1996 Supreme(SC) 1463

1996(7) Supreme 548
SUPREME COURT OF INDIA
B.P. Jeevan Reddy, S.C. Sen and S.B. Majmudar, JJ.
Patiala Central Cooperative Bank Ltd. -Appellant
versus
Patiala Central Cooperative Bank Employees Union & Anr. etc. -Respondents
Civil Appeal No. 4390 of 1988
With
Civil Appeal No. 4074 of 1988 and Civil Appeal Nos. 4075-4076 of 1988
Decided on 16-9-1996
Counsel for the Parties :
For the Appellant : G.K. Chatrath, Advocate General, S.S. Kang, Dy. Advocate General, (Punjab), H.S. Munjral, G. Bansal, Arvind Kumar, Ms. Laxmi Arvind, and T.S. Arora, Advocates.
For the Respondents : A.K. Sen, and Rajinder Sachar and P.P. Singh, Advocates.

Headnote:(i) Industrial Disputes Act, 1947-Section 19(2)-Agreement between Bank and Union provided for a number of things like fixation of pay scales etc. etc.-Expiration of term of agreement in 1977-Pay scales and other terms and conditions relating to employment drastically revised upwards after expiration of agreement-In such facts and circumstances, employees cannot claim dearness allowance in terms of the agreement.

       Held : That agreement has been given up for much better terms and conditions and also subsequent revision of pay. The employees cannot be heard to say that they will enjoy all the subsequent benefits given by the revision of pay scales, but dearness allowance must be given in accordance with the formula contained in the agreement dated 28.5.1973. It is not the case of the employees that the agreement dated 28.5.1973 will have to be enforced in full. There is some dispute as to the exact amount of the benefit considered by the various revisions in pay scales but there is no dispute that the pay scales and other benefits now given are much better and higher than what was given by the agreement dated 28.5.1973. No one wants to go back to that agreement so far as the pay scales are concerned. I fail to see how in the context of these facts, the employees can urge that Dearness Allowance formula of that agreement must remain in fact but at the same time the drastic changes in every other part of the agreement dated 28.5.1973 will continue in force for the benefit of the employees. (Paras 15 & 16)

       (ii) Punjab Cooperative Societies Act, 1961-Section 84-B-Validity and scope of-Agreement between Bank and Union-Expiration of term of agreement-Notice was given terminating the Agreement-Agreement ceased to operate-Whether High Court was justified to go into the legislative competence of State Legislature in enacting Section 84-B?-Differing opinions.

       As per S.C. Sen, J.

       Prima facie, there is no reason to hold that this provision will not apply to the agreement dated 28.5.1973 assuming that that agreement was still in force on the date. Section 84-B was introduced in the statute. (Para 19)

       The provisions of Section 19(2) make an agreement between the employers and the employees binding. It also lays down the period during which it shall be binding. It also provides the manner in which the agreement can be terminated inter parties. It does not follow from this provision that a competent legislature cannot legislate on any matter which forms part of the agreement. Nor does Section 19 have the effect of validating any infirmity in the agreement. If the agreement is contrary to any law or if the agreement cannot be implemented without violating any provision of law, then the agreement cannot be enforced at all. There is nothing in sub-section (2) of Section 19 to suggest that even such an agreement will continue to be binding upon the employers and the employees and enforceable against express provision of law. If after the agreement has been entered into, any law is passed and the agreement cannot be enforced without violating that law, then clearly the agreement cannot be enforced. The law will prevail. (Para 23)

       Sub-section (2) of Section 19 merely extends the period during which the agreement will be enforced, but it does not provide that the agreement will be valid and binding notwithstanding any law to the contrary. (Para 24)

       As per B.P. Jeevan Reddy, J.

       So far as the validity of Section 84-B of the Punjab Cooperative Societies Act, 1961 is concerned, it is enough to say that once the settlement between the parties was held to have been validly terminated by the management, there was no occasion for the High Court to have considered the validity of the said section and/or to have declared it void. The judgment of the High Court declaring Section 84-B as void and illegal is accordingly set aside herewith. (Para 28)

       As per S.B. Majmudar, J.

       In my opinion the said exercise was not open to the High Court on the admitted facts of the present case. That even under Section 19(2) of the Act the said Agreement had ceased to operate from 25th February 1978 and consequently there remained no question of any repugnancy of Section 84-B on the one hand and Sections 9A and 19(2) of the Industrial Disputes Act on the other. In short that question did not arise for consideration of the High Court on the aforesaid well established facts on record. In my view once this factual conclusion is arrived at as rightly arrived at by my learned brother Sen, J., no occasion arises for this Court nor did it arise for the High Court to go into the legislative competence of the State Legislature in enacting Section 84B and to examine and pronounce upon the said question. On this short ground, therefore, I would set aside the decision of the High Court declaring Section 84-B as ultra vires the State Legislature on account of repugnancy of Section 84-B with the provisions of Sections 9A and 19(2) of the Industrial Disputes Act. The appeal of the bank is required to be allowed on this short ground keeping the question of vires of Section 84-B open for consideration in an appropriate case. However, with great respect I do not concur with the view of my learned brother Sen, J., that the said Section will operate even de hors the binding agreement under Section 19(2) of the Act. On this aspect I would express no opinion as that question, in my view, does not arise for consideration on the facts of the present case. (Para 31)