Appeal No 135 of 1955
Appeal by special leave from the judgment and order dated October 30 1952 of the Labour Appellate Tribunal of India Allahabad in Misc
Case No C 146 of 1952
R R Biswas for the appellant
Sukumar Ghose amicus curiae for the respondents
November 28
The Judgment of the Court was delivered by SK DAS J
This is an appeal by special leave from the judgment and order of the Labour Appellate Tribunal of India at Allahabad dated October 30 1952
The relevant facts are these
The Banaras Ice Factory Limited the appellant before us was incorporated on September 13 1949 as a private limited company and was carrying on the business of manufacturing ice in the city of Banaras though its registered office was in Calcutta
The factory worked as a seasonal factory and had in its employment about 25 workmen at all material times
These workmen were employed from the month of March to the month of September 145 year
The appellant company got into financial difficulties on account of trade depression rise in the price of materials and increase in the wages and emoluments of workmen
It tried to secure a loan of Rs 10000 from a Bank but met with no success
Thereupon it decided to close down the factory and on January 15 1952 a notice was given to its workmen saying that the factory would be closed down with effect from January 17 1952 and the services of the workmen would not be necessary for two months from that date
The work
men received their wages up to January 16 1952
On March 18 1952 they were again taken into service but this temporary closing of the factory gave rise to an industrial dispute and the workmen complained that they were wrongfully laid off with effect from January 17 1952
The dispute was referred to the Regional Conciliation Officer Allahabad for adjudication
In the meantime that is on June 6 1952 the workmen gave a strike notice and as there was no coal in the factory the appellant also gave a notice of closure on June 12 1952
A settlement was however arrived at between the parties on June 15 1952 at the house of the Collector of Banaras
The terms of that settlement inter alia were 1 the management would withdraw its notice of closure dated June 12 1952  2 the workmen would withdraw their strike notice dated June 6 1952 3 there being no coal the workers would remain on leave for a period of thirty days with effect from June 16 1952 and would report for duty on July 16 1952 at 8 AM and 4 after the workers had resumed their duty on July 16 1952 the appellant would not terminate the services of any workmen or lay them off in future without obtaining the prior permission of the Regional Conciliation Officer Allahabad
On June 28 1952 the Regional Conciliation Officer Allahabad gave his award in the matter of the industrial dispute between the appellant and its work  men with regard to the alleged wrongful laying off of the workmen from January 17 1952 to March 18 1952 19 146 referred to above
By his award the Regional Conciliation Officer gave full wages to the workmen for the period in question
On July 16 1952 none of the workmen reported for duty in accordance with the terms of the agreement referred to above and on that date the appellant gave a notice to its workmen to the effect that the appellant found it difficult to run the factory and had decided to close it down the workmen were informed that their services would not be required and would be terminated upon the expiry of thirty days from July 16 1952
The workmen it is stated accepted the notice and took their pay for one month from July 16 to August 15 1952 without any protest
Against the award of the Regional Conciliation Officer dated June 28 1952 the appellant filed an appeal to the Labour Appellate Tribunal on July 25 1952
On August 31 1952 a complaint was made on behalf of the workmen to the Labour Appellate Tribunal under section 23 of the Industrial _ Disputes Appellate Tribunal Act 1950 hereinafter referred to as the Act
The gravamen of the complaint was that the appellant had contravened the provisions of section 22 of the Act
because the appellant had discharged all the workmen with effect from August 15 1952 without the permission in writing of the Labour Appellate Tribunal during the pendency before it of the appeal filed on July 25 1952 against the award of the Regional Conciliation Officer
The Labour Appellate Tribunal dealt with this complaint by its order dated October 30 1952
Before the Labour Appellate Tribunal it was urged on behalf of the appellant that there was no contravention of a 22 because on July 16 1952 when the notice of discharge was given by the appellant no appeal was pending before it the appellant s appeal having been filed several days later namely on July 25 1952
This contention was not accepted by the Labour Appellate Tribunal on the ground that though the notice of discharge was given on July 16 1952 the termination of service was to come into operation after one month that is from August 15 1952 on which date the appeal before the Labour Appellate Tribunal was certainly pending
As learned counsel for the 147 appellant has not again pressed this point before us it is not necessary to say anything more about it
A second point uroed before the Labour Appellate Tribunal was that the appellant had the right to close down the factory when the appellant found that it was not in a position any longer to run the factory
The agreement of June 15 1952 did not stand in the appellant s way as the workmen themselves did not report for duty on July 16 1952
The closure being a bona fide closure it was not necessary to obtain the permission of the Labour Appellate Tribunal and there was therefore no contravention of section 22 of the Act
The Labour Appellate Tribunal apparently accepted the principle that the appellant had the right to close its business but took the view that permission should have been obtained before the closure
It referred to the agreement of June 15 1952 and held that though the appellant had the right to close its business permission was still necessary and in the absence of such permission the appellant was guilty of contravening cl
b of section 22 of the Act and directed that the appellant should pay its workmen full wages as compensation for the period of involuntary unemployment up to the date of its award that is during the period from August 16 1952 to October 30 1952
Relying on the decision in J K Hosiery Factory vs Labour Appellate Tribunal of India 1 learned counsel for the appellant has urged three points before us
His first point is that the termination of the services of all workmen on a real and bona fide closure of business is not discharge  within the meaning of cl
b of section 22 of the Act
His second point is that if the word discharge  in cl
b aforesaid includes termination of services of all workmen on bona fide closure of business then the clause is an unreasonable restriction on the fundamental right guaranteed in el
g of article 19 1 of the Constitution
His third point is that in any view the Labour Appellate Tribunal was not entitled to grant compensation to the workmen because section 23 of the Act did not in terms entitle the Labour 1 AIR 1956 All
148 Appellate Tribunal to pass an order of compensation
We may state here that if the appellant succeeds on the first point it becomes unnecessary to decide the other two points
For a consideration of the first point we must first read sections 22 and 23 of the Act
Section 22  During the period of thirty days allowed for the filing of an appeal under section 10 or during the pendency of any appeal under this Act no employer shall aalter to the prejudice of the workmen concerned in such appeal the conditions of service applicable to them immediately before the filing of such appeal or bdischarge or punish whether by dismissal or otherwise any workmen concerned in such appeal save with the express permission in writing of the Appellate Tribunal
 Section 23  Where an employer contravenes the provisions of section 22 during the pendency of proceedings before the Appellate Tribunal any employee aggrieved by such contravention may make a complaint in writing in the prescribed manner to such Appellate Tribunal and on receipt of such complaint the Appellate Tribunal shall decide the complaint as if it were an appeal pending before it in accordance with the provisions of this Act and shall pronounce its decision thereon and the provisions of this Act shall apply accordingly The short question before us is whether the word discharge  occurring in cl
b of section 22 includes termination of the services of all workmen on a real and bona fide closure of his business by the employer
It is true that the word discharge  is not qualified by any limitation in cl
We must however take the enactment as a whole and consider section 22 with reference to the provisions of the  XIV of 1947 which is in pari materia with the Act under our consideration
We have had occasion to consider recently in two cases the general scheme and 149 scope of the 
In Burn  Co Calcutta vs Their Employees1 this Court observed that the object of all labour legislation was  firstly to ensure fair terms to the workmen and secondly to prevent disputes between employers and employees so that production might not be adversely affected and the larger interests of the public might not suffer
In Pipraich Sugar Mills Ltd vs Pipraich Sugar Mills Mazdoor Union 2 it was observed  The objects mentioned above can have their fulfilment only in an existing and not a dead industry
 We accepted the view expressed in Indian Metal and Metallurgical Corporation vs Industrial Tribunal3 and K M Padmanabha Ayyar vs The State Of Madras 4 that the provisions of the  applied to an existing industry and not a dead industry
The same view was reiterated in Hariprasad Shivshankar Shukla vs A D Divikar 5 where we held that retrenchment  in cl
oo of section 2 and section 25F did not include termination of the services of workmen on bona fide closure of business
Turning now to section 22 of the Act it is clear enough that el
a applies to a running or existing industry only when the industry itself ceases to exist it is otiose to talk of alteration of the conditions of service of the workmen to their prejudice because their service itself has come to an end
The alteration referred to in cl
a must therefore be an alteration in the conditions of service to the prejudice of the workmen concerned in an existing or running industry
Similarly the second part of cl
b relating to punishment can have application to a running or existing industry only
When the industry itself ceases to exist there can be no question of punishment of a workman by dismissal or otherwise
We are then left with the word discharge 
Unqualified though the word is it must we think be interpreted in harmony with the general scheme and scope of the 
Our attention has been drawn to 1  4 2 2
5 1957 SC R121
3 AI R 150 the definition of workman  in cl
s of a 2 which says  for the purposes of any proceeding under this Act in relation to an industrial dispute the definition includes any person who has been dismissed discharged or retrenched in connection with or as a consequence of that dispute or whose dismissal discharge or retrenchment has led to that dispute
 In the said definition clause also the word discharge  means discharge of a person in a running or continuing business not discharge of all workmen when the industry itself ceases to exist on a bona fide closure of business
The true scope and effect of sections 22 and 23 of the Act were explained in The Automobile Products of India Ltd vs Rukmaji Bala 1
It was pointed out there that the object of section 22 was  to protect the workmen concerned in disputes which formed the subject matter of pending proceedings against victimisation  and the further object was  to ensure that proceedings in connection with industrial disputes already pending should be brought to a termination in a peaceful atmosphere and that no employer should during the pendency of these proceedings take any action of the kind mentioned in the sections which may give rise to fresh disputes likely to further exacerbate the already strained relations between the employer and the workmen
 Those objects are capable of fulfilment in a running or continuing industry only and not a dead industry
There is hardly any occasion for praying for permission to lift the ban imposed by section 22 when the employer has the right to close his business and bona fide does so with the result that the industry itself ceases to exist
If there is no real closure but a mere pretence of a closure or it is mala fide there Is no closure in the eye of law and the workmen can raise an industrial dispute and may even complain under a23 of the Act
For these reasons we must uphold the first point taken before us on behalf of the appellant
The Appellate Tribunal was in error in holding that the 1  151 appellant had contravened cl
b of section 22 of the Act
The Appellate Tribunal did not find that the closure of the appellants business was not bona fide on the  contrary in awarding compensation it proceeded on the footing that the appellant was justified in closing its business on account of the reasons stated by it
As to the agreement of June 15 1952 the workmen themselves did not abide by it and the appellant s right cannot be defeated on that ground
In view of our decision on the first point it becomes unnecessary to decide the other two points
On the point of construction of section 22 of the Act we approve of the decision of the Allahabad High Court in J K Hosiery Factory vs Labour Appellate Tribunal of India supra but we refrain from expressing any opinion on the other points decided therein and we must not be understood to have expressed our assent contrary to the opinion expressed by us in the case of The Automobile Product8 of India Ltd supra to the view that under section 23 of the Act it is not open to an industrial Tribunal to award compensation in an appropriate case
In the result the appeal is allowed and the decision of the Labour Appellate Tribunal dated the 30th October 1952 is set aside
As the workmen did not appear before us there will be no order for costs
We are indebted to Mr Sukumar Ghosh for presenting before us the case of the workmen as amicus curiae
Appeal allowed


Summary:
Clause b Of section 22 of the Industrial Disputes Appellate Tribunal Act 1950 provides that during the pendency of any appeal under the Act no employer shall discharge any workmen concerned in such appeal save with the express permission in writing of the Appellate Tribunal and section 23 enables any employee to make a complaint in writing to such Appellate Tribunal if the employer contravenes the provisions Of section 22 during the pendency of proceedings before the said Tribunal
144 During the pendency of an appeal filed before the Labour Appellate Tribunal the appellant company finding it difficult to run the factory decided to close it down and gave notice to all the workmen that their services would be terminated upon the expiry of thirty days from July 16 1952
On August 31 1952 a complaint was made on behalf of the workmen to the Tribunal under section 23 Of the Act that the appellant had discharged them without the permission in writing of the Tribunal and had thereby contravened the provisions of section 22 of the Act
It was found that the closure of the appellant s business was bona fide
Held that section 22 of the Act is applicable only to an existing or running industry and that the termination of the services of all workmen on a real and bona fide closure of business is not discharge  within the meaning of section 22b of the Act
J K Hosiery Factory vs Labour Appellate Tribunal of India AIR 1956 All 498 approved on the point of construction of section 22 of the Act
Pipraich Sugar Mills Ltd vs The Pipraich Sugar Mills Mazdoor Union followed