1. This petition under Article 227 of the Constitution is directed against the order of the First Labour Court, Ahmedabad, dated 28th August 1961, under which the petitioner's application under Section 33-C(2) of the Industrial Disputes Act 1947, (hereinafter referred to us 'the Act') has been dismissed. The short facts which have given rise to this petition are as under: The petitioner is an oilman working in the Power House run by the respondent No. 1, Vadnagar Municipality, which is a District Municipality governed by the Bombay District Municipal Act, 1901, (hereinafter referred to as 'the Municipal Act'). The respondent No. 1, on 2nd July 1949, entered into a settlement under the Act, during conciliation proceedings, under which the salaries of the workmen including the petitioner were revised with effect from 1st July 1959. As the petitioner was not paid the revised wages from 1st July 1959 to 30th September 1059, the petitioner applied to the Labour Court under Section 33-C, Clause (2) of the Act, to compute the benefit to which he was entitled under the said settlement and to issue the requisite recovery certificate. The Labour Court has dismissed the said application on the ground that in view of the proviso (a) to Section 46 of the Municipal Act, the settlement was not enforceable, unless it was approved by the Commissioner as, in effect, it altered the existing rules. The petitioner has, therefore, challenged the said order in the present petition.
2. The short point which arises in this petition is whether the said settlement is enforceable without the approval of the Divisional Commissioner. Section 46 of the Municipal Act provides that every Municipality shall make and may from time to time alter or rescind rules, hut not so as to render them inconsistent with the Act x x x (b) determining (ii) the staff of officers and servants to he employed by the Municipality and the respective designations, duties, salaries, fees or other allowances of such officers and servants, and the powers and duties delegated to them under Section 37. Then proviso (a) provides that no rule made, or alteration or rescission of a rule made under this section shall have effect, unless and until it has been approved, in the case of City Municipalities, by the State Government, or in other cases by the Commissioner. It is not in dispute that the present Municipality is not a City Municipality and so, for the alteration of any rule made under Section 46 of the Act, the approval of the Commissioner would be required. The Labour Court has come to the conclusion that when a settlement was made revising the salaries, in substance and effect, the rules regarding the salaries of the servants would be altered and such ail alteration could not be done without the approval of the Commissioner. On that ground, the Labour Court has held that the settlement in question was unenforceable. The Labour Court has not properly considered the scope and effect of the two relevant Acts, The Municipal Act deals with municipal affairs and the relevant rules which are to be provided for the municipal servants or the contracts which have to be entered into would have to be done as provided under the Municipal Act. But the Municipal Act does not deal with the sphere of industrial disputes. This field is occupied by the Act. Therefore, when the first contract of employment was made or the initial rules were made, the mailer would be governed by the Municipal Act. But, after the workmen raised an industrial dispute for changing their existing conditions of employment, the matter would be entirely governed by the Act which provides for settlement of industrial disputes by changing, modifying or altering the existing conditions of service, whether under a contract or under a rule. When, therefore, an industrial dispute arises, the matter would have to he dealt with by the industrial law and the matter would be resolved by an industrial settlement or an award as the case may be. The two fields are thus totally distinct and the two Acts operate in different fields. The Labour Court was, therefore, obviously in error in coming to the conclusion that when an industrial settlement was arrived at, what was sought to be done was an alteration of the municipal rules. Whether the settlement was arrived at as required by law will have to be examined only from the provisions of the Act and not by recourse to Section 46 of the Municipal Act which deals with alteration of municipal rules and which does not deal with any industrial dispute. Therefore, Section 46 of the Municipal Act would have no application whatsoever in considering the binding effect of the settlement arrived at under Section 12 of the Act.
3. Section 12, Sub-section (1) of the Act provides that where an industrial dispute exists or is apprehended, the conciliation officer may, or where the dispute relates to a public utility service and a notice under Section 22 has been given shall hold conciliation proceedings, in the prescribed manner. Under Sub-section (2), the conciliation officer shall, for the purpose of bringing about a settlement of the dispute, without delay, investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute. Sub-section (3) then provides that if a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings the conciliation officer shall send a report thereof to the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute. Thus, Section 12 of the Act enables a conciliator in the course of a conciliation proceeding to Induce the parties to come to a fair settlement of an Industrial dispute and if such a settlement is arrived at in the course of the conciliation proceeding, the memorandum of the settlement has to be signed by the parties to the dispute. In the present case, the dispute was between the workman of the Municipality, which is a local authority, and the Power House employees. Now Section 2(g)(ii) of the Act defines an 'employer' to mean in relation to an industry carried on by IT on behalf of a local authority, the Chief Executive Officer of that authority. Therefore, the other party to the dispute, viz. the employer, was, in view of Section 2(g) the Chief Executive Officer of the respondent No. 1. Mr. Patel does not dispute that, under Section 24, Sub-clause (1)(b) of the Municipal Act, the Chief Executive Officer of this local authority was the President of the Municipality. Therefore, reading Section 12 of the Act along with Section 2(g) in the present case, the employer, being the President of the Municipality, the settlement had to be arrived at between the President and the workman and that settlement on the employer's side had to be signed by the President only as a party to the dispute. The present settlement is signed both by the President and the Vice-President. The settlement, therefore, has been properly arrived at as required under Section 12, read with Section 2(g) of the Act
4. Mr. Patel, however, contends that a Municipal President was a creature of the Municipal Act and he could have no power to sign such a settlement, ignoring the limitations under the Municipal Act. According to Mr. Patel, if the rides of service had to be altered, the municipal body itself even had to obtain the approval of the Commissioner. Mr. Patel contends that if the parent body had to obtain the approval, the President could not sign such a settlement without obtaining first the approval of the Commissioner, We cannot agree with Mr. Patel's contention. The President here was exercising the special power which vested in him by reason of the fad that he was the Chief Executive Office of the local authority, for, the industrial law, in cases of an industry run by a local authority, invests such power as an employer to arrive at a settlement or to sign the settlement in such President in his capacity as the Chief Executive Officer. This power, therefore, docs not flow from the Municipal Act, but from the provisions of the Act. No limitations whatsoever have been shown to us on the powers of the President to enter into and sign any such settlement In fact, the municipal law Was not dealing with industrial disputes and no provision limiting his power to enter Into such a settlement could be found in the Municipal Act.
5. Mr. Patel, however, relied on Section 165(1) of the Municipal Act which provides that the Municipality may, compound or compromise in respect of any suit instituted, by or against them, or in respect of any claim or demand arising out of any contract entered into by them under the Act. This provision is hardly applicable to the case of a settlement. The provision deals with suits or claims arising out of contracts; while what we are concerned with is a provision regarding the settlement of industrial dispute to which Section 105(1) of the Municipal Act would have no application whatsoever.
6. Mr. Patel then contends that under Rule 62(2) of the Industrial Disputes (Bombay) Rules, 1957, the settlement shall be signed by -- (a) in the case of an employer, by the employer himself, or by his authorised agent, or where the employer is an incorporated company or other body corporate, by the agent, manager or other principal officer of such company or body Relying on this Rule 62, Sub-clause (2), Mr. Patel contends that the Municipality, being a corporate body, the settlement must be signed by the agent. In view of Section 2(g), in case of a local authority, the employer, who is a party, is the Chief Executive Officer who, in the present case, is the President himself and when the employer him self signs, that is, the President himself signs in the present case, the settlement is duly signed as required under Rule 62, Clause (2) and no question arises of any agent signing on behalf of the employer. We, therefore, find no substance in the contention of Mr. Patel that the President was not the person authorized who can enter into a settlement under Rule 62. The President got the power to enter into and sign the settlement by virtue of Section 2(g), read with Section 12 of the Act itself
7. Mr. Patel also relied on the decision of the Supreme Court in Baroda Borough Municipality v. Its workmen. (S) AIR 1957 SC 110 at p. 119. In that case, Section 58 of the Bombay Municipal Boroughs Act, 1026, which dealt with the rule-making power of the Borough Municipality, provided a similar proviso (a) to the effect that no rule shall he altered unless and until it has been approved by the Stale Government. The contention there raised was that, under Section 58, the Baroda Municipality had no power to make rules for the payment of bonus to its employees, because the word 'allowances' did not include bonus; and even if such rides could he made, they require the sanction of the State Government and, therefore, the claim of bonus could not be entertained. The Supreme Court held that the demand for bonus as an industrial claim was not dealt with by the Municipal Act, but it was dealt with by the Industrial Disputes Act, 1947. Therefore, it was not a relevant consideration whether there were provisions in the Municipal Act with regard to payment of bonus. The provisions of the Municipal Act were relevant only for the purposes of determining the quality or nature of the municipal property or fund; those provisions could not be stretched beyond that limited purpose for defeating a claim of bonus That decision could not help Mr. Patel. Mr. Patel wanted to make a distinction on the ground that, in case of an award, it was a judicial or quasi-judicial decision and such an award could be made in spite of the provisions of the Municipal Act, but in case of a settlement, the same position did not hold good. There is a clear misconception in this argument of Mr. Patel. Whether the industrial claim is resolved by a settlement or by an award, the claim which arises under the industrial' law has to be decided in accordance with the industrial law. The general municipal law dealing with municipal affairs does not occupy that field. That decision would really completely destroy the argument of Mr. Patel that when the industrial claim for revision of salaries was granted, it would amount to any alteration of the municipal rules so as to require any sanction as provided under the Municipal Act. The question which is decided under the industrial law is really dehors the contract or the rules and, therefore, no question arises of fulfilling the provisions under the Municipal Act for entering into a contract or for altering the rules for that purpose. We, therefore, do not find any substance in any of the contentions of Mr. Paid.
8. The Labour Court was therefore, patently in error in holding that the present settlement was not enforceable as it had not been approved by the Commissioner, No such approval was necessary and the settlement was binding, as it was duly arrived at under the Act by reason of Section 18 of the Act.
9. In the result, the petition is allowedand the order of the Labour Court is set asideand the matter shall go back to the LabourCourt to he disposed of in accordance withlaw. Rule made absolute with costs.