Registration of Trade Union obtained by fraud/mistake can be cancelled - Supreme Court

One Mr. R.G. D'souza, President of Poona Employees' Union submitted an application for registration of the Trade Union, which was granted. Due to internal clashes, he was expelled from the Trade Union. There were some disputes between Poona Employees' Union and another Trade Union by name, Bharatiya Kamgar Sangha.

Mr. R.G. D'souza filed an application under Section-10 of the Trade Unions Act before the Addl. Registrar of Trade Unions seeking cancellation of certificate of registration of the Trade Union on the ground that the same was obtained by fraud/mistake and misrepresentation. Another ground taken was non-filing necessary documents as per Rules and Regulations and obtained registration certificate by mistake/fraud. The above plea of Mr. R.G. D'souza was accepted by the Addl. Registrar of Trade Union.

Aggrieved by the said order the Poona Employees Union filed appeal before the Industrial Court, Poona, which is the Appellate Authority. The Industrial Court, Poona, passed Order dated 11.4.2008 recording its reasons and set aside the Order passed by the Addl. Registrar of Trade Union cancelling registration.

Mr. R.G. D'souza preferred writ petition before the Hon'ble Court of Bombay, urging various grounds. The Hon'ble High Court recorded findings on two issues namely, (a) whether the appellant had locus standi to invoke proceedings under Section 10 of the Trade Union Act, 1926? (b) whether the Registration Certificate obtained by fraud by the Trade Union is liable to be cancelled? The Hon'ble High Court of Bombay answered the first issue holding that Mr. R.G. D'souza had no locus standi to apply for cancellation of registration of the Trade Union and upheld the view taken by the Industrial Court.

The matter was taken before the Apex Court by Mr. R.G. D'souza. It was contended on behalf of Mr. R.G. D'souza that the Trade Union did not follow provisions under Sections 4 and 6 of the Trade Union Act and did not specifically mention the names of establishment or nature of industry in which the persons employed were members of the Union and that the application was not filled-up properly and the registration was obtained by mistake and fraud by the Trade Union.

The Apex Court observed that though the Registrar of Trade Union has power to cancel the registration either on a complaint or suo motu, if the registration is obtained by fraud or mistake or misrepresentation. However, the authority can cancel the registration if the same is granted by mistake due to incorrect assessment or non-application of mind is mechanical act on the part of the authority.

Further, coming to the case on hand, the Apex Court found that the Registrar of Trade Unions while exercising power under Section 10 of the Trade Unions Act cancelled the Registration Certificate of the Trade Union without enquiry, without show cause notice disclosing grounds for initiation. If such procedure had been adopted the same could have been answered by the Trade Unions effectively. Since the same was not done in the present case, it was held that cancellation of Registration of the Poona Employees' Union was wrong and upheld the decision of Industrial Court, Poona and High Court of Bombay.

The Apex Court further noticed that certain requirements of law not furnished in the application for registration under the Trade Union Act pointed out by Mr. R.G. D'souza, and held that those requirements came into existence after amendment of Trade Union Act with effect from 9.1.2002. Since the Registration of Poona Employees' Union was prior to the said date, the subsequent requirements did not call for examination. Therefore, the appeal filed by Mr. R.G. D'souza, Ex- President of Poona Employees' Union was dismissed and the registration of Trade Union restored by the Industrial Court, Poona and the Hon'ble High Court of Bombay, was confirmed.

This judgment is reported in 2015 (144) FLR 1 in the case of R.G. D'souza and Poona Employees' Union.

The judgment is delivered by Justice V. Gopala Gowda and Justice C. Nagappan. Justice V.Gopala Gowda is from Kolar, Karnataka and was leading Advocate for workmen in Industrial Law. Justice V. Gopala Gowda, was the Judge of Hon'ble High Court of Karnataka for 10 years and was the Chief Justice of Orissa High Court for nearly two years and became Judge of the Apex Court.

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