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Ahmedabad Miscellaneous Industrial Workers' Union Vs. the Electricity Mazdoor Sabha and Anr. (01.04.1969 - GUJHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtGujarat High Court
Decided On
Case NumberC.A. No. 423 of 1969
Judge
Reported in(1970)11GLR628; (1970)IILLJ716Guj
ActsTrade Unions Act, 1926 - Sections 3(1), 5, 6, 8, 9, 11, 12, 13, 14, 15, 16, 23, 25, 26, 28(3), 29, 30, 32 and 33
AppellantAhmedabad Miscellaneous Industrial Workers' Union
RespondentThe Electricity Mazdoor Sabha and Anr.
Cases ReferredBirch v. National Union of Railwaymen
Excerpt:
labour and industrial - certificate of registration - sections 3 (1), 5, 6, 8, 9, 11, 12, 13, 14, 15, 16, 23, 25, 26, 28 (3), 29, 30, 32 and 33 of trade unions act, 1926 - every trade union must have its rules which is to be forwarded to registrar along with application of registration - when such rules are altered copy of alterations required to be sent to registrar within fifteen days of alterations - registrar to apply his mind as to whether alterations in accordance with provisions of act - no provisions made in act for inquiry to be held by registrar for purpose of considering whether or not alterations should be registered - no member of trade union entitled to raise question on validity of alterations before registrar - in present case majority not aggrieved by any irregularities.....bhagwati, c.j.1. ordinarily in the field of industrial law disputes which come to this court are industrial disputes between an employer on the one hand and an employee or union of employees on the other, but this case is rather unusual in that it brings to the court a dispute between two unions of employees. the petitioner union registered under the provisions of the indian trade unions act, 1926, and prior to the order of the registrar dated 26th december 1968, which is impugned in this petition, it was registered as a representative union for the following industry, namely, generation and/or supply and/or transmission of electrical energy (hereinafter referred to as the electrical industry) in the local area of ahmedabad city municipal borough, ahmedabad cantonment and the village of.....
Judgment:

Bhagwati, C.J.

1. Ordinarily in the field of industrial law disputes which come to this Court are industrial disputes between an employer on the one hand and an employee or union of employees on the other, but this case is rather unusual in that it brings to the Court a dispute between two unions of employees. The petitioner union registered under the provisions of the Indian Trade Unions Act, 1926, and prior to the order of the Registrar dated 26th December 1968, which is impugned in this petition, it was registered as a representative union for the following industry, namely, generation and/or supply and/or transmission of electrical energy (hereinafter referred to as the electrical industry) in the local area of Ahmedabad City Municipal Borough, Ahmedabad Cantonment and the village of Sabarmati (hereinafter referred to as the local area of Ahmedabad) under S. 14 of the Bombay Industrial Relations Act, 1946. The first respondent union is also a trade union registered under the provisions of the Indian Trade Union Act, 1926. It was registered in the name of the Ahmedabad Electricity Co., Ltd., Mazdoor Sabha on 20th December 1967 under certificate No. G. 560 issued by the Registrar of the Trade Unions. The rules of the first respondent union as originally registered with the Registrar of Trade Unions provided, so far as is material for the purpose of the present petition :

'1. The name of the unions shall be the Ahmedabad Electricity Company Limited Mazdoor Sabha and it shall, in the following Rules, be referred to as the 'UNION'.

2. (A) The objects of the union shall be :

(a) to organise and unite the persons employed in the Ahmedabad Electricity Company Ltd., in the Ahmedabad City and to regulate their relations with their employers. 3. Any person employed in the Ahmedabad Electricity Company Limited in Ahmedabad City and also who has attained the age of 15 years shall be entitled to become an ordinary member of the union on payment of monthly subscription of Re. 0-50 p provided he agrees to abide by rules, bye-laws that may be made by the union from time to time.

4. Persons who are not eligible to become ordinary members of the union may be admitted as honorary members of the union for the purposes of being elected or co-opted the Managing Committee .....'

Rule 30 provided for the manner in which the Rules shall be amended, varied or rescinded and it said :

'30. The rules may be amended, altered replace, rescinded or added to at any time by a majority of the members present at a General Meeting provided previous notice of at least seven days is given to the members of the proposed alterations.'

On 10th May 1968 a general meeting of the members of the first respondent union was convened inter alia for the purpose of amending the Rules and at this meeting, which was held in Hansraj Pragji Hall, a resolution was passed altering the rules in several aspects. Rule 1 was altered changing the name of the first respondent from the Ahmedabad Electricity Co., Ltd., Mazdoor Sabha to the Electricity Mazdoor Sabha and rules 2(a) and 3 were altered so as to provide that any person employed in the electricity industry in Ahmedabad district shall be entitled to become an ordinary member of the first respondent union. The first respondent union sent a copy of the resolution containing the alterations to the Registrar of Trade Unions on 11th May 1968 as required under S. 28(3) of the Indian Trade Unions Act, 1926 and the Registrar of Trade Unions by his letter dated 23rd May 1968 intimated to the first respondent union that the alterations made in the rules at the meeting held on 10th May 1968 had been registered by the officer of the Registrar on 20th May 1968. This letter, according to the first respondent union, was received prior to 27th May 1968 and after receipt of this letter on 27th May 1968 the first respondent union made an application to the Registrar under the Bombay Industrial Relations Act, 1946 for being registered as a representative union in place of the petitioner union for the electrical industry in the local area of Ahmedabad.

2. This application was made under S. 16 of the Bombay Industrial Relations Act, 1946. The first respondent union alleged in the application that for the whole of the period of three calendar months, namely, February, March and April 1968, the first respondent union had a membership of not less than 25 per cent. of the total number of employees employed in the electrical industry in the local area of Ahmedabad and during the whole of the said period its membership was larger than the membership of the petitioner union and claimed that, in the circumstances, it was entitled to registration as a representative union in place of the petitioner union. On receipt of the application, the Registrar issued a show cause notice dated 4th June 1968 calling upon the petitioner union to show cause within thirty days of the receipt of such notice why the first respondent union should not be registered in its place. The petitioner union in reply to the show cause notice raised several contentions affecting the maintainability of the application and urged that these contentions being in the nature of preliminary objections should be treated as preliminary issues so that a long and protracted inquiry into the relative membership of the two unions may be avoided if it was found that the application was not maintainable. The Registrar however, declined to treat these contentions as preliminary issues and decided to proceed with the hearing of the application as a whole and called upon the two unions to submit their relevant records. The 1st respondent union produced its records as directed by the Registrar but the petitioner union refused to do so and, instead, filed Special Civil Application No. 1217 of 1968 in this Court praying that a direction be issued to the Registrar not to proceed with the inquiry into the comparative membership of the two unions without first deciding the preliminary issues. The special civil application, was, however, withdrawn by the petitioner union at the stage of admission, as it was clear that this Court would not interfere at an interlocutory stage. The Registrar thereafter proceeded to hold an inquiry for ascertaining the relative membership of the two unions and since the petitioner union failed to produce the documents required to be produced under Rule 28A(3) as also to remain present before the Registrar on the dated fixed for the inquiry, the Registrar proceeded with the enquiry ex parte in the absence of the petitioner union as he was entitled to do under Rule 28A(5)(b) of the Bombay Industrial Relations (Gujarat) Rules, 1961. The Registrar interviewed the workers in a spot inquiry at three different places and after the conclusion of the spot inquiry, the Registrar fixed a date for hearing the various preliminary contentions which were raised by the petitioner union against the maintainability of the application. The petitioner union by its letter dated 12th December 1968 stated that, in support of these contentions, the petitioner union wanted to lead evidence, oral as well as documentary, and for that purpose the petitioner union made several applications for summoning witnesses and forwarded them to the Registrar along with its letter dated 12th December 1968. The oral hearing of arguments thereafter took place on 16th December 1968 and at this hearing the petitioner union pressed its legal objections against the maintainability of the application. The Registrar in an elaborate order dated 26th December 1968 rejected the contentions of the petitioner union and, so far as the applications for summoning witnesses were concerned, observed that the legal position in regard to these contentions being clear, it was not necessary to summon any witnesses as desired by the petitioner union. The Registrar summarised the result of the spot inquiry conducted by him for ascertaining the relative membership of the two unions and pointed out that out of 2411 employees interviewed by him, 1795 were members of the first respondent union, 197 were members of the petitioner union, 412 were members of neither union and 7 were members of both unions. The Registrar therefore, held that during the months of February, March and April 1968 the first respondent union had a membership of over 25 per cent. of the total number of employees employed in the electrical industry in the local area of Ahmedabad and its membership was larger than the membership of the petitioner union and in view of this conclusion he registered the first respondent union as a representative union in place of the petitioner union under S. 16 of the Bombay Industrial Relations Act, 1946.

3. The petitioner union being aggrieved by the order of the Registrar preferred an appeal to the Industrial Court under S. 20 of the Bombay Industrial Relations Act, 1946. The same contentions which were advanced before the Registrar were repeated before the Industrial Court with an additional complaint, namely, that the Registrar was in error in rejecting the applications of the petitioner union for summoning witnesses in support of the legal objections raised by it. The Industrial Court was however, not impressed by these contentions and by an order dated 20th February, 1960 the Industrial Court confirmed the order of the Registrar and rejected the appeal of the petitioner union. Hence, the present petition at the instance of petitioner union challenging the validity of the orders of the Registrar and the Industrial Court.

4. Before we set out the grounds on which the validity of the impugned orders was challenged, it would be convenient at this stage to refer briefly to a few relevant provisions of the Indian Trade Unions Act, 1926 and the Bombay Industrial Relations Act, 1946. The Indian Trade Unions Act, 1926 provides in a fasculus of sections for registration of trade unions. Every application for registration of a trade union, says S. 5, shall be made to the Registrar and it shall be accompanied by a copy of the rules of the trade union. The rules of the trade union, according to S. 6 clause (g), must provide inter alia for the manner in which the rules shall be amended, varied or rescinded. That is done by Rule 30 of the rules of the first respondent herein. Section 8 then provides that the Registrar, on being satisfied that the trade union has complied with all requirements of the Act in regard to registration, shall register the trade union by entering the particulars relating to the trade union in a register and issue a certificate of registration in the prescribed form which, under S. 9, shall be conclusive evidence, that the trade union has been duly registered under the Act. Sections 23 and 25 lay down the procedure for effecting change in name of a registered union and so far as alterations in the rules are concerned, S. 28(3) provides that a copy of every alteration made in the rules of a registered trade union shall be sent to the Registrar within 15 days of the making of the alteration. What the Registrar is supposed to do in receiving a copy of the alteration is not set out in the Act, but regulation 12 of the Bombay Trade Unions Regulations, 1927 made by the Government of Bombay in exercise of the power conferred under S. 29 makes provision in that behalf. That regulation says, omitting portions immaterial :

'12. Alteration of rules. (1) On receiving a copy of any alteration in the rules of a trade union under sub-s. 3 of S. 28 the Registrar shall, unless he has reason to believe that the alteration has not been made in the manner provided by the rules of the trade union or unless the alteration is not in accordance with the provisions of the Act, register the alteration in a register to be maintained for this purpose and shall notify the fact that he has done so to the Secretary of the trade union.'

The combined effect of Ss. 6(g), 22(3) and regulation 12, as pointed out by the Supreme Court in the recent decision in Indian Oxygen Ltd., v. Their Workmen [1969 - I L.L.J. 238] is 'that a registered union can alter its rules only in the manner provided in these provisions, that is, it has to send the amended rules to the Registrar within fifteen days from the amendment and until the Registrar is satisfied that the amendments are in accordance with the rules of the union and the provisions of the Act and on such satisfaction registers them in a register kept for that purpose and notifies that fact to the union's secretary, the amendments do not become effective.

5. The Bombay Industrial Relations Act, 1946, as its preamble shows, is an Act intended to regulate the relations of employers and employees and to make provision for settlement of industrial disputes. It is an Act which has often come up for consideration before this Court and the basic principle underlying it is the principle of collective bargaining. The conception upon which this law is based is that redress of grievances must be collective and not individual. Recognition is given to the fact that in most industries labour is organised and if labour is organised through its union, that union must act and appear for labour in a representative capacity. Now in order to facilitate collective bargaining and to make it more effective, it would be desirable to have only one union competent to speak on behalf of the employees and to bind them and that union from the point of view of healthy growth of trade union movement, should not be confined only to a unit of an industry but should extend to the entire industry in a local area. The Act has, therefore, evolved the concept of a representative union for an industry in a local area and given it complete and exclusive representative capacity to act and appear for all employees in the industry in the local area and to bind them, regardless of the fact whether they are members or not. Section 3(33) defines 'representative union' to mean a union for the time being registered as a representative union under the Act. Section 13(1) provides for registration of a representative union and says that any union, and union here means a trade union, registered under the Indian Trade Unions Act, 1926 by reason of the definition of 'union', in S. 3(38) :

'...... Which has for the whole of the period of three calendar months immediately preceding the calendar month in which it so applies under this section a membership of not less than fifteen per cent. of the total number of employees employed in any industry in any local area may apply in the prescribed form to the Registrar for registration as a representative union for such industry in such local area'.

If an application made by a union is once rejected the union cannot make a fresh application for a period of one year from the date of disposal of the previous application, vide S. 13(4). When an application is made under S. 13(1) how is the Registrar to deal with it Section 14 provides the answer. It says :

14. On receipt of an application from a union for registration under S. 13 and on payment of the fee prescribed the Registrar shall if after holding such inquiry as he deems fit comes to the conclusion that the conditions requisite for registration specified in the said section are satisfied that the union is not otherwise disqualified for registration, enter the name of the union in the appropriate register maintained under S. 12 and issue a certificate of registration in such form as may be prescribed.

There are six provisions to this section but out of them, we are concerned only with the sixth proviso which reads;

'Provided - Sixthly, that the Registrar shall not register any union, if the rules of the union relating to its membership contain any provision debarring any employee in the industry concerned from being a member of such union on the ground that he is or is not an employee in any particular undertaking in the said industry'.

Section 15 defines the circumstances in which registration of a union may be cancelled by the Registrar. We are not directly concerned with that section and it need not therefore, detain us. Section 16 deals with the situation where there is already one union registered as a representative union and another union applies for registration in its place. Where such is the case, what are the conditions which must be satisfied by the applicant union in order to capture the position of a representative union from the registered union Section 16 says :-

'16(1). If at any time any union (hereinafter in this section referred to as 'applicant union') makes application to the Registrar for being registered in place of the union already registered (hereinafter in this section referred to as 'registered union') for an industry, in a local area, on the ground that it has a larger membership of employees employed in such industry the Registrar shall, if a period of two years has elapsed since the date of registration of the registered union, call upon the registered union by a notice in writing to show cause within thirty days of the receipt of such notice why the applicant union should not be registered in its place. An application made under this sub-section shall be accompanied by such fee as may be prescribed.

(2) ... ... ... (3) If, on the expiry of the period of notice under sub-s. (1) after holding such inquiry as he deems fit, the Registrar comes to the conclusion that the applicant union complies with the conditions necessary for registration specified in S. 13, and that its membership was during the whole period of three calendar months immediately preceding the calendar month in which it made the application under this section larger than the membership of the registered union, he shall subject to the provisions of S. 14 register the applicant union in place of the registered union and issue certificate of registration in such form as may be prescribed. (4) ... ... ...

It was under this section that the first respondent applied for registration as a representative union in place of the petitioner union and since in the view of the Registrar and the Industrial Court the first respondent union complied with the conditions necessary for registration under S. 13 and its membership during the months of February, March and April 1968 was larger than the membership of the petitioner union and the sixth proviso to S. 14 did not disentitle it to registration, it was registered as a representative union in place of the petitioner union.

6. Having referred to the relevant provisions of law we now go on to examine the grounds of challenge urged on behalf of the petitioner union. The grounds ranged over a large area but in the ultimate analysis, they could be broadly classified under three heads namely :

(A) The sixth proviso to S. 14 disentitled the first respondent union to registration since the unamended rules, which were the rules in force during the months of February, March and April 1968, contained a provision debarring employees of other concerns in the electrical industry from being members of the first respondent union on the ground that they were not employees of a particular undertaking, namely, the Ahmedabad Electricity Co., Ltd. Even if the date of the application be taken as the material date with reference to which it has to be determined whether the rules of the first respondent union contained any debarring provision as contemplated under sixth proviso to S. 14, that would make no difference for the rules of the first respondent union which were in force at that date were the unamended rules containing such debarring provision, the alterations in the rules purported to be made at the meeting of 10th May 1968 were not validly made since previous notice of the proposed alterations was not given to the members before the meeting was held and moreover there was no quorum which could lawfully transact the business of meeting and in any event, even if they were validly made, they did not become effective until after the date of the application. (B) The application was not maintainable as the Managing Committee which resolved to make the application was not a validly elected committee. It was elected at the meeting of 29th January 1968 at which there was not quorum sufficient to transact the business of the meeting. (C) The change of name from the Ahmedabad Electricity Co. Ltd. Mazdoor Sabha to the Electricity Mazdoor Sabha not having been made with the consent of not less than two thirds of the total number of the members of the first respondent union, was invalid by reason of S. 23 of the Indian Trade Unions Act, 1926, and, in any event, even if valid, it was not effective at the date of the application since it was not registered in the register, at any rate until 11th July 1968 and the application made in the name of the Electricity Mazdoor Sabha was therefore not maintainable.

Though the last ground mentioned above was relied upon by Mr. C. T. Daru, learned advocate appearing on behalf of the petitioner union, at the time when he formulated the arguments, it must be stated in fairness to him that when it was pointed out to him that under S. 13 of the Indian Trade Unions Act, 1926, every registered trade union is a body corporate having perpetual succession and a common seal and S. 26 provides that the change in the name of a registered trade union shall not affect any rights or render defective any legal proceeding by or against the trade union and such legal proceedings may be continued or commenced by its new name, he with his usual candour conceded - and in our opinion rightly - that mere change in name does not affect the identity of the trade union and therefore so long as the identity of the trade union which made the application certain and define, its mis-description by use of the wrong name would not affect the maintainability of the application. Since in the present case it was clear from the application that it was made by the trade union which was originally registered in the name of the Ahmedabad Electricity Co. Ltd. Mazdoor Sabha and of which the name was subsequently sought to be changed to Electricity Mazdoor Sabha, the application could not be said to be non-maintainable merely because it was made by the first respondent-union in the name of Electricity Mazdoor Sabha instead of Ahmedabad Electricity Co. Ltd. Mazdoor Sabha. This being the correct and indisputable legal position, Mr. C. T. Daru very rightly did not press this ground of challenge. That leaves only the first two grounds of challenge and we shall now proceed to examine them in the order in which we have set them out above.

7. Re. Ground (A). This ground depends for its determination on the true interpretation to be placed on the sixth proviso to S. 14. If there is one rule of construction more firmly established than any other, it is that to arrive at a proper meaning of a statutory enactment, the court must also look to the object and reason which inspired it. Let us therefore ask our-selves the question, why was the sixth proviso to S. 14 enacted What was the object and purpose which the Legislature had in view in enacting it That would furnish us a key to the interpretation of the proviso. Now, as pointed out above, the basic principle underlying the scheme of the Act is that there should be a representative union for an industry in a local area which should be entitled to represent completely to the exclusion of any other union-even to the exclusion of an individual employee in certain cases-employees in the industry in the local area irrespective of the fact whether they are members of such union or not. This principle has found recognition in several provisions of the Act. Section 3(32) defines 'representative of employees' to mean a representative of employees entitled to appear or act as such under S. 30 and when we turn to S. 30 we find that representative union stands first in the order of preference amongst the authorities entitled to appear or act as a representative of employees. Section 27A provides that save in the limited cases specified in Ss. 32 and 33, no employee shall be allowed to appear or act in any proceeding under the Act except through the representative of employees. Section 33 confers power on the authority before whom a proceeding is pending under the Act to permit an individual, whether an employee or not, to appear in the proceeding but there is a proviso which qualifies this provision any says that no such individual shall be permitted to appear in any proceeding in which a representative union has appeared as the representative of employees. Where therefore a representative union appears in any proceeding under the Act as the representative of employees, no employee, not even one whose grievance forms the subject matter of the proceedings, can be permitted to appear in the proceeding; his point of view must be presented only through the representative union. So also under S. 42(2) where an employee desires a change in respect of an industrial matter not specified in representative of employees with the result that if there is a representative union, that union alone can give notice of change to the exclusion of an individual employee. Vide Usman Habib v. The State of Bombay, 56 Bom. L.R. 1124. The representative union is also given power to bind all employees in the industry in the local area by entering into a registered agreement, settlement, submission or award. Section 414 sub-s. (1)(b) provides that in case of a registered union, which would include a union registered as a representative union which is a party to a registered agreement settlement, submission or award, all employees in the industry in the local area whose representative that union is shall be bound by such agreement, settlement, submission or award. The representative union is thus given valuable rights under the Act; it is given the power to represent and bind all employees in the industry in the local area for which it is registered as a representative union. Now, this being the position, it would be highly inequitable and unjust; that an employee should be represented and bound by the acts of the representative union, and yet he should have no voice in shaping the policies of that union. If an employee is to be bound by the acts of the representative union it is but fair and just that he should be able to become a member of the union and to participate in its deliberations. The Legislature therefore insisted that if a union is to be registered as a representative union, its doors must be open to all the employees in the industry in the local area, whom it would represent on being registered as a representative union. This result was secured by enacting the sixth proviso to S. 14 which provided that the Registrar shall not register any union if the rules of the union contain any provision debarring any employee in the industry from being a member of such union on the ground that he is or is not an employee in any particular undertaking in the said industry. The object of enacting the sixth proviso to S. 14 was that no employee represented by the representative union and bound by its acts should be denied the opportunity of becoming a member of the union merely because he is or is not an employee in any particular undertaking in the industry. If this object of enactment of the sixth proviso to S. 14 is kept in mind, the construction of the proviso does not present any difficulty.

8. The first question which arises for consideration on the sixth proviso to S. 14 is as to whether the rules of the first respondent union as they stood prior to their amendment contained any provision debarring any employee in the electrical industry from being a member of the first respondent union on the ground that he is or is not an employee in any particular undertaking in the electrical industry. The argument of the first respondent union was, and that argument found favour with the industrial court, that there was no such debarring provision in the unamended rules of the first respondent union and in any event if there was any such provision, it was of no practical consequence since apart from the Ahmedabad Electricity Co. Ltd. there was no other concern in electrical industry which was recognised as an undertaking under S. 11 and no employee of any undertaking in the electrical industry was therefore in fact excluded from membership of the first respondent union. Now if this argument were correct it would afford a complete answer to the contention based on the sixth proviso to S. 14 and it would be wholly unnecessary to consider the other questions argued before us. But for reasons which we shall presently discuss, we are of the view that the argument is not well-founded and cannot be sustained.

9. Turning to the first limb of the argument the first respondent union contended that the words used by the Legislature in the sixth proviso to S. 14 clearly suggested that the rules of the union must contain an express provision debarring any employee in the industry from becoming a member of the union. The words emphasized were 'contain any provision' and from these words it was sought to be argued on behalf of the first respondent union that there must be an express provision and since in the present case there was no such express provision, the unamended rules did not fall within the mischief of the sixth proviso to S. 14. Now it is no doubt true that there is no provision in the unamended rules saying in so many terms that an employee in any other concern in the electrical industry in the local area of Ahmedabad shall be debarred from being a member of the first respondent union on the ground that he is or is not an employee in particular undertaking in the industry. But in order to attract the applicability of the sixth proviso to S. 14, it is not necessary that there should be any express provision. The words, 'contain any provision,' would be fully satisfied whether the provision is an express provision or an implied provision. Even if a provision is found in the rules by necessary implication, it would be quite appropriate and correct to say that the rules contain such provision. If the Legislature intended that the provision should be an express provision and an implied provision would not suffice, we have no doubt that the Legislature would have used appropriate language to express itself clearly by adding some such word as 'express' or 'explicit' before the word 'provision'. Moreover, the object behind the enactment of the sixth proviso to S. 14 also supports the thesis that the provision may be an implied provision. If an implied provision were not within the scope of the sixth proviso to S. 14 it would be possible for a union to exclude employees is other concerns in the industry by framing its rules skillfully and thus defeat the object of the enactment of the sixth proviso to S. 14. The underlying idea behind the sixth proviso to S. 14 being that the membership of the representative union must be open to all employees in the industry in the local area, any provision, express or implied, in the rules which has the effect of debarring any employee in the industry in the local area from being a member of the union must be held to come within the mischief of the sixth proviso to S. 14. Now in the present case it is clear on a plain reading of rules 29(g), 3 and 4 of the unamended rules of the first respondent union that only those persons who were employees of the Ahmedabad Electricity Co. Ltd., were entitled to become members of the first respondent union and by necessary implication, no person who was not an employee of the Ahmedabad Electricity Co. Ltd. could be a member of the first respondent union. There was thus clearly an implied provision debarring employees in other concerns in the electrical industry from being members of the first respondent union on the ground that they were not employees of the Ahmedabad Electricity Co. Ltd. which was admittedly an undertaking recognised under S. 11.

10. So far as the second limb of the argument was concerned, it rested upon the assumption that apart from the Ahmedabad Electricity Co. Ltd., there was no other undertaking in the electrical industry in the local area of Ahmedabad and the contention of the first respondent union based on this assumption was that no employee of any undertaking in the electrical industry was in fact debarred from being a member of the first respondent union and therefore it was academic to consider whether the rules of the first respondent union contained any debarring provision as contemplated under the sixth proviso to S. 14. This contention, plausible though it may seem at first blush, is clearly, on a closer analysis, devoid of merit. What the sixth proviso to S. 14 requires is that the rules of the union must not contain any provision debarring any employee in the industry from being a member of the union on the ground that he is or is not an employee in any particular undertaking in the industry. If the rules contain any such provision, expressly or by necessary implication, the inhibition contained in the sixth proviso to S. 14 would be attracted and it would be no answer to say that in fact there are no other employees in the industry in the local area who would be excluded from membership by such provision. It may be at the time when the union is registered as a representative union by the Registrar there is no other concern in the industry in the local area governed by the Act and therefore no employee in the industry in the local area is in fact excluded from membership of the first respondent union but after the registration other concerns may come into being which are governed by the Act and the employees of those concerns would be excluded from membership of the first respondent union and yet they would be bound by the acts of the first respondent union. The mischief sought to be avoided by the sixth proviso to S. 14 would not be prevented and the object of the enactment of the sixth proviso would be frustrated. It would, therefore, be dangerous to adopt what may be called a practical approach in the construction and application of the sixth proviso to S. 14. We must look at the rules as they stood prior to amendment and consider whether they contained any provision debarring any employee in the electrical industry from being a member of the first respondent union and, if they did, they must come within the mischief of the sixth proviso to S. 14 and if, at a given point of time, there were in fact no other employees in the electrical industry who could be debarred from being members of the first respondent union under the unamended rules.

11. It is, therefore, clear that if the rules as they stood prior to their amendment governed the decision of this question, the first respondent union cannot escape the inhibition of the sixth proviso to S. 14. The first respondent union however contended that the rules were altered at the meeting held on 10th May 1968 and as a result of the alterations, the membership of the first respondent union was thrown open to all employees in electrical industry in Ahmedabad district and the vice affecting the rules contemplated under the sixth proviso to S. 14 was removed. The altered rules, said the first respondent union, were effective at the time when the Registrar decided the question of registration of the first respondent union and, in any event, at the date when the application was made and therefore the sixth proviso to S. 14 did not stand in the way of the registration of the first respondent union. The petitioner union sought to repel this contention by saying that the material time with reference to which the question whether the rules contained any debarring proviso was required to be determined was the period of three calendar months, namely, February, March and April 1968 and since during these three months the alterations in the rules had not come into force and the unamended rules prevailed, the first respondent union was within the inhibition of the sixth proviso to S. 14. The petitioner union also urged that in any event even if the date of the application be taken as the material date that would not help the first respondent union since the alterations in the rules were not validly made and, even if validly made, they had not become effective at the date of application and therefore the rules which prevailed at the date of application were the unamended rules. These rival contentions raised an interesting question of construction of the sixth proviso to S. 14.

12. Turning once again to the scheme of the provisions of the Act in relation to a representative union, obviously in order that a representative union should be really representative in character, it was necessary for the Legislature to lay down a minimum strength of membership which should be considered sufficient to give representative character to the representative union. The Legislature, therefore, fixed the minimum strength of membership at twenty-five per cent. of the total number of employees employed in the industry in the local area and provided that a union which applies for registration as a representative union must have this minimum strength of membership. Now it may be that at the date of the application the applicant union has a membership of not less than twenty-five per cent. of the total number of employees in the industry in the local area but that strength of membership may be the result of some fortuituous or advantagious circumstance and may not be a continuous sustained strength over a period of time. To recognise the applicant union as a representative union in such a case would not be right, for the strength of membership at the date of the application may not correctly reflect whether the representative union is really representative in character. The Legislature therefore provided a period of three calendar months immediately preceding the calendar month in which the application is made, during which the applicant union must have the minimum strength of membership in order to entitle it to make an application for registration as a representative union. This period of three calendar months was regarded as a reasonably sufficient period for the purpose of the determining whether the applicant union was really representative in character. If the applicant union had the minimum strength of membership throughout this continuous period of three calendar months indicating that its strength of membership was sustained and not erratic or fortuituous, it could reasonably be assumed that it was representative in character and could apply for registration as a representative union. Now the argument of the petitioner union was that if this period of three calendar months was provided as the period with reference to which the representative character of the applicant union must be judged, it was reasonable to suppose that the question whether the rules contained any debarring provision within the meaning of the sixth proviso to S. 14 was also intended to be determined with reference to the same period. The condition that the rules of the applicant union must not contain any debarring provision was as much a requirement of representative character as the condition that the applicant union should have a minimum strength of membership and if the latter was required to be judged with reference to the period of three calendar months, the former must also likewise be judged with reference to the same period. This argument was seriously pressed on behalf of the petitioner union but it does not appeal to us. It seeks to project in the sixth proviso to S. 14 the period of three calendar months provided in S. 13 when there are no words to that effect in the sixth proviso to S. 14. The period of three calendar months is provided in S. 13 for the purpose of determining whether the applicant union really enjoys the sustained strength of membership considered sufficient to give it representative character and the condition that the applicant union should have the minimum strength of membership throughout this period of three calendar months is made by S. 13 a condition of making an application for registration as a representative union. It is only it this condition is satisfied that a union can make an application for registration as a representative union. Then comes the sixth proviso to S. 14 which says that the Registrar shall not register the applicant union if the rules of the applicant union contain any debarring provision. There is nothing in the language of the sixth proviso to S. 14 to indicate that the inhibition contained in it is referable to the period of three calendar months specified in S. 13. There is not even a reference in the sixth proviso to S. 14 to the period of three calendar months and it is not possible to project the period of three calendar months in the sixth proviso to S. 14. Moreover the condition set out in the sixth proviso to S. 14 namely that the rules of the applicant union should not contain any debarring provision, is not made a condition of making the application. It is not introduced as a proviso to S. 13. The sixth proviso to S. 14 is a proviso which qualifies the power of the Registrar to register the applicant union; it is an inhibition which comes into play at the time of registration. It is at the time of registration that the Registrar has to ask himself the question, do the rules of the applicant union contain any debarring provision To answer this question, he will have to look at the rules as they exist at that time. He will not be concerned with the question as to what the rules were during the period of three calendar months referred to in S. 13 or even at the date of the application, though, ordinarily the period of time between the date of the application and the time when he decides the question of registration would not be long and there would be very few chances of the rules being altered during that period. If the intention of the Legislature were that the question whether the rules of the applicant union contain a debarring provision should be considered with reference to the date of the application, the Legislature would have expressed itself clearly by saying something to the following effect :

'The Registrar shall not register any union if at the date of the application the rules of the union .....'

Moreover, the object of enactment of the sixth proviso to S. 14 being that the union should not be allowed to represent and bind employees in the industry in the local area as a representative union unless its membership is open to all such employees, it is only when the applicant union acquires representative character that it becomes necessary that all employees in the industry in the local area should be entitled to be members of such union. It is, therefore, at the stage of registration that the question becomes relevant whether the rules of the applicant union contain any debarring provision. If the rules contain any debarring provision, then obviously, representative character cannot be given to the applicant union. We are, therefore, of the view that the question whether the rules of the applicant union contain any debarring provision as contemplated in the sixth proviso to S. 14 has to be determined not with reference to the period of three calendar months referred to in S. 13 nor with reference to the date of the application but with reference to the time at which the question of registration is decided by the Registrar.

13. Now it was common ground between the parties that the altered rules removed the vice contemplated under the sixth proviso to S. 14 and if, therefore, the altered rules became effective prior to the date of the order of the Registrar, the sixth proviso to S. 14 would be out of the way of the first respondent union. The alterations in the rules were made at the meeting of the 10th May, 1968 and a copy of the resolution containing the alterations was forwarded by the first respondent union to the Registrar of Trade Unions on 11th May 1968. The Registrar of the Trade Unions by a letter dated 23rd May 1968 intimated to the first respondent union inter alia that the alterations in the rules were registered. This letter, according to the first respondent union, was received before the application was made by first respondent union. This position was disputed by the petitioner union and an application was made by the petitioner union to the Registrar for summoning an officer from the officer of the Registrar of Trade Unions for producing various documents from that office. This application was rejected by the Registrar and a complaint was made before us that the Registrar was wrong in refusing the application. We, therefore, required the Registrar of Trade Unions to produce the relevant records before us as desired by the petitioner union. On looking at the records produced by the Registrar of Trade Unions, it is clear that the letter dated 23rd May 1968 acknowledging the fact of the registration of the alterations in the rules was dispatched from the office of the Registrar of Trade Unions on 23rd May 1968 and in normal course it must have been received by the first respondent union within one or two days. The fact that it was received by the first respondent union before the date of the application is also borne out from a letter dated 27th May 1968 addressed by the first respondent union to the Registrar of Trade Unions acknowledging receipt of the letter dated 23rd May 1968. We are, therefore, satisfied that the acknowledgment of the registration of the alterations in the rules was notified to the secretary of the first respondent union, prior to the date of the application. The alterations in the rules were, therefore, effective at the date of the application and a fortiori, they were in force at the time when the Registrar made the order granting registration.

14. That takes us to the last question under this head of challenge, namely, whether the alterations in the rules were validity made at the meeting of 10th May 1968. The argument of the petitioner union was that the alterations in the rules were invalid for two reasons first, because a seven days' previous notice of the proposed alterations was not given to the members of the 1st respondent union before holding the meeting and secondly, there was no sufficient quorum at the meeting. This argument was also urged before the Registrar but it was negatived on the ground that once the alterations in the rules were registered by the Registrar of Trade Unions, it was not open to the Registrar under the Bombay Industrial Relations Act, 1946 to go into the question whether the alterations were validly made in accordance with the provisions of the Act and the rules. The same argument was repeated before the Industrial Court in appeal but the Industrial Court taking the view that even if the rules stood unamended they did not offend the sixth proviso to S. 14 did not consider it necessary to examine the question whether the alterations in the rules were invalid for either of the two reasons. Since, however, we have taken a different view as to the construction of the sixth proviso to S. 14, it becomes necessary to deal with this argument and the principal question which required to be considered is whether it is open to a third party like the petitioner union to challenge the validity of the alterations in the rules of the first respondent union before the Registrar under the Bombay Industrial Relations Act, 1946, when they have been registered by the Registrar of Trade Unions and acknowledgment of registration has been communicated to the secretary of the first respondent union.

15. Now it may be noted that every trade union must have its rules and no trade union can be registered unless a copy of the rules is forwarded to the Registrar of Trade Unions along with the application for registration and the Registrar of Trade Unions is satisfied that the rules are in accordance with the provisions of the Act. Where the Registrar of Trade Unions is so satisfied and he registers the trade union, the rules as approved and accepted by him constitute the basis on which the trade union is registered and no one can be permitted to challenge that the rules are not in order. Similarly when the rules are altered, a copy of the alterations is required to be sent to the Registrar of Trade Unions within fifteen days of the making of the alterations. Vide S. 28(3) of the Trade Union Act, 1926. On receipt of the copy of the alterations, the Registrar, says Regulation 12 of the Bombay Trade Union Regulations, 1927 which by reason of S. 30 has effect as if enacted in the Act, 'shall unless he has reason to believe that the alteration has not been made in the manner provided by the rules of the trade union or unless the alteration is not in accordance with the provisions of the Act, register the alteration and shall notify the fact that he has done so to the secretary of the trade union'. The Registrar has therefore to apply his mind to the question whether the alterations are in accordance with the provisions of the Act and have been made in the manner provided in the rules and if he is satisfied in that behalf then only he would register the alterations and notify the fact of registration to the secretary of the trade union. As pointed out by the Supreme Court in Indian Oxygen v. Their Workmen (supra) it is only when 'The Registrar is satisfied that the amendments are in accordance with rules of the union' - and also in accordance with the provisions of the Act - 'and on such satisfaction registers them in a register kept for that purpose and notifies that fact to the union secretary' that the amendments become effective. No alterations in the rules are effective until they are registered by the Registrar of Trade Unions and acknowledgment of registration is communicated to the secretary of the trade union. It is therefore evident that the law makers have attached great importance to the registration of alterations, so much so that the efficacy of the alterations is made dependent on registration and the reason for this is not far to seek. The original rules being registered it is necessary that the rules' alterations should also be registered for otherwise an outsider dealing with the trade union would not know what are the rules of the trade union at a given point of time and he would be misled. Moreover, once the alterations are registered by the Registrar of Trade Unions after being satisfied that they 'are in accordance with the rules or the union' and also in accordance with the provisions of the Act, every one concerned with the trade union should be able to proceed on the basis that the alterations were regularly made in accordance with the provisions of the Act and the rules of the trade union. No enquiry should thereafter be permissible into the question whether in making the alterations the forms of procedure prescribed by the Act or the rules of the trade union was complied with or not. Otherwise it would be open to refractory member at any distance of time to raise a question as to the validity of the alterations on the ground of non-compliance with some rule relating to procedure such as want of proper notice of the meeting of lack of quorum or some such procedural defect and that would lead to great inconvenience and mischief. The law makers obviously intended that no such question should be allowed to be raised once the alterations had passed the scrutiny of the Registrar of Trade Unions and had been registered by him : then everyone concerned with the trade union may safely act on the alterations and treat them as valid and effective. If that were not so, it is difficult to imagine any intelligible reason why the lawmakers should have insisted that the alterations must be scrutinised by the Registrar of Trade Unions is satisfied that the alterations are made in accordance with the provisions of the Act and the rules of the trade union and registers them, then only they should become effective. This provision, we can safely presume, must have been enacted for a valid reason and that reason can only be prevent allegations of failure to comply with the forms of procedure in making the alterations and to introduce a measure of certainty and definitiveness so that anyone concerned with the trade union whether he be a trade union official or an outsider dealing with the trade union can safely act on the rules as he finds them in the register without any possibility of finding subsequently to his mortification that some procedural rule was not complied with and the alterations made in the rules were therefore invalid.

16. It is no doubt true that three is no provision made in the Act or in Regulations for an inquiry to be held by the Registrar of Trade Unions for the purpose of considering whether or not the alterations made in the Rules forwarded to him should be registered nor is any right given to a member of the trade union to raise the question of validity of the alterations before the Registrar of Trade Unions. The Registrar of Trade Unions has to arrive at his satisfaction whether the alterations are made in accordance with the provisions of the Act and the rules on such material as is placed before him either voluntarily by the office bearers of the trade union or pursuant to inquiry made by him in that behalf and it is possible that this material may be inadequate or incomplete so that even alterations which are not made in accordance with the provisions of the Act and the Rules may come to be registered by him. But even where such is the case, the construction adopted by us does not involve any real hardship or inconvenience. If any procedural requirements prescribed by the Act or the Rules have not been followed in making the alterations, any member of the trade union can always bring such irregularities to the notice of the Registrar of Trade Unions before he registers the alterations and it would be a fair presumption to make that the Registrar of Trade Unions would in that event be more critical and searching in his inquiry. If necessary he might even take the assistance of such member for the purpose of satisfying himself whether any such irregularities affect the making of the alterations. Even if the registration is made, an individual member of the trade union is not without remedy; he can always move for repeal or modification of the alterations at a meeting of the members of the trade union and if a majority of the members agree with him and disapproved of the alterations, the alterations can be repealed or modified and the wrong redressed. If however the majority is in favour of the alterations, he can have no complaint, for alterations of the rules is a matter within the power of a simple majority. So far as a third party is concerned, it is difficult to see how he is entitled to complain about any irregularity in the internal management of the trade union. If there is any irregularity in the making of the alterations in the rules, it is for the trade union as a corporate body to complain about it and no individual member of the trade union, much less a third party, can be heard to say that the alterations are invalid because of such irregularity. Since the power to make the alterations belongs to the majority the majority can always cure such irregularity and, therefore, if the majority accepts the alterations as valid, it is not open to a third party to contend that by reason of such irregularity the alterations are invalid. That is a matter pertaining to the internal management of the trade union over which the majority has full control. This is a well established field of company law, commonly known as the rule in Foss v. Harbottle (1843) 8 Here, 461 : 67 F.R. 189 AND Mozlay v. Alston (1947) 1 Ph. 790 : 41 E.R. 833 and it extends equally to other corporations and there are at least two decisions of the English Courts namely Cotter v. National Union of Seamen [1929] 2 Ch. 58 and Edwards and Another v. Haliwall and Another (1950) 2 All. E.R. 1964, where it has been held applicable also in the case of trade unions which are corporate bodies under the statutes creating them. It would therefore appear that no real difficulty or hardship is caused by taking the view that once the alterations are registered by the Registrar of Trade Unions, their validity cannot be challenged on the ground of non-compliance with the forms of procedure prescribed by the Act and the Rules of the trade union. This bar of course does not apply where the ground of challenge is that the alterations are illegal or ultra vires, Registration precludes an inquiry into the regularity of the steps taken to make the alterations and not an inquiry into the question whether the alterations are illegal or ultra vires. If the alterations are illegal or ultra vires the question can certainly be raised notwithstanding registration for otherwise illegality would be perpetuated and what is incapable of being done, what is honest in the eye of the law, would have efficacy and force. But that does not help the petitioner union for the contention of the petitioner union is not that the alterations are illegal or ultra vires but that they are invalid by reason of the procedural irregularities, namely, want of proper notice of the meeting of the members and lack of quorum at the time and this contention is no longer open once the alterations are registered by the Registrar of Trade Unions. Moreover, apart from the bar arising from registration, it is evident from the application of the rule of Foss v. Harbottle, (supra) and Mozlay v. Alston (supra) that the petitioner union being a third party cannot be heard to complain about any irregularities in the internal management of the trade union when the majority, which is capable of doing regularly that which has been done irregularly, accepts what has been done as valid. If the majority is not aggrieved by any irregularities in the making of the alterations in the rules, it is difficult to see how the petitioner union which is a third party can rely on any such irregularities for the purpose of invalidating the alterations.

17. This view as to the effect of registration of alterations in the rules receives considerable support from certain decisions, of the English Courts. The earliest decision, and also the most of quoted, is the one in Dewhurst v. Clarkson 3E & B 194 : 118 E.R. 1114. In that case the Court was concerned with a certificate which a barrister was required to give under the Friendly Societies Act 1834, S. 4, that the rules of a society were 'in conformity to law and to the provisions of the said recited Act' (10 Geo. IV c. 56) 'and this Act'. The section also providing that :

'..... all rules, alterations and amendments thereof, from the time when the same shall be certified by the said barrister of advocate shall be binding on the several members and officers of the said society, and all other persons having interest therein.'

The majority of the Court thought that the barrister's certificate barred objections as to the regularity of the manner in which the rules had been made, though the barrister was not required to inquire into regularity of the making of the rules so that his certificate could not be considered a judicial determination of the matter. Lord Campbell delivering the majority judgment said :-

'The plaintiff's counsel, I think, entirely failed in the attempt to show that the barrister is to inquire into the regularity of the making of the rules, so that his certificate is to be considered a judicial determination of this matter. No such function is vested in him : and those who may think that the rules were irregularly made are not furnished with any means of raising the question. In very rare instances this may produce some inconvenience but faith may generally be given to the signature and affidavit required as preliminaries; and probably much more inconvenience would arise if, after the rules have been certified and confirmed and acted upon, it were competent to any refractory member, at any distance of time to object that the proper notices were not given of the meeting at which they were agreed to, or that there were not a sufficient number of members at this meeting, or that, upon a division, the votes on each side were not accurately counted. If, notwithstanding the precautions taken, any rule has been certified by the barrister which was not regularly made, a remedy would be open to a member who disapproves of it, by moving its repeal or modification; and, if there be a majority of the Society who agree with him, the wrong would be redressed.'

The principle of this case was applied in Rossenberg v. Northumberland Building Society (1889) 22 Q.B.D. 373, where the question was as to the effect of a certificate, issued by the Registrar under S. 17 of the Building Societies Act, 1874 which provided that the Registrar.

'.... if he finds that the rules contain all the provisions set forth in S. 16 of this Act, and that they are in conformity with this Act'

shall register the rules. The court held that the registration certificate was conclusive as to the validity of the proceedings taken by the society for the passing of the new rules.

18. These cases were reviewed by Danckwerts, J., in a recent decision reported in Birch v. National Union of Railwaymen, (1950) 2 All Eng. L.R. 353 and the learned Judge stated the principle deducible from these cases in the following words :

'So far as any principle can be ascertained from these cases, they indicate that such approval or certificate normally prevents inquiry into the regularity of the steps taken to pass the rules, but does not prevent judicial inquiry into the validity of the rules if it is contended that they are ultra vires.'

The learned Judge then proceeded to consider whether this principle was applicable in the construction of S. 3(1)(b) of the Trade Unions Act, 1913 with which he was concerned in that case. That section provided for approval of the rules by the Registrar and the question was whether the approval of the Registrar precluded an inquiry into the question whether the conditions required by that sub-section were satisfied. The learned Judge observed :

'It was contended on behalf of the defendants that such approval must be meant to have some effect, and that the intention is that trade union officials might safely act on the rules and treat them as valid once they have been approved by the Registrar. There is much force in this contention, and it is not unreasonable that trade union officials should suppose that, when rules have passed the scrutiny of the Registrar, such rules can be treated as effective. On the other hand, the cases to which I have referred to show that certificates of approval under a number of statues have been treated as effective only to prevent subsequent allegations of failure to comply with the forms of procedure and not to prevent attack on the material validity of the rules. In the present case, the Legislature has made it plain in other sections that certificates under this Act are to be conclusive, but has omitted any such provision in the present context. It seems to me that the approval mentioned in S. 3(1) cannot be treated as conclusive, so as to preclude consideration by the Court whether the conditions required by the sub-section have been satisfied.'

The learned Judge held that the inquiry into the questions whether the conditions of S. 3(1)(b) were satisfied or not was not precluded by the approval of the Registrar since that was a question affecting the material validity of the rules and it was not merely a question of failure to comply with certain forms of procedure. The case before us is however of a different character because what is alleged here is not a ground affecting the material validity of the rules but mere irregularities arising from non-compliance with the rules of procedure and it must therefore be held that the petitioner union was not entitled to contend that the alterations in the rules were invalid for either of the two reasons put forward by it.

19. Re : Ground (B). This ground raises a question as to whether the managing committee which authorised the making of the application was a validity constituted committee. It is a question relating to the internal administration of the first respondent union and, for reasons which we have already discussed while dealing with the preceding ground, it is clear that the petitioner union which is a third party is not entitled to contend that the managing committee was not properly elected as there was no sufficient quorum at the meeting of 20th January 1968 which elected the managing committee. That is not a matter about which even an individual member of the first respondent union can complain and if that be so, it is difficult to see how the petitioner union which is a third party can do so.

20. These were the only grounds urged on behalf of the petitioner union and since there is no substance in them, the petition fails and the rule is discharged. There will be no order as to costs of the petition.

21. Petition dismissed.


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