Telangana High Court Upholds Conduct Of Secret Ballot To Elect Majority Trade Union, Says Non-Filing Of Returns No Ground To Stall Process
The Telangana High Court refused to interfere with process initiated by labour authorities to conduct a secret ballot election for determining the majority representative trade union, holding that such a process is integral to industrial democracy promoting democratic representation for workmen. Justice Nagesh Bheemapaka, dismissing the writ petition filed by Sirpur Paper Mills...
The Telangana High Court refused to interfere with process initiated by labour authorities to conduct a secret ballot election for determining the majority representative trade union, holding that such a process is integral to industrial democracy promoting democratic representation for workmen.
Justice Nagesh Bheemapaka, dismissing the writ petition filed by Sirpur Paper Mills Ltd., observed:
“The apprehension expressed by petitioner that conduct of elections would disturb industrial peace, adversely affect day-to-day operations, impede implementation of the resolution plan approved by the National Company Law Tribunal, or jeopardize the revival of the unit is speculative and unsupported by any tangible material. On the contrary, the very object of the Code of Discipline and the process of secret ballot election is to promote orderly industrial relations, provide a legitimate and democratic representative mechanism for workmen, and ensure industrial harmony.”
The court said that the allegation of "extraneous influence or mala fides on the part of the labour authorities" are bald and unsupported by any cogent material.
"The record indicates that the authorities have acted within the bounds of their statutory duties and in accordance with the procedure contemplated under the Trade Unions Act, the Industrial Disputes Act and the Code of Discipline. This Court also finds that the issues raised by petitioner, particularly relating to compliance by trade unions with statutory requirements, filing of annual returns and their continued existence, involve disputed questions of fact. Such issues are required be examined and adjudicated by the competent statutory authorities under the Trade Unions Act, 1926 and are not amenable to determination in proceedings under Article 226 of the Constitution of India," it added.
The Court declined to set aside the action of the labour authorities in proceeding to conduct elections for recognition of the majority union under the Code of Discipline.
Background
The petitioner, M/s Sirpur Paper Mills Ltd., contends that it became a sick industrial unit due to erosion of net worth and stopped operations in 2014. Insolvency proceedings under Section 9 of the IBC were initiated, culminating in an NCLT-approved resolution plan (19.07.2018), pursuant to which management was taken over by J.K. Paper Ltd. and operations resumed in accordance with the plan.
Prior to closure, around 15 trade unions operated in the factory. During the prolonged shutdown (2014–2018), many became defunct and allegedly failed to file annual returns or comply with statutory requirements under the Trade Unions Act, 1926. The petitioner asserts that this rendered their registrations invalid, leaving no validly existing trade union in the factory for there to be any elections.
After revival, the petitioner entered into a Section 12(3) Industrial Disputes Act settlement (03.01.2023), valid till 31.03.2026, governing service conditions and grievance redressal.
A Section 12(3) settlement under the Industrial Disputes Act is a binding agreement reached between employer and workmen during conciliation proceedings, which has statutory force and applies to all parties covered by it.
Subsequently, the Deputy Commissioner of Labour, Adilabad, acting as Returning Officer, issued a communication dated 22.10.2025 fixing a meeting on 28.10.2025 to conduct a secret ballot election to determine the majority union under the Code of Discipline, and called upon unions to nominate representatives.
Petitioner's Submissions
The petitioner contends that the decision of the Deputy Commissioner of Labour, Adilabad and other labour authorities to proceed with a secret ballot is arbitrary and illegal. It argues that most trade unions had become non-functional and incurred disqualification by failing to file annual returns for over a decade.
The petitioner also relies on the subsisting Section 12(3) settlement, contending that it has statutory force till March 2026 and already governs service conditions; hence, conducting elections during its operation is unnecessary.
Finally, it is argued that at a “critical stage of revival,” trade union elections would disrupt industrial harmony, affect production, impede implementation of the resolution plan, and risk pushing the unit back into financial distress.
Respondents' Submissions
The state labour authorities (respondents 1-4) deny that the proposed election is arbitrary, asserting that the purpose of conducting a secret ballot is to ensure industrial peace and effective collective bargaining. It is specifically contended that there is no clause in the settlement prohibiting such elections.
They further argue that non-filing of annual returns does not automatically cancel registration of trade unions. Under the Trade Unions Act, 1926, cancellation can only be effected in accordance with Section 10, after due notice and procedure, and the Registrar is empowered to withdraw or cancel registration on specific grounds. Section 28 merely mandates filing of returns and does not provide for automatic deregistration.
It is thus contended that the unions continue to exist in law, and conducting elections is necessary to determine the majority representative union.
The unions (respondents 5-19) contend that the writ petition is misconceived and filed with a mala fide intent to obstruct statutory authorities from conducting union elections. It submits that the petitioner seeks to deprive workmen of their constitutional and statutory right to form unions and democratically elect a representative body for collective bargaining.
The Court's Analysis
The Court rejected the petitioner's central contention that non-filing of annual returns by trade unions results in automatic cancellation or de-recognition. On a conjoint reading of Sections 8, 10 and 28 of the Trade Unions Act, 1926, it held that while Section 28 mandates filing of returns, the Act “does not prescribe automatic cessation of registration as a consequence of default.” Cancellation can only be effected under Section 10 by the competent authority (Registrar) following due procedure and for specific reasons.
Significantly, the Court noted that no order had been passed by the Registrar of Trade Unions cancelling or withdrawing registration of any respondent unions, nor had the petitioner sought such determination. In the absence of a statutory decision, the Court held that the unions continue to exist in the eye of law and are entitled to participate in the process of verification and recognition.
The Court further held that the settlement dated 03.01.2023, though having statutory force during its operation, does not bar the conduct of a secret ballot election. It governs agreed service conditions but does not override the statutory mechanism for union recognition, particularly in the absence of any clause prohibiting such elections.
Rejecting allegations of mala fides, the Court found that the labour authorities had acted within the bounds of their statutory duties under the Trade Unions Act, Industrial Disputes Act and the Code of Discipline.
The Court also emphasised that the petitioner had an effective statutory remedy before the Registrar of Trade Unions and, without exhausting such remedy, could not invoke writ jurisdiction to stall an ongoing statutory process.
Accordingly, the Court concluded that the decision of the labour authorities to conduct a secret ballot election to determine the majority representative union does not suffer from “arbitrariness, illegality or lack of jurisdiction,” and no case for interference under Article 226 was made out.
The writ petition was held to be devoid of merit and dismissed.
Case Title: M/s Sirpur Paper Mills Ltd. v. State of Telangana & Ors.
Case No.: Writ Petition No. 32597 of 2025
Appearance: Smt. Vedula Chitralekha for the Petitioner; Government Pleader for Labour for Respondent Nos.1 to 4; Sri B. Jithender for Respondent No.5; Sri M. Shankar for Respondent No.7; Sri Abid Hussain for Respondent No.15; Sri Pochaiah Dorishetty for Respondent Nos.8, 14 & 17.