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Sisir Kumar Mohanty Vs. State of Orissa and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtOrissa High Court
Decided On
Case NumberO.J.C. No. 351 of 1968
Judge
Reported inAIR1970Ori113
ActsIndustrial Disputes Act, 1947 - Sections 25FFF; Orissa Khadi and Village Industries Board Act, 1956 - Sections 4(2); Constitution of India - Article 226
AppellantSisir Kumar Mohanty
RespondentState of Orissa and anr.
Appellant AdvocateR. Mohanty, Adv.
Respondent AdvocateAdv. General
DispositionPetition dismissed
Excerpt:
.....india v smt gita banik, 1996 (2) glt 246, are not good law]. - provided that if at any time the state government on being satisfied that the board constituted under this act is not functioning properly or is incompetent to discharge its functions, decide that it shall be dissolved, they may lay such proposal before the orissa legislative assembly and on such proposal being accepted by a resolution of the assembly, the board shall stand dissolved on and from the date on which such resolution is passed. there is clearly distinction between incorporation of the board and its constitution. the proviso to section 4 (2) provides the machinery for dissolving the board, and it is stated that once the state government on being satisfied that the board does not function properly or is..........the petitioner challenges his termination of service and along with it questions the action of the state government in dissolving the board.2. before discussing the points raised by mr. mohanty for the petitioner, it is necessary to make some reference to the provisions of the act in order to appreciate his contentions. the relevant sections, with which the disposal of this writ application is concerned, are sections 3. 4 end 15. for convenience the said sections are extracted:--'3. (1) the state government with effect from such date as they may by notification appoint in this behalf, shall establish for the purposes of this act a board to be called the orissa khadi and village industries board.(2) the board established under subsection fl) shall be a body corporate incorporated by its.....
Judgment:

R.N. Misra, J.

1. This is an application under Article 226 of the Constitution of India by a person who had been appointed as a clerk on 30-1-62 under the Orissa Khadi and Village Industries Board. Under Orissa Act 3 of 1956 (the Orissa Khadi and Village Industries Board Act, 1956) (hereinafter referred to as the Act) with effect from 15-6-56 the Orissa Khadi and Village Industries Board was constituted. It was dissolved on 12-3-68, and on the following day the Director of Industries was put in charge of the affairs of the said Board. The petitioner's service was terminated by a notice dated 1-5-68 with effect from 15-6-68. The petitioner challenges his termination of service and along with it questions the action of the State Government in dissolving the Board.

2. Before discussing the points raised by Mr. Mohanty for the petitioner, it is necessary to make some reference to the provisions of the Act in order to appreciate his contentions. The relevant sections, with which the disposal of this writ application is concerned, are Sections 3. 4 end 15. For convenience the said sections are extracted:--

'3. (1) The State Government with effect from such date as they may by notification appoint in this behalf, shall establish for the purposes of this Act a Board to be called the Orissa Khadi and Village Industries Board.

(2) The Board established under subsection fl) shall be a body corporate incorporated by its name with perpetual succession and common seal and may sue and be sued in its corporate name and shall be competent to acquire and hold and dispose of property both movable and immovable and to contract and do all things necessary for the purposes of this Act.

4. (1) The Board established under Section 3 shall consist of fifteen mem-beis both official and non-official, including the President and Secretary to be nominated by the State Government:

Provided that--

(a) the President of the Board shall be a non-official person nominated by the State Government;

(b) the Secretary shall be an officer of the State Government nominated as such;

(c) not more than one-third of the total number shall be official members of the Board.

(2) The President, Secretary and other members of the Board shall hold office for such period as the State Government may, by general or special order, direct:

Provided that if at any time the State Government on being satisfied that the Board constituted under this Act is not functioning properly or is incompetent to discharge its functions, decide that it shall be dissolved, they may lay such proposal before the Orissa Legislative Assembly and on such proposal being accepted by a resolution of the Assembly, the Board shall stand dissolved on and from the date on which such resolution is passed. (3) No member of the Board shall receive or be paid from the Fund of the Board any salary or other remuneration for services rendered by him in any capacity whatsoever but shall be allowed travelling allowance as prescribed:

Provided that the President may receive such monthly allowance as may be prescribed. 15. On the Board ceasing to exist by dissolution under the proviso to subsection (2) of Section 4--

(i) all funds and other properties vested in, the Board shall vest in the State Government; and (ii) All liabilities, legally subsisting and enforceable against the Board shall be enforceable against the State Government to the extent of the funds and properties vested in the State Government under Clause (i)'.

3. On an analysts of Sections 3 and 4 it would be clear that Section 3 concerns Itself with the incorporation of the Board and once the Board is incorporated the law of Corporation seems to have been applied and perpetual succession and common seal are provided for. Section 4 concerns itself with the constitution of a particular Board and provides that 15 members, both official and non-official, including the President and the Secretary all of whom are to be nominated bv the State Government will constitute the Board. There is clearly distinction between incorporation of the Board and its constitution. The proviso to Section 4 (2) provides the machinery for dissolving the Board, and it is stated that once the State Government on being satisfied that the Board does not function properly or is incompetent to discharge its functions lays a proposal before the Orissa Legislative Assembly and the said proposal is accepted by a resolution of that Assembly, the Board stands dissolved. Mr. Mohanty's contentions with reference to these two sections are as follows:--

(1) Section 3 provides for a corporeal status for the Board once it is incorporated. The scheme of Section 3 clearly indicates that permanency is attached to the Board once it is incorporated.

(2) Section 4 deals with the constitution of the Board from time to time and while the body incorporated is a permanent one the Board at any particular time which consists of 15 members to be nominated by the State Government Is available to change.

(3) The dissolution contemplated under the proviso to Section 4 (2) is of the Board which is constituted under Section 4 and the process embodied in the said proviso does not have the effect of dis-incorporation of the Board, but only dissolution of the Board which is constituted under Section 4. To clarify his submission on this point Mr. Mohanty contends that once the resoultion of the Assembly accepts the proposal of the Government, the particular Board with 15 members stands dissolved and the scheme of the Act requires the State Government to nominate a new Board in the manner indicated in Section 4 (1) of the Act.

4. With reference to Section 15, Mr. Mohanty's contention is that it contemplates a temporary arrangement between the terminii of two points of time i.e., the dissolution of the Board under the proviso to Section 4 (2) and the constitution of the new Board under Section 4 (1). According to him, once the Board is reconstituted the properties revest in the Board. The learned Advocate General, appearing for the opposite parties, contends that the effect of the proviso to Section 4 (2) is dis-incorporation and in the absence of any particular statutory provision to revest the properties when a Board is reconstituted, Section 15 has to be given full effect and when all these three sections are read together it is clear that with the dissolution, in terms of the proviso to Section 4 (2), there is an end to the Board. Besides these aspects Mr. Mohanty also contends that the State Government acted in an arbitrary and high-handed manner in placing their decision to dissolve the Board before the Legislature. As a matter of fact a committee had been appointed by the State Government to review the activities of the Board as early as 1967 and the Committee furnished its report on 8-3-68. But before the report was in the hands of the Government, the Government took their decision to dissolve the Board and placed the draft resolution before the Legislative Assembly on 6-3-68. Ultimately the resolution was passed by the Legislature on 12-3 68, but the report of the Committee, which went into the affairs of the Board at length, was never taken into account. On these facts Mr. Mohanty's contention is that the requirements of the proviso to Section 4 (2) have not been satisfied. He contends that there was no satisfaction reached by the State Government in the matter, particularly because the materials for satisfaction, if any had not reached their hands and the Committee, as indicated above, had not reported by the time it is said that the State Government became satisfied.

5. While all these contentions were formulated by Mr. Mohanty, at the time of argument he indicated to us that he would confine his argument in this case mainly to one aspect, namely, that the Khadi Board is an 'Industry' and is governed by the provisions of the Industrial Disputes Act On the aforesaid premises he next contended that the provisions of Section 25FFF of the Industrial Disputes Act were attracted and the State Government as the successor of the Board who was the employer of the petitioner, was bound to make payment of the dues in terms of Section 25FFF to the petitioner. He indicated to us that if this aspect of the matter is decided, he would reserve his other contentions to be raised in some other suitable proceeding, and since the petitioner is only a workman he is not interested to canvass the longer issues referred to above.

6. The learned Advocate General concedes before us that the Orissa Khadi and Village Industries Board is an 'Industry'. He, however, disputes the application of Section 25FFF to the facts of this case and contends that statutory dissolution prescribed under the proviso to Section 4(2) of the Act is not covered by Section 25FFF of the Industrial Disputes Act, Section 25FFF provides.--

'(1) Where an undertaking is closed down for any reason whatsoever every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of Sub-section (2), be entitled to notice and compensation in accordance with the provisions of Section 25F, as if the workman had been retrenched provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer the compensation to be paid to the workman under Clause (b) of Section 25F shall not exceed his average pay for three months.

Explanation--An undertaking which is closed down by reason merely of financial difficulties (including financial losses) or accumulation of undisposed of stocks shall not be deemed to have been closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub-section.x x x x x x.'

On a comparison of the provisions in Sections 25FF and 25FFF we are satisfied that closure of an undertaking for, whatever reason is covered under Section 25FFF. While Section 25F deals with the case of retrenchment of a workman at the volition of the employer and Section 25FF deals with retrenchment in certain exigencies. Section 25FFF covers cases of closure of an Industrial undertaking for any reason, A statutory closure or dissolution is covered also under Section 25FFF. On the admitted position that the Industrial Disputes Act applies to the Khadi Board and on out: finding that the petitioner is entitled to the benefits of Section 25FFF. the position emerges that the petitioner; is entitled to certain compensation.

7. The next point for consideration is in what manner the said compensation has to be computed. The benefit prescribed under Section 25FFF is a special one not under the general law but under the Statute. A machinery is provided under the Statute to work out such beneficial provisions. It is difficult to go into the matter in a writ application and examine and compute the advantages to which the petitioner becomes entitled. Once we find that the petitioner is entitled to compensation under the Industrial Disputes Act, he must work out his remedies under the said Statute.

8. We consider it proper to advert to the submissions of the learned Advocate General In this aspect of the matter with reference to Section 15 of the Act, Therein it has been provided that all liabilities, legally subsisting and enforceable against the Board shall be enforceable against the State Government to the extent of the funds and properties of the Board vested in the State Government. Therefore, after the Industrial Tribunal quantifies the compensation payable, if any, to the petitioner, the liability of the State Government would be limited to the extent of funds and properties belonging to the Khadi Board which came to be vested in the Government. That would be a matter which would arise for examination after the dues of the petitioner are computed in a suitable proceeding under the Industrial Disputes Act. We, therefore, hold that the petitioner is entitled to the advantages of Section 25FFF of the Industrial Disputes Act and he must work out his remedies under the provisions of the said Statute. While leaving all the other questions open and on the aforesaid finding that the petitioner has his remedy under the Industrial Disputes Act, we do not propose to enter into the computation of the compensation and decline to make any further orders.

9. In the circumstances, the writ application fails and is dismissed, but without costs.

G.K. Misra, C.J.

10. I agree.


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