JUDGMENT
Mukul Mudgal J.
1. This writ petition by the petitioner which is the Voltas Employees Union of the employer M/s Voltas Limited respondent No. 2, seeks a writ of mandamus against respondent No. 1, Secretary Labour, Government of NCT of Delhi, for directions to prosecute respondent No. 2 under Section 29 of the Industrial Disputes Act (hereinafter referred to as the ‘Act’). By the impugned order dated 5th May, 2000, the Conciliation Officer, Govt. of NCT of Delhi declined to take any action under Section 29 of the Act.
2. The brief facts relevant for the determination of the issues raised in this writ petition are as under:-
(a) The petitioner is the Voltas Employees Union, respondent No. 1 is the Secretary Labour cum Labour Commissioner, Government of NCT of Delhi and respondent NO. 2 is the Management, Voltas Limited.
(b) On 6th April, 1984 the understanding was arrived at between the respondent No. 2 employer and the employees that the union shall be consulted before entrusting the regular nature of work to the contractor.
(c) On 31st March, 1995, a registered settlement under the Act was arrived at between the petitioner union and the respondent No. 2 employer. Clause 14 of the said settlement provided that the settlement shall last for a period of three years until the expiry of notice period of two months in writing by either party as per Section 19 of the Act and even thereafter until it is replaced by another settlement or award.
(d) Respondent No. 2 employer on 12th March, 1999 proposed the change in working hours of workmen at Najafgarh Road establishment, which according to the petitioner was in violation of settlement dated 31st March, 1995.
(e) Certain other violations on 6th July, 1999, 5th August, 1999 and 20th August, 1999 of the settlement dated 31st March, 1995 relating to (a) changing of uniform code; (b) withdrawal of facilities of cold drink to the workmen; and (c) transferring of regular work of watchmen to contractors, were also alleged by the petitioner union. Accordingly a complaint was filed on 30th August, 1999 by the petitioner under Section 29 of the Act leading to the impugned order dated 5th May, 2000 rejecting the complaint made by the petitioner and the order of the rejection of the review petition dated 27th February, 2002.
3. The relevant portion of the impugned order dated 5th May, 2000 reads as follows:-
“Since the settlement has been terminated by the union after giving notice and fresh demands have been raised by demand notice and the matter has been filed for conciliation. Under these circumstances, I have been directed to inform you that no proceedings against the management under Section 29 of the I.D. Act on the basis of violation of the Settlement dated 31.03.95 is possible.”
4. This order was sought to be reviewed by the petitioner by filing a review application. This review application was also dismissed by order dated 27th February, 2002. This writ petition challenges the orders dated 5th May, 2000 and 27th February, 2002. Learned counsel for the petitioner has relied on clause 14 of the settlement which reads as follows:-
“14.0 DURATION OF SETTLEMENT
That this Settlement shall remain in force for a period of three years from the date of signing in the first instance and will continue in operation thereafter until the expiry of two months notice of termination in writing served by either party as per provisions of Section 19 of the Industrial Dispute Act and even thereafter until it is replaced by another Settlement or Award. The Union, however, shall be free to raise its Charter of Demands three months earlier without terminating the terms and conditions of this Settlement.”
(underlining supplied)
5. The relevant statutory provisions of the Industrial Disputes Act are as follows:-
2(s) “workman” means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person –
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) Who is employed mainly in the police service or as an officer or other employee of a prison; or
(iii) Who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
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18. Persons on whom settlements and awards are binding. – [(1) A Settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement.
(2) Subject to the provisions of sub-section (3), an arbitration award] which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration.
(3) A settlement arrived at in the course of conciliation proceedings under this Act [or an arbitration award in a case where a notification has been issued under sub-section (3A) of section 10A] or [an award of a Labour Court, Tribunal or National Tribunal] which has become enforceable] shall be binding on
(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause;
(c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates;
(d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part.
19. Period of operation of settlements and awards. – (1) A settlement shall come into operation on such date as is agreed upon by the parties to the dispute, and if no date is agreed upon, on the date on which the memorandum of the settlement is signed by the parties to the dispute.
(2) Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months from the date on which the memorandum of settlement is signed by the parties to the dispute, and shall continue to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement. ………..
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29. Penalty for breach of settlement or award – Any person who commits a breach of any term of any settlement or award, which is binding on him under this Act, shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both, and where the breach is continue one, with a further fine which may end to two hundred rupees for every day during which the breach continues after the conviction for the first and the Court trying the offence, if it fines the offender, may direct that the whole or any part of the fine realised from him shall be paid, by way of compensation, to any person who, in its opinion has been injured by such breach.”
6. While the period of the settlement dated 31st March, 1995 entered into for a period of three years came to an end, by virtue of the effect of clause 14 on 31st March, 1998, its terms still continued to operate unless and until it was replaced by another Settlement or Award. There is no dispute that no replacement or substitution of the said terms by another award or settlement has taken place. The learned counsel for the respondent Shri Vinay Sabharwal has contended that upon expiry/termination of the original period stipulated in the settlement, the effect of the settlement ceases to have statutory force and is now enforceable only contractually. He has accordingly submitted that not having statutory but only contractual force, the said settlement cannot be enforced by this writ petition. In this context he has relied on observations made in paragraph 39, 41, 77 and 78 of the judgment of the Hon’ble Supreme Court in LIC vs. D.J. Bahadur, .
7. In fact the law laid down by the Hon’ble Supreme Court in LIC’s case (supra) is clear and categorical as is evident from the following paragraphs :-
“45. The catena of cases we have briefly catalogued discloses an unbroken stream of case-law binding on this Court, the ratio whereof, even otherwise, commends itself to us. The award or settlement under the ID Act replaces the earlier contract of service and is given plenary effect as between the parties. It is not a case of the earlier contract being kept under suspended animation but suffering supersession. Once the earlier contract is extinguished and fresh conditions of service are created by the award or the settlement, the inevitable consequence is that even though the period of operation and the span of binding force expire, on the notice to terminate the contract being given, the said contract continues to govern the relation between the parties until a new agreement by way of settlement or statutory contract by the force of an award takes it place. If notice had not been given, the door for raising an industrial dispute and fresh conditions of service would have have been legally open. With action under Section 9-A, Section 19(2) or (6), the door is ajar for disputes being raised and resolved. This, in short, is the legal effect not the lethal of invitation to industrial trial of strength with no contract of service or reversion to an obsolete and long ago ‘dead’ contract of service.
(underlining supplied)
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47. At this stage, I may record my firm conclusion that for the reasons already given the settlement under the ID Act does not suffer death merely because of the notice issued under Section 19(2). All that is done is a notice “intimating its intention to terminate the award”. The award even if it cases to be operative qua award, continues qua contract. Therefore, if the ID Act regulates the jural relations between the LIC and its employees — an ‘if’ we will presently scan — then the rights under the Settlement of 1974 remain until replaced by a later award or settlement.”
8. The above judgment relied upon by the learned counsel for the respondent No. 2 in fact clearly supports the petitioner and has clearly held that even a contract, the span of which has expired, continues to govern the relations between the parties until replaced by another settlement or award. In this view of the matter the differentiation sought to be pointed out by the learned counsel for the respondent to the effect that a contractual settlement is different from a statutory settlement cannot be sustained. Consequently the plea of the learned counsel for the respondent No. 2 that proceedings under Section 29 lies for infraction only of a settlement having statutory and not contractual force is clearly against the clear terminology of Section 29 and the ethos and objects of the Industrial Disputes Act which strives to achieve industrial peace.
9. Clause 14 of the settlement clearly stipulates that the settlement shall continue even after the expiry until replaced by another settlement or award. Similarly Section 18 of the Act makes the settlement binding on the parties to the settlement which include respondent No. 2. Furthermore, Section 19(2) provides that a settlement is a binding for such period as is agreed upon by the parties. In the present case, the terms of settlement agreed between the parties after the expiry of three years as per clause 14 of the settlement subsist until the existing settlement is replaced by another settlement or award. Thus even Section 19(2) read with Section 18 makes the settlement binding even after the expiry of the original period in the agreement, as no substitution by settlement or an award has come into being. Thus Section 19(2) in any case imposes a statutory requirement of the settlement terms being binding on the employer and the employees even de-hors the position of law laid down by the Hon’ble Supreme Court as extracted above in D.J. Bahadur’s case. Thus whether the settlement’s operation is statutory or contractual, by the virtue of the position of law laid down in D.J. Bahadur and the mandate of Section 18 and Section 19(2) of the Act, it is enforceable against the respondent No. 2. Since the mandate of Section 19(2) is undeniably statutory, a writ petition would lie to enforce its import. In this view of the matter the reasoning in the impugned order dated 5th May, 2000, which held that no proceedings against respondent No. 2/Management would lie on the basis of the violation of the terms of the settlement dated 31st March, 1995 as the settlement was terminated by the union, cannot be sustained.
10. Accordingly the writ petition deserves to be allowed. The orders dated 5th May, 2000 and 27th February, 2002 passed by the respondent No. 1 are set aside. In view of the fact that this matter was pending for more than a year in this Court, the respondent No. 1 is directed to initiate proceedings against respondent No. 2 and endeavor to conclude the same not later than 31st August, 2004. The petitioner shall be entitled to costs quantified at Rs. 10,000/- payable by the respondent No. 2 on or before 31st January, 2004.