IMPORTANT POINT
All workman who are employed in an establishment or who subsequently become employed in that establishment would be bound by an award made by an Industrial Tribunal.

Headnote:Industrial Disputes Act, 1947 - Section 18(3)(d) - Persons on whom settlement and awards are binding - All workmen who were employed in the establishment or who subsequently became employed in that establishment, would be bound by award made by Industrial Tribunal - Respondents were deposit collectors in small deposit schemes floated by appellant bank and under the agreement were entitled to commission at the rate of 3.5% of collections made by them - Industrial dispute was raised by deposit collectors of various banks and association of bankers was also impleaded in reference - Tribunal passed award in favour of deposit collectors - Indian Bank Association filed writ against award - It was conceded before High Court that relief of being absorbed as regular staff of bank in clerical cadre was not available to be granted and High Court set aside that part of award - Other directions were upheld - Appeal against that award was dismissed - Notices issued to Deposit Collectors for recovery of amounts paid to them from date of judgment of High Court - Writ petition challenging the notices on ground that no opportunity of hearing was given and that respondents were not party to the award - High Court allowed writ on premise that principles of natural justice were required to be complied with - Appeal - Award was binding on respondents though they were not party in the reference - Appellant Bank had no other option but to implement the award - Impugned judgment could not be sustained - In peculiar facts and circumstances of the case, recoveries however not to be effected.
       Held : From a perusal of clause (d) of sub-section (3) of Section 18 of the Industrial Disputes Act, it is, thus, evident that all workmen who are employed in the establishment or who subsequently become employed in that establishment would also be bound by an award made by an industrial tribunal. The management as also the workmen were parties to the said award. Hence, Respondents cannot be heard to say that the award was not binding on them only because they were not parties.(Para 17)
       In an industrial dispute referred to by the Central Government which has an all-India implication, individual workman cannot be made parties to a reference. All of them are not expected to be heard. The Unions representing them were impleaded as parties. They were heard. Not only the said Unions were heard before the High Court, as noticed hereinbefore from a part of the judgment of the High Court, they had preferred appeals before this Court. Their contentions had been noticed by this Court. As the award was made in presence of the Unions, in our opinion, the contention of Respondents that the award was not binding on them cannot be accepted. The principles of natural justice were also not required to be complied with as the same would have been an empty formality. The court will not insist on compliance of the principles of natural justice in view of the binding nature of the award. Its application would be limited to a situation where the factual position or legal implication arising thereunder is disputed and not where it is not in dispute or cannot be disputed. If only one conclusion is possible, a writ would not issue only because there was a violation of the principle of natural justice.(Para 18)
       Appellant Bank had no other option but to implement the award. If it did not, its action could be held to be penal. Reliance placed by Respondents on the letter of the Syndicate Bank dated 26.5.2001 is also misplaced. The said circular letter does not state that the principles of natural justice were required to be complied with. As on the date of issuance of the circular letter they had not received the necessary guidelines, a temporary measure was proposed to be taken therefor.(Para 21)
       For the reasons aforementioned, the impugned judgment cannot be sustained which is set aside accordingly.(Para 22)
       However, keeping in view the peculiar facts and circumstances of this case, we direct that the recoveries may not be made from Respondents so as to avoid undue hardship to them. This order is being passed in exercise of our jurisdiction under Article 142 of the Constitution of India.(Para 23)

JUDGMENT

S.B. Sinha, J. - Leave granted.

2. Appellant herein is a nationalised Bank. Some scheduled banks initiated a scheme commonly known as Daily Deposit Scheme. There were, however, various nomenclatures given therefor, as for example, Mini Deposit Scheme, Pygmy Deposit Scheme etc. The said schemes were introduced for mobilizing small savings from public. For the said purpose, services of deposit collectors were taken to canvass opening of accounts, to collect deposits from the account holders at their residence/business premises, and to deposit collections in the banks on a daily basis.

3. New Bank of India, which has since merged with Appellant, had such a scheme. Respondents herein were deposit collectors in Pygmy Deposit Scheme floated by the said Bank. Under the agreement, they were entitled to commission at the rate of 3.5% of the collections made by them. Those Pygmy deposit collectors working in New Bank of India since 1979 had been allowed to continue with Appellant No. 1 upon their amalgamation in 1993. The system of paying commission at the rate of 3.5% of the amount collected by them continued.

4. An industrial dispute was raised by such deposit collectors of various banks pursuant whereto the Government of India by a notification on 3.10.1980 referred the following dispute for adjudication before the Industrial Tribunal, Hyderabad.

“Whether the demand of the Commission Agents or as the case may be Deposit Collectors employed in the Banks listed in Annexure that they are entitled to the pay scale and other service conditions admissible to regular clerical employees of these banks is justified? If not to what relief the workers concerned entitled to and from which date?”

5. Appellant Bank along with some other nationalised Banks was also parties to the said reference. The Association of the Bankers, viz., Indian Banks Association was also impleaded in the said reference. By an award made on 22.12.1988, the Tribunal opined that the deposit collectors were workmen and as such the reference was maintainable.

6. In its award it was directed :

(i)Eligible deposit collectors, i.e., those who are less than 45 years of age as on 3.10.1980, if otherwise eligible, would be considered for regular absorption after taking qualifying examination.

(ii)Those, other than (i) above, shall be given benefits as conferred by the Award, i.e.

a.Full back wage of Rs. 750/- linked to minimum deposit of Rs. 7500/- p.m.

b.Incentive remuneration @ 2% for deposit collected above Rs. 7500/- p.m.

c.Conveyance allowance of Rs. 50/- p.m. for deposit collected less than Rs. 10,000/- and Rs. 100/- p.m. for deposit collected over Rs. 10,000/- p.m.

d.Gratuity equal to 15 days commission for each year of service rendered.

7. A writ petition filed by the Indian Banks Association before the High Court of Andhra Pradesh questioning the correctness of the said award was dismissed. A special leave petition was preferred by the said Association before this Court. The Appeal was also dismissed. The judgment of this Court is since reported in [(2001) 3 SCC 36]. This Court noticed that before the High Court it was conceded that the relief of being absorbed as regular staff of the Bank in clerical cadre was not available to be granted whereupon the High Court had set aside the directions of the Tribunal to absorb the deposit collectors as regular staff. Other directions, however came to be upheld. Appeals were also filed by the Workmen before this Court.

8. The contention of Respondents was noticed in the following terms :

“Mr Sharma submitted that gratuity need not be only under the Payment of Gratuity Act. He submitted that the Tribunal had not said that it was awarding gratuity under the Gratuity Act. He submitted that the Tribunal has powers, dehors the Gratuity Act, to direct payment of gratuity. He submitted that the Tribunal always has power and jurisdiction to modify conditions of service and, in this case, it has been found by the Tribunal that there were no fixed p

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2006 Supreme(SC) 916

IMPORTANT POINTAll workman who are employed in an establishment or who subsequently become employed in that establishment would be bound by an award made by an Industrial Tribunal.

Cases Referred (5)

IMPORTANT POINT
All workman who are employed in an establishment or who subsequently become employed in that establishment would be bound by an award made by an Industrial Tribunal.