Holding

A declaration signed by workers is presumptive proof of their membership in the union, the burden of disproving it rests on the challenger, and the settlement is binding and just and fair.

Summary

In a dispute between Tata Engineering & Locomotive Co. Ltd. and its workmen, two unions – the Telco Union (minority) and the Telco Kamgar Sanghatana (majority) – were involved. A settlement was reached on 7 February 1970 between the company and the Sanghatana and was signed by 564 of the 635 daily‑rated workers. The Telco Union challenged the settlement, alleging duress, coercion and that many signatories were not members of the Sanghatana. The Industrial Tribunal held the settlement legal but not entirely just and fair, ordered an increase in daily wages and refused to act upon the settlement. On appeal, the Supreme Court held that the signed declaration is presumptive proof of the workers’ membership in the Sanghatana, that the burden of proving falsity lies on the challenger, and that the settlement is binding and, as a whole, just and fair. Consequently, the Tribunal’s refusal to enforce the settlement was erroneous. The appeal was allowed, the award set aside and replaced by the settlement.

Issues considered

The effect of a declaration signed by workers on proving their membership in a union under Section 18(1) of the Industrial Disputes Act.
The allocation of the burden of proof to show that such a declaration is forged or false.
Whether a settlement reached with a majority union is binding on its members and on the dispute before the tribunal.
Whether the settlement is "just and fair" within the meaning of Section 18(1) and can be rejected or varied by the tribunal.

Legislation cited

Industrial Disputes Act, 1947s. 10(1)(d), s. 18(1), s. 2(p)

Subjects

Industrial disputeSettlementBinding settlementBurden of proofJust and fairUnion membershipSection 18Collective bargaining

Judgment

929 A

TATA ENGINEERING & LOCOMOTIVE
CO. LTD.
v.
8
THEIR WORKMEN

October 16, 1981

[A.D. KOSHAL, V. BALAKRISHNA ERADI & R.B. MISRA, JJ.)

Industrial Disputes Act, 1947-Section 18(1)-Warkmen signed a settlement-
c
Union claimed that the declaration was forged and fictitious-Burden ~of proof on
whom lay-Workmen, if could claim the settlement was unjust and unfair.

In conciliation proceedings in relation to the demands of one of the two
unions (known as Sanghatana) of workers of the appellant-company a settle--
meat wat reached. At the instance of the second union (Telco Union) which was D
dissatisfied with the settlement, the Government referred the dispute to the
tribunal. Before the tribunal the company contended that since 564 out of 635
daily rated workers to whom the settlement reached by the Sanghatana related,
had assented to it, the dispute no longer survived.

Rejecting the Telco Union's contention that the settlement was vitiated by
duress, coercion or false promises, the tribunal held that it was binding on the E
parties under section 18 (1) read '.with srction 2 (p) of the Industrial Disputes
Act. The tribunal, however, held that it had not been proved by either party as
to how many of the 564 workmen, who had assented to the settlement, were
members of the Sanghatana. Although the tribunal found that the settlement
was just and fair in most aspects it held that an increase in the additional daily
wages was called for in respect of certain categories and calculated the increase
separateJy for each grade. The tribunal refused to act upon the setdement. F
Allowing the appeal,

HELD : The declaration signed by 564 workers of the company constituted
presumptive proof of the fact that the signatories to it were all membe1s of the
Sanghatana when they signed it. In the absence of any evidence that any of the
signatories to the declaration was not one of the 635 workers or that any signature G
appearing in the declaration was forged or fictitious the assertion of each
signatory that he was a member of the Sanghatana is to be presumed to be
correct until it is shown to be false. The onus to prove the falsity of the asser-
tion in the case of any particular workman rested on the Telco Union which
made no attempt to discharge the burden. Out of 635 workmen, 564 signed the
declaration. The fact that 400 workmen later on challenged the settlement only H
leads to the inference that at least 329 workmen changed sides afterwards.
[932 H; 933A-C]
930 SUPREME COURT REPORTS [1982] I s.c.R.

A The conclusion of the tribunal that the settlement was not just and fair is
unsustainable. The settlement as a whole was just and fair. If the settlement
had been arrived at by a vast majority of the concerned workmen with their eyes
open and was accepted by them in its totality, it must be presumed to be just
and fair and not liable to be ignored while deciding the reference merely because
a small number of workers were not parties to it or refused to accept it or because
the tribunal was of the opinion that the workers deserved marginally higher
8 emoluments than they themselves thought they did. The question whether a
settlement is just and fair has to be answered on the basis of principles different
~
from those which come into play when an industrial dispute is under
adjudication. [933 G-H)

Herbertsons Limited v. Workmen of Herbertsons Limited & Others, [1977]
.
~
2 S.C.R. 15 followed.
c
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1484 of •
1971.
JI'
Appeal by special leave from the Award dated the 30th April ~
1971 of the Industrial Tribunal Maharashtra, Bombay in Reference
D No. LT. 123 of 1968 published in the Maharashtra Government
Gazette dated the 5th August, 1971. "'
M.C. Bhandare and Dr. Y.S. Chitale, O.C. Mathur, K.J. John
and J.S. Sinha, for the Appellant.

E Jitendra Sharma and Janardan Sharma for Respondent No. I.

K. Rajendra Choudhary for Respondent No. 2.

The Judgment of the Court was delivered by

KOSHAL, J. This is an appeal by special leave against an award
F dated 30th April, 1971 of the Industrial Tribunal, Maharashtra (the
Tribunal, for short), deciding a reference made to it under clause (d)
of sub-section 1 of section 10 of the Industrial Disputes Act (herein- •
, '
after called the Act) requiring adjudication of demands raised by the
workmen of the Tata Engineering and Locomotive Company Limited
(Machine Tools Division), Chinchwad {hereinafter referred to as the
G company).

2. The facts leading to this appeal may be briefly set out.
The Company came into existence under an order passed by the
High Court of Maharashtra on the 27th June, 1966 directing ~·
H
amalgamation of two pre-existing concerns, one having the same
name as the Company and another known as the Investa Machine
TATA ENGINEERING v. WORKMEN (Kasha/, J.) 931

Tools and Engineering Company. After the amalgmation a section A
of the workers of the Compay formed a union known as Telco
Kamgar Union (for short, the Telco Union) which was registered as
such on the 2nd June, 1967, but which, even before that, submitted
a charter of demands to the Company on the 1st May, 1967.
Subsequently other workers of the Company established anothec
union named the Telco Kamgar Sanghatana (hereinafter called the B
Sanghatana) which presented another set of demands to the Com-
pany on the 29th September, 1967. A settlement was reached in
conciliation proceedings in relation to the demands last mentioned
on the 3rd October, 1967. Being dissatisfied with the attitude of the
Assistant Labour Commissioner, Poona who acted as the Concilia-
- tion Officer, the Telco Union approached the State Government
who made the reference culminating in the impugned award.
c

3. The reference was received by the Tribunal on the 22nd
March, 1968 and was pending adjudication when, on the 18th
February, 1970, the Company filed an application (Exhibit C-10)
stating that a settlement (Exhibit C-lOA) had been reached between D
it and the Sanghatana on the 7th February 1973, that the same had
been assented to by 564 out of 635 daily-rated workmen, that the
dispute pending adjudication before the Tribunal related only to
that category of workmen and that it did not survive by reason of
the settlement.
E
Settlement Exhibit C-IOA was challenged by the Telco Union
through an application (Exhibit U-1) made to the Tribunal on the
14th April, 1970 and signed by 400 daily-rated workmen who pro-
fessed to be members of that Union with the allegation that it had
been brought about by coercion, duress and false promises. F

- In these circumstances, the Tribunal addressed itself to the
controversy regarding the legality and binding nature of the settle-
& ment. In that behalf its findings were:

(a) There was no evidence of the settlement being vitiated G
by any duress, coercion or false promises. It was,
therefore, both legal and fully binding on the parties,
thereto under sub-section (I) of section 18 read with
clause (p) of s~ction 2 of the Act.
H
(b) No attempt had been made by either party to the
reference to prove as to how many of the 564 workmen
932 SUPREME COURT REPORTS [1982] I S.C.R

A who had assented to the settlement were members of
the Sanghatana.

(c) Those of the 564 workmen aforesaid who were not
members of the Sanghatana were not bound by the
settlement in as much as they were not parties thereto
B but had ratified or accepted the settlement only after
it had been reached; and such ratification and
acceptance does not make them parties to the settlement
/
for the purposes of the Act.

The Tribunal, therefore, proceeded to find out whether the •
c settlement was just and fair and although it found it to be so in
most aspects, it was of the opinion that an increase in the additional
daily wage was called for in respect of each of the 7 grades of daily-
-
rated workmen. That increase was calculated by it separately for
eich grade and varies from Rs. 7.80 to Rs. 12.90 per month. By
the impugned award it declared accordingly, refusing to act upon -'---•
D the settlement although the same had been held by it to be legal and
binding on the parties to it.

4. After hearing learned counsel for the parties, we
have come to the conclusion that finding (b) above set out cannot
be sustained. It is not disputed before us that the settlement dated
7th February, 1970 was arrived at between the Company on the one
hand and the Sanghatana on the other and also that it was assented
to by the said 564 workmen by means of a document (Exhibit S-8)
bearing their signatures underneath a declaration which reads:

"We, the following workers, who are members of the
F Te/co Kamgar Sanghatana, hereby sign individually on the
settlement, which has been agreed upon and signed under
Section 2 (p) of the Industrial Disputes Act, 1947. The
terms and conditions of the settlemnt are acceptable to me
and are binding on me."
(emphasis supplied).
G
It is no body's case that any of the signatories to this declara-
tion was not one of the said 635 workers or that any of the signatures
appearing underneath the declaration was forged or fictitious. And
H if that be so, the assertion by each signatory to the declaration that
he was a member of the Sanghatana has to be taken at its face value
and presumed to be correct until it is shown IQ be false. The onus
TATA ENGINEERING v. WORKMEN (Koshal. J.) 933

to prove the falsity of the assertion in the case of any particular A
workman thus rested heavily on the Telco Union but it made no
attempt to cischarge the same. It has been urged on its behalf
that the very fact that 400 workmen had challenged the settlement
claiming to be members of the Telco Union showed that the declara-
tion made earlier was not correct. Now it is true that out of a
total of 635 workmen, 564 signed the declaration and later on 400 ll
challenged the settlement. The only reasonable inference to be
drawn from that circumstance would, however, be that at least 329
workers changed sides in between the 18th of February 1970 and the
14th of April, 1970. It cannot be further interpreted to mean, in
the absence of any other evidence on the point, that the declaration,
when made, was false. In this view of the matter we must hold c
that the declaration constitutes presumptive proof of the fact that
the signatories to it were all members of the Sanghatana when they
signed it.

5. The correctness of finding (a) has not been assailed before
us on behalf of either party and in view of the provisions of sub- D
section (!) of section 18 of the Act that finding must be upheld so
that settlement dated the 7th February 1970 would be binding on
all workers who were members of the Sanghatana as on that date
including the 564 workers who signed the declaration. Consequently
finding (c) which is unexceptionable in so far as it goes, loses all its
relevance and we need take no further notice of it. E

6. The conclusion reached by the Tribunal that the settlement
was not just and fair is again unsustainable. As earlier pointed out,
the Tribunal itself found that there was nothing wrong with the
settlement in most of its aspects and all that was necessary was to
marginally increase the additional daily wage. We are clearly of
F
the opinion that the approach adopted by the Tribunal in dealing
with the matter was erroneous. If the settlement had been arrived
at by a vast majority of the concerned workers with their eyes open
and was also accepted by them in its totality, it must be presumed
to be just and fair and not liable to be ignored while deciding the
G
reference merely because a small number of workers (in this case 71,
i.e., 11.18 per cent) were not parties to it or refused to accept it, or
because the Tribunal was of the opinion that the workers deserved
marginally higher emoluments than they themselves thought they
did. A settlement cannot be weighed in any golden scales and the H
question whether it is just and fair has to be answered on the basis
of principles different from those which come into play when an
II

934 stJl>ll.EM E cOtJRt REPORts [1982] I s.c.k.

A industrial dispute is under adjudication. In this connection we
cannot do better than quote extensively from Herber/sons Limited v.
Workmen of Herbert son Limited and 0th, rs,(') wherein Goswami, J.,
speaking for the Court observed.

"Besides, the settlement has to be considered in the
B light of the conditions that were in force at the time of the
reference. It will not be correct to judge the settlement
merely in the light of the award which was pending appeal
before this Court. So far as the parties are concerned
there will always be uncertainty with regard to the result
of the litigation in a Court proceeding. When, therefore,
c negotiations take place which have to be encouraged,
particularly between labour and employer, in the interest
of general peace and well being there is always give and
take. Having regard to the nature of the dispute, which
was raised as far back as 1968, the very fact of the existence
D of a litigation with regard to the same matter which was -~,._

bound to take some time must have influenced both the
parties to come to some settlement. The settlement has to
be taken as a package deal and when labour has gained in
the matter of wages and if there is some reduction in the
matter of dearness allowance so far as the award is
concerned, it cannot be said that the settlement as a whole
E is unfair and unjust.

We should point out that there is some misconception
about this aspect of the case. The question of adjudication
F has to be distinguished from a voluntary settlement. It is
true that this Court has laid down certain principles with
regard to the fixation of dearness allowance and it may be
even shown that if the appeal is heard the said principles.
have been correctly followed in the award. That, however,
will be no answer to the parties agreeing to a lesser amount
G under certain given circumstances. By the settlement,
labour has scored in some other aspects and will save all
unnecessary expenses in uncertain litigation. The settlement,
therefore, cannot be judged on the touch-stone of the prin-
ciples which are laid down by this Court for adjudication.
H
(I) [1977] 2 SCR 15.
'tATA ENGINEElllNG v. WORKMEN (kosha/, J) 93S
A
There may be several factors that may influence
parties to a settlement as a phased endeavour in the course
of collective bargaining. Once cordiality is established
between the employer and labour in arriving at a settlement
which operates well for the period that is in force, there
is always a likelihood of further advances in the shape of B
improved emoluments by voluntary settlement avoiding
friction and unhealthy litigation. This is the quintessence
of settlement which courts and tribunals should endeavour
" to encourage. It is in that spirit the settlement has to be

• judged and not by the yardstick adopted in scrutinising an
award in adjudication. The Tribunal fell into an error in C
r-- invoking the principles that should govern in adjudicating
a dispute regarding dearness allowance in judging whether
II the settlement was just and fair.

I f~--.t
It is not possible to scan the settlement in bits and D
pieces and hold some parts good and acceptable and others
bad. Unless it can be demonstrated that the objectionable
portion is such that it completely outweighs all the other
advantages gained the Court will be slow to hold a settle-
ment as unfair and unjust. The settlement has to be
accepted or rejected as a whole and we are unable to reject E
it as a whole as unfair or unjust. Even before this Court
the 3rd respondent representing admittedly the large
majority of the workmen has stood by this settlement and
that is a strong factor which it is difficult to ignore. As
stated elsewhere in the judgment, we cannot also be
oblivious of the fact that all workmen of the company have F
accepted the settlement. Besides, the period of settlement
has since expired and we are informed that the employer
and the 3rd respondent are negotiating another settlement
with further improvements. These factors, apart from
what has been stated above, and the need for industrial
peace and harmony when a union backed by a large G
majority of workmen has accepted a settlement in the
course of collective bargaining have impelled us not to
interfere with this settlement."

H
The principles thus enunciated fully govern the facts of the
case in hand, and, respectfully following them, we hold that the
936 SUPREME COtlil.t REPOil.tS tJ 982) I s.t.I!..
A settlement dated the 7th February 1970 as a whole was just and
fair.

7. There is no quarrel with the argument addressed to us on
behalf of the workers that mere acquiescence in a settlement or its
acceptance by a worker would not make him a party to the settle-
B ment for the purpose of section 18 of the Act (vide Jhagrakha11
Collieries (P) Ltd. v. Sh1i G.O. Agarwal, Presiding Officer, Central
Government Industrial Tribunal-cum-Labour Court, Jabalpur and
Others, (1). It is further unquestionable that a minority union of
workers may raise an industrial dispute even if another union which
consists of the majority of them enters into a settlement with the
c employer (vide Tata Chemicals Ltd. v. /Is Workmen, ('). But then
here the Company is not raising a plea that the 564 workers became
parties to the settlement by reason of their acquiescence in or
acceptance of a settlement already arrived at or a plea that the
reference is not maintainable because the Telco Union represents
only a minority of workers. On the other band the only two conten·
D tions raised by the Company are:-

(i) that the settlement is binding on all members of the
Sanghatana including the 564 mentioned above because
the Sanghatana was a party to it, and

E (ii) that the reference is liable to be answered in
accordance with the settlement because the same is just
and fair.

And both these are contentions which we find fully acceptable
for reasons already stated.
F 8. In the result the appeal succeeds and is accepted. The
impugned award is set aside and is substituted by one in conformity
with the settlement. There will be no order as to costs.

P.B.R. Appeal allowed. ,+.

(1) [1975] 2 SCR 873.
(2) [1978] 3 SCR 535.