Case: Indian Hume Pipe Co. Ltd Vs. Their Workmen

The appellant is a big engineering concern with its head office at Bombay and factories and establishments numbering about sixty spread all over India and Ceylon. In West Bengal it had two factories, one at Barakar and the other at Konnagore near Calcutta. The distance between the two factories is about 140 miles. The Barakar factory had about 85 workmen daily-rated as well as monthly-rated. The factory was situated quite close to Grand Trunk road. The whole area of the factory and its surroundings including the Grand Trunk road was coal-bearing land from which coal had been extracted towards the end of the nineteenth century or the beginning of the twentieth century. On December 18, 1962 there was a subsidence of the earth towards the north of the Grand Trunk road passing through Barakar town affecting a surface area of about 100 X 60. This is corroborated by a letter of the Inspecting Officer Circle III of the Coal Board, Asansol to the Barakar Electric Supply Co. Ltd., a copy whereof was sent to the appellant. This letter shows that the subsidence had affected a part of the premises of the factory of the appellant and appeared to have a trend of extending towards the occupied quarters of the appellants factory. Simultaneously, there was a declaration of the Mines Department of India that Barakar town near Asansol had been declared unsafe. The declaration further shows that this was the second time when the town had been so declared unsafe and according to the Mines Department this was due to the fact that the area involved was above a 70 year old abandoned colliery. It appears that there was another subsidence in the same area on May 4, 1963 as a result whereof the approach road to the appellants factory was badly damaged. There was also damage to a portion of the managers quarters near the factory gate. By letter dated May 15, 1963 addressed to the Chief Inspector of Mines, Government of India, the appellant wanted the site to be inspected for the purpose of finding out whether there was any chance of further subsidence. That the subsidences were real was not questioned before the Industrial Tribunal nor is there any controversy regarding the same before us. This has been referred to in many official correspondence which have been exhibited in this case: On July 18, 1963 there was a letter from the office of the Chief Inspector of Mines to the appellant that its factory was situate on a goaf made in the last part of the nineteenth century and was therefore dangerous for habitation. It was also mentioned in that letter that the factory having been declared unstable, restarting of the factory on that site could not be recommended. On September 12, 1963 the head office of the appellant at Bombay wrote to its office at Barakar that it was considering closing down of the above factory as a precautionary safety measure and that it was not thinking of shifting the factory but intended to close it completely. The last portion of the letter seems to have been necessitated by enquiries started by the factory at Barakar regarding the availability of a suitable site not very far away to which the factory could be shifted. It appears that inspection had been made of a plot at Rajbandh but the idea of shifting the factory to that site had to be given up because of the unavailability of high tension electric line. The intention to close down the factory is also apparent from letters written by it to several authorities including the Controller of Purchase and Stores, Durgapur Steel Plant, Burdwan dated November 12, 1963 and to the Executive Engineer, Ganga Barrage Investigation Division, Berhampore dated July 14, 1964 showing that in view of the intended closure of the factory it would not be in a position to execute the orders from the Barakar factory.4. On September 23, 1964 the company served notices on twelve of its workmen to the effect that their services had become surplus to the appellants requirement and they were being given one months notice of termination of service and would be paid all legal dues i. e. earned wages, leave wages retrenchment compensation, etc. on October 23, 1964. At the intercession of the Assistant Labour Commissioner, Government of West Bengal, the appellant agreed to retain these 12 workmen in their employment at first till November 4 1964 and then till December 12, 1964. On December 31, 1964 the company gave notice of closure and termination of service to all the workmen individually. The workmen were intimated that they would be paid one months notice wages in lieu of one months notice. retrenchment compensation as per provisions ofthe Industrial Disputes Act, 1947. wages in lien of earned leave due, if any, as on to-date as also for the proportionate earned leave for the current year till the last day of service, gratuity amount, if due, as per terms of settlement award earned wages and such other legally due amounts, if any, Mention was also made of the bonus for the year 1962-63 and 1963-64

Court's reasoning:
7. In our opinion, it was not open to the Tribunal to go into the question as to the motive of the appellant in closing down its factory at Barakar and to enquire whether it was bona fide or mala fide with some oblique purpose, namely, to punish the workmen for the union activities in fighting the appellant. It has been laid down by this Court in a series of decisions that it is not for Industrial Tribunals to enquire into the motive to find out whether the closure is justified orview of these decisions, our conclusion is that once the Tribunal finds that an employer has closed its factory as a matter of fact it is not concerned to go into the question as to the motive which guided him and to come to a conclusion that because of the previous history of the dispute between the employer and the employees the closure was not justified. Such a closure cannot give rise to an industrial dispute.10. The above conclusion is sufficient to allow the appeal, but one last point remains. The Tribunal had evidence before it of at least two workers of the Barakar factory having been transferred in the past to other places. On the basis of this evidence, the Tribunal went into the question as to whether the company even ii it decided to effect a retrenchment of the 12 workmen should have applied the principle last come first go and found out whether these workmen could be transferred to other places if they were senior to those retained. It is not disputed that no such plea was taken in the written statement of the union and with all respect to the Tribunal it was not competent to go into that question at all. There is no evidence here as to the terms of employment of the workers in other units of the factory. The nearest units to the Barakar factory were the one at Konnagore and the other at Patna at a distance of 200 miles from Barakar. The point not having been raised by the union and without going into the question as to whether it was feasible for the appellant to effect such transfers, the Tribunal should not have attempted to apply the principle of last come first go.