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CASE NO.:

Appeal (civil) 7170 of 2000

PETITIONER:

ANZ Grindlays Bank Ltd @ Standard Chartered Grindlays Bank Ltd

RESPONDENT:

Union of India and others

DATE OF JUDGMENT: 08/11/2005

BENCH:

H.K. Sema & G.P. Mathur

JUDGMENT:

J U D G M E N T

G.P. Mathur, J.

This appeal, by special leave, has been preferred against the

judgment and order dated 19.6.2000 of the Bombay High Court by

which the Letters Patent Appeal filed by ANZ Grindlays Bank

Limited (hereinafter referred to as the 'Bank') was dismissed and the

order dated 29.2.2000, passed by the learned single Judge dismissing

the writ petition filed by the Bank, was affirmed. The present appeal

has been filed by ANZ Grindlays Bank Limited and the respondents

arrayed in the appeal are (1) Union of India, (2) All India Grindlays

Bank Employees Federation, and (3) All India Grindlays Bank

Employees Association. During the pendency of the appeal in this

Court the entire share capital of ANZ Grindlays Bank Limited has

been acquired by Standard Chartered Bank Limited and consequently

an application (I.A. No. 3 of 2000) has been moved to change the

name of the appellant from ANZ Grindlays Bank Limited to Standard

Chartered Grindlays Bank Limited, which has been allowed.

2. The Bank has branches all over the country and employs

approximately 1666 personnel commonly known as Award Staff in its

branches/offices in India. The All India Grindlays Bank Employees

Association (third respondent) is recognized by the Bank and it

represents majority workmen of the Bank all over the country. The

All India Grindlays Bank Employees Federation (second respondent)

represents the minority workmen of the Bank. The terms and

conditions of the employment of the workmen of the appellant Bank,

popularly known as Award Staff, are governed by Shastri Award as

modified by Desai Award and the bipartite settlements entered into

between the Indian Banks Association and the Unions and Federations

representing the workmen in the banking industry. Apart from these

industry wise bipartite settlements, the appellant-Bank also entered

into in-house bilateral settlement with second and third respondents

and these settlements are usually signed after every three years in

respect of certain allowances and benefits and other terms and

conditions of employment. The third respondent the All India

Grindlays Bank Employees Association (for short the 'Association')

represents over 66% of the workmen of the appellant-Bank. The

Grindlays Bank Employees Union, Calcutta, an affiliate of the second

respondent All India Grindlays Bank Employees Federation (for short

the 'Federation') represents nearly 13% of the workmen of the Bank

and the balance, who are not members of either of these unions are

represented by the second respondent the All India Grindlays Bank

Employees Federation.

3. The case of the appellant is that the Federation (second

respondent) is in the habit of backing out from signing the settlement

at the last minute after having agreed to the terms thereof. Since 1993

several settlements were entered into between the Bank, the

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Association (third respondent) and also Grindlays Bank Employees

Union, Calcutta. However, on account of the recalcitrant attitude of

the Federation (second respondent), in the settlement entered into

under Section 18(1) of the Industrial Disputes Act, 1947 (for short the

'Act') a clause had to be incorporated for voluntary acceptance of the

terms and conditions of such settlements by non-members of the

Association (third respondent) with a view to extend the benefit of

such settlements to such of the non-members of the Association, who

are willing to accept the settlement.

4. A strike notice dated 14.3.1996 was issued to the management

of the Bank by the Federation (second respondent). Discussions were

held with all the parties and finally a settlement was arrived at

between the appellant-Bank and the Association (third respondent),

which was signed on 18.8.1996. The Federation (second respondent),

however, backed out and refused to sign the settlement. The

Federation then informed the Conciliation Officer (Central) on

19.8.1996 that it had not signed the settlement and that the signing of

the settlement by the Bank with the Association (third respondent)

amounted to unfair labour practice. On 6.12.1997 Grindlays Bank

Employees Union, Calcutta, a constituent of the Federation (second

respondent) representing 13% of the workmen of the Bank accepted

the terms of the settlement dated 18.8.1996 by signing a separate

settlement dated 6.12.1997. The settlement dated 18.8.1996 contained

the following clause: -

"DURATION

This settlement will come into force with effect from

August 18, 1996 and on various dates as specified under

different items contained in the settlement. The same

shall be binding on the parties until December 31, 1998.

After December 31, 1998 and except in the case of ex-

gratia system/payments all other terms and conditions

thereof shall continue to be binding on the parties until

the settlement is terminated by either party giving to the

other statutory notice as prescribed in law for the time

being in force.

It is agreed that since the settlement shall be binding

between the parties to this settlement under Section 18(1)

of the Industrial Disputes Act, 1947, it will also be

binding on the affiliated units of All India Grindlays

Bank Employees' Association and hence on their

members and thus the members shall automatically be

entitled to the benefits of this settlement and subject to

the obligations under this settlement. However, any

other workmen who is not a member of any Union

affiliated to All India Grindlays Bank Employees'

Association shall also be bound by the terms and

conditions of this settlement and consequently entitled to

the benefits flowing out of this settlement if he/she

accepts this settlement by signing a receipt and the

format of the settlement enclosed with this settlement,

which will be made available to such employees.

The benefits arising out of this settlement will be given

effect to by September 10, 1996."

The settlement itself contained a format in which the receipt had to be

given and the same is as under: -

"To

The Manager

ANZ Grindlays Bank Limited.

Sir,

The terms and conditions of the settlement dated

August 18, 1996 between the Management of ANZ

Grindlays Bank and their workmen represented by All

India Grindlays Bank Employees' Association in respect

of the various demands have been perused by me. I

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accept the settlement and the same will be binding on me.

I undertake to receive the benefits in terms of the

conditions set out in the settlement. I, therefore, request

you to release the benefits accruing to me under the

same.

This may be construed as my receipt towards

payment/receipt of grant under the subject settlement.

Sd/-

SIGNATURE"

As a result of signing of the settlement by the Association (third

respondent) and the Calcutta Union, almost 99% of the Award Staff

signed the settlement and only 29 persons remained, who did not sign

the settlement and were objecting to the same. However, according to

the Federation (second respondent) 60 persons have not signed the

settlement and are objecting to the same. Nearly three years thereafter

the Association (third respondent) submitted a fresh charter of

demands and after holding discussions and negotiations a fresh

settlement was signed on 10.3.1999 by the Association and Calcutta

Unit of Grindlays Bank Employees Union.

5. At the instance of All India Grindlays Bank Employees

Federation (second respondent) the Central Government, by order

dated 29.12.1997, made a reference under Section 10(1) of the Act for

adjudication by the Industrial Tribunal. After issuance of a

corrigendum on 17.12.1998, the reference reads as under: -

"Whether the terms of bipartite settlement dated

18.8.1996, between the management of ANZ Grindlays

Bank Limited, and All Indian Grindlays Bank Employees

Association which bound withholding of benefits of

settlement to workmen who are not members of All India

Grindlays Bank Employees Association until the

individual gives acceptance of the settlement in the given

format is legal and justified? If not, to what relief are the

workmen entitled to?"

Feeling aggrieved by the aforesaid reference made by the Central

Government the ANZ Grindlays Bank filed a writ petition under

Article 226 of the Constitution before the Bombay High Court for

quashing and setting aside the same. The writ petition was dismissed

by a learned single Judge and the appeal preferred against the said

decision before the Division Bench also failed. The present appeal

has been filed by the Bank challenging the aforesaid orders.

6. Mr. Gaurab Banerji, learned senior counsel for the appellant-

Bank, has submitted that the reference made by the Central

Government is wholly redundant and it does not show what is the

precise demand of the Federation (second respondent) and how the

decision of the reference by the Industrial Tribunal if answered in

favour of the second respondent, would give any benefit to the said

respondent. The language in which the reference has been couched

clearly shows that the Federation (second respondent) merely wants a

declaratory relief which by itself would be wholly ineffective and will

give no benefit to the Federation. The settlement arrived at between

the Bank and the Association (third respondent) was under Section

18(1) of the Act and consequently it did not bind those who are not

parties to the settlement like the Federation (second respondent) and

thus the rights, if any, of the Federation were not affected in any

manner by the settlement. Learned counsel has also submitted that the

Central Government had on two previous occasions refused to make a

reference and there being no change in circumstance there was no

occasion for reviewing the decision taken earlier and in making the

reference on 29.12.1997. It has been further contended by Mr.

Banerji that the settlement made on 18.8.1996 had already worked

itself out and benefits had been given to the employees in terms

thereof. The said settlement had been superseded by another

settlement on 10.3.1999. If the settlement arrived at on 18.8.1996 is

held to be illegal or unjustified, it will result in causing serious injury

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to the appellant Bank as it will be impossible to recover back the

benefits which had already been given to the employees in terms of

the settlement.

7. It may be mentioned at the very outset that the appellant-Bank

had entered into the settlement dated 18.8.1996 with the Association

(third respondent) and members of the Grindlays Bank Employees

Union, Calcutta, after holding discussions and negotiations. The

settlement had not been entered into either before a conciliation

officer or labour court or industrial tribunal. In view of Section 18(1)

of the Act the settlement was binding only upon the parties thereto.

Section 18 of the Act reads as under: -

"18. Persons on whom settlements and awards are

binding.-- (1) 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.

(2) Subject to the provisions of sub-section (3), an

arbitration award which has become enforceable shall be

binding on the parties to the agreement who referred the

dispute to arbitration.

(3) A settlement arrived at in the course of conciliation

proceedings under this Act or an arbitration award in a

case where a notification has been issued under sub-section

(3-A) of Section 10-A or an award of a Labour Court,

Tribunal or National Tribunal which has become

enforceable shall be binding on--

(a) all parties to the industrial dispute;

(b) all other parties summoned to appear in the

proceedings as parties to the dispute, unless the

Board arbitrator, Labour Court, Tribunal or National

Tribunal, as the case may be, records the opinion

that they were so summoned without proper cause;

(c) where a party referred to in clause (a) or clause (b)

is an employer, his heirs, successors or assigns in

respect of the establishment to which the dispute

relates;

(d) where a party referred to in clause (a) or clause (b)

is composed of workmen, all persons who were

employed in the establishment or part of the

establishment, as the case may be, to which the

dispute relates on the date of the dispute and all

persons who subsequently become employed in that

establishment or part."

A plain reading of the provisions of Section 18 would show that

where a settlement is arrived at by agreement between the employer

and the workman otherwise than in the course of conciliation

proceeding shall be binding on the parties to the agreement in view of

the clear language used in sub-section (1) thereof. Sub-sections (2)

and (3) of Section 18 contemplate different situations where an

arbitration award has been given or a settlement has been arrived at in

the course of conciliation proceedings. In M/s. Tata Chemicals Ltd.

vs. The Workmen employed under M/s. Tata Chemicals Ltd. AIR

1978 SC 828, it was held as under: -

"Whereas a settlement arrived at by agreement

between the employer and the workman otherwise than

in the course of conciliation proceeding is binding only

on the parties to the agreement, a settlement arrived at in

the course of conciliation proceeding under the Act is

binding not only on the parties to the industrial dispute

but also on other persons specified in Cls. (b), (c) and (d)

of sub-sec. (3) of S. 18 of the Act."

8. The Federation (second respondent) not being party to the

settlement, it is obvious that the same is not binding upon it in view of

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sub-section (1) of Section 18 of the Act. Thus the settlement dated

18.8.1996 did not affect the rights of the Federation (second

respondent) in any manner whatsoever and it can possibly have no

grievance against the said settlement.

9. Mr. S.N. Bhat, learned counsel for the Federation (second

respondent), has submitted that under the settlement such employees

of the bank, who were not members of the Association (third

respondent), were required to give a receipt in writing in order to avail

of the benefits of the settlement and this was clearly illegal. We are

unable to accept the submission made. As already stated, the

settlement was arrived at between the Bank and the Association (third

respondent) and by virtue of sub-section (1) of Section 18 of the Act it

bound only the members of the Association (third respondent).

However, the Bank also extended the benefit of settlement to such

other employees, who were not members of the Association. In order

to avail of the benefit they had to give a receipt that they were

accepting the settlement and the same shall be binding upon them and

the format of the receipt, which has been reproduced earlier, does not

contain any such term, which may be of detriment to them. To protect

its interest the Bank was perfectly justified in asking for a receipt from

those employees, who were not members of the Association (third

respondent), but wanted to avail of the benefit of the settlement.

Therefore, we do not find anything wrong in the Bank asking for a

receipt from the aforesaid category of employees.

10. The principal issue, which requires consideration, is whether

the Central Government was justified in making a reference to the

Industrial Tribunal in terms set out earlier. Section 2(k) of the Act

defines "industrial dispute" and it means any dispute or difference

between employers and employers, or between employers and

workmen, or between workmen and workmen, which is connected with

the employment or non-employment or the terms of employment or

with the conditions of labour, of any person. The definition uses the

word "dispute". The dictionary meaning of the word "dispute" is: to

contend any argument; argue for or against something asserted or

maintained. In Black's Law Dictionary the meaning of the word

"dispute" is: a conflict or controversy, specially one that has given rise

to a particular law suit. In Advance Law Lexicon by P. Ramanatha Iyer

the meaning given is: claim asserted by one party and denied by the

other, be the claim false or true; the term dispute in its wider sense may

mean the ranglings or quarrels between the parties, one party asserting

and the other denying the liability. In Gujarat State Cooperative Land

Development Bank Ltd. Vs. P.R. Mankad and others (1979) 3 SCC 123,

it was held that the term dispute means a controversy having both

positive and negative aspects. It postulates the assertion of a claim by

one party and its denial by the other.

11. A plain reading of the reference made by the Central

Government would show that it does not refer to any dispute or

apprehended dispute between the Bank and the Federation (second

respondent). It does not refer to any demand or claim made by the

Federation or alleged refusal thereof by the Bank. In such

circumstances, it is not possible to hold that on account of the

settlement dated 18.8.1996 arrived at between the Bank and the

Association (third respondent), any dispute or apprehended dispute

has come into existence between the Bank and the Federation (second

respondent). The action of the Bank in asking for a receipt from those

employees, who are not members of the Association (third

respondent) but wanted to avail of the benefit of the settlement, again

does not give rise to any kind of dispute between the Bank and the

Federation (second respondent). Thus, the reference made by the

Central Government by the order dated 29.12.1997 for adjudication

by the Industrial Tribunal is wholly redundant and uncalled for.

12. There is another aspect of the matter, which deserves

consideration. The settlement dated 18.8.1996 had already worked

itself out and a fresh settlement had been arrived at between the Bank

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and the Association (third respondent) on 16.11.1999. The members

of the Association (third respondent) and other employees, who

availed of the benefit of the settlement, have received payments in

terms thereof. Some of the employees have already retired from

service. Even if the settlement is set aside the Federation (second

respondent) would not gain in any manner as no enforceable award

can be given in its favour, which may be capable of execution. On the

contrary the appellant-Bank would be a big loser as it will not only be

very difficult but almost impossible for the Bank to recover the

monetary benefits already paid to its employees under the settlement.

We are, therefore, of the opinion that the reference made by the

Central Government is wholly uncalled for and deserves to be set

aside.

13. Mr. Bhat, learned counsel for the second respondent, has

submitted that this Court should not interfere with the order of the

Central Government making a reference under Section 10 of the Act,

as the appellant can ventilate its grievances before the Industrial

Tribunal itself and if the decision of the tribunal goes against the

appellant, the same may be challenged in accordance with law.

According to learned counsel the writ petition is pre-mature as the

appellant has got a remedy before the Tribunal to show that the

reference is either bad in law or is uncalled for. We are unable to

accept the submission made. It is true that normally a writ petition

under Article 226 of the Constitution should not be entertained against

an order of the appropriate Government making a reference under

Section 10 of the Act, as the parties would get opportunity to lead

evidence before the Labour Court or Industrial Tribunal and to show

that the claim made is either unfounded or there was no occasion for

making a reference. However, this is not a case where the infirmity in

the reference can be shown only after evidence has been adduced. In

the present case the futility of the reference made by the Central

Government can be demonstrated from a bare reading of the terms of

the reference and the admitted facts. In such circumstances, the

validity of the reference made by the Central Government can be

examined in proceedings under Article 226 of the Constitution as no

evidence is required to be considered for examining the issue raised.

14. In National Engineering Industries Ltd. vs. State of Rajasthan

and others (2000) 1 SCC 371, this Court held as under in para 24 of

the report:

"It will be thus seen that High Court has jurisdiction to

entertain a writ petition when there is allegation that there

is no industrial dispute and none apprehended which

could be subject matter of reference for adjudication to

the Industrial Tribunal under Section 10 of the Act. Here

it is a question of jurisdiction of the Industrial Tribunal,

which could be examined by the High Court in its writ

jurisdiction. It is the existence of the industrial dispute

which would clothe the appropriate Government with

power to make the reference and the Industrial Tribunal

to adjudicate it."

15. In view of the discussions made above it is manifestly clear that

there is no industrial dispute in existence nor there is any apprehended

dispute between the appellant-Bank and the Federation (second

respondent) and as such there is absolutely no occasion for making

any reference for adjudication by the Industrial Tribunal. The

reference being wholly futile, the same deserves to be quashed.

16. The appeal is accordingly allowed with costs. The judgments

and orders of the learned single Judge dated 29.2.2000 and that of the

Division Bench of the High Court dated 19.6.2000 are set aside and

the reference made by the Central Government to the Industrial

Tribunal on 29.12.1997 is quashed.

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