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Monday, January 12, 2015

cancelling the Registration Certificate of the Poona Employees Union- =CIVIL APPEAL NO. 10129 OF 2010 R.G.D’SOUZA ………APPELLANT Vs. POONA EMPLOYEES UNION & ANR. ………RESPONDENTS

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                       CIVIL APPEAL NO. 10129 OF 2010

R.G.D’SOUZA                  ………APPELLANT



                               J U D G M E N T


 The appellant has filed this appeal  questioning  the  correctness  of  the
Judgment and order dated 25.2.2009 passed in W.P. No.4048  of  2008  by  the
Division Bench of High Court of Judicature at Bombay affirming the order  of
Industrial Court, Pune dated 11.04.2008 whereby  the  Industrial  Court  set
aside  the  order  of  Additional  Registrar,  cancelling  the  Registration
Certificate of the Poona Employees Union-the  respondent  No.1  (hereinafter
referred  to  as  the  Trade  Union),  urging  various   facts   and   legal
The factual matrix and  the  rival  legal  contentions  are  briefly  stated
hereunder with a view to find out as to whether the  impugned  Judgment  and
order warrants interference by this Court under its appellate jurisdiction.
The  appellant  was  the  Union  President  of  the  Trade  Union  when  the
application for the Registration  of  it  was  submitted.  Due  to  internal
clashes, he was expelled from the Trade  Union.  There  were  some  disputes
between the Trade Union and  another  Union  namely,  Bhartiya  Kamgar  Sena
(“BKS” for  short)  pending  before  the  Industrial  Court.  The  appellant
claimed that he  was  an  active  member  in  the  Labour  movement  and  an
interested party and therefore, filed an application  under  Section  10  of
the Trade Unions Act, 1926 (for  short  “the  Act”)  before  the  Additional
Registrar of  Trade  Unions  seeking  cancellation  of  the  Certificate  of
Registration of the Trade Union on the ground that the same was obtained  by
fraud, mistake or misrepresentation.
The ground taken for cancellation of the registration  of  the  Trade  Union
was non-filing of the necessary documents as per the  Rules  and  Regulation
and obtained  Registration  Certificate  by  mistake  and  fraud  which  was
accepted by the Additional Registrar of the  Trade  Unions.  The  Additional
Registrar of Trade  Unions  by  his  order  dated  12.2.2008  cancelled  the
registration of the Trade Union.
3. Being aggrieved by the said order, the Trade Union filed an appeal  under
Section 11 of the Act before  the  Industrial  Court,  Pune,  the  Appellate
Authority. After hearing  both  the  parties,  the  Industrial  Court,  Pune
passed an order on 11.4.2008, by recording its reasons, set aside the  order
passed by the Additional Registrar of Trade Unions.
4. Being aggrieved  by  the  order  passed  by  the  Industrial  Court,  the
appellant preferred writ petition No. 4048 of 2008 before the High Court  of
Bombay under Article  226  of  the  Constitution  of  India  urging  various
grounds, inter alia contending that  the  order  passed  by  the  Industrial
Court is vitiated both on the grounds of  erroneous  finding  and  error  in
law. The High Court came out with the following two issues involved  in  the
 Whether the appellant had locus standi  to  invoke  the  proceedings  under
Section 10 of the Trade Unions Act, 1926?
 Whether the Registration Certificate obtained by fraud or  mistake  by  the
first respondent-Trade Union and so liable to be cancelled?
5. The High Court rejected the submissions made on behalf of  the  appellant
and held that the appellant had no locus to apply for  cancellation  of  the
Certificate of Registration of the Trade Union and that the  view  taken  by
the Industrial Court on the same is legal and valid.
6. Mr. C. U. Singh, the learned senior counsel on behalf  of  the  appellant
has argued that the Industrial Court completely mixed up  the  issues  while
answering the questions of law raised before it. It is urged by him that  at
the time of applying for the registration, the Trade Union  did  not  follow
the provisions under Sections 4 and 6 of the Act. The Trade Union  ought  to
have specifically mentioned the name/names of any  establishment  or  nature
of any industry/industries in which the persons employed were to  be  united
or combined. In the absence of mentioning the  name  of  industry  and  non-
inclusion of the same in the schedule in the application in  the  prescribed
form is a gross mistake on the part of the Trade Union.  Our  attention  was
also drawn to the application  submitted  by  the  Trade  Union  before  the
Registrar of Trade Unions for its registration. Further, the learned  senior
counsel urged on the point of requirement of specific mention of the  object
or purpose in the  application  for  registration  by  the  Trade  Union  by
relying upon Indian Express Newspapers (Bom) Employees Union v.  K.M.  Desai
& Ors.[1] and  Maharashtra  Engg.  Plastic  &  General  Kamgar  v.  Chamundi
Petroleum & Ors.[2] in support of his case.
7. It is also contented by the learned senior counsel that the  registration
was obtained by mistake or fraud by the Trade Union and  the  same  was  not
examined by either the Industrial Court or the High Court.
8. He further contended that the details of the office bearers of the  Trade
Union were not given in the Schedule-I of the list of officers  as  per  the
prescribed Form ‘A’,  relevant  column  5,  under  Section  5(1)(c)  of  the
Central Trade  Union  Regulations,  1938.  In  support  of  the  said  legal
contention he has placed reliance upon the decision of this Court in  Forbes
Forbes Campbell & Co. Ltd. v. Engineering  Mazdoor  Sabha[3],  wherein  with
regard to recognition of a Trade Union this Court held that  filing  in  the
form by furnishing details is mandatory, and that  form  and  rule  must  be
read in tandem. It was contended that the said decision with  all  fours  is
applicable in justification of cancellation of Registration Certificate.

9. It was further contended by the learned senior counsel for the  appellant
that the High Court has erred in law in interpreting  the  phrase  ‘mistake’
occurred under Section 10(b) of the Act stating that the legislative  wisdom
which excludes an act of mistake the power of review  can  be  exercised  by
the Registrar  of  Trade  Unions  and  the  order  of  cancellation  of  its
Certificate of Registration can be made, but the High Court has  erroneously
held that registration cannot be cancelled by the Registrar in  exercise  of
the power by him under Section 10 of the Act.
10. Further,  the  learned  senior  counsel  placing  strong  reliance  upon
Section 4 of the Act, pointed out that the Amendment in view  of  the  first
proviso to Section 4 of the Act, which  mandates  that  no  Trade  Union  of
workmen shall be registered unless at least ten percent or  one  hundred  of
the workmen whichever is less, engaged or employed in the  establishment  or
industry with which it is connected are the members of such Trade Union,  on
the date of making of  application  for  registration.  The  second  proviso
states that no Trade Union of workmen shall be registered unless it  has  on
the date of making application not less than seven persons as  its  members,
who are the workmen engaged or employed in  the  establishment  or  industry
with which it is  connected.  Such  requirement  under  Section  4  and  its
proviso is a statutory legal requirement for either registered  Trade  Union
or continues as a registered Trade Union even after  the  amendment  to  the
Act by bringing an Amendment to its constitution is  the  legal  requirement
in accordance with the aforesaid provisos. Therefore, he contends that  non-
compliance of the said legal requirement by the Trade Union even  after  the
amendment to the Act has invited the cancellation of its registration.  This
cancellation was done in the instant case by the Registrar of  Trade  Unions
at the instance of the appellant. Since the same was not considered  by  the
High Court, the impugned judgment and order is liable to be set aside.
11. On the other hand, Mr. Colin Gonsalves, the learned  senior  counsel  on
behalf of Trade Union, sought to justify the  impugned  Judgment  and  order
passed by the High Court by affirming the Judgment of the  Industrial  Court
by placing strong reliance upon the fact  that  the  Trade  Union  has  been
actively working for the welfare of labourers since  1986.  Cancellation  of
the Registration Certificate  by  the  Registrar  of  Trade  Unions  at  the
instance of the appellant is totally impermissible under Section 10  of  the
Act. As per Section 10(a) of the Act, the  Registrar  of  Trade  Unions  can
take cognizance of the cancellation on application by a Trade Union and  not
that of an individual. It was contended that  the  appellant  had  no  locus
standi under  Section  10(a)  of  the  Act  to  challenge  the  Registration
Certificate issued by the Additional Registrar of Trade Unions. It  is  also
urged by him that as per Section 10(a) of the Act the mistake  ought  to  be
on the part  of  the  applicant  and  could  not  be  on  the  part  of  the
Registering Authority in support of the said contention and legal  position,
the learned senior counsel has relied upon the judgment  of  Karnataka  High
Court in the case of Registrar, Trade Unions,  Mysore  v.  M.  Mariswamy[4],
wherein the Court held as under:-
“Index Note: (A) Trade Unions  Act  (1926),  Section  10(b)-  Withdrawal  or
cancellation of registration on ground of ‘mistake must  have  been  on  the
part of the applicant Union and not on the part of  the  Registrar  himself-
withdrawal or cancellation cannot be made for the mistake of  the  Registrar

12. On the point of disclosure of the object,  the  learned  senior  counsel
placed  reliance  on  B.P.L.  Group  of  Companies   Karmikara   Sangha   v.
Commissioner of Labour[5] in  support  of  the  submission  made  as  stated
13. Learned senior counsel appearing on behalf of the  Trade  Union  further
justified the impugned judgment on  three  grounds.  The  authorisation  and
approval of the registration of the Trade Union was made  by  the  Registrar
of Trade Unions. In the absence  of  prohibition  or  prevention  under  the
Statute from being a general Trade Union, non-furnishing  the  name  of  the
industry or industries under Schedule III in the relevant column Sl.  No.  5
of the application form it is specifically mentioned  “any”  industry  means
“all”, the object of registration of the Trade Union further  fortifies  the
stand taken by the Trade Union that it is a general Trade  Union,  where  it
is empowered to have enrolment of workmen from all the industries which  are
situated  within  the  Pune  District.  Non-furnishing  the  name   of   the
industries in respect of which the Trade Union has been registered does  not
vitiate its registration in law.  Therefore,  non-furnishing  the  names  of
industries in the Schedule III portion to the application in the  prescribed
form is only  superfluous  and  making  a  big  issue  in  this  regard  for
justification for the cancellation of Certificate  of  Registration  of  the
Trade Union is wholly untenable in  law.  Non-furnishing  of  the  names  of
industries in Schedule III to the application due to inadvertence cannot  be
attributed as fraud or mistake on the part of the Trade  Union  to  get  its
registration with the Registrar of Trade  Unions  and  cancellation  of  the
same is not permissible in law. It is not the form,  but  the  substance  of
the matter and substantial compliance of the details that are  furnished  in
the prescribed form ‘A’ by the Trade Union that matters, this has been  done
in the case on hand by the Trade Union and therefore, the impugned  Judgment
& order passed by the High Court is legal and valid.  Further,  in  response
to the reliance  placed  upon  the  two  judgments  namely,  Indian  Express
Newspapers  (Bom)  Employees  Union  (supra)  and  Chamundi  Petroleum  Case
(supra) by senior counsel for the appellants,  the  learned  senior  counsel
for the Trade  Union  submitted  that  they  are  distinguishable  from  the
present case on hand. In the Indian Express  Newspapers  case  (supra),  the
constitution  of  the  respondent-Trade  Union  which  consisted   of   both
journalists and non-journalists working in  the  respondent-company  (Indian
Express) only mentioned  the  objects  of  the  union  in  Schedule  ‘A’  as
“printing press” and did not bear an entry of  the  newspaper  establishment
or a newspaper industry. It was held in that case that the  Constitution  of
the respondent-Trade Union did not permit it to enrol journalists  and  non-
journalists  employed  by  the  respondent-Company  and  that  a   newspaper
industry  cannot  be  equated  with  the  “printing   press”   industry   as
publication of newspaper and periodical involves  many  more  functions.  In
the case of Chamundi Petroleum (supra) the constitution of the  Trade  Union
did not say that it is in relation to workmen of working  in  petrol  pumps.
Therefore, the reliance placed upon  the  aforesaid  two  judgments  by  the
senior  counsel  on  behalf  of  the  appellant  to  justify  the  order  of
cancellation of the Registration of the Trade Union are wholly untenable  in
law as these cases do not apply to the facts and circumstances of  the  case
on hand as both the cases are distinguishable.
14. We have heard both the learned senior counsels for  the  parties.  After
examining the correctness of the legal contentions,  we  are  in  respectful
agreement with the concurrent finding  and  reasons  recorded  by  the  High
Court as well as the Industrial Court for the following reasons.
15. As per Section 10 of the Act,  the  Certificate  of  Registration  of  a
Trade Union may be withdrawn or cancelled by the Registrar  of  Trade  Union
either on application of  a  Trade  Union  inviting  the  attention  of  the
Registrar of Trade Unions or the Registrar  may  suo  moto  take  cognizance
under the said section. There is no mention  in  the  said  provision  about
cancellation of Registration of Trade Union  on  application  by  any  other
person. The said section permits the Authority to  cancel  the  registration
of the trade union if, it is obtained by fraud  or  mistake,  but  does  not
permit the Authority to cancel the certificate of registration if, the  same
is granted by mistake due to  incorrect  assessment  or  non-application  of
mind or mechanical act on the part of the Authority.

16. Even for the sake of argument, it is accepted by us that the mistake  is
on the part of the Trade Union and in the opinion of the Registrar of  Trade
Unions in exercise of his powers under Section 10 of  the  Act  cancels  the
Certification of Registration of the Trade Union, then it must  be  preceded
by an enquiry,  followed  by  show  cause  notice,  disclosing  grounds  for
initiating action so that the same can be  answered  by  the  noticee  Union
effectively. This was not done in the present case on hand and the same  has
been rightly held by the High Court. Further Rule 8(2) of the  Bombay  Trade
Union Regulations 1927 clearly states that:-

“2)  The  Registrar  on  receiving  an   application   for   withdrawal   or
cancellation of registration shall, before granting the application,  verify
himself that the application was approved in general meeting  of  the  Trade
Union if it was not so approved, that it has the approval  of  the  majority
members of the Trade Union. For this purpose, the  Registrar  may  call  for
such further particulars as he  may  deem  necessary  and  may  examine  any
officer of the Union.”

      The above said rule was not fully complied with by  the  Registrar  of
Trade Unions and the appellant has not submitted any approval granted  by  a
general body meeting or by majority of the Trade Union  for  the  withdrawal
or cancellation of the registration of the Trade Union. The act of fraud  or
mistake cannot be attributed  to  the  Trade  Union  since  the  information
provided by the Trade Union for  registering  itself  is  not  by  fraud  or
mistake as mandated under Section 10 of the Act.

17. With respect to the provisions of Sections 4, 5, and  6  of  the  Act  &
Rules, which provide for furnishing the details in  the  application  to  be
submitted for registration of the Trade Union. The above said provisions  of
the sections clearly state that they must be complied with for the applying-
Union to be entitled for registration. However,  it  is  essential  to  note
that the 1st proviso of Section 4; clause (aa), (b) and  (c)  of  Section  5
and clause (ee) & (hh) of Section 6 were inserted to the  Act  only  by  the
Amendment Act of 31 of 2001, w.e.f. 09.01.2002, whereas the Trade Union  was
registered in the year 1986 when part of the above said provisions were  not
present. Therefore, in the present case on hand, although it  was  necessary
for the Trade Union to comply with and provide  all  the  necessary  details
under  the  above  said  provisions  that  were  relevant  at  the  time  of
registration,  the  Registrar  either  by  mistake  or  due   to   incorrect
assessment or non-application of mind  may  have  issued  a  Certificate  of
Registration to the Trade Union. This  official  act  by  the  Registrar  of
Trade Unions cannot be nullified by him under Section 10  of  the  Act,  but
can only be rectified by the appellate authority or writ  court  as  rightly
opined by the High Court in the impugned judgment.

18. In our considered view, the High Court has correctly held that the  word
“any” in the application form  and  the  Rules  of  the  Trade  Union  under
Section 6 of the Act can be considered as “all”. The High Court has  rightly
held that the word “any” could mean that the object the Trade Union  was  to
operate in all types of  industries  in  Pune  District.  The  necessity  of
specifying or disclosing the nature  of  industry/industries  in  which  the
Trade Union intends to operate and functions came only when  the  Section  2
of the amendment Act of 31 of 2001 (w.e.f. 9.1.2002)  was  inserted  in  the
Trade Unions Act, 1926, whereas the Trade Union was registered in  the  year
1986. The requirement of workmen engaged in  an  establishment  or  industry
with which it is connected to be members of the Trade Union came only  after
Section 4 was amended and the provisos were  incorporated  which  came  into
force w.e.f. 09.01.2002, which is much after the registration of  the  Trade
Union. The first part of the proviso mandated that a Trade Union  must  have
at least ten percent or one  hundred  workmen  engaged  or  employed  in  an
establishment or industry who are members of such Trade Union  on  the  date
of making the application for registration. The second part of  the  proviso
mandated  that  a  Trade  Union  on  the  date  of  making  application  for
registration must have not less than seven persons as its  members  who  are
engaged or employed in the  establishment  or  industry  with  which  it  is
connected. This requirement was not needed at the time  of  registration  of
the Trade Union as the above said  amendment  to  the  Act  came  after  the
registration of the same. From the facts and circumstances of  the  case  on
hand, the Trade Union has neither suppressed nor  supplied  any  information
by fraud or mistake in order to  obtain  the  Certificate  of  Registration.
Therefore, discrepancy in providing  details  in  the  prescribed  Form  ‘A’
being a product of the above Amendment Act cannot invalidate  or  is  not  a
valid ground to cancel the Certificate of Registration of  the  Trade  Union
and the decision of this  Court  in  the  case  of  Forbes  Forbes  Campbell
(supra) as relied on by the learned senior counsel for the appellant is  not
relevant in the case on hand.

19. In the light of the above discussion and reasons assigned by us, we  are
of the considered  view  that  the  High  Court  has  rightly  affirmed  the
decision of the Industrial Court, wherein  it  has  rightly  set  aside  the
cancellation of Certificate of Registration of the Trade Union holding  that
it is not legal or valid. We find no valid or cogent  reasons  to  interfere
with the same in  exercise  of  this  Court’s  Appellate  Jurisdiction.  The
appeal is dismissed. No costs.

……………………………………………………………J.                 [V. GOPALA GOWDA]

……………………………………………………………J.[C. NAGAPPAN]

New Delhi,                                  November 18, 2014
[1]    1995 I CLR 677
[2]    2007 1 CLR 810
[3]    (1979) 1 SCC 14
[4]     1974 LAB I.C. 695
[5]    2001 91 L.L.N. 599


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