JUDGMENT
Tarun Agarwala, J.
1. A settlement between the employers and its Union was arrived at outside the conciliation proceedings and was duly registered under Section 6B(3) of the U.P. Industrial Disputes Act on 3.8.2004. Under this settlement various demands of the Union were met and granted but one of the demands, namely, that the workers, who had worked for more than 5 years should be kept in skilled category was not conceded by the employer, and in view of the other demands being accepted by the employer, this demand was taken back by the Union and it was agreed that this issue would not be raised during the period of the operation of the settlement. The settlement also contemplated that the terms recorded in the settlement would remain in operation for a period of three years from the date of its registration.
2. Inspite of the aforesaid settlement, the Union raised a dispute and eventually, the State Government by an order dated 30.9.2005 referred two disputes under Section 4K of the U.P. Industrial Disputes Act for adjudication before the Industrial Tribunal, Meerut. The terms of the reference order was:
(1) whether the employers were justified in not giving the designation and pay scale on the post of operator to the 111 workers working on the post of Assistant Operator, technician, etc.
(2) whether the employers were justified in terminating the service of two workers, namely, Shri Nirdosh Kumar Sharma and Smt. Neelam Sharma w.e.f. 5.3.2005 and Shri Jagdish Sharma w.e.f. 20.9.2005? if not to what relief are they entitled to?
3. The petitioner is the employer and has filed the present writ petition challenging the validity of the reference order made by the State Government. The short submission raised in this petition is, whether such a reference could be made by the State Government under Section 4K of the U.P. Industrial Disputes Act? Whether any industrial dispute existed when the matter was settled through a settlement which was duly registered under Section 6B of the U.P. Industrial Disputes Act?
4. Heard Sri Shakti Swarup Nigam, the learned Counsel for the petitioner and Sri Siddhartha, the learned Counsel for the respondent No. 2 and the standing counsel for the remaining respondents.
5. The learned Counsel for the petitioner submitted that once a controversy had been settled and was duly registered under the provision of the U.P. Industrial Disputes Act, the subject matter of the dispute could not be referred for adjudication before the labour court or Tribunal during the validity period of the settlement. On the other hand, the learned Counsel for the Union submitted that the settlement was not complied by the employer, and therefore, the dispute was referred for adjudication.
6. In my view, the State Government committed a manifest error referring the first dispute to the industrial Tribunal for adjudication. A settlement is defined under Section 2(t) of the U.P. Industrial Disputes Act as a settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and the workmen arrived at otherwise than in the course of conciliation proceedings where such an agreement has been signed by the parties thereto in such a manner as may be prescribed and a copy thereof has been sent to the State Government and the Conciliation Officer.
7. Section 6B of the U.P. Industrial Disputes Act reads as under:
6B. Settlement outside conciliation proceedings.–(1) A settlement arrived at by agreement between the employer and workmen otherwise than in the course of conciliation proceedings shall except as provided in Sub-section (4), be binding on the parties to the agreement;
Provided that if the period for which a settlement shall remain in force has not been laid down in such settlement itself, it shall remain in force for one year from the date of its registration.
(2) As soon as settlement referred to in Sub-section (1) has been arrived at, the parties to the settlement or any one of them may apply to the Conciliation Officer of the area concerned in the prescribed manner for registration of the settlement.
(3) On receipt of application for registration under Sub-section (2) the Conciliation Officer or an authority notified by the State Government in this behalf, either : (i) register the settlement in the prescribed manner, or (ii) refuse registration if it considers it to be inexpedient to do so on public grounds affecting social justice, or if the settlement has been brought about as a result of collusion, fraud or misrepresentation.
(4) Where a settlement under Sub-section (1) has been refused registration, it shall not be binding under this Act.
8. In view of the aforesaid, a settlement duly registered under Section 6B(1) is binding on the parties and the terms of the said settlement forms part of the contract of employment. The industrial law gives greater sanctity to the settlement than it gives to an award. The industrial law does not contemplate any interference with the finality of the settlement and compels a settlement to run on for the period of its operation. This is necessary for industrial peace, and therefore, it is imperative that the settlement arrived at between the employer and the Union should bind all the parties. The object is to uphold the sanctity of a settlement and to discourage a party from scuttling the settlement. The settlement arrived at and duly registered is binding on the parties to the agreement. The proviso to Section 6B(1) of the Act stipulates that a settlement would remain in force for the period mentioned in the settlement otherwise it would remain in force for a period of one year from the date of its registration.
9. When a settlement is registered under the provisions of Act. it has the effect of imposing a statutory contract between the parties. The settlement is binding during the validity of the period of the settlement. This means that the settlement cannot be terminated by a unilateral act of one party before the expiry of the period of settlement.
10. A settlement is binding on the parties as long as it is in operation. In my view, no industrial dispute could be raised with regard to the matters covered by the settlement. This view of mine is supported by a decision in Poona Mazdoor Sabha v. G.K. Bhutto 1956 (2) LLJ 319 as well as a decision in Workers and Staff Association of Government Soap Factory v. State of Mysore 1971 LIC 79 and in Anglo India Jute Mills Co. Ltd. v. 5th Industrial Tribunal. 1971 LIC 58.
11. In view of the aforesaid decisions, there is a clear bar to refer a dispute which is covered by a settlement. This is on account of fact that when a dispute between the workers and the employer is concluded by a settlement which binds them, no industrial dispute relating to any item covered by the settlement can come into existence or can be apprehended which can be referred under Section 4K of the Act, it is only when a dispute exists or is apprehended that the same can be referred for adjudication under Section 4K of the Act. If during the period of the operation of the settlement, a dispute is raised with respect to the subject-matter which is covered by the settlement, the same in my view could not be referred for adjudication. The purpose of the Act to achieve peaceful and harmonious industrial relations by settlement would be eroded if such disputes are referred for adjudication during the validity period of the settlement. The object of the Section 6B of the Act is to achieve industrial peace with regard to the subject-matter of the settlement for the duration of the period of settlement. If a dispute is raised and an award is given, in that case, there would be a conflict between the settlement and the award. Hence in my opinion, matters which are covered under the settlement cannot be made a subject-matter of adjudication before an industrial Tribunal or labour court during the period of the operation of the settlement.
12. The submission of the learned Counsel for the respondents that a dispute could be referred for adjudication where the employer fails to comply with the terms of the settlement is misconceived and bereft of merit. The answer lies under Section 14A of the Act. The mere fact that one party did not comply with the terms of the settlement does not mean that an industrial dispute exists or is apprehended and that such a dispute could be referred. In such a situation, a party to the settlement could invoke the provisions of Section 14A of the Act for prosecution against a person who commits a breach of the terms of the settlement.
13. In R.K. Chaturvedi v. Secretary, B.H.E.L. and Ors. 1997 (77) FLR 364 : 1997 (3) AWC 2.268 (NOC), this Court held:
Labour court or Tribunal could not under the law are authorised to open a closed chapter setting at naught the finality of a settlement arrived at in the conciliation proceedings acting contrary to the stipulation contained in Section 18(3) of the Industrial Disputes Act. A settlement being a settlement arrived at in the conciliation proceedings in accordance with the law continues to be binding on the parties as well as the authorities under the Industrial Disputes Act and any adjudication contrary to the terms of the settlement reduced in writing in a settlement reached during the conciliation proceedings could not be taken to be permissible under the law.
14. In view of the aforesaid, this Court is of the opinion that the State Government committed an error in referring the dispute No. 1 for adjudication during the validity period of the settlement. The settlement was registered on 3.8.2004 for a period of three years which was to continue in operation till 2.8.2007. The reference under Section 4K of the U.P. Industrial Disputes Act was issued on 30.9.2005, i.e., during the period of the tenure of the settlement. Consequently, this Court is of the opinion that dispute No. 1 referred by the State Government under Section 4K of the U.P. Industrial Disputes Act could not be referred, being the subject-matter of a dispute, covered under the terms of the settlement and is therefore quashed. However, it is open to the Union to raise a conciliation proceeding with regard to the said dispute after the expiry of the period of the validity of the settlement.
15. The writ petition is allowed in part.