- 1 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR WRIT PETITION NO. 7332 OF 2022 (L-RES) BETWEEN: 1. M/S KC DAS PRIVATE LIMITED, NO.03, SAINT MARKS ROAD, BENGALURU - 560 001. REPRESENTED BY ITS DIRECTOR MR. BN.DAS, AGED ABOUT 87 YEARS, CHURCH STREET, BENGALURU - 560 001. NOTE: PETITIONER NOT CLAIMING ANY BENEFITS OF SENIOR CITIZEN …PETITIONER (BY SRI MANJUNATHA B., ADVOCATE) AND: 1. THE ADDL. LABOUR COMMISSIONER, (INDUSTRIAL RELATION) & AUTHORITY UNDER SECTION 29 OF INDUSTRIAL DISPUTES ACT, 1947, OFFICE OF THE LABOUR COMMISSIONER, KARMIKA BHAVANA, BANNERGHATTA ROAD, BENGALURU - 560 029. 2. KARNATAKA TRADE UNION CENTRE, NO.43, MIG, 2ND STAGE, 2ND FLOOR, BASAVESHWARANAGAR, BENGALURU - 560 079. REPRESENTED BY MR. G.R.SHIVASHANKAR- PRESIDENT, KARNATAKA TRADE UNION CENTRE. …RESPONDENTS (BY SRI RAJENDRA K.R., LEARNED AGA FOR R1; Digitally signed by GAVRIBIDANUR SUBRAMANYA GUPTA SREENATH Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 SMT.M.R.RASHMI, ADVOCATE FOR R2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 18.03.2022 PASSED IN NO.IAA- 1/CR-59/2021-22 BY RESPONDENT NO.1-ADDITIONAL LABOUR COMMISSIONER AND AUTHORITY UNDER SECTION 29 OF THE INDUSTRIAL DISPUTES ACT, 1947 AS PER ANNEXURE-D. THIS PETITION, COMING ON FOR PRELIMINARY HEARING 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE PRADEEP SINGH YERUR ORAL ORDER Heard learned counsel for petitioner, learned Additional Government Advocate for respondent No.1 and learned counsel for respondent No.2. 2. The petitioner is a Private Limited Company involved in the business of manufacturing and selling of Bengali Sweets and Savouries. The petitioner employed about 44 workers, out of them, 34 workers are members of the Union, namely the KC Das Employees Union. The petitioner, with a good intention of having good camaraderie with the employees, permitted the employees to form a Union in the name of the KC Das Employees Union (for short, 'Union'), affiliated with AITUC. - 3 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 2.1 The petitioner and the Union entered into a bipartite settlement agreement on 06.06.2017 and the same expired on 31.03.2019 with the submission of fresh charter of demands from the Union dated 29.03.2019. The Management and the Union after negotiations and discussions finalised the settlement talks and entered into wage settlement dated 05.11.2019 under Section 18(1) of the Industrial Disputes Act, 1947 (‘I.D. Act’ for short) read with Rule 59 of the Karnataka Industrial Disputes Rules, 1957. 3. It is contended by the learned counsel for petitioner that due to some misunderstanding among the members of the Union, around 10 to 15% of the workers, i.e., 10 out of 46 workers, have left the Union and joined an external Union i.e., respondent No.2 Union. However, despite the majority of the membership and recognition, the Management continued the recognition of its Union. 3.1 This being the state of affairs, respondent No.1 got issued notice on 02.02.2022 that respondent No. 2 Union submitted the petition to the Authority alleging that the petitioner violated the settlement agreement dated 30.09.2019, - 4 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 which was said to have been signed before the Labour Officer, Sub-Division-4, Bengaluru. The petitioner also submitted the preliminary objections with regard to there being no locus standi of respondent No.2 to espouse the cause of the workers, as it is not a recognised Union of the workers. 3.2 It is the contention of the learned counsel for petitioner that pursuant to the reply, the submission was made before respondent No.1 and arguments were putforth on 17.03.2022. It is further contended by the learned counsel for petitioner that absolutely no settlement had taken place on 30.09.2019 before the Labour Officer nor did respondent No.2 justify and produce the so-called settlement before respondent No.1 or before this Court. Therefore, how respondent No.2 is an interested party without there being any settlement agreement with the petitioner, is a question to be answered. 3.3 Learned counsel further contends that respondent No.1 having not considered all these aspects, proceeded further to pass the impugned order, which is illegal, arbitrary and liable to be set aside in violation of the basic tenor and convenants of the settlement agreement and the provisions of the Industrial - 5 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 Disputes Act, 1947 (for short, "Act"). Learned counsel further contends that respondent No.1 has committed a serious error of law by passing the impugned order against the settled legal position and contrary to law and the principles of natural justice. 3.4 Learned counsel further contends that when respondent No.2 made a statement with regard to the alleged settlement agreement dated 30.09.2019, it was the duty of respondent No.2 to have produced the said settlement agreement before respondent No.1, which has not been done. Therefore, the question of considering the alleged settlement agreement dated 30.09.2019 would not arise, as no such document is produced before the Authorities or even before this Court. 3.5 Secondly, learned counsel for petitioner contends that respondent No.2 is not a party to the settlement agreement at Annexure-A, so also even if there are any of the employees of the petitioner in respondent No.2-Union, they could not have raised any dispute nor the petitioner has agreed to any settlement before the Conciliation Officer, as alleged by - 6 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 respondent No.2. Under the circumstance, he seeks to set aside the impugned order passed by respondent No.1. 3.6 Learned counsel for petitioner relied upon three Authorities, the same is squarely applicable to the present facts and circumstances of the case. 4. Per contra, learned counsel for Respondent No.2 contends that the petition filed by the petitioner is not maintainable and liable to be dismissed at the very threshold. Learned counsel sustains the impugned order passed by Respondent No.1. He contends that Respondent No.2 - Karnataka State Trade Union Centre works for the welfare of the workmen and President of the said Trade Union has got all the responsibility and the right to give representation regarding the problems or difficulties faced by the workmen in different industries. It is also contended by learned counsel that some of the workmen working in the petitioner - company are members of the 2nd respondent – Union and such workmen were purposefully and deliberately avoided by the petitioner – company and were not allowed to attend any meeting conducted by the petitioner – company. Learned counsel - 7 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 further contends that workmen who are members of the Respondent No.2 - Union have been working diligently and honestly to the satisfaction of the petitioner, whereas petitioner has not extended various Labour benefits which have been raised and demanded by Respondent No.2 - Union for the welfare of the workers. 4.1 Learned counsel for Respondent No.2 contends that petitioner and Respondent No.2 – Union have entered into a settlement agreement dated 30.9.2019. However, petitioner did not implement the terms of the agreement. Learned counsel relied upon paragraph-2 of the settlement agreement dated 30.9.2019 to contend that the settlement agreement applies to all the permanent workmen of the company. Learned counsel contends that once the settlement agreement has been entered into by the petitioner and the workers Union, even if Respondent No.2 - Union has not produced any documents, the settlement agreement entered into by the petitioner and the workers Union would be applicable to all other workers, even if they are affiliated to other trade Union. - 8 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 4.2 Learned counsel further contends that total number of workers in the petitioner company is around 50 and out of them, 22 workmen have joined Respondent No.2 - Karnataka Trade Union Centre headed by its President - Sri G.R. Shivashankar. Learned counsel further contends that in view of the fact that petitioner has not implemented the terms of the agreement for the welfare and benefit of the workers, 2nd respondent gave representation to the Labour and Conciliation Officer, based on which a show cause notice was issued to the petitioner - company. Despite the show cause notice issued, a frivolous reply was sent by the petitioner and did not comply the demands made therein and thus the petitioner company did not implement the settlement agreement dated 30.9.2019, which is in clear violation of Section 29 of the I.D. Act, which is an offence punishable under the I.D. Act. 4.3 On these grounds, learned counsel for Respondent No.2 sustains the impugned order passed by the Addl. Labour Commissioner. Hence, learned counsel seeks for dismissal of the petition. - 9 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 5. Having heard learned counsels for the parties, the points that would arise for consideration in the present petition are as under: i) Whether the petitioner has entered into settlement agreement with the Respondent No.2 viz., Karnataka Trade Union Centre represented by its President - Mr. G.R. Shivashankar and whether any such agreement is produced before the Court and whether the same is binding on the petitioner ? ii) Whether the settlement agreement entered into by the petitioner and K.C. Das Employees Union would also give the benefit to the other workmen who have enrolled themselves in the Respondent No.2 - Trade Union ? 6. It is not in dispute that petitioner is a company registered under the Company's Act and employees of the petitioner company formed Union in the name of ‘K.C. Das Employees Union’, which is affiliated to AITUC. It is also not in dispute that petitioner and the K.C. Das Employees Union have entered into Memorandum of Settlement dated 5.11.2019 under Section 18(1) of the I.D. Act r/w Rule 59 of the Karnataka Industrial Disputes Rules, 1957. There are several - 10 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 terms and conditions in the said Memorandum of settlement dated 5.11.2019. 7. At this stage, it is relevant to extract Section 18(1), (2) and (3) of the I.D. Act, which read as under: "18. Persons on whom settlements and awards are binding. (1) A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement. (2) Subject to the provisions of sub-section (3), an arbitration award] which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration. (3) A settlement arrived at in the course of conciliation proceedings under this Act 3 or an arbitration award in a case where a notification has been issued under sub-section (3A) of section 10A or an award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on— a) all parties to the industrial dispute; - 11 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause; c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates; d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part." 8. It is seen from the provisions of Section 18 of the I.D. Act that the said section divides settlements and awards into two categories. The first category under Section 18(1) consists of settlements which are arrived at by agreement between the employer and the workmen otherwise than in the course of any conciliation proceedings, which would be binding - 12 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 on parties to the agreement The second category under Section 18(3) consists of settlements which are arrived at in the course of conciliation proceedings under the I.D. Act, which would be binding on all parties to the industrial dispute ; all other parties summoned to appear in the proceedings before the Board, Arbitrator, Labour Court etc. ; where a party is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates; and finally to all persons who are employed in the establishment or part of the establishment and all persons who are subsequently employed in that establishment. 9. In the present case on hand, it is apparently not in dispute that a settlement agreement has been entered into between the petitioner and K.C. Das Employees Union on 5.11.2019 under Section 18(1) of the I.D. Act. Therefore, this settlement agreement entered into by the petitioner and the K.C. Das Employees Union would be applicable and binding to all those workers who are parties to the settlement agreement and not to other workers, who have not entered into the agreement. It is a different matter if the settlement agreement - 13 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 was entered into in the course of the conciliation proceedings under the I.D. Act or under the arbitration award or before the Labour Court, which would have the binding nature to all the workmen of the petitioner even if they are not members of the K.C. Das Employees Union. 10. It is relevant to note that Respondent No.2 relied upon the settlement agreement dated 30.9.2019 alleged to have been entered into by the petitioner and the Respondent No.2 before the Labour Officer. But, the said agreement dated 30.9.2019 has not been produced by Respondent No.2 either before the Labour Court or before this Court. When Respondent No.2 relies upon the settlement agreement to bind the workers who are members of its Union, it becomes the duty of Respondent No.2 or its Workers to produce such settlement agreement to enforce the same or to prove that the same is binding on the members of Respondent No.2 - Union or for that matter other workers and employees who are working with the petitioner. Admittedly, no such document is produced though it is stated in the statement of objections. - 14 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 11. Having heard learned counsels for both parties and having perused the records and the impugned order, Respondent No.2 has not placed on record the settlement agreement alleged to have been entered into by the petitioner and the Respondent No.2 on 30.9.2019. In my opinion, when a settlement agreement is entered into between two parties which would be called as bipartite agreement under Section 18(1) of the I.D. Act, it would certainly bind only the parties to the agreement i.e., petitioner and K.C. Das Employees Union consisting of its members and not others who are not members of the Union, who are affiliated to any other Union. 12. My view is fortified by the judgment of the Hon'ble Supreme Court in the case of General Manager, Security Paper Mill, Hoshanagabad -vs- R.S. Sharma and Others reported in MANU/SC/0326/1986 : (1986)2 SCC 151, wherein it is held at paragraphs 5 and 6 as under: “5. The expression ‘settlement’ is defined in Section 2(p) of the Industrial Disputes Act, 1947. It means a settlement arrived at in the course of conciliation proceeding and also includes a written agreement between employer - 15 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 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 appropriate Government and the Conciliation Officer. A distinction is made in the Industrial Disputes Act, 1947 between a settlement arrived at in the course of conciliation proceeding and a settlement arrived at by agreement between the employer and workmen otherwise than in conciliation proceeding both as regards the procedure to be followed in the two cases and as regards the persons on whom they are binding. Section 12 of the Industrial Disputes Act, 1947 lays down the duties of Conciliation Officer. Under sub-section (1) of Section 12 where any industrial dispute exists or is apprehended, the Conciliation Officer is required to hold conciliation proceedings in the prescribed manner. By sub-section (2) thereof he is charged with the duty of promptly investigating the dispute and all matters affecting the merits and the right settlement thereof for the purpose of bringing about the settlement of the dispute and he is required to do all necessary things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable - 16 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 settlement of the dispute. If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation 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 Memorandum 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 settlement. He has to play the role of an adviser and friend of both the parties and should see that neither party takes undue advantage of the situation. Any settlement arrived at should be a just and fair one. It is on account of this special feature of the settlement sub-section (3) of Section 18 of the Industrial Disputes Act, 1947 provides that a settlement arrived at in the course of conciliation proceeding under that Act shall be binding on (i) all parties to the industrial dispute, (ii) where a party referred to in clause (i) is an employer, his heirs, successors, or assigns in respect of the establishment to which the dispute relates and (iii) where a party referred to in clause (i) is comprised of workmen, all persons who were employed in the - 17 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 establishment or part of the establishment as the case may be to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part. Law thus attaches importance and sanctity to a settlement arrived at in the course of a conciliation proceeding since it carries a presumption that it is just and fair and makes it binding on all the parties as well as the other workmen in the establishment or the part of it to which it relates as stated above. But in the case of a settlement not arrived at in the course of the conciliation proceeding it has to be in writing and signed by the parties in the prescribed manner and a copy thereof should be sent to the officer authorised by the appropriate Government in this behalf and to the Conciliation Officer. Such a settlement arrived at by agreement between the employer and workmen otherwise than in the course of conciliation proceedings is binding only on the parties to the agreement as provided in Section 18(1) of the Industrial Disputes Act, 1947. Such a settlement is not binding on the other workmen who are not parties to the settlement. 6. It is seen from the material placed before us that there were three Unions and there was no - 18 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 evidence to show that the respondents were the members of the SPM Employees Union which had entered into the agreement dated April 11, 1979. Since it is not shown that SPM Employees Union which had entered into the agreement could represent the respondents herein and that the respondents were parties to it, the agreement was not binding on them.” 13. My view is also fortified by the judgment of Coordinate Bench of this Court in the case of The Secretary, Mypower Mazdoor Welfare Union -vs- The Management of Karnataka Power Corporation Limited and others in Writ Petition No.15876 of 2006 (L-RES) decided on 5.2.2016, wherein at paragraph - 9, it is observed as under: 9. A perusal of the decisions cited by the learned counsel for the petitioner-Union will indicate that they are a duplication on the same point rendered by the different High Courts and the Hon'ble Supreme Court. The consolidation of the legal position as enunciated therein is, to construe a settlement as the one contemplated under Section 12 (3) of the I.D. Act so as to make it binding on all other employees and the Unions as provided under Section 18(1) of the - 19 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 Act, it should be one arrived with the assistance of the Conciliation Officer. The bipartite or tripartite settlements entered outside the conciliation proceedings will not have such binding effect. The role of the Conciliation Officer after the issue of notice as contemplated under Rule 10 of the Rules is explained to state that a proactive part is to be taken by the Conciliation Officer to bring about the settlement keeping in view the Charter of Demands of all the parties. The mere filing of the Charter of Demand by itself is not sufficient, but there should be proceedings 22 based on the statements filed. Even the minority Union also will have the right to participate in the conciliation proceedings and the demands raised by them also will require consideration. If such consideration is not made, the failure report is to be submitted under Section 12(4) of the I.D. Act and a reference is to be made for adjudication. If such reference is not made, the minority Union will still have the liberty of raising a dispute. Further, even if the benefits under the settlement are received by the members of such Union, the same will not preclude them from raising the dispute. - 20 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 14. My view is further fortified by the Division Bench Judgment in the case of A. Kari and others -vs- Needle Industries Limited, Ketti, Nilgris and others reported in MANU/TN/1780/2011, wherein High Court of Madras while dealing with Section 18(1) of the I.D. Act, held at paragraphs- 13 and 17 as under: “13. In the present case, the Settlement arrived at was one out side the Conciliation proceedings and it would bind only the parties to the Settlement. The claimants were not the members of the recognised Union and they belong to another Union. The recognised Union entered into 18(1) Settlement and the other Union did not accept the Settlement and pressing over their demand in the Conciliation proceedings, which was in progress. The Union which signed Section 18(1) Settlement was not recognised as the sole Bargaining Agent with exclusive right to represent the workmen. There is neither pleading nor evidence adduced to that effect. Moreover, the other Union is also not a party to the present proceedings. In such circumstances, the contention of the learned Senior Counsel for the Appellant/workmen that Section 18(1) Settlement entered into by the - 21 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 recognised Union as Sole Bargaining Agent and it would bind all workmen, is devoid of merit and liable to be rejected. 17. The last contention of the learned Senior Counsel for the Appellants is that this Court cannot exercise its discretionary jurisdiction under Article 226 of the Constitution of India in a case where substantial justice is being done. In support of his submission, the learned senior counsel also relied on the decisions of the Supreme Court. None of those decisions deal with the jurisdiction of the Labour Court from which the impugned order emanates. The claimants were not parties to the Settlement under Section 18(1) of the Act and in the absence of any existing right, claim under Section 33-C (2) of the Act cannot be legally sustained and the Order granting relief to them suffers from lack of jurisdiction; error apparent on the face of the record and hence, liable to be set aside.” 15. Having heard the learned counsel for the parties, I do not find any good ground or cogent reason to sustain the impugned order, as it is in gross violation of the provisions of the I.D. Act, particularly the impugned order is not in consonance with Section 18(1) of the I.D. Act and also in violation of Section 12 of the Act. The points raised in the present writ petition are answered accordingly. - 22 - HC-KAR NC: 2025:KHC:36275 WP No. 7332 of 2022 16. In view of the above, I pass the following: ORDER i. This petition is allowed; ii. The impugned order dated 18.03.2022 passed in No.IAA-1/CR-59/2021-22 by respondent No.1 under Section 29 of the Act, is hereby set aside and quashed. Ordered accordingly, Sd/- (PRADEEP SINGH YERUR) JUDGE paras 1 to 3..CPN 4 to end GSS List No.: 1 Sl No.: 26