Case ID: 5100

Judgment:
ivil Appeal No. 768 (NL) of 1973 From the order dated 27.9.1972 of the Industrial Court	 Maharashtra	 Bombay in Appeal (IC) No. 133 of 1971. G.B. Pai	 O.C. Mathur	 section Sukumaran	 Miss Meera Mathur and D.N. Mishra for the Appellant. E Naunit Lal and Jitendra Sharma for the Respondent. The Judgment of the Court was delivered by M.M. DUTT	 J. This appeal by special leave has been preferred by the appellant	 Prakash Cotton Mills Pvt. Ltd.	 against the order dated September 27	 1972 of the Industrial Court	 Maharashtra	 Bombay directing payment of compensation by the appellant to its employees and to some badli workmen for the period from March 24	 1964 to June 10	 1964 (both days inclusive) during which the mill of the appellant had been closed down under circumstances beyond control of the appellant. The appellant is a Company engaged in the business of manufacture of cotton textile goods and comes within the purview of the provisions of the Bombay Industrial Relations Act	 1946 (hereinafter referred to as the 'Act '). It is not disputed that the mill of the appellant H 422 is recognised as an undertaking under section 11 of the Act. The respondent	 the Rashtriya Mill Mazdoor Sangh	 is the approved	 registered and representative union under section 14 of the Act	 representing the employees in the cotton textile industry within the limits of Greater Bombay. It appears that on account of the alleged failure of the appellant to pay the Central Excise duty	 certain detention orders were passed by the Assistant Collector of Central Excise detaining the goods of the appellant like cotton fabrics	 cotton yarn and cotton bales Lying in the premises of the appellant 's mill. As a result of the said detention orders	 the goods which were essential for the manufacturing process in the appellants mill were detained and	 consequently	 there was a disruption in the functioning of the appellant 's mill compelling the appellant to stop the working of the mill. It is not necessary for us to state in detail the proceedings that were taken by the appellant against the said detention orders	 but suffice it to say that the detention orders were withdrawn and the appellant started the working of the mill after June 10	1964. The respondent Sangh demanded that the employees who were affected by the said closure from March 29	 1964 to June 10	 1964 should be paid their wages for the entire period. As the said demand was not accepted by the appellant	 the respondent filed an application before the First Labour Court	 Bombay	 under section 79 read with section 78 of the Act and prayed for the payment of full closure compensation to the employees affected during the aforesaid period. The application of the respondent was opposed by the appellant. It was contended on behalf of the appellant that as the closure was due to certain circumstances beyond the control of the appellant	 the appellant was not liable to pay any compensation for such closure. The Labour Court	 after hearing the parties	 by its order dated February 19	1968 held that the appellant was liable to pay closure compensation to the employees affected at the rate of 50% of the total basic wages and dearness allowance on the ground that such closure amounted to lay off within the meaning of section 2(kkk) of the 	 and that compensation at the same rate as prescribed by section 25C of the 	 namely 50% of the total wages would be payable to the employees affected by the said closure. The appellant preferred an appeal against the said order of the 423 Labour Court to the Industrial Court	 Maharashtra. The Industrial A Court set aside the order of the Labour Court and remanded the matter to that Court for a fresh enquiry and finding on the question of liability and extent of compensation for the period of closure. After remand	 the Labour Court again held that the appellant was liable to pay closure compensation to the employees affected by the closure of the mill from March 24	1964 to June 10	 1964 at the rate of 50% of the basic wages and dearness allowance. The appellant again preferred an appeal to the Industrial Court	 Maharashtra	 contending	 inter alia	 that it was not liable to pay any compensation on account of closure that took place under circumstances beyond the control of the appellant and that	 in any event	 the appellant was not liable to pay compensation to the Badli workmen. C The Industrial Court by the impugned order dated September 27	 1972 partly allowed the appeal and directed the appellant to pay closure compensation to the employees affected by the closure for the said period from March 24	 1964 to June 10	 1964 at the rate of 50% of their basic wages and dearness allowance and further directed that where the employees had been sick and enjoyed sickness benefits for all the days or had been on privilege leave or enjoyed leave with wages for all the days or secured alternative employment for any period during the closure	 such employees would not be entitled to any closure compensation for such days	 but in respect of such days half of the wages payable to Badli workmen in lieu of the said three categories of workmen would be paid to the Badli workmen equitably. Being aggrieved by the said order of the Industrial Court	 the present appeal has been filed by the appellant by special leave. Mr. G.B. Pai	 learned Counsel appearing on behalf of the appellant	 submits in the first instance that as the appellant had closed down the mill in accordance with the provisions of Standing orders 16 & 17	 it is not liable to pay any compensation. Standing orders 16 & 17 provide as follows: "16. The Company may	 at any time or times	 in the event of a fire	 catastrophe	 breakdown of machinery or stop page of the power supply	 epidemic	 civil commotion or other cause	 beyond the control of the Company	 stop any machine or machines or department or departments	 wholly or partially for any period or periods	 without notice and without compensation in lieu of notice. 424 In the event of a stoppage of any machine or department under this order during working hours	 the operatives affected shall be notified by notices put upon notice boards in the department concerned and at the time keeper 's office	 as soon as practicable	 when work will be resumed and whether they are to remain or leave the mill. The period of detention in the mill shall not ordinarily exceed one hour after the commencement of the stop page. If the period of detention does not exceed one hour	 operatives so detained shall not be paid for the period of detention. If the period of detention in the mill exceeds one hour	 operatives so detained shall be entitled to receive wages for the whole of the time during which they are detained in the mill as a result of the stoppage. In the case of piece workers	 the average daily earnings for the previous month shall be taken to be the daily wages. Any operative played off under order 16 shall not be considered as dismissed from service	 but as temporarily unemployed	 and shall not be entitled to wages during such unemployment except to the extent mentioned in order 16. Whenever practicable a reasonable notice shall be given of resumption of normal work and all operatives played off under order 16	 who present them selves for work	 when the normal working is resumed	 shall have prior right of reinstatement. " Relying upon the provision of Standing order 16	 it is urged by the learned counsel for the appellant that as the said Standing order does not make any provision for payment of compensation on account of closure of the mill	 when such closure was due to circumstances beyond the control of the Company	 the Industrial Court was wrong in directing payment of compensation to the employees of the appellant for the period in question including payment to the Badli workmen. The question whether compensation should be paid to the Badli workmen will be considered by us later in this judgment. We are	 however	 unable to accept the contention of the appellant that as the closure had been made in accordance with the provisions of the Standing orders 16 & 17 due to circumstances beyond the control of the appellant	 the appellant is not liable to pay any compensation to its employees for the period of closure. Nor are we in a position to accept 425 the contention of the Counsel for the appellant that the application of A the respondent Sangh before the First Labour Court was not maintainable as the closure was made under the provisions of the Standing orders 16 & 17. In this connection	 we may refer to the provision of sub section (4) of section 42 of the Act which provides as follows: "42(4). Any employee or a representative union desiring a change in respect of (i) any order passed by the employer under standing orders	 or (ii) any industrial matter arising out of the application or interpretation of standing orders	 or (iii) an industrial matter specified in Schedule III	 except item (5) thereof shall make an application to the Labour Court and as respects change desired in any industrial matter specified in item (3) of Schedule III	 to the Industrial Court: Provided that no such application shall lie unless the employee or a representative union has in the prescribed manner approached the employer with a request for the change and no agreement has been arrived at in respect of the change within the prescribed period. " Item No. 7 of Schedule III	 referred to in sub section (4)	 relates to "Payment of compensation for closures". Further	 clause (a)(iii) of section 78(1) of the Act provides that a Labour Court shall have power to decide any change made by an employer or desired by an employee in respect of an industrial matter specified in Schedule III	 except item (5) thereof	 and matters arising out of such change. In view of the provision of sub section (4) of section 42 read with the provision of section 78(1) (a)(iii)	 it is manifestly clear that an employee is entitled to challenge the refusal by the Company to pay compensation for the closure and claim such compensation before the Labour Court whether or not such closure was due to circumstances beyond the control of the Company	 as enumerated in Standing order 16. Such a contention	 if accepted	 will make the provision of section 42(4) and that of section 78(1)(a)(iii) of the Act nugatory. The respondent Sangh	 therefore	 in our opinion	 was entitled to make the application before the Labour Court claiming compensation for the period of closure even though such closure was made in accordance with the provisions of the Standing orders 16 & 17. There is no substance in the contention of the appellant that as 426 the closure had to be made under certain compelling circumstances	 the appellant was not liable to pay compensation to any of its employees. The Standing order 16 provides that such closure can be made without notice and no compensation would be required to be paid in lieu of notice. It is clear from Standing order 16 that it does not contemplate that when there has been a closure on account of some unavoidable circumstances	 no compensation is required to be paid to the employees. Under the circumstances	 there is no substance in the contention of the appellant that as the closure had been made in accordance with Standing orders 16 & 17	 it is not liable to pay any compensation. The contention is	 accordingly	 overruled. We	 therefore	 uphold the order of the Industrial Court directing payment of compensation to the employees of the appellant for the above period of closure. The next question that remains to be considered is whether the Industrial Court is justified in directing payment of compensation to some of the Badli workmen. It is not in dispute that Badli workmen get work only in the absence	 temporary or otherwise	 of regular employees	 and that they do not have any guaranteed right of employment. Their names are not borne on the muster rolls of the establishment concerned. Indeed	 a Badli workman has no right to claim employment in place of any absentee employee. In any particular case	 if there be some jobs to be performed and the employee concerned is absent	 the Company may take in a Badli workman for the purpose. Badli workmen are really casual employees without any right to be employed. It has been rightly submitted by the learned Counsel for the appellant that the Badli employees could not be said to have been deprived of any work to which they had no right and	 consequently	 they are not entitled to any compensation for the closure. Indeed	 the Industrial Court has itself observed that to allow the claim of Badli workmen would be tantamount to penalising the appellant. In spite of the said observation	 the Industrial Court directed payment of compensation to the Badli workmen in place of certain categories of regular employees. We fail to understand how the Industrial Court can direct payment of compensation to the Badli workmen when	 admittedly	 such Badli workmen	 as noticed already	 have no right to be employed. It may be that the Company may not have to pay closure compensation to the three categories of employees	 as mentioned by the Industrial Court	 but that does not mean that the Company has to pay compensation to the Badli workmen in place of these categories of employees. In this connection	 we may refer to section 25C of the 427 which excludes a Badli workman or a A casual workman from the benefit of compensation in the case of layoff. In the circumstances	 although we uphold the order of the Industrial Court for payment of compensation to the regular employees of the appellant at the rate fixed by it	 we are unable to subscribe to the view that the compensation which would have been payable to the three categories of employees	 should be paid to the Badli workmen. In other words	 we hold that Badli workmen have no right to claim compensation on account of closure. Mr. Naunit Lal	 learned Counsel appearing on behalf of the respondent Sangh	 has placed reliance upon the fact that in the Rashtriya Mill Mazdoor Sangh vs Apollo Mills Ltd .	 l ; 	 this Court awarded compensation to Badli workmen. Accordingly	 it is submitted by him that it is implied that this Court must have taken the view that Badli workmen are also entitled to compensation on account of closure under Standing orders 16 & 17. We are unable to accept the contention. The question whether the Badli workmen are entitled to compensation or not	 was not raised in Apollo Mills case (supra). Indeed	 in that case	 it has been observed by this Court that the case of Badli workmen does not appear to have been separately raised and	 accordingly	 there is no reason not to award them compensation. Thus it appears that nothing was decided by this Court but	 as no body challenged the right of the Badli workmen to get compensation	 this Court directed payment of compensation to them. We have	 however	 come to the conclusion that the Badli workmen are not entitled to any compensation on account of closure under Standing orders 16 & 17. In the circumstances	 the order of the Industrial Court in so far as it directs payment of compensation to the Badli workmen is set aside and	 except that	 the rest of the order of the Industrial Court is affirmed. The appeal is allowed in part to the extent indicated above. In view of the facts and circumstances of the case	 there will	 however	 be no order for costs. A.P.J. Appeal allowed in part.

Summary:
Certain goods which are essential for the manufacturing process in the appellant 's mill were detained by the Excise Authorities for non payment of Central Excise Duty and consequently there was a disruption in the functioning of the appellant 's mill compelling the appellant to stop the working of the mill for the period from March 24	 1964 to June 10	 1964. The Respondent Sangh demanded that the employees who were affected by the said closure should be paid their wages for the aforesaid period. As the said demand was not accepted by the appellant	 the respondent filed an application before the First Labour Court	 praying for the payment of full closure compensation to the affected employees. The Labour Court held the appellant liable to pay closure compensation to the employees affected by the closure of the mill for the aforesaid period at the rate of 50% of the basic wages and dearness allowance. The Industrial Court partly allowing the appeal of the appellant	 directed the appellant to pay closure compensation to the employees affected by the closure for the period from March 24	1964 to June 10	 1964 at the rate of 50 per cent of their basic wages and dearness allowance and further directed that where the employees had been sick and enjoyed sickness benefits for all the days or had been on privilege leave or enjoyed leave with wages for all the days or secured alternative employment for any period during the closure	 such employees would 420 not be entitled to any closure compensation for such days	 but in respect of such days half of the wages payable to Badli workmen in lieu of the said three categories of workmen would be paid to the Badli workmen equitably. In appeal to this Court	 it was contended on behalf of the appellant that as the closure had been made in accordance with the provisions of the Standing orders 16 and 17 due to circumstances beyond the control of the appellant	 the appellant is not liable to pay any compensation to its employees for the period of closure including payment to the Badli workmen. Allowing the appeal in part	 ^ HELD: (1) The order of the Industrial Court in so far as it directs payment of compensation to the Badli workmen is set aside and	 except that	 the rest of the order of the Industrial Court is affirmed. [427F G] 2.(i) Sub section (4) of Sec. 42 read with the provision of section 78(1)(a)(iii) of the Bombay Industrial Relations Act 1946	 makes it manifestly clear that an employee is entitled to challenge the refusal by the company to pay compensation of the closure and claim such compensation before the Labour Court whether or not such closure was due to circumstances beyond the control of the company	 as enumerated in Standing order 16. The Respondent Sangh therefore	 was entitled to make the application before the Labour Court claiming compensation for the period of closure even though such closure was made in accordance with the provisions of the Standing orders 16 and 17.[425E H] 2.(ii) The Standing order 16 provides that such closure can be made without notice and no compensation would be required to be paid in lieu of notice. It is clear from Standing order 16 that it does not contemplate that when there has been a closure on account of some unavoidable circumstances	 no compensation is required to be paid to the employees. Therefore	 the order of the Industrial Court directing payment of compensation to the employees of the appellant for the above period of closure is upheld. [426A C] 3. Badli workmen get work only in the absence	 temporary or otherwise	 of regular employees	 and that they do not have any guaranteed right of employment. Their names are not borne on the muster rolls of the establishment concerned. Indeed a Badli workman 421 has no right to claim employment in place of any absentee employee. In A any particular case	 if there be some jobs to be performed and the employee concerned is absent	 the Company may take in a Badli workman for the purpose. Badli workmen are really casual employees without any right to be employed. Therefore	 the Badli employees could not be said to have been deprived of any work to which they had no right and	 consequently	 they are not entitled to any compensation for the closure. It may be that the Company may not have to pay closure compensation to the three categories of employees as mentioned by the Industrial Court	 but that does not mean that the company has to pay compensation to the Badli workmen in place of these categories of employees. [426D Il] Rashtriya Mill Mazdoor Sangh vs Appollo Mill Ltd.	 []960] 3 SCR 231 distinguished.