POONA EMPLOYEES UNION Vs. FORCE MOTORS LIMITED & ANR.

Tags Interpretation

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 10130-10131 of 2010, Judgment Date: Dec 01, 2015

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 10130-10131 OF 2010

POONA EMPLOYEES UNION ....APPELLANT

VERSUS

FORCE MOTORS LIMITED & ANOTHER …..RESPONDENTS

JUDGMENT

AMITAVA ROY,J.

Two employees unions of the industrial establishment, Force
Motors Limited (hereinafter to be referred to as “the company”) are locked
in a legal tussle, the appellant for acquiring the status of a recognized
union under the Maharashtra Recognition of Trade Unions and Prevention of
Unfair Labour Practices Act, 1971 (for short, hereinafter to be referred to
as “the Act”) and the respondent No. 2 to ward off such an endeavour, it
being the recognized union. The pursuit for recognition that had commenced
in the year 2003, on an application filed by the appellant before the
Industrial Court under Section 11 of the Act, has witnessed a prolonged
adjudication, however, leaving the issue unresolved. Though the appellant
union tasted success before the Industrial Court, the fortune reversed
before the High Court thus, catapulting it before this Court for its
pancean intervention. In challenge, is the judgment and order dated
2.2.2009 rendered by the High Court of judicature at Bombay in Writ
Petition (C) No. 2907 of 2006 jointly with W.P. (C) No. 2878 of 2006,
lodged by the company and the defender union independently assailing the
determination of the Industrial Court.
2. We have heard Mr. Colin Gonsalves, learned senior counsel for
the appellant and Mr. Shyam Divan and Mr. C.U. Singh, learned senior
counsel for the respondent Nos. 1 and 2 respectively.
3. The factual backdrop has to be summarily outlined to better
comprehend the issue and the rival assertions. The company, Force Motors
Limited, earlier named as Bajaj Tempo Limited, has its office at Akurdi,
Pune. The respondent No. 2- union i.e. Bhartiya Kamgar Sena (for short,
hereinafter to be referred to as “the BKS”) is the recognized union of
the company. The appellant union in its bid to be adjudged as the
recognized union in place of BKS, filed an application on 6.9.2003 before
the Industrial Court, Pune, as required under the provision of the Act. It
insisted that almost all the employees members of BKS had meanwhile
tendered their resignation, and had expressed their desire to discontinue
their membership therewith. It claimed that majority of the employees had
become its members, so much so that in the month of January, 2003, it had
in its fold 1973 employees members. Claiming that it was a union
registered under the Trade Unions Act, 1926 (for short, hereinafter to be
referred to as “1926 Act”) on 20.7.1986 with a valid certificate to that
effect, it asserted that with the exodus of the employees members from BKS
to its ranks, it had the holding of 85% of the total employees of the
company. It disclosed, inter alia, as well the names and particulars of
the office bearers and members of the Executive Committee as in the month
of January, 2003 and mentioned as well that its membership subscription was
Rs. 2 per month and that the meetings of the Executive Committee were being
held at regular intervals of not more than 3 months. It maintained as well
that the resolutions passed by the Executive Committee and the General Body
thereof were recorded in the Minute Book and that its accounts were being
duly audited by a Chartered Accountant for every financial year and that
certificate(s) to that effect was/were issued as well. Contending that it,
in any case, had in its roll more than 30% membership of the employees of
the company, this along with the other factors entitled it to be adjudged
as the recognized union thereof under the Act. That it complied with the
prescription of the statute more particularly as laid down in Sections 11
and 19 of the Act, was emphasized.
4. The company resisted the application by pleading, amongst
others, that the appellant union was not duly registered under the 1926
Act. It denied as well that it did have, at that point of time, 30%
membership of the employees of the company and that it did comply with the
imperatives of Section 19 of the Act. Dismissing the appellant union’s
claim of majority membership to be a bogey, it refuted its claim of having
larger membership of the employees of the company compared to BKS. The
company alleged that the appellant union had failed to maintain the records
as per Section 22 of the 1926 Act and that it was, thus not eligible to be
conferred the status of recognized union of the company.
5. BKS, as well, joined the fray in similar lines with the
company. Apart from reiterating that the appellant union was not duly
registered under the 1926 Act and thus it had no locus standi to claim the
status of a recognized union, it categorically controverted its clam of
holding 30% membership of the company as compared to it (BKS). It denied
that the appellant union had complied with the mandatory provisions of
Section 19 of the Act pertaining to minimum subscription of membership,
meetings of the Executive Committee at regular intervals, record of
resolutions in Minute Book and audit of its accounts. It alleged that the
appellant union had produced false and fabricated records in respect of
membership as well as the meetings of its Executive Committee. BKS claimed
that it had been working efficiently and effectively as the recognized
union of the company over the years and had zealously guarded the interest
of the workers by entering into settlements with the company from time to
time to effectuate the same. It alleged further that the office bearers of
the appellant union were outsiders and that it (appellant upon) had not
been working in the interest of the employees of the company.
6. In the proceedings registered as Application (MRTU) No. 3 of
2003 before the Industrial Court at Pune, following issues were framed
founded on the rival pleadings:
“1) Whether the Applicant Union proves that it has membership of
not less than 30% of the total number of the employees, employed in the
undertaking for the whole of the period of six months, immediately
preceding the calendar month, in which it so applies”?

2) Whether the membership of Applicant Union was larger than that of the
membership of the Non-Applicant No. 2 (Recognized Union), during the whole
of the period of six months, prior to the filing of the petition?
3) Whether the Applicant Union has made compliance of Section 19 of MRTU
& PULP Act, 1971?

4) Whether the Applicant Union is entitled for the certificate of
registration as a recognized union in place of Non-Applicant No. 2 Union as
per Section 14 (3) of MRTU & PULP Act, 1971?

What order? ”

7. At the outset, the Industrial Court recorded that the
application of the appellant union was in keeping with the requirement that
there should be a time lag of two years since the date of registration of
the recognized union and an interregnum of one year since the date of
disposal of the previous application for recognition, if any.
8. The Industrial Court in the course of adjudication entrusted an
exercise to the Investigating Officer contemplated by the Act to verify the
membership of both the unions and to submit a report before it. This was
patently in order to satisfy itself of the compliance of the prescriptions
of Sections 11 and 12 of the Act, by the appellant union seeking the status
of recognized union. As the decision eventually rendered by the Industrial
Court on 22.3.2006 would reveal, both the unions were afforded sufficient
opportunity by the Investigating Officer to adduce evidence on the rival
claims of membership. The report of the Investigating Officer dated
26.10.2004, as is available on record, was taken note by the Industrial
Court in details.
09. It took into account the findings recorded in the report that
there were 26 and 217 exclusive members of the appellant union and BKS
respectively and 1908 common members of both the unions. This was in the
face of the total strength of the employees of the company ranging from
2109 to 2155 during the relevant period i.e. March 2003 to August, 2003.
That vis-à-vis, this strength, whereas the appellant union had claimed its
hold over 1973, BKS asserted that it had 2166 employees as its members. As
a plea was raised before the Industrial Court that the aspect of
overlapping membership ought to be excluded and that exclusive membership
of the unions ought to be determined as a correct index of the membership
strength of the competing unions, it undertook an analysis, inter alia, of
the oral evidence adduced before it as would be adverted to hereafter. The
appellant union had examined witnesses including its President – Madhav
and a member–Gugario to prove the issue of majority membership of the
employees of the company. The company and the BKS produced witnesses as
well in support of their resistance. For BKS, office bearers including its
General Secretary, President of Pune Unit, Executive Member of Pune Unit,
Secretary and Vice-President of BKS were examined.
10. In the process of evaluation of the oral evidence adduced, it
transpired that the membership fee of BKS was being deducted from the bonus
amount payable to the workers every year. That the act of the company in
deducting the membership fee from the bonus amount was the subject matter
of assailment in the Industrial Court in a separate proceeding was noted.
The Industrial Court recorded that for the last five to six years prior to
the adjudication, the company was collecting Rs. 100 per worker per annum
from the bonus amount and adjusting the same against the membership fee of
BKS. It also noted that such deduction was at the instance of BKS,
requesting the company to do so from the bonus payable to the workers every
year. It was also recorded that there was no practice to pay membership
fee in cash by the employees of the company to BKS for this period. The
endeavour on the part of the witnesses of the BKS in the capacity of office
bearers to testify that it used to collect membership fee in cash from the
workers was not accepted as the same was opposed to the contemporaneous
records. To fortify this conclusion, the Industrial Court also referred
to the documentary evidence as available demonstrating that more than 1500
workers of the company along with appellant union had raised this issue in
the year 2002 and had impeached the deduction of membership fee of BKS from
the bonus amount by filing complaints in the year 2003 before the same
forum. That there was no individual consent letter of the workers
authorizing the company or the BKS to effect deduction used for adjustment
against membership fee was noted as well. The Industrial Court returned a
finding that such deduction did not amount to voluntary subscription of
membership fee from the workers’ accounts and in fact was an exaction
against their consent and will since the year 2002. The oral evidence
adduced on behalf of BKS about acceptance of membership fee in cash for the
year 2003 was, thus discarded as untrustworthy.
11. In arriving at this conclusion, the Industrial Court, inter
alia, referred to the findings of the Investigating Officer pertaining to
the anomalies noticed in the cash book of BKS maintained for the relevant
period. To discard the entries made therein, as proof of collection of
membership fee, the observation of the Investigating Officer that the cash
book was not only not in the prescribed proforma but also not signed by
any of the office bearers of BKS, was noted. The oral evidence of the
witnesses produced by BKS relating to the transactions with the bank
involving membership fee was not accepted, being not duly corroborated by
the documentary evidence on record, besides being inherently untrustworthy.
The Industrial Court, in particular, recorded its reservation on the
inconsistency between the two versions, namely, deduction from the bonus
amount by the company till the year 2003 against membership fee and the
claim of the BKS of collection of such fees by cash which were mutually
mutilative. Taking cognizance of the proceedings separately instituted in
a representative capacity on behalf of the members of the appellant union
and other employees of the Company, objecting to the deduction from bonus
amount, for the membership fee of BKS, its (BKS) claim of majority
membership was rejected.
12. In contradistinction, the Industrial Court noted that the
Investigating Officer had not detected any irregularity or mistake with
regard to the collection of membership fee for the relevant period of six
months and that the entries in cash book of the appellant union were
correct and were in conformity with the receipt books maintained therefor.
The finding of the Investigating Officer that the amount of membership fee
collected, however, was not deposited in the bank, was also marked. This
omission on the part of the appellant union, according to the Industrial
Court, was not a cardinal lapse, as it was making its endeavour to acquire
the status of a recognized union. The Industrial Court recorded as well
that the appellant union, as per the report of the Investigating Officer,
could collect membership fee from 1973 employees which amply demonstrated
their spontaneous support for it. It was deduced that the objections
raised by 1500 employees of the company against its action of effecting
deductions from the bonus amount towards the membership fee of BKS also
evinced that there was no voluntary payment thereof, belying thus its (BKS)
claim of having a hold on majority of the employees members of the company.
13. In course of the adjudication before the Industrial Court, an
application was filed by the appellant union to produce affidavits of its
members numbering 1556 to consolidate its decision of majority membership.
The Industrial Court in the proceedings dated 29.11.2004 under Section 11
of the Act overruled the objection of the respondents that such proof of
affidavits was inadmissible and allowed the prayer with the condition that
the same would not be used for proving the point of membership of the
appellant union and would be used for other relevant and ancillary
purposes. In granting this permission, the Industrial Court took note of
the submission made on behalf of the appellant union that these affidavits
would not be used or proving the issue of membership but for other relevant
and ancillary purposes. The non-applicants/respondents were also granted
the liberty to file counter-affidavits of rebuttal, if so advised. BKS,
though did challenge this order before the High Court, the petition was
dismissed on 9.8.2005. Eventually, BKS, also filed affidavits of 170
employees.
14. The Industrial Court took note of the contents of 1556
affidavits filed on behalf of the appellant union to deduce that the
affiants had resigned from the membership of BKS in the year 2002 and had
not paid the membership fee since December, 2002. It was held by the
Industrial Court that these affidavits did substantiate that these 1556
employees did bring an end to their relationship with the BKS and had not
paid the membership fees to it after December, 2002. That the contents of
these affidavits did clearly indicate that the concerned employees had
severed their ties with the BKS and had come over to the appellant union
was concluded. On a scrutiny of the cross-examination of the 100 affiants,
as was permitted, the Industrial Court held that there was no circumstance
or ground to disbelieve the deponents on their plea that they had
disconnected their membership with the BKS and had stopped paying
membership fees to it after December, 2002. The intention of the affiants
numbering 1556 to support the appellant union, according to the Industrial
Court, was conspicuously established. It referred to as well the 170
affidavits filed by BKS only to return a finding that if its claim of
common membership of 1908 employees was credible, it ought to have been in
a position to produce more affidavits. The Industrial Court thus inferred
that this fact also authenticated that only a small segment of the
employees of the company was in support of BKS. The claim of common
membership of 1908 employees advanced by BKS was thus rejected. The
Industrial Court, thus eventually in deciding the issue of membership, held
thus:
“So, after comparing the entire evidence adduced by both unions on the
point of strength of their membership read together with report of
Investigating Officer as well 1556 affidavits of the employees filed on
record by Applicant Union, I am of the (Opinion that the Applicant Union
was having more than 30 % of membership of the total employees of the
Company as well as larger membership than the membership of B.K.S. during
the period of six months from the month of March 2003 till August 2003. In
such circumstances, mandatory requirements as given under Section 11 and
Section 14 of MRTU & PULP Act, 1971, are substantially complied by the
Applicant Union, and Applicant Union has succeeded in establishing
membership of not less than 30 % of total employees as well as larger
membership of the total employees of the company with it during the period
of six months prior to filing of the present petition. So, I answer No. 1
and 2 in affirmative.”

15. As would be evident from the above extract, the Industrial
Court did take note of the contents of 1556 affidavits of the employees and
acted thereon to conclude that the appellant union did hold at that point
of time more than 30% membership of the total employees of the company
during the relevant time i.e. March, 2003 to August, 2003 and that it had
otherwise satisfied as well, the mandatory requirements of Sections 11 and
14 of the Act.
16. Referring to Section 19 of the Act, the Industrial Court next
adverted to the constitution of the appellant union placed on record and
the evidence of its President to the effect that the membership fee of Rs.
2 per month from each member was being collected and that the Minute Book
of the meetings of the Executive Committee as well as the audit of its
accounts was being done regularly and further that the necessary records
namely, receipt book, register of members, cash book etc. were also being
maintained. It held that the prescriptions of Section 19 of the Act had
also been complied with. It, however, recorded that any irregularity in
the observance of the enjoinment of Section 19 of the Act, per se would
not debar a union from claiming the status of recognized union as those,
were to be necessarily complied with after the said status was conferred.
The allegation leveled against the appellant union that it had instigated,
aided or assisted illegal strikes during the relevant period, was also
dismissed in absence of corroboration thereof by any evidence. The
imputation that the appellant union’s request for being acknowledged as the
recognized union, lacked bonafide, was rejected as well. In all, the
Industrial Court, thus returned a finding that having regard to the
materials on record, the appellant union was entitled to be adjudged
eligible to be conferred the status of recognized union and did issue a
direction to that effect. It was directed that the appellant union be
registered as recognized union in place of BKS for the company and also
saddled BKS with costs of Rs. 25000/- for resisting the process without the
support of the majority employees’ of the company.
17. The High Court, as the impugned judgment would disclose, took
note of the order dated 29.09.2004 of the Industrial Court by which the
objection of BKS to the prayer of the appellant union to file affidavits
was rejected with the observation that the same would not be taken into
consideration for the purpose of verification of the membership. It also
took cognizance of the fact that as per the report of the investigating
officer dated 26.10.2004, the appellant union had exclusive membership of
26, and BKS of 270 and that 1908 employees were common to both the unions.
It also marked the finding of the Investigating Officer that the appellant
union had never deposited any amount in its bank account. Taking note of
the order dated 29.9.2004 whereby the Industrial Court had permitted cross-
examination of 99 affiants out of 1556 affidavits, the High Court did
record that 17 of them had admitted that they still continue to be the
members of the BKS and that 7 had admitted in their cross-examination that
they had filed the affidavits only on the assurance of the appellant union
that they would be reimbursed the wages deducted on account of go-slow
initiatives resorted to by them. The fact that the prayer of the BKS to
cross-examine all the 1556 affiants was rejected by the Industrial Court,
was minuted.
18. Vis-a-vis the first limb of impugnment registered by the
respondents, namely, the applicant union had no right to represent the
employees, the High Court referred to its constitution and more
particularly its object of organizing and uniting the employees, and
recorded that though the same was represented to be included in the
schedule thereto, the same was not discernable therefrom and thus the
purpose for which the applicant union had been established was not
forthcoming for which it was not eligible to be recognized under Section 11
of the Act.
19. On the aspect of the reception of 1556 affidavits, the High
Court was of the view that the liberty to cross-examination only 99
affiants, when the contents of the affidavits were the same, was unfair as
these documents were relied upon to draw conclusions about the factum of
membership of the unions. It referred to the report of the Investigating
Officer in details pertaining to the facet of membership and held that the
approach of the Industrial Court in dealing with this issue by overlooking
the fact that it was the onus of the appellant union to prove that the BKS
had lost its representative character and that it was eligible to be
recognized under Section 11 of the Act, was defective. It was of the
considered view, that the Industrial Court in fact had relied upon the
affidavits as a proof of membership of the applicant union by marking a
departure from its order that the same would not be used for such purpose.
The High Court thus concluded that the affidavits filed by 1556 employees
did play a decisive role to enable the Industrial Court to reach the
conclusion that the applicant union commanded majority of membership of the
undertaking which was unsustainable in law.
20. The High Court also took note of the findings recorded in the
report of the Investigating Officer about the exclusive and dual membership
claimed by both the unions as per the records as well as the observations
on the documents produced by them. Referring to the decision of this court
in Automobile Products of India Employees’ Union Vs. Association of
Engineering Workers, Bombay and Others, (1990) 2 SCC 444, the High Court
returned the finding that the decision of the Industrial Court holding the
appellant union to be eligible under the Act to be conferred the status as
the recognized union was flawed and untenable and thus interfered with the
same.
21. Mr. Gonsalves has emphatically argued that as the appellant
union had on the basis of the materials on record demonstrated that it had
fully complied with the enjoinment of Sections 11, 14 and 19 of the Act,
the High Court ought not to have reversed the finding of the Industrial
Court that it (appellant union) was entitled to be conferred the
distinction of recognized union under the statute. The Industrial Court
having, on an elaborate analysis of the evidence adduced as required by law
having held that the appellant union was adequately suitable to be
adjudged, the recognized union in place of BKS, the High Court had fallen
in error in recording a conclusion contrary thereto, he urged. The learned
senior counsel insisted, that it being apparent on the face of the
materials laid before the Industrial Court that during the relevant period,
BKS had been reduced to a minority with regard to its membership holding
and that in the interest of collective bargaining, the appellant union
ought to be handed over the reins thereof, the impugned judgment needs to
be interfered with on the touchstone of welfare of the industrial community
as well. Mr. Gonsalves maintained that the appellant union had been able
to establish its eligibility as well as suitability for being adjudged as
the recognized union of the company as a replacement of BKS on the basis
of the report of the Investigating Officer as well as the other evidence
adduced sans the affidavits on record and thus the High Court had erred in
returning a finding that the Industrial Court had impermissibly taken note
of and relied upon the affidavits for a decisive finding in its favour. He
urged that the affidavits filed on behalf of the appellant union having
been referred to by the Industrial Court principally to take cognizance of
the deduction by the company, from the yearly bonus, for adjustment against
the membership fee of BKS, the High Court went wrong in deducing that the
same had been relied upon to decide the issue of membership. In any view
of the matter, Mr. Gonsalves argued that not only the 1556 affidavits filed
on behalf of the appellant union did evince a mass migration of the members
of BKS to the appellant union, as the respondents had been accorded and had
availed the opportunity of cross-examining 100 affiants, the process by no
means was repugnant to the one as envisaged by Section 14 of the Act and is
thus beyond reproach. Though admitting, that reception of affidavits on
the aspects of enquiry contemplated by the Act qua the issue of conferment
of the status of recognized union is not obligatory, the course adopted by
the Industrial Court in that regard in the case in hand, thereby ipso facto
did not vitiate the exercise, he pleaded. Apart from referring to the
report of the Investigating Officer and the other evidence on record as
well as the concluded determination of impermissible deduction from the
annual bonus of the employees by the company for payment of membership of
BKS, the learned senior counsel insisted that the impugned judgment and
order ought to be interfered with to secure industrial peace, amity and
stability. The learned senior counsel took pains as well, to take us
through the oral evidence of the witnesses of the appellant union to
authenticate its claim of compliance of the pre-conditions embodied in
Sections 11, 14 and 19 of the Act. Mr. Gonsalves distinguished the
decision of this Court in Automobile Products of India Employees’ Union
(supra) in its application to the facts of the case. He cited the decision
in Balmer Lawrie Workers’ Union, Bombay and Anr. Vs. Balmer Lawrie & Co.
Ltd. and Ors., 1984 Supp. SCC 663 and R.G. D’SOUZA Vs. Poona Employees
Union and Another, (2015) 2 SCC 526 to buttress his contentions.
22. In controversion, the learned senior counsel for the
respondents have asserted that having regard to the scheme of the Act and
the provisions pertaining to the enquiry for verification of membership for
conferment of status of a recognized union, the Industrial Court ought to
have limited the adjudication of the issue on a consideration of the report
of the Investigating Officer and the evidence adduced by the parties only
and its reliance on the affidavits did vitiate the process undertaken by
it, as rightly held by the High Court. Placing emphatic reliance on the
decision of this Court in Automobile Products of India Employees’ Union
(supra), they have urged that on this count alone the present challenge
ought to be negated.
23. Without prejudiced to this, they have argued that on a
cumulative evaluation of the findings recorded in the report of the
Investigating Officer and the other evidence on record, it being apparent
that the appellant union had failed to satisfy the statutorily prescribed
pre-requisites to entitle a union to be acknowledged as a recognized union
under the Act, no interference in the impugned judgment and order is
warranted.
24. They contended that, even assuming that the finding of the
Investigating Officer of dual membership of 1908 employees was acceptable,
even then in total, the appellant union could be credited with only 1937
members compared to 2125 of BKS. On a comparative assessment of the
evidence adduced by the rival unions, the Industrial Court could not have
allowed the application of the appellant union to accept it as a recognized
union as a substitute of BKS, they emphatically urged. According to them,
not only the report of the Investigating Officer, but also the testimony of
the witnesses of the appellant union did conspicuously demonstrate that the
essential records as prescribed by the Act had not been maintained by it,
thus belying its claim of a deserving union to be conferred the status, it
had applied for. 25. Attention of this Court, in particular was
drawn to the finding of the Investigating Officer that the amount collected
as membership fees during the relevant period had not been deposited by the
appellant union in its bank account and also that its accounts were not
audited by an auditor appointed by the State Government as required under
Section 19 of the Act. The learned senior counsel were critical as well of
the omission on the part of the Industrial Court to take note of the
version of the affiants of 100 affidavits cross-examined which totally
demolished the appellant union’s claim of the majority membership. The
following decision was referred to for reinforcement:
Ayaaubkhan Noorkhan Pathan Vs. State of Maharashtra and Ors., 2013 (4) SCC
465.
26. A few intervening events of significance demand attention at
this stage. On 10.10.2003, one Shri Rosaria D’Souza, claiming himself to a
permanent employee of the company had filed a representative complaint on
behalf of the members of the appellant union before the Industrial Court
under Section 28 of the Act alleging unfair labour practice thereunder for
causing deduction from the bonus amount payable to the employees for
payment of membership fees of BKS for the year 2003. Reference was also
made of such deduction in the year 2002. It was averred in the complaint
that the members employees of BKS had by then resigned from its rolls and
had joined the appellant union. It was alleged that such kind of deduction
in absence of any written authority of the employees concerned, did amount
to unfair labour practice and that the company and the BKS had joined
together arbitrarily in resorting thereto. This complaint was registered as
Complaint (ULP) No. 309 of 2003.
27. By order dated 16.10.2003, the Industrial Court, Pune, on a
proposal being made on behalf of BKS and not objected to by the company and
the complainant, though permitted the deduction from the bonus amount, it
directed that the sum collected be retained with the company and restrained
it from defraying the same to any person or union till the complaint was
finally decided.
28. It was finally on 28.9.2006 that the Industrial Court decided
that the respondents herein namely; company and the BKS had jointly
committed unfair labour practice under the Act by deducting the membership
subscription of Rs. 100 per employee from the bonus amount payable for the
year 2003 and prohibited them from doing so in future. The challenge
thereto laid before the High Court was dismissed in limine on 24.03.2008.
The High Court upheld the decision of the Industrial Court to the extent
of impermissibility of deduction of membership fee but set-aside the
finding that the same in the facts and circumstances of the case did amount
to unfair trade practice.
29. Pursuant to the order dated 29.09.2004 of the Industrial Court
causing an enquiry to be made into the aspect of membership strength of the
rival unions, the investigating officer initiated an exercise in course
whereof, both the unions submitted original documents in support of their
respective claims. The documents included list of members, membership
books, receipt book of members, minute book register, computerized cash
book, bank pass book, audit report etc. for the relevant period and also
beyond the same. Vis-a-vis the appellant union, the investigating officer
in his report recorded that from the list of 1973 members that it had
produced, 39 were ineligible and thus in all 1934 could be treated as
eligible members. Referring to the receipt books of membership, it was
recorded that every worker was depositing Rs. 60 per annum and also that in
several receipts, no date was mentioned. The investigating officer
mentioned, that the bank pass book of the appellant union was with the
Syndicate Bank, Chinchwar Branch, Pune and that the contribution by way of
membership fee was not being deposited in the account.
30. So far as the documents of the BKS were considered, the
Investigating Officer on his inspection thereof, recorded that it had
submitted a list of 2166 workers claiming them to be its members, out of
which 41 were found to be ineligible. It was thus set down that 2125
members could be treated as eligible.
31. On a scrutiny of the receipt books of the members, the
Investigating Officer opined that no responsible official bearer of the
union had signed the same and that it was not maintained as per the
provision of the 1926 Act. The particulars of the contribution book were
elaborately examined and the deposit of membership fee of 2166 members, was
noted. The Investigating Officer was of the view that the cash book of the
BKS was not in the prescribed form and was not signed by any responsible
office bearer of the union. That there were some anomalies with regard to
the dates of the deposits and the receipts, were pointed out as well. It
was noted too that out of 2166 members, claimed by the BKS to be in its
hold, 54 had either retired or resigned or expired during the period March
2003 to August 2003. On a comparison of the lists of members submitted by
the unions, the Investigating Officer noted that 26 and 217 members were
exclusively in the ranks of the appellant union and BKS, whereas 1908
members appeared to be common to both the entities, i.e. with dual
membership.
32. As mentioned herein above, the parties did adduce oral evidence
as well. The two witnesses examined by the appellant union were Madhav son
of Baburao Roham and Gugario son of Gabriel D’Souza. Whereas the first
witness claimed to be the President of the appellant union, the second
said on oath that he was a member thereof having resigned from BKS on
12.12.2002. The President of the appellant union in his deposition stated,
inter alia, about the records of its union including minute books, receipt
books of membership fees and in general referred to the lists of the
employees numbering 1973, who had resigned from the BKS to join his union
after 01.01.2003. He claimed that the receipts to the members for the fees
were issued and that receipts books in that regard were maintained. He
also deposed that the membership fees were being deposited with the bank
which, however as the report of the investigating officer would reveal was
inconsistent therewith in this regard. He admitted that the accounts of
his union used to be audited by a Chartered Accountant not appointed by the
Government. He also expressed his inability to produce the minute book of
the general body meeting authenticating the members and office bearers of
the appellant union.
33. In course of cross-examination, this witness conceded that he
had no evidence to show that he was a honorary member of the appellant
union in the past. He admitted as well that the account of the appellant
union was opened with the Syndicate Bank in the month of January 2003 and
though such account previously was with another bank, he was not in a
position to either name it or to provide the account number. When
confronted with reference to the report of the Investigating Officer that
there was a shortfall in the amount claimed to be deposited with the bank
compared to the sum received as membership fees, the witness could not
provide any explanation therefor. He also conceded that the finding of the
Investigating Officer that the membership amount had not been deposited
with the bank had remained unquestioned. He was confronted as well with
certain omissions in the return filed by the appellant union under the
Bombay Trade Unions Regulation, 1947 for the year 2003.
34. The evidence of the other witness i.e. Gugario was essentially
to the effect that he had resigned from the membership of BKS to join the
appellant union as he along with others, who had similarly drifted to the
appellant union, were not receiving any benefit from their parent union
i.e. BKS. In course of his evidence, he claimed also to be the Unit
President of the appellant union and asserted that there were 1973 members
thereof since 2003. In his cross-examination, when asked, this witness
could not provide the particulars of the general body meetings or managing
committee meetings of the appellant union required to be held as per its
constitution. Though he referred to the meeting of the managing committee
held on 9.1.2003, he could not furnish the names of the persons present.
He also expressed his ignorance about the existence of any consolidated
register of all the employees who have been members of the appellant union
though from the different companies.
35. The 1556 affidavits filed on behalf of the appellant union were
in a particular format, which for ready reference, is being quoted
hereunder:

“AFFIDAVIT

I, Shri,…………………………………….. Age ………………

Occupation Service, residing at ………………………………

State on solemn affirmation as follow:
I have resigned from the recognized union, namely, Bharatiya Kamgar
Sena on 12.12.2002. The said union has never defended the interest of the
workers and has worked as per the directions of the Company. Therefore I
have resigned from the said Union. I have not paid union subscription to
Bharatiya Kamgar Sena since the last two years.
I have accepted the membership of the Applicant Union, namely, Poona
Employees Union on 12.12.2002 and today I am a member of Poona Employees
Union. Since I along with the other workmen are members of Poona Employees
Union and since Bharatiya Kamgar Sena does not have majority of membership
since Ist Jan. 2003. I am filing this affidavit so that the recognition of
Bharatiya Kamgar Sena is revoked.
All that is stated above is true as per my knowledge and information
and I have put my signature on it at Pune on 29.9.2004.”

36. We have extended our anxious consideration to the rival
pleadings and the arguments based thereon. The documents available on
record have also received our attention. It is expedient, having regard to
the issues raised, to embark on a summary survey of the relevant provisions
of the Act in quest of the underlying objective thereof, which in our
comprehension, would define, amongst others, the nature, extent and
essentialities of the enquiry contemplated and obligated by it in order to
determine the eligibility-cum-suitability of a union contending for the
status of “recognized union” under the statute.
37. As the preamble of the Act would testify, it is one to provide
for the recognition of trade unions for facilitating collective bargaining
for the undertakings visualised therein and amongst others, to define and
provide for the prevention of certain unfair labour practices and to
constitute courts for carrying out the purposes of according recognition
to the trade unions and for enforcing the provisions relating to unfair
practices. The report of the ”Committee on Unfair Labour Practices”,
appointed by the State Government to outline the activities of employers
and workers and their organizations to be construed as unfair labour
practices and to suggest the steps against the perpetrators thereof,
preceded the enactment which duly took note of the report of the Committee.
38. The Act contemplates, Industrial Courts to be constituted by
the State Government, duties whereof are amongst others, to decide an
application by a union for grant of recognition to it, in place of a union
which has been recognised thereunder, as well as to decide the complaints
relating to unfair labour practices, with the exceptions as enumerated in
Item 1 of Schedule IV to the legislation. The Industrial Court under
Section 5 is empowered to assign work, and to give direction, to the
Investigating Officers in mattes of verification of membership of unions,
and investigation of complaints relating to unfair labour practices.
Investigating Officers, referred to hereinabove, are appointed by the State
Government for the area(s), as may be specified as necessary to assist the
Industrial Courts and the Labour Courts in discharge of their duties. In
terms of Section 9, it is the duty of an Investigating Officer to assist
the Industrial Court in mattes of verification of membership of unions, and
assist the Industrial and Labour Courts for investigating into complaints
relating to unfair labour practices.
39. Chapter III devoted to recognition of unions, prescribes that
any union seeking to apply for being registered as a recognised union of
any undertaking has to have membership of not less than 30% of the total
number of employees employed in that undertaking for the whole period of
six calendar months immediately preceding the calendar month in which it
applies. In case, such an application is made, it is incumbent on the
Industrial Court, as far as possible, to dispose of the same within a
period of three months therefrom.
40. Section 12 provides the manner of disposal of such
applications. On the receipt thereof and on the payment of the prescribed
fee, as mentioned therein, the Industrial Court, if the application on a
preliminary scrutiny is found to be in order, would cause notice to be
displayed on the notice board of the undertaking, declaring its intention
to consider the said application on the date specified in the notice and
call upon the other union or unions, if any, having membership of employees
in that undertaking and the employers and employees likely to be affected,
to show cause as to why the recognition, as prayed for, would not be
granted. The Industrial Court, thereafter, on a consideration of the
objections, that may be received from any other union or employers or
employees, as the case may be, and after holding such enquiry, in such
manner as it deems fit, if it comes to the conclusion that the conditions
requisite for registration specified in Section 11 of the Act are satisfied
and that the applicant union also complies with the conditions enumerated
in Section 19 of the Act, would grant recognition to the applicant union
and issue a certificate of such recognition in a form, as prescribed. The
caveat in sub-section (5) of Section 12 is to the effect that Industrial
Court shall not recognize any union, if it is satisfied that the
application for recognition is not made bona fide in the interest of the
employees, but is made in the interest of the employer or to the prejudice
of the interest of the employees. The Industrial Court is also debarred
from recognizing any union if at any time, within six months immediately
preceding the date of the application, the applicant union had instigated,
aided or assisted the commencement or continuation of a strike which is
deemed to be illegal under the Act.
41. Whereas Section 13 delineates the eventualities and the
procedure for cancellation of recognition and suspension of rights of a
union, Section 14 predicates the perquisites and the procedure for
deciding an application laid before the Industrial Court by any union for
being registered as a recognised union in place of an existing recognised
union in the undertaking. In terms of this provision, if such an
application is made on the ground that the applicant union has the largest
membership of employees employed in that undertaking, and if a period of
two years has elapsed since the date of registration of the recognised
union, it (Industrial Court) would call upon the recognised union by a
notice in writing to show cause within thirty days of the receipt thereof,
as to why the applicant union should not be recognised in its place.
42. The proviso to Section 14 ordains that the Industrial Court,
may not entertain any application for registration of a union, unless a
period of one year had elapsed since the date of disposal of the previous
application by the same union. Identically, as per the procedure as
contemplated in Section 12 of the Act, the Industrial Court, on the expiry
of period of notice, if is of the opinion, on a preliminary scrutiny of the
application made, that it is in order, it shall cause notice to be
displayed on the notice board of the undertaking, declaring its intention
to consider the said application on the date specified in the said notice
and call upon other union or unions, if any, having membership of employees
in that undertaking, employers and employees likely to be affected by the
proposal as to why the recognition as sought for would not be granted. The
Industrial Court, thereafter, on a consideration of the objections that may
be received and after holding such enquiry as it may deem fit, which may
include recording of evidence of witnesses and hearing of parties, if comes
to the conclusion that the applicant union had complied with the
conditions necessary for recognition specified in Section 11 and that its
membership was during the whole of the period of six calendar months
immediately preceding the calendar month in which it had made the
application, larger than the membership of the recognised union, then it
would recognise the applicant union in place of the recognised union and
issue a certificate in such form as may be prescribed. Such an
application, as sub-section (5) of Section 14 would denote, is to be
disposed of within a period of three months as far as possible.
43. Section 19 appearing under Chapter IV of the Act mandates the
obligations of a recognised union, whereunder the rules thereof should
provide that:
(i) The membership subscription shall not be less than fifty paise per
month;

(ii) Executive Committee shall meet at intervals of not more than three
months;
(iii) All resolutions passed, whether by the Executive Committee or the
general body of the union, shall be recorded in a minute book kept for the
purpose;
(iv) An auditor appointed by the State Government may audit its account
at least once in each financial year.

44. Section 30 which defines the powers of Industrial and Labour
Courts, does recognise these fora to be Courts vested with the powers of:
(a) requiring proof of facts by affidavit;
(b) summoning and enforcing the attendance of any person and examining him
on oath;
(c) compelling the production of documents and;
(d) issuing commissions for the examination of witnesses.

45. The power to call upon any of the parties to the proceedings
before them to furnish in writing, and in such forms as it may think
proper, any information considered relevant has also been conferred by this
provision.
46. On a conjoint reading of the above referred provisions of the
Act, it is abundantly and predominantly clear that the exercise of
examining an application of a union in an undertaking seeking the status of
recognized union whether by replacing an existing recognized union or not,
is neither a routine ritual nor an idle formality. Not only the applicant-
union has to be eligible to apply as per the prescriptions with regard to
the extent of membership it has to command for the relevant period, its
application has to be bona fide in the interest of the employees and it
must not have indulged in any activity of instigating, aiding or assisting,
the commencement or continuation of a strike during the said period. The
detailed procedure in both the eventualities, as contemplated in Sections
12 and 14 of the Act, enjoins a participating enquiry to verily ascertain
the membership pattern of the rival unions, and also the existence or
otherwise of the disqualifying factors as stipulated by the Act.
47. Section 9(2) of the Act, to reiterate, makes it incumbent on
the Investigating Officer to assist the Industrial Court in matters of
verification of membership of unions and also to assist the Industrial and
Labour Courts investigating into the complaints relating to the unfair
labour practice. Axiomatically, thus the enquiry to be undertaken by the
Industrial Court, has to strictly comport to the prescripts of the relevant
provisions and cannot be repugnant to the letter and spirit thereof.
Indubitably, the burden would be on the applicant union to decisively
establish its eligibility and suitability for being conferred the status of
a recognized union to be adjudged by the legislatively enjoined parameters.
Though the enquiry envisages participation of the rival union(s),
employers and employees, having regard to the ultimate objective of
installing a representative union to secure genuine, effective and
collective negotiations, catering to industrial cohesion, harmony and
growth, no compromise or relaxation in the rigours of the requirements of
the enquiry can either be contemplated or countenanced.
48. This Court in Automobile Products of India Employees’ Union
(supra) was seized with a fact situation where in the course of enquiry
under Section 14 of the Act, the Industrial Court had acceded to the joint
request of the two contesting unions to verify the membership thereof on
the basis of the results of a secret ballot. Both the unions had agreed
that the issue pertaining to recognition be decided by secret ballots and
the union which would muster majority of the votes, should be treated as
the recognized union. Accordingly, a secret ballot was held, in which the
appellant union therein was found to have secured higher number of voters.
The respondent-union submitted its objection principally disputing the cut-
off date fixed for the purpose of determining the eligible voters. Be that
as it may, the Industrial Court sustained the claim of the applicant union
i.e. the appellant. The High Court on a challenge being laid before it by
the defeated union as well as two workers thereof, upheld the same and
interfered with the order of the Industrial Court.
49. This Court on a exhaustive survey of the relevant provisions of
the Act and emphatically underlining the avowed role of a recognized union
contemplated thereby, in the interest of stability of industrial relations
and peace through collective bargaining, affirmed the determination made by
the High Court. This Court propounded that the procedure adopted by the
Industrial Court, to grant recognition of a union was one which was clearly
alien to the Act. It observed that thereby, the parties were allowed not
only to circumvent the provisions of the statute but also it failed to
bring about the representative character of the union which was the sine
qua non for the recognition to be accorded. That the elective element
inherent in the secret ballot had the potential of encouraging the growth
of mushrooming unions on the eve of election, outbidding each other in
promising returns to the workers merely to assert supremacy, unmindful of
the health of the industry leading to unwarranted industrial strife,
stoppage of production, closure of the establishment, was underlined as the
unhealthy and undesirable consequences of such process.
50. The factual conspectus, albeit, not wholly identical herein,
the fact remains that though it had been undertaken by the appellant union
that if permitted to file its affidavits, the same would not be utilized to
decide the issue of membership and was endorsed as well by the Industrial
Court, its decision would clearly reveal that the contents of the
affidavits not only had been taken note of by it but also relied upon
along with the other materials on record, to eventually hold that the
appellant union held in its ranks, the majority membership of the employees
of the undertaking. To this extent, we are constrained to hold that the
approach of the Industrial Court in deciding the issue of membership cannot
be sustained being in derogation of the letter, spirit and objectives of
the procedure prescribed by the Act to determine the issue of majority of
membership for the purpose of identifying the recognized union of an
industrial establishment.
51. To recall, the common averment made in the 1556 affidavits
filed by the appellant union is that the employees concerned had resigned
from BKS on 12.12.2002 as it did not defend the interest of the workers and
had functioned as per the directions of the company. It was further
affirmed that the deponent did not pay union subscription to BKS since last
year and that he/she had instead accepted the membership of the appellant
union i.e. Puna Employees Union on 12.12.2002 and that concludes to be its
member on the date of the execution of the affidavit. It was stated further
that in view of the resignation of the deponent and others, BKS did not
have majority of the membership since 1.1.2003 and that thus its
recognition be revoked.
52. Vis-à-vis the demur of the respondents that the appellant union
lacked in representative capacity, as it had failed to furnish the schedule
to the constitution to disclose its object under clause 2(a) thereof as
required under Section 6 of the Union Act, it transpires on the perusal of
the said charter that clause 2(a) thereof reads as hereunder:
“The objects of the Union shall be:

to organise and unite the persons employed in any Industry, any Factory,
any Section, any shop and any establishment within the district of Poona as
per Schedule: in the …….……. and to regulate their relations with their
employers. “

53. True it is that the extract of this clause in the impugned
judgment and order wrongly records “the” preceding the word “industry”
instead of “any”. However, the copy of the constitution available on
records does not contain the schedule as well. We leave it at that.

54. Adverting to the evidence, dehors the affidavits, suffice it to
state that the report of the Investigating Officer clearly reveals that the
contribution collected from the members of the appellant union had not been
deposited in its bank account. This finding, to reiterate, is based on a
scrutiny of the original records of the appellant union. Though the then
President of the appellant union, in his testimony claimed that the
membership fee had been duly deposited in the bank, he conceded that no
complaint had been made against the Investigating Officer for incorporating
a finding contrary thereto. No overwhelming evidence was also produced to
counter this finding. This witness admitted as well that the accounts of
the appellant union were not being audited by a Chartered Accountant,
appointed by the Government which per se is also in repudiation of the
mandate of Section 19(iv) of the Act. This witness in course of the cross-
examination was also confronted with the annual return submitted by the
union for the period January to December, 2003 in which he admitted that
the columns No. 10, 13, 15 and 17 of the prescribed form had been left
blank. A perusal of Form No. 1 in which annual returns are to be submitted
by a registered trade union in terms of the Bombay Trade Unions
Regulations, 1927 framed under Section 29 of the 1926 Act reveals that the
blank columns refer to:

Number and date of receipt for payment of application fee;
number of members admitted during the year;
number of members on books at the end of year i.e., on 31st December;
number of members who paid their subscription for the whole year.

These in the contemplation of this Court are vital informations pertaining
to the claim of membership of appellant union, in order to wrest the title
of “recognized union” from an existing rival union enjoying the said
status.

55. Not only, in the comprehension of this Court, the report of the
Investigating Officer based on a scrutiny of all relevant records of the
appellant union including the list of employees, membership receipt book,
register of membership, cash book, bank pass books etc. does not as such
admit of any doubt about its credibility, even some of the affiants, in
their cross-examinations, on their affidavits filed in support of the claim
of membership of the appellant union, had stated that they had affirmed the
same because they were promised by the appellant union that their deducted
wages for the go-slow tactics would be reimbursed. Though the respondents
have nursed a remonstrance that the permission granted by the Industrial
Court to cross-examine only 100 of the affiants out of 1556
deponents did denude them of a valuable right of defence, in our estimate,
nothing much turns thereon. No dilation on the decision of this Court in
Ayaaubkhan Noorkhan Pathan (supra) is thus warranted.

56. To reiterate, these affidavits could not have been, in the
facts and circumstances of the case, and more particularly in view of the
undertaking given by the appellant union and also the order to that effect
by the Industrial Court that the same would not be used to decide the issue
of membership, acted upon for this purpose. It had throughout been in the
understanding of all concerned that the contents of the affidavits would be
used only for relevant and ancillary purpose but divorced from the issue of
membership. The Industrial Court however, in concluding that the appellant
union did have more than 30% of the membership of the total employees, took
cognizance of these affidavits and relied on the same. The contents of the
affidavits, referred to hereinabove, which are identical and in a format
are to the effect that the deponents had not paid subscription to the BKS
for the last two years and that they had accepted the membership of
appellant union on 20.12.2002 and that BKS does not have majority of the
membership since 1.1.2003. These affidavits taken on their face value,
irrefutably testified on the aspect of membership of the two unions and
though the Industrial Court did endeavour to construe the same for the
purpose of ascertaining the intention of the affiants to support the
appellant union, it indeed had a decisive bearing on its ultimate
conclusion of its majority membership.

57. We have perused the materials on record, relevant to the issues
involved and are of the considered opinion that dehors the affidavits, the
evidence or the materials laid by the appellant union are not
overwhelmingly determinative of its claim of majority membership as
required under Sections 11,12, and 14 of the Act. The adjudication on the
issue of deduction of bonus amount by the company for adjustment against
the membership fee of BKS in the background pertaining thereto and narrated
hereinabove does not conclusively clinch the cause in favour of the
appellant union. The decision of this Court in Balmer Lawrie Workers’
Union (supra) is as such of no avail to it.

58. Having regard to the judicially acknowledged and proclaimed
contours of the jurisdiction under Article 136 of the Constitution of
India, we are of the unhesitant opinion that the impugned decision does not
merit annulment. As it is, the extra-ordinary jurisdiction of this Court
under Article 136 of the Constitution, is to be exercised sparingly and
even mere errors in the appreciation of the evidence on record are
insufficient to attract this Court’s invigilatory intervention thereunder.
It is a trite proposition, that this Court may interfere in rare and
exceptional cases where manifest illegality or grave and serious
miscarriage of justice has been occasioned by the decision under scrutiny
as has been propounded by this Court in Union of India and others Vs.
Gangadhar Narsingdas Aggarwal (1997) 10 SCC 305. If two views are possible
and the view taken in the impugned decision is a plausible one, it would
not warrant intervention of this Court under Article 136 of the
Constitution of India.

59. In the facts of the present case, in our estimate, the analysis and
evaluation of the materials on record as undertaken cannot be denounced as
illogical, irrational or uncalled-for and the view recorded in the impugned
judgment and order is one permissible on the basis thereof.

60. We have perused the impugned judgment and order. In the above
presiding backdrop of facts and law, we are of the unhesitant opinion that
the view taken by High Court is plausible and rational being based on a
logical analysis of the materials on record and the law applicable does not
merit any interference at our end. Having regard to the paramount
objectives of the Act and in the interest of industrial orderliness,
stability, peace and overall wellbeing as well, we find no persuasive
reason to intervene at this distant point of time. The appeals fail and
are, accordingly, dismissed. No costs.

……..……………………..….J.
(V. GOPALA GOWDA)

……..……………………..….J.
(AMITAVA ROY)
NEW DELHI;
DECEMBER 1, 2015.

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