Section 10 of Trade Unions Act

In this age of extensive industrialisation and commercialisation, trade unions play a very important role in determining and safeguarding the nature of the intricacies and complexities of various working relationships, in particular, the employer-employee relationship. In a layman's parlance, a trade union refers to an association formed primarily for the purpose of regulating the relations between workmen and employers, or between workmen and workmen, or between employers and employers.

The history of labour legislation in India is naturally interwoven with the history of British colonialism. Considerations of British political economy were naturally paramount in shaping some of these early laws. In the beginning it was difficult to get enough regular Indian workers to run British establishments and hence laws for indenturing workers became necessary. To date, India has ratified 39 International Labour Organisation (ILO) conventions of which 37 are in force. Of the ILO’s eight fundamental conventions, India has ratified four – Forced Labour 1930, Abolition of Forced Labour 1957, Equal Remuneration 1951, and Discrimination (employment and occupation) 1958.

The concept of trade unionism stemmed from the growth of industrialisation and capitalism. India, being essentially an agricultural country, the growth of trade unionism was slow and gradual. However, the establishment of the International Labour Organisation in 1919 largely initialised the growth of trade unions in India. The constitution of the All India Trade Union Congress in 1920, also acted as a catalyst for the growth of trade unionism in India. It was, however, the Trade Unions Act, 1926, which facilitated legislative recognition to the workers' right to organise trade unions.

Freedom of association has been the corner stone of society. This freedom finds its expression in a democratic form of government. Trade unionism has been a movement launched against the concentration of economic power in the hands of a few individuals of society and for the purpose of promoting the welfare of working class. Trade union movement is not confined to the premises of one nation or country but it has widened to the international field as well.

In addition to giving a legal status to the registered trade unions, the registration confers on trade unions and their members a measure of immunity from civil suits and criminal prosecutions. Registration also enhances the status of unions in the eyes of the public as well as the employers and in this process, even unregistered unions benefited, and the movement as a whole gained greater confidence of the workers. [1] 

The Trade Unions Act, 1926, covers mainly three sets of matters, namely, the conditions governing registration of trade unions, the obligation to which a trade union is subjected after registration and the rights and privileges accorded to registered unions.

The right to form and continue a trade union is a fundamental right guaranteed under Article 19 (1) (c) of the Constitution of India [2] , which may only be subjected to reasonable restrictions in the public interest as provided under Art. 19(1)(6) of the Constitution. Provision is also made in the Indian Trade Unions Act, 1926 for providing them immunities from criminal prosecution in certain circumstances, which further ensure the safe conduct of the trade unions. Under the various laws, the trade unions are required to get themselves registered for certain purposes. Every trade union is required to register itself under the Trade Unions Act in order to operate as a trade union.

SCOPE OF SECTION 10

Section 10 - Cancellation of registration: A certificate of registration of a Trade Union may be withdrawn or cancelled by the Registrar

(a) On the application of the Trade Union to be verified in such manner as may be prescribed;

(b) If the Registrar is satisfied that the certificate has been obtained by fraud or mistake or that the Trade Union has ceased to exist or has wilfully and after notice from the Registrar contravened any provision of this Act or allowed any rule to continue in force which is inconsistent with any such provision or has rescinded any rule providing for any matter provision for which is required by section 6;

(c) If the Registrar is satisfied that a registered Trade Union of workmen ceases to have the requisite number of members.

Provided that not less than two months' previous notice in writing specifying the ground on which it is proposed to withdraw or cancel the certificate shall be given by the Registrar to the Trade Union before the certificate is withdrawn or cancelled otherwise than on the application of the Trade Union.

Section 10 deals with the cancellation of registration of a trade union. Several grounds have been enumerated under section 10 under which the registration of a trade union may be cancelled. Clause (c) was inserted by the Amending Act of 2001 to ensure that a trade union represented a minimum number of workers as stated in Section 4 of the Trade Unions Act (ten percent or hundred workmen whichever is less, the number of members being at least seven). This was done to insure that any registered trade union represented a substantial number of the workmen in the establishment or the industry with which it is connected and that the same industry or establishment did not have too many trade unions.

A mistake on the part of the applicant trade union and not the Registrar is a ground for withdrawal or cancellation of registration [3] . Section 10 applies not only when the certificate of registration has been obtained by fraud or mistake; but also when the registration itself has been obtained by fraud or mistake. The relief for quashing the registration falls within section 10. In case of amalgamation of two unions and the change of name, an order as to relief against the change of name falls under section 10. [4] Withdrawal or cancellation of registration must be preceded by an appropriate notice and a sufficient opportunity to show cause against the proposed action. [5] The registrar is not competent to cancel registration of a Trade Union, without in the first instance giving the requisite notice and giving an opportunity to the trade union to show cause against the proposed action. Where the Registrar cancelled the registration of a trade union immediately on expiry of the period in his notice, within which the trade union was called upon to hold a meeting of the general body without giving a further notice to show cause against proposed cancellation, the order of cancellation was bad in law for non-compliance of mandatory provision. [6] A prior notice apart from the one for the proposed cancellation or withdrawal of certificate of registration as contemplated under the proviso to section 10 has to be given by the Registrar in case where there is any allegation of contravention of any of the provisions of the Act. In the absence of such a previous notice, the proceedings for cancellation or withdrawal of registration would become illegal and without jurisdiction. [7] Regulation 6 of the Central Trade Union Regulations provides that the Registrar should satisfy himself that the withdrawal or cancellation of registration has been approved by the general meeting of the trade union or has the approval of the majority of the members.

An appeal against the order of the Registrar cancelling the registration of a trade union can be made before the designated court within such period as may be prescribed. The words ‘person aggrieved’ used in the section includes a trade union, registration of which is cancelled by the Registrar and hence a trade union can file an appeal under the section against the order of cancellation. The appellate authority cannot sustain the order of cancellation of registration of trade union on grounds on which the order of cancellation itself does not rest. A rival trade union has no locus standi to oppose the registration of another union. An appeal against an order of the Registrar should be filed on the original side of the High Court.

CASES DEALING WITH SECTION 10

1. R.G. D'Souza Shramadeep Housing Society (Appellants) v Poona Employees Union and Ors (Respondents) [8] 

THE HIGH COURT OF BOMBAY

Hon'ble Judges: V.C. Daga and Mridula Bhatkar, JJ.

FACTS

Petitioner was the Unit President of the Respondent No. 1 Trade Union when the application for the Registration Certificate of Respondent No. 1 Union was made. However, the Petitioner, due to internal clashes, was expelled from the Respondent No. 1 Union. There were some disputes between the Respondent No. 1 and one other Union namely Bhartiya Kamgar Sena (BKS) pending before the Industrial Court. The Petitioner being the active member in the labour movement and interested party, filed an application under Section 10 of the Trade Unions Act, 1926 (Amended Act- 2001) before the second Respondent i.e. the Additional Registrar, Trade Union seeking cancellation of the registration of the Respondent No. 1 - Union on the ground that the same was obtained by fraud, mistake or misrepresentation.

CASE HISTORY

The Petitioner has challenged the Order dated 11th April 2008, passed by the Industrial Court, Pune by which it set aside the order of the Additional Registrar cancelling the Registration Certificate of the Respondent No. 1 - the Trade Union.

ADDITIONAL REGISTRAR

By Order dated 12th February 2008, the said matter was decided in favour of the Petitioner by the Additional Registrar of Trade Union and it was held that the registration of the Respondent Union was illegal.

INDUSTRIAL COURT, PUNE

An appeal under section 11 was filed before the Industrial Court. Non filing of the necessary documents as per the rules and obtaining Registration Certificate by mistake and fraud were the main grounds of challenge. The Industrial Court after hearing both the parties, gave verdict on 11th April 2008, and set aside and quashed the Order passed by the Additional Registrar of Trade Union. Petitioner, thereafter, being aggrieved with the said Judgment and Order preferred a Writ Petition in the High Court under Article 226 of the Constitution of India.

ISSUES

(a) Whether the Petitioner has locus standi to invoke the proceedings under Section 10 of the Trade Unions Act, 1926 or not?

(b) Whether the Registration Certificate has been obtained by fraud or mistake by the Trade Union and so liable to be cancelled?

CONTENTION BY PETITIONER

Learned Advocate of the Petitioner has submitted that the Order passed by the Industrial Court is bad and illegal. That the Industrial Court has completely mixed up the issues while answering the questions of Law raised by him. It was argued that at the time of applying for the registration, the Union did not follow the rules under Sections 4 and 6 of the Trade Unions Act (Section 4 deals with the mode of registration and lays down that any seven or more members of a Trade Union may, by subscribing their names to the rules of the Trade Union and by otherwise complying with the provisions of this Act with respect to registration, apply for registration of the Trade Union under this Act while Section 6 deals with the provisions to be contained in the rules of a Trade Union and lays down that amongst other things the whole of the objects for which the Trade Union has been established will have to be disclosed by the Union). The Respondent Union ought to have specifically mentioned the name of any establishment or nature of any industry in which the persons employed were to be united or combined. The absence of indication of industry and non-inclusion of the schedule is a gross mistake on the part of the Union. Our attention was drawn to the copies of the application for registration submitted by the Union at the time of registration. The Advocate for the Petitioner, on the point of requirement of specific mention of the object or purpose in the application for registration by the Trade Union, relied on the ruling of the Division Bench of the Bombay High Court in Indian Express Newspapers (Bom) Employees Union v. K.M. Desai and Ors. [9] Learned Advocate has argued that the Industrial Court ought not to have set aside the order of cancellation of the Registration Certificate passed by the Additional Registrar as it was obtained by fraud and mistake.

CONTENTION BY RESPONDENT

Learned Advocate for the trade union, in reply, has submitted that the Union is actively working for the well being of the labourers since 1986. It was argued that the cancellation of Registration Certificate is provided under Section 10 of the Trade Unions Act. That as per Section 10 (a), cognizance of cancellation can be taken by the Registrar, on application, not of the individual, but that of the trade union. Hence, the locus of the Petitioner under Section 10 (a) is challenged. While countering the arguments on the point of obtaining Registration Certificate by mistake, it was urged that as per Section 10 (a), the mistake ought to be on the part of the applicant and could not be on the part of the registering authority. She relied on the ruling of Karnataka High Court in Registrar, Trade Unions, Mysore v. M. Mariswamy [10] in support of the submission, wherein the court held that under section 10 (b) the mistake must have been on the part of the applicant Union and not on the part of the Registrar himself or in other words the withdrawal or cancellation cannot be made for the mistake of the Registrar himself. On the point of disclosure of the object, reliance was placed on B.P.L. Group of Companies Karmikara Sangha v. Commissioner of Labour [11] to support the submission made.

JUDGMENT

The court held that Section 10 (a) specifically mentions about "on application of the Trade Union" and it does not speak about "on application of the individual". An individual may submit an application under Section 10 (a) of the Act to invite the attention of the Registrar of Trade Union. The Registrar, thereafter, can suo motu take cognizance under Section 10 of the Trade Unions Act, 1926. The court further observed that Section 10 (a) needs to be read along with Section 10 (b), which speaks about the satisfaction of the Registrar about validity of the Certificate. When Registrar forms an opinion to exercise suo motu powers, it must be preceded by an enquiry, may be preliminary in nature. He has to record prima facie reasons for his satisfaction before initiating action of cancellation of registration of the Union followed by show cause notice disclosing grounds for actions so that the same can be effectively answered by the noticee Union. The court held that no such course of action was adopted by the Registrar of the Trade Unions in this behalf and as such it is not possible to hold that the action was initiated and taken by the Registrar. Thus, the court held that the Petitioner has no locus to apply for cancellation of the registration of the Respondent Union and that the view taken by the Industrial Court on this count was legal and reasonable.

The court further held that Registrar while considering application for registration is expected not to act mechanically or like a stamp machine. Registrar can refuse to grant Registration Certificate, if information is found to be not as per the legal requirements. As per Section 10, the act of mistake is attributable to the Trade Union applying for registration and not to the Registrar, who is an authority to register the Trade Union. It mandates that there should be a fraud or mistake in the information given or facts presented or details furnished by the applicant Trade Union. The court observed that an official act done in official capacity is presumed to be legal and valid and the said act cannot again be nullified by the second decision of the Registrar, who has no power of review under the Act. Thus, only the act of obtaining the Registration Certificate by fraud or mistake, that too, by the person applying for registration, could only be a reason or ground for cancellation of registration of the Trade Union under Section 10 of the Act.

The court further took into account that in the year 1986, when the Respondent Trade Union was registered, it was not necessary to specify or disclose the nature of industry in which it intended to operate. This requirement became a part of the statute for the first time when Section 4 was amended and two provisos were incorporated in the section. The court also held that Form 'A' which is prescribed for making application is a product of subordinate legislation. It cannot override the provisions of the Act as such any discrepancy while giving details in the prescribed form cannot invalidate the registration of the Trade Union and hence the Union cannot be said to have suppressed any information nor to have furnished wrong or misleading information for obtaining registration and as such its registration could not have been cancelled by the Registrar of the Trade Unions.

Hence, the court dismissed the Petition with no order as to costs.

2. Tata Workers' Union and Ors. (Appellants) v State of Jharkhand and Ors. (Respondents) [12] 

THE HIGH COURT OF JHARKHAND

Hon'ble Judges: S.J. Mukhopadhaya, J.

CASE HISTORY

REGISTRAR

This writ petition was preferred by petitioner, Tata Workers' union and others against an order dated 4th February, 2005 issued by the Registrar, Trade Union-cum-Commissioner on a complaint of one S.N. Singh. By impugned order, the Registrar while holding that the election of other bearers was not in accordance with law, refused to register the newly elected members of the Executive Committee. Direction was also given to take steps for fresh election of the members of Executive Committee and to make interim arrangement. After the aforesaid order, the Registrar, Trade Union issued another order dated 6th May, 2005 under Section 10 (b) of Trade Union Act, 1926 and the registration of the Trade Union, in question, was cancelled. A Bench of this Court vide its order dated 9th August, 2005 while did not choose to decide the issues on merit, gave liberty to the Trade Union to prefer appeal before the competent Court/ Tribunal.

In the present case, certain interim order was passed against which the respondent moved before the Supreme Court by preferring a SLP. In the meantime, the registration of the Trade Union having been cancelled, the Supreme Court held that the said Special Leave Petition has become infructuous and hence it was dismissed.

ISSUE

Whether the Registrar of Trade Union has Jurisdiction to give any direction in respect of a de-recognized Trade Union?

CONTENTION OF THE RESPONDENT

Learned counsel for respondent submitted that the writ petition has become infructuous as the registration of the Trade Union has subsequently been cancelled.

CONTENTION OF THE PETITIONER

Counsel for the petitioner submitted that the issue, as raised in the present case, still subsists, as persons are acting on the basis of impugned order dated 4th February, 2005.

JUDGMENT

The court rejected the submission of the Petitioner and held that this cannot be accepted in view of the fact that the registration of the Trade Union has been cancelled. The court further held that once the registration of the Trade Union has been cancelled and it has been de-recognized, the Registrar of Trade Union has no jurisdiction to give any direction in respect to such de-recognized Trade Union. After the de-recognizing of Trade Union, the Order dated 4th February, 2005 cannot be acted upon either for the purpose of election or for the purpose of interim arrangement. The court held that since the said Order dated 4th February, 2005 has lost its force; this writ petition has become infructuous and thus vacated the interim order passed on 23rd February, 2005.

Hence, the court dismissed the writ petition on the ground of it being infructuous.

3. Coromandal Cement Factory Employees Union (Appellants) v Deputy Registrar of Trade Union and Deputy Commissioner of Labour, Kurnool and others (Respondents) [13] 

THE HIGH COURT OF ANDHRA PRADESH

Hon'ble Judges: E. Dharma Rao, J.

FACTS

The petitioner (Union) was registered and a certificate was issued by the Registrar. Thereafter, the Commissioner of Labour, Andhra Pradesh, Hyderabad recognized the petitioner as a representative Union since it had secured majority of votes in the secret ballot election held on 23-6-1988. The petitioner had been submitting the returns in Form-E every year without fail. For the year 1990 also the petitioner has submitted the annual returns before 30-4-1991 in duplicate in Form-E. But, the deputy registrar issued notice to the petitioner expressing the intention of cancellation of registration of the petitioner for its failure to submit the annual returns for the calendar year 1990. The petitioner denied the receipt of the said notice sent by the respondent on 7-3-1992. The notice issued by the respondent was a general notice issued to the General Secretaries of all Trade Unions in Kurnool region.

CASE HISTORY

DEPUTY REGISTRAR

In view of the failure of the petitioner to submit explanation to the notice, the respondent passed order cancelling the registration of the petitioner. Assailing the correctness of this order of the respondent, the petitioner filed a Writ Petition on the ground that the order of the deputy registrar was illegal, arbitrary and violative of the principles of natural justice.

ISSUE

Whether the order passed by the Deputy Registrar was contrary to the provisions of Section 10 of the Act and offending the principles of natural justice?

CONTENTION OF THE PETITIONER

The counsel for the petitioner contended that as per Section 31 of the Trade Unions Act, 1926, the respondent can impose a fine of Rs.5. for continued default with additional fine which may extend to Rs.5. However, the aggregate fine shall not exceed Rs.50. It is further contended that under Section 10 of the Act, before cancelling the registration, the respondent has to give a notice for showing cause for not submitting the returns. Thereafter, before cancelling the registration, a second notice has to be given. But the deputy registrar, without giving a second notice, cancelled the registration of the petitioner. Therefore, the impugned order passed by the respondent is bad in law. It was further submitted by the counsel for the petitioner that before cancelling the registration under Section 10 of the Act, the respondent has not given any opportunity to the petitioner and, therefore, the impugned order violates the principles of natural justice. learned Counsel for the petitioner relied on a judgment of the Mysore High Court in Mysore Iron and Steel Works, Labourers' Association v. Commissioner of Labour and Registrar of Trade Unions, Bangalore [14] wherein it was held that “It is clear from Section 10 of the Act before the Registrar can take any action to cancel the registration on the ground that the Trade Union has wilfully and after notice from the Registrar contravened any provision of the Act, a notice has to be given by the Registrar of a duration of not less than two months specifying the ground on which it is proposed to cancel the registration. The object of giving a notice under the proviso to Section 10 is obviously to give an opportunity to the trade union to show-cause against the proposed action."

He also relied on a judgment of the Bombay High Court in Tata Electric Companies Officer Guild v. Registrar of Trade Unions [15] , wherein it was held that while cancelling the registration of a Trade Union for contravention of any provision of the Act, the contravention must be willful after notice from the Registrar.

CONTENTION OF THE RESPONDENT

The learned counsel for the respondents submitted that the respondent filed a counter stating that under Section 10 (b) of the Act, the respondent had issued a show-cause notice dated 7-3-1992 for non-submission of the returns for the year 1990 on or before 30-4-1991 under Section 28 of the Act. The petitioner had not submitted any reply to the impugned notice dated 7-3-1992. Therefore, in exercise of the powers contemplated under Section 10 of the Act, the registration of the petitioner was cancelled. Therefore, the impugned order passed by the respondent was legal and sustainable under the provisions of the Act.

JUDGMENT

The court observed that Section 10 of the Act contemplates the ground for cancellation of the registration of a Trade Union, according to which if a Union wilfully and after notice from the Registrar contravenes any provisions of this Act, its registration is liable to be cancelled. The court held that in the present case on hand, the petitioner has not contravened any provision of the Act wilfully after notice from the Registrar. Therefore, the impugned order passed by the respondent is contrary to the provisions of Section 10 of the Act.

The court relied on the Mysore Iron and Steel Works case and held that the notice contemplated under the proviso to Section 10 of the Act is mandatory and the Registrar is not competent to pass an order cancelling the registration without, in the first instance, giving a notice and giving an opportunity to the Trade Union to show-cause against the proposed action. The court also relied on another judgment of the Madhya Pradesh High Court in Nagda Rashtra Seva Karmachari Congress and another v. Industrial Court and another [16] wherein it was held that while making a decision to cancel the registration of a trade union, principles of natural justice must be followed by giving an opportunity of hearing to the trade union and that imposition of the extreme penalty of cancellation of registration for the alleged default and irregularities including the delay in filing the annual returns is not proportionate under the Act and thus the cancellation order is bad in law.

The court held that though the Registrar has got the power to cancel the registration of a Trade Union for wilful contravention of any provision of the Act after notice from the Registrar, a show-cause notice must be issued showing the cause for cancellation of the registration giving two months time. After receiving the explanation from the Trade Union, another notice has to be issued proposing to impose the punishment of cancellation of registration against the Trade Union.

The court observed that it was evident from the records of the case that the respondent has not stated anything about the receipt of the notice dated 7-3-1992 by the petitioner. It was further evident from the records that the respondent had not given any second show-cause notice to the petitioner before initiating the action of cancellation of the registration. The court held that when the rights of a citizen or a Union are affected by the proposed imposition of any punishment, he or it must be heard in person or through an advocate. In this case, the respondent had not given any opportunity to the petitioner to represent its case before passing the impugned order.

The court came to the conclusion that the respondents had not given a second show-cause notice while cancelling the registration of the petitioner-trade union for not submitting the annual returns for the year 1990 and the respondents had not given any opportunity to represent the case of the petitioner before passing the impugned proceedings. Hence the court held that the impugned order cancelling the registration of the petitioner-trade union is contrary to the provisions of Section 10 of the Act and offending the principles of natural justice and, therefore, liable to be set aside.

Therefore, the court allowed the writ petition without any order as to costs.

CONCLUSION

Section 10 of the Trade Unions Act lays down several grounds under which the registration of a Trade Union may be cancelled. The registration of the trade union can be cancelled only under the circumstances and on any of the grounds which are enumerated under section 10 of the Act and not otherwise. [17] The application for the cancellation of the registration has to be filed by the Trade Union or the Registrar has to take suo motu cognizance. An individual may submit an application under Section 10 (a) of the Act to invite the attention of the Registrar of Trade Union after which the Registrar may take cognizance and conduct some preliminary inquiry but the Registrar cannot act solely on the basis of the application of the individual as the section envisages the application for cancellation to be made by a trade union and not by an individual. The notice to be sent under the section is also of extreme importance. It has been settled through case laws that the Registrar is not competent to pass an order cancelling the registration without, in the first instance, giving a notice and giving an opportunity to the Trade Union to show-cause against the proposed action.

Thus, though the Registrar has got the power to cancel the registration of a Trade Union for wilful contravention of any provision of the Act after notice from the Registrar, a show-cause notice must be issued showing the cause for cancellation of the registration giving two months time. After receiving the explanation from the Trade Union, another notice has to be issued proposing to impose the punishment of cancellation of registration against the Trade Union. Hence, the cancellation of the registration done by the Registrar without following the procedure laid down under the section will be bad in law and liable to be set aside.

The section not only lays down the grounds on which the registration may be cancelled but also prescribes the procedure to be followed and this procedure has to be strictly followed by the Registrar before passing the order of cancellation as cancellation of registration is a very strict penalty which deprives the trade union from legal protection and hence the penalty should be imposed only after following the prescribed procedure.