Case: The Rashtriya Mill Mazdoor Sangh,Parel, Bombay And Another Vs. The Apollo Mills Limited And Others

2. The facts of the case are as follows: In the year 1951 monsoon failed, and caused scarcity of water in catchment area of the Tata Hydro-Electric System, from which the Mills obtained their supply of power. It was, therefore, found necessary to reduce the consumption of electricity, and Government, after consulting the various Mills and also the appellant Sangh, decided that the Mills should work, instead of 48 hours, for 40 hours per week during a period of 30 weeks from November 1, 1951. It was also agreed that if the Mills could reduce their consumption of electricity to 5./6th of their normal consumption, then they could work for 48 hours per week as before. Some of the Mills installed their own generators, but many others were compelled to reduce the working time to 40 hours in a week, working at 8 hours per day. As a result, the working of some of the Mills was reduced by one day in the week, and the Mills lost a maximum number of 38 days, some more and some less. One of the Mills (the Raghuvanshi Mills) remained closed only on one day. The order of the Bombay Government was made under S. 6A (1) of the Bombay Electricity (Special Powers) Act, 1946. While this short working continued, the workers claimed their wages and dearness allowances or compensation in lieu thereof. Negotiations followed, but when they did not result in anything to the advantage of the workers, the matter was referred for arbitration to the Industrial Court by the Bombay Government on October 30, 1952, under S. 73 of the Bombay Industrial Relations Act, 19463. The Mills raised the objection that the matter was covered by Standing Orders 16 and 17, and inasmuch as the partial closure of the Mills was due to force majeure, they were not liable. They contended that the Industrial Court had thus no jurisdiction, as these Standing Orders were determinative of the relations between the workmen and their employers under S. 40 (1) of the Bombay Industrial Relations Act, 1946. They also submitted that the orders of the Government issued under the Bombay Electricity (Special Powers) Act, 1946, had to be obeyed and therefore no compensation was payable. They pointed out that the employees were receiving fair wages, and that the Mills were not in a position to bear an additional burden, in view of the fact that they had lost their profits due to short working. They relied upon the decision of the Bombay High Court in Digambar Ramachandra v. Khandesh Spinning and Weaving Mills Co., Ltd., 52 Bom LR 46: (AIR 1950 Bom 174  ), where it was held that though an arbitrator or whom a dispute falling under S. 49A of the Bombay Industrial Disputes Act, 1938, was referred had jurisdiction to decide the disputes within the terms of the Standing Orders framed under S. 26 of that Act, he had no jurisdiction to determine the liability of the employers on grounds outside the Standing Orders4. The Industrial Court, after hearing the parties, made an award on January 20, 1954, and directed all the respondent Mills to pay to the employees compensation, holding that Standing Orders 16 and 17 were not applicable, and were, therefore, no bar. The Industrial Court held that in view of the provisions of Ss. 3, 40(2), 42(4), 73 and 78 of the Bombay Industrial Relations Act read with Sch. III, item 7, and having regard to the decision of the Federal Court in Western India Automobile Association v. Industrial Tribunal, Bombay, 51 Bom LR 894: (AIR 1949 FC 111), it had jurisdiction to grant compensation. The Industrial Court, therefore, held that on principles of social justice the workers were entitled to compensation, which it assessed at the rate of 50 per cent of the wages and dearness allowances which the workers would have drawn, if the Mills had worked on the days they remained closed5. Against the award, the Mills Owners Association and two of the Mills appealed to the Appellate Tribunal, Bombay. All the contentions which were raised before the Industrial Court were once again raised before the Appellate Tribunal. Two new contentions were raised, viz., that the claim for compensation was barred under S. 11 of the Bombay Electricity (Special Powers) Act, 1946, and was also barred by the decision of the S. C. in Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, Kanpur, (1955) 1 SCR 991  : ( (S) AIR 1955 SC 170  )6. The Appellate Tribunal by its decision now impugned before us, allowed the appeal, and set aside the award of the Industrial Court, and dismissed the claim of the employees. It held that even if Standing Orders 16 and 17 covered the case, the decision in Digambar Ramachandras case, 52 Bom LR 46: (AIR 1950 Bom 174  ), could not now be applied because of the provisions of S. 40 (2) and the addition of Sch. III, item 7 in the Bombay Industrial Relations Act, which provisions did not find place in the Bombay Industrial Disputes Act, 1938, under which the decision of the Bombay High Court was given. The Appellate Tribunal referred to the Federal Court decision cited earlier, and observed that there was no doubt that the award of compensation to workmen equal of half of their wages and dearness allowances was fair and just. The Tribunal, however, felt compelled by the decision of this court in the Muir Mills case, (1955) 1 SCR 991  : ( (S) AIR 1955 SC 170  ), to reject the claim of the workers, and allowed the appeal. In this view of the matter, the Appellate Tribunal did not decide whether S. 11 of the Bombay Electricity (Special Powers) Act, 1946 barred the grant of compensation.

Court's reasoning:
10. The present proceedings are for compensation for the period during which the Mills remained closed. This claim is made by the workers against the Mills.The section which confers immunity bars proceeding arising from the interference with the supply of electrical energy and its consumption. It is a protection to the supplier of electrical energy against the consumer and vice versa, and protects also those who act to enforce the order. There is no complaint here about the reduction of electricity or even about the closure of the Mills for part of the time. Neither the Mills nor the workers have raised any such contention. Further, the sub-section is a protection clause which is usually introduced in an Act, where it gives new or unusual powers, and is designed to give immunity to persons acting under or enforcing it. The ambit of the protection is in relation to the supply and consumption of electricity which alone are curtailed by the order issued under S. 6A (1) of the Act. The protection conferred by the first sub-section of S. 11 does not, therefore, prevent the raising of an industrial dispute resulting in an award for the equitable sharing of loss which had been occasioned to both the employers and the employees by the observance of the orderIt may not be necessary to discuss the matter at length, because even if the subject-matter did not fall within any of the eight enumerated topics, there was a substantial question of law involved, inasmuch at it was necessary to decide whether a claim for compensation was not admissible in view of the provisions of the Bombay Industrial Relations Act and the Standing OrdersThere is some force in the contention of the appellant, but, in our opinion, Standing Orders 16 and 17 do not, in terms, apply to a claim for compensation such as is made here. Standing Order 16 speaks of stoppage "without notice and without compensation in lieu of notice". The compensation which is claimed by the workers in this case is not in lieu of notice, that is to say, for a period equal to that in respect of which notice would have had to be given. That period would be before the date of closure. The Standing Order contemplates those cases in which a notice has to be dispensed with and then no compensation in lieu of notice is payable. There is, however, here a question of quite a different sort, and it is not covered by Standing Order 16, even though the closure was by reason of stoppage of power. Standing Order 17 speaks of "wages", and we are not concerned with wages here but with compensation which is not the same thing as wages.In this view of the matter, Standing Orders 16 and 17 cannot be said to cover the present facts, and they are not, therefore, determinative of the relations between the parties.-19. Thenon-obstante clause clearly shows that in spite of the other provisions of the Bombay Industrial Relations Act, an industrial dispute may be referred to the Industrial Court. An industrial dispute as defined in that act means inter alia any dispute or difference between an employer and employee or between employers and employees, which is connected with an industrial matter, which includes all matters pertaining to non-employment of any person. That these workmen were not employed on certain days goes without saying, and thus, there was an industrial dispute concerning their claim for compensation for the period of non-employment. Item 9 of Sch. I gave the power to frame Standing Orders in relation to temporary closures. The Standing Orders made covered only compensation in lieu of notice and wages for the period of closure, but not compensation for closure. In the view which we have taken of the Standing Orders, it is not necessary to decide whether item 7 of Sch. III relates only to compensation for permanent closure, or whether item 9 of Sch. I gave the power to make a Standing Order relating to compensation for temporary closure. It is enough to say that Standing Orders 16 and 17, as they stand, do not cover a case of compensation for closureWe are of opinion that Standing Orders 16 and 17 do not apply to the present facts for reasons already stated, and we express our dissent from that decision in so far as it held that the Standing Orders covered a case of compensation for closure also. We note further that in the Bombay Industrial Disputes Act, 1938 there was no item similar to the one in Sch. III of the Bombay Industrial Relations ActIn Textile Labour Association, Ahmedabad v. Ahmedabad Millowners Association, Ahmedabad, 1946-47 Industrial Court Reporter 87, Sir H. V. Divatia, Rajadhyaksha, J. and Mr. D. V. Vyas (later, Vyas, J.) correctly held that the Standing Orders did not cover a case of compensation for loss of earningsNo doubt, the reference there was under S. 43 of the Bombay Industrial Disputes Act, 1938; but the provisions of S. 73 of the Bombay Industrial Relations Act are wide enough to cover a reference on the same topic.We are, therefore, of opinion that the claims for compensation was not barred by Standing Orders 16 and 17 read with S. 40(1) of the Bombay Industrial Relations ActWe are not concerned in this case with the award of bonus as such, and we need not, therefore, make use of the reasons which appealed to this Court in that case. The narrow sphere in which social justice demands that workmen going into forced unemployment should receive compensation is quite different.Social justice is not based on contractual relations and is not to be enforced on the principles of contract of service. It is something outside these principles, and is invoked to do justice without a contract to back itThere is no other basis suggested by the one side or thet was contended that the loss to labour went into the consideration of the grant of bonus, and that the two cases were heard together. The Appellate Tribunal says so.But bonus is to come out of profits and is the share of labour in the profits it has helped to earn, to bridge the gap between wages as they are and the living wage. Compensation in the present context is for loss of wages and dearness allowance, and the two cannot be considered together on any principle.There is nothing to show that in spite of the formula which the Appellate Tribunal had evolved for itself, it took into account some other factors quite alien to the said formula. It appears to us that what the Appellate Tribunal really meant to say was that inasmuch as the workers were paid bonus they should not make a grievance if they lost wages on some of the days, because if compensation were paid bonus would have had to be reduced. If that is the meaning, as it obviously is, then the question of compensation was not decided at all.In our opinion, this reasoning was beside the point. It was wholly immaterial whether profits were made or losses were incurred in the year, if the employers continued to retain the labour force so as to be available for the days on which the Mills worked24. Inour opinion; the Appellate Tribunal after giving a finding that a claim for compensation equal to half the wages and dearness allowances was just and proper, erred in holding that it was not admissible because of the decision of this court in the Muir Mills case, 1955-1 SCR 991  : ( (S) AIR 1955 SC 170  ). That case had no application to the facts here.The Appellate Tribunal also erred in declining to grant compensation on the ground that since bonus was granted the claim for compensation could not be entertained.The case of badli workers does not appear to have been separately raised, and we see no reason not to award them compensation; but payment of such compensation will be subject to the same condition, as was imposed by the Industrial Court.