2000 (11) TMI 1115 - HC - Companies Law

Summary

Issues:
1. Request for re-auditing the balance-sheet of the company for the financial year 1990-91.
2. Allegations of mismanagement and false balance-sheets by the respondent.
3. Dispute over bonus payments and conciliation settlements.
4. Legal provisions regarding the appointment of auditors for Government companies.
5. Binding nature of conciliation settlements on all parties involved.

Analysis:

1. The Trade Union filed a petition seeking a writ of mandamus for re-auditing the balance-sheet of the company for the financial year 1990-91. They alleged mismanagement by the respondent in projecting loss-oriented balance-sheets despite the company earning profits. The petitioner argued that an independent agency should be appointed by the Court for auditing to reveal the true financial status, leading to increased benefits for the workers.

2. The respondent contended that the petition was unsustainable, with 17 Trade Unions in the company and false allegations made by a minority union. They referred to a conciliation settlement regarding bonus payments agreed upon in meetings chaired by the Labour Commissioner and the Minister for Labour, which was certified as binding on all parties involved, including the workers represented by the petitioner.

3. Legal provisions under the Industrial Disputes Act, 1947, were cited, emphasizing the binding nature of settlements reached during conciliation proceedings on all parties to the dispute. Citing relevant case law, it was established that conciliation settlements are generally binding on all workmen, even if they were not directly involved in the dispute or did not concur with the settlement.

4. The respondent, being a Government company under the Companies Act, 1956, was subject to specific provisions regarding the appointment of auditors by the Central Government. The audit report for the year 1990-91, along with comments from the Comptroller and Auditor-General of India, was presented. The special provisions for Government companies and the power of the Central Government to direct special audits were highlighted to refute the petitioner's request for an independent audit.

5. The Court concluded that the conciliation settlement regarding bonus payments was binding on all parties, including the petitioner's union. Therefore, the petition lacked merit, and the request for appointing an independent agency for re-auditing was deemed unsustainable. Consequently, the Original Petition was dismissed.