far as the settlement arrived at outside the
conciliation proceedings is concerned, Section 18(1) deals
with such settlement and lays down that a settlement arrived
at by agreement between the employer and workmen otherwise
than in the course of conciliation proceeding shall be
binding on the parties to the agreement. Sub-section (3) of
section 18, however, deals with settlement arrived at during
conciliation proceedings and lays down that settlement
arrived at in the course of conciliation proceedings under
this Act, or an arbitration award in a case where a
notification has been issued under sub-section (3A) of
Section 10A or an award of a Labour Court, Tribunal or
National Tribunal which has come enforceable shall be
binding on -
(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the
proceedings as parties to the dispute, unless the
Board, arbitrator, Labour Court, Tribunal or National
Tribunal, as the case may be, records the opinion that
they were so summoned without proper cause:
(c) Where a party referred to in clause (a) or clause
(b) is an employer, his heirs, successors or assign in
respect of the establishment to which the dispute
relates;
(d) Where a party referred to in clause (a) or clause
(b) is composed of workmen, all persons who were
employed in the establishment or part of the
establishment, as the case may be, to which the dispute
relates on the date of the dispute and all persons who
subsequently become employed in that establishment or
part.
DISCUSSION ON THE POINT FOR CONSIDERATION :
The aforesaid relevant provision of the Act, therefore,
leave no room for doubt that once a written settlement is
arrived at during the conciliation proceedings such
settlement under Section 12(3) has a binding effect not only
on the signatories to the settlement but also on all parties
to the industrial dispute which would cover the entire body
of workmen, not only existing workmen but also future
workmen. Such a settlement during conciliation proceedings
has the same legal effect as an award of Labour Court, or
Tribunal or National Tribunal or an Arbitration award, They
all stand on part. It is easy to visualise that settlement
contemplated by Section 12(3) necessarily means a written
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settlement which would be based on a written agreement where
signatories to such settlement sign the agreement.
Therefore, settlement under Section 12(3) during
conciliation proceedings and all other settlements
contemplated by Section 2(p) outside conciliation
proceedings must be based on written agreements. Written
agreements would become settlements contemplated by Section
2(p) read with section 12(3) of the Act when arrived at
during conciliation proceedings or even outside conciliation
proceedings. Thus, written agreements would become
settlements after relevant procedural provisions for
arriving at such settlements are followed. Thus, all
settlements necessarily are based on written agreements
between the parties. It is impossible to accept the
submissions of learned counsel for the appellants that
settlements between the parties are different from
agreements between the parties. It is trite to observe that
all settlements must be based on written agreements and
such written agreements get embeded in settlements. But all
agreements may not necessarily be settlements till the
aforesaid procedure giving the status of such settlements
gets followed. In other words, under the scheme of the Act,
all settlements are necessarily to be treated as binding
agreements between the parties but all agreements may not be
settlements so as to have binding effect as provided under
Section 18(1) or (3) if the necessary procedure for giving
them such status is not followed in given cases. On the
aforesaid scheme of the Act, therefore, it must be held that
the settlement arrived Respondent No.1 - Management on the
one hand and the four out of 5 unions of workmen on the
other, had a binding effect under Section 18(3) of the Act
not only on the members of the signatory unions but also on
the remaining workmen who were represented by the fifth
union which, though having taken part in conciliation
proceedings, refused to sign the settlement. It is axiomatic
that if such settlement arrived at during the conciliation
proceedings is binding to even future workmen as laid down
by Section 18(3) (d), it would ipso facto bind all the
existing workmen who are all parties to the industrial
dispute and who may not be members of union that are
signatories to such settlement 12(3) of the Act.
It has to be kept in view that the Act is based on the
principle of collective bargaining for resolving industrial
disputes and for maintaining industrial peace. Thus
principles of industrial democracy is the bed-rock of the
Act. The employer or a class of employers on the one hand
and the accredited representatives of the workmen on the
other are expected to resolve the industrial dispute
amicably as for as possible by entering into the settlement
outside the conciliation proceedings of if no settlement is
reached and the dispute reaches conciliator even during
conciliation proceedings. In all these negotiation based on
collective bargaining individual workman necessarily recedes
in background. The reins of bargaining on his behalf is
handed over to the union representing such workmen. The
unions espouse the common cause on behalf of all their
members. Consequently, settlement arrived at b them with
management would bind at least their members and if such
settlement is arrived at during conciliation proceedings, it
would bind even non-members. Thus settlements are the live
wires under the Act for ensuring industrial peace and
prosperity. Section 10(2) of the Act highlights this
position by providing that where the parties to an
industrial dispute apply in the prescribed manner, whether
jointly or separately, for a reference of the dispute to a
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Board, Court, Labour Court, Tribunal or National Tribunal,
the appropriate Government, if satisfied that the persons
applying represent the majority of each party, shall make
the reference accordingly. Individual workman comes into the
picture only in connection with a limited class of
industrial disputes as indicated by Section 2A of the Act
dealing with discharges, dismissals, retrenchments or
otherwise termination of services of an individual workman.
Save and except the aforesaid class of disputes, which an
individual workman can rest of the industrial disputes
including disputes pertaining to illegal lock out, lay-off
and lay-off compensation have to be filtered through the
process of collective barganing and they are disputes of
general nature or class disputes wherein individual workman
by himself has no say. In this connection, it is profitable
to keep in view a decision of three-member Bench of this
Court in the case of Ram Prasad Vishwakarma vs. Chairman
Industrial Tribunal, Patna & Ors. [AIR 1961 SC 857] where in
Das Gupta, J, speaking for this Court made the following
pertinent observations on the scheme of the Act, at the time
when Section 2A was not on the statute book :-
"It is now well settled that a
dispute between an individual
workman and an employer cannot be
an industrial dispute as defined in
section 2(k) of the Industrial
Disputes Act unless it is taken up
by a Union of the workmen or by a
considerable number of workmen. In
Central Provinces Transport Service
Ltd. vs. Raghunath Gopal, 1956 SCR
956 : (S) AIR 1957 SC 104), Mr.
Justice Venkatarama Ayyar speaking
for the Court pointed out after
considering numerous decision in
this matter that the preponderance
of judicial opinion was clearly in
favour of the view that a dispute
between an employer and a single
employee cannot per se be an
industrial dispute but it may
become one if it is taken up by a
union of a number of workmen.
"Notwithstanding that the language
of Section 2(k) it wide enough to
cover disputes between an employer
and a single employee". observed
the learned Judge, "the scheme of
the Industrial Disputes Act does
appear to contemplate that the
machinery provided therein should
be set in motion to settle only
disputes which involve the rights
of workmen as a class and that a
dispute touching the individual
rights of a workman was not
intended to be the subject of
adjudication under the Act, when
the same had not been taken up by
the Union or a number of workmen"
This view which has been reaffirmed
by the Court in several later
decision recognises the great
importance in modern industrial
life of collective bargaining
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between the workmen and the
employers. It is well known how
before the days of collective
bargaining labour was at a great
disadvantage in obtaining
reasonable terms for contracts of
several from his employer. As trade
unions developed in the country and
collective bargaining became the
rule the employers found it
necessary and convenient to deal
with the representatives of
workmen, instead of individual
workman, not only for the making or
modification of contracts but in
the matter of taking disciplinary
action against one or more workmen
and as regards all other disputes.
The necessary corollary to this is
that the individual workman is at
no stage a party to the industrial
dispute independently of the Union.
The Union or those workmen who have
by their sponsoring turned the
Individual dispute into an
industrial dispute, can therefore
claim to have a say in the conduct
of the proceedings before the
Tribunal.
It is not unreasonable to think
that Section 36 of the Industrial
Disputes Act recognises this
position, by providing that the
workman who is a party to a dispute
shall be entitled to be represented
by an officer of a registered trade
union of which he is a
member........"
Consequently, the provisions contained in the first
proviso to Section 35C of the Act would also necessarily
require an agreement to be entered into on behalf of the
affected class of workmen by their accredited
representatives being office bearers of their union. It is
easy to visualise that when lay-off has been imposed by the
management in an establishment or in any department thereof,
there entire body of workmen working therein would be
affected by lay-off. Therefore, their grievance in
connection with lay-off compensation pertaining to the
period of lay-off would not be necessarily an individual
grievance but would be grievance of the class of workmen as
a whole affected by such lay-off. If there is a binding
settlement embodying an agreement on behalf of a class of
workmen through their union in connection with lay-off
compensation it would obviously be binding on all the
members of the union and if such settlement based on
agreement is arrived at during conciliation proceedings it
would be binding to the entire class of workmen covered by
the industrial dispute regarding lay-off compensation. The
Individual dispute regarding lay-off compensation. The
individual workman can raise his grievance under Section 25C
only if his statutory right of lay-off under Section 25C is
not hedged on by any binding effect of an agreement entered
into by its own union with the management, whether in or
outside conciliation proceedings or even by other unions
that may arrive such settlement during the course of
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conciliation proceedings. Then only individual workman can
have full play under Section 25C for vindicating his right
of lay-off compensation.
In Barauni Refinery Paragatisheel Shramik Parishad vs.
Indian Oil Corporation Ltd. & Ors. [AIR 1990 SC 1801],
Ahmadi, J. as he ten was, speaking for a Bench of two
learned Judges of this Court had an occasion to consider the
binding effect of such a settlement arrived at during
conciliation proceedings in the light of Section 18 of the
Act. The following pertinent observations, in this
connection, were made :
" A settlement arrived at in the
course of conciliation proceedings
with a recognised majority union
will be binding on all workmen of
the establishment, even those who
belonging to the minority union
which had objected to the same. To
that extent it departs from the
ordinary law of contract. The
object obviously is to up-hold the
sanctity of settlements reached
with the active assistance of the
Conciliation Officer and to
discourage an individual employee
or a minority union from scuttling
the settlement. There is an
underlying assumption that a
settlement reached with the held of
the Conciliation Officer must be
fair and reasonable and can,
therefore, safety be made binding
not only on the workmen belonging
to the union signing the settlement
but also on others. That is why a
settlement arrived at in the course
of conciliation proceedings is put
on part with an award made by an
adjudicatory authority."
In this light we have now to examine the relevant
provisions of the Act dealing with lay-off and compensation
to be paid to workmen for lay-off. Section 25C is found in
Chapter VA of the Act which deals with lay-off and
retrenchment. We are concerned with lay-off in the present
case. Section 25C deals with statutory right of the workmen
laid off for compensation. Sub-section (1) of Section 25C
with the first proviso reads as under :-
"25C. Right of workmen laid off for
compensation. - (1) Whenever a
workman (other than a badll workman
or a casual workman) whose name is
borne on the muster-rolls of an
industrial establishment and who
has completed not less than one
year of continuous service under an
employer is laid off, whether
continuously or intermittently, he
shall be paid by the employer for
all days during which he is laid
off, except for which weekly
holidays as may intervene,
compensation which shall be equal
to fifty per cent of the total of
the basic wages and dearness
allowance that would have been
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payable to him had he not been so
laid off:
Provided that if during any period
of twelve months, a workman is so
laid off for more than forty-five
days, no such compensation shall be
payable in respect of any period of
the lay-off after the expiry of the
first forty-five days, if there is
an agreement to that effect between
the workman and the employer."
It is of course true that sub-section (1) of Section
25C lays down that if there is a legal lay-off imposed by
the employer, the permanent workman covered by sweep of sub-
section (1) of Section 25C would be entitled to be paid by
way of lay-off compensation 50% of the total wages and
dearness allowances during the relevant period of lay-off.
However, because of the first proviso to the said section,
the right of the workman to be paid 50% lay-off compensation
during the relevant period of lay-off would be curtailed and
restricted to 45 days only if there is an agreement to that
effect between the workman and the employer. The question is
whether there was such an agreement between the appellants
and the employer. Learned counsel for the appellants
submitted that for attracting the first proviso to Section
25C(1), there should be independent agreement between the
workman and the employer to that effect agreeing not be
demand lay-off compensation beyond 45 days of the starting
of the lay-off period. It is difficult to appreciate this
contention. An agreement restricting the claim of lay-off
compensation beyond the available period of 45 days can be
said to be arrived at between the workmen on the one hand
and the employer on the other as there is such an agreement
embedded in a binding settlement which has a legal effect of
binding all the workmen in the institution as per Section
18(3) of the Act. Such building effect of the embedded
agreement in the written settlement arrived at during the
conciliation proceeding would get telescoped into the first
proviso to Section 25C(1) and bind all workmen even though
individually they might not have signed the agreement with
the management or their union might to have signed such
agreement with the management on behalf of its member-
workmen. The first proviso to Section 25C(1) clearly lays
down that if there is an agreement for into paying any more
lay-off compensation beyond 45 days between the workman and
the employer, such an agreement has binding effect both on
the employer and the workman concerned. Such binding force
gets clearly attracted in the case of the appellants by
virtue of operation of Section 12(3) read with Section 18 of
the Act emanating from the settlement arrived at during the
conciliation proceedings as aforesaid. Learned counsel,
however, strongly relied upon Section 25J of the Act for
isolating the effect of Section 18(3) in the present case,
Section 25J reads as under :-
"25J. Effect of laws inconsistent
with this Chapter. - (1) The
provisions of this Chapter shall
have effect notwithstanding
anything inconsistent therewith
contained in any other law
(including standing orders made
under the Industrial Employment
(Standing Orders) Act, 1946) (20 of
1946) :
Provided that where under the
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provisions of any other Act of
rules, orders or notifications
issued thereunder or under any
standing orders or under any award,
contract of service or otherwise, a
workmen is entitled to benefits in
respect of any matter to benefits
in respect of any matter which are
more favourable to him than those
to which he would be entitled under
this Act; the workman shall
continue to be entitled to the more
favourable benefits in respect of
that matter, notwithstanding that
he receives benefits in respect of
other matters under this Act.
(2) For the removal of doubts, it
is hereby declared that nothing
contained in this Chapter shall be
deemed to affect the provisions of
any other law for the time being in
force in any State in so far as
that law provides for the
Settlement of industrial disputes,
but the rights and liabilities of
employers and workmen in so far as
they relate to lay-off and
retrenchment shall be determined in
accordance with the provisions of
this Chapter."
It is difficult to appreciate how the said proviso can
be of any assistance to the appellants. All that is stated
is that anything inconsistent with the provisions of Chapter
VA found to have been laid down by any other law including
standing orders etc. will have no effect. Even sub-section
(2) of Section 25J is to the same effect. Therefore,
Section 25J overrides any inconsistent provision of any
other law or otherwise binding rule of conduct and makes the
provisions of Chapter VA operative of their own. The
submission of learned counsel for the appellants in this
connection was to the effect that "any other law" as
provided in Section 25J(1) would include even the Industrial
Disputes Act, specially the provision contained in Section
18 thereof. It is difficult to agree. Section nowhere
provides that the provisions of Chapter VA shall have effect
notwithstanding anything inconsistent contained in any other
chapter of the Industrial Disputes Act as well as in any
other law. Such a provisions is conspicuously absent in
Section 25J (1). If submission of learned counsel for the
appellants is accepted, Section 25J(1) will have to be re-
written by introducing the additional words therein "in any
other part of this Act or" before the words "any other law"
as mentioned therein. On the express language of the said
provision, therefore, such an exercise is contra-indicated
is total impermissible.
In fact, this Court in Krishna District Co-operative
Marketing Society Ltd. vs. N.V. Purnachandra Rao & Ors.
[1987 (4) SCC 9 99 (at 111)] pointed out that the purpose of
Section 25J(2) in Chapter V of the Industrial Disputes Act,
194 was to give overriding effect to the provisions of
retrenchment and lay-off in Chapter VA over cognate
provisions of State laws dealing with retrenchment and lay-
off. In the above case Venkataramiah, J., (as he then was)
observed :-
"By enacting Section 25J(2),
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Parliament, perhaps intended that
the rights and liabilities arising
out of lay-off and retrenchment
should be uniform throughout India
where the Central Act was in force
and did not wish that the States
should have their own laws
inconsistent with the Central law."
The above passage also shows that Chapter V was not
intended to override any provisions of the Industrial
Disputes Act, 1947 itself.
Once Section 25J(1) is out of the picture, Section
25C(1) will have to be read with the proviso and once a
settlement is arrived at between the parties during
conciliation proceedings as laid down by Section 18(3) the
binding effect of such settlement gets visited on all the
workmen, as seen earlier. Consequently the appellants would
remain bound by the settlement which would be treated as an
agreement binding on them as contemplated by the said
proviso. Once that conclusion is reached no fault can found
with the High Court taking the view on the scheme of the Act
that additional benefit which the appellants claimed under
the settlement arrived at under Section 12(3) read with
Section 18 of the Act could not be computed under Section
33C(2) of the Act and such application was, therefore,
rightly held incompetent.
It is now time for us to refer to some decisions of
this Court to which our attention was invited.
This Court speaking through Untwalia, J. held in
Workmen of Firestone Tyre and Rubber Co. of India (P) Ltd..
Etc. vs. The Firestone Tyre and Rubber Co etc., (1976 (1)
L.L.J. 493) that Chapter VA of the Act was a complete code
and if the workmen are found to have been laid off, the
benefit of the said provision can be attracted. It is
difficult to appreciate how this decision can be of any
assistance to the counsel for the appellants as in the
aforesaid case there was no question of any binding
settlement between the parties which had tried to which did
tried to whittle down the statutory right of lay-off
compensation as per the first proviso to Section 25C of the
Act.
In R.B. Bansilal Abirchand Mills Co. Ltd. vs. The
Labour Court. Nagpur & Ors. [(1972) 1 SCC 154] this Court
was concerned with a question whether application under
Section 33C(2) could be filled by co-employees who claimed
benefit under Section 25C of the Act for lay-off
compensation even though those workmen had not filed such
application earlier. Even in that case there was no
question of any binding effect of any settlement under
Section 12(3) read with Section 18(3) of the Act.
In Workmen of Dewan Tea Estate & Ors. vs. The
Management [(1964) 5 SCR 548] this Court was concerned with
the question whether lay-off compensation could be claimed
by the workmen under section 25C even though such claim was
not covered by the standing orders. It was held that the
lay-off compensation would be permissible only where one or
the other of the factors mentioned by Section 2(kkk) is
present, and for such a lay-off compensation would be
permissible only where one or the other of the factors
mentioned by Section 2(kkkk) is present, and for such a lay-
off, compensation could be awarded under Section 25C. Even
in this case the question of binding effect of a settlement
arrived at during conciliation proceedings and curtailment
of right of workmen laid-off for compensation under Section
25C of the Act was not on the anvil of scrutiny.
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In the Cachar Chah Sramik Union Silchar, Assam vs. The
Management of the Tea Estate of Cachar, Assam [(1966 (2) SCR
344] it was held that even though the management might have
given ex-gratia compensation to the workmen laid-off they
were entitled to claim lay-off compensation as per the Act
and as per the relevant standing Orders. The aforesaid
decision cannot advance the case of the appellants as there
was no question of any binding effect of any settlement
arrived at between the parties which would govern the claim
of all the workmen even though their union might not have
been signatory to such settlement during conciliation
proceedings.
In the result this appeal fails and is dismissed. In
the facts and circumstances of the case, there will e no
order as to costs.