Appeal No 511 of 1976
Appeal by Special Leave from the order dated 19 8 1975 of the First Labour Court Ahmedabad in Appln 49375
RP Bhatt DK Agarwal K K Jain and Bishamber Lal for the Appellant
710 V M Tarkunde KL Hathi PC Kapur and Miss M Tarkunde for the Respondent
The Judgment of the Court was delivered by GOSWAMI J
A complaint was made to the Labour Court by the respondent Mazdoor Mahajan Mandal Baroda briefly the union alleging the lock out declared by the appellant to be illegal
The appellant Priya Laxmi Mills Ltd briefly the management resisted the petition
After examining the oral and documentary evidence the Labour Court came to the conclusion that the lock out was illegal under clauses a and h of sub section 1 of section 98 of the Bombay Industrial Relations Act 1946 briefly the Act
A brief reference to the facts will be appropriate at this stage
The present appellant purchased this textile mill from Ms Sayaji Mills Ltd in 1972 when it had about 2500 work men besides officers
It is said that in 1974 the textile industry suffered adverse market conditions accumulation of stocks shortage of raw materials and bank credit squeeze in consequence of which the management started experiencing acute financial difficulties which were aggravated by a spate of litigation between the appellant and the previous owners
The appellant somehow continued to pay the wages of the workmen upto February 1975 although in an irregular manner
The mill works in three shifts
By a notice of April 13 1975 the management notified a lay off from the first shift of April 14 1975 till further notice
The lay off was in the departments of spinning weaving grey folding and engineering as per the lists containing the names of the workmen and the members of the staff connected therewith
Other departments however were allowed to continue to work as usual
It was mentioned in the notice
of lay off that a workman if eligible shall be paid lay off compensation as provided under the law
The permanent workmen of laid off departments who were eligible to get compensation under the law were required to present themselves in the respective departments at the start of their respective shifts and get themselves marked as laid off
Naturally therefore although the workmen were laid off they had to attend the mill premises for being marked present at the time of the commencement of the shift in order to be able to claim lay off compensation
In view of the mounting tension on account of irregular payment of wages for quite some time and the subsequent lay off negotiations were also afoot between the management and the union without much headway
According to the management the workmen refused to accept the decision of lay off and they continued to remain inside the mill premises even after getting their presence marked
Some employees remained in the department while a large number of them collected outside the department and refused to go out of the mill premises
It is said that the workmen started staging a dharna  daily in the administra 711 tive office of the mills thereby disrupting its normal and smooth working
This state of affairs continued from April 14 1975 to April 21 1975
The workmen did not pay any head to the request of the management to leave the premises after they had been marked present
In this background on April 21 1975 at about 400 PM a section of the workmen forcibly entered the Guest House No 2 and trespassed into the living room of Shri L Grover Establishment Officer of the mills dragged him out of the room and took him into the administrative office and kept him there under restraint and illegal confinement for about 24 hours
The workmen also removed the personal belongings of Shri Grover
They also gheraoed and kept under restraint and illegal confine ment the Deputy Executive Director Shri VK Bagla the Deputy Chief Executive Works Shri SC Gandhi and other senior officers in the mill premises with effect from 700 PM on April 21 1975
The officers were kept in illegal confinement without food and other basic amenities of life continuously for 21 hours
It is said that the officers were abused and humiliated
The workers also held out threats to their lives
The management also referred to other alleged unruly and undisciplined behaviour of the workmen
The officers were ultimately brought out with the help of the police authorities at about 400 PM on April 22 1975
The employees however continued dharna  inside the mill premises on April 22 and the night between April 22 and April 23
It is thus the management s case that under the circumstances mentioned above the company was compelled to declare a lock out from the first shift of April 23 1975 It may be appropriate to set out the lock out notice dated April 23 1975 We hereby give notice to all concerned that a lock out is declared with effect from the begin ning of l st shift commencing at 700 am on 23 4 1975 in our mills for the following or any of the reasons given below a On or about 430 pm on 21 4 1975 a section of the workmen forcibly entered into the mill Guest House No 2 and trespassed into the room in which Shri L Grover the Establishment Officer of the mills resides dragged him out of the room and took him to the Administrative Office of the mills and kept him there under restraint and illegal confinement for about 24 hours
The work ers also removed personal belongings of Shri Grov er
b The workers gheraoed kept in restraint and illegal confinement
our Dy
Executive Direc tor Shri VK Bagla Dy
Chief Executive Works Shri SC Gandhi and other senior officers in the mill premises with effect from 700 pm of Monday the 21st April 75
Those officers were kept in illegal confinement without food and other basic amenities of life continuously for 21 hours
c The workers not only kept the above mentioned officers under wrongful restraint but also abused and humiliat 712 ed them
Threats were advanced to the life of these officers and to the effect that the mill property will also be damaged
d The workers employed in spinning and weaving departments including their preparatories and partly engineering department have been laid off with effect from 14 4 75
These workmen in stead of leaving the factory premises after lay off attendance staged dharana daily in the adminis trative office of the mills thereby disrupting its normal and smooth working
f The workers have also arrested the move ment of cloth bales from mill godowns thereby disrupting the bales of the finished goods
The lock out hereby declared will cover all the departments of the mills except the Watch and Ward and essential service which will continue to function as usual and will not be affected by this notice
 X X X X The union denied the various allegations made against the workmen and stated that the lock out was carried out with a view to pressurise the union and the workmen to accept the management s terms with regard to the mode of payment of their salary as well as the lay off arrangements introduced by the management
Both sides produced documentary evidence as well as examined witnesses
The management examined four witnesses whereas the union examined two witnesses on their behalf
After examining the entire evidence the Labour Court came to the conclusion that the lockout was an illegal lock out
Hence this appeal by special leave
The question that falls for decision is whether the lock out in question is illegal under section 981a of the Act
We are not required to consider whether it is also illegal under section 981h of the Act as referred to by the Labour Court
According to section 981a a lock out shall be illegal if it is commenced or continued in cases where it relates to any industrial matter specified in Schedule III or regulated by any standing order for the time being in force
We are not required to consider the second part of section 981a which refers to the standing order
Sched ule III enumerates seven items out of which we are required to consider only item 6ii which reads as follows  Employment including unemployment of persons previously employed in the industry concerned
Before we proceed further we may take note of the definition of lock out which is found in sec tion 3 24 of the Act  Lock out  means the dosing of a place or part of a place of employment or the total or partial suspension Of 713 work by an employer or the total or partial refusal by an employer to continue to employ persons em ployed by him where such closing suspension or refusal occurs in consequence of an industrial dispute and is intended for the purpose of a compelling any of the employees directly af fected by such closing suspension or refusal or any other employees of his or b aiding any other employer in compelling persons employed by him to accept any term or condition of or affecting employment
 This definition is differently worded from what is there in the 
We however find that in the Trade Disputes Act 1929 lock out is similarly defined as in the present Act
By section 21 of the Industrial Disputes Act lock out means the closing of a place of employment or the suspension of work or the refusal by an employer to continue to employ any number of per sons employed by him
This Court while interpreting the above defini tion in Management of Kairbetta Estate Kotesiri vs Rajamanickam and others C observed as follows  Even so the essential character of a lock out continues to be substantially the same
Lock out can be described as the entithesis of a strike
Just as a strike is a weapon available to the employees for enforcing their industrial demands a lock out is a weapon available to the employer to persuade by a coercive process the employees to see his point of view and to accept his demands
 It should however be made clear that lock out can be declared also for reasons similar to those described in the present notice of lock out
In that case although it will be lock out in anoth er sense it may not be a lock out within the meaning of section 3 24 of the Act
That kind of a lock out with the avowed object of preventing violence and threat to life and property may even be justified on facts in a given case
In such a situation it may be difficult to prove that it is an illegal lock out since in an illegal lock out the sole object is to compel the workmen to accept the terms of the employer which the workers consid er as unreasonable and oppressive
In the instant case although we do not approve of the Labour Court s observations in the order to a possible effect that threats and gheraoes are the normal behaviour when an occasion like this takes place we cannot say that its ultimate conclusion after appreciation 1  714 of the evidence is such that it may call for inter ference in an application under Article 136 of the Constitution
The Labour Court has given a finding at paragraph 15 of the as follows  Coming now to the other important ingredient viz intention on the part of the management to compel the workers directly affected by such clos ing to accept any term or condition affecting employment it appears that there was such an intention on the part of the management
The opponent company because of the financial diffi culties which they were facing wanted the workers to agree to accept lay off and also agree to accept wages not on the specified days as per the existing awards etc
but as and when the management could pay 
In my opinion therefore it could be said that all the ingredients of an illegal lock out  were present in this case
The Labour Court has taken note of the fact that there was no evidence of any violence being caused to the property of the mill notwithstanding the presence of a huge crowd said to be in a riotous mood
The tribunal also took the view that the officers were not confined in
their rooms as such as represented but they themselves did not like to come out perhaps due to apprehension
The Labour Court was of opin ion that the situation was not of such a grave nature which called for such a drastic step like a lock out
The Labour Court seems to be of the further view that since the manage ment has been in continuous financial difficulties heading towards a closure and closure would have put the management under an obligation to pay compensation under section 25 FFF under the  opportunity was taken to declare a lock out on the slightest opportunity
It is not possible for us to reappraise the evidence and come to a different conclusion on the facts in this appeal
We are also unable to hold that the conclusions of the Labour Court are perverse or even against the weight of evidence on record
The only question therefore that survives is whether on the finding of the Labour Court the lock out is illegal
It is contended on behalf of the appellant that item 6ii in Schedule Iii to the Act which deals with the unemployment of persons previously employed in the industry concerned cannot govern a case of lay off
According to counsel lay off is not unemployment since the relationship of master and servant is not snapped
We are unable to accept this contention
Lay off is not defined in the Act but has been defined in section KKK of the   lay off  with its grammatical variations and cognate expressions  means the failure refus al or inability of an employer on account of short age of coal power or raw materials 715 or the accumulation of stocks or the breakdown of machinery or for any other reason to give employ ment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched
X X X X X Even according to the dictionary meaning lay off means to discontinue work or activity to dismiss or discharge temporarily
When workers are in employment and they are laid of that immediately results in their unemployment howsoever temporary and such an unemployment will clearly come under item 6ii in Schedule III of the Act
It is not disputed that unemployment is an industrial matter as defined under section 318 of the Act
Since unemployment is an industrial matter under item 6ii of Schedule III to the Act the lock out which has been found by the Labour Court to have direct connection with lay of is clearly illegal under section 981a of the Act
In the result the appeal fails and is dis missed with costs
PBR Appeal dis missed


Summary:
According to section 981a of the Bombay Industrial Rela tions Act 1946 a lock out shall be illegal if it is com menced
or continued in cases where it relates to any indus trial matter specified in Schedule III Item 6ii
Item 6ii states employment including unemployment of persons previously employed in the industry concerned
On account of financial and other difficulties the appellant laid off workers in some departments of the mill
After
a few days the management declared a lock out alleg ing that the workers gheraoed some officers in the mill started dharna  and behaved in an unruly manner
The Labour Court to which the dispute was referred held that there was no evidence of violence or of gheraoes that the situation in the mills was not of such a grave nature as called for a lock out and that the management resorted to the lock out on the slightest opportunity in order to avoid payment of compensation since it was in continuous financial difficulties heading towards a closure and closure would have put the company under obligation to pay compensation
Dismissing the appeal HELD 1 A lock out can be declared for reasons similar to those described in the present notice of lock out
In that case although it will be lock out in another sense it may not be a lock out within the meaning of section 324 of the Act
That kind of lock out with the avowed object of pre venting violence and threat to life and property may be justified on facts in a given case
In such a situation it may be difficult to prove that it is an illegal lock out since in an illegal lock out the sole object is to compel the workmen to accept the terms of the employer which the workers consider as unreasonable and oppressive
713 F G But in the instant case though the views of the Labour Court that threats and gheraoes are the normal behaviour when an occasion like this takes place should be disap proved the ultimate conclusion after appreciation of the evidence was not such as would call for interference in an application under article 136 of the Constitution
713 H 2 Though the Act has not defined lay out  even according to the dictionary meaning lay off means to dis continue work or activity to dismiss or discharge tempo rarily
When workers are in employment and they are laid off that immediately results in their unemployment howso ever temporary
and such an unemployment will clearly come under item 6ii in Schedule III of the Act
Since unemploy ment is an industrial matter under item 6ii of Schedule Iii of the Act the lock out which had been found by the Labour Court to have direct connection with lay off is clearly illegal under section 981a of the Act
715 BC