TMI Blog1999 (2) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... the common cause of complaint against the impugned judgment of the Division Bench, while the respondent KSRTC Staff and Workers Federation, which is the common respondent in all these appeals, is the only contesting respondent, being the original writ petitioner whose writ petition was allowed by the learned Single Judge of the High Court and which judgment came to be confirmed by the impugned judgment of the Division Bench. We shall refer to the appellant - Management of Karnataka State Road Transport Corporation, the original Respondent No. 1 in the writ petition, as the Corporation, the appellant State of Karnataka in other two appeals, being original Respondent No. 2 in the writ petition as the State , while the contesting Union, Respondent No.1 in these appeals in writ petition as the Union for the sake of convenience in the latter part of this judgment. The question involved in these appeals in as to whether the order passed by the State on 10th Sept., 1993 and the consequential order passed by the Corporation on 21st September, 1993 were legal and valid. Both these orders came to be set aside by the learned Single Judge in the writ petition filed by the Union and as noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A Memoradum of Settlement regarding the wages payable to the employees was also entered into on 1st January, 1988 between the Corporation and the Union. the settlement was for a period of four years commencing from 1st January, 1988 till 31st December, 1991. As the recognition given to the Federation had come to an end, election had to be conducted again to choose the sole bargaining agent by way of referendum. The Union emerged successful as the sole bargaining agent and was chosen as such. The Corporation by its order dated 16th July, 1992 accorded recognition to the Union as the sole bargaining agent as per the Memorandum. It is not in dispute between the parties that as four years period expired with effect from 16th July, 1996 a fresh referendum had to be held for finding out as to whether the Union still commanded majority membership of workmen so as to be re-designated as a recognised Union. But the said referendum has still not been held because of writ petitions pending in the present proceedings. During the time, admittedly, the Union was functioning as a recognised Union it submitted a charter of demands on various disputed items concerning service conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed by the Division Bench by the impugned judgment and order and that is how the Corporation and the State are before us in these appeals on grant of Special Leave to appeal under Article 136 of the Constitution of India. RIVAL CONTENTIONS: Shri G.L.Sanghi, learned senior counsel appearing for the Corporation, vehemently contended that the settlement of 28th July, 1988 could not survive after 16th July, 1996 when the Union ceased to be a recognised Union of employees and till a new bargaining agent emerged by way of recognition, the respondent Union could not rely upon the terms of the earlier settlement of 28th July, 1988. It was next contended that in any case the said settlement had ceased to operate and was validly terminated by the Corporation by the impugned Notification dated 21st Sept., 1993 as the State had already directed the Corporation to withdraw the Pay Roll Check of Facility given to the Union by the earlier agreement dated 28th July 1988. It was alternatively contended that in any case the said earlier settlement dated 28th July, 1988 ceased to operate also on the ground that subsequent to the said Notification a second settlement was arrived at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required by Section 19(2) of the ID Act it remains binding on the Corporation. That whether the Corporation subsequently got trifurcated or not becomes irrelevant as even to the successors of the Corporation the settlement would be binding. It was next submitted that the Notification of the Corporation dated 21st Sept. 1993 cannot be treated to be a notice as contemplated by Section 19(2) of the ID Act. Even assuming that it was such a notice, the binding effect of the settlement of 1988 would not come to an end automatically till a fresh settlement on the topic is substituted by negotiations between the parties, as was clearly laid down in the decision of three Judge Bench of this Court in The Life Insurance Corporation of India Vs. D.J.Bahadur Ors. 1981(1) SCR 1083. It was then submitted that the Memorandum of Understanding dated 10th May, 1993 was in connection with entirely different demands put forward by the Union for consideration of the Corporation. That it had nothing to do with the Pay Roll Check off Facility which was already governed by a binding Settlement of 28th July, 1988. Consequently, there was no occasion for the State to pass the impugned order dated 10th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocus standi of the Union in the present proceedings is concerned, it must be kept in view that the Corporation itself by its order dated 24th December, 1987 granted recognition to the Union as the sole bargaining agent for its members. It was noted by office memorandum of the Corporation dated 24th Dec. 1987 that the Federation having secured 53.04% of the votes polled at the Corporation level in the referendum held on 11th Dec. 1987, the Corporation was pleased to accord recognition to the respondent Federation as sole bargaining agent at the Corporation level. However, this was subject to the conditions stipulated under Notification dated 30th April, 1987 which prescribed four years period from the date of such concerned. It is also not in dispute between the parties that even in the subsequent referendum, the respondent Federation/Union secured 61.07% of votes polled at the Corporation level and the Corporation by its Office Memorandum dated 16th July, 1992 continued recognition to the Union as sole bargaining agent subject to the conditions stipulated in the earlier Notification dated 3rd Dec. 1991. It is therefore, not in dispute between the parties that till 16th, 1996 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties dated 28th July, 1988. This settlement was current when the Memorandum of Understanding dated 10th May. 1993 came to be entered into between the respondent Union and the Corporation. The said Memorandum of Understanding dealt with various demands including revision of pay scales. They are listed at item Nos. 1 to 23. In none of these demands, there is any whisper about the then existing Pay Roll Check-off Facility covered by the settelment of 28th July. 1988. Paragraph 24 of the Memorandum on which strong reliance was palced by learned senior counsel Shri Sanghi for Corporation, deserves to be noted in extenso. It is therefore extracted as under ; 24 SAVINGS: Benefits already granted under earlier Settlements excepting those covered under this Settlement, facilities continuing by way of conventions and or practice to be continued in respect of the employees who are in the services of the Corporation as on the date of signing of this Settlement. An understanding has been reached on the above mentioned points in anticipation of approval of the Board of Directors and the State Government. However, the issue regarding free duty facility to R.Federation/R.U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. We have to see as to what is the scope and iambic of aforesaid clause 24 of the Memorandum of Understanding dated 10th May, 1993 vis-a-vis this scheme. The first part of clause 24 deals with benefits already granted under earlier settlements but excepting those covered by the settlement at hand namely the Memorandum of Understanding. These benefits were to be continued for the employees who were in the service of the Corporation on the date of signing of the settlement. They were obviously benefits already made available to the workmen under any earlier settlements. Pay Roll Check-off facility, as noted earlier, cannot be considered to be a benefit available to the workmen. At the most, it will be a facility to the Union to get an ensured method of securing membership fees from its members on regular basis. The first part of paragraph 24 states that facilities continuing by way of conventions and or practice will be continued. It is obvious that such facilities may include any of the then available facilities to the Union or even to workmen. However facility given to the Union of getting benefit of the scheme of Pay Roll Check-off is obviously not a facility available to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e binding settlement of 28th July, 1988. If that is so, there was no occasion for the State in the light of the aforesaid Memorandum of Understanding to pass the impugned Government Order dated 10th Sept., 1993, on a wrong assumption that it was called upon to make any observations or convey its decision whether it approved or did not approve the grant of Pay Roll Check-off Facility to the respondent Union. The proceedings of the Govt. of Karnataka which are at page 110 of Vol. 1 of the paper book clearly mentioned as its subject, List of demands submitted by KSRTC Staff Workers Federation and also referred to the D.O.Letter dated 13th July, 1993 from the Chairman Managing Director of the Corporation. The Preamble of the impugned G.O. issued by State recites that the Memorandum of Understanding arrived at between the Chairman Managing Director of the Corporation, and the Management of Corporation and KSRTC Staff Workers Federation had been signed on 10th May, 1993 in anticipation of approval of the Board of Directors of the Corporation and the Govt. It is in that light that the scope of the Govt. Order dated 10th Sept. 1993 is to be appreciated. It states that after examini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and the Union and it was holding the field at least by the time the order dated 10th Sept. 1993 saw the light of the day. It must, therefore, be held that Condition No.2 as imposed in the impugned Govt. Memo dated 10th Sept. 1993 was totally ultra vires and uncalled for and that the State had no occasion to lay down such a condition in connection with existing binding Pay Roll Check-off Facility. Once this conclusion is reached, it becomes obvious that the aforesaid condition contained in the impugned Memo must be held to be null and void and inoperative at law. Consequently, it is not necessary for us to examine the wider question canvassed by learned Advocate General for the State of Karnataka whether the State could issue such Cabinet Note in connection with the charter of demands submitted by KSRTC Staff and Workers Federation. So far as Pay Roll Check-off Facility is concerned, it has to be kept in view that Free Duty Check-off facility was substituted by a scheme of direct deduction from the employees wages the amount of subscription for direct payment to their union, which became Pay Roll Check-off Facility in place of duty free facility. It is this Pay Roll Check-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to visualise that in exercise of powers conferred under Section 34 of the Corporation Act, the State of Karnataka could not have directed the Corporation to commit breach of any binding settlement operative between the parties under Section 18(1) of the ID Act or to make the Corporation liable for criminal action in this connection. It has to be noted that under Section 29 of the ID Act, any party who commits breach of a binding settlement would be liable to be prosecuted and the punishment may extend even to six months imprisonment. It is also not possible to agree with the contention canvassed in the written submissions that because by way of an interim order of this Court the parties were directed to arrive at some amicable settlement of the dispute and which did not fructify, it can be said that the said order of the Govt. declining to restore the Check-off facility had put an end to the entire controversy in the present case. If the Govt. had approved a modified settlement in this connection and if that had resulted into a fresh agreement between the parties regarding Pay Roll Check-off Facility then it could have become a new binding settlement between the parties. But ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of 1988. It is also not possible to countenance the submission that thought the Check-off Facility may continue to exist de jure it would cease to exist de facto. Such unilateral withdrawal of Check-off Facility by one of the parties cannot be treated to be an act which is legal and valid. Minutes of the meeting held between the representatives of the Corporation and Respondent NO.1 Union held on 18th October, 1995 also cannot amount to substitution of a fresh settlement on the Pay Roll Check-off Facility. To reiterate, the Federation s only agreement was to discuss demands relating to check off and trade union facilities at the Govt. Level. So long as the said discussion had not culminated into any other binding settlement on the topic the earlier settlement cannot be said to have been replaced or substituted by any other validly binding settlement. Consequently, the aforesaid written submissions do not advance the case of the appellant. We, thereforem answer point No.2 by holding that the Govt. Order dated 10th Sept., 1993 in connection with the impugned Pay Roll Check-off Facility was neither legal nor valid and was totally uncalled for. This point is, therefore, answe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on issued by the Corporation on 21st Sept. 1993 itself resulted into termination of the said submission is to be stated to be rejected. The contingency contemplated by second part of para 7 of the settlement dated 28th July, 1988 could apply only when both the parties namely, the Corporation as well as the respondent Union by mutual consent, terminated the said settlement earlier i.e.during the time the Union remained a recognised Union. It obviously could not be submitted by Shri sanghi for the Corporation that the unilateral Notification dated 21st Sept. 1993 issued by the Corporation brought about the termination of the settlement of 28th July, 1988 by mutual consent of Corporation and the respondent Union. Consequently, the second part of para 7 of the said settlement could never have applied to the facts of the present case. Having realised this difficulty, Mr.Sanghi, learned senior counsel for the Corporation, submitted that, in any case, the impugned order dated 21st Sept. 1993 of the Corporation can be treated to be a Noitce under Section 19(2) of the ID Act. In this connection, it is necessary to refer to Section 19 sub-sections (1) (2) of the ID Act. They read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Corporation could have unilaterally terminated such settlement it could not have done so during the time the settlement was operative on its own terms, meaning thereby, till the recognition accorded to the Union continued or till any earlier termination by mutual consent. As seen earlier, by 21st Sept. 1993 none of these contingencies had occurred. Consequently, the so called unilateral termination of the settlement by the Notification of Corporation dated 21st Sept. 1993 must be held to be completely ultra vires toe powers of the Corporation under Section 19 sub-section (2). But even that apart, it has to be observed that the Corporation had not given two month s notice in any case as contemplated by Section 19 sub-section (2) for terminating the said binding settlement, though such an occasion had still not arisen for the Corporation as the binding effect of the settlement during the period provided therein as per clause 7 had not come to an end by then. Even on that ground the notification dated 21st Sept. 1993 fell foul on the touchstone of Section 19(2) of the ID Act, having not complied with the said provision. But even on an assumption that the aforesaid notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd purpose. Industrial law frowns upon a lawless void and under general law the contract of service created by an award or settlement lives so long as a new lawful contract is brought into being. To argue otherwise is to frustrate the rule of law. If law is a means to an end - order in society can in commit functional harakiri by leaving a conflict situation to lawless void? In view of the aforesaid settled legal position, therefore, if any unilateral notice to terminate the binding settlement of 28th July 1988 was issued by the Corporation which on the facts of the present case, is found not to have been issued even then till any new settlement on the question of grant of Pay Roll Check-off Facility was substituted by parties, the legally binding effects of the earlier settlement of 1988 would continue to operate and the Corporation will then be contractually bound to confer pay roll check-off facility to the Union. Consequently, there was no occasion for the Corporation to issue the impugned Notification dated 21st Sept. 1993 even on this ground as it was clearly violative of the mandatory requirement of Section 19 sub-section (2) and was contrary to the settled legal posit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said binding terms of the settlement and only grievance was that these binding terms of settlement were being violated by the Corporation and hence the demand was to recall such withdrawal. The Federation in para 2 of the said settlement clearly mentioned that, out of the nine demands made by the Federation, for the demands at Nos. 1 to 5, the Federation would reserve its right to pursue with the Govt. of Karnataka. Meaning thereby the Federation agreed with the Corporation to take up the matter with the Govt. of Karnataka and to persuade it to call upon the Corporation to withdraw its impugned order dated 21st Sept., 1993 and to restore the facility available under binding terms of settlement dated 28th July., 1988. To say the least, this agreement between the parties as per the settlement of 8th Sept., 1994 cannot be said to have whittled down the settlement dated 28th July, 1988 nor can it neb said to have substituted it by any fresh scheme of check-off facility. All that the Union can be said to have agreed with the Corporation was to pursue the matter with the Govt. for enforcement of the terms of the earlier Settlement of 1988 and for doing the needful in this connection. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the settlement, the Union was insisting upon complying with the terms of the said settlement. It was not the case of substituting the terms of the said settlement but it was a case of reiterating those terms so far as the Union was concerned. We then turn to settlement dated 16th Feb., 1995. A mere look at the said settlement shows that it has nothing to do with the Pay Roll Check-off Facility made available to the respondent Union by the settlement of 28th July, 1988. Therefore, this settlement is miles away from the terms settled on 28th July, 1988 between the parties regarding Pay Roll Check-off Facility. It is totally irrelevant for deciding the question as tried to be raised by Shri Sanghi regarding substitution of the terms of settlement of 1988 by the settlement of 16th Feb., 1995. Same is the position regarding the settlement of 10th Oct., 1995 on which reliance was placed by Shri sanghi. The said settlement also does not deal with the question of Pay Roll Check-off Facility. That takes us to the last settlement dated 27th Dec. 1995 strongly pressed in service by Shri Sanghi for the Corporation. It is true that in the short recital of the case as found in the settleme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier settlement dated 28th July, 1988 or for exhibiting any conduct on the part of the respondent Union of giving a go by to the terms of the earlier settlement which gave it the said facility of pay roll check off can be of any avail to Shri Sanghi. It must be held that the settlement of 28th July, 1988 granting pay roll check-off facility to the respondent Union has continued to operate all throughout without in any way being substituted by any fresh settlement between the parties in this connection. The submission made by Shri Sanghi, learned senior counsel for the Corporation, that the Corporation has now undergone trifurcation into three Corporations also cannot be of any avail to him for the simple reason that such a contention was not canvassed either before the learned Single Judge or before the Division Bench. It is also bot brought out on the record as to how this trifurcation has taken place and whether the subsequent successors-in-interest of the Corporation have undertaken the liability of earlier existing settlements entered into by their predecessor Corporation with the erstwhile Union. All these vised questions of fact cannot be permitted to be raised for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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