vil Appeal No 2080 L of 1977
Appeal by Certificate from the Judgment and Order dated 201274 of the Calcutta High Court in Appeal No 104 of 1972
RN Nath and Rathin Das for the Appellant SP Khera M Quamaruddin and Mrs M Quamaruddin for the Respondents
GS Chatterjee for the State
The Judgment of the Court was delivered by SC AGRAWAL J
This appeal by certificate granted under Article 1331a of the Constitution is directed against judgment and order of the High Court of Judicature at Calcutta dated December 20 1974 in Appeal No 104 of 1972
Karnani Properties Ltd appellant herein is a company incorporated under the Companies Act 1913
It owns several mansion houses known as Karnani Mansions at Park Street Calcutta
There are about 300 flats in these mansions which have been let out to tenants
The appellant provides various facilities to its tenants in these flats eg free supply of electricity washing and cleaning of floors and lavato ries lift service electric repairs and replacing sanitary repairs and replacing etc and for that purpose the appel lant employ over 50 persons namely sweepers plumbers malis lift man durwans pumpmen electric and other mis tries bill collectors and bearers etc in connection with these properties
A dispute arose between the employees of the appellant represented by Barabazar Zamandar Sangh hereinafter referred to as the union  and the appellant with regard to wages scales of pay dearness allowance and gratuity
The Government of West Bengal by order dated July 29 1967 referred for adjudication to the 6th Industrial Tribunal West Bengal the industrial dispute relating to a Fixation of Grades and Scales of pay of the different categories of workmen b Dearness Allowance and c Gratuity
937 The appellant raised preliminary objections with regard to the validity of the reference before the Industrial Tribunal on the ground that the alleged dispute is not an industrial dispute and that the reference is barred by Section 19 of the hereinafter referred to as the Act  for the reason that in 1960 there was an Award on the basis of settlement made with the union and the said Award has not been terminated by either of the parties and is still binding on the parties
The Industrial Tribunal by its order dated August 24 1968 overruled the said preliminary objections raised by the appellant and thereafter the Tribunal gave the Award dated March 3 1969
The Industrial Tribunal expressed its inability to fix any grades and scales of pay of the workmen for the reason that the evidence adduced by the Union on this issue was scrappy none too convincing and not very much acceptable
As regards dearness allowance the Industrial Tribunal held that since November 1964 the price index of working class in Calcutta has considerably gone up from 460 to 750 points as was in October 1968 ie roughly by 300 points
The Industrial Tribunal awarded enhanced DA at the rate of Rs60 per month Rs20 per 100 points to the sweeper bearer helper mali mazdoor lift man head sweeper durwan pumpman and as sistant electric mistry
DA at the  ate of Rs54 per month Rs 18 per 100 points was awarded to the plumber raj mistry head durwan electric mistry and driver and bill collector
It was also directed that the said rates of DA would remain in force as long as the price index will remain between 600 to 800 points and if the price index goes up beyond 800 points the rate of DA will be revised according to the rates mentioned and if it goes below 600 points it also may be revised accordingly
With regard to gratuity the Industrial Tribunal pointed out that under the existing scheme gratuity is payable to every workmen after completion of three years continued faithful and satisfactory service at the rate of 10 days consolidated salary for every com pleted year of service since the date of appointment
The Industrial Tribunal held that three years  period was too short to make a workman entitled to gratuity and that satisfactory and faithful are vague terms
The Industri al Tribunal framed a scheme of gratuity whereunder after completion of six years of continuous service with the appellant every workmen on retirement or on death will get an amount of gratuity at the rate of 10 days  consolidated salary for every completed year of service since the date of appointment and a workman who resigns voluntarily would also be entitled to get the gratuity at the same rate provided he completed 10 years of continuous service
The Industrial Tribunal also directed that if the termination of service is the result of misconduct which caused financial loss to the employer 938 that loss would first be compensated from the gratuity payable to employee and the balance if any should be paid to him
It was also directed that the services of the work men prior to 1950 would not be taken into consideration for the purpose of payment of gratuity
The appellant filed a writ petition in the High Court under Article 226 of the Constitution wherein the order dated August 24 1968 and the Award dated March 7 1969 given by the Industrial Tribunal were challenged
The said writ petition was heard by a learned single Judge who by his judgment dated March 17  20 1972 dismissed the said writ petition
Before the learned single Judge it was urged that the Award made by the Industrial Tribunal was without jurisdiction for the reason that the appellant does not carry on an industry as defined in the Act and that the dispute between the appellant and the workmen cannot come within the ambit of industrial dispute and also
for the reason that there was a previous Award dated March 3 1960 which has not been terminated and was still subsisting and in view of the said Award the present reference was invalid and further that no dispute was raised between the workmen and the appellant prior to the reference before the Indus trial Tribunal and as such the Tribunal has no jurisdiction to deal with the matter
The learned single Judge rejected all these objections
He held that in view of the nature of the activity carried on the appellant does carry on an industry within the meaning of the Act and the dispute between the appellant and its workmen come within the ambit of the Act
As regards the Award dated March 3 1960 the learned single Judge found that the workmen concerned had given notice to terminate the previous Award and as such the existence of previous Award and as such the existence of previous Award would not preclude a fresh reference
The learned single Judge observed that no specific plea was raised by the appellant before the Industrial Tribunal challenging the order and the reference on the ground that there was no such dispute prior to the reference between the workmen and the appellant about the questions referred to in the order of reference and that whether there was any demand or not is a question of fact
the learned single Judge however held that from the evidence it is clear that the workmen concerned had demanded before the order of reference in their charter of demands dearness allowance and provident fund and gratuity and as such there was a dispute between the workmen concerned and the employers before the order of reference was made
The Award was challenged on merits before the learned single Judge on the ground that the Industrial Tribunal did not consider the appellant s capaci ty to pay in granting dearness allowance to the workmen concerned
The learned single Judge 939 rejected the said contention on the view that reading the Award as a whole it could not be contended that the Tribunal did not take into consideration either the capacity to pay or the leval of the cost of living
The appellant filed an appeal against the judgment of the learned single Judge which was dismissed by a Division Bench of the High Court by its judgment and order dated December 20 1974
The learned Judges agreed with the deci sion of the learned single Judge that the appellant is carrying on an industry under Section 2j of the Act
Before the Division Bench it was contended on behalf of the appellant that the earlier Award was made on the basis of a settlement between the two parties and that since the said Award was in a nature of settlement it could only be termi nated in accordance with the provisions of Section 192 of the Act relating to termination of a settlement
The learned Judges of the Division Bench held that the said contention was not raised by the appellant before the Tribunal and also before the learned single Judge and it could not be raised for the first time at the stage of the appeal and that it cannot be considered to be a pure question of law because for a settlement under Section 2p of the Act the necessary requirements of settlement as laid down in the statute and the rules have to be satisfied and whether the necessary recruitments have been satisfied or not will involve inves tigation into facts
The learned Judges were however of the view that even if the said plea was allowed to be raised it could not be accepted inasmuch as the materials on record do not establish that the requirement of settlement as defined in Section 2p of the Act are satisfied in respect of the earlier Award
It was held that an Award does not necessarily cease to be an Award merely because the same was made on the basis of a settlement arrived at between the parties and that the earlier Award was an Award within the meaning of Section 2b of the Act and was not a settlement as contemplated by Section 2p of the Act
With regard to the termination of the earlier Award the learned Judges have held that in the facts and circumstances of the case it had been validly terminated in accordance with Section 196 as well as Section 192 of the Act
Before the Division Bench it was urged on behalf of the appellant that the Tribunal has not considered the financial capacity of the appellant while making the Award with regard to dearness allowance and reliance was placed on certain documents which were filed before the Division Bench
The learned Judges held that in considering the findings arrived at by the Tribunal the Court should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the 940 Tribunal should not be allowed to be placed before the Court in a writ petition for determining whether the findings of the Tribunal are justified or not and that in the instant case no proper grounds have been made out for not producing the materials which were then available at the time of the hearing before the Tribunal and why the said documents could not be produced even before the learned single Judge
The learned Judges further held that even if the said documents are taken into consideration the same would be of no partic ular assistance to the appellant inasmuch as the said docu ments consist mainly of balance sheets and assessment or ders and that the legal position is settled that while computing gross profits for the purpose of revising wage structure and dearness allowance the provision made for taxation depreciation and development rebate cannot be deducted and the provisions of the Companies Act contained in Sections 205 and 211 and the principles of accountancy involved in preparation of profit and loss accounts have no relevance or bearing while considering the revision of wages and dearness allowance
The learned Judges have held that on the materials on record the Tribunal was justified in making the Award and that the materials on record before the Tribu nal establish that the amount ordered by the Tribunal was not beyond the financial capacity of the appellant
Aggrieved by the decision of the Division Bench of the High Court the appellant has flied this appeal after obtain ing leave to appeal from the High Court under Article 1331a of the Constitution
Shri RN Nath the learned counsel for the appellant has submitted that the High Court was in error in holding that the appellant is an industry under Section 2j of the Act
Shri Nath has submitted that in arriving at the said conclusion the learned Judges of the Division Bench of the High Court have relied upon the decision of this Court in Management of Safder Jung Hospital vs Kuldip Singh Sethi   which decision was overruled by this Court in Bangalore Water Supply  Sewerage Board vs R Rajappa and Others  The submission of Shri Nath is that in accordance with the principles laid down in Bangalore Water Supply  Sewerage Board Case supra the appellant cannot be taken to be carrying on an industry under Section 2j of the Act
In our opinion there is no substance in this contention
It is no doubt true that the learned Judges of the Division Bench of the High Court have placed reliance on the decision of this Court in the Safdar Jung Hospital Case Supra for holding that the appellant is carrying on an industry under Section 2j of the Act and the decision in Safdar Jung Hospital case supra has 941 been overruled by a larger Bench of this Court in Bangalore Water Supply  Sewerage case supra
But this does not mean that the view of the High Court that the appellant is carrying on an industry under Section 2j of the Act is erroneous
In Safdar Jung Hospital case supra a six member Bench of this Court had overruled the earlier deci sion in State of Bombay vs Hospital Mazdoor Sabha  and gave a restricted interpretation to the definition of industry contained in Section 2j of the Act
Bangalore Water Supply  Sewerage Board case decided by a seven member Bench of this Court by overruling the decision in Safdar Jung Hospital case has restored the Hospital Mazdoor Sabha case
In other words the effect of decision on Bangalore Water Supply  Sewerage Board case is that the expression industry as defined in Section 2j has to be given the meaning assigned to it by this Court in the earlier decisions in DN Banerjee vs PR Mukherjee   Corporation of the of Nagpur vs Its employees   and the Hospital Mazdoor Sabha case Krishna Iyer J who delivered the main judgment in Bangalore Water Supply  Sewerage Board case has summed up the principles which are decisive positively and nega tively of the identity of industry under the Act
The first principle formulated by the learned Judge is as under I Industry as defined in Section 2j and explained in Banerjee has a wide import a Where i systematic activity ii organised by cooper ation between employer and employee the direct and sub stantial element is chimerical iii for the production andor distribution of goods and services calculated to satisfy human wants and wishes not spiritual or religious but inclusive of material things or services geared to celestial bliss eg making on a large scale prasad or food prima facie there is an industry in that enterprise
b Absence of profit motive or gainful objective is irrele vant be the venture in the public joint or other sector
c The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer employee relations
d If the organisation is a trade or business it does not cease to be one because of philanthropy animating the under taking
 942 If the said principles are applied to the facts of the present case and there can be no doubt that the activity carried on by the appellant satisfies the requirements of the definition of industry contained in Section 2j of the Act
In this regard it may be mentioned that the learned Judges of the Division Bench of the High Court have found as under i The Memorandum of Association of the appellant company indicate that the principal object for which the appellant company was incorporated is to acquire by purchase trans fer assignment or otherwise lands buildings and landed properties of all description and in particular to acquire from the Karnani Industrial Bank Ltd the immovable proper ties now belonging to the said Bank and to improve manage and develop the properties and to let out the same on lease or otherwise dispose of the same
ii The principal business of the company is to deal with the real property and it is a real estate company
iii The income which the appellant derives is not from mere letting out the properties to the tenants and that the tenants pay not only for mere occupation of the property but also for enjoyment of the various services which are ren dered by the appellant to the tenants and to which services the tenants are entitled as a matter of right for the occu pation of the premises
iv The services which are rendered to the tenants and about which there does not appear to be any dispute are a elaborate arrangements for supply of water b free supply of electricity c washing and cleaning of floors and lavatories d lift services e electric repairs and replacing and f sanitary repairs and replacing etc
943 v For offering these services to the tenants the appel lant has employed a number of workmen and these services which undoubtedly confer material benefits on the tenants and constitute material services are rendered by the em ployees
vi The employees of the appellant company are engaged in their respective calling or employment to do their work in rendering the services
vii Activity carried on by the appellant company is un doubtedly not casual and is distinctly systematic
viii The work for which labour of workmen is required is clearly productive of the services to which the tenants are entitled and which also form a part of the consideration for the payments made by the tenants
ix The appellant carries on its business with a view to profits and it makes profits and declares dividends out of the profits earned
From the aforesaid findings recorded by the High Court with which we find no reason to disagree it is evident that the activity carried on by the appellant falls within the ambit of the expression industry defined in Section 2j of the Act as construed by this Court in Bangalore Water Supply  Sewerage Board case supra
The Award of the Industrial Tribunal cannot therefore be assailed on the basis that the appellant is not carrying on an industry under the Act
Shri Nath has next contended that the Industrial Tribu nal was not competent to make the Award as the earlier Award dated March 3 1960 had not been validly terminated
He has urged that the earlier Award was in the nature of a settle ment under Section 2p of the Act and it could be terminat ed only in accordance with Section 192 of the Act
Shri Nath has pointed out that for terminating a settlement under Section 192 a written notice is necessary whereas for termination of an Award under Section 196 of the Act a written notice is not required and a notice is sufficient
In our opinion this contention does not require consid eration in view of the finding recorded by the learned Judges of Division Bench of the High Court that the letter dated November 24 1966 was a notice 944 under Section 196 as well as under Section 192 of the Act
It has been found that the said letter of the union which was addressed to the Labour Commissioner was sent to the appellant company and that in the said letter there is a clear intimation of the intention of the employees to termi nate the Award and from the letter of the appellant dated February 13 1967 it appears that the appellant had become aware of the intention of the union to terminate the Award and that the order of reference was made on July 29 1967 long after the expiry of the period of two months
It is not the requirement of Section 192 of the Act that there should be a formal notice terminating a settlement and notice can be inferred from the correspondence between the parties See Indian Link Chain Manufacturers Ltd vs Their Workmen  In the aforesaid facts and circumstances the High Court was justified in holding that the Award dated March 3 1960 had been validly terminated before the passing of the order of reference
Shri Nath has urged that there has been non compliance of the provisions of Section 197 of the Act which lays down that no notice given under sub section 2 or sub sec tion 6 shall have effect unless it is given by a party representing the majority of the persons bound by the set tlement or Award as the case may be
This question has been raised by the appellant for the first in this Court
It involves an inquiry into questions of fact which cannot be made at this stage
The same therefore cannot be allowed to be agitated
Shri Nath has lastly urged that the Industrial Tribunal was in error in making the Award in relation to Dearness Allowance without examining the capacity of the appellant to pay the additional amount and that the High Court should have remanded the matter to the Tribunal for considering this issue in the light of the documents which were submit ted by the appellant before the High Court
We find no substance in this contention
The High Court has rightly held that in considering the finding arrived at by the Tribunal the High Court while exercising its jurisdiction under Article 226 of the Constitution should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the Tribunal should not normally be allowed to be placed before the Court
The appellant has not been able to show why the said documents were not produced before the Tribunal
It is not the case of the appellant that the Tribunal had precluded the appellant from producing these documents
In these circumstances we find no justification for accepting the plea of the learned counsel for the appel lant for 945 reconsideration of the Award of the Tribunal in the light of the documents submitted by the appellant during the pendency of the appeal before the High Court
The appeal is therefore dismissed with costs
During the pendency of this appeal the appellant has made a deposit before the Tribunal
The respondent union will be entitled to withdraw the said amount along with the interest that has accrued on it
TNA Appeal dismissed


Summary:
The land in plots Nos
6385 and 6386 had been in posses sion of Ram Dayal as mortgagee under Baijnath who was the original tenant
Respondents No 1 3 are the descendants of Ram Dayal
They made an application under section 9 of UP Consolidation of Holdings Act 1954 before the Consolidation Officer claiming tenancy rights on the basis of the deed dated July 30 1945 stating that their names had been recorded in Khatauni of 1359 Fasli
They are in cultivatory possession and have become adhivasis and subsequently sir dars
They further contended that the appellants have no right of possession over the land and their names have been wrongly entered in the Khatauni No 1353 Fasli
The respond ents prayed for entering their names as sirdars
This application was allowed by the Consolidation Offi cer vide order dated July 23 1967
The Settlement Officer Consolidation reversed the order and the Deputy Director of Consolidation dismissed the revision filed by the re spondents
Subsequently the respondents filed a writ petition in the High Court
The High Court allowed the same and quashed the orders of the appellate and the revisional authorities and maintained the order of the Consolidation Officer in its judgment dated 3rd October 1972
The appellants filed a special leave on 30th November 1972 against the judgment of the High Court dated 3rd Octo ber 1972 under letters patent
It was not maintainable in view of the UP Courts Abolition of Letters Patent Appeal Amendment Ordinance 1972 which came into force on 30th June 1972
Thus Writ Petition finally culminated in favour of the respondents by High Court order dated 3rd October 1972
958 The appellants instead of challenging the order of the High Court by way of filing any Special Leave Petition before this Court initiated fresh proceedings by moving an application on 6th July 1973 before the Settlement Officer Consolidation which was rejected on 30th October 1974
A revision was filed against the said order before the Deputy Director of Consolidation which was also rejected on 21st July 1975
Thereafter the appellants moved the High Court again and the Writ Petition filed by them was dismissed by its order dated 18th September 1975
Since the subject matter had been finally decided by the High Court judgment of 3rd October 1972 so to start pro ceedings afresh was not in good faith as none of the author ities of the Settlement or Consolidation could have any right or jurisdiction to set aside the order of the High Court
The second judgment of the High Court dated 18th September 1975 was challenged in CA No 1003 of 1976 in this Court
Dismissing the appeal the Court HELD Both the appeals had been filed after the expiry of the period of limitation
The appellants had applied for condonation of delay on the ground that they had been prose cuting the prior proceedings in good faith and on legal advice so the period of more than three years be excluded in computing the period of limitation under section 14  of the 
The Respondents filed counter to the application and opposed the same
961D E Special leave was granted by this Court on 2nd Septem ber 1976 subject to the rights of the respondents to argue the question of limitation and applicability of section 14 of the at the hearing of the appeals
961F The appellants as to the question of limitation submit ted that the delay of 1198 days had occurred unwillingly though they had been prosecuting with due diligence before the appellate authorities but there is no proper affidavit either of the appellants or the Counsel in support of the application for condonation of delay
There is also no other material to indicate that the appellants had exercised due diligence in working out their remedies and sought proper advice in the matter
There was no right of appeal against the judgment of the High Court as it quashed the orders of the appellant and the revisional authorities so the proceed ings instituted by the party by restoring to the lower authorities for fresh decision are not legal or valid
Hence the appeals are liable to be dismissed as time barred
961G H 962A B 959 Even on merits the appellants cannot succeed
Admitted ly the original tenant was Baijnath but was dispossessed in execution decree obtained by the landlord in 1944
Thereaf ter the land was mortgaged in favour of Ram Dayal and the mortgagee obtained the decree against the landlord
The respondents subsequently entered into an agreement setting the claims under the decree and granting patta in favour of the Respondents in deed dated 30th July 1945
These facts have been accepted by the Consolidation Officer and the deed and title were found to be in favour of therespondents
The tenancy in favour of Baijnath was subsisting when the deed of 23rd November 1943 was executed
The creation of a tenancy during the subsistence of the earlier one could not confer any right and even before the deed of 2nd August 1945 patta was already granted in favour of the respondents
962D G Even the contention of the appellants that they have a case under section 43 of the Transfer of Property Act which embodies the rule of estoppel by deed is not applicable because the transfer under the deed of 23rd November 1943 became inoperative because the settlement was invalid on account of the subsisting lease in respect of the Land and the landlord could not super impose a second lease in re spect of the tenanted property so no interest could be created in favour of the appellants under that document of 2nd August 1945 and therefore there is no question of feeding the estoppel
963E G