High Court of Bombay Considers Writ Petition Challenging Industrial Court’s Recognition of Trade Union Under MRTU & PULP Act. Recognition Granted Based on Retrospective Membership Payments Raises Question of Legal Validity.

Writ petition under Articles 226 and 227 of the Constitution of India challenging an order of the Industrial Court that granted recognition to a rival trade union under the MRTU & PULP Act.

The petitioner sought to quash and set aside the judgment and order dated 3 March 1998 passed by the Industrial Court, Thane in Application (MRTU) No. 7 of 1994, which granted recognition to respondent no. 1 union, and to deny such recognition.

The petitioner-union contended that the respondent-union did not have valid membership of 30 per cent of the total workmen for the requisite six-month period because many of its members had ceased to be members due to non-payment of subscriptions and could not retrospectively regain membership.

The Industrial Court, Thane, by its order dated 3 March 1998, allowed Application (MRTU) No. 7 of 1994 and granted recognition to respondent no. 1 union as the recognised union for the undertaking of respondent no. 2 company at Thane.

Whether the Industrial Court’s order granting recognition to respondent-union under section 11 of the MRTU & PULP Act was legal, particularly in view of the dispute over valid membership caused by delayed subscription payments. Whether the respondent-union complied with the requirement of having 30 per cent of the total number of employees as members for the whole of six calendar months immediately preceding the application, as mandated by section 11 read with section 19. Whether the payment of subscription arrears by employees several months in arrears could revive their membership retrospectively for the purpose of satisfying the recognition requirement, in light of the definition of 'member' under section 3(11) and the union’s own constitution and rules.

Petitioner argued that the respondent-union had not complied with its own constitution and rules, under which a member who fails to pay subscriptions for three months without permission ceases to be a member, and even with permission, membership ceases after six months' default; rejoining upon clearing arrears has no retrospective effect. Petitioner contended that acceptance of subscription arrears in October or November 1993 could not confer valid membership for the period from July 1993 onwards, as this would amount to impermissible retrospective membership, contrary to the statutory scheme and Supreme Court precedents. Petitioner relied on Maharashtra Grini Kamgar Union v. S. Bhattarcharji (1997) 7 SCC 547 and Mumbai Mazdoor Sabha v. Bennet Coleman Co. Ltd. (CIR 1986 SC 430) to support the argument that recognition orders based on defective membership are without jurisdiction. Respondent-union submitted that it had over 30 per cent valid members during the six-month period July to December 1993, even after excluding the 19 members who paid in November 1993, leaving 72 members, which satisfied the statutory requirement. Respondent argued that section 3(11) of the Act allows a member who pays subscription arrears before the end of the third month from the month in which the subscription is in arrears to retain membership for the three preceding months; hence members who paid in October 1993 were valid members from July 1993. Respondent contended that the petitioner-union itself was not entitled to recognition under section 11 as it did not represent employees for the whole six-month period, and therefore the Industrial Court rightly considered only the respondent-union’s application. Respondent asserted that rule 5 of its constitution permitted rejoining on payment of arrears and that this, read with section 3(11), validated the membership for the relevant period. Petitioner countered that even with the three-month grace period under section 3(11), a member who had been in arrears for ten or twelve months could not automatically acquire three months of retrospective membership from the date of payment.

Not mentioned (judgment incomplete; final reasoning and conclusion unavailable)

The question that falls for our consideration in this writ petition is whether the order of the Industrial Court granting respondent-union’s application under section 11 of the Act, for being registered as recognised Union for the Undertaking of respondent-company at Thane, was legal or calls for interference by this Court. The Industrial Court while reaching the conclusion that the respondent-union had 30 per cent of the employees as its members, excluded 19 members who paid their subscription on 2.11.1993 and 10 others on some other grounds. Such interpretation of section 3(11) of the Act would lead to the startling and clearly unintended result that any union can collect retrospective membership and thereby claim to enroll the persons as its members with retrospective effect for upto four months. A conjoint reading of these rules and the definition of 'Member' under section 3(11) of the Act, he submitted, clearly show that the respondent-union had 30 per cent of total number of the employees as its members for the whole of the period of six calendar months immediately preceding the calendar month in which they applied for its recognition.

1. On 31 January 1994, respondent no. 1 union filed Application (MRTU) No. 7 of 1994 under section 11 of the MRTU & PULP Act before the Industrial Court, Thane, seeking recognition for the Thane factory of respondent no. 2 company. 2. On 7 April 1994, the petitioner-union filed an application for impleadment in the recognition proceedings. 3. By order dated 29 April 1997, the Industrial Court allowed the petitioner’s impleadment application. 4. On 5 September 1997, the petitioner filed a written statement and contested the respondent-union’s application. 5. By judgment and order dated 3 March 1998, the Industrial Court granted recognition to respondent no. 1 union. 6. Thereafter, the petitioner filed Writ Petition No. 1889 of 1998 in the High Court of Bombay under Articles 226 and 227 of the Constitution, challenging the Industrial Court’s order. 7. The High Court heard the parties and reserved judgment on 18 April 2006, and pronounced judgment on 3 May 2006.

• Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971: Section 3(11), Section 11, Section 19
• Trade Unions Act, 1926:
• Constitution of India: Article 226, Article 227
• Companies Act, 1956: