Civil Appeal No 156 of 1965
Appeal by special leave from the judgment and order dated August 12 1963 of the Bombay High Court Nagpur Bench in Special Civil Application No 315 of 1962
V P Sathe and A G Ratnaparkhi for the appellants
661 M N Phadke J B Dadachanji OC Mathur and Ravinder Narain for respondents Nos 1 and 3
N section Bindra and B R G K Achar for respondent No4
The Judgment of the Court was delivered by Satyanarayana Raju J
This is an appeal by Special Leave against the judgment of a Division Bench of the Bombay High Court dismissing an application for the issue of a Writ of certiorari under article 226 of the Constitution to quash the order of the State Industrial Court at Nagpur
For a proper appreciation of the questions that have been raised in the appeal it would be necessary to state the material facts
The Model Mills Nagpur hereinafter referred to as the Mills is a public limited company incorporated under the Indian Companies Act
On July 18 1959 in exercise of the powers conferred by section 18 A of the Industries Development and Regulation Act 1951 the Central Government took over the management of the Mills and appointed the 3rd respondent as the authorised Controller of the Mills
On March 25 1960 the State of Bombay now the State of Maharashtra in exercise of the powers conferred by sections 3 and 4 of the Bombay Relief Undertakings Special Provisions Act 1958 hereinafter referred to as the Bombay Act made a notification declaring the Mills to be a  relief undertaking for a period of one year commencing from March 26 1960 and ending with March 25 1961
The appellants eight in number were at the relevant time the permanent employees of the Mills
It would be convenient to refer to them as employees
On December 15 1960 when the notification made by the State Government under the Bombay Act was in force the employees abstained from work
Thereupon the 1st respondent who is the Factory Manager of the Mills issued notices to the employees to show cause why they should not be dismissed from service for joining an illegal strike
On January 6 1961 the Factory Manager passed orders dismissing the employees from service
On January 12 1961 the employees filed an application in the High Court of Bombay for the issue of a writ of mandamus directing the employees to be reinstated in service
On April 4 1961 the exemption of the Mills from the application of section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act XXIII of 1947 herein after called the State Act was made
On April 25 1961 the employees filed applications before the Assistant Commissioner Sup
CI76 12 662 of Labour claiming reinstatement with back wages
The High Court dismissed the Writ Petition filed by the employees with liberty to file a fresh petition if necessary since they were prosecuting their applications for relief of reinstatement before the Assistant Commissioner of Labour
In and by his order dated September 29 1961 the Assistant Commissioner allowed the applications filed by the employees
He held that as there was no illegal strike the orders of dismissal were unsustainable and should be set aside
He directed that the employees should be reinstated with back wages
Against the orders passed by the Assistant Commissioner the Mills preferred applications in revision to the State Industrial Court
By its order dated February 16 1962 the Industrial Court allowed the revision applications filed by the Mills on the ground that the applications before the Assistant Commissioner were not maintainable
On the merits the Industrial Court agreed with the Assistant Commissioner that there was no illegal strike
Aggrieved by the orders of the Industrial Court the employees filed an applicaton under articles 226 and 227 of the Constitution for the issue of a writ of certiorari to quash the orders of dismissal passed by the Factory Manager and to direct their reinstatement with back wages
By its judgment dated August 12 1963 the High Court dismissed the Writ Petition filed by the employees
The High Court has held that the right to claim reinstatement is not a right which is available to an employee under the Common Law and that the relief of reinstatement is a special right which has been conferred on an employee under section 16 of the State Act
In the opinion of the High Court the essential pre condition for an employee to claim relief under section 16 is that he is an employee in an industry to which that section is applicable and in respect of which a notification under section 161 also has been issued
The High Court has reached this conclusion by reason of the fact that the State Government issued a notification exempting the Mills from the operation of section 16 of the State Act and that the exemption was withdrawn only on April 4 1961 while the employees were dismissed on January 6 1961
In the opinion of the High Court by reason of the fact that section 16 of the Act was not applicable the dismissal of the employees even if it was wrongful did not give them a right to claim TV instatement and that to hold otherwise would be to give retrospective operation to section 16 of the State Act which became applicable to the Mills on and from April 4 1961 by reason of the withdrawal of the exemption
in the result the High Court confirmed the finding of the State Industrial Court that the employees had 663 no right to file applications under section 16 of the State Act and the applications filed by them before the Assistant Commissioner were not maintainable
Now it is contended by Mr V Sathe on behalf of the employees that though the industry was exempt from the operation of certain sections including section 16 of the Act on the date when the appellants were dismissed there was an existing industrial dispute relating to an industrial matter between the employees and the Mills on April 4 1961 when the notification withdrawing the exemption in favour of the Mills from the operation of section 16 of the State Act was issued by the Government that on the date when the employees filed an application under section 16 before the Commissioner of Labour the period of six months provided by that section had not elapsed and that therefore the employees could invoke the provisions of section 16 and claim reinstatement
The learned counsel for the Mills Mr Phadke has endeavoured to support the judgment of the High Court and the reasons on which its conclusions were rested
The questions which arise for determination in this appeal are  1
Whether the right of a dismissed employee to claim reinstatement in appropriate cases exists
de hors section 16 of  the State Act  2
Whether by reason of the State Government s exemption of the industry from the operation of section 16 on the date when the employees were dismissed from service their right to apply for reinstatement ceased to exist  For a proper determination of the above questions it is necessary to refer to the material statutory provisions
The State Act became law on June 2 1947
section 15 of the State Act empowers the State Government to appoint any person as Labour Commissioner for the State and he shall exercise all or any of the powers of the Labour Commissioner
Now section 16 of the State Act as it stood at the relevant date provides as follows 1 Where the State Government by notification so directs the Labour Commissioner shall have power to decide an industrial dispute touching the dismissal discharge removal or suspension of an employee working in any industry in general or in any local area as may be specified in the notification
664 lm15 2 Any employee working in an industry to which the notification under sub section 1 applies may within six months from the date of such dismissal discharge removal or suspension apply to the Labour Commissioner for reinstatement and payment of compensation for loss of wages
The different powers that could be exercised by the Labour Commissioner are then set out in sub section
3  On receipt of such application if the Labour Commissioner after such enquiry as may be prescribed finds that the dismissal  was in contravention of any of the provisions of this Act or in contravention of a standing order he may direct that the employee shall be reinstated forthwith or by a specified date and paid for the whole period from the date of dismissal  to the date of the order of the Labour Commissioner
It is common ground that section 16 is made applicable to the textile industry with effect from
March 1 1951 by a notification dated February 22 1951
The provisions of section 16 were thus applicable to the Mills till March 25 1960 on which date however the State Government issued a notification in exercise of the powers conferred under sections 3 and 4 of the Bombay Act declaring the Mills to be a relief undertaking 
The notification directed that the provisions of section 16 of the State Act and Chapter V A of the Industrial Disputes Act XIV of 1947 Lay off and Retrenchment shall not apply to the Mills and that it shall be exempt therefrom
This notification was extended by the State Government on March 8 1961 for a further period of one year
A subsequent notification dated April 4 1961 issued by the State of Bombay amended the earlier notification by withdrawing the exemption in so far as it related to section 16 of the State Act
The alleged participation by the employees in an illegal strike occurred on December 15 1960 and the 1st respondent dismissed the employees in and by his order dated January 6 1961
It was during the period between March 25 1960 and April 4 1961 when the exemption was in force that the incident which resulted in the Mills framing a charge against the employees happened and the subsequent orders of dismissal were passed
It is submitted by the learned counsel on behalf of the Mills that the right of an employee to claim reinstatement has been granted by section 16 of the State Act and since the Mills were exempt 665 from the provisions of that section on the material dates the employee had no right to claim reinstatement
The Industrial Disputes Act XIV of 1947 came into force on April 1 1947
For our present purposes it is not necessary to consider whether the right to claim reinstatement by a dismissed employee existed before the Central Act became law
The question about the jurisdiction of an Industrial Tribunal to direct reinstatement of a dismissed employee was raised as early as 1949 before the Federal Court in Western India Automobile Association vs Industrial Tribunal Bombay1
In that case the Federal Court considered the larger question about the powers of industrial tribunals in all its aspects and rejected the argument of the employer that to invest the tribunal with jurisdiction to order reinstatement amounts to giving it authority to make a contract between two persons when one of them is unwilling to enter into a contract of employment at all
This argument it was observed overlooks the fact that when a dispute arises about the employment of a person at the instance of a trade union or a trade union objects to the employment of a certain person the definition of industrial dispute would cover both those cases
In each of those cases although the employer may be unwilling to do there will be jurisdiction in the tribunal to direct the employment or non employment of the person by the employer
The Federal Court also added The disputes of this character being covered by the definition of the expression industrial disputes  there appears no logical ground to exclude an award of rein statement from the jurisdiction of the Industrial Tribunal
For nearly two decades the decision of the Federal Court has been accepted without question
Therefore after the  at any rate the right of a dismissed employee to claim reinstatement in proper cases has been recognised
It is no doubt true that under the Central Act the right to claim reinstatement has to be enforced in the manner laid down by that statute whereas under the State Act it is open to an employee to claim reinstatement without the intervention of the appropriate Government
This would not however make any difference
It is argued that by reason of the exemption granted by the Bombay State when it declared the Mills to be a relief undertaking rights and obligations which accrued to the employees or were incurred by the Mills during the period of exemption stood 1 666 abrogated
This takes us to the question as to the legal effect of the exemption granted by the State of Bombay
The notification issued by the State of Bombay is in the following terms  The Government of Bombay hereby directs that in relation to the said relief undertaking and in respect of the said period of one year for which that relief undertaking continues as such the provisions of i Sections 16 31 and 37 section 40 in so far as it relates to lock out and section 51 and section 61 in so far as it relates to clauses b and c of Rule 36 of the Central Provinces and Berar Industrial Disputes Settlement Rules 1949 Central Provinces and Berar Act No XXIII of 1947 and ii Chapter V A of the XIV of 1947 shall not apply and the said relief undertaking shall be exempt from the aforesaid provisions of the Central Provinces and Berar Industrial Disputes Settlement Act 1947 Central Provinces and Berar Act No XXIII of 1947 and the XIV of 1947
 The contention urged on behalf of the Mills proceeds on the assumption that the right to claim reinstatement has been granted by section 16 of the State Act
As we have already stated section 16 only recognises the right of a dismissed employee in appropriate cases to claim reinstatement but does not confer the right
The section provides the procedure for enforcing the right
In this view the right of the dismissed employee to claim reinstatement was in existence even during the period of exemption but only it could not be enforced under section 16
Once the exemption is withdrawn the status quo ante is restored and it is open to the employee to file an application for reinstatement provided however his application is within the period of six months from the date of his dismissal
Under section 4  1 a on a notification being made the industry becomes a relief undertaking and the laws enumerated in the Schedule to the Bombay Act shall not apply
The Schedule specifies Chapter V A of the and section 16 of the State Act
Section 4  1 a i also provides that the relief undertaking shall be exempt from the operation of the Acts mentioned in the Schedule
Learned counsel drew a distinction between the expressions exemption  and suspension  by relying upon the meanings given to these words in the Oxford Dictionary Exempton  means 667 immunity from a liability  whereas the word suspension  means put it off 
Basing himself on the dictionary meanings learned counsel for the Mills has contended that the word exemption  is of a wider connotation than suspension  and means that the industry shall be immune from the liabilities arising under the statutes specified in the Schedule and that the order of dismissal having been passed while the exemption was in force the Mills were immune from liability to reinstate the employees on their dismissal being held to be wrongful
The order dismissing the employees was passed on January 6 1961 when the notification was in force
The employees filed applications before the Commissioner of Labour on April 25 1961
On the date of their applications the exemption granted to the Mills by the State Government was no longer in operation
The decision in Birla Brothers Ltd vs Modak1 has firmly established the principle that for a dispute which originated before the came into force but was in existence on the date when that Act became law the Act applied to the dispute since it was in existence and continuing on that date and no question of giving retrospective effect to the Act arose
At p 22 1 the learned Chief Justice Harries who spoke for the Court stated thus  In my judgment the Act of 1947 clearly applies to the present dispute without any question arising of giving the Act any retrospective effect
It is true the dispute arose before the Act was passed but on April 1 1947 when the Act came into force the dispute was in existence and continuing
The employees were on strike and the strike actually continued until May 19 that is five days after the Government made the order referring the dispute to arbitration
In my judgment the Act must apply to any dispute existing after it came into force no matter when that dispute commenced
There is nothing in the Act to suggest that it should apply only to disputes which originated after the passing of the Act
On the contrary the opening words of s10 of the Act make it clear that the Act would apply to all disputes existing when it came into force
The opening words of section 101 are If any industrial dispute exists or is apprehended the appropriate Goverment may by order in writing etc
1 LLR 668 It seems to me that these words make it abundantly clear that the Act applies to any industrial dispute existing when it came into force and therefore the Act applies to this dispute
 It is argued by Mr Phadke that the notification dated April 4 1961 withdrawing the exemption is only prospective and no retrospective effect can be given to it
This argument proceeds on a fallacy
There is no question of the notification withdrawing an exemption being prospective or retrospective
It is finally submitted by learned counsel for the Mills that the validity of the order passed by the Factory Manager dismissing the employees from service has not been determined by the High Court and that the matter must be remitted to that Court for a consideration of that question
We may point out that the Assistant Commissioner of Labour has held that the dismissal is wrongful
This conclusion is affirmed by the Industrial Court
The validity of the dismissal was therefore finally concluded in favour of the employees
There is therefore no question of the validity of the dismissal order now being considered by the High Court
We may now summarise the conclusions reached by us as a result of the above discussion
The right of an employee to claim reinstatement on a wrongful dismissal exists de hors section 16 of the State Act
Section 16 provides a forum for a dismissed employee to claim reinstatement but does not create a right
The effect of an exemption granted by the notification issued under the Bombay Act is not to destroy the right but to suspend the remedy prescribed by section 16 for enforcing that right during the period when the exemption remains in force
The right can be enforced by a dismissed employee by resorting to the provisions of section 16 of the Act provided he makes the application within six months from the date of his dismissal
In the present case the appellants filed their applications within the period specified in section 16 of the State Act
The High Court was in error in holding that the applications were not maintainable
In the result the judgment of the High Court and the order of the Industrial Court are set aside and the award made by the Assistant Commissioner of Labour is restored
The appeal is allowed and the appellants will have their costs in this Court paid by respondent No 1
Appeal allowed


Summary:
The State of Bombay by a notification under the Bombay Relief Undertakings Special Provisions Act 1958 declared a Mill a relief undertaking  and exempted it from the applicability of section 16 of the CP and Berar Industrial Dispute Settlement Act 1947
During the period the exemption was in force the appellants employees of the Mill abstained from work and were dismissed for joining an illegal strike
After the exemption was withdrawn and was no longer in operation the employees filed applications before the Labour Commissioner claiming reinstatement with back wages
The Labour Commissioner allowed the applications
The Mill preferred revisions to the Industrial Court which were allowed
In writ petitions filed by the employees the High Court confirmed the finding of the Industrial Court that the employees had no right to file applications under section 16 and the applications filed by them before the Labour Commissioner were not maintainable
In appeal to this Court
HELD  The High Court was in error in holding that the applications were not maintainable
The right of an employee to claim reinstatement on a wrongful dismissal existed de hors section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act
Section 16 provides a forum for a dismissed employee to claim reinstatement but does not create a right
The effect of an exemption granted by the notification issued under the Bombay Relief Undertakings Special Provisions Act is not to destroy the right but to suspend the remedy prescribed by section 16 for enforcing that right during the period when the exemption remains in force
The right can be enforced by a dismissed employee by restoring to the provisions of section 16 of the Act provided he makes the application within six months from the date of his dismissal
668 E