2006 (9) TMI 587 - SC - Indian Laws

Section 18 of the Industrial Disputes Act - deposit collectors working for 20 to 25 years - binding effect of the Award - writ petitioners being not parties to the said award - demand of the Commission Agents or as the case may be Deposit Collectors employed in the Banks listed in Annexure that they are entitled to the Pay scale and other service conditions admissible to regular clerical employees of these banks is justified - Violation of Principles of Natural Justice - HELD THAT - From a perusal of Clause (d) of Sub-section (3) of Section 18 of the Industrial Disputes Act, it is, thus, evident that all workmen who are employed in the establishment or who subsequently become employed in that establishment would also be bound by an award made by an industrial tribunal. The management as also the workmen were parties to the said award. Hence, Respondents cannot be heard to say that the award was not binding on them only because they were not parties. In an industrial dispute referred to by the Central Government which has an all-India implication, individual workman cannot be made parties to a reference. All of them are not expected to be heard. The Unions representing them were impleaded as parties. They were heard. Not only the said Unions were heard before the High Court, as noticed hereinbefore from a part of the judgment of the High Court, they had preferred appeals before this Court. Their contentions had been noticed by this Court. As the award was made in presence of the Unions, in our opinion, the contention of Respondents that the award was not binding on them cannot be accepted. The principles of natural justice were also not required to be complied with as the same would have been an empty formality. The court will not insist on compliance of the principles of natural justice in view of the binding nature of the award. Its application would be limited to a situation where the factual position or legal implication arising thereunder is disputed and not where it is not in dispute or cannot be disputed. If only one conclusion is possible, a writ would not issue only because there was a violation of the principle of natural justice. Appellant Bank had no other option but to implement the award. If it did not, its action could be held to be penal. Reliance placed by Respondents on the letter of the Syndicate Bank dated 26.5.2001 is also misplaced. The said circular letter does not state that the principles of natural justice were required to be complied with. As on the date of issuance of the circular letter they had not received the necessary guidelines, a temporary measure was proposed to be taken therefore. Thus, the impugned judgment cannot be sustained which is set aside accordingly. We direct that the recoveries may not be made from Respondents so as to avoid undue hardship to them. The appeal is allowed.

Summary

Issues Involved:
1. Entitlement of deposit collectors to the pay scale and other service conditions of regular clerical employees.
2. Legality of the notices issued for recovery of amounts paid to deposit collectors.
3. Compliance with principles of natural justice before issuing recovery notices.
4. Binding nature of the Industrial Tribunal's award on deposit collectors not party to the original dispute.

Detailed Analysis:

1. Entitlement of Deposit Collectors to the Pay Scale and Other Service Conditions of Regular Clerical Employees:

The Industrial Tribunal adjudicated an industrial dispute regarding whether deposit collectors were entitled to the pay scale and service conditions of regular clerical employees. The Tribunal's award, dated 22.12.1988, concluded that deposit collectors were workmen and thus the reference was maintainable. The Tribunal directed that eligible deposit collectors (under 45 years as of 3.10.1980) would be considered for regular absorption after a qualifying examination. Others were granted benefits including full back wages, incentive remuneration, conveyance allowance, and gratuity.

2. Legality of the Notices Issued for Recovery of Amounts Paid to Deposit Collectors:

Following the Supreme Court's dismissal of an appeal by the Indian Banks Association, the appellant bank issued notices to deposit collectors for recovery of amounts paid from 28.3.1997 to 31.3.2001. The legality of these notices was challenged, leading to a writ petition in the Punjab and Haryana High Court. The High Court held that the principles of natural justice required compliance before issuing such notices, thus allowing the writ petition.

3. Compliance with Principles of Natural Justice Before Issuing Recovery Notices:

The High Court's decision was based on the premise that no unilateral decision could be taken by the appellant without giving the deposit collectors an opportunity to be heard. The Supreme Court, however, opined that the principles of natural justice were not required in this context as the award was binding on all workmen under Section 18(3)(d) of the Industrial Disputes Act, 1947. The Court noted that compliance with natural justice would have been an empty formality since the award was enforceable and binding on all concerned parties.

4. Binding Nature of the Industrial Tribunal's Award on Deposit Collectors Not Party to the Original Dispute:

The Supreme Court clarified that under Section 18(3)(d) of the Industrial Disputes Act, the award was binding on all workmen employed in the establishment or who subsequently became employed. The Court emphasized that individual workmen need not be parties to the reference for the award to be binding. The Unions representing the workmen were heard, and their appeals were considered, making the award applicable to all deposit collectors, including those not originally party to the dispute.

Conclusion:

The Supreme Court set aside the High Court's judgment, stating that the appellant bank was obligated to implement the award. However, to prevent undue hardship to the deposit collectors, the Court directed that recoveries should not be made from them, exercising its jurisdiction under Article 142 of the Constitution of India. This decision was made to address the peculiar facts and circumstances of the case and was not to be treated as a precedent. The appeal was allowed with no costs.