Case: Tea Districts Labour Association,Calcutta Vs. Ex-Employees Of Tea Districts Labourassociation And Anothe

The dispute which was referred to the industrial tribunal for its adjudication consisted of two items :-"(a) Whether the retrenchment of ten workers of Koraput and Ganjam agencies of Tea Districts Labour Association effected on the 30th November, 1956, was justified, if not, to what relief those workers are entitled?      (b) Whether the closure of the Koraput and Ganjam agencies contemplated by Messrs. Jardine Henderson Ltd., Secretaries, Tea Districts Labour Association with effect from the 31st May, 1957, is bona fide : If so, whether the affected workers are entitled to some other alternative employment in any other establishment under the same management. If not bona fide, to what relief those workers are entitled?"On this reference the award which was passed by the Tribunal directs the appellant to pay to the ten retrenched workmen all the pay and allowances to which they were entitled from November 30, 1956 to May 31, 1957, and it further orders the appellant to pay all its employees of the Berhampur and Koraput agencies, including the said ten retrenched workmen, all their pay and allowances from May 31, 1957, till one month after the publication of the award within which time the Management, if it so choses, may close down the agencies, and in that event there would be no necessity for further notice of retrenchment to those ten retrenched workmen . The award has further added that if no bona fide closure is effected the ten retrenched workmen would be entitled to statutory notice if the Management still wants to retrench them. In regard to the other employees the award provides that they shall be entitled to all their pay and allowances as before and the agencies will in the eye of law be continuing agencies. The validity of the latter portion of the award in particular is challenged before us by the appellant in the present appeal by special leave.8. The main grievance made before us by the appellant is about the direction of the tribunal that the closure must be treated as non est and that the agencies must be held to be continuing and must continue to function despite their factual closure. The argument is that even if the closure may not be bona fide it does not follow that the closure in fact has not taken place. It is not a case where closure is a pretence or the plea of closure is unreal in the sense that having purported to close the agencies, the same agencies have been functioning all the time, under a different garb. In fact the agencies have been closed even according to the finding of the tribunal. It is contended that the finding about the mala fides of the closure is open to serious doubt because the said finding is not supported by any legal evidence, and in a sense is opposed to the weight of the evidence on the record. We are inclined to think that there is considerable force in this contention. But assuming that the closure is not shown to be bona fide, does it necessarily follow that the closure is a fiction and it is unreal in the sense that the agencies can be treated to be in existence in the eye of the law? That is the very narrow point which arises for our decision in the present appeal.

Court's reasoning:
6. In regard to the question of closure the tribunal has observed that what it had to consider was whether the closure was real and bona fide. It considered the evidence and it was inclined to hold that the apprehensions entertained by the appellant in regard to the fall in its activities and work were not justified and that the appellant could have carried on with the two agencies in question. The tribunal also considered the fact that soon after the closure of Koraput and Berhampur agencies the appellant opened another agency at Vizianagaram, which is a place in Andhra Pradesh but is at some distance from Koraput in Orissa. The tribunal was not satisfied that the explanation given by the appellant for reopening of the Vizianagaram agency, which had been closed on the 6th September, 1956, was satisfactory. In the result the tribunal came to the conclusion that the closure was not bona fide, and it held that the legal consequence was that it was not a real closure. It is on the basis of this conclusion that it issued a direction to the appellant to reinstate the ten retrenched workmen and to pay all its workmen employed at the two centres as though the centres had not been closed and were actually working7. It is common ground that the compensation, due to the employees on the footing that the closure was not justified, has been duly paid to all the employees concerned, and the learned Attorney General has stated to us that so far as the ten retrenched workmen are concerned they have also been paid the statutory compensation. On behalf of the appellant the learned Attorney General had made it perfectly clear that even if the appeal were to succeed the appellant would not claim any amount back from any of its employees concerned though it would be entitled in law to do so8. The main grievance made before us by the appellant is about the direction of the tribunal that the closure must be treated as non est and that the agencies must be held to be continuing and must continue to function despite their factual closure. The argument is that even if the closure may not be bona fide it does not follow that the closure in fact has not taken place. It is not a case where closure is a pretence or the plea of closure is unreal in the sense that having purported to close the agencies, the same agencies have been functioning all the time, under a different garb. In fact the agencies have been closed even according to the finding of the tribunal. It is contended that the finding about the mala fides of the closure is open to serious doubt because the said finding is not supported by any legal evidence, and in a sense is opposed to the weight of the evidence on the record. We are inclined to think that there is considerable force in this contention. But assuming that the closure is not shown to be bona fide, does it necessarily follow that the closure is a fiction and it is unreal in the sense that the agencies can be treated to be in existence in the eye of the law? That is the very narrow point which arises for our decision in the present appealIt is on this latter observation that the Tribunal has founded its decision.With respect we do not read the observations as laying down an unqualified and categorical proposition of law that wherever a closure is mala fide it must be deemed to be unreal and nonexistent. What this Court has said is that in cases of pretence of closure no closure in fact has taken place and for the purpose of S. 23 of the Act with which the Court was dealing a mala fide closure may conceivably be treated as falling in the same class as a pretence of closure. But in the present case the fact are not in dispute. There has been a closure and the agencies have been closed and their business has been wound up. If it is found that the closure was not bona fide the consequences would be the liability of the employer to pay the higher compensation under S. 25-FFF of the Industrial Disputes Act, 1947. But it is difficult to see how when the two agencies have in fact been closed the finding about mala fides can justify the conclusion that the said two agencies should be deemed to continue and how the award can make an order on that basis. Besides, as we have already indicated even the finding about the mala fides of the closure is itself open to serious doubt. In our opinion the said finding is based on mere surmises and is entirely opposed to the weight of evidence adduced in this case.