K.c.p. Limited v. The Presiding Officer And Ors.

Judgment

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11944 of 1996.

From the Judgment and Order dated 4.4.95 of the Madras High Court in W.A. No. 1186 of 1993.

N.B. Shetye, V. Balaji and A.T.M. Sampath for the Appellant.

V.G. Pragasam, M.A. Krishnamoorthy and M.A. Chinnasamy for the Respondents.

The Judgment of the Court was delivered by S.B. MAJMUDAR, J. Leave granted.

This appeal by special leave arises out of the judgment and order dated 4th April, 1995 of the High Court of Judicature at Madras in Writ Appeal No. 1186 of 1993. A Division Bench of the High Court dismissed the appeal of the appellant company and confirmed the judgment and order of the learned Single Judge in writ petition No. 611 of 1993 dismiss-

152 : SUPREME COURT REPORTS [1996] SUPP. 6 S.C.R.

= tr a ing the same. o :

A few relevant facts leading to this appeal, deserve to oben noted at the outset. The appellant is having ¢ an Engineering Unit’ at Tiruvottivur, Madras ree afi Fite ey where it manufactures ‘machinery’ for sugar, cement 2 and’ allied ‘industries’ and’ employs ‘about 500) workmen. Réspondent, No. 2i is ‘the only recognised | re ae ang aw tf s and a ‘representative uinion ‘of all the workmen working 1 in the said estabcn MEET? Dar MOO de be lishment. Jn ‘the e past a all industrial ‘disputes: were settled | by, the appellant 7 company 0 on ‘the basis ‘of. ong’ time ‘settlements entered ino ‘with ‘the 2 and respondent union, the, last Of which was, dated ‘December 30, 1991, rare eC! Mas peaks Pa HO) SR cua te ys Ti Sépiembek 1990. When the ' issue ‘of bonus for’ the firiaficial ‘year’

1989- 90' “was "under" onsidération’ the workmen ' ‘at the’ ‘instance’ ‘of On a respolident union resorted to go slow insisting ‘the appelldnt fb pay” ‘tore bonis’ eveh though * as ‘contended by the’ ‘appellant ‘inder “the | provisions ‘Of | the’ Paym nent ‘of. Bontus' ‘Act ‘only minintih ‘bonus: of 8. 33% ‘ot ‘the’ eartied * a wages was payable for’ ‘the finaticial “year “1989- 90. The go "How fesotted ‘to.

by the’ Workiheri resulted i in ‘total! stoppage’ of Work’ and ‘an’ alleged ilieg yal” robe gst striké'on‘and ‘from October 26; 1990. ii is the case ‘of t the ‘app pellant’that' in view of the deteriorating situation and ‘with’ a’ view’ to ” protect” personal security of the Supervisory and. Managerial staff, it,had.to declare .a,lock

_ out on October 30, 1990. The appellant also chargesheeted 29 workmen " including respondents 3 to 14 herein on November 5, 1990 for various acts of misconduct allegedly committed by them between September 25, 1990 and October 29, 1990 when the workmen had resorted to go slow and other ' alleged violent acts of misconduct. —

The explanation given by 29 workmen having not been found satisfactory the appellant. decided-to ‘hold ‘inquiry’ into ‘thé ‘charges involved against the said 29 workmen. Inquiries were conducted by the two tetired™ District Judges and during the inquiries all the 29 workmen participated in the inquiry proceedings which continued from Ja anuary 8, 1991 to August 21, 1992.

+ ee ee IP TEL ALY

_...On October, 31, 1990 the Government of Tamil Nadu intervened and initiated conciliation proceedings to bring, ‘about settlement, i in Tespect . of the pending disputes inchiding lock out. AS! no settlement could take place, during conciliation proceedings, the Conciliation Officer submitted report.,

Zz to the. ‘Appropriate. Government On, ‘April 9, 1991, On May 7, ‘1994 the |,

HO

Government of Tamil Nadu issued three different orders referring certain industrial disputes for adjudication. G.O. No. 485 was in respect of revision A of scale of pay, revision of dearness allowance, revision of house rent allowance etc. By G.O. No. 486 the Government of Tamil Nadu declined to refer certain disputes .such ‘as leave facility, housing scheme, medical facilities etc. for adjudication. by giving.reasons in the said G.O. No. 486..

The third G.O.-No. 487 was:issued under Section 10-B of the Industrial Disputes Act, 1947 (hereinafter referred to s ‘the Act’). ditecting the . appellant to lift lock out on or before. 13.5.1991. and allow all except 29. workmen to resume work. In the. said G.O. No. 487 the appellant was directed to maintain status quo obtaining prior to the date of.the lock out.::

in regard to the terms and conditions of service and the appellant was “y further directed to’ complete inquiry proceedings against 29 workmen on C or before 10.6.1991 and‘ to pay ‘them full wages during the' period’ of disciplinary proceedings. In thé said G.O. No. 487 the workmen ‘were’ directed to maiiitain normal! production which they were giving prior to the © date of the High Court order and also to maintain discipline in the factory.

_ By August 19, 1991 inquiries in respect of all the 29 workmen Were completed and on the basis of the findings by the Inquiry Officer and other extenuating circlitnstanceés, the 29 workmen were dismissed from ‘service between 23. 8. 1991 to 1:10.1991, ”

“ot.

In a meéting held before the Joint Commissioner of Labour on E October 4, 1991 between the appellant and the 2nd respondent, an agreement was reached on the quantum of increase in wages, recoverable advance and issue of bonus for the years 1989- 90 and 1990-91. It was further agreed that the i issue of “non-employinent of 29 dismissed workmen would be’ discussed separately ‘and on that basis all workmen except the FF said 29 workmen agreed to réstme work ina phased manner not later than October 12, 1991 although the lock out was lifted on May 13, 1991.

“Subsequently, a , settlement was arrived at between the appellant and the 2nd respondent under Section 12(3) of the Act wherein it was agreed wi! that the issue of, non-employment of 29 dismissed workmen. would be . G discussed.in the proceedings to.be initiated by the Joint Labour Commissioner as early as possible. The Joint Labour Commissioner held meetings, between January 8, 1992 and: March 6, 1992 and as no settlement could be, reached report with regard to failure of the conciliation proceedings was. +: submitted to the Government of Tamil Nadu which by order dated H

13.5.1992 referred the issue of non-employment of 29 workmen for adjudication to the 1st respondent. The said reference was registered as I.D. No. 708 of 1992 on the file of the 1st respondent.

The said industrial dispute was referred for adjudication pursuant to the demand espoused by all the workmen and raised by the 2nd respondent union under Section 2(k) of the Act. All the said 29 workmen who were members of the union had also authorised the 2nd respondent to represent them before the Conciliation Officer whereafter reference was made to the 1st respondent. None of the said 29 workmen raised industrial dispute in their individual capacity under Section 2A of the Act.

It appears that thereafter the appellant company on the one hand and second respondent - union on the other held discussions regarding non-employment of 29 workmen: Ultimately on 7th November, 1992 an understanding was reached between the appellant and the 2nd respondent - union that option would be given to the said 29 workmen either to accept reinstatement without backwages or a lumpsum amount of Rs. 75,000 with other monetary benefit may be accepted by the concerned workmen.

Respondent Nos. 3 to 14 (in all 12 workmen) out of these 29 workmen did not accept the proposed settlement and accordingly addressed a letter to the Commissioner of Labour on 2nd December, 1992. Thereafter, the 2nd respondent entered into a settlement with the appellant company under Section 18(i) of the Act on behalf of all the 29 workmen whose industrial dispute with regard to non-employment was espoused and raised by it under Section 2(k) of the Act. On 14th December, 1992 a comprehensive settlement was arrived at and signed by the appellant and the 2nd respondent - union. Copies of the said settlement were also forwerded to various authorities as contemplated under the provisions of the Act and Rule thereunder.

A joint memorandum signed by respondent No. 2 and the appellant company was filed before the Presiding Officer. First Additional Labour Court, Madras, respondent No. 1 herein, before whom the industrial dispute was pending for adjudication. It was requested that an award in terms of the settlement may be passed in the pending industrial dispute reference No. 708 of 1992. However, respondent No. 1, by his order dated 28th December, 1992 declined to make an award in terms of the settlement dated 14th December, 1992 on the ground that the respondent Nos. 3 to

14 had not approved the settlement and therefore industrial dispute in respect of these respondents will continue and proceed further. It may be ’ stated that out of the 29 dismissed workmen in connection with whose _ dismissal, respondent No. 2 - union had raised the industrial dispute under Section 2(k). of the Act., 17 workmen had already agreed to abide by the terms of the settlement and had got reinstated in exercise of their option. Only the remaining 12 dismissed workmen, respondent Nos. 3 to 14 herein. proceeded with the dispute and did not agree to the terms of the settlement even though admittedly they were members of the respondent No. 2 - union who was acting on their behalf and even till date they have continued to be the members of the said union.

As the 1st respondent decided to continue the reference in connection with respondent Nos. 3 to 14, the appellant company filed Writ Petition No. 611 of 1993 before the Madras High Court. As seen earlier, the learned Single Judge by his Judgment and order dated 29th September. 1993 dismissed the said Writ petition. The appellant thereafter moved the Division Bench of the High Court in appeal which also got dismissed on 4th April, 1995 and that is how the appellant company has moved this appeal on special leave.

Learned counsel for the appellant company vehemently submitted that when respondent No. 2 - union had espoused the cause of all the 29 dismissed workmen, and the reference was got made by it under Section 2(k) of the Act, the union which represented all the workmen including the dismissed respondents 3 to 14 was entitled to act on behalf of all of them by way of collective bargaining and could legitimately enter into the settlement which was for the benefit of all concerned workmen. Under these circumstances, individual workmen had no independent right to contest their dismissal orders and were bound by the settlement which was not shown by them to be in any way ex-facie, unfair or unjust; that it was a package deal entered into by respondent No. 2 - union with the appellant company and in such a collective industrial bargaining there was always give and take; that there were no exceptional grounds for rejecting such a settlement which was for the benefit of all concerned workmen and the Labour Court ought to have acted upon the same. Consequently, the order of the Labour Court refusing to act upon the said settlement so far as respondent Nos. 3 to 14 are concerned, was patently erroneous in law and hence, the order of the learned Single Judge of the High Court confirming

156 SUPREME COURT REPORTS [i996] SUPP. 6S.C.R.

A such order of respondent No. 1 and further order of the Division Bench also equally suffered from patent errors of law. In Support of these ‘sub- “ ; missions, various decisions of this Court were cited ¢ to which we will ‘refer a little later. ° ma ae

4 Learned counsel for’ respondent, Nos, 3 to 14° on’ the ‘other hand © submitted ‘that though these Fespondents were admittedly- itiefabers of the’ respondént“ inion, they had not accepted the’ terms’ of the’ Beltlément anid” the said settlement ‘Was ‘hot binding ¢ on thet; that in fact, ; according’ to the jearnéd “counsel, a “settlement was arrived’ at by’ respoitderit No. 2. ‘tinion not on behalf of these contesting workmen but only for’ the Temaih: friaining 17

C “workmen who had accepted the settlement by giving it in writing to the

President ‘of respondent No, 2" union. He also tried Ito Submit that in any case, the settlement was not ‘fair ‘and just as ‘the workmen were T required to give up. ail the back wages even though they % Were given reinstatement with continuity of service and they were. “further ‘required’ to give a letter in

£ ‘writing to the Management stating that they would acquit themselves in an orderly manner and would ‘ assure ‘that they ‘would: not give a. room for any misconduct and disciplinary action in future. It was ‘Subthitted that under these circumstances the contesting respondents were entitled to insist that‘ their dispute should be adjudicated on. merits by the Labour Court.

aa D4 é

E Having given our anxious cénsidération to these rival subthissioris, we ° find that'the térins of the settlement cannot be’ considered to be'in any way" ex facie, “unjust or: unfair and that the‘said ‘settlement! consequently must be: held t to be binding ¢ én v these ° contesting workmen also. Yt:

2 ” too, : wast : 8 boo. Ook wed

{ ~‘It Kas to be’ kept in view that the industrial dispiite was taiged by | respondent No. 2 ~" union ‘on’ behalf of all the 29 ‘workmen ‘who were''’ dismisséd from ‘service “by “the” appellanit’ company.” It’ was an industrial’ ° : dispute’ as defined by Section 2(k): of the Act ‘taised by the union’ on behalf’ of its members. Respondent Nos.'3 614 ‘were at ‘the’'televant titie,~"

, »mémbers of the union and even till date they ‘continue to be’ the members |

G of the sponsoring union. This was not ‘a reference raised’ ‘by 3 a dismissed employee | as per ‘Section ‘2A of the ‘Act. ‘Consequently, ' as per’ ‘Section 36 of | the ‘Act, it was Tespondent No. 2 union which was ‘incharge of the proceedings ‘and could represent all the 29 ‘dismissed, workmen, on whose . j behalf f the: dispute was raised by it. When, the said union having, considered”. H the pros and cons Of the situation, ‘entered into the settlement on behalf of

RCP. LTD. v. PRESIDING OFFICER [S.B. MAJMUDAR, J.] 157

_ all the workmen for whom it had taken cudgels unless the said settlement respondents who, can be said to be parties to the same through their representative, union - respondent No. 2. In this connection a reference is also required to be made to Section 18(1) of the Act which lays down as

_under :

"A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement." It is not in dispute that the settlement arrived at by respondent No. 2 - union with the appellant company was not in the course of conciliation proceedings. Therefore, it would’ be binding to the parties to the agreement, namely, the appellant company on the one hand and respondent No.

“2 ~ union representing all the 29 dismissed employees, who were its members and on whose behalf ‘it had raised the industrial dispute under

- Section :2(k) of the Act, on the other.

Rite, Ch ed ns

' . Section 2(p) of the Act defines a. settlement to mean a settlement arrived at in.the course of conciliation proceedings and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceedings where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate, Government and the Conciliation Officer.

It is.also not in dispute that parties to the settlement were the’ ,appellant company on the one hand and respondent No. 2 - union on _the- other, which acted on 1 behalf of all the 29. dismissed workmen for both these parties, Under these circumstances, respondent Nos. 3 to 14 was found to ex- facie, unjust or unfair it could not be gone behind by these — oo also would be ordinarily bound by this settlement entered into by their. ~ representative union with the company it is shown that the said settlement was, ex-facie, unfair, unjust ‘or malafide. No. such case could.-be even alleged .much less,made,out by the, dissenting respondent Nos. 3 to, 14

: -before the. trial, court. It is interesting to note, that before the Labour , Court the only argument put forward on behalf of respondent Nos. 3. to'*

158 , SUPREME GOURF REPORTS [1996] SUPP. 6S.C.R.

14 was that they were not parties to the settlement and therefore, it was not binding on them. Once it is kept in view that the entire industrial dispute was raised by respondent No. 2 union on behalf of all the 29 dismissed workmen and as it was not an industrial disputé covered by Section 2A whereunder individual dismissed workman could come in the arena of contest, it could not be held, as wrongly assumed by the Labour Court that this settlement was not entered into under Section 18(1) of the Act by these dissenting workmen when the respondent - union did represent them from beginning to end and is still representing them as they are members of the union even at present. In the case of Ram Prasad Vishwakarma v. The Chairman, Industrial Tribunal, [1961] 3 SCR 196 a Bench of three Hon’ble Judges of this Court had an occasion to consider the effect of a settlement entered into by the union of workmen which had espoused the cause of its members by raising an industrial dispute under Section 2(k) of the Act and the further question whether under these circumstances an individual workman had any independent locus _ standi in proceedings before the reference court. Rejecting the contention on behalf of the individual workman, it was observed by Das Gupta., J. speaking for the Court that the concerned workman was not entitled to separate representation when already represented by the Secretary of the union which espoused his cause. A dispute between an individual workman and an employer cannot be an industrial dispute as defined in Section 2(k) of the Act unless it is taken up by a union of workmen or by a considerable number of workmen. When an individual workman becomes a party to a dispute under the Act he is a party, not independently of the union which has espoused his cause. It was further observed that although no general rule can be laid down in the matter, the ordinary rule should be that representation by an officer of the trade union should continue throughout the proceedings in the absence of exceptional circumstances justifying other representation of the workman concerned.

It is true that the said decision was rendered prior to the insertion of Section 2-A in the Act by which individual workmen were also given a fight to raise industrial dispute in case of discharge, dismissal or retrenchment or otherwise termination of service. It is also true that the present’ controversy has arisen after the coming into operation of Section 2-A but

K.C.P. LTD. v. PRESIDING OFFICER [S.B. MAIMUDAR,J.} 159 as noted earlier the industrial dispute raised for 29 dismissed workmen was raised by the union - respondent No. 2 under Section 2(k) of the Act and there was no reference under Section 2-A of the Act, so far as respondent nos. 3 to 14 are concerned.

In the case of Herbertsons Ltd. v. The Workmen of Herbertsons Ltd. and Ors., AIR (1977) SC 322 another Bench of three learned Judges of this Court considered the effect of a settlement arrived at by recognised union of majority of workers pending appeal to Supreme Court. It was observed by Goswami, J., speaking for the Court that when a recognised union negotiates with an employer ‘the workers as individuals do not come into — the picture. It is not necessary that each individual worker should know the implications of the settlement since a recognised union, which is expected to protect the legitimate interests of labour enters into a settlement in the best interests of labour. This would be the normal rule. There may be exceptional cases where there may be allegations of mada fides, fraud or even corruption or other inducements. But in the absence of such allegations a settlement in the course of collective bargaining is entitled to due weight and consideration.

In connection with the justness and fairness of the settlement it was observed that this has to be considered in the light of the conditions that were in force at the time of the reference. When, therefore, negotiations take place which have to be encouraged. particularly between labour and employer in the interest of industrial peace and well-being, there is always give and take. The settlement has to be taken as a package deal and when labour has gained in the matter of wages and if there is some reduction in the matter of dearness allowance so far as the award is concerned, it cannot be said that the settlement as a whole is unfair and unjust. It was further observed that it is not possible to scan the settlement in bits and pieces and hold some parts good and acceptable and others bad. Unless it can be demonstrated that the objectionable portion is such that it completely outweights all the other advantages gained the Court will be slow to hold a settlement as unfair and unjust. The settlement has to be accepted or rejected as a whole.

It has to be kept in view that under the Scheme of labour legislations like the Act in the present case, collective bargaining and the principle of industrial democracy permiate the relations between the management on

.

160 _,, ,, SUPREME COURT REPORTS [1996] SUPP.6S.C.R.

-A_ the one, hand and the union which resorts, to collective bargaining on behalf

Of its ‘ members- workmen with ‘the’ management’ on the: other. ‘Stich a_ ‘Collective’ bargaining which i may » resiilt’ in Sst ‘and fair "Settlement would always be beneficial to the ‘management as well as to the body, of workmen and society at large as there would be industrial ' peace ‘and ttanquility

B pursuant to such settlement. and. which would. avoid unnecessary: social strife and tribulation on the one hand and | promote, industrial ‘and. commer- cial development on the other ‘hand, Keeping 1 in view the aforesaid salient features of the Act the settlement which is sought ¢ to be impugned has to be scanned and scrutinised. Settlement of” labour disputes | by ‘direct

, negotiation and collective bargaining i is ‘always, to ‘be preferred’ for it'is the C_ best guarantee of industrial peace’ which i is the aim of ail legislations , for settlement of labour disputes. In order to bring about, such a settlement more easily and to make it more’ workable dhd effective it’ ‘wtay "ot ‘be always possible or necessary that ‘suet r settlement is artiveld At ‘ih ‘the course of conciliation proceedings Which may bE the | first step “towards

Dp resolving the industrial dispute’ which niay ibe ‘litgeting between ‘the urs émployers and theit workrien ‘Teptéseited! by their tinions but’ even if’ at ‘ that’ stage‘ such settlerient doés not’ také ‘place and ‘the industrial dispute gets referred for adjudication, even pending such'disputes; the parties can arrive at amicable settlement which may be binding to the parties to the settlement unlike settlément’ artived at “during ‘cOnéiliation proceedings

E which may be binding not “only to the parties’ tothe settlement but’ even'to the entire labour force working in the concerned’ organisation even though they may not be members of the union’ which might have entered into settlement during conciliation proceedings. The difference between the .

' settlement arrived at under the ‘Ad during: conciliation proceedings: by -F " parties and the settlement arrived at otherwise’ ‘than during contiliation , proceedings has been succinctly’ brought out by the decision of this” Court in Barauni Refinery ‘Pragatisheel' Shramik Parishad Etc. Etc. v. Indifin Oil

_, Corporation Lid. Etc. Etc, [i991] 1 $cc’ 4 wherein Alimadi, Y (as His

“Tdrdghip’ ‘then Was) spoke ‘for the “Court'to t the following éffect', “2”

clahalip ay Woolas alu? ef otro vidhgr ds god de jead b dutlerertrab Gitud Oy wale iF Hite spo bt butte om ingep. coith dt thn eu: EM

0 bidepasun oF "Settlements are divided into two \categories, namely, (i) those arrived at outside the conciliation proceedings [Section 18()] and

(ii) those arrived at in the course of conciliation proceedings stes' Ly, bection 18(3), A settlement, which belongs,to the first. category has vay clan limited, application j in that, itrmerely binds. the parties to the, agree- iPHen tee ment, But,a settlement, arrived at in the course, of conciliation er we

KC.P. LTD. v. PRESIDING OFFICER [S.B. MAJMUDAR, J.] 161 proceedings with a recognised majority union has extended application as it will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same. To that extent it departs from the ordinary law of contract. The object obviously is to uphold the sanctity of settlements reached with the active assistance of the Conciliation Officer and to discourage an individual employee or a minority union from scuttling the settlement. There is an underlying assumption that a settlement reached with the help of the Concilition Officer must be fair and reasonable and can, therefore, safely be made binding not only on the workmen belonging to the union signing the settlement but also on the others. That is why a settlement arrived at in the course of conciliation proceedings is put on par with an award made by an adjudicatory authority.’

As in the present case the settlement arrived at between the parties was not during conciliation proceedings, it would remain binding to parties to the settlement as per Section 18(1) of the Act. But as we have seen above, respondent No. 2 union while entering into that settlement acted on behalf of all the 29 dismissed workmen who were its members including the present respondent nos. 3 to 14 who are also its members as noted earlier. We have also seen earlier that the Labour Court had erred in taking the view that respondents 3 to 14 were not parties to the said settlement as individually they had no /ocus standi and they were represented by their union respondent no. 2 which had signed the settlement on behalf of its members for whom the dispute was raised by the union. Nothing could be alleged by respondents 3 to 14 to the effect that the said settlement was in any way unjust or unfair or was a mala fide one. There were no exceptional circumstances to reject this settlement qua even the contesting respondents. However, as learned counsel for the respondent-workmen tried to faintly suggest to that effect we have carefully gone through the circumstances which are brought on record which had led to the settlement. It may be noted that about 500 workmen had gone on strike and that had resulted in the lock-out by the appellant company and ultimately disciplinary action was initiated against 29 workmen who had indulged into various acts of misconduct. It is for these 29 workmen who were ultimately dismissed from service that the respondent-union had raised a dispute under Section 2(k) of the Act on their behalf. Earlier the remaining workmen had gone on strike for nearly 5 months Ultimately. the strike was withdrawn; lock-out was lifted and broad understanding was reached between the appellant company and the workmen represented by their union whereby it was agreed that 29 workmen, who were dismissed, would ‘be either given Rs. 75,000 as compensation or reinstatement with continuity of service without back wages and the concerned workmen should express apology for misconduct and also assure good conduct in future.

Out of 29 workmen for whom the industrial dispute was raised 17 workmen agreed and accepted this settlement and joined the service Remaining 12 workmen (respondent Nos. 3 to 14) have not agreed to the said settlement. It is under these circumstances that the settlement arrived at by the union on behalf of all of them has to be scrutinised. It has clearly transpired on the record of this case that all the 500 workmen excluding 29 dismissed workmen had espoused the cause of these dismissed workmen and had struck the work. Ultimately, when they were reinstated in service leaving aside the 29 workmen for whom industrial dispute lingered on, all the remaining workmen lost their wages from 20.10.1990 to 12.5.1991 and also from 13.5.1991 to 6.10.1991. They lost their wages because they were expressing sympathy for their 29 colleagues who were facing disciplinary action and even for these 29 workmen respondent no. 2 union entered into a settlement so that they could be reinstated in service with continuity of service or could walk out from service with Rs. 75,000 and other monetary benefits. All that was agreed to by the union as a condition for reinstatement was that the workmen would give up back wages and had to sign a written undertaking to behave properly in future. In our view there was nothing unreasonable or unfair in these terms of settlement. The relief of reinstatement without back wages could not be said to be unreasonable as for nearly 12 months all the other workmen lost their back wages only because they supported the cause of these 29 colleagues of theirs and hence there was no reason why the workmen who indulged in the acts of misconduct and who were also to be taken in service should not lose their wages for 12 months. Relief of reinstatement was made available to respondents 3 to 14 on the same line as it was made available to their 17 remaining colleagues who were covered by the very same settlement and who accepted the relief of settlement without back wages or a lumpsum compensation of Rs. 75,000 and other monetary benefits in lieu of that. In our view such a package deal entered into by respondent no. 2 in the best interest of these workmen could not be said to be unfair or unjust from any angle. On the contrary, it the back wages were given to them, then the remaining workmen against whom there was no disciplinary action or any alleged misconduct and who had also lost wages for 12 months only because they were in sympathy with these 29 dismissed workmen would have stood discriminated against. Consequently, it is not possible to agree with the learned counsel for respondent nos. 3 to 14 that the said settlement was in any way unfair or unjust. Once this conclusion is reached it is obvious that the entire industrial dispute should have been disposed of in the light of this settlement and an award in terms of the settlement should have been passed by the first respondent-court in the case of respondents 3 to 14 also. Consequently, the judgment and order of the Division Bench of the High Court dated 4th April, 1995 and the order of learned Single Judge dated 29th September, 1993 are quashed and set aside. The writ petition filed by the appeilant company will stand allowed with a direction to the first respondent-Labour Court to pass award in terms of the settlement dated 14th December, 1992 by treating it to be binding to respondent nos. 3 to 14 also.

Learned counsel for these respondents ultimately submitted that the time during which the concerned workmen had to exercise their option as per the terms of the settlement is now over and the appellant company may not make available the said option to them. His apprehension on behalf of the respondents was set at rest by learned counsel for the appellant company who stated that the appellant company is willing to make available the option to these respondent nos. 3 to 14 to either accept reinstatement with continuity of service without back wages on their executing the writing as per the said settlement or to be paid Rs. 75,000 each in addition to gratuity as per the payment of Gratuity Act, wages for unavailed leave and bonus, if any payable.

In view of this fair stand taken by the appellant company it is directed that if the respondent nos. 3 to 14 exercise their option as per the procedure laid down in the settlement dated 14th December 1992 either to get — reinstatement without back wages for the period of non-employment and

‘with continuity of service or to accept a lumpsum monetary compensation as laid down in the settlement within a period of 8 weeks from today, the appellant company will act upon the said option exercised by the said workmen and shall give appropriate benefit of the option as per the

164 , SUPREME COURT REPORTS [1996] SUPP. 6S.C.R.

settlement to the concerned workmen. As the period of lumpsum payment of Rs. 75,000 by instalments (as laid down by the settlement) is already over, it is directed that if any of the concerned workmen-respondents 3 to 14 exercises the option of receiving the lumpsum amoun* of Rs. 75,000 in: lieu of the reinstatement, a sum of Rs. 40,000 out of the said amount shall be paid to the concerned workmen within 15 days of the exercises of such option and the balance of the Rs. 35,000 with other monetary benefits as indicated in the settlement shall be paid to the concerned workmen within a further period of 2 months thereafter.

The appeal is allowed in the aforesaid terms. In the facts and circumstances of the case, there shall be no order as to costs.

VSS. Appeal allowed.