2013 (10) TMI 1561 - HC - Indian Laws

Trade Union Registration obtained by fraud or mistake - Minimum Number of Workers required for Registration - Powers of Registrar to Cancel Registration - The petitioner received a certificate of registration under Trade Union Regulations, 1927.Soon thereafter, 88 workers of the 4th respondent submitted individual letters informing the 3rd respondent that they were not the members of the Union, their I.D. Cards and other documents were obtained without their knowledge and were used for the purpose of registration of the Trade Union. The 4th respondent submitted representations to the Management that they had no knowledge of the registration of the Union by the so called office bearers, which needed urgent enquiry to ascertain the real facts; and a proper enquiry should be made regarding membership of the petitioner Union, and their registration cancelled. HELD THAT - The petitioner's Certificate of Registration was cancelled, is set aside. Sec.9A of the Act relates to the minimum requirement of membership of a Trade Union and, thereunder, a registered Trade Union of workmen shall at all times continue to have not less than ten per cent, or one hundred of the workmen. Sec.10 of the Act relates to cancellation of registration and, thereunder, a certificate of registration of a Trade Union may be withdrawn or cancelled by the Registrar. As the petitioner Union was neither put on notice nor were they informed of the proposal to cancel their registration under Sect.10(b) of the Act, the requirement of affording the petitioner Union a reasonable opportunity to show cause, as stipulated under the proviso to Section 10 of the Act, cannot be said to have been complied with. Sec.4(1) of the Act obligated the Registrar to ascertain whether the Petitioner-Union had the minimum required strength of 10% of the workmen, or 100 workers, in the establishment of the 4th respondent on the date of its registration. He ought to have verified whether the 88 workmen, who submitted a representation to him, were never the member of the Petitioner Union, and registration of the Union was obtained by fraud; or they had disassociated themselves from the petitioner Union between the date of the submission of the application and the date of registration of the Union.

Issues Involved:
1. Arbitrary and illegal cancellation of the trade union's registration by the Registrar.
2. Violation of the principles of natural justice.
3. Interpretation of Section 10 of the Trade Unions Act, 1926.
4. Fundamental rights under Article 19(1)(c) of the Constitution.
5. Procedural aspects of the Registrar's inquiry and decision-making process.
6. Role and rights of the employer in the registration and cancellation process.
7. Maintainability of the writ petition and the availability of alternative remedies.

Detailed Analysis:

I. Arbitrary and Illegal Cancellation of the Trade Union's Registration:
The Deputy Registrar of Trade Unions and Deputy Commissioner of Labour, Sangareddy, cancelled the registration certificate of the petitioner-trade union, alleging that the union did not have the requisite membership as per Section 9A of the Trade Unions Act, 1926. The petitioner contended that the cancellation was arbitrary, illegal, and in violation of the Act's provisions. The petitioner argued that their union had the required 10% membership and that the Registrar's notice was based on self-contradictory claims.

II. Violation of the Principles of Natural Justice:
The petitioner argued that the Registrar failed to conduct a proper inquiry and did not provide an opportunity for the union to be heard. The Registrar's decision was based on statements from workers recorded without the union's knowledge, violating the principles of natural justice. The court emphasized that natural justice requires that affected parties be given a fair opportunity to present their case, and any material used against them must be disclosed.

III. Interpretation of Section 10 of the Trade Unions Act, 1926:
The court examined the scope of Section 10 of the Act, which allows the Registrar to cancel a trade union's registration if it was obtained by fraud, mistake, or if the union ceased to exist or did not have the requisite number of members. The court noted that the Registrar must have reasonable grounds for such satisfaction and that the satisfaction must be based on objective criteria. The court found that the Registrar failed to distinguish between cessation of existence and membership falling below the statutory minimum.

IV. Fundamental Rights Under Article 19(1)(c) of the Constitution:
The court highlighted that the right to form associations or unions is a fundamental right under Article 19(1)(c) of the Constitution. Any restriction on this right must be reasonable and in the interest of public order, morality, or the sovereignty and integrity of India. The court emphasized that the restriction must not be arbitrary or excessive and must be imposed by law.

V. Procedural Aspects of the Registrar's Inquiry and Decision-Making Process:
The court criticized the Registrar's decision-making process, noting that the inquiry was conducted in the employer's premises and not independently. The court found that the Registrar did not verify the union's membership strength properly and failed to consider the union's offer to produce members for verification. The court also noted that the Registrar's decision was influenced by instructions from superior officers, which amounted to a surrender of discretion.

VI. Role and Rights of the Employer in the Registration and Cancellation Process:
The court clarified that the employer does not have a statutory right to be heard in the registration or cancellation process of a trade union. The employer's role is limited to providing information to the Registrar, who must independently verify the facts. The court emphasized that the employer is not a "person aggrieved" under Section 11 of the Act and cannot appeal against the registration or refusal to cancel a union's registration.

VII. Maintainability of the Writ Petition and the Availability of Alternative Remedies:
The court held that the writ petition was maintainable despite the availability of an alternative remedy of appeal under Section 11 of the Act. The court noted that the impugned order violated principles of natural justice, was in excess of jurisdiction, and resulted in the denial of the petitioner's fundamental rights. Therefore, the court found it appropriate to entertain the writ petition.

Conclusion:
The court set aside the impugned order dated 13.06.2013, whereby the petitioner's Certificate of Registration was cancelled, and allowed the writ petition. The court clarified that this order does not preclude the Registrar from taking action in accordance with the law, including the observations mentioned in the judgment.

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