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Fashion Production Mazdoor Sabha Vs. Smt. Smita Prabhakar Dalvi and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberW.P. No. 1554 of 1984
Judge
Reported in[1985(51)FLR542]; (1994)IIILLJ814Bom; 1985MhLJ819
ActsMaharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 - Sections 12 and 13
AppellantFashion Production Mazdoor Sabha
RespondentSmt. Smita Prabhakar Dalvi and ors.
Appellant AdvocateS.M. Dharap, Adv.
Respondent AdvocateY.N. Bandekar Adv. for Respondents 1 and 2 and ;N.B. Shetye, ;Nishita Pradhan, ;Pankaj and ;M. Patel, Advs. for Respondent 3, Advs.
DispositionPetition allowed
Excerpt:
labour and industrial - derecognition of trade union - sections 12 and 13 of maharashtra recognition of trade unions and prevention of unfair labour practices act, 1971 - petition against application of respondent for derecognition of petitioner trade union - whether individual employee can make application for cancellation of trade union - combined reading of sections 12 and 13 provides that individual does not have any right to make application for derecognition of trade union - in case trade union operates in collusion with employer or against interest of employee other trade union can file application for derecognition of such trade union - application of respondent not maintainable. - - 1. quite an interesting and substantial question of law that arises for consideration in this..........for cancellation of recognition of a union under section 13 of the maharashtra recognition of trade unions and prevention of unfair labour practices act, 1971 (hereinafter referred to as 'the act').2. the petitioner union, fashion production mazdoor sabha, is a registered trade union under the trade unions act, 1926. it is also a recognised trade union under the act, functioning as such in an undertaking viz. m/s. kanak industries which is engaged in the business of manufacturing readymade garments (hereinafter referred to as 'respondent no. 3'). respondent nos.1 and 2, smt. smita prabhakar dalvi and sonali r. aadkar, are the two employees of m/s. kanak industries. respondent no.4 is the member of the industrial court, maharashtra, bombay, appointed under section 4 of the act.3......
Judgment:

H.H. Kantharia, J.

1. Quite an interesting and substantial question of law that arises for consideration in this Writ Petition under Article 226 of the Constitution of India is whether individual employee or employees can initiate proceeding for cancellation of recognition of a union under Section 13 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as 'the Act').

2. The Petitioner union, Fashion Production Mazdoor Sabha, is a registered trade union under the Trade Unions Act, 1926. It is also a recognised trade union under the Act, functioning as such in an Undertaking viz. M/s. Kanak Industries which is engaged in the business of manufacturing readymade garments (hereinafter referred to as 'Respondent No. 3'). Respondent Nos.1 and 2, Smt. Smita Prabhakar Dalvi and Sonali R. Aadkar, are the two employees of M/s. Kanak Industries. Respondent No.4 is the Member of the Industrial Court, Maharashtra, Bombay, appointed under Section 4 of the Act.

3. Respondent Nos.1 and 2 made an application in the Court of Respondent No.4, being Application (MRTU) No. 14 of 1983 under Section 13(i), (ii), (iii) and (iv) of the Act for cancellation of recognition of the Petitioner union on the grounds that from Jan. 1982, out of 950 employees 849 resigned their membership from that union and joined the Genera! Labour Union (Red Flag), and, therefore, the Petitioner union did not have the membership as required under Section 11 of the Act and that it was recognised under mistake, misrepresentation or fraud and it had failed to observe the conditions specified in Section 19 of the Act and further that it was not being conducted bona fide in the interest of the employees. An application for interim relief under Section 30(2) of the Act was also made in the said proceeding. The Petitioner union raised two preliminary objections; (1) that an application under Section 30(2) for interim relief was not maintainable in a proceeding taken under Section 13 and (2) that the proceeding under Section 13 could not be initiated by individual employee or employees as such proceeding can be instituted only by a trade union. At the hearing of the preliminary objections, the first contention that an application for interim relief under Section 30(2) would not be maintainable in a proceeding under Section 13 was conceded but the second preliminary objection that proceeding under Section 13 can be initiated only by a trade union was vehemently resisted by and on behalf of Respondent Nos. l and 2. The learned Member of the Industrial Court heard this preliminary objection and by an Order dated October 10, 1983 held that there was no substance in the preliminary objection as, according to him, a harmonious reading of Sections 11, 12, 13 and 14 of the Act shows that although the word 'employee' was not mentioned in Section 13, the same could be read and, therefore, even an employee can make an application under Section 13 for cancellation of the recognition of a union. Being aggrieved by the said Order, the Petitioner union filed a Writ Petition No. 175 of 1984 in this Court, but the same was allowed to be withdrawn as at that stage it was felt that only an interlocutory order was challenged. Thereafter, the Industrial Court further proceeded with the matter on merits and came to the conclusion that Respondent Nos.1 and 2 proved their case against the Petitioner union under Section 13(i), (ii) and (iii) of the Act and as such allowed the application, Accordingly, by an order dated April 30, 1984 the Industrial Court cancelled the recognition of the Petitioner union. The said orders dated October 10, 1983 and April 30, 1984 of the Industrial Court are impugned in this Writ Petition.

4. Now, let us first examine the moot point whether individual employee or employees can initiate proceeding under Section 13 of the Act for cancellation of the recognition of a trade union. Since we are concerned with the topic of recognition and de-recognition of trade unions, it would be appropriate to say a few words here about the historical background leading to the statutory provisions in the matter of the recognition of trade unions, A trade union is a continuous and voluntary association of the salary or wage-earners and is formed for safeguarding the interest of its members by maintaining and improving the conditions of their living and working lives and secure better relations between them and their employers, through a method called collective bargaining. Therefore, the existence and status of a trade union in an industrial undertaking cannot be under-estimated. As a matter of fact, trade unions are no longer now concerned only with the wages and allowances of workers but are widely concerned with the lives of the citizens as consumers of the production. They thus play an important role in the national problems and the socio-economic activities in the country. Since the recognition and derecognition of trade unions have been vitally linked with the question of industrial peace and harmony we shall have to examine this question bearing in mind its importance.

5. The Trade Unions Act, 1926 gave a legal status to trade unions to provide for their registration and give protection to their officers and members from criminal liability for their legitimate trade union activities. Prior to 1946, there was no provision in any State as regards the grant of recognition to the trade unions. It was the Bombay Industrial Relations Act, 1946 which made provisions for the first time for the recognition of the representative unions in the local area. This Act also applied to Gujarat and in a modified form in Madhya Pradesh and Rajasthan. In the rest of the country, recognition to trade unions was given on : the oasis of the criteria accepted at the 50th Tri-partite Labour Conference held at Nainital in 1958. Under the BIR Act, 1946, recognition is granted to a union for an entire industry in a given local area. This recognition is granted by the Registrar under the said Act to a union fulfilling certain conditions. The main conditions include membership of minimum 25 per cent and non-recourse or non support to an illegal strike. The privileges which a recognised union gets, consist of the status of sole bargaining agent, direct reference of industrial disputes to various Courts set up under the said Act, the right or veto on changes proposed by the employers in certain matters and the right of collection of membership fees at the place of payment of wages. It may also be noted here that the BIR Act, 1946 is applicable only to the sugar, textile, banking, transport and woolen industries. Maharashtra State which is the pioneer in the area of labour legislations then enacted the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. This Act, for an overview can be conveniently divided into three parts. The first part is regarding recognition of trade unions. The second and third are for declaring certain strikes and lock-outs as illegal and for prevention of Unfair Labour Practices with which we are not presently concerned. It applies to industries to which the BIR Act, 1946 applies and also to industries as defined in the Industrial Disputes Act, 1947 in so far the State Government is an appropriate Government. It provides for the constitution of the Industrial and Labour Courts. Industrial Court deals with, inter alia, the recognition of unions for Undertakings. The preamble of the Act shows that it provides for the recognition of trade unions for facilitating collective bargaining for certain industries and also to state the rights and obligations of such trade unions and to confer certain rights on unrecognised unions. Therefore, facilitation of collective bargaining is the object sought to be achieved by this Act.

6. Now, Union is defined under Section 3(17) of the Act as a trade union of employees, which is registered under the Trade Unions Act, 1926. Chapter III of the Act deals with recognition of unions. Under Section 11, a union having a membership of not less than 30% of the total number of employees employed in an Undertaking may apply to the Industrial Court for being registered as a recognised union for that Undertaking and the recognition may be granted on the Industrial Court being satisfied that certain conditions are complied with by the applicant union. Thus under Section 12, on receipt of an application for recognition, if the Industrial Court finds that the application is in order, it shall cause a notice to be displayed on the notice board of the Undertaking declaring its intention to consider the application and the employer or employees and the other union or unions, may, within a prescribed time, show-cause why recognition should not be granted to the applicant union. After considering the objections, if any, and holding an inquiry if the Industrial Court is satisfied that the applicant union satisfies certain conditions as laid down in Sections 11 and 19, it would grant recognition to the said union and issue a certificate of recognition. If the Industrial Court comes to a conclusion that any other union has the largest membership of employees and if that union has indicated its intention to be recognised and if it satisfies the conditions laid down in Sections 11 and 19, the Industrial Court shall grant recognition to that union. The Industrial Court shall not recognise any union, if it is satisfied that the application 10 for the recognition was not made bona fide in the interest of the employees, but it was made in the interest of the employer or to the prejudice of the interest of the employees. The Industrial Court shall also refuse is to recognise any union, if at any time within six months immediately preceding the date of application for recognition, the union had instigated, aided or assisted the commencement or continuation of a strike which is 20 deemed to be illegal under the Act. If any other union makes an application to the Industrial Court for being registered as a recognised union in place of a recognised union on the ground that it has the largest 25 membership and if certain conditions are satisfied, the Industrial Court shall once again follow the procedure laid down in Section 12 and grant recognition to such other union under Section 14 of the Act. 30 Thus notices to other union or unions and employer and employees are contemplated in Section 14 also. It is after great care, caution and scrutiny that the Industrial Court grants recognition to a union. The corollary 35 would be that its de-recognition cannot be done lightly. In other words, de-recognition of a union assumes as great an importance as grant of recognition to a union.

7. Then comes the crucial Section 13 of the Act. It reads as under:-

13. Cancellation of recognition and suspension of rights : (1) The Industrial 45Court shall cancel the recognition of aunion if after giving notice to such unionto show-cause why its recognition shouldnot be cancelled, and after holding aninquiry, it is satisfied-

(i) that it was recognised under mistake, misrepresentation or fraud; or

(ii) that the membership of the union has, for a continuous period of six calendar months, fallen below the minimum required under Section 11 for its recognition:

Provided that, where a strike (not being an illegal strike under the Central Act) has extended to a period exceeding fourteen days in any calendar month, such months shall be excluded in computing the said period of six months:

Provided further that, the recognition of a union shall not be cancelled under the provisions of this sub-clause, unless its membership for the calendar month in which show-cause notice under this section was issued was less than such minimum; or

(iii) that the recognised union has, after its recognition, failed to observe any of the conditions specified in Section 19; or

(iv) that the recognised union is not being conducted bona fide in the interests of employees, but in the interest of employer to the prejudice of the interest of employees; or

(v) that it has instigated, aided or assisted the commencement or continuation of a strike which is deemed to be illegal under this Act; or

(vi) that its registration under the Trade Unions Act, 1926 (XVI of 1926) is cancelled; or

(vii) that another union has been recognised in place of a union recognised under this Chapter..

(2) The Industrial Court may cancel the recognition of a union if, after giving notice to such union to show-cause why its recognition should not be cancelled, and after holding an inquiry, it is satisfied that it has committed any practice which is, or has been declared as, an unfair labour practice under this Act:Provided that, if having regard to the circumstances in which such practice has been committed, the Industrial Court is of opinion, that instead of cancellation of the recognition of the union, it may suspend all or any of its rights under Sub-section (1) of Section 20 or under Section 23, the Industrial Court may pass an order accordingly and specify the period for which such suspension may remain in force'.

It is apparent that Section 13 does not provide as to who should make an application for the cancellation of the recognition of a union. According to M. Dharap, learned counsel appearing on behalf of the Petitioner union, such an application can be made only by a union because the whole scheme of the Act shows that application for recognition can be made only by a union and, therefore, an application for de-recognition can also be made only by a union and not by individual employees. In other words, according to Mr. Dharap, individual employees who cannot make applications for recognition of unions, cannot similarly make applications for de-recognition of unions. Mr. Dharap then submitted that under Section 52 of the Act every recognised union has to submit periodical returns of its membership to the Industrial Court and under regulation 146 of the Industrial Court Regulations, 1975 the Industrial Court has to maintain a register in that respect and therefore Industrial Court suo motu can also derecognise a union if the record shows that its membership has fallen less than 30%. Mr. Dharap thereafter submitted that if the legislature intended that employees individually can make such applications nothing prevented the legislature from making such provision and that this Court cannot add or read word 'employees' in Section 13 which the legislature had intentionally omitted. Mr. Dharap also urged that if employees are permitted to make such application, there would be multiplication of proceedings which would create chaos. Mr. Shetye, learned Counsel appearing on behalf of Respondent No.3, adopted and supplemented the arguments made by Mr. Dharap. Mr. Bandekar, learned Counsel appearing on behalf of Respondent Nos.1 and 2, canvassed that under Section 12, the Industrial Court is duty-bound to consider the objection raised by employees and when recognition is to be granted to the other union under Section 14 again the objections raised by the employees have to be considered which would automatically mean that under Section 13 an application for cancellation of recognition of a union could be made by individual employee or employees. Mr. Bandekar also submitted that if employees are prohibited from resorting to Section 13, disastrous consequences may follow because in that case even if the recognised union does not conduct itself bona fide being in league with the employer, nobody will be able to move the Industrial Court.

8. At the first blush, the arguments of Mr. Bandekar appear to be quite attractive but in the ultimate analysis of the problem I find no substance in them. It is no doubt true that Section 12 and Section 14 envisage that in the matter of granting recognition to a union, employees' objections, if any, to a show-cause notice have to be considered by the Industrial Court but that would not mean that even when a question of cancellation of recognition of a union arises such employees have a right to initiate proceeding under Section 13. It is important to note that both under Sections 12 and 14; employees are not the parties. Again, under Section 11 an application for recognition is to be filed by a 'trade union' and not by an 'employee' or 'employer', though after receipt of such an application, a show-cause notice is to be displayed on the notice board of the Undertaking calling upon the other unions, if any, and the employees and employer to show-cause within a prescribed time as to recognition should not be granted to the applicant union. Giving a right to apply for recognition stands on a different footing than issuing a show-cause notice and considering the objections, if any, raised by either the employer or employees. The employer or employees affected are not given any right to seek recognition qua a particular union. Seeking such recognition by filling an application is restricted to a trade union only. Section 12 deals with the recognition of a union and Section 13 deals with its cancellation. Therefore, the application contemplated by Section 13 can be by a union only and not by individual employees. This seems to be the reason why in Section 13 it is nowhere stated as to who can apply for cancellation of recognition. The various rules such as 4, 5, 6 and 7 framed under the Act respectively lay down the form of application by any union for recognition, fees to be paid for such recognition, the prescribed period of show-cause notice and the form of the certificate of recognition. These rules, when read with Section 12, abundantly make it clear that recognition can be claimed by a union. A necessary corollary of this would be that cancellation of it could also be claimed by a union and not by individual employee or employees. Any other interpretation will result in absurdity. The disastrous consequences apprehended by Mr. Bandekar, if the recognised union operate in collusion with the employer against the interest of the employees, can be well looked after by any other union by filing an application for derecognition of such a union.

9. As said earlier, the object for which the MRTU & PULP Act was enacted was to achieve industrial peace and harmony by recognising trade unions for facilitating collective bargaining. We have, therefore, to read Section 13 in harmony with other provisions of the Act as a whole. The cardinal principle of interpretation of statutes is that unreasonable or artificial or anomalous constructions have to be avoided and if two constructions are possible, the one which is more reasonable to achieve the object sought to be achieved by the Act has to be chosen by the Court. The Court has to read the legislation as a whole so as to unfold the real intention of the legislature. We may here usefully quote a passage from 'Principles' of Statutory Interpretation' by G.P. Singh, 3rd Edition, at page 104:-

'that a statute must be read as a whole and one provision of the Act should be construed with reference to other provisions in the same Act so as to make a consistent enactment of the whole statute. Such a construction has the merit of avoiding any inconsistency or repugnancy either within a section or between a section and other parts of the statute. It is the duty of the Courts to avoid 'a head on clash' between the sections of the same Act and, whenever it is possible to do so, to construe provisions which appear to conflict so that they harmonise. It should not be lightly assumed that Parliament had given with one hand what it took away with other'.

The Supreme Court in the case of Philips India Ltd. v. Labour Court, Madras and Ors. : (1985)IILLJ33SC

'No canon of statutory construction is more firmly established than that the statute must be read as a whole. This is a general rule of construction applicable to all statutes alike which is spoken of as construction ex visceribus actus. This rule of statutory construction is so firmly established that it is variously styled as 'elementary rule'.

It is pertinent to note that Chapters III and IV of the MRTU & PULP Act which provide for recognition of unions and obligations and rights of recognised unions and other unions speak in terms of unions and unions alone and make no provision for the participation by the employees individually. As a matter of fact, individual employees are specifically prohibited from participating in certain proceedings. Thus Section 20(2)(b) in Chapter IV provides that when there is a recognised union for any Undertaking, no employee shall be allowed to appear or act or be allowed to be represented in any proceedings under the Industrial Disputes Act, 1947 (not being a proceeding in which the legality or propriety of an order of dismissal, discharge, removal, retrenchment, termination of service, or suspension of an employee is under consideration), except through the recognised union and the decision arrived at, or order made, in such proceeding, shall be binding on all the employees in such Undertaking. Section 21 further provides that no employee in an Undertaking to which the provisions of the I.D. Act, 1947, for the time being apply, shall be allowed to appear or act or allowed to be represented in any proceedings relating to unfair labour practices specified in items 2 and 6 of Schedule IV to this Act except through the recognised union. It is only when there is no recognised union to appear that an employee himself may appear or act in any proceeding relating to any such unfair labour practices. Further Sub-section (2) of Section 21 provides that notwithstanding anything contained in the BIR Act, 1946, no employee in any industry to which the provisions of the said Act, for the time being apply, shall be allowed to appear or act or allowed to be represented in any proceeding relating to unfair labour practices specified in items 2 and 6 of Schedule IV of this Act except through the representatives of the employees entitled to appear under Section 30 of that Act. These provisions make it crystal clear that the intention of the legislature was that individual employees had no role to play in the matter of certain proceedings. Further, the unfair labour practices scheduled in this Act are the unfair labour practices on the part of the 'employers' and 'trade unions' and not on the part of the 'employees' which also shows that the legislature did not envisage that employees individually can indulge in unfair labour practices which had to be prevented. Therefore, initiation of proceeding by individual employees under Section 13 was not thought of by the legislature. If the interpretation put forward by Mr. Bandekar is accepted, it would destroy industrial peace and create anarchical conditions in the industrial field. That is so because sometimes some unscrupulous employers and sometimes some disgruntled and frustrated trade union leaders in order to harass the recognised unions may instigate individual employees to make applications for cancellation of recognition with the result that recognised unions would not be able to carry out their duties as bargaining agents or representatives of the employees. This would defeat the very object sought to be achieved by the Act. It is very important to keep in one's mind, while dealing with this controversy, that apart from the disquieting feature of trade union leadership issue there is also a problem of multiple rival unionism. Intra-union and inter-union rivalry has an evil effect on healthy trade union activities adversely affecting the process of collective bargaining. In the teeth of these stark realities on the industrial scenario, can we reasonably construe Section 13 that the legislature had intended to give right to every employee to make an application for cancellation of the recognition of a trade union I do not think so. On the contrary, I strongly feel that such could not be the intention of the legislature.

10. In the result, in my judgment, the impugned order passed by the learned Member of the Industrial Court on Oct. 10, 1983 is bad in law and not sustainable. His finding that an application by individual employees for cancellation of recognition of a union under Section 13 of the Act is maintainable, is therefore set aside, Rule is accordingly made absolute. No order as to costs.

11. In this view of the matter, Mr. Dharap submits that the matter may not be further inquired into on merits as the impugned order dated April 30, 1984 does not survive.


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