1997 (1) TMI 532 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of unilateral freezing of Variable Dearness Allowance (VDA) by the appellants.
2. Existence and legal standing of an alleged oral agreement to freeze the VDA.
3. Maintainability of the application under Section 33C(1) of the Industrial Disputes Act for recovery of VDA.

Detailed Analysis:

1. Validity of Unilateral Freezing of VDA:
The appellants unilaterally froze the VDA effective from 4.8.88, citing the employees union's notice of termination of the 1986 settlement and a new charter of demands. The employees union demanded VDA from 1.7.88, asserting that the obligations under the 1986 settlement were still binding. The Labour Commissioner and the High Court found that the obligations under the 1986 settlement continued to be in force until a new settlement was reached. The unilateral freezing of the VDA by the appellants was deemed illegal.

2. Existence and Legal Standing of an Alleged Oral Agreement:
The appellants claimed an oral agreement existed to freeze the VDA at the June 1988 point. However, they produced no evidence to support this claim. The Labour Commissioner and the High Court found no proof of an oral agreement. The High Court noted that any oral agreement could not legally modify the terms of a written settlement. Section 2(p) of the Industrial Disputes Act and Rule 58 of the Industrial Disputes (Central) Rules, 1957, emphasize that a settlement must be in writing. Therefore, any alleged oral agreement to vary the terms of the 1986 settlement was invalid.

3. Maintainability of the Application under Section 33C(1):
The appellants argued that the application under Section 33C(1) was not maintainable, suggesting that the union should seek a reference under Section 10(1) or file an application under Section 33C(2). The High Court rejected this argument, stating that the obligations under the 1986 settlement were enforceable under Section 33C(1). The Supreme Court upheld this view, noting that Section 33C(1) is designed for the recovery of money due under a settlement or award, and that the obligations from the 1986 settlement continued as contractual obligations even after the settlement period expired. The Court emphasized that Section 33C(1) provides a summary and speedy procedure for recovery of predetermined amounts like VDA, which only require calculation rather than adjudication.

Conclusion:
The Supreme Court dismissed the appeals, affirming that the unilateral freezing of the VDA was illegal, no oral agreement existed to modify the 1986 settlement, and the application under Section 33C(1) for recovery of VDA was maintainable. The Court clarified that the findings were specific to the recovery certificates issued under Section 33C(1) and did not affect other claims pending under Section 33C(2).