Posted On by &filed under High Court, Kerala High Court.


Kerala High Court
Engineering, Mechanical And … vs National Textile Corporation on 8 November, 2000
Equivalent citations: (2001) IIILLJ 906 Ker
Author: K M Shafi
Bench: K M Shafi


JUDGMENT

K.A. Mohamed Shafi, J.

1. This O.P. is filed by a Trade Union in the 2nd respondent – company under the 1st respondent seeking issue of a writ of mandamus or other appropriate order appointing an independent agency to be nominated by this Court for the purpose of re-auditing the balance sheet of the 2nd respondent-Company for the financial year 1990-91 and to submit before this Court a proper balance sheet of the 2nd respondent-company for the financial year 1990-91 and to compel the 1st respondent to disburse to the workers of the 2nd respondent represented by the petitioner all approved benefits flowing from the reaudited balance sheet.

2. The petitioner has contended that there has been mismanagement of the affairs of the 2nd respondent by the 1st respondent and the 1st respondent has been projecting loss-oriented balance sheets for every year. According to them, even though the 2nd respondent is earning profit, the balance sheet is being published as if it is running in loss. They have contended that in the balance sheet of the 2nd respondent for the year 1990-91 the respondents have shown excess bad debts, excess expenditure as wear and tear, excess expenditure as interest, reserved gratuity, excess stock and excess bank balance to the tune of Rs. 3,89,57,247.35 and if that amount is added to the sale proceeds of Rs. 10,72,99,820.11 after deducting the expenditure of Rs. 12,90,69,965.91 for the year, there will be a profit of Rs. 1,71,87,101.55 for the year. Therefore, they contended that it is absolutely essential to get the accounts of the 2nd respondent audited through an independent agency that may be appointed by this Court, in which case the employees of the 2nd respondent including the petitioner will be getting much more benefits by way of bonus etc. for the year.

3. The respondents have contended that the above O.P. is absolutely unsustainable. According to them, there are 17 Trade Unions in the 2nd respondent-company and out of which the Trade Union representing very few workers has filed this O.P. making absolutely false and untenable allegations. According to the respondents, in the year 1990-91 it was agreed by the parties in the meeting of the industrial relations committee for textile industries in Kerala held on August 16, 1991 and the Chairmanship of the Labour Commissioner, Kerala that in those textile mills where the bonus liability as per the Bonus Act is 8.33%, an incentive at the rate of Rs. 2.50 per day of work performed by a worker in the accounting year 1990-91 will be paid. Exhibit R2(a) is the minutes of the meeting of the industrial relations committee for textile industries dated August 16, 1991. According to them, as disputes arose between various Units of the 1st respondent in Kerala and their workmen regarding demand for bonus for the year 1990-91, a conciliation settlement was reached in the meeting he!d on August 20, 1991 in the presence of the Labour Commissioner, Kerala and the Hon’ble Minister for Labour for Kerala and it was agreed by all the parties that bonus and incentive will be paid as per the terms of the industrial relations committee decisions of August 1, 1991. A true copy of the conciliation settlement is Exhibit R2(b). In Exhibit R2(b) the Labour Commissioner has certified that he is satisfied that the settlement being a reasonable and fair settlement, it is a conciliation settlement binding on all the workmen of all the units of the N.T.C. Mills in the State and their management.

4. Section 18(3) of the Industrial Disputes Act stipulates that a settlement arrived at in the course of conciliation proceedings under the Act or an arbitration award in a case where a notification has been issued under Sub-section (3-A) of Section 10-A or an award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on all parties to the industrial dispute, 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 and 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.

5. In the decision in Ram Pukar Singh & Ors. v. Heavy Engineering Corpn. and Ors. AIR 1995 SC 251 : 1994 (6) SCC 145 : 1995-I-LLJ-214 the Supreme Court has observed as follows at pp. 216, 217 of LLJ:

“The settlement dated September 13, 1990 was admittedly under Section 12(3) read with Section 18 and other provisions of the Industrial Disputes Act. The settlement was, therefore, binding on all the workmen whether they were members of the Union or not. In the circumstances, we are of the view that the said settlement of September 13, 1990 is binding on the appellants.”

6. In the decision in M.D., Co-op. Sugars Ltd., Palghat v. Secretary, Palghat, D.P.S. Workers Union 1998-III-LLJ (Suppl)-81 a Division Bench of this Court has observed as follows at pp. 87, 90:

“17. It is also clear that a settlement reached in the course of conciliation proceedings of an industrial dispute with the assistance of a Conciliation Officer and certified by him to be a fair and just settlement, will be binding generally on all the workmen under Section 18(3) of the Act even if all the workmen were not parties to the dispute or have not concurred with the settlement so reached.

xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx

“25. Since the only basis on which the Tribunal has found that Exhibit P9 settlement is not binding on the second respondent is the reasoning contained in the decision in Mohanakumaran Nair’s case (supra), which we have over-ruled as per this Judgment, it has to be held that the Tribunal was not justified in law in entering such a finding and the finding is liable to be set aside. In the circumstances, we would set aside the finding entered by the Tribunal in Exhibit P1 award that Exhibit P9 settlement will not be binding on the second respondent and as a necessary consequence, we have to hold that Exhibit P9 is a settlement of an ‘industrial dispute’ validity reached in the course of a conciliation proceedings which has become enforceable and as such binding on all the workmen to the dispute and other workmen and union including respondents 1 and 2 as contended by the petitioner.”

7. Therefore, it is clear that the conciliation settlement evidenced by Exhibit R2(b) certified by the Labour Commissioner as fair settlement is bindings upon the members of the petitioner-union.

8. The 2nd respondent-company is a Government company as defined under Section 617 of the Companies Act, Section 619 provides for the appointment of an auditor by the Central Government on the advice of the Comptroller and Auditor-General of India, in addition to the internal audit provided under Sections 224 to 233 of the Act. Such auditor appointed shall file his audit report to the Comptroller and Auditor-General of India and with the comments of the Comptroller and Auditor-General of India, the audit report will be placed before the annual general meeting. The respondents have produced Exhibit R2(f), the audit report for the year 1990-91 with the comments of the Comptroller and Auditor-General of India. Section 619 of the Companies Act is a special provision regarding the Government companies over and above the general provisions regarding the audit. Section 23-A of the Companies Act empowers the Central Government to direct special audit in certain cases. Therefore, it is clear that absolutely no ground is made out by the petitioner to appoint an independent agency to audit the accounts of the 2nd respondent-company for the year 1990-91. It is also clear that as per Exhibit R2(b) conciliation settlement entered into between the 2nd respondent and its employees, the dispute with regard to the payment of bonus for the year 1990-91 was referred for conciliation under Section 22 of the Payment of Bonus Act and the settlement arrived at the conciliation is binding upon the petitioner also. Therefore, the prayer made by the petitioner to appoint an independent agency to conduct fresh audit so as to enable them to get more bonus for the year 1990-91 is also not sustainable.

9. In view of what is stated above, the O.P. is devoid of any merits. Hence the same is dismissed.


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