Civil Appeal No 136 of 1958
Appeal by special leave from the decision dated April 301956 of the Labour Appellate Tribunal of India at Lucknow in Appeeal No III 45 of 1956 lip 919 arising out of the award dated February 6 1956 of the State Industrial Tribunal Allahabad in reference No 96 of 1955
Ram Lal Anand IM Lal and section section Sukla for the appellants
B D Sharma for respondents Nos
1 to 5
CP Lal and G N Dikshit for respondent No 6 1960
February 9
The Judgment of the Court was delivered dy SUBBA RAO J
This is an appeal by special leave against the order of the Labour Appellate Tribunal of India setting aside the award of the Industrial Tribunal Allahabad and directing the reinstatement of the workers in Kundan Sugar Mills at Amroha
 Kundan Sugar Mills  is a partnership concern and owns a sugar mill at Amroha
The respondents I to 4 were employed by the appellant as seasonal masons in the year 1946
In 1951 the partners of the appellant Mills purchased the building machinery and other equipment of another sugar mill at Kiccha in the district of Nainital
They closed the said mill at Kiccha and started it at Bulandshahr
The new factory was named Pannijee Sugar  General Mills Bulandshahr
On January 19 1955 the General Manager of the appellant Mills ordered the transfer of the respondents I to 4 from the appellant Mills to the new mill at Bulandshahr
The said respondents through their representative the fifth respondent protested to the General Manager against the said transfer
But the General Manager by his letter dated January 2224 1955 insisted upon their joining the new mill at Bulandshabr
But the said respondents did not accede to his request
On January 28 1955 the General Manager served a notice on the respondents 1 to 4 stating that they had disobeyed his orders and thereby committed misconduct under Standing Order No La
They were asked to submit their explanation as to why action should not be taken against them under the Standing Order
The Labour Union by its letter dated January 31 1955 denied the charges
On February 2 1955 the General Manager made an order dismissing the respondents 1 to 4 from service on the ground that 117 920 they had disobeyed his order of transfer and thus they were guilty of misconduct under Standing Order No LIa
The Labour Union thereafter raised an industrial dispute and the Government of UP by its notification dated November 7 1955 referred the following issue for decision to the State Industrial Tribunal for U P at Allahabad  Whether the employers have wrongfully andor unjustifiably terminated the services of Sarva Shri Zia Uddin Raisuddin Shafiquddin and Ahmed Bux for refusal to obey the orders of tranfer to Ms Pannijee Sugar and General Mills Co Bulandshahr
If so to what relief are the workmen entitled
 The State Industrial Tribunal by its order dated February 6 1956 made its award holding that the management was within its rights and that as the respondents 1 to 4 had disobeyed the order of the management they were properly dismissed by the management
The said respondents through their Union respondent No 5 perferred an appeal to the Labour Appellate Tribunal of India and the said Appellate Tribunal held that the management had no right to transfer the respondents 1 to 4 to the new factory and therefore the order dismissing them was illegal
The management has preferred the present appeal against the said order of the Labour Appellate Tribunal
Learned counsel for the appellant raised before us the following two questions 1 The right to transfer an employee by an employer from one of his concerns to another is implicit in every contract of service 2 the State Industrial Tribunal having held that both the concerns ie the mills at Amroha and the mills at Bulandshahr formed one unit the Appellate Tribunal had no jurisdiction to set aside that finding under section 71 of the Industrial Disputes Appellate Tribunal Act 1950
To appreciate the first contention it is necessary to notice the undisputed facts in this case
It is true that the partners of the Sugar Mills at Amroha own also the Sugar Mills at Bulandshahr but they were proprietors of the former Mills in 1946 whereas they purchased the latter mills only in the year 1951 and 921 started the same in Bulandshahr in or about 1955
The respondents 1 to 4 were employed by the owners of the appellant Mills at the Sugar Mills at Amroha at a time when they were not proprietors of the Sugar Mills at Bulandshahr
It is conceded that it was not an express term of the contract of service between the appellant and the respondents I to 4 that the latter should serve in any future concerns which the appellant might acquire or start
It is also in evidence that though the same persons owned both the Mills they were two different concerns
In the words of the Appellate Tribunal the only connection between the two is in th identity of ownership and but for it one has nothing to do with the other
It is also in evidence that an imported workman at Amroha is entitled to house rent fuel light and travelling expenses both ways while at Bulandshahr the workmen are not entitled to any of these amenities
The workmen at Amroha are entitled to benefits under the Kaul Award while those at Bulandshahr are not so entitled
The General Manager EW1 in his evidence stated that the interim bonus of the Bulandshahr factory as ordered by the Government in November 1955 was Rs 1 1000 while for Amroha it was nearly 1 12 lacs 
He also stated that the bonus for last year at Amroha would be probably equal to II months  wages and at Bulandshahr equal to about 4 or 5 days  wages
 It is also in evidence that apart from the disparity in the payment of bonus the accounts are separately made up for the two mills
It is clear that the two mills are situated at different places with accounts separately maintained and governed by different service conditions though they happened to be under the common management therefore they are treated as two different entities
The question of law raised in this case must be considered in relation to the said facts
The argument of the learned counsel for the appellant that the right to transfer is implicit in every contract of service is too wide the mark
Apart from any statutory provision the rights of an employer and an employee are governed by the terms of contracts between them or by the terms necessarily implied therefrom
It is 922 conceded that there is no express agreement between the appellant and the respondents where under the appellant has the right to transfer the respondents to any of its concerns in any place and the respondents the duty to join the concerns to which they may be transferred
If so can it be said that such a term has to be necessarily implied between the parties  When the respondents 1 to 4 were employed by the appellant the latter was running only one factory at Amroha
There is nothing on record to indicate that at that time it was intended to purchase factories at other places or to extend its activities in the same line at different places
It is also not suggested that even if the appellant had had such an intention the respondents I to 4 had knowledge of the same
Under such circumstances without more it would not be right to imply any such term between the contracting parties when the idea of starting new factories at different places was not in contemplation
Ordinarily the employees would have agreed only to serve in the factory then in existence and the employer would have employed them only in respect of that factory
The matter does not stop there
In the instant case as we have indicated the two factories are distinct entities situated at different places and to import a term conferring a right on the employer to transfer respondents I to 4 to a different concern is really to make a new contract between them
The decisions cited at the Bar do not in the least sustain the appellant s broad contention
In Alexandre Bouzourou vs The Ottoman Bank 1 the appellant was an employee of the respondent bank
The bank transferred him from one branch to another branch of the bank situated in different towns
As he refused to comply with the order of transfer he was dismissed
Thereafter he filed a suit to recover damages from the bank for wrongful dismissal
It was argued before the Judicial Committee that under the terms of his contract of service the sphere of his employment included only the head office and not the branches of the bank
The evidence in that case showed that transfer was one of the ordinary incidents of the bank s employment being usually concurrent with an 1 ATR  119
923 increase of salary and responsibility and suggest no more than that the bank considered their officials convenience where possible
Indeed the appellant therein did not even suggest in his correspondence thatthe transfer was a breach of his contract
On these circumstances the Judicial Committee observed as follows at p 119  From the point of view of proper organization of their staff it is difficult to assume that the Bank would willingly agree that their employees should not be bound to serve outside the place where the contract was made except with their consent and in their Lordships  opinion such a condition of the contract would require to be clearly established
 The essential distinction between that case and the present one is that there the bank with its branches was one unit and the records clearly indicated that transfer was one of the ordinary incidents of service in the Bank
In such circumstances when a person joined such a service the Privy Council found it easy to imply a term of transfer
That decision is therefore not of any relevancy to the present case
In Mary Anamalai Plantation Workers  Union vs Seliparai estate 2 labour was recruited in the plantations without any differentiation being made between factory and field workers and it had been the common practice prevailing for several years to transfer the factory workers to the field and vice versa according to the exigencies of work
A worker who had been appointed in such a plantation was transferred owing to mechanisation in the factory from the factory to the field
The Labour Appellate Tribunal of India held that in the circumstances of the case the liability to be so transferred must be deemed to be an implied condition of service
So too in Bata Shoe Company Ltd vs Ali Hasan Industrial Tribunal Patna  Ors 3 transfer of an employee in the circumstances of that case from one post to another was held not to be an alteration of any service condition within the meaning of section 33 of the Industrial Disputes Act
That was a case of a management employing a worker in one concern and transferring him from one post to 2 1956 ILLJ 343
3 924 another
In such a case it was possible to imply the condition of right of the management to transfer the employee from one post to another
section N Mukherjee vs Kemp  Co Ltd 4 was a case arising out of section 23 of the Industrial Disputes Appellate Tribunal Act 1950
The complaint there was that an employee was transferred by the management with a view to victimize him and that it amounted to alteration in the conditions of employment
It was held that if an employer employed a person it was implicit in the appointment that he could be transferred to any place where the business of the employer in the same line was situated unless there was an express condition to the contrary in the contract of employment
In that case the worker was employed by Kemp  Co Limited which had branches in different places
The decision assumed that the business was one unit and that the only question raised was that he should not be transferred to a place different from the place where he was actually discharging his duties
These observations must be limited to the facts of that case
It is not necessary to multiply the citation for the other decisions relied on by the learned counsel for the appellant pursue the same reasoning followed in the aforesaid cases
We have referred to the decisions only to distinguish them from the present case and not to express our opinion as to the correctness of the decisions therein
It would be enough to point out that in all the said decisions the workers had been employed in a business or a concern and the question that arose was whether in the circumstances of each case the transfer from one branch to another was valid or amounted to victimization
None of these decisions deals with a case similar to that presented in this appeal namely whether a person employed in a factory can be trans ferred to some other independent concern started by the same employer at a stage subsequent to the date of his employment
None of these cases holds as it is suggested by the learned counsel for the appellant that every employer has the inherent right to transfer his employee to anotherplace where he chooses to start 4 925 a business subsequent to the date of the employment
We therefore hold that it was not a condition of service of employment of the respondents either express or implied that the employer has the right to transfer them to a new concern stared by him subsequent to the date of their employment
The respondents also relied upon a Government Order No 6122 STXXXVI A 640S T 1953 in support of their contention that the order of transfer was bad
By this Order the Government of U P had directed that the employment of seasonal workmen in all vacuum pan sugar factories in the Uttar Pradesh should be governed by the rules contained in the annexure thereto
Rule I in the said annexure is to the following effect  A worker who has worked or but for illness or any other unavoidable cause would have worked in a factory during the whole of the second half of the last preceding season will be employed in this season in such factory
 This rule has no relevancy to the question raised in the present case
This rule only enjoins upon an employer to employ a worker in the circumstances mentioned therein in the same factory in which he was working in the previous season during the next season also
This does not prevent the employer to transfer an employee if he has the right to do so under the contract of service or under any statutory provisions
We have already held that the employer in the present case has no such right
Lastly it is said that the Appellate Tribunal had no jurisdiction to set aside the finding of the State Industrial Tribunal as it did not give rise to any substantial question of law within the meaning of section 71 of the Industrial Disputes Appellate Tribunal Act 1950
The question raised was one of law namely whether the appellant had the right to transfer the respondents 1 to 4 from one concern to another
A substantial question of law involved between the parties and that raised also an important principle governing the right of an employer to transfer his employees from one concern to another of his in the circumstances of this case
We therefore hold that 926 a substantial question of law arose in the case and that it was well within the powers of the Labour Appellate Tribunal to entertain the appeal
In the result the appeal fails and is dismissed with costs
Appeal dismissed


Summary:
The appellants were appointed under an agreement in writing by the Governor General as agents for purchasing and supplying ghee required for the Army personnel with effect from October 1 1937
After the outbreak of the World War 11 there was an enormous increase in the demand of ghee by the Government and the agreement was revised by mutual consent on June 20 1942 and the original rates of payment were scaled down
On December 6 1943 the appellants made a representation to the Government for enhancing the rates as conditions had become 794 abnormal
According to the appellants they were given assu rances that their claims would be favourably considered by the Government and relying on these assurances they continued to supply ghee in quantities demanded by the Government incurring heavy extra expenditure
The Government did not enhance the rates and the matter was referred to arbitration under the agreement of 1937
Before the arbitrators the appellants contended that the agreement Of 1942 was not binding upon them and claimed payment on the basis of the agreement Of 1937 and in the alternative claimed payment on the basis of increased rates of mandi charges additional buying remuneration and contingency charges
These claims were resisted by the Government and it was denied that any assurances were given by the Government to enhance the rates
The arbitrators incorporated the points of contest in the form of issues
By an award dated May 2 1954 the arbitrators rejected the primary claim of the appellant holding that the agreement of 1942 was binding
On the alternative claim they awarded a sum of money for loss suffered by the appellants on account of establishment and contingencies and another sum for mandi and financing charges
The award was filled in the Court of the Commercial Sub judge Delhi and the Government applied to have it set aside
The Sub judge held that though there was an error on the face of the award in ordering the payment of additional remuneration and financing and overhead charges the award could not set aside as specific questions had been expressly referred for adjudication to the arbitrators and the award was binding on the parties
On appeal the High Court held that no specific questions of law had been referred to the arbitrators and that the award was vitiated by errors apparent on the face of the award
Held that the award was liable to be set aside because of an error apparent on the face of the award
An arbitration award may be set aside on tile ground of an error on the face of it when the reasons given for the decision either in the award or in any document incorporated with it are based upon a legal proposition which is erroneous
But where a specific question is referred the award is not liable to be set aside oil the ground of an error on the face of the award even if the answer to the question involves an erroneous decision on a point of law
In the present case there was a general reference and not a specific reference on any question of law
Champsey Bhara and Co vs Jivraj Balloo Spinning  Weaving Co Ltd L R 50 1
A 324 In the matter of a arbitration between King and Duveen LR 1913 2 KB1
32 and Government of Kelantan vs Duff Development Co Ltd L R  relied on
The contract provided for payment of charges at rates specified therein and the arbitrators could not ignore the express covenants between the parties and award amounts not agreed to be 795 paid
A contract is not frustrated merely because the circumstances in which it was made are altered
The courts have no general power to absolve a party from the performance of his part of the contract merely because its performance has become onerous on account of an unforseen turn of events
Constantine s case  Hirji Mulji vs Cinemas Ltd Steamship Co Ltd  British Movietonews Ltd vs London and District Cinemas L R and Parki son Co Ltd vs Commissioners of Works
1949 2 K B D 632 referred to
British Movietonews Ltd vs London and District Cinemas Ltd 1951 1 KBD 190 disapproved
The award which ignored the express terms of the contract prescribing the remuneration payable could not be justified as proceeding upon the basis of quantum meruit
Compensation quantum meruit may be awarded for work done or services rendered only when the price thereof is not fixed by a contract
For work done or service rendered pursuant to the terms of a contract compensation quantum meruit cannot be awarded where the contract provides for the consideration payable in that behalf