G.S. Dhara Singh v. E.K. Thomas AIR 1988 SC 1829

G.S. DHARA SINGH V. E.K. THOMAS

ISSUE:

Whether a member of a trade union is entitled to ask for an account and to claim refund of the sums received by the trade union from the management for and on his behalf on his ceasing to be a member of the said trade union?

RULE:

There was no agreement between the trade union and its members that the amount received towards gratuity and accident benefit should form part of funds of the trade union. Any amount received for and on behalf of the members is liable to be refunded to the workmen concerned.

FACTS:

Respondents 1 and 2 were working as head load workers.
Some of the employees working under the management concerned were members of a trade union called Cochin Port Thozhilali Union (hereinafter referred to as “the trade union”) whose General Secretary is impleaded as Respondent 3 in this petition.
Under an agreement entered into in October, l973 an amount equivalent to 10 paise out of every rupee earned by the workers was deducted by the management towards the gratuity fund and transferred to the trade union for and on behalf of the workers.
Under another agreement a sum equivalent to 10 paise per rupee in the wages of the workers was paid by the management to the trade union towards accident benefit fund of which the workers were the beneficiaries.
The amounts so collected were entrusted to the petitioner, who was also the treasurer and custodian of the funds of the trade union.
Each of the plaintiffs in the said suits estimated the amount payable to him at Rs 3000.
The petitioner, who was the President and Treasurer of the trade union took up various pleas denying his liability to render account and to refund the amount.
One of the pleas raised by the petitioner was that since the plaintiffs had resigned and ceased to be the members of the trade union they had no right to claim the refund of the sums due to them from out of the funds of the trade union and that if they rejoined the trade union they would be entitled for payment of gratuity and accident benefit when occasion arose for payment of the same.
The petitioner filed an appeal and the Additional Sub-Judge found that the petitioner and respondent No. 3 had received from the management amounts on behalf of the workmen, but held that the plaintiffs were not entitled to any decree at
the hands of the Civil Court since the suits were not maintainable in view of the provisions of the Payment of Gratuity Act, l972 and the Workmen’s Compensation Act, 1923.
Second Appeals were filed in the High Court by respondent Nos. 1 & 2 and the High Court by a common judgment set aside the judgment and decree passed by the First Appellate Court and restored the judgment and decree passed by the Trial Court.

HELD:

The Supreme Court dismissed the Special Leave Petition.
It held that there was no scheme drawn up by the trade union regarding the payment of the gratuity amount and the accident benefit fund received on behalf of the Workmen to the workmen concerned.
There was no agreement between the trade union and its members that the amount received towards gratuity and accident benefit should form part of funds of the trade union.
Any amount received for and on behalf of the members is liable to he refunded to the workmen concerned.
In the instant case the amount which had been received on behalf of Respondent Nos. 1 and 1 by the petitioner and Respondent No. 3 had, therefore, to be refunded to them on their resignation from the membership of the trade union. We do not find any tenable defence which the trade union could put forward in the circumstances of the case.