Judgment:
Tarun Agarwala, J.
1. The petitioner is a Company under the Companies Act, 1956 and is under the control and supervision of the Ministry of Textiles, Government of India and is engaged in the manufacture of woolen fabric. The British India Corporation is a holding Company and its unit is known as Cawnpore Woolen Mills, better known as 'Lal Imli' in Kanpur which has been declared a sick Company and has been recommended to be wound up by the BIFR. For the security of the property of the Company, a contract was given to Guardwell Security Services Pvt. Ltd., New Delhi for the engagement of the security guards on contract labour. A written contract was executed in July 1989 and, upon the expiry of the contract, the security guards deployed by the contractors were withdrawn. The 46 security guards, being aggrieved by the alleged removal of their services, filed Writ Petition No. 12028 of 1991. During the pendency of the writ petition certain negotiations were held with the management and, a settlement was arrived at between the parties, which was duly registered under Section 6-B of the U.P. Industrial Disputes Act. Clause 2 of the said settlement is relevant for the purpose of the case which is quoted here under:
That in view of the above the Management has also decided to take a sympathetic view in the matter and has agreed to consider the cases of employees of the scud Guardwell Security Services mentioned in annexure No. 1 to the writ petition. In the event of new recruitment in the Security staff of the company, i.e. after absorbing the Home Guards employees already on the panel of the Security Guards of the company and who are engaged as Security Guards for the past several months, if any further recruitment is made they will be given preference.
2. The aforesaid settlement contemplated that the management would consider the case of the employees of the security agency which were mentioned in Annexure 1 to the writ petition and in the event of a new recruitment drive, the security guards would be given preference after the Home Guards already employed on the panel of the security guards are absorbed. It is alleged, that the settlement was given effect to by the Management and, out of 46 security guards, 29 security guards of the security agency were employed by the petitioner over a period of time. 17 of these security guards could not be given employment as, in the meantime, the Government of India issued a ban on fresh appointments. It is alleged, that the management issued a notice dated 24.6.1996 inviting applications from the employees and the Home Guards, for the post of Security Guards and peons. A condition was imposed in the said notice that there would be no change in the benefits or in the salary that was already being paid to them. Pursuant to this notice, it transpires, that the Home Guards who were working in other departments of the petitioner Company were deployed as security guards. The respondents, being aggrieved by the action of the petitioner and feeling left out, alleged violation of the settlement that was arrived at between the parties and accordingly the security guards through their union moved an application before the Conciliation Officer for conciliation, and upon its failure, the State Government referred the matter for adjudication under Section 4-K of the U.P. Industrial Disputes Act. The terms of the reference order was 'Whether the employers were justified in not absorbing the 21 workers in the services of the Company? If not, to what relief were the workers entitled to ?'
3. Before the Labour Court, the Union contended that the security guards had worked in the employment of the Company and had raised a grievance against the alleged termination by filing Writ Petition No. 12028 of 1991 before the High Court, which was disposed of in terms of the settlement dated 13.5.1992 arrived at between the parties and which settlement had been registered under Section 6-B of the U.P. Industrial Disputes Act. The Union alleged that the employers had not adhered to the terms of the settlement which was binding and instead of employing the security guards as per the terms of the settlement, the management had chosen to absorb outsiders by giving them regular employment pursuant to the notice dated 24.6.1994. The Union, therefore, contended that the security guards should be absorbed in the services of the Company.
4. The employers in their written statement contended that admittedly the respondents were employed as security guards through a contractor under the contract executed under the provisions of Contract Labour (Regulation and Abolition) Act 1970 and consequently there was no master and servant relationship between the management and the contract labourers. Therefore, the question of absorbing them in the services in the Company did not arise. The petitioner further contended that the dispute relating to the absorption of their services was not an Industrial Disputes which could be referred under Section 2(1) of the U.P. Industrial Disputes Act. Since the respondents were not the workers of the petitioner, consequently, their claim of employment or non-employment, as alleged by them, could not be termed as an Industrial Dispute, as contemplated under Section 2(1) of the U.P. Industrial Disputes Act.
5. The Labour Court, after considering the evidence on record, held that the settlement dated 13.5.1992 was binding on the parties and that the petitioners had violated the terms and conditions of the settlement. The Labour Court, found that fresh recruitment was made by the Management, pursuant to their notice dated 24.6.1996 and that the security guards were not given the employment on a preferential basis pursuant to the settlement. Consequently, the Labour Court held that the non-employment of the security guards was in violation of the terms of the settlement dated 13.5.1992 and therefore, gave an award directing the management to employ 15 out of the 21 persons, mentioned in the schedule to the reference order, as security guards w.e.f. 26.4.2001, i.e., from the date of the issuance of the reference order. The petitioner, being aggrieved by the aforesaid award, has filed the present writ petition.
6. Heard Sri J.N. Tewari, the learned senior counsel assisted by Sri Gopal Misra for the petitioner and Sri H.P. Misra, the learned Counsel appearing for the respondents.
7. The learned Counsel for the petitioner raised four submissions before the Court assailing the validity and legality of the award. The learned Counsel submitted that the State Government was not the appropriate Government to refer the dispute under Section 4-K of the U.P. Industrial Disputes Act, inasmuch as, the petitioner was a Company solely controlled and supervised by the Ministry of Textiles, Government of India and therefore, the appropriate Government, if any, was the Central Government. The learned Counsel for the petitioner further submitted that the dispute with regard to the employment or non-employment of the security guards was not an industrial dispute which could be referred for adjudication under Section 4-K of the U.P. Industrial Disputes Act, since the employment or the non-employment of the security guards was not an industrial dispute, as defined under Section 2(1) of the U.P. Industrial Disputes Act, In support of his submission the learned Counsel placed reliance upon a decision of the Supreme Court in Workmen of Nilgiri Coop. Mkt. Society Ltd. v. State of Tamil Nadu and Ors. : (2004)IILLJ253SC , as well as the decision of a Division Bench of the Madras High Court in the matter of Workers of Sagar Talkies v. Odeon Cinema, Madras, and Ors. 1957 (1), LLJ 639. The learned Counsel for the petitioner further submitted that the settlement arrived at between the management and the security guards was clear and explicit and that there was no room for any ambiguity. The management had agreed to consider the cases of the security guards on a preferential basis as and when a new recruitment drive was initiated by the Company. In the present case, there was nothing on record to suggest that a new recruitment drive had taken place by the Management, or that, the management had recruited new faces to the detriment of those security guards under the agreement. The learned Counsel, in fact, submitted that the agreement had been complied in letters and in spirit and that the management, pursuant to the settlement, had absorbed 29 out of 46 security guards. The learned Counsel for the petitioner, lastly submitted, that the Labour Court had directed 15 security guards to be given employment and, on a scrutiny, it has been found that out of these 15 employees, 12 were that these persons were total outsiders who could not claim any benefit pursuant to the settlement of 13.5.1992.
8. On the other hand, the learned Counsel for the respondent submitted that the award of the Labour Court did not suffer from any error of law and that the findings given by the Labour Court was based on the appreciation of the evidence brought on the record which required no interference in a writ jurisdiction. The learned Counsel for the respondents further submitted that the Management had adopted an unfair labour practice and did not adhere to the terms and conditions of the settlement that was arrived at between the parties. The settlement that was arrived at had become a contract of employment and was binding upon the parties. Since a new recruitment drive had take place pursuant to the notice dated 24.6.1996, it was imperative for the management to give preference to the security guards as per the settlement. Since the management did not give any preference to the security guards, the Union had rightly raised a dispute which was referred under Section 4-K of the U.P. Industrial Disputes Act.
9. Upon giving my thoughtful consideration in the matter and upon hearing the parties at length, I find that the first two submissions of the learned Counsel for the petitioner docs not find any merit. In my opinion, the submission of the learned Counsel for the petitioner, that the State Government was not the appropriate Government to refer the dispute under Section 4-K of the U.P. Industrial Disputes Act can not be considered by the writ court at the stage of the hearing of the petition. This ground was neither urged before the Labour Court nor has been spelt out in the writ petition itself. The learned Counsel for the petitioner urged that the question was one of jurisdiction which could be raised at any stage of the proceedings. In my opinion, the question of jurisdiction could be raised for the first time in a writ jurisdiction but could not be argued at the stage of the hearing of the writ petition especially, in the absence of any pleading to this effect in the writ petition. This Court is of the opinion, that a point of jurisdiction, having not been raised earlier before the Labour Court, nor in the writ petition, the petitioner had acquiesced in the matter. Consequently, this ground urged by the learned Counsel of the petitioner cannot be accepted.
10. This leads to the second submission, namely, as to whether the dispute that was referred was an Industrial Dispute or not under Section 2(1) of the U.P. Industrial Disputes Act. The learned Counsel for the petitioner submitted that the security guards had never worked in the establishment and that there was no master and servant relationship. The security guards were claiming employment under the terms of the settlement. The dispute which they have referred is with regard to their non-employment by the management. The respondents are alleging that under the terms of the settlement, the management had promised to give them an employment. The learned Counsel, therefore, submitted that the mere existence of a contract to employ the security guards under a settlement could not constitute a relationship of master and servant between the employer and the security guards who were promised to be given an employment on a preferential basis under the settlement. This would not entail or give rise to an industrial dispute under Section 2(1) of the U.P. Industrial Disputes Act.
11. In order to appreciate the aforesaid submission of the learned Counsel, it would be appropriate to take a look into the provision of Section 2(1) of the U.P. Industrial Disputes Act which reads as under:
(1) 'Industrial Dispute' means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the term of employment or with the conditions of labour, or any person; but does not include an industrial dispute concerning
(i) any industry carried on by or under the authority of the Central Government or by a Railway Company, or
(ii) such controlled industry as may be specified in this behalf by Central Government, or
(iii) baking and insurance companies as defined in the Industrial Disputes Act, 1947, or
(iv) a mine or an oil-field;
12. In Workman of Nilgiri Coop. Mkt. Society Ltd. (supra), the Supreme Court held
65. Employment and non-employment indisputably is a matter which is specified in the Second and Third Schedules of the Industrial Disputes Act. The concept of employment involves three ingredients, which are; (i) employer-one who employs i.e. engages the services of other persons; (ii) employee-- one who works for another for hire; and (iii) contract of employment -the contract of service between the employer and the employee whereunder the employees agrees to serve the employer subject to his control and supervision. On the other hand, non-employment being negative of the expression 'employment' would ordinarily mean a dispute when the workman is out of service. When non-employment is referable to an employment which at one point of time was existing would be a matter required to be dealt with differently than a situation where non-employment would mean a contemplated employment.
66. The question of non-employment in the latter category would arise only when the employer refuses to give work to a person who pleads and proves to the satisfaction of the management that he was entitled thereto. However, the dispute regarding the refusal to employ the person who were promised to be employed is not connected with employment or non-employment within the meaning of Section 2(k) of the Act See workers of Sagar Talkies v. Odeon Cinema
13. The Supreme Court while considering the decision of the Madras High Court in the case of Workers of Sagar Talkies (supra) held that the refusal by the management to employ the persons who were promised to be employed was not connected with the employment or non-employment within the meaning of Section 2(k) of the Act. Section 2(k) of the Industrial Disputes Act is more or less para material with the provisions of Section 2(1) of the Industrial Disputes Act.
14. There is no quarrel in the aforesaid proposition made by the learned Counsel for the petitioner. The refusal by the management to employ the persons who were promised to be employed was not connected with the employment or non-employment as contemplated under Section 2(1) of the U.P. Industrial Disputes Act and, to that extent, no Industrial Dispute arises nor could it be referred for adjudication. However, in the present case, the controversy is different. It is not a question of employment or non-employment of the persons who were promised an employment in the services of the Company. There exists a settlement duly arrived at between the parties which has been registered under Section 6-B of the U.P. Industrial Disputes Act. The registered settlement forms part of a contract of employment which is binding in terse between the parties. 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 operate as a contract of employment between the parties. This is necessary for industrial peace and therefore, it is imperative that a 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. Consequently, the terms and conditions mentioned in the settlement becomes a 'term of employment' which is also contemplated under Section 2(1) of the U.P. Industrial Disputes Act. It is settled law that a settlement arrived at between the parties, which is registered under Section 6-B of the U.P. Industrial Disputes Act, becomes a contract of employment interest between the parties.
15. In view of the aforesaid, this Court holds that the dispute which was referred under Section 4-K of the U.P. Industrial Disputes Act was an industrial dispute contemplated under Section 2(1) of the Industrial Disputes Act.
16. This leads to the third and fourth submission raised by the learned Counsel for the petitioner. The Labour court has given a finding that the management had recruited new hands and while recruiting new hands, gave preference to outsiders and did not give preference to the security guards as per the settlement dated 13.5.1992. From a perusal of the notice dated 24.6.1996, it is clear, that the management had invited applications from the employees already working in the mills and from the Home Guards working in different departments of the Company, who were willing to work as security guards on the same pay and benefits which they were already drawing. Based on this notice dated 24.6.1996, the Home Guards were deployed as security guards. It has already come on record that the Government of India had issued a notification banning new recruitment which has not been disputed. Consequently, in my opinion, the finding of the Labour Court that a new recruitment drive had taken place by the management is not correct. The finding that new hands were taken in employment is perverse and is against the material on the record. The employment on the post of security guards was made from those workers who were already working in some capacity in the Company. Consequently, the finding of the Labour Court that the petitioners had violated the terms of the settlement is incorrect. Paragraph 2 of the settlement clearly contemplated that the employment of the security guards of the agency would be considered only when there was a new recruitment drive in the Company. Further, their case could only be considered on a preferential basis after the absorption of the Home Guards already employed in the Company. It has also come on record that pursuant to the settlement 29 security guards were given employment. The claim of the respondents could only be considered on a preferential basis provided there was a new recruitment drive. I have already held that no new recruitment drive was conducted by the employers and the employees who were deployed as security guards were those employees who were already working in other departments on different posts. Consequently, this Court is of the opinion that the Management had not violated any term or condition of the settlement dated 13.5.1992. Consequently, the question of absorbing 15 security guards in the service of the Company does not arise.
17. There is another aspect of the matter which was brought to the knowledge of the Court, namely, that the direction of absorption of 15 persons by the Labour Court were such persons who were not part of the agreement of 13.5.1992. The agreement dated 13.5.1992 contemplated that the management would consider the case of the employees of the M/s Guardwell Security Services, mentioned in Annexure 1 to the writ petition. Annexure 1 to the Writ Petition No. 12028 of 1991 has been perused by me which indicates the names of 46 persons. The name 12 persons out of 15 persons mentioned in the award of the Labour Court are those names which I do not find in the list of 45 persons mentioned in Annexure 1 to the Writ Petition No. 12028 of 1991. Consequently, these 12 persons had no right to claim any employment pursuant to the settlement dated 13.5.1992.
18. For the reasons stated aforesaid, this Court finds that the award of the Labour Court cannot be sustained and is quashed. The writ petition is allowed. In the circumstances of the case there shall be no order as to cost.