The validity of a settlement entered under Section 12(3) of the Industrial Disputes Act during conciliation proceedings carries a presumption of fairness and can only be challenged with evidence of mala fides, fraud, or misrepresentation. The court emphasized that such disputes should be resolved through the Industrial Disputes Act.

The writ petition is filed for a declaration that the settlement entered under Section 12(3) of the Industrial Disputes Act, dated 17.05.2006 before the third respondent between 4th and 5th respondents, is binding only on the members of the 5th respondent union and not on the petitioner union.

2. According to the petitioner union, the petitioner union is representing the workmen employment in the 4th respondent management in factory at Sreeperumpudur with membership of 61 workmen and 18 workmen in Gumidipundi out of the total number of workmen numbering 170. The 4th respondent management has transferred 23 workers on 12.09.2001 working in Sreeperumpudur factory to Gumidipundi factory, at the time, when the 4th respondent was not having factory at Gumidipundi at all and the transfer was only for victimization. When the 4th respondent management has withdrawn "on duty permission" granted to workmen, which was protested, they have announced a scheme for voluntary retirement, those who were not opting for voluntary retirement scheme were transferred to far of places like TATA Nagar, Jamshedpur and other places. There was also alteration of service condition which was protested and the 4th respondent management has issued memo to 16 workmen in respect of the said alteration of service condition in fixing the norms to its new products called R.A.109.

3. The 4th respondent management issued show-cause notice to 16 workmen for not giving production and imposed lockout in respect of them and the matter was referred to the Industrial Tribunal, Chennai, which has passed award in favour of workmen. However, the 4th respondent has challenged the same and it is pending before this Court. The 5th respondent union was started in the year 2003 at the instance of the 4th respondent in which 14 permanent workers were members. However, the 4th respondent has neglected the petitioner union, which is a majority and recognized union and entered 18(1) settlement on 03.09.2003 with the 5th respondent, for increasing production by nearly double the existing production. The said settlement, which was entered with the members of the 5th respondent union, which is binding upon the 15 permanent workers, has been insisted by the 4th respondent management, to be followed in respect of the petitioner union also.

.4. The petitioner union has raised a dispute about the transfer of 23 workmen from Sreeperumpudur to Gumidipundi. The Government has referred the dispute only regarding transfer and not relating to unfair labour practice, committed by the 4th respondent and therefore, the petitioner union has filed the Writ petition, which is pending. The petitioner union entered a settlement on 01.09.1999 with 4th respondent, which was to be in force for 3 years period. It was in those circumstances, no fresh demands were made due to the conduct of the management. After the agreement with the 5th respondent dated 03.09.2003 with the minority members, the 4th respondent has entered another agreement under Section 18(1) with the 5th respondent union on 04.02.2004 and 02.01.2004 in line with the earlier settlement dated 03.09.2003. The 4th respondent has also regularized the service of some of the apprentice in order to strengthen the 5th respondent union, by which the membership of the 5th respondent has increased.

.5. According to the petitioner union, since the settlement didnt materialise at the instance of the 4th respondent, the 5th respondent has raised the Industrial Dispute before the 3rd respondent, about which the petitioner union was not aware and the third respondent has also not given notice regarding the conciliation. After several round of discussion on the said dispute, the third respondent has issued a notice to the petitioner union on 03.02.2006 as a formality fixing the date as 09.02.2006 at 11.30 a.m. That day was declared as holiday and no meeting was held. There was another notice dated 10.02.2006 fixing the date of meeting at