Dismissed

The Zuari Industries Ltd. through Attorney Mr. R. Y. Patil v. State of Goa through Chief Secretary and 21 Ors.

Bombay HC7 May 2014WP/195/2007

Case brief

AI extract

What is this about?

The High Court dismissed the petitioner's writ petition challenging the State Government's order referring a dispute to the Industrial Tribunal. The court upheld the reference despite the union raising the demands being deregistered at the time of the petition but later restored, noting the union was registered when the reference was made.

What did the court decide?

Rule discharged; petition dismissed. Reference proceedings to continue subject to the pendency of W.P. No.264/2012 regarding the union's registration status.

The Zuari Industries Ltd. through Attorney… — Contract and Commercial Disputes | Bombay HC (2014)

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IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO. 195 OF 2007

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The Zuari Industries Ltd., A Company incorporated under the Companies Act, having its factory at Zuarinagar – Goa, through its constituted attorney Shri R.Y. Patil, General Manager – Legal Affairs & Company Secretary. …... Petitioner.

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V/s.

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State of Goa through the Chief Secretary, having its Office at Secretariat, Porvorim, Goa.

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Commissioner of Labour, Govt. of Goa, Shram Shakti Bhawan, 2^nd Floor, Patto Plaza, Panaji, Goa.

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Deputy Commissioner of Labour, Blessings Pioneer Commercial Complex, 2^nd Floor, Old Market, Maregao, Goa.

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Mr. R. G. Furtado,

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Mr. O.S.A. Da Silva,

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Mr. G.R. Kanekar,

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Mr. M. G. Tirodkar,

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Mrs. Veena A. Kantak,

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Mr. V. V. Prabhudessai,

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Mr. A.C. Govekar,

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Mr. S.M. Naik,

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Mr. F. F. Fernandes,

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Mr. A. J. D'Costa, 14. Mr. P. S. Sangodkar,

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Mr. L. D. Vaz,

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Mr. R. S.S. Shirodkar,

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Mr. J. Gomes,

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Mr. A. F. Barreto,

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Mr. S.M. Arolkar,

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Mr. S. S. Priolkar,

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Mr. P. S. Borkar

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Mrs. Ayona D'Silva, All having office at Zuari Industries Ltd., Zuarinagar, Goa.

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The Zuari Agro Chemicals Ltd. Employees Union (Goa), Zuari Industry, Sancoale, Zuarinagar, Goa. ….... Respondents.

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Shri. G. K. Sardessai, with Mr. Vijay Palekar, Advocates for the petitioners.

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Shri. M. Salkar, Government Advocate for respondents No.1 to 3.

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Shri. Shivan Dessai, Advocate or respondents No.4 to 9, 21 and 22.

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Shri. Valmiki Menezes, Advocate for respondent No.23.

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CORAM :- F.M. REIS &

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Z.A. HAQ, JJ.

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Judgment reserved on : 21^st April, 2014. Judgment pronounced on : 7^th May, 2104.

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J U D G M E N T :- (PER Z.A. HAQ, J.)

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In this case, undisputedly two employees' unions had been recognized by the petitioner-Industry since 1973 till the present

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dispute arose. The two unions are :

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(i) Zuari Agro Chemicals Employees' Union, (hereinafter referred to as “the Employees' Union”), representing the majority of the workers; and

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(ii) Zuari Agro Chemicals Workers' Union (hereinafter

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referred to as “the Workers' Union”), (which was deregistered at the time of filing of this writ petition.).

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The Petitioner-Industry had been negotiating and entering into settlements from time to time with both the above mentioned Unions since 1973 till the present dispute had started.

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On 25^th April, 1994, the petitioner-Industry entered into a settlement in conciliation as provided under Section 12(3) of the Industrial Disputes Act, 1947 with the Employees' Union.

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On 22^nd June, 1994, the petitioner-Industry entered into a settlement with the Workers' Union. The settlement dated 22^nd June, 1994 was challenged by the Employees' Union before this Court. The writ petition, challenging the above mentioned settlement dated 22^nd June, 1994 was dismissed by this Court. The judgment passed by this

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Court was challenged before the Hon'ble Supreme Court in Special Leave Petition (C) No.12389 of 1996 which was dismissed.

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The Workers' Union raised charter of demands on 14.12.1995 and the Employees' Union raised charter of demands on 21.2.1996. The petitioner-Industry arrived at a settlement dated 5^th November, 1997 as per Section 2(p) read with section 18(1) of the Industrial Disputes Act with the Employees' Union. The charter of demands submitted by the Workers' Union on 14^th December, 1995 continued to pend with the Labour Commissioner. This dispute was admitted in conciliation and as the conciliation proceedings failed, the State Government by an order dated 9^th December, 1997 referred the dispute for adjudication to the Industrial Tribunal. The Industrial Tribunal passed an Award on 1^st July, 1998 in terms of the settlement dated 5^th November, 1997.

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The Workers' Union submitted their charter of demands on 20^th January, 1999 and the Employees' Union submitted their charter of demands on 4^th February, 1999. According to the petitioner-Industry the strength of the Workers' Union was regularly reducing and it was

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147 at the time of signing of the settlement dated 5^th November, 1997, and on 20^th January, 1999 it was 88. The petitioner-Industry communicated to the Workers' Union that they were negotiating on the charter of demands with the Employees' Union as it was a majority union. The Workers' Union by letter dated 24^th March, 1999 submitted

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that the refusal of the petitioner-Industry to negotiate with them has to be treated as an industrial dispute and demanded that their charter of demands be referred to the Industrial Tribunal for adjudication. The State Government referred the matter for adjudication to the Industrial Tribunal and the reference came to be registered as IT/62/1999. As far as the charter of demands submitted by the Employees' Union was concerned, it was admitted in conciliation before the Labour Commissioner and settlement was arrived at between the petitionerIndustry and the Employees' Union on 19^th May, 2000. It is the case of the petitioner-Industry that the Workers' Union had also participated in the conciliation proceedings and had raised their objections and the Conciliation Officer had considered the objections of the Workers' Union and after being satisfied that the Employees' Union had majority, the above mentioned settlement dated 19^th May, 2000 was accepted by him. According to the petitioner-Industry, the settlement dated 19^th

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May, 2000 was signed in conciliation under section 12(3) of the Industrial Disputes Act and the benefits of the settlement were extended to all the employees covered under the settlement and the arrears as per the settlement were paid on 21^st June, 2000 to all the workmen, including the members of the Workers' Union. The Workers' Union had filed a writ petition before this Court, challenging the settlement arrived at in conciliation on 19^th May, 2000. This Court disposed of the writ petition, permitting the Workers' Union to raise the issues before the Industrial Tribunal. The reference is still pending before the Industrial Tribunal.

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The Workers' Union submitted their charter of demands on 17^th January, 2002 and the Employees' Union submitted their charter of demands on 28^th November, 2002. The petitioner-Industry negotiated with the Employees' Union and signed the settlement on 16^th January, 2003. The case of the petitioner-Industry is that all the members of the Employees' Union and some of the members of the Workers' Union accepted the terms of settlement and gave individual undertakings as required by the settlement. In the meanwhile, the State Government referred the charter of demands of the Workers' Union to the Industrial

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Tribunal and the reference is registered as IT/45/03. The Workers' Union had filed an application before the Industrial Tribunal praying for an ad interim relief for extension of benefits of the settlement dated 16^th January, 2003. The Industrial Tribunal rejected the above mentioned application, against which Writ Petition No.365/04 was filed before this Court, which was also dismissed.

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In the meantime, the Registrar of Trade Unions revoked the registration certificate of the Workers' Union by an order dated 6^th August, 2004 on the ground that the Workers' Union did not meet the requirement of 10 % membership as required by Section 9A of the Trade Unions Act.

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The Employees' Union submitted a charter of demands on 10^th January, 2005. Nineteen members of the Workers' Union (which according to the petitioner-Industry was deregistered) submitted a charter of demands on 10^th January, 2005. The Workers' Union raised a dispute before the Deputy Labour Commissioner in respect of their charter of demands. The Deputy Labour Commissioner held conciliation proceedings and submitted a failure report to the State Government. The Petitioner-Industry had sent a representation dated

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17^th January, 2006 to the State Government pointing out that the Workers' Union was deregistered by the Registrar of Trade Unions by order dated 6^th August, 2004 and therefore, it cannot raise a charter of demands. The petitioner-Industry and the Employees' Union held negotiations on the charter of demands of the Employees' Union and arrived at a settlement on 24^th March, 2006 which was registered with the Government under No.24/2006. The petitioner-Industry stated that all the workers accepted the settlement except 19 workers who claimed to be the members of the Workers' Union which was deregistered at that time. The charter of demands of the Workers' Union was admitted by the Labour Commissioner in conciliation and part of the charter of demands of the Workers' Union was referred to the Industrial Tribunal by order dated 7^th December, 2006 for adjudication. The petitioner-Industry has filed this writ petition challenging the above mentioned order.

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The substantive challenge on behalf of the petitionerIndustry is that the Workers' Union is in minuscule minority and, therefore, it cannot raise any charter of demands and consequently, the order of reference on the charter of demands raised by the Workers'

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Union is unsustainable in law. It is submitted on behalf of the petitioner-Industry that at the time of submitting the charter of demands on 10^th January, 2005, only 19 members proclaimed to be the members of the Workers' Union and at that time, the Workers' Union had membership of more than 400 workers. It is in view of these facts that this Court had passed the order dated 13^th November, 2013, granting leave to implead the Employees' Union as respondent in the writ petition. Accordingly, the Employees' Union is impleaded as respondent in the writ petition and it is served and has put in its appearance.

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At the time of the filing of the writ petition, the Workers' Union was deregistered and an appeal against the order of deregistration was filed. It is undisputed that the order of deregistration of the Workers' Union is set aside and the appellate order is the subject-matter of Writ Petition No.264/2012, which is pending before this Court and which is to be placed before the learned Single Judge, as per the Bombay High Court Appellate Side Rules, 1960.

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Shri Sardessai, learned Advocate for the petitionerIndustry has relied on the proviso below Sections 4, 9A and 10(c) of Trade Unions Act, 1926 and has submitted that the Workers' Union cannot insist for the reference, when as per the above mentioned provisions it has no right in the eye of law for its registration as trade union under the Trade Unions Act, 1926.

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Shri Shivan Dessai, learned Advocate for the respondents No.4 to 9, 21 and 22 has submitted that the arguments made on behalf of the petitioner-Industry to challenge the order of reference, are misdirected. According to the learned Advocate, the order of reference was challenged mainly on the ground that the Workers' Union was deregistered at the time of filing of the writ petition and because of the subsequent appellate order restoring the registration of the Workers' Union, challenge to the order of reference does not survive. The learned Advocate has submitted that the test while the Government orders the reference is not as to whether the union which has submitted

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the charter of demands is in majority or in minority and the Government at the stage of issuing the order of reference cannot examine the status of the concerned union as to whether it is in

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majority or in minority. Shri Dessai, the learned Advocate has submitted that this exercise is neither required, nor permissible under Section 10 of the Industrial Disputes Act, 1947. The learned Advocate has submitted that the only requirement which is to be considered by the Government while issuing the order of reference is to see as to whether the union which has made the charter of demands is registered or not and in the present case, the Workers' Union being a registered union, the State Government has rightly made the reference. It is submitted that the same issue is considered by the Honourable Supreme Court between the same parties and the conclusive findings about existence of the two settlements and applicability of each settlement to the members of the respective unions and that both settlements have to be treated as a composite settlement to resolve the disputes raised in

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the charter of demands submitted by both the unions, cannot be overlooked. The learned Advocate has submitted that the entitlement of the members of the Workers' Union for the benefits as per the charter of demands submitted by it, has to be considered on merits by the Industrial Tribunal. In support of this submission, the learned Advocate relies on the Judgment given in the case of Tata Chemicals Ltd. vs. The Workmen represented by Chemicals Kamdar Singh

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reported in AIR 1978 SC 828, .

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Shri Valmiki Menezes, the learned Advocate for respondent No.23 has submitted that the claim as made by the Workers' Union cannot be considered at this stage because its registration itself is subjudiced in Writ Petition No.264/2012. The learned Advocate has further submitted that if the reference is to be adjudicated upon by the Industrial Tribunal, then the Employees' Union will be a necessary party before the Industrial Tribunal, as the Award which would be passed by the Industrial Tribunal would be binding on all the workers in view of Section 18(3) of the Industrial Disputes Act, 1947. In support of his submission, he relies on the Judgment given in the case of National Engineering Industries Ltd. vs. State of Rajasthan and others, reported in (2000) 1 SCC 371 .

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Shri Sardessai, the learned Advocate for the petitionerIndustry has submitted that the argument on behalf of the respondents No.4 to 9, 21 and 22 that the Industrial Tribunal can examine the entitlement of the claim of the workers affiliated with the Workers' Union, is unacceptable in law. It is further submitted by him that the

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cause of the workmen claiming affiliation with the Workers' Union cannot be sponsored by the Workers' Union, as it is in minuscule minority. In support of his submission, reliance is placed on the judgments given :

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(i) in the case of National Engineering Industries Ltd. vs.

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State of Rajasthan and others, reported in (2000) 1 SCC 371; and

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(ii) in the case of Workmen of Indian Express (P) Ltd.

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vs. The Management, reported in 1969 (1) SCC 228,

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It is undisputed that the Workers' Union was a registered Union at the time when the order of reference was made by the State Government. It is also undisputed that at present, the registration of the Workers' Union continues, though it is the subject-matter of Writ Petition No.264/2012. In this background, the submission made on behalf of the petitioner-Industry about the validity of the reference at the behest of the Workers' Union cannot be accepted. The Judgment

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given in the case of Workmen of Indian Express (P) Ltd. vs. The Management (supra), has dealt with the issue as to whether the Union not being exclusively an Union of the workmen employed in the Company could espouse the said cause and while answering this issue,

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the Honourable Supreme Court has held that this is not permissible. In the present case, the workmen who are the members of the Workers' Union are admittedly the workers of the petitioner-Industry and the petitioner-Industry had been negotiating and entering into the settlements pursuant to the charter of demands submitted by the Workers' Union since 1973. Not only this, the challenge to the action of the petitioner-Industry entering into the settlement with the Workers' Union was made by the Employees' Union before the Honourable Supreme Court in Special Leave Petition (C) No.12389 of 1996 and the said challenge was rejected. The relevant portion of the judgment of the Hon'ble Supreme Court is as follows :

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“... Having regard to the past conduct of the two rival unions in entering into separate settlements for resolving the disputes arising out of their demands and keeping in view the clauses in the two settlements dated April 24, 1994 and June 22, 1994 restricting the applicability of each settlement to the members of their union which has entered into the settlement, we are of the opinion that two settlements have to be read together and both the settlements have to be treated as a composite settlement resolving the dispute raised in the Charters of demands submitted by both the unions. In these circumstances we are unable to hold that the High

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Court was in error in taking the view that the said settlement dated June 22, 1994 cannot be said to have been entered into in violation of the provisions of Section 18(3) of the Act. We, therefore, find no ground to interfere with the impugned judgment of the High Court under Article 136 of the Constitution. It is, however, made clear that we are not in agreement with the observations made by the High Court on the preliminary objections regarding the maintainability of the writ petition. The special leave petition is dismissed accordingly with no order as to costs.”

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Further more, it is an admitted fact on the record that the reference vide No.IT/62/1999 and the reference vide No.IT/45/2003 to consider the dispute referred at the behest of the Workers' Union, are pending before the Industrial Tribunal. In these facts and in view of the judgment of the Honourable Supreme Court in Special Leave Petition (C) No.12389 of 1996, the challenge raised by the petitionerIndustry cannot be accepted.

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In view of the above, the petition is dismissed. Rule is discharged. In the circumstances, the parties to bear their own costs. It is clarified that the reference proceedings before the Industrial

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Tribunal will be subject to the decision of the Writ Petition No.264/2012.

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As far as the submission on behalf of respondent No.23 is concerned that respondent No.23 would be a necessary party before the Industrial Tribunal, we are of the view that it would not be proper for this Court to pass any orders in this regard, at this stage. This point is left open to be considered by the Industrial Tribunal. Respondent No.23 is aware about the pendency of the reference before the Industrial Tribunal and may take appropriate steps, if so advised and as permissible in law.

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Z.A. HAQ, J. F.M. REIS, J.

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ssm.

The Zuari Industries Ltd. through Attorney Mr. R. Y. Patil v. State of Goa through Chief Secretary and 21 Ors.

Case brief

What is this about?

What did the court decide?

The Zuari Industries Ltd. through Attorney Mr. R. Y. Patil v. State of Goa through Chief Secretary and 21 Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

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Coram

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