Ramnagar Cane and Sugar Co. Ltd vs Jatin Chakravorty And Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Criminal Appeal No. 96 of 1959

Decision Date: 5 May, 1960

Coram: P.B. Gajendragadkar, K.N. Wanchoo, K.C. Das Gupta

The case was styled Ramnagar Cane and Sugar Co. Ltd. versus Jatin Chakravorty and Others and was decided on the fifth day of May, 1960. The judgment was issued by the Supreme Court of India and the opinion was written by Justice P. B. Gajendragadkar, who was joined by Justices K. N. Wanchoo and K. C. Das Gupta. The petitioner in the matter was Ramnagar Cane and Sugar Co. Ltd., while the respondents were Jatin Chakravorty together with other respondents. The formal citation of the decision is reported in the 1960 volume of the All India Reporter at page 1012, and the decision is also referenced in subsequent reports as D 1969 SC 306, (11) R 1978 SC 828, and (13) R 1980 SC 115. The issues addressed in the judgment involved the applicability of the West Bengal Security Act of 1950, specifically Section 2(g)(e), Explanation (ii), and several provisions of the Industrial Disputes Act of 1947, namely Sections 18(3)(d), 22(1)(d) and 24(1)(1). The factual backdrop concerned a public utility concern in the sugar industry that employed two rival trade unions representing its workmen. One of the unions was engaged in conciliation proceedings with the employer, while the other union initiated an industrial strike. The Court examined whether a settlement reached in the conciliation process would bind all workmen, irrespective of the union to which they belonged, and whether the strike conducted by the rival union would constitute an illegal strike under the statutory framework.

The Court observed that, under Section 18(3)(d) of the Industrial Disputes Act, a settlement arrived at through conciliation with the employer must have a binding effect on the entire workforce of a public utility concern, even on those employees who are members of a rival union that did not take part in the conciliation. The Court emphasized that the policy underlying Section 18 is to give an extended operation to such settlements so as to promote industrial peace. Consequently, the Court held that the strike initiated by the rival union amounted to a contravention of Section 22(1)(d) of the Act when read in a reasonable construction, and therefore it was illegal under Section 24(1)(1) of the same Act. The Court noted that it was unnecessary to establish the affiliation of the striking workmen with the union that participated in the conciliation, because the statutory scheme intended that the settlement bind all employees. The Court referred to earlier authorities, namely Associated Cement Company Ltd., Porbandar v. Their Workmen, reported in 1960 at page 57 of the Supreme Court Reports, and M/s. New India Motors (P) Ltd. v. K. T. Morris, reported in the same year at page 350, to support this view. The Court further observed that the lower courts had erred in acquitting certain workmen of the offence of subversive activity under Section 11 of the West Bengal Security Act on the ground that the rival union to which they belonged was not a party to the conciliation proceedings. On that erroneous basis, the Court directed that the acquittals be set aside. The judgment was rendered in a criminal appellate jurisdiction, specifically Criminal Appeal No. 96 of 1959, which arose by special leave from the order dated 19 August 1957 of the Calcutta High Court in Criminal Revision No. 1577 of 1956, itself arising from the order dated 3 August 1956 of the First Class Magistrate at Krishnagar, Nadia, in General Revision Case No. 69 of 1954. The Solicitor‑General of India and counsel for the appellant appeared, while the respondent chose not to appear. The opinion was delivered by Justice Gajendragadkar, and the appeal raised a concise question concerning the construction and effect of Section 22(1)(d) of the Industrial Disputes Act, 1947.

The Court noted that the provision under discussion was Section 22(1)(d) of the Industrial Disputes Act, 1947, hereinafter referred to as the Act. The appellant in the present matter was Ramnagar Cane & Sugar Co. Ltd., a company incorporated under the Indian Companies Act. The company engaged in the manufacture of sugar, an essential commodity, at its factory located at Plassey in the District of Nadia. By a notification issued on 8 October 1953, the appellant was declared a public utility concern or service. At the material time the appellant employed approximately 545 permanent workers and about 703 seasonal workers, not counting casual labourers. The majority of the workmen were members of the Ramnagar Cane & Sugar Co. Employees’ Union, hereinafter called the Employees’ Union, while a smaller group were members of a rival organization known as the Ramnagar Sugar Mill Workers’ Union, hereinafter called the Workers’ Union. On 9 December 1953 the Workers’ Union submitted a charter of demands to the appellant. Subsequently, on 20 January 1954 the Employees’ Union presented a similar charter of demands. On that same day the Workers’ Union served a notice of strike on the appellant. A conciliation meeting was convened before the Conciliation Officer on 1 February 1954; the Employees’ Union and the appellant attended, and a notice of that meeting had also been served on the Workers’ Union. The following day, 2 February 1954, the appellant proposed to the Conciliation Officer that the matter be discussed separately with the representatives of each Union. The Workers’ Union objected to this suggestion, and thereafter declared that it considered the conciliation process to have failed. Consequently, on 3 February 1954 the Conciliation Officer filed a report under Section 12, sub‑section (4) of the Act stating that conciliation had failed only with respect to the Workers’ Union.

Further developments were recorded as follows. On 25 February 1954 the appellant and the Employees’ Union reached a settlement, which was documented in a memorandum of settlement duly signed by both parties. In the meantime, on 13 February 1954 the Workers’ Union commenced a strike. As a result of that strike, a criminal complaint was lodged against eleven respondents under Section 11 of the West Bengal Security Act, 1950. The charge framed against the respondents alleged that on or about 13 February 1954 at Plassey each respondent had committed subversive acts intended to impede, delay or restrict the work of Ramnagar Cane & Sugar Co. Ltd., which was a public utility concern engaged in the production of sugar, an essential commodity. The respondents entered a plea of not guilty, contending substantively that the strike in question was not illegal. While they did not deny having participated in the strike on the stated date, they maintained that because the strike was lawful, the offence charged could not be established. The learned magistrate upheld the respondents’ plea and acquitted them.

The trial magistrate accepted the respondents’ plea of not guilty and accordingly acquitted them. The appellant contested that acquittal by filing a revisional petition in the Calcutta High Court. The High Court dismissed the revisional petition because it held that the strike was lawful and concurred with the trial magistrate’s finding. Subsequently, the appellant sought a certificate from the same High Court, but that request was also refused. The appellant then applied for special leave to appeal before this Court, and special leave was granted. The sole issue raised by the appellant before this Court is the allegation that the lower courts erred in concluding that the strike was not illegal, contending that they misinterpreted the provisions of section 22(1)(d) of the West Bengal Security Act.

Before the present point can be examined, it is necessary to set out the relevant statutory framework. Section 11 of the West Bengal Security Act provides that any person who commits a subversive act shall be liable to imprisonment for a term that may extend to five years, to a fine, or to both. Section 2(9)(e) defines a subversive act as any act intended or likely to impede, delay, or restrict (i) any work or operation, or (ii) any means of transport or locomotion, which are necessary for the production, procurement, supply, or distribution of an essential commodity, unless the act is carried out in furtherance of an industrial dispute as defined in the Industrial Disputes Act, 1947. The accompanying explanation clarifies that an illegal strike or illegal lock‑out, as defined in section 24 of the Industrial Disputes Act, 1947, does not qualify as an act in furtherance of an industrial dispute for the purposes of subsection (e). Consequently, if the strike in question is held to be illegal, it automatically meets the definition of a subversive act under section 2(9)(e). This interpretation was adopted by the lower courts. Accordingly, the only remaining question for this Court is whether the strike was an illegal strike under section 24 of the West Bengal Security Act. Section 24 provides, inter alia, that a strike is illegal if it is commenced or declared in contravention of sections 22 or 23. This brings the analysis to section 22, specifically to determine whether, on February 13, 1954, the respondents violated section 22(1)(d). Section 22(1)(d) stipulates that no person employed in a public utility service may go on strike in breach of contract during the pendency of any conciliation proceedings before a conciliation officer, and also not within seven days after the conclusion of such proceedings. The provision makes clear that any strike declared while conciliation proceedings are pending in a public utility service is illegal. The question, therefore, is whether any conciliation proceeding was pending between the appellant and the respondents at the relevant time.

In this appeal the court was asked to determine whether the strike that began on 13 February 1954 was illegal under section 24 of the Industrial Disputes Act. The respondents argued that the workers’ union to which they were attached had withdrawn from the conciliation proceedings on 2 February 1954 and that the conciliation officer had filed a failure report on 3 February 1954. Accordingly, they maintained that no conciliation proceeding existed between that workers’ union and the appellant after 5 February 1954, the date on which the government received the officer’s failure report. Conversely, the appellant asserted that conciliation proceedings with the employees’ union remained open until 25 February 1954 and that a settlement between the two parties was actually reached on that date and was duly signed by both sides. The appellant’s position was that the existence of a pending conciliation proceeding on 13 February 1954 rendered the strike, in which the respondents participated, unlawful. The High Court had held that because it had not been shown that the respondents were members of the employees’ union, it could not be said that a conciliation proceeding was pending between the respondents and the appellant. The correctness of that conclusion was the issue before this court. In examining the rival contentions, the court first considered the overall scheme of the Act. It is well‑settled that an industrial dispute may be raised only when it is sponsored by a body of workmen, either through a trade union or otherwise. Once such a dispute is raised, its resolution—whether by settlement or by award—is governed by section 18 of the Act. Section 18(1) declares that a settlement arrived at by agreement between the employer and the workman outside the course of conciliation proceedings is binding only on the parties to that agreement. In contrast, section 18(3) provides that a settlement made during conciliation proceedings, once it becomes enforceable, binds all persons specified in clauses (a) to (d) of sub‑section (3). Clause (d) of section 18(3) further clarifies that where a party identified in clause (a) or (b) consists of workmen, the settlement binds every person who was employed in the relevant establishment on the date of the dispute and also any person who later becomes employed there. Accordingly, there can be no doubt that the settlement reached between the appellant and the employees’ union on 25 February 1954, which was concluded in the course of conciliation proceedings, binds not only the members of that union but also all workmen employed by the appellant at that time. This inevitably means that the respondents, even if they belong to a different union, would be bound by the settlement arrived at on 25 February 1954.

In the present case, the Court observed that it was unnecessary to prove that a workman belonged to the Union that had been a party to the dispute before the conciliator in order to bind that workman by the settlement. The policy underlying section 18 was described as intended to give a wide‑reaching effect to a settlement reached during conciliation, and the section specifically enumerates four categories of persons who are to be bound by such a settlement, as set out in sub‑section (3). The judgment referred to two recent decisions of this Court that had examined similar questions under section 19(6) and section 33(1)(a) of the Act; the cases were The Associated Cement Companies Ltd., Porbandar v. Their Workmen (1) and Messrs. New India Motors (P.) Ltd. v. K. T. Morris (2). The Court explained that the reasoning in those cases was relevant to the interpretation of section 22(1)(d). When section 22(1)(d) speaks of the pendency of any conciliation proceedings, the Court held that the phrase must be understood to refer to any conciliation process that could lead to a settlement before the conciliator and that such a settlement would be capable of binding all workmen concerned. Consequently, if a conciliation proceeding was pending between one union and the employer and the matters under consideration affected all employees of the employer, the very pendency of that proceeding acted as a bar preventing any employee of the employer who was engaged in a public‑utility service from striking while the proceeding was ongoing, in accordance with section 22(1)(d). The Court further expressed that this construction aligned with the specific effect of settlement prescribed by section 18(3)(d) and was harmonious with the overall policy of the legislation. The Court warned that a contrary interpretation would disturb industrial peace, for it would allow a union in a public utility to strike even though the same demands that affected its members were being examined in conciliation with the employer and the employer’s other employees, who were represented by another union.

The Court noted that a different result would arise only if the conciliation proceedings were limited to demands that applied to a particular class of employees. In such a limited scenario, it could be argued that employees who were not parties to the specific demands would not be bound by the pending conciliation. However, the Court stated that this point was not relevant to the appeal before it. The record showed the charter of demands that had been submitted by both unions to the employer, and the Court found that the demands in both charters were framed to cover every employee of the employer, not merely a particular segment. In other words, the two unions had presented demands whose intended benefit was to accrue to all workmen of the employer, and they were not demands limited to a single section of the workforce. The Court concluded that, because the demands were universal in scope, the pendency of the conciliation proceedings between the employer and the Employees’ Union attracted the operation of section 22(1)(d) and prohibited the strike that was presently before the Court.

The demands presented by the two trade unions were not limited to a particular section of the appellant’s establishment but were intended to apply to all employees. Although the demands originated from two separate unions, both charters sought the same improvements and effectively represented the collective aspirations of the entire workforce. The conciliation settlement that was finally reached between the appellant and the Employees’ Union conferred benefits on the members of the Workers’ Union in exactly the same manner as it did on the members of the Employees’ Union. Consequently, the settlement covered the whole body of workmen rather than a limited group. In our view, the lower courts erred by interpreting section 22(1)(d) of the Industrial Disputes Act in an unduly narrow and restrictive manner. The pendency of the conciliation proceedings between the appellant and the Employees’ Union brings section 22(1)(d) into play with respect to the strike that is presently before us. The application of that provision renders the strike illegal under section 24(1)(1) of the same Act. The facts, therefore, show that the strike was conducted in violation of the statutory prohibition contained in the Act. Such a conclusion follows logically from the statutory scheme designed to preserve industrial peace.

Because the strike is illegal, the respondents’ participation amounts to a subversive activity as defined in section 2(9)(e) of the West Bengal Security Act. Such participation consequently constitutes an offence punishable under section 11 of that Act. Accordingly, we set aside the order of acquittal that the High Court had rendered in favour of the respondents. We convict each respondent of the offence with which they have been charged. The Solicitor‑General has fairly informed us that the appellant’s primary objective in approaching this Court was not to secure a heavy sentence against the respondents but to obtain a definitive ruling on the interpretation of section 22(1)(d) of the Industrial Disputes Act. While acknowledging that purpose, the law requires that the respondents be punished for the illegal strike they conducted. In order to satisfy the ends of justice, we order that each convicted respondent shall pay a nominal fine of one rupee. The appeal is therefore allowed, and the judgment of the High Court is reversed. The penalty, though nominal, serves to affirm the legal principle that participation in an unlawful strike cannot be tolerated. It also reinforces the statutory duty of employers and workers to resolve disputes through prescribed conciliation mechanisms.