Narendra Mohan Kasliwal, J.
1. This special appeal is directed against the judgment of learned Single Judge dated January 23, 1981 in Civil Writ Petition No. 1864/1984.
2. Bichhu Ram & Shersingh (here in after referred to as ('the respondents') filed a petition under Section 33C(2) of the Industrial Disputes Act, 1947 (here in after referred to as 'the Act') against M/s Rohtas Industies Ltd. (here in after referred to as the appellant before the Labour Court, Jaipur. The case of the respondents before the Labour Court was that they had joined service with the appellant in the year 1970 and 1974. In accordance with the settlement arrived at between the appellant and M/s Rohtas Industries Labour Union on December, 5 1976, bonus ex-gratia was allowed to be paid to the workmen @ 17 per cent of the total wage earned during the years 1977 and 1978. As the above bonus ex-gratia was not paid to the respondents as such Bichu Ram nude a claim of Rs. 867/- and Sher Singh made a claim of Rs. 393.72. The case of the appellant before the Labour Court was that Bichu Ram and Sher Singh respondents had already left the service of the appellant by tendering resignations voluntarily on March 23, 1978 and June 5, 1978 respectively. It is submitted that at the time of accepting their resignations entire dues were settled and no demand remained to be paid to these persons. It was further submitted that these persons were not workmen of the appellant when the above mentioned settlement dt. Dec. 5,1978 was arrived at between the appellant and the Union. The Labour Court held that according to the language of the settlement dated December 5, 1978, there was nothing to debar these workmen from deriving the benefit solely on account of the fact that they were not workmen on December 5, 1978. It was further held by the Labour Court that in India a stranger to a consideration can enforce a contract otherwise valid and may claim for his benefit. The settlement dated December 5, 1978 is one where the respondents were not parties. Certain advantages were conferred on the respondents under the settlement and they can reap their fruits. In the result, a sum of Rs. 867/- in favour of Bichhu Ram and Rs. 383/72 in favour of Sher Singh were computed to be due to them from the appellant.
3. Aggrieved against the order of the Labour Court the appellant filed a writ petition. Learned Single Judge, also took the view that there is no clause in the agreement that those workmen, who had ceased to be workmen at the time of settlement would not get the benefit of 17 percent ex-gratia bonus. The settlement was arrived at on December 5, 1978. The notice giving charter of demands was given on June 19, 1978. According to the terms of the settlement which was based on the charter of demands the workmen wanted certain benefits and the respondents were entitled to those benefits. Learned Single Judge also held that the argument made by learned Counsel for the appellant that the definition of 'workmen' excluded those workmen, who had resigned or voluntarily left the service had no relevancy so far the application under Section 33C(2) of the Act is concerned. It was further observed that the settlement arrived at was not between the individual workmen and the management, but it was between the Union and the management. Such a settlement would thus entitle all persons to take benefit in terms of settlement. Learned Single Judge also observed that a very petty amount has been allowed to the respondents and it would meet the ends of justice if these two workmen, who are low paid employees are not dragged in the law courts at this stage. The writ petition as such was dismissed in limine.
4. Aggrieved against the order of the learned Single Judge, this special appeal has been filed by M/s Rohtas Industries Ltd.
5. At the out-set it may be mentioned that learned Counsel for the appellant made a statement that they have already paid the amount in question to the two workmen and even if they succeed in this special appeal they would not realise the amount from the workmen. Learned Counsel for the appellant however, submitted that they wanted a decision as a principle of law and also because similar claims were already pending before the Labour Court and could be filed in future also. In view of the above statement made by Mr. Keshote, learned Counsel for the appellant, we are considering the appeal on merits.
6. Admitted facts of the case are that the respondent Bichu Ram had resigned voluntarily on March 23, 1978 and respondent Sher Singh had voluntarily resigned on June 5, 1978. The notice raising charter of demands was given by the Union on June 19, 1978. Thereafter, a bipartite settlement was arrived at on December 5, 1978. It was not a settlement in the course: of conciliation proceedings and the respondents were not parties to the settlement arrived at on December 5, 1978. The respondents were not even workmen on December 5, 1978, nor even on June 19, 1978, when the notice of charter of demands was given by the Union. The application under Section 33C(2) of the Act has been filed by the respondents individually and not through the Union. Section 18 of the Act lays down the persons on whom settlement awards are binding. Sub-section (1) of Section 18 clearly provides that a settlement arrived at by agreement between the employer and workmen otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement. The settlement in the present case arrived at on December 5, 1978, is not in the course of conciliation proceedings under the Act. It was also not made during the course of any industrial dispute raised between the Union and the management. Sub-section (1) of section 18 as such clearly lays down that a settlement arrived at by agreement can only be binding on the parties to the agreement. In the facts of this case, before us the respondents cannot be considered as parties to the agreement or settlement dated December 5, 1978. Madras High Court in Workers of Buckingham and Carnatic Co. v. Commissioner of Labour and Chief Conciliation Officer and Ors. : AIR1964Mad538 has held as under:
Section 18 of the Industrial Disputes Act, 1947, makes a distinction between a case of settlement without the aid of the recognised official agency (Sub-section (1) of Section 18) and one arrived at with the help of it or which is the result of an adjudication by a tribunal functioning under the Act (Sub-section (3) of Section 18). The former will bind only the parties thereto; the latter, all the workers whether parties or not. It follows that an agreement between one union and the management without recourse to conciliation proceedings will only bind the members of that union not others. It is only by virtue of Section 18(3)(d) that the settlement specified in the section becomes binding on persons not actually parties thereto.
7. Again in Kumbakonam Electric Supply Corporation Ltd. v. Presiding Officer Labout Court Madras and Anr. : (1969)IILLJ154Mad , it was held as : that Section 33C(2) read with Section 18(1) of the Act gives right only to parties to settlement to take advantage of settlement and claim benefit capable of being computed in terms of money. Persons who had already left the service long before the settlement under Section 18(1) cannot take advantage of the settlement.
8. Their Lordships of the Supreme Court in Tata Chemicals Ltd. v. The Workmen Employed under Tata Chemicals Ltd. : (1978)IILLJ22SC held as under;
Where as a settlement arrived at by agreement between the employer and the workmen otherwise than in the course of conciliation proceedings is binding only on the parties to the agreement. A settlement arrived at in the course of conciliation proceedings under the Act is binding not only on the parties to the industrial dispute but also to other persons specified in Clauses (b), (c) and (d) of Sub-section (3) of Section 18 of the Act.
9. It was further held that even if a settlement regarding certain demand is arrived at otherwise than during the conciliation proceedings between the employer and the union representing majority workmen the same is not binding on the other union, who represents minority workmen, and who was not a party to that settlement. The other union can, therefore, raise a dispute in respect of the demand covered by the settlement and the same can be validly referred for adjudication.
10. A similar view has been taken in Jhagrakhan Collieries (P) Ltd. v. G.C. Agrawal, Presiding Officer, Central Government, Industrial Tribunal-cum-labour Court, Jabalpur and Ors. : (1975)ILLJ163SC .
11. In view of the above weightly pronouncements of their Lordships of the Supreme Court and clear provision of Sub-section (1) of Section 18 of the Act, we have no hesitation in holding that the respondents having already resigned from the service of the appellant, they cannot be considered as parties to the settlement arrived at on December 5, 1978 in this case. The respondents were thus not entitled to get any benefit out of such settlement dated December 5, 1978.
12. In the result, this special appeal is allowed, the order of the learned Single Judge dated January 23, 1981 and that of the Labour Court dated September 30, 1980, are set aside and as a result of quashing the order of the Labour Court, the application filed by the respondent Nos. 2 and 3, under Section 33C(2) of the Act automatically stands dismissed. There will be no order as to costs.