POONA EMPLOYEES UNION Vs FORCE MOTORS LIMITED
Bench: V. GOPALA GOWDA,AMITAVA ROY
Case number: C.A. No.-010130-010131 / 2010
Diary number: 3758 / 2009
Advocates: JYOTI MENDIRATTA Vs
K J JOHN AND CO
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 10130-10131 OF 2010
POONA EMPLOYEES UNION ....APPELLANT
VERSUS
FORCE MOTORS LIMITED & ANOTHER …..RESPONDENTS
JUDGMENT
AMITAVA ROY,J.
Two employees unions of the industrial
establishment, Force Motors Limited (hereinafter to be referred
to as “the company”) are locked in a legal tussle, the appellant
for acquiring the status of a recognized union under the
Maharashtra Recognition of Trade Unions and Prevention of
Unfair Labour Practices Act, 1971 (for short, hereinafter to be
referred to as “the Act”) and the respondent No. 2 to ward off
such an endeavour, it being the recognized union. The pursuit
for recognition that had commenced in the year 2003, on an
application filed by the appellant before the Industrial Court
under Section 11 of the Act, has witnessed a prolonged
adjudication, however, leaving the issue unresolved. Though
the appellant union tasted success before the Industrial Court,
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the fortune reversed before the High Court thus, catapulting it
before this Court for its pancean intervention. In challenge, is
the judgment and order dated 2.2.2009 rendered by the High
Court of judicature at Bombay in Writ Petition (C) No. 2907 of
2006 jointly with W.P. (C) No. 2878 of 2006, lodged by the
company and the defender union independently assailing the
determination of the Industrial Court.
2. We have heard Mr. Colin Gonsalves, learned senior
counsel for the appellant and Mr. Shyam Divan and Mr. C.U.
Singh, learned senior counsel for the respondent Nos. 1 and 2
respectively.
3. The factual backdrop has to be summarily outlined to
better comprehend the issue and the rival assertions. The
company, Force Motors Limited, earlier named as Bajaj Tempo
Limited, has its office at Akurdi, Pune. The respondent No. 2-
union i.e. Bhartiya Kamgar Sena (for short, hereinafter to be
referred to as “the BKS”) is the recognized union of the
company. The appellant union in its bid to be adjudged as the
recognized union in place of BKS, filed an application on
6.9.2003 before the Industrial Court, Pune, as required under
the provision of the Act. It insisted that almost all the
employees members of BKS had meanwhile tendered their
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resignation, and had expressed their desire to discontinue their
membership therewith. It claimed that majority of the
employees had become its members, so much so that in the
month of January, 2003, it had in its fold 1973 employees
members. Claiming that it was a union registered under the
Trade Unions Act, 1926 (for short, hereinafter to be referred to
as “1926 Act”) on 20.7.1986 with a valid certificate to that
effect, it asserted that with the exodus of the employees
members from BKS to its ranks, it had the holding of 85% of
the total employees of the company. It disclosed, inter alia, as
well the names and particulars of the office bearers and
members of the Executive Committee as in the month of
January, 2003 and mentioned as well that its membership
subscription was Rs. 2 per month and that the meetings of the
Executive Committee were being held at regular intervals of not
more than 3 months. It maintained as well that the resolutions
passed by the Executive Committee and the General Body
thereof were recorded in the Minute Book and that its accounts
were being duly audited by a Chartered Accountant for every
financial year and that certificate(s) to that effect was/were
issued as well. Contending that it, in any case, had in its roll
more than 30% membership of the employees of the company,
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this along with the other factors entitled it to be adjudged as
the recognized union thereof under the Act. That it complied
with the prescription of the statute more particularly as laid
down in Sections 11 and 19 of the Act, was emphasized.
4. The company resisted the application by pleading,
amongst others, that the appellant union was not duly
registered under the 1926 Act. It denied as well that it did
have, at that point of time, 30% membership of the employees
of the company and that it did comply with the imperatives of
Section 19 of the Act. Dismissing the appellant union’s claim
of majority membership to be a bogey, it refuted its claim of
having larger membership of the employees of the company
compared to BKS. The company alleged that the appellant
union had failed to maintain the records as per Section 22 of
the 1926 Act and that it was, thus not eligible to be conferred
the status of recognized union of the company.
5. BKS, as well, joined the fray in similar lines with the
company. Apart from reiterating that the appellant union was
not duly registered under the 1926 Act and thus it had no
locus standi to claim the status of a recognized union, it
categorically controverted its clam of holding 30% membership
of the company as compared to it (BKS). It denied that the
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appellant union had complied with the mandatory provisions of
Section 19 of the Act pertaining to minimum subscription of
membership, meetings of the Executive Committee at regular
intervals, record of resolutions in Minute Book and audit of its
accounts. It alleged that the appellant union had produced
false and fabricated records in respect of membership as well
as the meetings of its Executive Committee. BKS claimed that
it had been working efficiently and effectively as the recognized
union of the company over the years and had zealously
guarded the interest of the workers by entering into settlements
with the company from time to time to effectuate the same. It
alleged further that the office bearers of the appellant union
were outsiders and that it (appellant upon) had not been
working in the interest of the employees of the company.
6. In the proceedings registered as Application (MRTU)
No. 3 of 2003 before the Industrial Court at Pune, following
issues were framed founded on the rival pleadings:
“1) Whether the Applicant Union proves that it has membership of not less than 30% of the total number of the employees, employed in the undertaking for the whole of the period of six months, immediately preceding the calendar month, in which it so applies”? 2) Whether the membership of Applicant Union was larger than that of the membership of the Non-Applicant No. 2 (Recognized Union), during
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the whole of the period of six months, prior to the filing of the petition? 3) Whether the Applicant Union has made compliance of Section 19 of MRTU & PULP Act, 1971? 4) Whether the Applicant Union is entitled for the certificate of registration as a recognized union in place of Non-Applicant No. 2 Union as per Section 14 (3) of MRTU & PULP Act, 1971? 5) What order? ”
7. At the outset, the Industrial Court recorded that the
application of the appellant union was in keeping with the
requirement that there should be a time lag of two years since
the date of registration of the recognized union and an
interregnum of one year since the date of disposal of the
previous application for recognition, if any.
8. The Industrial Court in the course of adjudication
entrusted an exercise to the Investigating Officer contemplated
by the Act to verify the membership of both the unions and to
submit a report before it. This was patently in order to satisfy
itself of the compliance of the prescriptions of Sections 11 and
12 of the Act, by the appellant union seeking the status of
recognized union. As the decision eventually rendered by the
Industrial Court on 22.3.2006 would reveal, both the unions
were afforded sufficient opportunity by the Investigating Officer
to adduce evidence on the rival claims of membership. The
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report of the Investigating Officer dated 26.10.2004, as is
available on record, was taken note by the Industrial Court in
details.
09. It took into account the findings recorded in the
report that there were 26 and 217 exclusive members of the
appellant union and BKS respectively and 1908 common
members of both the unions. This was in the face of the total
strength of the employees of the company ranging from 2109
to 2155 during the relevant period i.e. March 2003 to August,
2003. That vis-à-vis, this strength, whereas the appellant
union had claimed its hold over 1973, BKS asserted that it had
2166 employees as its members. As a plea was raised before
the Industrial Court that the aspect of overlapping
membership ought to be excluded and that exclusive
membership of the unions ought to be determined as a correct
index of the membership strength of the competing unions, it
undertook an analysis, inter alia, of the oral evidence adduced
before it as would be adverted to hereafter. The appellant
union had examined witnesses including its President –
Madhav and a member–Gugario to prove the issue of majority
membership of the employees of the company. The company
and the BKS produced witnesses as well in support of their
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resistance. For BKS, office bearers including its General
Secretary, President of Pune Unit, Executive Member of Pune
Unit, Secretary and Vice-President of BKS were examined.
10. In the process of evaluation of the oral evidence
adduced, it transpired that the membership fee of BKS was
being deducted from the bonus amount payable to the workers
every year. That the act of the company in deducting the
membership fee from the bonus amount was the subject
matter of assailment in the Industrial Court in a separate
proceeding was noted. The Industrial Court recorded that for
the last five to six years prior to the adjudication, the company
was collecting Rs. 100 per worker per annum from the bonus
amount and adjusting the same against the membership fee of
BKS. It also noted that such deduction was at the instance of
BKS, requesting the company to do so from the bonus payable
to the workers every year. It was also recorded that there was
no practice to pay membership fee in cash by the employees of
the company to BKS for this period. The endeavour on the
part of the witnesses of the BKS in the capacity of office
bearers to testify that it used to collect membership fee in cash
from the workers was not accepted as the same was opposed
to the contemporaneous records. To fortify this conclusion,
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the Industrial Court also referred to the documentary evidence
as available demonstrating that more than 1500 workers of the
company along with appellant union had raised this issue in
the year 2002 and had impeached the deduction of
membership fee of BKS from the bonus amount by filing
complaints in the year 2003 before the same forum. That
there was no individual consent letter of the workers
authorizing the company or the BKS to effect deduction used
for adjustment against membership fee was noted as well. The
Industrial Court returned a finding that such deduction did
not amount to voluntary subscription of membership fee from
the workers’ accounts and in fact was an exaction against their
consent and will since the year 2002. The oral evidence
adduced on behalf of BKS about acceptance of membership fee
in cash for the year 2003 was, thus discarded as
untrustworthy.
11. In arriving at this conclusion, the Industrial Court,
inter alia, referred to the findings of the Investigating Officer
pertaining to the anomalies noticed in the cash book of BKS
maintained for the relevant period. To discard the entries
made therein, as proof of collection of membership fee, the
observation of the Investigating Officer that the cash book was
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not only not in the prescribed proforma but also not signed by
any of the office bearers of BKS, was noted. The oral evidence
of the witnesses produced by BKS relating to the transactions
with the bank involving membership fee was not accepted,
being not duly corroborated by the documentary evidence on
record, besides being inherently untrustworthy. The Industrial
Court, in particular, recorded its reservation on the
inconsistency between the two versions, namely, deduction
from the bonus amount by the company till the year 2003
against membership fee and the claim of the BKS of collection
of such fees by cash which were mutually mutilative. Taking
cognizance of the proceedings separately instituted in a
representative capacity on behalf of the members of the
appellant union and other employees of the Company,
objecting to the deduction from bonus amount, for the
membership fee of BKS, its (BKS) claim of majority
membership was rejected.
12. In contradistinction, the Industrial Court noted that
the Investigating Officer had not detected any irregularity or
mistake with regard to the collection of membership fee for the
relevant period of six months and that the entries in cash book
of the appellant union were correct and were in conformity
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with the receipt books maintained therefor. The finding of the
Investigating Officer that the amount of membership fee
collected, however, was not deposited in the bank, was also
marked. This omission on the part of the appellant union,
according to the Industrial Court, was not a cardinal lapse, as
it was making its endeavour to acquire the status of a
recognized union. The Industrial Court recorded as well that
the appellant union, as per the report of the Investigating
Officer, could collect membership fee from 1973 employees
which amply demonstrated their spontaneous support for it. It
was deduced that the objections raised by 1500 employees of
the company against its action of effecting deductions from the
bonus amount towards the membership fee of BKS also
evinced that there was no voluntary payment thereof, belying
thus its (BKS) claim of having a hold on majority of the
employees members of the company.
13. In course of the adjudication before the Industrial
Court, an application was filed by the appellant union to
produce affidavits of its members numbering 1556 to
consolidate its decision of majority membership. The Industrial
Court in the proceedings dated 29.11.2004 under Section 11
of the Act overruled the objection of the respondents that such
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proof of affidavits was inadmissible and allowed the prayer
with the condition that the same would not be used for proving
the point of membership of the appellant union and would be
used for other relevant and ancillary purposes. In granting
this permission, the Industrial Court took note of the
submission made on behalf of the appellant union that these
affidavits would not be used or proving the issue of
membership but for other relevant and ancillary purposes.
The non-applicants/respondents were also granted the liberty
to file counter-affidavits of rebuttal, if so advised. BKS, though
did challenge this order before the High Court, the petition was
dismissed on 9.8.2005. Eventually, BKS, also filed affidavits
of 170 employees.
14. The Industrial Court took note of the contents of
1556 affidavits filed on behalf of the appellant union to deduce
that the affiants had resigned from the membership of BKS in
the year 2002 and had not paid the membership fee since
December, 2002. It was held by the Industrial Court that
these affidavits did substantiate that these 1556 employees did
bring an end to their relationship with the BKS and had not
paid the membership fees to it after December, 2002. That the
contents of these affidavits did clearly indicate that the
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concerned employees had severed their ties with the BKS and
had come over to the appellant union was concluded. On a
scrutiny of the cross-examination of the 100 affiants, as was
permitted, the Industrial Court held that there was no
circumstance or ground to disbelieve the deponents on their
plea that they had disconnected their membership with the
BKS and had stopped paying membership fees to it after
December, 2002. The intention of the affiants numbering
1556 to support the appellant union, according to the
Industrial Court, was conspicuously established. It referred to
as well the 170 affidavits filed by BKS only to return a finding
that if its claim of common membership of 1908 employees
was credible, it ought to have been in a position to produce
more affidavits. The Industrial Court thus inferred that this
fact also authenticated that only a small segment of the
employees of the company was in support of BKS. The claim of
common membership of 1908 employees advanced by BKS
was thus rejected. The Industrial Court, thus eventually in
deciding the issue of membership, held thus:
“So, after comparing the entire evidence adduced by both unions on the point of strength of their membership read together with report of Investigating Officer as well 1556 affidavits of the employees filed on record by Applicant Union, I am
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of the (Opinion that the Applicant Union was having more than 30 % of membership of the total employees of the Company as well as larger membership than the membership of B.K.S. during the period of six months from the month of March 2003 till August 2003. In such circumstances, mandatory requirements as given under Section 11 and Section 14 of MRTU & PULP Act, 1971, are substantially complied by the Applicant Union, and Applicant Union has succeeded in establishing membership of not less than 30 % of total employees as well as larger membership of the total employees of the company with it during the period of six months prior to filing of the present petition. So, I answer No. 1 and 2 in affirmative.”
15. As would be evident from the above extract, the
Industrial Court did take note of the contents of 1556
affidavits of the employees and acted thereon to conclude that
the appellant union did hold at that point of time more than
30% membership of the total employees of the company
during the relevant time i.e. March, 2003 to August, 2003 and
that it had otherwise satisfied as well, the mandatory
requirements of Sections 11 and 14 of the Act.
16. Referring to Section 19 of the Act, the Industrial
Court next adverted to the constitution of the appellant union
placed on record and the evidence of its President to the effect
that the membership fee of Rs. 2 per month from each
member was being collected and that the Minute Book of the
meetings of the Executive Committee as well as the audit of its
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accounts was being done regularly and further that the
necessary records namely, receipt book, register of members,
cash book etc. were also being maintained. It held that the
prescriptions of Section 19 of the Act had also been complied
with. It, however, recorded that any irregularity in the
observance of the enjoinment of Section 19 of the Act, per se
would not debar a union from claiming the status of
recognized union as those, were to be necessarily complied
with after the said status was conferred. The allegation
leveled against the appellant union that it had instigated,
aided or assisted illegal strikes during the relevant period, was
also dismissed in absence of corroboration thereof by any
evidence. The imputation that the appellant union’s request
for being acknowledged as the recognized union, lacked
bonafide, was rejected as well. In all, the Industrial Court,
thus returned a finding that having regard to the materials on
record, the appellant union was entitled to be adjudged eligible
to be conferred the status of recognized union and did issue a
direction to that effect. It was directed that the appellant
union be registered as recognized union in place of BKS for
the company and also saddled BKS with costs of Rs. 25000/-
for resisting the process without the support of the majority
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employees’ of the company.
17. The High Court, as the impugned judgment would
disclose, took note of the order dated 29.09.2004 of the
Industrial Court by which the objection of BKS to the prayer
of the appellant union to file affidavits was rejected with the
observation that the same would not be taken into
consideration for the purpose of verification of the
membership. It also took cognizance of the fact that as per the
report of the investigating officer dated 26.10.2004, the
appellant union had exclusive membership of 26, and BKS of
270 and that 1908 employees were common to both the
unions. It also marked the finding of the Investigating Officer
that the appellant union had never deposited any amount in
its bank account. Taking note of the order dated 29.9.2004
whereby the Industrial Court had permitted cross-examination
of 99 affiants out of 1556 affidavits, the High Court did record
that 17 of them had admitted that they still continue to be the
members of the BKS and that 7 had admitted in their cross-
examination that they had filed the affidavits only on the
assurance of the appellant union that they would be
reimbursed the wages deducted on account of go-slow
initiatives resorted to by them. The fact that the prayer of the
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BKS to cross-examine all the 1556 affiants was rejected by the
Industrial Court, was minuted.
18. Vis-a-vis the first limb of impugnment registered by
the respondents, namely, the applicant union had no right to
represent the employees, the High Court referred to its
constitution and more particularly its object of organizing and
uniting the employees, and recorded that though the same
was represented to be included in the schedule thereto, the
same was not discernable therefrom and thus the purpose for
which the applicant union had been established was not
forthcoming for which it was not eligible to be recognized
under Section 11 of the Act.
19. On the aspect of the reception of 1556 affidavits, the
High Court was of the view that the liberty to cross-
examination only 99 affiants, when the contents of the
affidavits were the same, was unfair as these documents were
relied upon to draw conclusions about the factum of
membership of the unions. It referred to the report of the
Investigating Officer in details pertaining to the facet of
membership and held that the approach of the Industrial
Court in dealing with this issue by overlooking the fact that it
was the onus of the appellant union to prove that the BKS had
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lost its representative character and that it was eligible to be
recognized under Section 11 of the Act, was defective. It was
of the considered view, that the Industrial Court in fact had
relied upon the affidavits as a proof of membership of the
applicant union by marking a departure from its order that
the same would not be used for such purpose. The High
Court thus concluded that the affidavits filed by 1556
employees did play a decisive role to enable the Industrial
Court to reach the conclusion that the applicant union
commanded majority of membership of the undertaking which
was unsustainable in law.
20. The High Court also took note of the findings
recorded in the report of the Investigating Officer about the
exclusive and dual membership claimed by both the unions as
per the records as well as the observations on the documents
produced by them. Referring to the decision of this court in
Automobile Products of India Employees’ Union Vs. Association
of Engineering Workers, Bombay and Others, (1990) 2 SCC
444, the High Court returned the finding that the decision of
the Industrial Court holding the appellant union to be eligible
under the Act to be conferred the status as the recognized
union was flawed and untenable and thus interfered with the
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same.
21. Mr. Gonsalves has emphatically argued that as the
appellant union had on the basis of the materials on record
demonstrated that it had fully complied with the enjoinment of
Sections 11, 14 and 19 of the Act, the High Court ought not to
have reversed the finding of the Industrial Court that it
(appellant union) was entitled to be conferred the distinction of
recognized union under the statute. The Industrial Court
having, on an elaborate analysis of the evidence adduced as
required by law having held that the appellant union was
adequately suitable to be adjudged, the recognized union in
place of BKS, the High Court had fallen in error in recording a
conclusion contrary thereto, he urged. The learned senior
counsel insisted, that it being apparent on the face of the
materials laid before the Industrial Court that during the
relevant period, BKS had been reduced to a minority with
regard to its membership holding and that in the interest of
collective bargaining, the appellant union ought to be handed
over the reins thereof, the impugned judgment needs to be
interfered with on the touchstone of welfare of the industrial
community as well. Mr. Gonsalves maintained that the
appellant union had been able to establish its eligibility as well
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as suitability for being adjudged as the recognized union of the
company as a replacement of BKS on the basis of the report
of the Investigating Officer as well as the other evidence
adduced sans the affidavits on record and thus the High Court
had erred in returning a finding that the Industrial Court had
impermissibly taken note of and relied upon the affidavits for a
decisive finding in its favour. He urged that the affidavits filed
on behalf of the appellant union having been referred to by the
Industrial Court principally to take cognizance of the
deduction by the company, from the yearly bonus, for
adjustment against the membership fee of BKS, the High
Court went wrong in deducing that the same had been relied
upon to decide the issue of membership. In any view of the
matter, Mr. Gonsalves argued that not only the 1556 affidavits
filed on behalf of the appellant union did evince a mass
migration of the members of BKS to the appellant union, as
the respondents had been accorded and had availed the
opportunity of cross-examining 100 affiants, the process by no
means was repugnant to the one as envisaged by Section 14 of
the Act and is thus beyond reproach. Though admitting, that
reception of affidavits on the aspects of enquiry contemplated
by the Act qua the issue of conferment of the status of
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recognized union is not obligatory, the course adopted by the
Industrial Court in that regard in the case in hand, thereby
ipso facto did not vitiate the exercise, he pleaded. Apart from
referring to the report of the Investigating Officer and the other
evidence on record as well as the concluded determination of
impermissible deduction from the annual bonus of the
employees by the company for payment of membership of
BKS, the learned senior counsel insisted that the impugned
judgment and order ought to be interfered with to secure
industrial peace, amity and stability. The learned senior
counsel took pains as well, to take us through the oral
evidence of the witnesses of the appellant union to
authenticate its claim of compliance of the pre-conditions
embodied in Sections 11, 14 and 19 of the Act. Mr. Gonsalves
distinguished the decision of this Court in Automobile
Products of India Employees’ Union (supra) in its
application to the facts of the case. He cited the decision in
Balmer Lawrie Workers’ Union, Bombay and Anr. Vs.
Balmer Lawrie & Co. Ltd. and Ors., 1984 Supp. SCC 663
and R.G. D’SOUZA Vs. Poona Employees Union and
Another, (2015) 2 SCC 526 to buttress his contentions.
22. In controversion, the learned senior counsel for the
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respondents have asserted that having regard to the scheme of
the Act and the provisions pertaining to the enquiry for
verification of membership for conferment of status of a
recognized union, the Industrial Court ought to have limited
the adjudication of the issue on a consideration of the report
of the Investigating Officer and the evidence adduced by the
parties only and its reliance on the affidavits did vitiate the
process undertaken by it, as rightly held by the High Court.
Placing emphatic reliance on the decision of this Court in
Automobile Products of India Employees’ Union (supra),
they have urged that on this count alone the present challenge
ought to be negated.
23. Without prejudiced to this, they have argued that on
a cumulative evaluation of the findings recorded in the report
of the Investigating Officer and the other evidence on record, it
being apparent that the appellant union had failed to satisfy
the statutorily prescribed pre-requisites to entitle a union to
be acknowledged as a recognized union under the Act, no
interference in the impugned judgment and order is
warranted.
24. They contended that, even assuming that the finding
of the Investigating Officer of dual membership of 1908
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employees was acceptable, even then in total, the appellant
union could be credited with only 1937 members compared to
2125 of BKS. On a comparative assessment of the evidence
adduced by the rival unions, the Industrial Court could not
have allowed the application of the appellant union to accept it
as a recognized union as a substitute of BKS, they
emphatically urged. According to them, not only the report of
the Investigating Officer, but also the testimony of the
witnesses of the appellant union did conspicuously
demonstrate that the essential records as prescribed by the
Act had not been maintained by it, thus belying its claim of a
deserving union to be conferred the status, it had applied for.
25. Attention of this Court, in particular was drawn to
the finding of the Investigating Officer that the amount
collected as membership fees during the relevant period had
not been deposited by the appellant union in its bank account
and also that its accounts were not audited by an auditor
appointed by the State Government as required under Section
19 of the Act. The learned senior counsel were critical as well
of the omission on the part of the Industrial Court to take note
of the version of the affiants of 100 affidavits cross-examined
which totally demolished the appellant union’s claim of the
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majority membership. The following decision was referred to
for reinforcement:
Ayaaubkhan Noorkhan Pathan Vs. State of
Maharashtra and Ors., 2013 (4) SCC 465.
26. A few intervening events of significance demand
attention at this stage. On 10.10.2003, one Shri Rosaria
D’Souza, claiming himself to a permanent employee of the
company had filed a representative complaint on behalf of the
members of the appellant union before the Industrial Court
under Section 28 of the Act alleging unfair labour practice
thereunder for causing deduction from the bonus amount
payable to the employees for payment of membership fees of
BKS for the year 2003. Reference was also made of such
deduction in the year 2002. It was averred in the complaint
that the members employees of BKS had by then resigned
from its rolls and had joined the appellant union. It was
alleged that such kind of deduction in absence of any written
authority of the employees concerned, did amount to unfair
labour practice and that the company and the BKS had
joined together arbitrarily in resorting thereto. This complaint
was registered as Complaint (ULP) No. 309 of 2003.
27. By order dated 16.10.2003, the Industrial Court,
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Pune, on a proposal being made on behalf of BKS and not
objected to by the company and the complainant, though
permitted the deduction from the bonus amount, it directed
that the sum collected be retained with the company and
restrained it from defraying the same to any person or union
till the complaint was finally decided.
28. It was finally on 28.9.2006 that the Industrial Court
decided that the respondents herein namely; company and the
BKS had jointly committed unfair labour practice under the
Act by deducting the membership subscription of Rs. 100 per
employee from the bonus amount payable for the year 2003
and prohibited them from doing so in future. The challenge
thereto laid before the High Court was dismissed in limine on
24.03.2008. The High Court upheld the decision of the
Industrial Court to the extent of impermissibility of deduction
of membership fee but set-aside the finding that the same in
the facts and circumstances of the case did amount to unfair
trade practice.
29. Pursuant to the order dated 29.09.2004 of the
Industrial Court causing an enquiry to be made into the
aspect of membership strength of the rival unions, the
investigating officer initiated an exercise in course whereof,
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both the unions submitted original documents in support of
their respective claims. The documents included list of
members, membership books, receipt book of members,
minute book register, computerized cash book, bank pass
book, audit report etc. for the relevant period and also beyond
the same. Vis-a-vis the appellant union, the investigating
officer in his report recorded that from the list of 1973
members that it had produced, 39 were ineligible and thus in
all 1934 could be treated as eligible members. Referring to the
receipt books of membership, it was recorded that every
worker was depositing Rs. 60 per annum and also that in
several receipts, no date was mentioned. The investigating
officer mentioned, that the bank pass book of the appellant
union was with the Syndicate Bank, Chinchwar Branch, Pune
and that the contribution by way of membership fee was not
being deposited in the account.
30. So far as the documents of the BKS were considered,
the Investigating Officer on his inspection thereof, recorded
that it had submitted a list of 2166 workers claiming them to
be its members, out of which 41 were found to be ineligible. It
was thus set down that 2125 members could be treated as
eligible.
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31. On a scrutiny of the receipt books of the members,
the Investigating Officer opined that no responsible official
bearer of the union had signed the same and that it was not
maintained as per the provision of the 1926 Act. The
particulars of the contribution book were elaborately
examined and the deposit of membership fee of 2166
members, was noted. The Investigating Officer was of the view
that the cash book of the BKS was not in the prescribed form
and was not signed by any responsible office bearer of the
union. That there were some anomalies with regard to the
dates of the deposits and the receipts, were pointed out as
well. It was noted too that out of 2166 members, claimed by
the BKS to be in its hold, 54 had either retired or resigned or
expired during the period March 2003 to August 2003. On a
comparison of the lists of members submitted by the unions,
the Investigating Officer noted that 26 and 217 members were
exclusively in the ranks of the appellant union and BKS,
whereas 1908 members appeared to be common to both the
entities, i.e. with dual membership.
32. As mentioned herein above, the parties did adduce
oral evidence as well. The two witnesses examined by the
appellant union were Madhav son of Baburao Roham and
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Gugario son of Gabriel D’Souza. Whereas the first witness
claimed to be the President of the appellant union, the second
said on oath that he was a member thereof having resigned
from BKS on 12.12.2002. The President of the appellant
union in his deposition stated, inter alia, about the records of
its union including minute books, receipt books of
membership fees and in general referred to the lists of the
employees numbering 1973, who had resigned from the BKS
to join his union after 01.01.2003. He claimed that the
receipts to the members for the fees were issued and that
receipts books in that regard were maintained. He also
deposed that the membership fees were being deposited with
the bank which, however as the report of the investigating
officer would reveal was inconsistent therewith in this regard.
He admitted that the accounts of his union used to be audited
by a Chartered Accountant not appointed by the Government.
He also expressed his inability to produce the minute book of
the general body meeting authenticating the members and
office bearers of the appellant union.
33. In course of cross-examination, this witness
conceded that he had no evidence to show that he was a
honorary member of the appellant union in the past. He
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admitted as well that the account of the appellant union was
opened with the Syndicate Bank in the month of January
2003 and though such account previously was with another
bank, he was not in a position to either name it or to provide
the account number. When confronted with reference to the
report of the Investigating Officer that there was a shortfall in
the amount claimed to be deposited with the bank compared
to the sum received as membership fees, the witness could not
provide any explanation therefor. He also conceded that the
finding of the Investigating Officer that the membership
amount had not been deposited with the bank had remained
unquestioned. He was confronted as well with certain
omissions in the return filed by the appellant union under the
Bombay Trade Unions Regulation, 1947 for the year 2003.
34. The evidence of the other witness i.e. Gugario was
essentially to the effect that he had resigned from the
membership of BKS to join the appellant union as he along
with others, who had similarly drifted to the appellant union,
were not receiving any benefit from their parent union i.e.
BKS. In course of his evidence, he claimed also to be the Unit
President of the appellant union and asserted that there were
1973 members thereof since 2003. In his cross-examination,
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when asked, this witness could not provide the particulars of
the general body meetings or managing committee meetings of
the appellant union required to be held as per its constitution.
Though he referred to the meeting of the managing committee
held on 9.1.2003, he could not furnish the names of the
persons present. He also expressed his ignorance about
the existence of any consolidated register of all the employees
who have been members of the appellant union though from
the different companies.
35. The 1556 affidavits filed on behalf of the appellant
union were in a particular format, which for ready reference,
is being quoted hereunder:
“AFFIDAVIT
I, Shri,…………………………………….. Age ………………
Occupation Service, residing at ……………………………… State on solemn affirmation as follow: I have resigned from the recognized union, namely, Bharatiya Kamgar Sena on 12.12.2002. The said union has never defended the interest of the workers and has worked as per the directions of the Company. Therefore I have resigned from the said Union. I have not paid union subscription to Bharatiya Kamgar Sena since the last two years. I have accepted the membership of the Applicant Union, namely, Poona Employees Union on 12.12.2002 and today I am a member of Poona Employees Union. Since I along with the other workmen are members of Poona Employees Union and since Bharatiya Kamgar Sena does not have majority of membership since Ist Jan. 2003. I am filing this affidavit so
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that the recognition of Bharatiya Kamgar Sena is revoked. All that is stated above is true as per my knowledge and information and I have put my signature on it at Pune on 29.9.2004.”
36. We have extended our anxious consideration to the
rival pleadings and the arguments based thereon. The
documents available on record have also received our
attention. It is expedient, having regard to the issues raised,
to embark on a summary survey of the relevant provisions of
the Act in quest of the underlying objective thereof, which in
our comprehension, would define, amongst others, the nature,
extent and essentialities of the enquiry contemplated and
obligated by it in order to determine the eligibility-cum-
suitability of a union contending for the status of “recognized
union” under the statute.
37. As the preamble of the Act would testify, it is one to
provide for the recognition of trade unions for facilitating
collective bargaining for the undertakings visualised therein
and amongst others, to define and provide for the prevention
of certain unfair labour practices and to constitute courts for
carrying out the purposes of according recognition to the
trade unions and for enforcing the provisions relating to unfair
practices. The report of the ”Committee on Unfair Labour
Practices”, appointed by the State Government to outline the
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activities of employers and workers and their organizations to
be construed as unfair labour practices and to suggest the
steps against the perpetrators thereof, preceded the
enactment which duly took note of the report of the
Committee.
38. The Act contemplates, Industrial Courts to be
constituted by the State Government, duties whereof are
amongst others, to decide an application by a union for grant
of recognition to it, in place of a union which has been
recognised thereunder, as well as to decide the complaints
relating to unfair labour practices, with the exceptions as
enumerated in Item 1 of Schedule IV to the legislation. The
Industrial Court under Section 5 is empowered to assign
work, and to give direction, to the Investigating Officers in
mattes of verification of membership of unions, and
investigation of complaints relating to unfair labour practices.
Investigating Officers, referred to hereinabove, are appointed
by the State Government for the area(s), as may be specified
as necessary to assist the Industrial Courts and the Labour
Courts in discharge of their duties. In terms of Section 9, it is
the duty of an Investigating Officer to assist the Industrial
Court in mattes of verification of membership of unions, and
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assist the Industrial and Labour Courts for investigating into
complaints relating to unfair labour practices.
39. Chapter III devoted to recognition of unions,
prescribes that any union seeking to apply for being registered
as a recognised union of any undertaking has to have
membership of not less than 30% of the total number of
employees employed in that undertaking for the whole period
of six calendar months immediately preceding the calendar
month in which it applies. In case, such an application is
made, it is incumbent on the Industrial Court, as far as
possible, to dispose of the same within a period of three
months therefrom.
40. Section 12 provides the manner of disposal of such
applications. On the receipt thereof and on the payment of
the prescribed fee, as mentioned therein, the Industrial Court,
if the application on a preliminary scrutiny is found to be in
order, would cause notice to be displayed on the notice board
of the undertaking, declaring its intention to consider the said
application on the date specified in the notice and call upon
the other union or unions, if any, having membership of
employees in that undertaking and the employers and
employees likely to be affected, to show cause as to why the
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recognition, as prayed for, would not be granted. The
Industrial Court, thereafter, on a consideration of the
objections, that may be received from any other union or
employers or employees, as the case may be, and after holding
such enquiry, in such manner as it deems fit, if it comes to
the conclusion that the conditions requisite for registration
specified in Section 11 of the Act are satisfied and that the
applicant union also complies with the conditions
enumerated in Section 19 of the Act, would grant recognition
to the applicant union and issue a certificate of such
recognition in a form, as prescribed. The caveat in sub-
section (5) of Section 12 is to the effect that Industrial Court
shall not recognize any union, if it is satisfied that the
application for recognition is not made bona fide in the
interest of the employees, but is made in the interest of the
employer or to the prejudice of the interest of the employees.
The Industrial Court is also debarred from recognizing any
union if at any time, within six months immediately preceding
the date of the application, the applicant union had instigated,
aided or assisted the commencement or continuation of a
strike which is deemed to be illegal under the Act.
41. Whereas Section 13 delineates the eventualities and
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the procedure for cancellation of recognition and suspension
of rights of a union, Section 14 predicates the perquisites and
the procedure for deciding an application laid before the
Industrial Court by any union for being registered as a
recognised union in place of an existing recognised union in
the undertaking. In terms of this provision, if such an
application is made on the ground that the applicant union
has the largest membership of employees employed in that
undertaking, and if a period of two years has elapsed since the
date of registration of the recognised union, it (Industrial
Court) would call upon the recognised union by a notice in
writing to show cause within thirty days of the receipt thereof,
as to why the applicant union should not be recognised in its
place.
42. The proviso to Section 14 ordains that the Industrial
Court, may not entertain any application for registration of a
union, unless a period of one year had elapsed since the date
of disposal of the previous application by the same union.
Identically, as per the procedure as contemplated in Section
12 of the Act, the Industrial Court, on the expiry of period of
notice, if is of the opinion, on a preliminary scrutiny of the
application made, that it is in order, it shall cause notice to be
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displayed on the notice board of the undertaking, declaring its
intention to consider the said application on the date specified
in the said notice and call upon other union or unions, if any,
having membership of employees in that undertaking,
employers and employees likely to be affected by the proposal
as to why the recognition as sought for would not be granted.
The Industrial Court, thereafter, on a consideration of the
objections that may be received and after holding such
enquiry as it may deem fit, which may include recording of
evidence of witnesses and hearing of parties, if comes to the
conclusion that the applicant union had complied with the
conditions necessary for recognition specified in Section 11
and that its membership was during the whole of the period of
six calendar months immediately preceding the calendar
month in which it had made the application, larger than the
membership of the recognised union, then it would recognise
the applicant union in place of the recognised union and issue
a certificate in such form as may be prescribed. Such an
application, as sub-section (5) of Section 14 would denote, is
to be disposed of within a period of three months as far as
possible.
43. Section 19 appearing under Chapter IV of the Act
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mandates the obligations of a recognised union, whereunder
the rules thereof should provide that:
(i) The membership subscription shall not be less than fifty paise per month;
(ii) Executive Committee shall meet at intervals of not more than three months; (iii) All resolutions passed, whether by the Executive Committee or the general body of the union, shall be recorded in a minute book kept for the purpose; (iv) An auditor appointed by the State Government may audit its account at least once in each financial year.
44. Section 30 which defines the powers of Industrial
and Labour Courts, does recognise these fora to be Courts
vested with the powers of:
(a) requiring proof of facts by affidavit; (b) summoning and enforcing the attendance of
any person and examining him on oath; (c) compelling the production of documents and; (d) issuing commissions for the examination of
witnesses.
45. The power to call upon any of the parties to the
proceedings before them to furnish in writing, and in such
forms as it may think proper, any information considered
relevant has also been conferred by this provision.
46. On a conjoint reading of the above referred
provisions of the Act, it is abundantly and predominantly clear
that the exercise of examining an application of a union in an
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undertaking seeking the status of recognized union whether
by replacing an existing recognized union or not, is neither a
routine ritual nor an idle formality. Not only the applicant-
union has to be eligible to apply as per the prescriptions with
regard to the extent of membership it has to command for the
relevant period, its application has to be bona fide in the
interest of the employees and it must not have indulged in any
activity of instigating, aiding or assisting, the commencement
or continuation of a strike during the said period. The
detailed procedure in both the eventualities, as contemplated
in Sections 12 and 14 of the Act, enjoins a participating
enquiry to verily ascertain the membership pattern of the rival
unions, and also the existence or otherwise of the
disqualifying factors as stipulated by the Act.
47. Section 9(2) of the Act, to reiterate, makes it
incumbent on the Investigating Officer to assist the Industrial
Court in matters of verification of membership of unions and
also to assist the Industrial and Labour Courts investigating
into the complaints relating to the unfair labour practice.
Axiomatically, thus the enquiry to be undertaken by the
Industrial Court, has to strictly comport to the prescripts of
the relevant provisions and cannot be repugnant to the letter
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and spirit thereof. Indubitably, the burden would be on the
applicant union to decisively establish its eligibility and
suitability for being conferred the status of a recognized union
to be adjudged by the legislatively enjoined parameters.
Though the enquiry envisages participation of the rival
union(s), employers and employees, having regard to the
ultimate objective of installing a representative union to
secure genuine, effective and collective negotiations, catering
to industrial cohesion, harmony and growth, no compromise
or relaxation in the rigours of the requirements of the enquiry
can either be contemplated or countenanced.
48. This Court in Automobile Products of India
Employees’ Union (supra) was seized with a fact situation
where in the course of enquiry under Section 14 of the Act,
the Industrial Court had acceded to the joint request of the
two contesting unions to verify the membership thereof on the
basis of the results of a secret ballot. Both the unions had
agreed that the issue pertaining to recognition be decided by
secret ballots and the union which would muster majority of
the votes, should be treated as the recognized union.
Accordingly, a secret ballot was held, in which the appellant
union therein was found to have secured higher number of
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voters. The respondent-union submitted its objection
principally disputing the cut-off date fixed for the purpose of
determining the eligible voters. Be that as it may, the
Industrial Court sustained the claim of the applicant union
i.e. the appellant. The High Court on a challenge being laid
before it by the defeated union as well as two workers thereof,
upheld the same and interfered with the order of the
Industrial Court.
49. This Court on a exhaustive survey of the relevant
provisions of the Act and emphatically underlining the avowed
role of a recognized union contemplated thereby, in the
interest of stability of industrial relations and peace through
collective bargaining, affirmed the determination made by the
High Court. This Court propounded that the procedure
adopted by the Industrial Court, to grant recognition of a
union was one which was clearly alien to the Act. It observed
that thereby, the parties were allowed not only to circumvent
the provisions of the statute but also it failed to bring about
the representative character of the union which was the sine
qua non for the recognition to be accorded. That the elective
element inherent in the secret ballot had the potential of
encouraging the growth of mushrooming unions on the eve of
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election, outbidding each other in promising returns to the
workers merely to assert supremacy, unmindful of the health
of the industry leading to unwarranted industrial strife,
stoppage of production, closure of the establishment, was
underlined as the unhealthy and undesirable consequences of
such process.
50. The factual conspectus, albeit, not wholly identical
herein, the fact remains that though it had been undertaken
by the appellant union that if permitted to file its affidavits,
the same would not be utilized to decide the issue of
membership and was endorsed as well by the Industrial
Court, its decision would clearly reveal that the contents of
the affidavits not only had been taken note of by it but also
relied upon along with the other materials on record, to
eventually hold that the appellant union held in its ranks, the
majority membership of the employees of the undertaking. To
this extent, we are constrained to hold that the approach of
the Industrial Court in deciding the issue of membership
cannot be sustained being in derogation of the letter, spirit
and objectives of the procedure prescribed by the Act to
determine the issue of majority of membership for the
purpose of identifying the recognized union of an industrial
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establishment.
51. To recall, the common averment made in the 1556
affidavits filed by the appellant union is that the employees
concerned had resigned from BKS on 12.12.2002 as it did not
defend the interest of the workers and had functioned as per
the directions of the company. It was further affirmed that the
deponent did not pay union subscription to BKS since last
year and that he/she had instead accepted the membership of
the appellant union i.e. Puna Employees Union on 12.12.2002
and that concludes to be its member on the date of the
execution of the affidavit. It was stated further that in view of
the resignation of the deponent and others, BKS did not have
majority of the membership since 1.1.2003 and that thus its
recognition be revoked.
52. Vis-à-vis the demur of the respondents that the
appellant union lacked in representative capacity, as it had
failed to furnish the schedule to the constitution to disclose its
object under clause 2(a) thereof as required under Section 6 of
the Union Act, it transpires on the perusal of the said charter
that clause 2(a) thereof reads as hereunder:
“The objects of the Union shall be:
to organise and unite the persons employed in any
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Industry, any Factory, any Section, any shop and any establishment within the district of Poona as per Schedule: in the …….……. and to regulate their relations with their employers. “
53. True it is that the extract of this clause in the
impugned judgment and order wrongly records “the”
preceding the word “industry” instead of “any”. However, the
copy of the constitution available on records does not contain
the schedule as well. We leave it at that.
54. Adverting to the evidence, dehors the affidavits,
suffice it to state that the report of the Investigating Officer
clearly reveals that the contribution collected from the
members of the appellant union had not been deposited in its
bank account. This finding, to reiterate, is based on a
scrutiny of the original records of the appellant union.
Though the then President of the appellant union, in his
testimony claimed that the membership fee had been duly
deposited in the bank, he conceded that no complaint had
been made against the Investigating Officer for incorporating a
finding contrary thereto. No overwhelming evidence was also
produced to counter this finding. This witness admitted as
well that the accounts of the appellant union were not being
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audited by a Chartered Accountant, appointed by the
Government which per se is also in repudiation of the
mandate of Section 19(iv) of the Act. This witness in course of
the cross-examination was also confronted with the annual
return submitted by the union for the period January to
December, 2003 in which he admitted that the columns No.
10, 13, 15 and 17 of the prescribed form had been left blank.
A perusal of Form No. 1 in which annual returns are to be
submitted by a registered trade union in terms of the Bombay
Trade Unions Regulations, 1927 framed under Section 29 of
the 1926 Act reveals that the blank columns refer to:
(a) Number and date of receipt for payment of
application fee;
(b) number of members admitted during the year;
(c) number of members on books at the end of year
i.e., on 31st December;
(d) number of members who paid their subscription for
the whole year.
These in the contemplation of this Court are vital informations
pertaining to the claim of membership of appellant union, in
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order to wrest the title of “recognized union” from an existing
rival union enjoying the said status.
55. Not only, in the comprehension of this Court, the
report of the Investigating Officer based on a scrutiny of all
relevant records of the appellant union including the list of
employees, membership receipt book, register of membership,
cash book, bank pass books etc. does not as such admit of
any doubt about its credibility, even some of the affiants, in
their cross-examinations, on their affidavits filed in support of
the claim of membership of the appellant union, had stated
that they had affirmed the same because they were promised
by the appellant union that their deducted wages for the go-
slow tactics would be reimbursed. Though the respondents
have nursed a remonstrance that the permission granted by
the Industrial Court to cross-examine only 100 of the
affiants out of 1556 deponents did denude them of a
valuable right of defence, in our estimate, nothing much turns
thereon. No dilation on the decision of this Court in
Ayaaubkhan Noorkhan Pathan (supra) is thus warranted.
56. To reiterate, these affidavits could not have been, in
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the facts and circumstances of the case, and more particularly
in view of the undertaking given by the appellant union and
also the order to that effect by the Industrial Court that the
same would not be used to decide the issue of membership,
acted upon for this purpose. It had throughout been in the
understanding of all concerned that the contents of the
affidavits would be used only for relevant and ancillary
purpose but divorced from the issue of membership. The
Industrial Court however, in concluding that the appellant
union did have more than 30% of the membership of the total
employees, took cognizance of these affidavits and relied on the
same. The contents of the affidavits, referred to hereinabove,
which are identical and in a format are to the effect that the
deponents had not paid subscription to the BKS for the last
two years and that they had accepted the membership of
appellant union on 20.12.2002 and that BKS does not have
majority of the membership since 1.1.2003. These affidavits
taken on their face value, irrefutably testified on the aspect of
membership of the two unions and though the Industrial
Court did endeavour to construe the same for the purpose of
ascertaining the intention of the affiants to support the
appellant union, it indeed had a decisive bearing on its
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ultimate conclusion of its majority membership.
57. We have perused the materials on record, relevant to
the issues involved and are of the considered opinion that
dehors the affidavits, the evidence or the materials laid by the
appellant union are not overwhelmingly determinative of its
claim of majority membership as required under Sections
11,12, and 14 of the Act. The adjudication on the issue of
deduction of bonus amount by the company for adjustment
against the membership fee of BKS in the background
pertaining thereto and narrated hereinabove does not
conclusively clinch the cause in favour of the appellant union.
The decision of this Court in Balmer Lawrie Workers’ Union
(supra) is as such of no avail to it.
58. Having regard to the judicially acknowledged and
proclaimed contours of the jurisdiction under Article 136 of the
Constitution of India, we are of the unhesitant opinion that the
impugned decision does not merit annulment. As it is, the
extra-ordinary jurisdiction of this Court under Article 136 of
the Constitution, is to be exercised sparingly and even mere
errors in the appreciation of the evidence on record are
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insufficient to attract this Court’s invigilatory intervention
thereunder. It is a trite proposition, that this Court may
interfere in rare and exceptional cases where manifest illegality
or grave and serious miscarriage of justice has been
occasioned by the decision under scrutiny as has been
propounded by this Court in Union of India and others Vs.
Gangadhar Narsingdas Aggarwal (1997) 10 SCC 305. If two
views are possible and the view taken in the impugned
decision is a plausible one, it would not warrant intervention of
this Court under Article 136 of the Constitution of India.
59. In the facts of the present case, in our estimate, the
analysis and evaluation of the materials on record as
undertaken cannot be denounced as illogical, irrational or
uncalled-for and the view recorded in the impugned judgment
and order is one permissible on the basis thereof.
60. We have perused the impugned judgment and order.
In the above presiding backdrop of facts and law, we are of the
unhesitant opinion that the view taken by High Court is
plausible and rational being based on a logical analysis of the
materials on record and the law applicable does not merit any
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interference at our end. Having regard to the paramount
objectives of the Act and in the interest of industrial
orderliness, stability, peace and overall wellbeing as well, we
find no persuasive reason to intervene at this distant point of
time. The appeals fail and are, accordingly, dismissed. No
costs.
……..……………………..….J. (V. GOPALA GOWDA)
……..……………………..….J. (AMITAVA ROY)
NEW DELHI; DECEMBER 1, 2015.