M.D., M/S. HINDUSTAN FASTENERS PVT. LTD. versus NASHIK WORKERS UNION

Citation: [2006] SUPP. 7 S.C.R. 553 · Decided: 19-10-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

M.D., MIS. HINDUSTAN FASTENERS PVT. LTD. 
A 
1~ 
NASHIK WORKERS UNION 
OCTOBER 19, 2006 
[S.B. SINHA AND DAL VEER BHANDARI, JJ.] 
B 
labour laws: 
Reference of industrial dispute after settlement-Maintainability of-
Held, maintainable, since the dispute raised was not the subject matter of C 
settlement-Evidence Act, 1872-Sections 91 and 92. 
Pursuant to a settlement between the management and workers of 
Appellant-company in 1990, the workmen went on strike and raised several 
demands. Consequently a second settlement was arrived at in 1993. However, D 
thereafter the workers raised an industrial dispute claiming that the lock-
out effected by the Company in 1992 was unjustified and that they were entitled 
for wages for the lock-out period. The dispute was referred to for adjudication 
by the Industrial Court. Company challenged the maintainability of the 
reference by taking the stand that the disputed issue was covered by the 
settlement of 1993. 
E 
Tribunal held that the settlement of 1993 nowhere made any reference 
regarding the wages to be paid to workers for the lock-out period and that if 
the issue regarding the payment of lock-out period would have been discussed 
between the parties, then, certainly the said issue could have been mentioned 
in the settlement. Further finding that no witness was examined on behalf of F 
the Company to justify the lock-out declared by it, the Tribunal held that the 
said lock-out was unjustified and the workers were entitled to wages for lock-
out period. High Court affirmed the decision of the Tribunal. Hence the present 
appeal 
Dismissing the appeal, the Court, 
HELD: I. The purport and object of a settlement arrived at by and 
between the management and the workmen is undisputedly required to be 
construed keeping in view its salutary effect. It is aimed at maintenance of 
553 
G 
H 
554 
SUPREME COURT REPORTS 12006] SCl'P. 7 S.C.R. 
A industrial peace and harmony. A settlement, therefore, although is required 
to be read for upholding the validity thereof like any other agreement, it should 
be read in its entirety so as to ascertain the intention of the parties behind 
the same. It is true that in the said settlement, not only the Charter of 
Demands served on the management was referred to, the exchange of letters 
B between the parties had also been referred to, but the intention of the parties 
is to be gathered having regard to the circumstances attending thereto. 
1560-G-H; 561-AI 
2. Had the intention of the parties been to settle their disputes also in 
relation to legality or otherwise of the lock-out declared by the management, 
C it was expected to have been stated so explicitly therein. It was also expected 
that the parties would file the said settlement before the Industrial Tribunal 
so that an award could be passed in terms thereof. Clause 20 of the said 
settlement provides for a package deal vis-a-vis all the demands raised by the 
Union. The package deal was in relation to the Charter of Demands dated 
1.01.1993 and any other document including the letters exchanged between 
D the parties pursuant thereto or in furtherance thereof. The subject matter of 
settlement was 'all demands of whatever nature' in terms whereof the workmen 
might not have been able to make any other demand, but, on a bare perusal of 
the said settlement, it is apparent that the expression which has repeatedly 
been used was the 'Charter of Demands'. 1561-E, Fl 
E 
3. In furtherance of the said Charter of Demands, the parties entered 
into several other correspondences. In terms of the settlement, the parties 
settled their disputes in relation to the demands raised. The wages to be paid 
to the workmen which they had claimed as of right was not and could not have 
been the subject matter of any payment or settlement. Whereas the concept 
F of a demand must be held to be relating to a right higher than the existing 
right, the workmen were entitled to raise a claim in relation to their existing 
right and in that. view of the matter financial implication therefor cannot be a 
ground for refusal thereof. If a claim is to be withdrawn by reason of a 
settlement, the same must find a specific mention therein. 1562-B, Cl 
G 
4. Subject, of course, to the parties acting on the settlement, the 
workmen had promised that they would not go for 'work stoppage' or 'go slow' 
but then in terms of Clause 23 of the said settlement, it had categorically 
been reiterated that the expression

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