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Management of Saran Motors (P.) Ltd. Vs. Shrihansraj and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 477 of 1967
Reported in11(1975)DLT210
ActsIndustrial Disputes Act, 1947 - Sections 19
AppellantManagement of Saran Motors (P.) Ltd.
RespondentShrihansraj and ors.
Advocates: C.V. Francis,; Lalit Bhasin and; Urmila Kapoor, Advs
Cases ReferredPoona Mazdoor Sabha v. Dhutia
labour and industrial - preliminary objection - section 19 of industrial disputes act, 1947 - petition filed challenging rejection of preliminary objections raised by management - objection made regarding reference of dispute between parties to industrial tribunal - objection raised on ground that as per previous award passed any dispute must be referred to arbitration and not to tribunal - dispute in question related to arbitration clause mentioned in contract - previous award referred by management already terminated - any dispute regarding deletion or non-deletion of arbitration clause cannot be referred to arbitration itself - dispute rightly referred to tribunal - petition rejected. - - (6) his decision of the supreme court has clearly laid down that the rights and obligntions..........parties, the government referred the same to the adjudication of the industrial tribunal. it was industrial dispute no, 10 of 1967. the terms of the reference are:- 'whetherthe present conditions of service require any revision, if so, what directions are necessary in this respect ?'during the adjudicationpreceedin'gs,the management (petitioner before me) raised a preliminary objection which was to the effect that in view of the arbitration clause contained in the previous award, the present reference was not competent. this gave rise to the follwoing issue, namely: - isthe reference barred by the terms of the earlier award betwe- en the parties in i. d. no. 98 of 1966.'the issue has been answered in the negative by the additional industrial tribunal by the impugned awards (4) the same.....

B.C. Misra, J.

(1) This writ petition has been filed by the Management against the order of the Additional Industrial Tribunal Delhi dated 6th April, 1967 by which it has repelled the preliminary objection raised by the Management.

(2) The material facts of the case are that on a previous occasion there was a dispute between the Management and its workmen relating to the conditions of service. This was referred to the Industrial Tribunal on 18th April, 1960 under I.D. No. 98 of 1960 During the course of proceedings, the Management and the workmen arrived at a settlement which was incorporated. in an award dated 5th November, 1960 It is the construction and effect of the arbitration clause contained in the present case.

(3) He said award was published by the Government and became effective. Eventually the workmen terminated it on 26th August, 1964. There after they raised a charter of demands. The charter principally related to revision of the wages and conditions of service. Mrs. Kapur, counsel for the workmen, points out that the said charter includes the deletion of the terms with regard to the arbitration clause contained in the previous award and it also includes deletion of the provisions against conciliation and against constitution of a grivance committee which had been agreed to in the previous award. Upon the rasing of the dispute between the parties, the Government referred the same to the adjudication of the Industrial Tribunal. It was Industrial Dispute No, 10 of 1967. The terms of the reference are:-

'WHETHERthe present conditions of service require any revision, if so, what directions are necessary in this respect ?'

During the adjudicationPreceedin'gs,the Management (petitioner before me) raised a preliminary objection which was to the effect that in view of the arbitration clause contained in the previous award, the present reference was not competent. This gave rise to the follwoing issue, namely: -

ISthe reference barred by the terms of the earlier award betwe- en the parties in I. D. No. 98 of 1966.'

The issue has been answered in the negative by the Additional Industrial Tribunal by the impugned awards

(4) The same has been assailed in the writ petition and Mr. Frainciscs, appearing in support of the petition, contends that even after the termination of the award, it continues to be effective as a contract between the parties and governs their rights and obligations until it is displaced by another settlement or award and such the arbitration clause contained in the award still survives and the workmen are debarred from resorting to the industrial dispute without having recourse to the machinery of arbitration provided in the previous award. The relevant terms in the previous award read as follows. In the event of any dispute bet ween the managmant and their employees regarding employment or non-employment, conditions of service or working condtions, recourse shall be first to voluntery arbitration of one nominee of the management and one of the employees Incase of difference of opinion between the npminees an umpire shall be app ointed by the arbitrators and.its decision shall be binding on both the parties for all purposes.

(5) There are other provisions contained in the settlement in eluding prohibition, against recourse to conciliation officers offiice An award founded upon the settlement is effective for the period prescribed in section 19 of the Industrial, Disputes Act. In the instant case, it is not disputed now, although,it was not admitted at the initial stages) that the award had been terminated by the.workmen on 26th August, 1964. Consequently the award based on the .settlement including its arbitration clause, have .come to an.,end. The Supreme Court in South Indian Bank Limited. v. A B Chacko has obseryed in paragraph 7 and 8 of the report that after the.period of operation of 'the award has expired, it does not cease to be effeclive but it continues to .be binding until not- ice has been by one of the parties to terminate it the Court also observed that apart , from... this, it appeared. that even if an award had ceased to be in operation or in force and had ceased to. be binding on the parties under the provisions of section 19(6),it would continue to have its effect as a contract between, the parties that had been made by industrial adjudication of the old contract. The Court further observed that solong as the award was binding on a party, breach of any of its terms would make the party liable to penalty under section 29 of the Act but after the period of its operation and the period for which the award was binding had elapsed, sections 23 and 29 could not have any operation, but the contract would continue to given the relationship between the parties till it is displaced by.another contract.

(6) His decision of the Supreme Court has clearly laid down that the rights and obligntions of the parties will continue to be governed by the terms of the award even after its termination unless and until they are replaced by a new contract or a new award. This is true of the substantive lights of the parties. The question, however, arises whether the procedural matters provided by the old award still survive and liave got to be resorted to before recourse is had to the adjudication by Industrial Courts.

(7) Mr. Francis has relied upon a decision of the High Court of Punjab and Haryana reported as Allay Cycle Industries Limited v. State of Haryana, where Sandhawalia, J. noticed two decisions, one by Bishan Narain, J. in Amin Chand Pyare Lal v. Second Punjab Industrial Tribunal to the effect that it was a common ground that if the settlement was binding upon the parties, then the reference of the alleged dispute was not in accordance with law. The other decision is Poona Mazdoor Sabha v. Dhutia which laid down that in the absence of any specific provision with regard to a settlement, it was clear that neither any industrial dispute could be raised with regard to the settlement, nor could matters covered by the settlement form the subject matter of conciliation proceedings under section 12. Following the said decisions, the learned Judge held that so long as a valid settlement was in force and binding between the parties which had laid down the procedure for settlement of disputes arising between, them, no industrial dispute was capable of being referred to adjudication under the Industrial Disputes Act unless resort had been made to the agreed procedure under the settlement and thereforee where there was a settlement as defined in section 2(p) of the Act binding on the employer and the workmen undei section 18(3), all matters in dispute arising from 'time to time between, the employer and the workmen had to be referred by either party to a settlement in accordance with the procedure laid down in the settlement and consequently reference of any dispute for adjudication would be invalid.

(8) This decision apoears to help the petitioner, but in that decision, the settlement had not been terminated. The settlement had been arrived at on 5th August, 1968 and the order of reference had been passed on 16th December, 1969, but the award had not been terminated by notice. In this view of the matter no help can be derived from the decision in Atlas Cycle Industries case.

(9) In the instant case, not only the period of the award made in 1960 has expired under section 19 of the Act, but the award has also been terminated by appropriate notice. It is true that the rights and obligations accuring under the award would continue to be governed by the same unless and until they are displaced by another award or adjudication, still the machinery provided by the award cannot be availed of for the purpose of determining any industrial dispute. The arbitration clause in the previous award which has been quoted above in detail, includes within its ambit the employment or nonemployment and the conditions of service or working conditions of the workmen. This has clear reference to the fulfillment or non-fulfilment of the conditions which had previously been agreed to by settlement under the award. In case, the parties want revision of the conditions of service after the termination of the award, it is scarcely a matter which can be said to be covered by the arbitration clause mentioned above. Undobtedly after the award has come to an end, there is nothing in the award or any provision of law to prevent the parties from raising an industrial dispute or having recourse to conciliation proceedings or adjudication proceedings before an Industrial Tribunal. That is a right flowing from the provisions of the Act. It is true that the substantive rights and obligations of the parties continued to govern them until replaced even after termination of the award but on the termination of the award, the fetters placed by the award on the rights of the parties to raise an industrial dispute during the-continuance of the award stand lifted. Effect has to be given to the legal termination of the award. This gives a right to the parties to obtain another award or raise an industrial dispute or have recourse to eonciliation and in short initiate any proceedings for change of the rights and obligations occurring under the old award. The submission of Mr. Francis would accord a perpetuity to the award and a permanent fetter on the raising of the industrial dispute This submission ignores the difference in the legal effect of the subsistanee or termination of the award and must, thereforee, be rejected.

(10) Considered from another point of view ; supposing the parties desire to alter the term about reference of the dispute to arbitration, it certainly cannot be said that this itself must go through an idle process of arbitration which the parties are entitled to change. This will be a dispute dehors of arbitration clause and unless and until I find anything barring the reference of industrial dispute, it is not possible to accept the submission that the referen;e in question was not competent without recourse to arbitration. I have no doubt that the arbitration clause contained in the previous award had a limited application and it dealt with only those rights and obligations which had already arisen or could arise under the award or which had already been referred to the Arbitrators in accordance with the previous agreement. The award is and the arbitration clause contained in it have already been terminated. It entitled the parties to raise an industrial dipute. Consequently, in respect of new disputes for revision of conditions of service and in particular for those which required whole sale revision of the terms of the contract or deletion of the arbitration clause itself, in my opinion, the reference to arbitration is neither a proper remedy nor a condition precedent and there is nothing in the provisions or principles of law to bar a reference of the industrial dispute to the Industrial Tribunal. The impugned decision of the tribunal, is, in my view, legally correct.

(11) As a result, I find that there is no merit in the writ petition and the same is dismissed, but in the circumstances of the case, there is no order as to costs.

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