Narayana Pai, J.
1. Workers and Staff Association of Government Soap Factory, the Petitioner, was formed in 1963 and registered as a Trade Union under the Trade Unions Act. In 1964, it was recognised by the managment. At that time it was the only Union of the workers or employees of the Government Soap Factory. Various questions relating to pay scales, emoluments and amenities as well as conditions of employment were subject of a settlement or agreement between the petitioner Association and the Management in March, 1964. It was reduced into writing on the 30th of that month and was to remain in force for a period of three years.
2. When the currency of the said settlement came to an end fit is also stated that shortly before 30th March 1967 the Petitioner had issued a notice of termination), the Petitioner-Association submitted a detailed charter of demands. As the management did not show any inclination to accept the same, the Petitioner moved the Conciliation Officer to intervene. During the pendency of the conciliation proceedings another Union of the Workers appears to have been formed by name the Government Soap Factory Employees' Union. This Union intervened in the conciliation proceedings in November 1967. It appears from the report made by the Conciliation Officer that the said Union also presented a charter of demands or otherwise pressed its own demands on the same matters as were covered by the charter of demands made by the Petitioner-Association. After some time the said Union ceased to take further interest in the conciliation proceedings on the report or representation that it was trying to enter into a settlement with the management on the matters raised in the charter of demands. The Petitioner-Association, however, pressed its demands and also offered to go into voluntary arbitration. As the management did not accept either the demands or the suggestion to submit the matters to voluntary arbitration the Conciliation Officer was left with no other alternative but to make a report to the Government of failure of conciliation proceedings. He did so and the report was received by the State Government on 6th January 1968.
3. According to the case presented in the affidavit in support of the writ petition, the Petitioner, finding that no action had been taken by the State Government for several weeks it started writing reminders to the Government requesting them to make a reference of the dispute under Section 10 of the Industrial Disputes Act. As such correspondence did not bear fruit, some of the members of the Petitioner-Association also an-pear to have staged a hunger strike in relays before the Vidhana Soudha. As even the hunger strike did not bring about the desired result, the Petitioner came to this Court with this Writ Petition seeking the issue of a writ in the nature of a mandamus directing the Government to consider the report and take appropriate action.
4. The Writ Petition was posted for hearing on some occasions when adjournments were sought by and granted to the Respondents to present counter affidavits. Such affidavits were filed in , June 1970. On the 2nd of July 1970 the State Government communicated its decision to the Petitioner Association that it did not consider the dispute in question as one which merits reference being made under Section 10 of the Act. Consequently, the Petitioner-Association sought permission to amend the prayer in the writ petition. The prayer as amended asks for the issue of a writ in the nature of a mandamus directing the Government to reconsider its decision so communicated to the Petitioner.
5. In the counter affidavits filed on behalf of the Respondents the version given is that shortly after the receipt of the failure report from the Conciliation Officer the State Government were given to understand by the Management that they were making efforts to enter into a settlement with its employees and that before the ultimate decision was taken by the Government the Management had succeeded in entering into a settlement of the dispute with the majority of the workers.
6. The decision of the Government in that regard is in the following terms:
'Sub:-- Industrial dispute between the workmen and the management of Government Soap Factory, Bangalore, regarding charter of demand.
With reference to the above subject, I am directed to state that Government consider that the dispute in question does not merit reference for adjudication for the reasons that the management have entered into an agreement with the Employees' Union which enjoys the support of majority of the workers. This agreement covers all the demands raised by the workers and staff Association. Out of about 292 workers, 245 workers have accepted the settlement.'
7. Sri Krishnaiah, the learned Counsel for the Petitioner opened the case with the statement that the question whether his client is entitled to the issue of such a mandamus as prayed, has to be considered within the frame work of the principles stated by this Court in the case of B. E. L. Employees Union v. State of Mysore, (1970) 1 Mys LJ 96; also reported in (1970) 37 FJR 81. In that case this Court followed the statement of law already made by the Supreme Court in two cases, viz., State of Bombay v. K. P. Krishnan, : (1960)IILLJ592SC and Bombay Union of Journalists v. State of Bombay, : (1964)ILLJ351SC . Briefly stated the principle is that in deciding upon the action to be taken after receipt of a failure report under Section 12(5) of the Act, the Government still retains the discretion given to it under the Second Proviso to Section 10(1) to consider the expediency or inexpediency of making such a reference. It is also pointed out that the limits of judicial review of a decision of the Government to decline to make a reference is to examine whether the Government have applied their mind to matters which are relevant or irrelevant. Summarising the effect of the two rulings of the Supreme Court mentioned above, this Court pointed out that 'the reasons stated for the opinion that the Government is not satisfied that there is a case for reference, should be reasons directly connected with the absence of satisfaction; that is to say, the reasons must have a direct bearing on the issues involved and must lead reasonably to the conclusion that there is no case for a reference.'
8. The attempt on the part of Sri Krishnaiah, therefore, has been to make out that the reasons stated are not at all relevant to the decision on the question whether or not to make a reference. He first starts with the proposition that the settlement or agreement allegedly entered into between the Management and the new Union was not a settlement arrived at in the course of the conciliation proceedings and that, therefore, it cannot be binding on anybody other than the persons who have directly joined it, vide the difference indicated by sub-sections (1) and (3) of Section 18 of the Industrial Disputes Act continued. He next relies upon the decision in : (1961)ILLJ303SC , Bata Shoe Co., Ltd, v. D. N. Ganguli, that a private settlement falling within the scope of Section (1) of Section 18 does not bar the exercise of the Government's power to make a reference under Section 10 of the Act. His next contention is that the statement in the Government's order that the agreement covers all the demands raised by the workers and the other Association is not correct. He also contends that the statement therein that 245 workers have accepted the settlement is not correct.
9. That a private settlement does not operate as a bar against the making of a reference, but that settlement come to in the course of a conciliation proceeding or adjudication proceeding bars such a reference is a direct result of the legal position that when a dispute between the workers and the management is concluded by a settlement which binds all of them there is no longer in existence an industrial dispute which is capable of being referred by the Government under Section 10 of the Act. But when the dispute is reported to have been settled by the management with some of its workers but not with all of them, the questions which arise regarding its reference for adjudication under Section 10 of the Act are undoubtedly questions of expediency. That a dispute may still exist though in a mutilated form is a statable possibility. It is when a dispute does exist, the question arises whether a reference should or should not be made. In this case, having taken the view that there has been a settlement the Government opines that what still remained of the dispute does not merit reference for adjudication. Although the statement of reasons appears to enumerate three reasons the most important of the reasons appears to be the last one. The reasons analysed are the following :--
(1) that the dispute raised by the charter of demands presented by the petitioner is now covered by an agreement;
(2) that the agreement is with the Employees Union which enjoys the support of the majority of the workers and
(3) that out of 295 workers, 245 workers have accepted the settlement.
10. We shall first dispose of the argument that the Government is wrong in stating that the agreement covers all the demands raised by the workers. Sri Krishnayya has taken us through the details of the charter of demands and the ultimate settlement. We find that except that the manner in which the settlement is arrived at it may appear to be less advantageous than what had been asked for in the charter of demands, the general topics to which the demands related are all covered by the settlement. The fact that certain extra benefits claimed in the Petitioner's charter of demands are not stated or agreed to in the settlement does not mean that the topics in respect of which dispute had been raised are not covered by the agreement.
11. That there has been an agreement is also not capable of being denied. That such an agreement was entered into on 16th August 1969 is also conceded. But what is strongly contested is the statement that the Employees Union enjoyed the support of the majority of workers and the statement that 245 out of 292 workers have accepted the same.
12. On the question which of the two Unions enjoys support of the majority of workers, it has been argued that as the petitioner-Association had been recognised and the recognition continues to be in force one should start with at least a presumption of fact that it represents the majority of the workers. That such a presumption assumes greater strength and becomes more difficult of rebuttal is also sought to be made out on the ground that in the return submitted by the two Unions of their membership as on 31st December 1968, it is seen that the Petitioner-Association had a membership of 210 and the new Union with which the management had entered into an agreement had a membership of 87. It is further suggested that the management had by unfair means tried to secure the acceptance of the agreement by several other workers subsequent to the date of the agreement.
13. Assuming in favour of the Petitioner that so late as in December 1968 the majority of workers were still within the fold of the Petitioner's membership and that even at the time when the new Union entered into an agreement with the management its membership might not have constituted the majority of workers, there is no reason to doubt or not to accept as creditworthy the specific statement made in the order of the Government that 245 workers out of 292 have actually accepted the agreement. The suggestions of unfair methods having been adopted are not, in our opinion, capable of investigation in this case, not only because the judicial review is limited in the manner already indicated, but also because, the new Union or the members who are said to have been subjected to pressure are not implicated nor have they come to Court to support the Petitioner.
14. For the purpose of this case we have necessarily to accept the statement as found in the order of the Government for examining the legal position as to whether the Petitioner has made out a case for interference under Article 226 of the Constitution.
15. The statement that there is an agreement covering all the demands made in the Petitioner's charter of demands and that the said agreement has been accepted by as many as 245 workers out of 292 workers is, in our opinion, a reason which is directly connected with the issues and a reason which has a direct bearing on the decision to be taken by the Government on the question of the expediency of making a reference. The fact that the adjudication of a dispute relating to wage structure and other matters connected with it like emoluments, amenities, etc., is a complicated matter requiring an elaborate investigation of facts, does not mean that the fact that most of the parties interested have entered into a settlement becomes irrelevant. Indeed, what is of greatest relevance is whether the parties interested have either agreed or are still keeping the dispute open. In essence, an industrial dispute is one between all the Workers on the one hand and the management on the other hand. Before a dispute raised by a few people can assume the character of an industrial dispute it must have the support of a substantial majority of the workers. The intervention by a Union is firstly a sten to facilitate collective bargaining and secondly a pointer for the purpose of determining whether and if so what majority is behind the dispute. The very idea of the Code of Discipline requiring that before a Union is recognised it should have a majority of workers as its members is to subserve both the above purposes. At the same time a machinery devised for the purpose of convenient discussion or settlement of disputes cannot be given such importance as to totally leave out of account or discolor the main feature of the matter. If, as pointed out by the State Government 245 out of 292 workers are satisfied with the settlement of the dispute, It would be unreasonable to hold that the remaining minority should be permitted to unsettle what has been accepted as satisfactorily settled by the majority of workers. On the contrary, the fact that the majority have withdrawn their support to the dispute as originally formulated, may itself support the suggestion that what remains over is not of such a character or magnitude as to be called an industrial dispute capable of being referred for adjudication.
16. What is stated above Is sufficient to dismiss this writ petition. Sri Krisbnayya has, however, strenuously contended that because the employer in this case also happens to be the State Government, a clear indication of mala fides could be gathered from the sequence of events. He says that in ordinary circumstances, the Government decides whether or not to make a reference within a month of the receipt of failure report from the Conciliation Officer, but there is no reason for the delay of over a year on the part of the Government before making up their mind on the question. It is further stated that the management is in fact a department of the State Government and that the decision of the Government acting under Section 10 of the Industrial Disputes Act must necessarily be regarded as biased in favour of and in the Interest of the management.
17. So far as the delay is concerned we do not think that any case of mala fides is capable of being made out in this case. The Government state in their counter affidavit that they postponed decision as there were reasonable expectations of the matter being settled without being taken up for adjudication under Section 10 of the Act. That the hopes were reasonable and were not regarded as unreasonable even by the Petitioner is clear from the fact that several months later the Petitioner also participated in the discussions for the purpose of arriving at a settlement at the invitation of the Director of the Factory.
18. Regarding the management of the Factory being in the hands of one of the departments of the State Government which also is the appropriate Government under Section 10 of the Industrial Disputes Act, it is enough to say that so high an authority as the State Government may be and should be presumed to act with complete propriety and without any bias while exercising a statutory function. There is no material before us to dislodge to any extent this presumption.
19. The Writ Petition, therefore, fails and is dismissed.