State of Bihar vs Kripa Shankar Jaiswal

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

Court: Supreme Court of India

Case Number: Criminal Appeal No. 83 of 1959

Decision Date: 14 October, 1960

Coram: J.L. Kapur, P.B. Gajendragadkar, K.N. Wanchoo

In the matter titled State of Bihar versus Kripa Shankar Jaiswal, a judgment was delivered on 14 October 1960 by the Supreme Court of India. The judgment was authored by Justice J. L. Kapur and the bench comprised Justices J. L. Kapur, P. B. Gajendragadkar, and K. N. Wanchoo. The case is reported in the 1961 volumes of AIR 304 and the Supreme Court Reporter (Second Series) 1, and it concerns the application of the Industrial Disputes Act, 1947 (the Act) to a settlement reached in conciliation proceedings involving an unregistered trade union.

The factual backdrop involved the management of Mankatha Distillery and a workmen’s union that had approached the conciliation officer for settlement of their industrial dispute. At the time the settlement was arrived at, the union had not been registered under the Indian Trade Unions Act. The terms of the settlement were not implemented by the management, and consequently the proprietor of the distillery and its manager were prosecuted and convicted by a magistrate. The conviction was affirmed by the Sessions Court on appeal by the respondents. The respondents then appealed to the Patna High Court, which set aside the conviction and acquitted them. The High Court’s reasoning was that there was no recognised union and that the conciliation officer had visited the distillery on 18 March 1954 without giving a reasonable notice; therefore it held that no agreement could exist between the proprietor on one side and the workmen as a whole on that date, and it was erroneous to assume that the settlement signed by some workmen bound all the workmen.

The Supreme Court held that, for a dispute to qualify as an industrial dispute, it is not a condition that the dispute be sponsored by a recognised union, nor is it necessary that all workmen of the industrial establishment be parties to the dispute. The Court explained that a settlement reached during conciliation proceedings falls within sections 18(3)(a) and 18(3)(d) of the Act and, as a result, binds all workmen even when the dispute was raised by an unregistered union or by only a portion of the workmen. The Court further observed that the lack of notice prescribed by section 11(2) of the Act does not affect the jurisdiction of the conciliation officer; the purpose of the notice is merely to inform the establishment that the officer is arriving in an official capacity and not as a private individual. While a failure to comply with section 12(6) by not submitting the report within fourteen days may constitute a breach of duty on the part of the conciliation officer, such a breach does not invalidate the legality of the proceedings, which terminate as provided under section 20(2) of the Act.

Finally, the Court noted that where a fresh settlement is achieved between the parties and all disputes are resolved, public interest does not require the revival of a stale matter. The Court referred to the decision in Newspapers Limited, Allahabad v. State Industrial Tribunal, Uttar Pradesh, [1960] 2 L.L.J. 37, and also mentioned the earlier authority of Andheri Marol Kurla Bus Service v. The State of Bombay, A.I.R. [1959] S.C. 841, in support of this principle.

In the matter titled State of Bihar v. Hiralal Kejrilal, reported in the first volume of the 1960 Supreme Court Reports at page 726, the Court recorded that the appeal fell under criminal appellate jurisdiction. The appeal was designated as Criminal Appeal number 83 of 1959 and was filed against a judgment and order dated 25 July 1958 issued by the Patna High Court in Criminal Revisions numbers 593 and 594 of 1958. Those revisions themselves arose from a judgment and order dated 3 March 1958 rendered by the Additional Sessions Judge in Monghyr in Criminal Appeal number 286 of 1956. Counsel representing the appellant were identified as D P Singh and R H Dhebar, while the respondent was represented by C P Lal. The judgment of the Supreme Court was pronounced on 14 October 1960 by Justice Kapur. The Court noted that the appeal was instituted pursuant to a certificate issued under article 134 sub‑paragraph (1)(c) of the Constitution, challenging the High Court’s order of acquittal. The appeal therefore sought to set aside the earlier finding of acquittal on the basis that the constitutional certificate authorized the Supreme Court to examine the correctness of that judgment.

The factual matrix of the case involved a series of industrial disputes between the workmen employed at Mankatha Distillery and the proprietor of the distillery, who was the respondent. On 23 November 1953, a petition on behalf of the workmen was presented to the Assistant Labour Commissioner in Bhagalpur; the petition bore the signature of a Banarsi Choudhuri, who signed both in his own name and as a representative of the workmen. The petition outlined various grievances raised by the workers. Following the filing, conciliation proceedings were initiated, and an agreement was reached on 5 December 1953, which the High Court later characterised as “some sort of agreement.” Subsequently, on 12 January 1954, the workmen applied for registration of their union under the Indian Trade Unions Act, and the registration was effected on 23 March 1954 under the title Mankatha Distillery Mazdoor Panchayat. The distillery was thereafter closed, and the workmen were dismissed. On 19 February 1954, the General Secretary of the unregistered Mazdoor Panchayat sent a letter to the management protesting the dismissals without compensation and opposing the employer’s plan to restart the factory with new labour. The letter listed the long‑served workers who had been dismissed and included the following passage, which the Court deemed pertinent: “All the persons named below shall work in the factory in legal manner, on monthly salary on permanent basis. It is not only hoped, rather fully believed that you would consider the above facts and gladly accept the same. On getting a satisfactory reply, all the workers who had been working in your factory since years would report themselves to duty and work according to your orders.” Although addressed to the proprietor, the letter was forwarded to the Assistant Labour Commissioner in Bhagalpur, where it was received on 25 February 1954. The document bore the endorsement, “Discussed with you. The management is requested.”

In this case the Union was directed to attend a conciliation proceeding scheduled for 10 March 1954 at 11 a.m., and the Union was informed of that direction accordingly. Another petition dated 5 March 1954 was submitted by the General Secretary of the Distillery Mazdoor Panchayat to the Assistant Labour Commissioner. That petition listed the names of all persons who had been newly employed by the proprietors and prayed that those who had been discharged at the time of the factory’s closure should be reinstated with payment of wages, and it requested that the Assistant Labour Commissioner cause the workmen to be reinstated. The order issued on that petition directed that the parties were called on the following day to the officer’s office for conciliation and that the result of the proceeding could be awaited. On 18 March 1954 a settlement was reached between the management and the workers. The settlement was signed by the Conciliation Officer appointed under section 4 of the Industrial Disputes Act, 1947 (Act 14 of 1947), and it was also signed by the proprietor and the manager of the distillery, by Banarsi Choudhuri, General Secretary of the Workers’ Panchayat, and by six other members of the Panchayat who were members of its Executive Committee. The settlement contained ten specific terms. First, the workers named in Schedule A would be taken to jobs without any break in their service. Second, the new hands who had been appointed after the closure of the factory would be discharged. Third, if three shifts were started or any other increased employment opportunity became available in the factory, management would employ only those workers who were present on that day and who had worked in August 1953 and September 1953, in order of seniority. Fourth, Shri Banarsi Choudhry, Balmiki Singh, Bhaso Singh and Kaltu Singh, who were accused in a case pending before the Court at Monghyr, would be given jobs if they were acquitted by that court. Fifth, all the workers would be placed on a permanent basis as earlier; the order that had placed them on a temporary basis after the reopening of the mill was cancelled. Sixth, arrears of wages would be paid on a monthly basis as before, rather than the weekly basis that had been in operation after the reopening. Seventh, grievances raised by the workers that were covered by the agreement dated 5 December 1953 would be decided by the Labour Commissioner of Bihar, Patna, and his decision would be final and binding on the parties. Eighth, the work of the factory would be resumed immediately. Ninth, the workers would continue to enjoy all benefits and privileges guaranteed by law, usage or custom. Tenth, the workers would not be victimised for their trade‑union activities. The prosecution argued that the terms of the settlement had not been implemented because the old workmen were not re‑employed and the newly employed workmen were not discharged.

In this case the prosecution alleged that although the newly employed workmen were not discharged, the old workmen were not re‑employed, contrary to the terms of the settlement. Accordingly the respondent and the distillery manager, identified as Ram Narain Lal, were prosecuted following a complaint filed by the Labour Superintendent, Mr L. D. Singh, after the requisite sanction had been obtained from the Government of Bihar. Both accused were convicted and each was sentenced to a fine of Rs 150, with a default provision of one month’s simple imprisonment. The learned Magistrate held that the matter constituted an industrial dispute within the meaning of the Act and that the conciliation settlement dated 18 March 1954 was a valid settlement, but the respondent had failed to implement the first term of that settlement. An appeal against the Magistrate’s order was filed in the Sessions Court, where the Third Additional Sessions Judge dismissed the appeal and affirmed the Magistrate’s findings. The respondent then lodged an appeal to the High Court, which set aside the conviction and acquitted the accused. The High Court reasoned that there was no recognised trade union, only a vague union, and that the Conciliation Officer had entered the distillery without giving reasonable notice, rendering his decision of 18 March 1954 devoid of jurisdiction. It further held that no agreement had been reached between the proprietor and the labourers as a whole, and that it was unreasonable to assume that a settlement signed by some labourers bound all labourers. The High Court described a serious defect in the settlement, characterising it as a decision of the Conciliation Officer dated 18 March 1954, and therefore concluded that the settlement was not binding on the respondent, leading to the quashing of the conviction. The Court subsequently observed that it would be erroneous to hold that an industrial dispute must be sponsored by a recognised union or that all workmen of an establishment must be parties to it. Under section 18(3)(a) and (d) of the Act, a dispute qualifies as an industrial dispute even when it is sponsored by an unregistered union or when only some workmen raise the dispute. The Court cited the precedent of Newspapers Limited, Allahabad v. The State Industrial Tribunal, Uttar Pradesh, supporting this view. It noted that the settlement of 18 March 1954, arrived at during conciliation proceedings, was signed by the General Secretary and members of the executive committee of the union, albeit the union was unregistered at that time. Consequently, the Court could not accept the view that the settlement was not binding between the parties. The issue concerning the scope and effect of section 11(2) was then raised before the Court, with argument that the lack of reasonable notice by the Conciliation Officer affected the legality of the settlement.

In this matter, it was contended that the settlement reached on March eighteenth, 1954, could not be regarded as a legal settlement and therefore could not bind the parties or give rise to penal liability under section twenty‑nine of the Act because the conciliation officer had not given any reasonable notice before entering the distillery on that date. Section eleven, clause two, of the Act states: “A conciliation officer or a member of a Board or Court or the presiding officer of a Labour Court, Tribunal or National Tribunal may for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates.” Section eleven deals solely with the procedure and powers of conciliation officers, authorising them to enter premises after reasonable notice. That notice is required only to inform the establishment that a conciliation officer is arriving to make an enquiry into an existing or apprehended industrial dispute, and is not intended to create a jurisdictional prerequisite. Consequently, the failure to give such notice does not deprive the conciliation officer of jurisdiction. The powers and duties of the conciliation officer are set out in section twelve of the Act. Sub‑section one empowers the officer to conduct conciliation proceedings in a public utility service after a notice under section twenty‑two, imposing a mandatory duty, while in other disputes the officer may, at his discretion, conduct proceedings in the manner prescribed. Sub‑section two requires the officer to investigate the dispute without delay in all matters affecting its merits and to take any steps he thinks necessary to induce the parties to achieve a fair and amicable settlement. Sub‑section three provides that if a settlement is reached, a report of that settlement shall be sent to the appropriate Government, and sub‑section four requires a similar report to be sent when no settlement is achieved. Sub‑section five deals with the powers of the Government upon receipt of a report indicating non‑settlement, and sub‑section six, which was relied upon, reads: “A report under this section shall be submitted within fourteen days of the commencement of the conciliation proceedings or within such shorter period as may be fixed by the appropriate Government. Provided that the time for the submission of the report may be extended by such period as may be agreed upon in writing by all the parties to the dispute.” It was argued that because the report had not been sent to the Government within

The Court observed that the contention that a settlement was invalid and not binding because the required report was not sent to the Government within fourteen days of the commencement of the conciliation proceedings must be repelled. It held that any failure to comply with section 12(6) of the Act may constitute a breach of duty on the part of the conciliation officer, but such a breach does not upset the legality of the conciliation proceedings that terminated in accordance with section 20(2) of the Act. This position was previously affirmed by this Court in Andheri Marol Kurla Bus Service v. The State of Bombay (1). Accordingly, the settlement arrived at on 18 March 1954 could not be characterized as illegal, and any breach of that settlement would still attract the penal provisions of section 29 of the Act. After the Judicial Magistrate rendered its decision, the parties executed a fresh settlement on 6 October 1956, which expressly stated: “That this settlement made this day the 6th October, 1956, at Patna, settles all the pending grievances and/or demands of workmen whatsoever.” As a result of that agreement, twenty‑five of the discharged workmen, whose names appear in Appendix A attached to the compromise, were reinstated with effect from 8 October 1956, while the claim concerning the remaining discharged workmen was withdrawn. The Industrial Tribunal subsequently accepted this settlement by an order dated 10 October 1956, thereby confirming that all disputes between the parties had been resolved and that the workmen had been reinstated. In view of this, the Court quoted the observation of Subba Rao, J., in State of Bihar v. Hiralal Kejrilal (2) that “public interest does not require that the stale matter should be resuscitated.” Consequently, the Court found no justification to interfere with the High Court’s order under article 136, and dismissed the appeal, ordering that the appeal be dismissed. (1) [1969] Supp. 2 S.C.R. 734. (2) [1960] S.C.R. 726, 736.