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 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.BackgroundThe 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...

Telangana High Court Upholds Conduct Of Secret Ballot To Elect Majority Trade Union, Says Non-Filing Of Returns No Ground To Stall Process

Ananya Tangri

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