Case: R. B. Bansilal Abirchand Milis Co. Ltd Vs. Labour Court Nagpur &amp; Ors

2. The facts are as follows. In Hinganghat there was a textile mill known as R. B. Bansilal Abirchand Mills which used to employ about 1000 men. The mill was owned by the firm, the appellant in the second appeal. A fire broke out in the mill on March 27, 1959 doing appreciable damage to some of the machines. The employers put up a notice under their Standing Order No. 19 on March 28, 1959 to the effect that the fire of the previous night had caused heavy loss and extensive damage to the departments rendering the mills working impracticable until necessary repairs and adjustments were carried out. The employees were however to note that the folding and workshop departments would continue to work as usual and notice of resumption of mills working would be posted after necessary adjustments and repairs were carried out. This was followed by a second notice issued on April 2, 1959 to the effect that the preliminary survey of the fire havoc in conjunction with the insurance companies had shown that over 60 per cent of the machines in the carding, fly frame and Ring frame departments had been damaged and that the damage to the bulk of these machines was such that they might require complete replacement. It was further announced that in the circumstances the Management had no alternative but to declare stoppage of work of all the productive departments of the mills3. Although it is not possible to be precise as to the extent of the damage caused, a fair idea of it can be had from a letter of Hukumchand Insurance Company Ltd. dated August 28, 1959 stating that the loss to buildings, machinery and accessories had been determined at Rs. 22,624/- by the surveyors. It appears that on 27th April 1960 the representatives of the insurance companies had agreed to reassessment increasing the figure for repairs to Rs. 37,420/-4. The third notice put up by the firm on April 29, 1960 gave no indication of the date of completion of the repairs. On September 13, 1960 the firm notified that the departments of the mills which had remained unproductive since 28th March, 1959 were expected to commence working on or about 30th September, 19605. The firm did not however work the mills in terms of the last notice but transferred the same to the company which had been incorporated on 8th December, 1959. It appears that the consideration for the transfer was Rs. 34,75,000/- made up of Rupees 11,50,000/- being the value of the immovable properties and Rs. 23,25,000/- being the value of movable properties. Compared to the second figure, the damage to the machinery as assessed by the insurance companies is insignificant6. The first notice of 28th March, 1959 brings out the fact that the work in the mill as a whole was not brought to a stand still and that it was to continue as usual in the folding and workshop departments. According to the second notice, the preliminary survey had shown that over 60 per cent of the machines in only three departments, namely, Carding, fly frame and ring frame, had been damaged and that complete replacement of some of the above might be necessary. The notices do not make out the case that the damage was such that it was not possible to turn the mills at all7. Towards the end of 1961 and the beginning of 1962, respondents 2 to 346 in Civil Appeal No. 2295 of 1966 presented applications under S. 33-C (2) of the Industrial Disputes Act to the Labour Court at Nagpur claiming to have been laid-off from 28th March 1959 to 30th September, 1960. The appellants in the second appeal filed a written statement before the Labour Court contending inter alia that the Labour Court had no jurisdiction under S. 33-C (2) and that the parties had to work out their rights within the four corners of the State Act i.e. the C. P. and Berar Industrial Disputes Settlement Act, 1947. By order dated 30th November, 1962 the preliminary objection as to jurisdiction of the employers was rejected by the Labour Court. On this, the appellants preferred an application under Article 226 of the Constitution of India before the Bombay High Court. By a common judgment rendered on 25th August, 1962 the High Court rejected the contentions of the appellants that the claim under the Industrial Disputes Act was not maintainable because of the operation of the State Act and further held that the Labour Court was competent to adjudicate on the merits of the claim of the workers even where the employer disputed not only the jurisdiction of the said court but also disputed that there was any lay-off as claimed and that the applicants were not workmen within the meaning of the Act. The appellants who were petitioners before the High Court did not proceed further in the matter by applying for a certificate that the case was fit for appeal to this Court. By order dated November 30, 1962 the Labour Court dismissed as barred by the principles of res judicata 125 applications of some of the workers who had previously applied to the Labour Court at Bombay and whose applications had been subsequently dismissed by the Labour Judge, Bombay on the ground of lack of jurisdiction under S. 33-C of the Industrial Disputes Act. The claims dismissed related to the period between March 28, 1959 and May 2, 1960. The Labour Court allowed the claims relating to the period from May 3, 1960 to September 30, 1960 and ordered the issue of certificates of recovery under Section 33-C of the Act8. Respondents 2 to 493 in Appeal No. 2136/1966 filed applications under S. 33-C in the Labour Court at Nagpur claiming lay-off compensation for the period 28th March, 1959 to September 30, 1960. The Labour Court held by order dated February 29, 1964 that there had been a lay-off within the meaning of S. 2 (kkk) of the Industrial Disputes Act and that the employees were entitled to compensation for the full period of 18 months but workers who were "badli" workers were not entitled to such compensation. The appellants in both the appeals preferred writ petitions before the High Court of Bombay for quashing the order of the Labour Court9. The two writ petitions were disposed of by the High Court by a common judgment on February 2, 1965. Before the High Court four main points were raised, namely:1. Whether having regard to the circumstances and the established facts there had been a lay-off within the meaning of the expression in S. 2 (kkk)?2. If there had been a lay-off whether compensation under S. 25-C read with S. 25-E of the Act was payable to the workers, also whether the workers were not entitled to compensation because of non-fulfilment of conditions prescribed in S. 25-E?3. Whether badli workers were entitled to lay-off compensation? and4. Whether the quantum of compensation would be governed by the first proviso to S. 25-C or whether S. 25-C (ii) would be applicable entitling the workers to compensation for the full period of the lay-off i.e. 28-3-59 to 30-9-1960?10. On the first question the High Court held that "by every indication and circumstance and by express declaration of its management it was a running industry", meaning thereby that there was no closure. On the second question, the High Court held that the Labour Court should have considered whether the workmen had proved that they had presented themselves for work or not in terms of S. 25-E to be able to claim compensation under S. 25-C, excepting with regard to three workmen who gave clear evidence on the point. It also held that badli labour were not entitled to lay-off compensation. It turned down the Contention that compensation was claimable only in terms of the Standing Orders of the Mill. In the result the High Court remanded the matters back to the Labour Court for recording fresh evidence on behalf of both the parties on the following issue:Do the applicants prove that they presented themselves for work at the appointed time at least once a day within the meaning of S. 25-E (ii)?11. On the application of the appellants, the High Court granted certificates under Art. 133 (1) (a) of the Constitution.

Court's reasoning:
18. Section 25-C provides for the measure of compensation to be awarded in cases of lay-off of workers. Section 25-E of the Act however provides inter alia that no compensation shall be paid to a workman who has been laid-off if he does not present himself for work at the establishment at the appointed time during the normal working hours at least once a day19. The claim to compensation of every workman who is laid-off is one which arises under the statue itself and S. 25-C provides for a benefit to the workman which is capable of being computed in terms of money under S. 33-C (2) of the Act. The scheme of the Act being to enable a workman to approach a Labour Court for computation of the compensation claimed by him in terms of S. 25-C of the Act he is not concerned to see whether other co-workers will or will not adopt the same course. The fact that a number of workers make claims of identical nature i.e. to compensation for lay-off, arising out of the same set of facts and circumstances cannot make any difference to the individual workman who prefers the claim. The mere fact that a large number of persons makes a claim of the same nature against the employer, does not change the nature of the dispute so as to take it out of the pale of S. 7 of the Act and render the dispute one which can only be dealt with by an Industrial Tribunal to which reference can be made by the appropriate GovernmentThis Court found that the appellant had not taken the plea in its written statement and that there had been a lay-off or a lock-out and that it had only submitted that the closure in accordance with the notice did not fall within the scope of S. 25-FFF of the Act. By issues 6 and 7 the appellant raised questions as to whether the closure had resulted in the retrenchment of the applicant and whether the closure was beyond the control of the employer. No dispute was raised about the factum of closure. Strangely enough it was urged before this Court that "there could be no closure because the appellant was merely protesting against irresponsible action of the Government and had no intention to close the business permanently." The Court found that the question of lockout was not mooted when the issues were settled nor had any plea been taken that there had been a temporary cessation of work under Standing Orders No. 11. In our view, the observations in this case do not help the appellants before usThe more so it was stated, when the dispute was not between a solitary workman on the one hand and the employer on the other but a whole body of workmen ranged against their employer who was faced with numerous applications before the Labour Court for computation of benefit in terms of money. As has been said already the Labour Court must go into the matter and come to a decision as to whether there was really a closure or a lay-off. If it took the view that there was a lay-off without any closure of the business it would be acting within its jurisdiction if it awarded compensation in terms of the provisions of Chapter V-A. In our opinion the High Courts conclusion that"In fact the business of this Company was continuing. They in fact continued to employ several employees. Their notices say that some portions of the mills would continue to work" was unexceptionable. The notices which we have referred to can only lead to the above conclusion. The Labour Courts jurisdiction could not be ousted by a mere plea denying the workmans claim to the computation of the benefit in terms of money; the Labour Court had to go into the question and determine whether, on the facts, it had jurisdiction to make the computation. It could not however give itself jurisdiction by a wrong decision on the jurisdictional pleaUnder Standing Order 19 the employer could, in the event of fire, breakdown of machinery etc. stop any machine or machines or department or departments wholly or partially or the whole or a part of the establishment for any period, without notice and without compensation in lieu of notice. Understanding Order 21, any operative played (sic) off under Standing Order 19 was not to be considered as dismissed from service but as temporarily unemployed and was not to be entitled to wages during such unemployment except to the extent mentioned in Standing Order No. 19.The High Court rightly turned down the contention in view of S. 25-J of the Act under which the provisions of Chapter V-A are to have effect notwithstanding anything inconsistent therewith contained in any other law including Standing Orders made under the Industrial Employment (Standing Orders) Act, 1946We do not think it necessary to go into this question as the matter can be disposed of even on the basis that it is open to the appellants to raise the question of jurisdiction before this Court although the point was not expressly taken in the grounds for leave to appeal to this Court before the High Court14. We find ourselves unable to accept Mr. Guptes contention. We may in this connection refer to the relevant provisions in the Act. The authorities under the Act are specified in different sections of Chapter II containing Ss. 3 to 9. Under S. 7 it is open to the appropriate Government by notification in the Official Gazette to constitute one or more Labour Courts for the adjudication of industrial disputes relating to any matters specified in the Second Schedule and for performing such other functions as may be assigned to them under the Act. Under S.A the appropriate Government may, by notification, constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule. In the Second Schedule are set forth certain matters in items 1 to 5 which are within the jurisdiction of a Labour Court and item 6 gives the Labour Court jurisdiction to deal with "all matters other than those specified in the Third Schedule"is not expressly covered by either of the two Schedules. It would therefore be a matter covered by the Second Schedule under item 6 thereof. Sec. 10 (1) ( c) enables the appropriate Government when it is of opinion that an industrial dispute exists or is apprehended inter alia, to refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule to a Labour Court for adjudication. So far as an Industrial Tribunal is concerned, the appropriate Government may under S. 10 (1) (d) make reference to it not only in cases covered by the Second Schedule but also those included in the Third Schedule except that when the dispute relates to any matter in the Third Schedule and is not likely to affect more than one hundred workmen, the appropriate Government may, if it thinks fit, make a reference to a Labour Court under cl. ( c)17. Following the above decision, it was held in Mining Engineer v. Rameshwar, (1968) 1 SCR 140   = (AIR 1968 SC 218  ) that. (2) of S.C was not confined to cases arising under an award, settlement or even under the provisions of ChapterA of the Act and the benefit provided in the bonus scheme underthe Coal Mines Provident Fund and Bonus Schemes Act, 1948 would be covered by