Case Note & Summary
The Supreme Court of India decided three civil appeals by certificate arising from writ petitions filed before the Andhra Pradesh High Court under Article 226 of the Constitution. The appellants, employers including The Sirsilk Ltd., had industrial disputes with their workmen which were referred to the Industrial Tribunal, Andhra Pradesh on June 6, 1956. The tribunal forwarded its awards to the Government in September 1957. Under Section 17 of the Industrial Disputes Act, 1947, the appropriate government is required to publish the award within thirty days of receipt. Before publication, the parties to each dispute reached settlements on October 1, 1957, and jointly requested the Government not to publish the awards. The Government refused, asserting that Section 17 was mandatory. The appellants then filed writ petitions seeking a direction to withhold publication. The High Court dismissed the petitions, holding that Section 17 was mandatory and no such direction could issue. The appellants obtained certificates to appeal to the Supreme Court. The core legal question was whether Section 17(1) of the Industrial Disputes Act is mandatory or directory, and if mandatory, what the appropriate course is when a binding settlement under Section 18(1) is reached after the award is forwarded to the Government but before publication. The appellants argued that Section 17 was directory, or alternatively that even if mandatory, a via media should be found to reconcile the conflict between a settlement binding under Section 18(1) and an award that would become binding under Section 18(3) upon publication. The respondents contended that accepting the appellants' argument would create difficulties, as parties might falsely claim settlements to prevent publication. The Supreme Court rejected the first contention. It held that the use of the word 'shall' in Section 17(1), read with Section 17(2) which makes the award final and not questionable, and Section 17A which gives specific powers to Government regarding enforceability, indicated a mandatory duty to publish the award within thirty days. Thus Section 17(1) is mandatory and not merely directory. However, the Court then considered the effect of the 1956 amendment introducing Section 18(1), which makes a settlement arrived at otherwise than in conciliation proceedings binding on the parties. A settlement under Section 2(p) includes a written agreement signed by the parties and sent to the Government and conciliation officer. Under Section 19(1), such settlement comes into operation on the date signed unless otherwise agreed. In this case, the settlement signed on October 1, 1957 became operative immediately. The Court emphasized that settlements are preferred to industrial adjudication because they are reached by free will and foster industrial peace. To reconcile the mandatory publication of the award with the equally mandatory binding nature of the settlement, the Court drew on State of Bihar v. D.N. Ganguly, where it was observed that if a dispute pending before a tribunal is settled, the tribunal can make an award in terms of the settlement, analogous to Order XXIII Rule 3 CPC. In the present case, however, the tribunal had already forwarded its award before the settlement. The Court held that in such a special situation, the only solution is to withhold the award from publication. This does not undermine the mandatory nature of Section 17(1) because ordinarily the Government must publish the award; only the emergence of a binding settlement creates an exceptional circumstance. If any dispute arises about the binding nature of the settlement on grounds of fraud or misrepresentation, that would be a fresh industrial dispute that the Government may refer for adjudication; if the settlement is found not binding, the Government can then publish the withheld award. Accordingly, the Supreme Court allowed the appeals and set aside the High Court's dismissal, effectively directing the Government to withhold publication of the awards in light of the settlements.
Headnote
A) Industrial Dispute - Mandatory Publication of Award - Section 17(1) Industrial Disputes Act, 1947 - Government has a mandatory duty to publish an industrial award within thirty days of receipt - The Court examined the word 'shall' in Section 17(1) together with Section 17(2) and Section 17A; held that intention behind Section 17(1) is to cast a duty on Government to publish the award, and the provision is mandatory, not merely directory - Held that Government cannot withhold publication except in the special situation of a binding settlement (Paras 3-4). B) Industrial Dispute - Settlement and Binding Effect - Sections 2(p), 18(1), 19(1) Industrial Disputes Act, 1947 - A written agreement between employer and workmen otherwise than in conciliation, signed and copy sent to Government, becomes a settlement and is binding on parties - Court noted that settlement is preferred to industrial adjudication because it is reached by free will and points to goodwill between parties; settlement operates from signed date unless otherwise agreed - Held that in the present case the settlement signed on October 1, 1957 became operative immediately (Paras 5-7). C) Industrial Dispute - Conflict Between Settlement and Award - Resolution by Withholding Publication - Sections 17(1), 18(1), 18(3) Industrial Disputes Act, 1947 - Where a binding settlement under Section 18(1) is reached after the award is forwarded to Government but before publication, Government may withhold publication of the award to avoid conflict - The Court reconciled the mandatory nature of Section 17(1) with the mandatory binding nature of the settlement by holding that in such special situation the only solution is to withhold the award from publication; if any dispute arises about the binding nature of the settlement on grounds of fraud or misrepresentation, that would be an industrial dispute which Government may refer for adjudication and if the settlement is found not binding, the award can be published - Held that the special situation justifies withholding despite mandatory Section 17 (Paras 8-12). D) Industrial Dispute - Compromise Before Tribunal - Order XXIII Rule 3 Code of Civil Procedure, 1908 - Tribunal can make an award in terms of a settlement when dispute is pending before it - Court referred to State of Bihar v. D. N. Ganguly, [1959] S.C.R. 1191, which held that though the Act does not specifically authorise recording of compromise, it would be unreasonable to insist on merits after amicable settlement, and tribunal would make award in terms of settlement - Held that the difficulty arises only when the tribunal has already forwarded the award before settlement (Paras 9-10).
Issue of Consideration
Whether Section 17 of the Industrial Disputes Act, 1947 is mandatory or directory regarding publication of an award, and if mandatory, what is the appropriate legal course when a binding settlement under Section 18(1) is reached after the award is forwarded to Government but before publication, creating a conflict between the settlement and the award.
Final Decision
Supreme Court held Section 17(1) mandatory, but in special situation where binding settlement under Section 18(1) reached after award forwarded to Government but before publication, Government may withhold publication of award to give effect to settlement; if any dispute arises regarding binding nature of settlement, it may be referred for adjudication and if settlement found not binding, Government may publish the withheld award. Appeals allowed accordingly.
Law Points
- Section 17(1) Industrial Disputes Act
- 1947 is mandatory
- not directory
- award must be published within thirty days of receipt
- Section 17(2) makes published award final and unchallengeable
- Section 17A confers specific powers on Government regarding enforceability and modification of award
- Section 18(1) makes settlement otherwise than in conciliation binding on parties
- Section 2(p) defines settlement to include written agreement signed and sent to Government
- Section 19(1) provides settlement operates from agreed date or date of signing
- settlement preferred over industrial adjudication because it is reached by free will and fosters industrial peace
- when binding settlement under Section 18(1) conflicts with award under Section 18(3)
- Government may withhold award publication
- if binding nature of settlement disputed
- refer for adjudication
- if settlement found not binding
- publish withheld award
- Section 17 mandatory publication is subject to special situation of post-award settlement
