Appeal No 87 of 1958
Appeal by special leave from the Award dated October 10 1956 of the Industrial Tribunal Bihar Patna in Reference No 6 of 1956
R J Kolah section N Andley and Rameshwar Nath for the appellants
B C Ghose and P K Chatterjee for the respondents
705 1959
September 11
The Judgment of the Court was delivered by section K DAS J
This appeal by special leave from an award dated October 10 1956 made by the Industrial Tribunal Bihar raises an important question of interpretation in the matter of a disqualification for lay off compensation under section 25E read with section 25C of the hereinafter called the Act and so far as we know this is the first case of its kind in which the expression  in another part of the establishment  occurring in cl
iii of section 25E has come up for an authoritative interpretation
The facts are simple and are shortly set out below
The Associated Cement Companies Ltd hereinafter called the Company have a number of cement factories in different States of the Indian Union as also in Pakistan
There are two such factories in the State of Bihar one at Khelari and the other at a place called Jhinkpani in the district of Chaibasa in Bihar
The latter factory is commonly known as the Chaibasa Cement Works
There is a limestone quarry owned by the same Company situate about a mile and a half from the Chaibasa Cement Works the quarry being known as the Rajanka limestone quarry
Limestone is the principal raw material for the manufacture of cement and the Chaibasa Cement Works depended exclusively for the supply of limestone on the said quarry
At the time relevant to this appeal there were two classes of labourers at the quarry those employed by the Company through the management of the Chaibasa Cement Works and others who were engaged by a contractor
There was one union known as the Chaibasa Cement Workers  Union hereinafter called the Union of which the Company s labourers both at the Cement Works and the quarry were members
There was another union consisting of the contractor s labourers which was known as the A C C Limestone Contractor s Mazdoor Union
On January 3 1955 the Union made certain demands on the management on behalf of the labourers in the limestone quarry but these were rejected by the management
Then by a subsequent letter dated February 18 706 1955 the General Secretary of the Union gave a notice to the Manager of the Chaibasa Cement Works to the effect that the Union proposed to organise a general stay in strike in the limestone quarry from March 1 1955 if certain demands details whereof are unnecessary for our purpose were not granted on or before February 281955
A similar notice was also given on behalf of the ACC Limestone Contractor s Mazdoor Union
These notices led to certain efforts at conciliation which however failed
On February 24 1955 the management gave a notice to all employees of the Chaibasa Cement Works in which it was stated that in the event of the strike materialising in the limestone quarry it would be necessary for the management to close down certain sections of the factory at Jhinkpani on account of the non supply of limestone the notice further stated that in the event of such closure it would be necessary to lay off the workers not required during the period of closure for the sections concerned
The strike commenced on March 1 1955 and lasted till July 4 1955
On March 25 1955 the management wrote to the General Secretary of the Union intimating to him that the workers in certain departments referred to in an earlier letter dated March 19 1955 would be laid off with effect from April 1 1955
On March 28 1955 the management gave the lists of employees who were to be laid off with effect from April 1 1955 and they were actually laid off from that date
During the period of the strike fresh efforts at conciliation were made and ultimately the strike came to an end on July 5 1955 when the Central Government referred the dispute between the management and the workers of the limestone quarry to the Central Industrial Tribunal at Dhanbad
This reference was however withdrawn by mutual consent in terms of a settlement arrived at on December 7 1955
The details of this settlement are not relevant to this appeal
Thereafter a demand was made by the Union for payment of lay off compensation to those workers of Chaibasa Cement Works who had been laid off for the period April 1 1955 to July 4 1955
This demand 707 was refused by the management
This gave rise to an industrial dispute which was referred by the Government of Bihar under section 10 of the Act to the Industrial Tribunal Bihar
The terms of reference set out the dispute in the following words  Whether the workmen of the Chaibasa Cement Works are entitled to compensation for lay off for the period from April 1 1955 to July 4 1955
 The parties filed written statements before the Industrial Tribunal and the only witness examined in the case was Mr Dongray Manager of the Chaibasa Cement Works Jhinkpani
At this point it is necessary to read the two sections of the Act which relate to the right of workmen to lay off compensation and the circumstances in which they are disqualified for the same
The right is given by section 25C and the disqualification is stated in three clauses of section 25E of which the third clause only is important for our purpose
We now proceed to read sections 25C and 25E so far as they are material for our purpose
 section 25C 1 Whenever a workman other than a badli workman or a casual workman whose name is borne on the muster rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer is laid off he shall be paid by the employer for alldays during which he is so laid off except for such weekly holidays as may intervene compensation which shall be equal to fifty per cent
of the total of the basic wages and dearness allowance that would have been payable to him had he not been so laid off
  section 25E No compensation shall be paid to a workman who has been laid off i     ii    iii if such laying off is due to a strike or slowing down of production on the part of workmen in another part of the establishment 708 Now the central point round which the controversy between the parties has raged is this
Was the lay off of the workers in certain sections of the Chaibasa Cement Works due to a strike on the part of workmen in another part of the establishment within the meaning of cl
iii of section 25E  In other words was the limestone quarry at Rajanka part of the establishment known as the Chaibasa Cement Works The contention of the management was and is that the Cement Works and the limestone quarry form one establishment within the meaning of cl
iii aforesaid
The contention on behalf of the workmen is that they are not parts of one establishment but are separate establishments
The learned Chairman of the Industrial Tribunal held for reasons which we shall presently discuss that the limestone quarry was not part of the establishment known as the Chaibasa Cement Works and the workmen in the latter were not disentitled to lay off compensation by reason of cl
iii of section 25E
The correctness of this view is the principal point for decision in this appeal
On behalf of the respondent workmen it has been contended that the conclusion of the Industrial Tribunal that the factory at Jhinkpani and the limestone quarry at Rajanka are not parts of one establishment is a finding of fact and this appeal should be disposed of on that footing
We do not think that this contention is correct and we shall presently deal with it
We propose however to examine first the relation between the limestone quarry at Rajanka and the cement factory at Jhinkpani in the light of the evidence given before the Tribunal and the findings arrived at by it because they will show the process of reasoning by which the Tribunal came to its final conclusion
The evidence was really one sided and the only witness examined was Mr Dongray Manager of the Chaibasa Cement Works
Now the relation between the limestone quarry and the factory can be considered from several points of view such as 1 ownership 2 control and supervision 3 finance 4 management and employment 5 geographical proximity and 6 general unity of purpose and functional integrality 709 with particular reference to the industrial process of making cement
On all that above points Mr Dongray gave evidence
It was not disputed that the Company owned the limestone quarry as also the factory and there was unity of ownership
Mr Dongray s evidence further showed that there was unity of control management and employment
He said that the limestone quarry was treated as a part and parcel of the Chaibasa Cement Works that is as a department thereof and he as the Manager was in overall charge of both though there was a Quarry Manager in charge as a departmental head under him
On this point Mr Dongray said  There is a Manager appointed for the quarries
The Manager is working under me
The Cement Works itself has about eight or nine departments under it
There are heads of each department
The Manager of the quarry has the same status as the heads of other departments at the Cement Works
 This was supported by a circular letter dated March 11 1952 which said that the entire factory and the associated quarries were under the sole control of the Manager who was responsible for maintaining full output at economic cost up to the expected standard
The circular letter further stated that all orders and contracts were to be issued by the Manager for the working of the factory and quarries and the relevant bills were to be passed by him
As to finance and conditions of employment Mr Dongray said  All requirements of the quarry are sent by the Manager there to the office of the Cement
Works and if they are available in the Cement Works Stores they are issued from there otherwise I indent them from the Bombay office or purchase them locally
There is no account office in the quarries and their account is maintained in the Cement Works  Office
I as Manager of the Chaibasa Cement Works make payment for the indents or requirements of the quarries stated above
The quarry has no separate banking account
The Quarry Manager is not entitled to operate banking account apart from myself At the quarries there are daily rated workers and monthly paid staff
90 710 To the daily paid workers in the quarries the cashier of the Cement Works or his Assistant makes payment when required
The monthly paid staff of the quarries come to the Cement Office for receiving payment
In the Cement Works we have got a system of allocation of work for different jobs every day
It is done by the Departmental Heads
Same system prevails in the quarries also
The Quarry Manager does the distribution as head of that department
Attendance Register is maintained at the quarry in the same way as it is done in the different departments of the Cement Works
There is only one common pay sheet for all the monthly paid staff whether he is at the factory or in the quarries
For the daily rated workers we have got different sheets department wise and there is one such sheet for the daily workers of the quarry as well
There is one summary sheet of the payment showing the payment of all the departments including the payment in the quarries as well
I have to send statutory intimation to the authorities under the Mines Act regarding the quarries for working faces and other accidents etc
The staff and workers working in the quarries are transferable to the Cement Works according to the exigencies of the work and also vice versa
There have been a few instances of such transfers
The terms and conditions of service for instance T A leave provident fund gratuity etc are same for workers in the Cement Works as also the workers in the quarries
We got the application of the statutory provident fund rules extended to our department in the quarries also
The report of the working of the quarry comes to me from the Manager there from time to time
I as Manager of the Cement Marks make payments of royalties in in respect of limestones raised from the quarries
Payments for compensation maternity benefits accidents etc in the quarry are made under my authority by the factory office and not by the Quarry Manager
 Exhibits 1 to 26 filed on behalf of the management which showed the working of the quarry and the 711 factory supported the aforesaid evidence of Mr Dongray they showed as has been observed by the Tribunal itself that the management was maintaining one common account and the final authority on the spot in respect of the quarry as also in respect of other departments of the factory was Mr Dongray the Manager
There were also other documents to show that the transfer of members of the staff from the quarry to the factory and vice versa was made by Mr Dongray according to the exigencies of service
It is worthy of note here that the Union itself gave notice to the Manager of the factory with regard to the intended strike in the limestone quarry
The geographical proximity of the limestone quarry was never in dispute
It was adjacent to the factory being situate within a radius of about a mile
As to general unity of purpose and functional integrality this was also not seriouly in dispute
Mr Dongray said that limestone was the principal raw material for the manufacture of cement and the cement factory at Jhinkpani depended exclusively on the supply of limestone from the quarry at Rajanka
His evidence no doubt disclosed that some excess limestone was sent to the factory at Khelari as well
On this point Mr Dongray said  Limestone from this quarry is at times sent to the Khelari Cement Works but that is very rare and in small quantity
It is done only in cases of emergency Mr Dongray explained that the normal number of departmental workers in the quarry before the strike was in the neighbourhood of 250 but there were about 1000 workers employed by contractors
The number of daily rated workers was in the neighbourhood of 950 and the total monthly paid staff varied from 100 to 105
The wages paid to the workers in the quarry were debited to limestone account of the Cement Works and in the matter of costing the amount spent on limestone was also debited
The bank accounts however were in the name of the Company and the persons who were entitled to operate on those accounts were Mr Dongray the Manager the Chief Engineer and the Chief Chemist of the Cement Works
712 All the aforesaid evidence oral and documentary was apparently accepted by the Tribunal as correct for the learned Chairman summarised the evidence of Mr Dongray without any serious adverse comment
He then referred to certain contentions urged on behalf of the Union which he said were not without force
We may now state those contentions
The first contention was that under the provisions of the Act the appropriate authority in respect of the factory at Jhinkpani was the State Government of Bihar whereas the appropriate authority in respect of the limestone quarry which was a mine as defined in the  was the Central Government
The second con tention was that there were two sets of Standing Orders one for the workmen of the factory and the other for the workmen in the limestone quarry
The third contention was that the limestone quarry had an office of its own and a separate attendance register and the fourth contention was that under the provisions of the  Mr Dongray was an Agent in respect of the limestone quarry and there was a separate Manager who was responsible for the control management and direction of the mine under the provisions of section 17 thereof
The learned Chairman referred to certain criticisms made in respect of the evidence of Mr Dongray
One criticism was that though the Company was the owner of both the factory and the limestone quarry it had also factories and limestone quarries at other places in India and Pakistan and if the test of one ownership were the determining test then all the factories and limestone quarries of the Company wherever situtate would be one establishment
This criticism was not however pertinent because the Company never claimed that all its factories in different parts of India and Pakistan formed one establishment by reason of unity of ownership only
The other criticism was that Mr Dongray admitted that if necessary in the interest of service the workmen at the Chaibasa Cement Works could be transferred to some other factory of the Company and therefore transferability was not a sure test
This criticism was also not germane because the Company 713 never claimed that transferability was the only sure test
A third criticism also advanced on behalf of the workmen was that Mr Dongray admitted that all the accounts of the different factories and limestone quarries of the Company were ultimately consolidated into one Profit and Loss Account a criticism which in our view was equally not pertinent to the question at issue
The learned Chairman then expressed his final finding in the following words  From these and other admissions made by Mr Dongray it would appear that it is only for economy and convenience that he was given charge of the control of both the concerns but his capacity was dual
While he was controlling the Cement Works as it Works Manager he had the control of the quarries as its Agent under the 
It has also to be noted that if both these establishments which are inherently different by their very nature are treated as one and the same anomalous position may arise in dealing with the employees in the quarries in matters of misconduct and such other things if there is a pendency of a dispute in the Cement Works and vice versa
Obviously the employees of the Cement Works have to be dealt with by the State Tribunal while the employees of the quarries by the Central Tribunal
This also nullifies the force of the management s contention that both are parts of the same establishment
Considering these it has to be held that the contention of the management fails and that of the Union must prevail
 We now revert to the contention urged on behalf of the respondent that this appeal should be disposed of on the footing that the final conclusion of the Industrial Tribunal is a finding of fact
The judgment of the Tribunal itself shows that the final conclusion was arrived at by a process of reasoning which involved a consideration of several provisions of the Act and some provisions of the 
The Tribunal accepted a major portion if not all of the evidence of Mr Dongray but it felt compelled to hold against the appellant despite that evidence by reason of an 714 anomalous position which it thought would arise if the factory and the quarry were held to be one establishment
The question before the Tribunal and this is also the question before us was the true scope and effect of cl
iii of section 25E of the Act with particular reference to the expression  in another part of the establishment  occurring therein
That question was not a pure question of fact as it involved a consideration of the tests which should be applied in determining whether a particular unit is part of a bigger establishment
Indeed it is true that for the application of the tests certain preliminary facts must be found but the final conclusion to be drawn therefrom is not a mere question of fact
Learned counsel for the respondent is not therefore justified in asking us to adopt the short cut of disposing of the appeal on the footing that a finding of fact should not be disturbed in an appeal by special leave
In this case we cannot relieve ourselves of the task of determining the true scope and effect of cl
iii of section 25E by adopting the short cut suggested by learned counsel
We proceed now to consider what should be the proper tests in determining what is meant by  one establishment 
Learned counsel for the respondent has suggested that the test has been laid down by the Legislature itself in the Explanation to section 25A of the Act
That Explanation states  In this section and in sections 25C 25D and 25E industrial establishment  means i a factory as defined in clause m of section 2 of the  or ii a mine as defined in clause j of section 2 of the  or iii a plantation as defined in clause f  of section 2 of the 
 The argument is that the Explanation states in clear terms what an industrial establishment means in certain sections of the Act including section 25E and on a proper construction it negatives the idea of a factory and a mineforming parts of one establishment
Curiously enough section 25E does not contain the 715 expression industrial establishment
It uses the word  establishment  only
We agree however that if section 25E is read with section 25C and the definition of  layoff  in section 2 kkk of the Act as it must be read the word  establishment  in section 25E has reference to an industrial establishment
On the footing that the word  establishment  in section 25E means an industrial establishment what then is the effect of the Explanation  The contention of the respondent is that an industrial establishment may be either a factory as defined in clause m of section 2
of the  or a mine as defined in cl
j of section 2 of the  or a plantation as defined in cl
f of section 2 of the  but it cannot be a combination of any two of the aforesaid categories therefore a factory and a mine together as in the present case cannot form one establishment
This argument proceeds on the assumption that the Explanation while stating what undertakings or enterprises come within the expression  industrial establishment  necessarily lays down the test of one establishment  also
We do not think that there is any warrant for this assumption
The Explanation only gives the meaning of the expression  industrial establishment  for certain sections of the Act it does not purport to lay down any test as to what constitutes one  establishment 
Let us take for example a factory which has different departments in which manufacturing processes are carried on with the aid of power
Each department if it employs ten or more workmen is a factory within the meaning of cl
m of section 2 of the  so is the entire factory where 1000 workmen may be employed
The Explanation merely states that an undertaking of the nature of a factory as defined in cl
m of section 2 of the  is an industrial establishment
It has no bearing on the question if in the example taken the factory as a whole or each department thereof should be treated as one establishment
That question must be determined on other considerations because the Explanation does not deal with the question of one establishment
In our view the true scope and effect 716 of the Explanation is that it explains what categories factory mine or plantation come within the meaning of the expression  industrial establishment   it does not deal with the question as to what constitutes one establishment and lays down no tests for determining that question
We cannot therefore accept the argument of learned counsel for the respondent that a factory and a mine a mine which supplies the raw material to the factory can never be one establishment under the Act that we do not think is the effect of the Explanation to section 25A
The Act not having prescribed any specific tests for determining what is one establishment  we must fall back on such considerations as in the ordinary industrial or business sense determine the unity of an industrial establishment having regard no doubt to the scheme and object of the Act and other relevant provisions of the  or the 
What then is  one establishment  in the ordinary industrial or business sense  The question of unity or oneness presents difficulties when the industrial establishment consists of parts units departments branches etc
If it is strictly unitary in the sense of having one location and one unit only there is little difficulty in saying that it is one establishment
Where however the industrial undertaking has parts branches departments units etc
with different locations near or distant the question arises what tests should be applied for determining what constitutes one establishment 
Several tests were referred to in the course of arguments before us such as geographical proximity unity of ownership management and control unity of employment and conditions of service functional integrality general unity of purpose etc
To most of these we have referred while summarising the evidence of Mr Dongray and the findings of the Tribunal thereon
It is perhaps impossible to lay down any one test as an absolute and invariable test for all cases
The real purpose of these tests is to find out the true relation between the parts branches units etc
If in their true relation they constitute one integrated whole we say 717 that the establishment is one if on the contrary they do not constitute one integrated whole each unit is then a separate unit
How the relation between the units will be judged must depend on the facts proved having regard to the scheme and object of the statute which gives the right of unemployment compensation and also prescribes disqualification therefor
Thus in one case the unity of ownership management and control may be the important test in another case functional integrality or general unity may be the important test and in still another case the important test may be the unity of employment
Indeed in a large number of cases several tests may fall for con sideration at the same time
The difficulty of applying these tests arises because of the complexities of modern industrial organisation many enterprises may have functional integrality between factories which are separately owned some may be integrated in part with units or factories having the same ownership and in part with factories or plants which are independently owned
In the midst of all these complexities it may be difficult to discover the real thread of unity
In an American decision Donald L Nordling vs Ford Motor Company 1 there is an example of an industrial product consisting of 3800 or 4000 parts about 900 of which came out of one plant some came from other plants owned by the same Company and still others came from plants independently owned and a shutdown caused by a strike or other labour dispute at any one of the plants might conceivably cause a closure of the main plant or factory
Fortunately for us such complexities do not present themselves in the case under our consideration
We do not say that it is usual in industrial practice to have one establishment consisting of a factory and a mine but we have to remember the special facts of this case where the adjacent limestone quarry supplies the raw material almost exclusively to the factory  the quarry is indeed a feeder of the factory and without limestone from the quarry the factory cannot function
Ours is a case where all the tests are fulfilled 1 272
91 718 as shown from the evidence given on behalf of the appellant to which we have earlier referred
There are unity of ownership unity of management supervision and control unity of finance and employment unity of labour and conditions of service of workmen functional integrality general unity of purpose and geographical proximity
We shall presently deal with the legal difficulties at which the Tribunal has hinted and which have been elaborated by learned counsel for the respondent
But apart from them the only fair conclusion from the facts proved in the case is that the Chaibasa Cement Works consisting of the factory and the limestone quarry form one establishment
The existence of two sets of Standing Orders and a separate attendance register for the limestone quarry have already been adverted to
They have been sufficiently explained by Mr Dongray particularly the existence of two sets of Standing Orders by reason of the statutory requirement of approval by different authorities one set by the Labour Commissioner Bihar and other by the relevant Central authority
We proceed now to consider the legal difficulties which according to learned counsel for the respondent stand in the way of treating the limestone quarry and the factory as one establishment
The Tribunal has merely hinted at these difficulties by saying that an anomalous position will arise if the quarry and the factory are treated as one establishment
It is necessary to refer briefly to the scheme and object of lay off compensation and the disqualifications therefor as envisaged by the relevant provisions in Chapter VA of the Act
That chapter was inserted by the Industrial Disputes Amendment Act 1953 43 of 1953 which came into effect from October 24 1953
The right of workmen to lay off compensation is obviously designed to relieve the hardship caused by unemployment due to no fault of the employee involuntary unemployment also causes dislocation of trade and may result in general economic insecurity
Therefore the right is based on grounds of humane public policy and the statute which gives such right should be 719 liberally construed and when there are disqualifying provisions the latter should be construed strictly with reference to the words used therein
Now section 25 gives the right and there are three disqualifying clauses in section 25E
They show that the basis of the right to unemployment compensation is that the unemployment is involuntary in other words due to no fault of the employees themselves that is why no unemployment compensation is payable when suitable alternative employment is offered and the workman refuses to accept it as in cl
1 of section 25E  or the work man does not present himself for work at the establishment as in cl
ii or when the laying off is due to the strike or slowing down of production on the part of workmen in another part of the establishment as in cl
iii
Obviously the last clause treats the work men in one establishment as one class and a strike of slow down by some resulting in the laying off of other workmen disqualifies the workmen laid off from claiming unemployment compensation the reason being that the unemployment is not really involuntary
It is against this background of the scheme and object of the relevant provisions of the Act that were must now consider the legal difficulties alleged by the respondent
The first difficulty is said to arise out of section 17 of the 
That section says in effect that every mine shall be under a Manager having prescribed qualifications who shall be responsible for the control management and direction of the mine it is then pointed out that the word agent  in relation to a mine means a person who acts as the representative of the owner in respect of the management of the mine and who is superior to a Manager
The argument is that the limestone quarry at Rajanka had a  Manager  under the  and Mr Dongray acted as the agent that is representative of the owner viz the Company and this arrangement which was in consonance with the provisions of the  it is argued made the factory and the quarry two separate establishments
We are unable to accept this argument as correct
We do not think that section 17 of the  has any relevance 720 to the question whether the limestone quarry was part of a bigger establishment
It prescribes the appointment of a Manager for purposes of the  and does not deal with the question of one establishment  within the meaning of cl
iii of section 25E of the Act
The fact that the quarry Manager worked under the overall control and supervision of Mr Dongray showed on the facts proved in this case just the contrary of what learned counsel for the respondent has contended  it showed that the factory and the quarry were treated as one establishment
The second difficulty is said to arise out of certain provisions of the Act which relate to the constitution of Boards of Conciliation Courts of Inquiry Labour Courts and Tribunals and the reference of industrial disputes to these bodies for settlement inquiry or adjudication
The scheme of the Act is that except in the case of National Tribunals which are appointed by the Central Government the appropriate Government makes the appointment of Boards of Conciliation Courts of Inquiry Labour Courts and Tribunals and it is the appropriate Government which makes the refer ence under section 10 of the Act
Now the expression appropriate Government is defined in section 2a of the Act
So far as it is relevant for our purpose it means the Central Government in relation to the limestone quarry at Rajanka and the State Government of Bihar in relation to the factory at Jhinkpani
We had stated earlier in this judgment that in this very case the original dispute between the management and the workmen in the limestone quarry was referred to the Central Tribunal at Dhanbad while the latter dispute about lay off compensation to workmen of the factory was referred by the Government of Bihar to the Industrial Tribunal at Patna
The argument before us is that when the statute itself brings the two units factory and mine under different authorities they cannot be treated as one establishment for the purposes of the same statute
Our attention has also been drawn to section 183 of the Act under which in certain circumstances a settlement arrived at in the course of conciliation proceedings under the Act or an award of 721 a Labour Court or Tribunal is made binding  on all persons who were employed in the establishment or part of the establishment as the case may be to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part
 It is contended that it will be difficult to apply section 183 if the factory and the limestone quarry are treated as one establishment
Lastly learned counsel for the respondent has referred us to section 33 of the Act
Sub section 1 of that section in substance lays down that during the pendency of any conciliation proceedings or of any proceeding before a Labour Court or Tribunal in respect of any industrial dispute no employer shall alter the conditions of service to the prejudice of workmen or punish any workmen save with the permission in writing of the authority before which the proceeding is pending
Sub sections 2 and 3 we need not reproduce because for the purposes of this _ appeal the argument is the same which is that if a proceeding is pending before a Central Tribunal say in respect of the limestone quarry there will be difficulty in applying the provisions of section 33 in respect of workmen in the factory over which the Central Tribunal will have no jurisdiction
The Industrial Tribunal did not specifically refer to these provisions but perhaps had them in mind when it said that an anomalous position would arise if the factory and the quarry were treated as one establishment
We have given our most earnest consideration to these arguments but are unable to hold that they should prevail
It is indeed true that in the matter of constitution of Boards of Conciliation Courts of Inquiry Labour Courts and Tribunals and also in the matter of reference of industrial disputes to them and perhaps for certain other limited purposes the Act gives jurisdiction to two distinct authorities the Central Government in respect of the limestone quarry and the State Government in respect of the factory
The short question is does this duality  of jurisdiction dichotomy one may call it necessarily imply that for all purposes of the Act and particularly for 722 payment of unemployment compensation as per the provisions in Ch
VA the factory and the quarry must be treated as separate establishments
We are unable to find any such necessary implication
There is no provision in the Act which says that the existence of two jurisdictions has the consequence contended for by learned counsel for the respondent nor do we find anything in the provisions creating two jurisdictions which by reason of the principle underlying them or by their very nature give rise to an implication in law that the existence of two jurisdictions means the existence of two separate establishments
On the contrary such an implication or inference will be at variance with the scheme and object of unemployment compensation as provided for by the provisions in Ch
VA of the Act
We have pointed out earlier that the object of unemployment compensation is to relieve hardship caused by involuntary unemployment that is unemployment not due to any fault of the employees
If in the ordinary business sense the industrial establishment is one a lay off of some of the workmen in that establishment as a result of a strike by some other workmen in the same establishment cannot be characterised as involuntary unemployment
To hold that such an establishment must be divided into two separate parts by reason of the existence of two jurisdictions is to import an artificiality for which we think there is no justification in the provisions of the Act
Nor do we think that sections 183 and 33 present any real difficulty
Section 183 clearly contemplates a settlement or an award which is binding on a part of the establishment
It says so in express terms
If therefore in the case before us there is a settlement or award in respect of the limestone quarry it will be binding in the circumstances mentioned in the subsection on the workmen in that part of the establishment which is the limestone quarry
Similarly a settlement or award in respect of the factory will be binding on the workmen of the factory
Section 33 as far as it is relevant for the argument now under consideration is in two parts
Sub section 1 relates 723 to a matter connected with the dispute in respect of which a proceeding is pending
Sub section 2 relates to a matter not connected with the dispute in respect of which the proceeding is pending
In one case permission of the authority before which the proceeding is pending has to be obtained for punishing etc
 in the other case an application for approval of the action taken by the employer has to be made
We see no difficulty in applying section 33 in a case like the one before us
For workmen in the mine the authority will be the one appointed by the Central Government for the factory the authority will be that appointed by the State Government
This is the same argument as the argument of two jurisdictions in another form
The assumption is that there cannot be two jurisdic tions for two parts of one establishment
This argument is valid if the assumption is correct
If however there is no warrant for the assumption as we have held there is none then the argument has no legs to stand upon
So far we have dealt with the case irrespective of and apart from reported decisions because there is no decision which really covers the point in controversy before us
Learned counsel for the appellant has referred to the decisions in Hoyle vs Cram 1 and Coles vs Dickinson 2 
The question in the first case was if the appellants there were liable to be convicted of an offence against the Bleaching Works Act 23 and 24 Vict
c 78 in employing the child without a school master s certificate
It was held that a child employed on the premises where the bleaching dyeing and finishing were performed was employed in an incidental printing process within the second section of 8 and 9 Vict
c 29 and that the place where he was so employed formed part of  the establishment where the chief process of printing was carried on  within the meaning of that Act
The decision proceeded mainly on the words of the statute but Earle CJ said  It appears that the works at Mayfield having some years ago become inadequate by reason of the 1  2   724 increase of the business and by the detorioration and deficiency of the water of the river Medlock the appellants transferred part of their works to Sandy Vale but that the principal part of the work continued to be carried on at Mayfield which was the principal seat of the firm
In a commercial sense therefore Sandy Vale clearly was part of one entire establishment
It was contended for the respondent that the statute did not mean forming part in a commercial sense but in a popular and local sense
But I see no reason for confining the meaning to local proximity
The whole substantially forms one establishment
 In the second case the question was this  by the 73rd section of 7 and 8 Vict c 15 premises which are used solely for the manufacture of paper were excluded from the operation of the Factory Acts there were two mills one at Manchester and the other in Hertfordshire
The Manchester mill prepared what was called half stuff which was sent to the mill in Hertfordshire to be manufactured into paper and the question was if the Manchester mill was exempted from the operation of the Factory Acts
The answer given was in the affirmative
It was stated that each step in the process was a step in the manufacture of paper and the distance between the two places where the several parts were carried on was wholly immaterial in view of the words of the statute
The last decision to which our attention has been drawn is the American decision in Donald L Nordling vs Ford Motor Company 1
This decision is perhaps more in point as it related to unemployment compensatiOn
The statute in that case provided that an individual losing his employment because of a strike or other labour dispute should be disqualified during its process  at the establishment in which he is or was employed 
The claimants there had been employed at a Minnesota automobile assembly plant which was partially shut down because of a lack of parts due to a strike at a manufacturing plant owned and operated by the same corporation in Michigan
The Minnesota Supreme Court to which an application was made for 1 272
725 a certiorari to review a decision of the director of the division of employment and security reviewed the tests which have generally been applied for determining what is meant by the term  establishment  within the meaning of the statute concerned it pointed out that there was no uniformity of decision on the question and it was not possible to lay down an absolute or invariable test
The decision was based on the broader ground that the tests of functional integrality general unity and physical proximity should all be taken into consideration in determining the ultimate question of whether a factory plant or unit of a larger industry is a separate establishment within the meaning of the employment and security law
The test which was emphasized in that case was the test of the unity of employment and on that footing it was found that the evidence was ample to support the director s finding that the Minnesota plant was a separate establishment
We do not think that these decisions carry the matter any further than what we have explained in earlier paragraphs of this judgment
We must have regard to the provisions of the statute under which the question falls to be considered if the statute itself says what is one establishment then there is no difficulty
If the statute does not however say what constitutes one establishment then the usual tests have to be applied to determine the true relation between the parts branches etc
 namely whether they constitute one integrated whole or not
No particular test can be adopted as an absolute test in all cases of this type and the word establishment  is not to be given the sweeping definition of one organisation of which it is capable but rather is to be construed in the ordinary business or commercial sense
For the reasons which we have already given we are of the view that the learned Chairman of the Industrial Tribunal wrongly held that the limestone quarry at Rajanka and the factory at Jhinkpani were separate establishments
In our view they constituted one establishment within the meaning of cl
iii of 92 726 s25E of the Act
It was conceded on behalf the respondent workmen that the lay off in the factory was due to the non supply of limestone by reason of the strike in the limestone quarry and the strike was decided on by the same Union which consisted of the workmen at the factory and the quarry
That being the position the disqualification in cl
iii aforesaid clearly applied and the workmen at the factory were not entitled to claim lay off compensation
The result therefore is that the appeal succeeds and is allowed and the award of the Industrial Tribunal is set aside
In the circumstances of the case in which a difficult question of interpretation arose for decision for the first time we pass no order as to costs
Appeal allowed


Summary:
The Saurashtra State Public Safety Measures Ordinance 1948 was passed to provide for public safety maintenance of public order and preservation of peace and tranquillity in the State of Saurashtra
 As crimes involving violence such as dacoity and murder were increasing this Ordinance was amended by the Saurashtra State Public Safety Measures Third Amendment Ordinance 1949 which by secs
9 10 and 11 empowered the State Government by notification in the official gazette to constitute Special Courts of criminal Jurisdiction for such area as may be specified in the noti fication to appoint Special Judges to preside over such Courts and to invest them with jurisdiction to try such offences or classes of offences or such eases or classes of cases as the Government may by general or special order in writing direct
The procedure laid down by 436 the Ordinance for trial before such Courts varied from the normal procedure prescribed by the Criminal Procedure Code in two material respects viz there was no provision for trial by jury or with the aid of assessors or for enquiry before commitment to sessions
In exercise of the powers conferred by this Ordinance the Government by a notifica tion constituted a Special Court for certain areas and empowered that Court to try offences under sees
183 189 302 304 307 392 and certain other sections of the Indian Penal Code which were specified in the notification
It was contended on behalf of the appellant who had been convicted by the Special Court under secs
302 307 and 392 of the Indian Penal Code read with sec
34 that the Ordi nance of 1949 and the notification above mentioned contra vened article 14 of the Constitution and were therefore ultra vires and void Held per PATANJALI SASTRI CJ FAZL ALI MUKHERJEA and DAS JJ MEHR CHAND MAHAJAN CHANDRASEKHARA AIYAR and Bose JJ
dissenting That the impugned Ordinance in so far as it authorised the State Government to direct offences or class es of offences or classes of cases to be tried by the Spe cial Court did not contravene the provisions of article 14 and was not ultra vires or void
The notification issued under the Ordinance was also not void
PATANJALI SASTRI CJ
All legislative differentation is not necessarily discriminatory
Discrimination involves an element of unfavourable bias and it is in that sense that the expression has to be understood in the context
Equal protection claims under article 14 are examined with the presumption that the State action is reasonable and
justi fied
Though differing procedures might involve disparity in treatment of persons tried under them such disparity is not
in itself sufficient to outweigh this presumption and establish discrimation unless the degree of disparity goes beyond what the reason for its existence demands eg when it amounts to a denial of a fair and impartial trial
The impugned Ordinance having been passed to combat the increas ing tempo of certain types of regional crime the two fold classification on the lines of type and territory adopted by the said Ordinance read with the notification issued there under was reasonable and the degree of disparity of treat ment involved was in no way in excess of what the situation demanded
While on the one hand it cannot be said that any variation of procedure which operates materially to the disadvantage of the accused is discriminatory and violates article 14 the other extreme view that article 14 provides no further constitutional protection to personal liberty than what is afforded by article 21 is also wrong FAZL ALI J A distinction must be drawn between dis crimination without reason and discrimination with reason 437 The whole doctrine of classification is based on this dis tinction and on the well known fact that the circumstances which govern one set of persons or objects may not neces sarily be the same as those governing another set of persons or objects so that the question of unequal treatment does not really arise as between persons governed by different conditions and different sets of circumstances
The clear recital of a definite objective in the earlier Ordinance and the impugned Ordinance which amended it furnished a tangi ble and rational basis of classification and the Ordinance and the notification did not violate article 14
The Legisla ture should however have recourse to legislation like this only in very special circumstances MUKHERJEA J Where the legislative policy is clear and definite and as an effective method of carrying out that policy a discretion is vested by the statute upon a body of administrators or officers to make selective application of the law to certain classes or groups of persons the statute itself cannot be condemned as a piece of discriminatory legislation
In such cases the power given to the execu tive body would import a duty on it to classify the subject matter of legislation in accordance with the objective indicated in the statute
If the administrative body pro ceeds to classify persons or things on a basis which has no rational relation to the objective of the legislature its action can certainly be annulled as offending against the equal protection clause
The preamble of the main Ordinance IX of 1948 taken along with the surrounding circumstances disclosed a defi nite legislative policy and objective and the impugned Ordinance cannot therefore be held to be unconstitutional merely because it vested in the Government the authority to constitute Special Courts and to specify the classes ofoffences to be tried by such courts with a view to achieve that objective
The notification issued by the Government was also not void as it did not proceed on any unreasonable or arbitrary basis but on the other hand there was a reasonable relation between the classification made by the notification and the objective that the legislation had in view
Though it is a sound and reasonable proposition that when the nature of two offences is intrinsically the same and they are punishable in the same manner a person accused of one should not be treated differently from a person accused of the other yet in determining the reach and scope of a particular legislation it is not necessary for the legislature to provide abstract symmetry
A too rigid insistence on anything like scientific classification is neither practicable nor desirable
DAS J The relevant part of sec
11 properly construed and understood does not confer an uncontrolled and unguided power on the State Government on the contrary the power is controlled by the necessity of making a proper classifi cation 438 which is to be guided by the preamble in the sense that the classification must have a rational relation to the object of the Ordinance as recited in the preamble
The classifica tion effected by the impugned Ordinance and the notification thus satisfied the two conditions necessary for a valid classification viz that it must not be arbitrary but must be rounded on an intelligible differentia and that differ entia must have a rational relation to the object sought to be achieved by the Act
The Ordinance and the notification did not therefore contravene article 14 of the Constitution
MAHAJAN J Section 11 of the Ordinance suggests no reasonable basis for classification either in respect of offences or in respect of cases nor has it laid down any measure for the grouping either of persons or of cases or of offences by which measure these groups could be distin guished from those outside the purview of the Ordinance
The words used in the preamble to the main Ordinance and the fact that sec
9 of the impugned Ordinance provides that the power can be exercised for any particular area cannot limit the plain and unambiguous language of sec
11 and the said section is therefore unconstitutional
CHANDRASEKHARA AIYAR J Sections 9 and 11 do not lay down any classification
The preamble to the earlier Ordi nance also indicates no classification as the object stated there is a general one which has to be kept in view by every enlightened Government or system of administration
The classification adopted in the notification also is not a rational one
BOSE J
The differentiation effected by the impugned Ordinance and the notification issued thereunder travels beyond bounds which are legitimate and the Ordinance there fore offends article 14 and is invalid
Held also per curiam that the Ordinance was not in valid on the ground that it involved delegation of legisla tive powers
The State of West Bengal vs Anwar Ali Sarkar 1952 SCR 284 In re  etc
1951 SCR 7471 and King Emperor vs Benoarilal Sarma 72 IA 57 referred to