WORKMEN OF M/S. DELHI CLOTH AND GENERAL MILLS vs MANAGEMENT OF M/S. DELHI CLOTH AND GENERAL MILLS LTD.

The Supreme Court held that under Section 18(1) of the Industrial Disputes Act, 1947, a settlement between management and union must comply with Rule 58(4) of the Industrial Disputes (Central) Rules, 1957 to be binding on workmen. The Court ruled that the management and workers' union do not have absolute freedom to contract settlements that affect all workers without adhering to statutory provisions. The appeal by the Kapra Karamchari Sangh was deemed valid as it represented Shibban Lal, who consented to this representation, despite the management's objections regarding the settlement's validity.