Case ID: 455

Judgment:
Appeal No. 135 of 1955. Appeal by special leave from the judgment and order dated October 30	 1952	 of the Labour Appellate Tribunal of India	 Allahabad	 in Misc. Case No. C 146 of 1952. R. R. Biswas	 for the appellant. Sukumar Ghose (amicus curiae)	 for the respondents. November 28. The Judgment of the Court was delivered by S.K. DAS J. This is an appeal by special leave from the judgment and order of the Labour Appellate Tribunal of India at Allahabad dated October 30	 1952. The relevant facts are these. The Banaras Ice Factory Limited	 the appellant before us	 was incorporated on September 13	 1949	 as a private limited company and was carrying on the business of manufacturing ice in the city of Banaras though its registered office was in Calcutta. The factory worked as a seasonal factory and had in its employment about 25 workmen at all material times. These workmen were employed from the month of March to the month of September 145 year. The appellant company got into financial difficulties on account of trade depression	 rise in the price	 of materials and increase in the wages and emoluments of workmen. It tried to secure a loan of Rs. 10	000/ from a Bank but met with no success. Thereupon	 it decided to close down the factory and on January 15	 1952	 a notice was given to its workmen saying that the factory would be closed down with effect from January 17	 1952	 and the services of the workmen would not be necessary for two months from that date. The work. men received their wages up to January 16	 1952. On March 18	 1952	 they were again taken into service but this temporary closing of the factory gave rise to an industrial dispute and the workmen complained that they were wrongfully laid off with effect from January 17	 1952. The dispute was referred to the Regional Conciliation Officer	 Allahabad	 for adjudication. In the meantime	 that is	 on June 6	 1952	 the workmen gave a strike notice and as there was no coal in the factory	 the appellant also gave a notice of closure on June 12	 1952. A settlement was	 however	 arrived at between the parties on June 15	 1952	 at the house of the Collector of Banaras. The terms of that settlement	 inter alia	 were: (1) the management would withdraw its notice of closure dated June 12	 1952 ; (2) the workmen would withdraw their strike notice dated June 6	 1952; (3) there being no coal	 the workers would remain on leave for a period of thirty days with effect from June 16	 1952	 and would report for duty on July 16	 1952	 at 8 A.M. and (4) after the workers had resumed their duty on July 16	 1952	 the appellant would not terminate the services of any workmen or lay them off in future without obtaining the prior permission of the Regional Conciliation Officer	 Allahabad. On June 28	 1952	 the Regional Conciliation Officer	 Allahabad	 gave his award in the matter of the industrial dispute between the appellant and its work 	 men with regard to the alleged wrongful laying off of the workmen from January 17	 1952	 to March 18	 1952	 19 146 referred to above. By his award the Regional Conciliation Officer gave full wages to the workmen for the period in question. On July 16	 1952	 none of the workmen reported for duty in accordance with the terms of the agreement referred to above	 and on that date the appellant gave a notice to its workmen to the effect that the appellant found it difficult to run the factory and had decided to close it down; the workmen were informed that their services would not be required and would be terminated upon the expiry of thirty days from July 16	 1952. The workmen	 it is stated	 accepted the notice and took their pay for one month (from July 16 to August 15	 1952) without any protest. Against the award of the Regional Conciliation Officer dated June 28	 1952	 the appellant filed an appeal to the Labour Appellate Tribunal on July 25	 1952. On August 31	 1952	 a complaint was made on behalf of the workmen to the Labour Appellate Tribunal under section 23 of the Industrial _ Disputes (Appellate Tribunal) Act	 1950	 hereinafter referred to as the Act. The gravamen of the complaint was that the appellant had contravened the provisions of section 22 of the Act. because the appellant had discharged all the workmen with effect from August 15	 1952	 without the permission in writing of the Labour Appellate Tribunal during the pendency before it of the appeal filed on July 25	 1952	 against the award of the Regional Conciliation Officer. The Labour Appellate Tribunal dealt with this complaint by its order dated October 30	 1952. Before the Labour Appellate Tribunal it was urged on behalf of the appellant that there was no contravention of a. 22	 because on July 16	 1952	 when the notice of discharge was given by the appellant	 no appeal was pending before it	 the appellant 's appeal having been filed several days later	 namely	 on July 25	 1952. This contention was not accepted by the Labour Appellate Tribunal on the ground that though the notice of discharge was given on July 16	 1952	 the termination of service was to come into operation after one month	 that is	 from August 15	 1952	 on which date the appeal before the Labour Appellate Tribunal was certainly pending. As learned counsel for the 147 appellant has not again pressed this point before us	 it is not necessary to say anything more about it. A second point uroed before the Labour Appellate Tribunal was that the appellant had the right to close down the factory	 when the appellant found that it was not in a position any longer to run the factory. The agreement of June 15	 1952	 did not stand in the appellant 's way	 as the workmen themselves did not report for duty on July 16	 1952. The closure being a bona fide closure	 it was not necessary to obtain the permission of the Labour Appellate Tribunal and there was therefore no contravention of section 22 of the Act. The Labour Appellate Tribunal apparently accepted the principle that the appellant had the right to close its business but took the view that permission should have been obtained before the closure. It referred to the agreement of June 15	 1952	 and held that though the appellant had the right to close its business	 permission was still necessary and in the absence of such permission	 the appellant was guilty of contravening cl. (b) of section 22 of the Act	 and directed that the appellant should pay its workmen full wages as compensation for the period of involuntary unemployment up to the date of its award	 that is	 during the period from August 16	 1952	 to October 30	 1952. Relying on the decision in J. K. Hosiery Factory vs Labour Appellate Tribunal of India (1)	 learned counsel for the appellant has urged three points before us. His first point is that the termination of the services of all workmen on a real and bona fide closure of business is not 'discharge ' within the meaning of cl. (b) of section 22 of the Act. His second point is that if the word 'discharge ' in cl. (b) aforesaid includes termination of services of all workmen on bona fide closure of business	 then the clause is an unreasonable restriction on the fundamental right guaranteed in el. (g) of article 19 (1) of the Constitution. His third point is that	 in any view	 the Labour Appellate Tribunal	 was not entitled to grant compensation to the workmen	 because section 23 of the Act did not in terms entitle the Labour (1) A.I.R. 1956 All. 148 Appellate Tribunal to pass an order of compensation. We may state here that if the appellant succeeds on the first point	 it becomes unnecessary to decide the other two points. For a consideration of the first point	 we must first read sections 22 and 23 of the Act. Section 22: " During the period of thirty days allowed for the filing of an appeal under section 10 or during the pendency of any appeal under this Act	 no employer shall (a)alter	 to the prejudice of the workmen concerned in such appeal	 the conditions of service applicable to them immediately before the filing of such appeal	 or (b)discharge or punish	 whether by dismissal or otherwise	 any workmen concerned in such appeal	 save with the express permission in writing of the Appellate Tribunal. " Section 23: " Where	 an employer contravenes the provisions of section 22 during the pendency of proceedings before the Appellate Tribunal	 any employee	 aggrieved by such contravention	 may make a complaint in writing	 in the prescribed manner	 to such Appellate Tribunal and on receipt of such complaint	 the Appellate Tribunal shall decide the complaint as if it were an appeal pending before it	 in accordance with the provisions of this Act and shall pronounce its decision thereon and the provisions of this Act shall apply accordingly." The short question before us is whether the word 'discharge ' occurring in cl. (b) of section 22 includes termination of the services of all workmen on a real and bona fide closure of his business by the employer. It is true that the word 'discharge ' is not qualified by any limitation in cl. We must	 however	 take the enactment as a whole and consider section 22 with reference to the provisions of the 	 (XIV of 1947) which is in pari materia with the Act under our consideration. We have had occasion to consider recently in two cases the general scheme and 149 scope of the . In Burn & Co.	 Calcutta vs Their Employees(1) this Court observed that the object of all labour legislation was ' firstly	 to ensure fair terms to the workmen and secondly	 to prevent disputes between employers and employees so that production might not be adversely affected and the larger interests of the public might not suffer. In Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union (2) it was observed " The objects mentioned above can have their fulfilment only in an existing and not a dead industry. " We accepted the view expressed in Indian Metal and Metallurgical Corporation vs Industrial Tribunal(3) and K. M. Padmanabha Ayyar vs The State Of Madras (4) that the provisions of the 	 applied to an existing industry and not a dead industry. The same view was reiterated in Hariprasad Shivshankar Shukla vs A. D. Divikar (5) where we held that 'retrenchment ' in cl. (oo) of section 2 and section 25F did not include termination of the services of workmen on bona fide closure of business. Turning now to section 22 of the Act	 it is clear enough that el. (a) applies to a running or existing industry only; when the industry itself ceases to exist	 it is otiose to talk of alteration of the conditions of service of the workmen to their prejudice	 because their service itself has come to an end. The alteration referred to in cl. (a) must therefore be an alteration in the conditions of service to the prejudice of the workmen concerned	 in an existing or running industry. Similarly	 the second part of cl. (b) relating to punishment can have application to a running or existing industry only. When the industry itself ceases to exist	 there can be no question of punishment of a workman by dismissal or otherwise. We are then left with the word 'discharge '. Unqualified though the word is	 it must	 we think	 be interpreted in harmony with the general scheme and scope of the . Our attention has been drawn to (1) ; (4) (2) 2. (5) [1957] S.C. R.121. (3) A.I. R. 150 the definition of 'workman ' in cl. (s) of a. 2	 which says ". for the purposes of any proceeding under this Act in relation to an industrial dispute	 (the definition) includes any person who has been dismissed	 discharged or retrenched in connection with	 or as a consequence of	 that dispute	 or whose dismissal	 discharge or retrenchment has led to that dispute. " In the said definition clause also	 the word 'discharge ' means discharge of a person in a running or continuing business not discharge of all workmen when the industry itself ceases to exist on a bona fide closure of business. The true scope and effect of sections 22 and 23 of the Act were explained in The Automobile Products of India Ltd. vs Rukmaji Bala (1). It was pointed out there that the object of section 22 was " to protect the workmen concerned in disputes which formed the subject matter of pending proceedings against victimisation " and the further object was " to ensure that proceedings in connection with industrial disputes already pending should be brought to a termination in a peaceful atmosphere and that no employer should during the pendency of these proceedings take any action of the kind mentioned in the sections which may give rise to fresh disputes likely to further exacerbate the already strained relations between the employer and the workmen. " Those objects are capable of fulfilment in a running or continuing industry only	 and not a dead industry. There is hardly any occasion for praying for permission to lift the ban imposed by section 22	 when the employer has the right to close his business and bona fide does so	 with the result that the industry itself ceases to exist. If there is no real closure but a mere pretence of a closure or it is mala fide	 there Is no closure in the eye of law and the workmen can raise an industrial dispute and may even complain under a.23 of the Act. For these reasons	 we must uphold the first point taken before us on behalf of the appellant. The Appellate Tribunal was in error in holding that the (1) ; 151 appellant had contravened cl. (b) of section 22 of the Act. The Appellate Tribunal did not find that the closure of the appellants business was not bona fide; on the ' contrary	 in awarding compensation	 it proceeded on the footing that the appellant was justified in closing its business on account of the reasons stated by it. As to the agreement of June 15	 1952	 the workmen themselves did not abide by it and the appellant 's right cannot be defeated on that ground. In view of our decision on the first point	 it becomes unnecessary to decide the other two points. On the point of construction of section 22 of the Act		 we approve of the decision of the Allahabad High Court in J. K. Hosiery Factory vs Labour Appellate Tribunal of India (supra) but we refrain from expressing any opinion on the other points decided therein and we must not be understood to have expressed our assent	 contrary to the opinion expressed by us in the case of The Automobile Product8 of India Ltd. (supra) to the view that under section 23 of the Act	 it is not open to an industrial Tribunal to award compensation in an appropriate case. In the result	 the appeal is allowed and the decision of the Labour Appellate Tribunal dated the 30th October 1952 is set aside. As the workmen did not appear before us	 there will be no order for costs. We are indebted to Mr. Sukumar Ghosh for presenting before us the case of the workmen as amicus curiae. Appeal allowed.

Summary:
Clause (b) Of section 22 of the Industrial Disputes (Appellate Tribunal) Act	 1950 provides that during the pendency of any appeal under the Act no employer shall discharge any workmen concerned in such appeal	 save with the express permission in writing of the Appellate Tribunal	 and section 23 enables any employee to make a complaint in writing to such Appellate Tribunal	 if the employer contravenes the provisions Of section 22 during the pendency of proceedings before the said Tribunal. 144 During the pendency of an appeal filed before the Labour	 Appellate Tribunal the appellant company finding it difficult to run the factory decided to close it down and gave notice to all the workmen that their services would be terminated upon the expiry of thirty days from July 16	 1952. On August 31	 1952	 a complaint was made on behalf of the workmen to the Tribunal under section 23 Of the Act that the appellant had discharged them without the permission in writing of the Tribunal and had thereby contravened the provisions of section 22 of the Act. It was found that the closure of the appellant 's business was bona fide. Held	 that section 22 of the Act is applicable only to an existing or running industry and that the termination of the services of all workmen	 on a real and bona fide closure of business	 is not 'discharge ' within the meaning of section 22(b) of the Act. J. K. Hosiery Factory vs Labour Appellate Tribunal of India (A.I.R. 1956 All. 498)	 approved on the point of construction of section 22 of the Act. Pipraich Sugar Mills Ltd. vs The Pipraich Sugar Mills Mazdoor Union followed.