The main legal point established in the judgment is the binding nature of a settlement reached in the course of a conciliation proceeding under the Industrial Disputes Act, and the interpretation of the provisions of S. 18, S. 19, and S. 23 in relation to the enforceability and validity of the settlement.

SOMNATH AYYAR, J.

( 1 ) WE are concerned in this writ petition with a settlement reached between an employer called the Mysore Sugar Company which is respondent 2 before us and to which we shall refer as the company, and an employees' association known as the Mysore Sugar Company Employees' association which is respondent 3 and which will be called the association, on 22 July, 1966. This settlement is called in question by the petitioner which is another employees' union known as the Mysore Sugar Company Employees' Union to which we shall refer as the union.

( 2 ) THE impugned settlement was reached between the association and the company in the presence of the State Conciliation Officer who was also the Commissioner of Labour. The settlement was the sequel to a proposal by the company which was announced on 22 June, 1966 to begin a lay-off with effect from 1 July, 1966. That announcement explained that the lay-off became necessary by pressure of external circumstances including the inability to secure raw materials and to find alternative employment for the workmen during the forced shut-down period. The company proposed to maintain only the bare minimum number of workmen required for essential works and for the expansion programme.

( 3 ) THERE was a conciliation proceeding which began at the instances of union which is the petitioner before us, held by the Assistant commissioner of Labour who was the concerned conciliation Officer. Those conciliation proceedings came to an unsuccessful termination on 4 july, 1966.

( 4 ) ON 12 July, 1966, the State Conciliation Officer who is respondent 1 before us, arranged for a joint discussion in regard to the controversies between the parties, and eventually on 19 July, 1966 he issued notices to them intimating his intention to commence a conciliation proceedings which began on 22 July, 1966. On the same day the impugned settlement was reached between the company and the association, and the three terms of the memorandum of settlement read :

" (1) It is agreed that in lieu of lay-off as proposed by the management, the association agreed to a reduction of 15 per cent of the total emolument of each employee, every month, for a period of one year from 1 July, 1966 to 30 June, 1967.

(2) When the company makes profits, the management will consider payment on the date of retirement, discharge, death or resignation of each employee to the extent of the cut that they have imposed upon themselves during the year 1 July, 1966 to 30 June, 1967. (3) It is agreed between the parties to abide by the code of discipline. "

( 5 ) THE union was not a party to the settlement and so calls it in question in this writ petition apprehending that under S. 18 of the Industrial Disputes Act, the settlement may be enforced even against the workmen who were not members of the association, but were members of the union.

( 6 ) SRI Krishnayya appearing for the union denounced the settlement in more that one way. His first submission was that the settlement was not arrived at in the course of a conciliation proceeding under the Industrial Disputes Act, and so did not have the efficacy which is claimable under S. 18 (3) of the Act. His second submission was that settlement derogated from the terms of an earlier settlement which had been reached in the year 1960 and which continued to operate under S. 19. His third submission was that the settlement transgressed the provisions of S. 23 of the Payment of Wages Act.

( 7 ) ALTHOUGH at one stage some argument was expended over the question whether after the failure of the first conciliation which was commenced by the Assistant Commissioner of Labour, a second conciliation could be commenced by the State Conciliation Officer. Sri Krishnayya had to admit that there was no statutory prohibition to the commencement of any such second conciliation proceeding.

( 8 ) THE first question to which we should therefore address ourselves, is, whether, as contended for the union, th

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