GENERAL MANAGER, SECURITY PAPER MILL, HOSHANGABAD versus R.S. SHARMA & ORS.

Citation: [1986] 1 S.C.R. 281 · Decided: 14-02-1986 · Supreme Court of India · Bench: E.S. VENKATARAMIAH · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

281 
GENERAL MANAGER, SECURITY PAPER MILL, 
HOSHANGABAD 
. 
v. 
R.S. SHARMA & ORS. 
FEBRUARY 14, 1986 
[E,S, VENKATARAMIAH AND M.P. THAKKAR, JJ,] 
Industrial Disputes Act, 1947 section 2(p) - "Settle-
ment", meaning of - Settlement arrived at by agreement between 
the employer and workman otherwise than in the course of 
conciliation proceedings, whom it binds, explained - Burden of 
Proof that a "Settlement" arrived at by agreement between the 
employer and the workman binds every workman being parties to 
the settlement and that the agreement was fair and just, is 
upon the employer. 
In the course of conciliation proceedings under the 
provisions of the Industrial Disputes Act, 1947, a settlement 
was arrived at on June 29, 1973 between the management of the 
Security Paper Mill, Hoshangabad, the appellant and the SPM 
Employees 
Union, 
Hoshangabad. 
One of the terms of the 
settlement related to the incentive benefit entered into on 
behalf of the workmen and other non-operative officers and 
staff of the ·security· Paper Mill· at Hoshangabad. When the 
above Settlement was in force the Government of India by its 
letter· dated December 29, 1975 reduced the rate of group 
incentive benefit payable by restricting the entitlements of 
the non-operative officers and staff with effect 'from 1.1. 76 
to 25% of the rate applicable to industrial workmen for 
gazetted officers and to 50% in respect of non-gazetted 
industrial staff. When the said order was challenged, the 
Central Government Industrial Tribunal-cum-Labour Court held 
that the modification of the incentive benefit made by the 
. Government of India was illegal. After that the management 
entered into an agreement with one of the trade unions named 
SPM Employees Union on ·April 11, .1979 reducing the rate of 
incentive benefit to 50% to the non-operative employees that 
ie administrative staff, accounts staff; estate employees and 
dispensary staff, and paid the benefit accordingly. The said 
agreement was not entered into during the course of any 
A 
B 
c 
D 
E 
F 
G 
H 
A 
B 
c. 
D 
E 
F 
G 
H 
282 
· SUPREME COURT REPORTS 
[1986] 
1 s.c.R. 
conciliation 
proceedings 
and 
in 
fact 
there 
were 
no 
conciliation proceedings 
pending at 
the 
time when the 
agreement was entered into. The respondents who belonged to 
the non-operative staff and who were not the members of the 
Union and parties to the agreement challenged the validity of 
the agreement before the Authority under the Payment of Wages 
Act on the basis of the Settlement of the year 1973. While 
allowing the claim for Rs, 1,93,357.85 and cost at the rate of 
Rs. 10 per worker, it did not, however, allow any compen-
sation. In appeal, the Industrial Court affirmed the decision 
of the authority under the Payment of Wages Act but disallowed 
the costs at the rate of Rs. 10 per worker. Hence the appeal 
by special leave by the management alone. 
Dismissing the appeal, the Court, 
lll!Ul: l. The expression "settlement" defined in section 
2(p) of the Industrial Disputes Act, 1947 means a settle111ent 
arrived at in the course of conciliation proceeding and also 
includes a written agreement between employer and workmen 
arrived at otherwise than in conciliation proceeding where 
such agreement has been signed by the parties thereto in such 
manner as may be prescribed and a copy thereof has been sent 
to an officer authorised in this behalf by the appropriete 
Government and the Conciliation Officer. [286 ~; 287 A] 
A distinction is made in the Industrial Disputes Act, 
1947 between a settlement arrived at in the course of concili-
ation proceeding and a settlement arrived at by agreement 
between the employer and workman otherwise than in concili-
ation proceeding both as regards the procedure to be followed 
in the cases and as regards the persons on whom they are 
binding. If a settlement of the dispute or of any of the 
matters in dispute is arrived at in the course of the concili-
ation proceeding the Conciliation Officer shall send a report 
thereof to the appropriate Government or an officer authorised 
in that behalf by the appropriate Government together with a 
Memorandlllll of Settlement signed by the parties. Even though a 
Conciliation Officer is not competent to adjudicate upon the 
disputes between the 
management and its workmen he is 
expected to assist them to arrive at a fair and just settle-
ment. He has to play the role of an adviser and friend of both 
~ 
the parties and 

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