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The Kerala Khadi and Village Industries Board, Trivandrum Vs. the Industrial Tribunal, Trivandrum and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Case NumberO.P. No. 2260 of 1961
Judge
Reported inAIR1965Ker112
ActsConstitution of India - Article 226; Industrial Disputes Act, 1947 - Sections 2, 25F and 25FFF; Kerala Khadi and Village Industries Board Act - Sections 15(2)(4)
AppellantThe Kerala Khadi and Village Industries Board, Trivandrum
RespondentThe Industrial Tribunal, Trivandrum and anr.
Appellant Advocate V. Narayana Menon and; V.P. Gopalan Nambiar, Advs.
Respondent Advocate Govt. Pleader (Labour) (for No. 1) and; K. Velayudhan Nair,;
Cases ReferredMessrs. Mckenzies Ltd. v. Presiding Officer Labour Court Madras
Excerpt:
labour and industrial - interpretation - sections 2, 25f and 25fff of industrial disputes act, 1947 - order awarding compensation to workers employed by petitioner challenged - challenge on ground of amenability of petitioner under act - petitioner board falls within term 'industry' - workmen terminated on account of bona fide closure of activities by petitioner - compensation to be determined in accordance with section 25fff. - - , that the appointment, of the various employees was only on a provisional basis for a term, and1 that the employees knew full well that, when once the various activity of the board were transferred over, either to institutions or to co-operative societies, there will be no necessity to continue the employment of these persons, and that, in accordance with.....orderc.a. vaidialingam, j.1. in this writ petition, on behalf of the petitioner, the learned advocate-general, challenges the award of the industrial tribunal, trivandrum, in i. d. no. 50 of 1959, and published in she state gazette on 25th july 1961.2. in view of certain disputes that arose between the petitioner, viz., the kerala khadi and village industries board, and its employees, two questions were referred for adjudication to the industrial tribunal by the state government, viz., (a) reduction in salary of the employees with effect from 15th october 1959, and (b) termination of the services of the employees, effective from 3 1st december 1959, as per the decision taken in the meeting of the board on 15th november 1959.3. he far as the first question, that was referred for.....
Judgment:
ORDER

C.A. Vaidialingam, J.

1. In this writ petition, on behalf of the petitioner, the learned Advocate-General, challenges the award of the Industrial Tribunal, Trivandrum, in I. D. No. 50 of 1959, and published in she State Gazette on 25th July 1961.

2. In view of certain disputes that arose between the petitioner, viz., the Kerala Khadi and Village Industries Board, and its employees, two questions were referred for adjudication to the industrial Tribunal by the State Government, viz., (a) reduction in salary of the employees with effect from 15th October 1959, and (b) termination of the services of the employees, effective from 3 1st December 1959, as per the decision taken in the meeting of the Board on 15th November 1959.

3. He far as the first question, that was referred for adjudication is concerned, it has been drought to my notice that the petitioner Board has adjusted the claims of the employees concerned, and therefore it became unnecessary for the Tribunal to consider and' adjudicate on that question.

4. Therefore, the only other matter that remained for adjudication at the hands of the Industrial Tribunal, was the question of termination of the services of the employees concerned, effective from 31st December 1959, as per the decision of 'the Board' taken in its meeting on 15th November 1959. So far as this is concerned, the Board took up the position that the activities of the Board in respect of which there is an employment of the employees in question, cannot be considered as an 'industry', as that expression is defined in Section 2(j) of the Industrial Disputes Act, 1947. The second contention that was taken by the Board', was that the employees cannot be considered as 'workmen' under Section 2(s) of the Act. The, third and last contention, that appears to have been taken by the Board before the Industrial Tribunal, was that in any event, the termination of the services of the employees in question, was as a result of the closure of the particular activities of the Board, and that the claim for compensation, if any, will have to be adjudicated upon on the basis of Section 25FFF of the Act.

5. It is seen from the award of the Industrial Tribunal, that the contention that the employees are not 'workmen', though raised by the petitioner, was not pressed at the time of the hearing, it is also mentioned by the Industrial Tribunal that, excepting for the bare allegation in the counter statement of the Board, no attempt was made to show that the employees are not 'workmen', as defined in the Act. But it is categorically recorded by the Industrial Tribunal that this contention was not pressed on behalf of the Board, at the time of argument. In consequence, it held against, the petitioner on this point. The learned Advocate-General, no doubt, attempted to raise this question over again before me; but, in view of the categorical statement in the award that this contention, though raised, was not pressed before the Industrial Tribunal, I declined to allow this aspect to be agitated in this Court, No doubt, the learned Advocate-General referred to the fact that a point has been taken in the affidavit filed by the petitioner in this Court, that the statement of the Industrial Tribunal in the award that this contention was not pressed before it, is not correct, and', therefore, he is at liberty to raise the question over again. I am not impressed with this contention of the learned Advocate-General, because, excepting a bare assertion that the statement in the award is not correct, no other materials have been placed before me to show as to why I should not prima facie accept the recording of a fact recited in the proceedings of the Industrial Tribunal. Therefore, this contention is not available to the petitioner in this Court either.

6. Regarding the question as to whether the activities of the petitioner, viz., the Kerala Khadi and Village Industries Board, Trivandrum, in respect of which the various persons were employed, constitute an 'industry' under Section 2(j) of the Act, here again, the Tribunal, having due regard' to the various principles laid down by the Supreme' Court in State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610 ultimately came to the conclusion that the activities in question of the Board, are such that they satisfy the tests laid down by their Lordships, for the said undertaking being characterised an 'industry' under Section 2(j) of the Act. And, on this basis, the Industrial Tribunal has held that the dispute, that has been, referred for adjudication, is an 'industrial dispute'.

7. The other contention, that was raised, as I mentioned earlier, was as to whether the termination of the services of the employees concerned, is as a result of closure, or as and' by way of retrenchment. On this question again, the Industrial Tribunal is of the view that, in the circumstances of this case, and in the manner in which the termination of the services of the employees took place, it cannot be considered to be the result of the closure of the undertaking. The view of the Industrial Tribunal is that the termination of the services of the employees in question should be considered to be as and by way of retrenchment; and, on that basis, it has awarded compensation to the various employees concerned, under Section 25F of the Act.

8. At this stage, I may mention that the management appears to have raised certain subsidiary contentions viz., that the appointment, of the various employees was only on a provisional basis for a term, and1 that the employees knew full well that, when once the various activity of the Board were transferred over, either to institutions or to co-operative societies, there will be no necessity to continue the employment of these persons, and that, in accordance with the terms of the employment a period of one month's notice has been given. Therefore, the management urged that there is no liability to pay any compensation whatsoever. So far as these aspects are concerned, the Industrial Tribunal, after considering the various materials placed before it, has ultimately rejected the contention^ of the management; and those findings have not been attacked before me by the Teamed Advocate General, appearing for the Board.

9. Therefore, ultimately, 'the industrial Tribunal has come to the conclusion that the claim for compensation will have to be adjudicated upon, on the basis of Section 25F of the statute, and accordingly awarded compensation to the various employees, by providing that those who have not completed one year of service be given two months' salary, and such of those employees, who have to their credit a service of one year and more, be paid 4 months' salary. Pausing here for a moment, I must say that the actual direction regarding the payment of compensation, is not also in conformity with Section 25F of the Industrial Disputes Act.

10. The learned Advocate-General has again raised the same contentions, that had been pressed before the Industrial Tribunal. The learned Advocate General urged that the activities of the Board concerned cannot be considered an 'industry' under Section 2(j) of the Act. According to him, the activity of the Board in conducting training centres and training people at such centres in Khadi and village industries, can only be considered to be in the nature of an educational activity, and has no analogy to trade or business, in which case, the principles laid down by the Supreme Court and relied upon by the 'Industrial Tribunal, in AIR 1960 SC 610 cannot apply. In particular, the learned Advocate-General relied upon the later decision of the Supreme Court in ATI Research Association v. State of Bombay AIR 1961 SC 484 particularly the query posed at p. 487, viz.,

'Can it be said under these circumstances that this is an undertaking which is purely of educational character and therefore covered' by the Australian case mentioned above?'

That js, the learned Advocate-General's attempt was to ask this court to draw an inference that if an activity is purely of an educational character, then it cannot be considered to be an 'industry' under Section 2(j) of the statute.

11. The other contention that is raised is that compensation should, if at all, be awarded only under Section 25FFF of the Act, treating the termination of the services in this case, as due to a bona fide closure of the undertaking by the Board.

12. The further contention, as I mentioned earlier,, that the employees are not 'workmen', is DO longer available to the learned Advocate-General in this Court.

13. On the other hand, Mr. K. Velayudhan Nair, learned counsel for the Employees' Association has urged that the view of the Indus trial Tribunal that the activity of the Board, with which the employees in question are connected, is an 'industry' under Section 2(3), and the decision of the Supreme Court relied upon by the Industrial Tribunal, viz., AIR 1960 SC 610 is applicable, He also urged that as a fact, the Industrial Tribunal has found that the management in this case is carrying on all the activities, which will bring it as an 'industry' under Section 2(j). The learned counsel urged that even according to the Board' itself the object of giving training to people in Amber Charka, was to help the unemployed to earn a living, and that is rendering material service to the community. It is also systematically organised by the Board. To achieve the purpose, cooperation between the Board and these employees is essential. Such an activity can, by no means, be characterised to be in the nature of an educational activity. Even if it is so, the learned counsel, urged, it will be an 'industry' as held' by the Supreme Court itself in Nagpur Corporation v. It Employees, AIR 1960 SC 675. According to the learned counsel, the Supreme Court in the sale decision has held that the Education Department of the Nagpur Corporation is an 'industry'.

14. The learned counsel also urged that the approach made by the Industrial Tribunal to reject the contention of the management that the termination o the services of the workers concerned should be considered consequent on a closure, attracting the provisions of Section 25FFF of the statute, is also perfectly justified. In this connection, the learned counsel referred me to the various, communications issued' by the Board, itself, which, according to him, will show that the termination of the services of the employees was as and by way of retrenchment. The learned counsel urged that the finding of the Industrial Tribunal is that., even after notice of termination was issued to the employees, to take effect from 31st December 1959, the Board was carrying on its activities, at any rate, so far as the Vidyalayas and Parishramalayas, wherein the trainees had not completed their course, were concerned. Therefore, the learned counsel urged that the termination of the services in this case, is only as and by way of retrenchment, attracting payment of compensation under Section 25F of the Industrial Disputes Act.

15. In order to appreciate the contentions raised by the learned Advocate-General on behalf of the petitioner, and by Mr. K. Velayudhan Nair on behalf of the Employees' Association, it is necessary to advert to certain provisions of the statute, viz., the Kerala Khadi and Village Industries Board Act (Act IX of 1957), as well as to the various communications that were issued by the Board itself. Those communications will throw a lot of light on the question as to whether the termination of the services of the employees in this case, is to be considered as retrenchment, or consequent upon the closure of the undertaking. The provisions of this statute will throw considerable light on the question as to whether the activities of the Board are to be considered an 'industry' under Section 2(j) of the Industrial Disputes Act.

16. The Board itself was constituted under the Kerala Khadi and' Village Industries Board' Act. The preamble to the Act is to the effect that it is an Act to provide for the organisation, development and regulation of Khadi and Village Industries in the State of Kerala, and to constitute a Board to carry out the said objects. Therefore, the Board itself is constituted for the purpose of organisation, development, and regulation of Khadi and Village Industries in the State. Section 2(i) of the Act defines the expression 'Board' as meaning 'the Kerala Khadi and Village Industries Board, established under Section 4; and Section 2(v) defines the expression 'Village Industries' as

'all or any of the industries specified in the Schedule to the Khadi and Village Industries Commission Act, 1956 (Act 61 of 1956), and includes any other industry declared by the Government under Section 3 to be a village industry'.

Chapter II of the Act deals with the establishment, constitution, and dissolution of the Kerala Khadi and Village Industries Board. Section 4 in that chapter relates to the establishment of the Board. The other provisions of Chapter II arc not necessary to be considered for the present purpose. Under Section 4(1), it is specifically provided that the Board is to be a body corporate having perpetual succession and a common seal, with power to acquire, hold and dispose of property, both movable and1 immovable, and to contract and do all things necessary for the purpose of the Act. Section 13 deals with the power of the Board to enter into and perform all contracts for carrying out any of the purposes of the Act; as also how contracts are to be made.

17. Chapter III deals with the functions and powers of the Board. Sections 15 and 16, occurring in the same chapter, deal with the general powers of the Board. Both these sections are, in my view, important, and they are as follows:

'15. (1) It shall be the duty of the Board to organise, develop and regulate Khadi and Village Industries and perform such functions as the Government may prescribe from time to time.

(2) Without prejudice to the generality of the provisions of Sub-section (1), the Board shall also in particular discharge and perform all or any, of the following duties and functions, namely--

(1) to start, encourage, assist and run Khadi and' Village Industries,

(2) to help the people by providing them with work in their homes and to give them monetary accommodation,

(3) to organise co-operative societies for Khadi and Village Industries,

(4) to conduct training centres and to train people at those centres or at other centres outside the State of Kerala in Khadi and Village Industries,

(5) to arrange for supply of raw material, tools and implements and for sate of the products,

(6) to arrange for publicity and popularising of goods manufactured in Khadi and Village Industries by opening stores, shops, exhibitions and the like.

(7) to endeavour to educate public opinion and to impress upon the public the advantages of patronising the products of Khadi and Village Industries,

(8) to seek and obtain advice and guidance in these subjects by inviting experts,

(9) to undertake and encourage research work,

(10) to carry on such activities as are incidental and conducive to the objects of this Act; and to discharge such other duties and to perform such other functions as the Government may direct for the purpose of carrying out the objects of the Act.

(16) The Board shall, for the purpose of carrying out its functions under this Act, have the following powers, namely;--

(i) to acquire and hold such movable and immovable property as it deems necessary and to lease, sell or otherwise transfer any such, property;

Provided that in the case of immovable property the aforesaid powers shall be exercised only with the previous sanction of the Government,

(ii) to incur expenditure and undertake works in any area in the State of Kerala, for the framing; and execution of such schemes as it may consider necessary for the purpose of carrying out the provisions of this Act or as may be entrusted to it by the Government, subject to the provisions of this Act and the rules made thereunder.'

18. Under Sub-section (1) of Section 15, it will be seen that the duty of the Board is to organise, develop and regulate Khadi and Village Industries. In particular, the activity in this case; which was under consideration before the Industrial Tribunal, relates to what is provided in Clause (4) of Sub-section (2) of Section 15, viz., to conduct training centres and to train people at those centres or at other centres outside the State of Kerala, in Khadi and Village Industries. And it is for that purpose that the management was running the several training centres known as Parishramalayas or Vidyalayas. Training was to be given in spinning Khadi in Amber Charka. The particular training that was given and for which the services of the employees were utilised, as is mentioned even in the affidavit filed in support of this writ petition,, was for the purpose of helping the unemployed public to earn a livelihood by spinning Khadi on Amber Charka. The purpose of the schema, even according to the petitioner, is to popularise spinning on Amber Charka and to persuade the people to use it as a means of employment and getting in come.

19. No doubt, it is stated by the petitioner that the original idea was to have all these Parishramalayas or Vidalayas, as they are called, to, be allowed to be run by institutions and co-operative societies; but in view of the fact that such institutions and co-operative societies were note forthcoming, the Board itself ultimately decided to start and run the Parishramalayas or Vidyalayas for the purpose of training people in spinning Khadi, on the Amber Charka. It is in such Parishramar lay as and' Vidyalayas, started by the Board, that the services of the various employees m question were utilised. I will have to refer later to the various communications' and circulars that have been issued by the Board, because they will have a bearing on the circumstances under which the termination of the services of the employees took place. It is not really necessary for me to refer to these communications at the present stage, because there is no controversy that during the period in question the Board was actually running the Parishramalayas or Vidyalayas and utilising the services of the employees in question, in those organisations. The members of the Employees Association, involved in this dispute, are 245 in number, consisting of Amber instructors, Amber Managers, Super visors and Maistries, employed by the Board in the Parishramalayas and Vidyalayas,

20. The question that now arises is as to whether the finding of the Industrial Tribunal, that this activity of the Board constitutes an 'industry' as defined in Section 2(j) of the Indus-trial Disputes Act, is correct or not. No doubt, the Industrial Tribunal has adverted only to the earlier decision of the Supreme Court in AIR 1960 SC 610. But there are two other decisions of the Supreme Court, which will have a bearing on this matter, viz., those reported in AIR 1960 SC 675 and AIR 1961 SC 484. Ordinarily, I may have to advert in considerable detail to the various principles laid down by their Lordships of the Supreme Court in these decisions; but it -has become unnecessary now, because 1 had occasion to refer to these principles in my recent judgment in O. P. No. 363 of 1962, Travancore Devaswom Board v. State of Kerala, ILR 1963 (1) Kerala 409: (AIR 1963 Ker 250). In that writ petition, I had occasion to consider the question as to whether the activities of the Travancore Devaswom Board, conducted' through the Maramath section, constitute an 'industry' under Section 2(j) of the Industrial Disputes Act. Having due regard to the principles laid down by their Lordships of the Supreme Court in ail the decisions referred' to above, and considering the nature and the manner in which the work in the Maramath section was being earned on by the Travancore Devaswom Board, I ultimately held that those activities must be considered to be an 'industry' under Section 2(j) of the Industrial Disputes Act,

21. In this case, the learned Advocate-General has not, as such, attacked the finding of the Industrial Tribunal viz., that the management was carrying on all the activities it is charged with under Section 15 of the Kerala Act IX of 1957. But the contention that has been taken by the learned Advocate-General, is that the training that is being given in the use of Amber Charka to person who wish to learn it, must be considered to be purely in the nature of an educational activity, having no analogy to an activity in the nature of trade or business; and so it will not constitute an 'industry' as defined in Section 2(j), The question is whether the activity in question is in the nature of an educational activity; and, even if it is so whether it cannot be characterised as an 'industry'. The expression 'industry' is defined in Section 2(j) of the Industrial Disputes Act, 1947, is follows:

' 'Industry' means any business, trade, undertaking, manufacture or calling of employers, and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen;'

22. In AIR 1960 SC 610 at p. 6r6, Mr. Justice Gajendragadkar after a consideration of the various aspects, observes as follows:

'We have yet to decide which, are the attributes, the presence of which makes an activity an undertaking within Section 2(j), on the ground that it is analogous to trade or business. It is difficult to state these possible attributes definitely or exhaustively; as a working principle it may be stated that an activity systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of employees is an undertaking. Such an activity generally involves the co-operation of the employer and the employees; and its object is the satisfaction of material human, need's. It must be organised or arranged in a manner in which trade or business is generally organised or arranged. It must not be casual, nor must it be for oneself nor for pleasure. Thus the manner in which the activity in question is organised or arranged, the condition of the co-operation between employer and the employee necessary for its success and its object to render material service to the community can be regarded' as some of the features which are distinctive of activities to which Section 2(3) applies.'

23. From the above extract, it will be seen that an activity, which is systematically or habitually undertaken for the production or distribution of goods for the rendering of material service to the community at large, or part of such community with the help of employees will be considered to be an undertaking; and' as such an 'industry' under Section 2(j) of the Act. In AIR 1960 S.C. 675 the Supreme Court after reiterating the principles laid down in its earlier decision in AIR 1960 S.C. 610 has held that if a service rendered by an individual as a private person could be an 'industry', it would equally be an 'industry' in the hands of a corporation. Applying those tests, in my view, the activities of the Board in the present case, even on the statements, contained' in the affidavit of the Board, will clearly show that they are carried' on systematically and habitually with the help of employees. The preamble to Kerala Act IX of 1957 clearly shows that the petitioner Board is constituted to organise, develop and regulate ' Khadi and Village Industries. Section 15(1) of the Act, dealing with the functions of the Board, emphasises the duty of the Board in the manner indicated above. As institutions and co-operative societies were not forthcoming to take up this work, the Board admits that it started the Parishramalayas and Vidyalayas for propagating and' organising khadi industry by means of Amber Charkas. It is an activity systematically undertaken; its object is to render material service to the members of the public, the material service being to give training' in spinning khadi on the Amber Charka, to help the unemployed to earn a living. The said activity of the Board is cairied on with the help of the employees, viz., Amber Instructors, Amber Managers, Supervisors and Maistries, and such co-operation between the Board' and the said employees is absolutely necessary for the running of the Parishramalayas and Vidayalayas; and the activities are organised' or arranged in a manner in which a trade or business is generally organised. It is not possible for me to accept the contention of the learned Advocate-General that these activities of the Board' are in the nature of purely educational activity. In my view, these activities of the Board have little in common with the activities of what may be called a purely educational institution. To conclude on this aspect, for the reasons mentioned above, these activities of the Board, in my view, can be characterised an 'industry' under Section 2(j) of the Industrial Disputes Act.

24. No doubt, in AIR 1960 SC 610, it is seen that the learned Judges of the Supreme Court ultimately make it clear that in the appeal before them their Lordships are not expressing any opinion on the question as to whether running an educational institution would be an 'industry' under the Act, inasmuch as that question did not arise in those proceedings before their Lordships.

It is also true that their Lordships in the said decision have not considered the question as 'to whether running of an educational institution would be an industry under Section 2(j).

25. As I mentioned earlier, the learned Advocate General referred me to the decision of the Supreme Court reported in AIR 1961 SC 484, wherein their Lordships had to consider the question as to whether' the Ahmedabad Textile Industry's Research Association is an 'industry' under Section 2(j) of the Industrial Disputes Act. In that decision the learned Judges reiterate the principles laid down in their previous decision in the Bombay Hospital case, AIR 1960 SC 610, On behalf of the Research Association, it was urged that the Association is a research centre and' is in the nature of an educational activity, having no analogy to an activity in the nature of trade or business., In this connection, the learned Attorney-General, appearing for the Research Association, relied on a decision of the Australian High Court in Federated State School Teachers' Association of Australia v. State of Victoria, 41 CLR 569, wherein it was held that educational activities of the State, carried on under appropriate statutes and statutory regulations relating to education, did not constitute 'industry' within the meaning of Section 4 of the Commonwealth Conciliation and Arbitration Act. The learned Judges of the Supreme Court refer in detail to the objects, nature and functioning of the Research Association, and then pose the question at p. 487, as follows:

'Can it be said' under these circumstances that this is an undertaking which is purely of educational character and therefore covered by the Australian case mentioned above ?'.

After holding that the Research Association is an industry, the learned Judges, at page 487, again state as follows:

'The activities of this Association therefore have, in our opinion, little in common with the activities of what may be called a purely educational institution.'

26. It is really based upon these observations of the Supreme Court, that the learned Advocate General has urged before me that if a particular activity is of a purely educational character, then the principles laid down by the Supreme Court in the Bombay Hospital case, AIR 1960 SC 610 will not apply. I have already held that the particular activity of the petitioner Board has little in common with the activities of what may be called a purely educational institution; and I have also held that the activity can be characterised as an 'industry'. In AIR 1960 SC 610, no doubt, the Court stated that they are not expressing any opinion on the question as to whether running an educational institution would be an 'industry'. It is also true that in AIR 1961 SC 484 the Supreme Court refers to the Australian cast; in, (1929) 41 CLR 569 (Aus.) and poses the question whether the Research Association is an undertaking which is of a purely educational character and therefore covered by the Australian case. If I may say so with respect, the implication may be that if an undertaking is of a purely educational character, it may not be an 'industry'.

27. But, in between these two decisions, there is the decision of the Supreme Court in AIR 1960 SC 675 wherein the Supreme Court, after reiterating the principles laid down in AIR 1960 SC 610 proceeds to find' out whether the Education Department of the Nagpur City Corporation is an 'Industry.' After exhaustively, if 1 may say so with great respect, considering the principles laid down by the Supreme Court in the previous decision and also having due regard to the various provisions contained in the City of Nagpur Corporation Act, Mr. Justice Subba Rao, speaking for the Court, considers item-war the various activities of the Corporation, and also, in turn, considers the question as to which of these activities can be considered an industry. In particular, the learned Judge takes note of the fact that among the various departments of the Nagpur City Corporation, one of the departments was the Education Department. The learned Judge is further of the view that the Education Department, of the Corporation looks after compulsory primary education within the limits of the Corporation. The learned Judge is further of the view that such services can equally be done by a private individual and that the Education Department of the Corporation satisfied all the other tests laid' down by the Supreme Court. Ultimately the learned Judge comes to the conclusion that the employees of the Education Department of the Corporation, coming under the definition of 'employees' under the said Act, would be certainly entitled to the benefits of the Act, and therefore the particular activity of the Corporation will also be an 'industry'.

28. Therefore, even on the basis that the learned Advocate-General's contention in this case can be accepted, vis:., that the giving of training to the members of the public in the art of working the Amber Charka, is to be considered to be purely of an educational character, in my view, because of the decision of the Supreme Court in AIR 1960 SC 675, it follows that the said activity of the Board is an 'industry' under Section 2(j) of the Industrial Disputes Act. This contention, that the activities of the Board are of an educational character, does not appear to have placed before the Industrial Tribunal, and therefore the Tribunal had no occasion to consider the same.

29. Therefore, I have no hesitation in accepting the finding of the Industrial Tribunal in this case, that the activity of the Board, in respect of which the services of the employees in question have been utilised, is an 'industry' as defined in Section 2(j) of the Industrial Disputes Act. If that is so, it follows that the dispute referred to the Industrial Tribunal is an industrial dispute and the Industral Tribunal was perfectly competent to adjudicate upon the same.

30. The second contention that has been raised by the learned Advocate-General is that the termination of the services of the employees in question in the circumstances of this case, is to be considered to be due only to closure of the under-taking as such so as to attract the provisions of section 25FFF of the statute, for the purpose of computing the claim for compensation, and that the view of the Industrial Tribunal that it is retrenchment, justifying the award of compensation under Section 25F, is erroneous. So far as that is concerned, it is necessary to advert to certain orders or communications issued by the management itself.

31. It will be seen that under Ext, M-1, dated 1st September 1957, the Board passes a resolution to run Amber Vidyalayas and Parishramalayas at various centres. It is not necessary to go into the various other matters mentioned in Ext, M-i, except to take note of the fact that the Board decides to run Vidyalayas and Parisharamalayas, Later on, under Ext, M-5, dated 7th January 1958, it is seen that the Board has implemented its previous decision to open Parisharamalayas and Vidyalayas, The various places, where the Parishramalayas are to be established, are also mentioned in detail in Ext. M-5. Then there is also another resolution, dated 18th May 1958, viz. Ext. M-6, wherein again, the Board reiterates its original decision to push through its programme of opening Parishramalayas, etc. It appears that some trouble was felt in the matter of continuing the Parishramalayas; end, therefore, a committee was appointed' by the Board to draw up a programme for Amber for the next two years, and also to report about the working of the Parishramalayas of the Board, and the said report was to be given -to the Board on or before 5th November 1959. That decision was taken by the Board under Ext. M-8 dated 15th October 1851). It is seen that in consequence of the said decision, a committee was actually appointed, and ultimately the report of the committee is Ext. M-9. The report of the committee appears to be that the Parishramalayas and Vidyalayas, which are being run by the Board, are to be handed over to cooperative societies or institutions that are to be set up for the particular purpose and' that the activities of the Board in this respect may be wound Up.

32. In consequence of this decision, it is seen that under Ext. M-10 dated 14th November 1059, the Board takes a decision to terminate the services of all the Amber Instructors, Amber Managers, Supervisors, Maistries, etc. and the termination of the service was to take effect from 31st December 1959. No doubt, from Ext, M-10, it is not very clear as to what exactly prompted' the Board coming to that decision. But, if taken along with the report of the committee, viz, Ext. M-9, which was accepted by the Board, it should be considered that the Board accepts the report of the committee and decides that the activities in question of the Board, are to be wound up and landed over to co-operative societies or other institutions, which are to take charge of these activities in future.

33. After taking the decision under Ext. M-10 on, 14th, November 1959 to terminate the services of the employees in question with effect from 31st December 1959, the Board issued a circular under Ext. M-11, dated 17th November 1959 to the District Industries Officer, In Ext. M-11, the District Industries Officer is asked to issue the necessary notice to terminate the services of the employees with effect from 3ist December 1959. It is also stated that the notice should be served on the employees on or before 2th November 1959 at the latest. On the basis of this circular, I will have to refer later to the actual notice issued by the Industries Officer under Ext. W-11 dated 23rd November 1959. Evidently, in view of the notice issued by the Industries Officer, the question was taken up by the union, both before the Labour Commissioner and also before the Government; and ultimately, it will be seen that by order dated 28th December 1959, the State Government made a reference to the Industrial Tribunal for adjudication on the two matters referred to already. Therefore, it will be seen that, even before, the actual termination of the services of the employees in question took effect, viz., on 31st December 1959, the question regarding the proposed action of the Board was already the subject of adjudication by reference being made to the Industrial Tribunal by the State Government on 28th December 1959.

34. Under Ext. M-13, dated 31st December 1959, it will be seen that the Board takes note of the reference that was already made by the State Government on 28th December 1959, viz., of referring for adjudication to the Industrial Tribunal the two questions, viz., reduction in salary, and termination of the services of the employees with effect from 31st December 1959. It appears to be the view of the petitioner Board, as will be seen from Ext. M-13, that the order of the State Government, referring the dispute for adjudication, is absolutely illegal and without jurisdiction, because the activities of the Board' cannot be considered an, industry. Ultimately, it is seen that the original decision to terminate the services of the employees with effect from 31st December 1959, is kept in abeyance, and the Board also resolved to inform the Government that the Kerala Khadi and Village-Industries Board is not an industrial establishment and that Amber Instructors are not workers. In Ext. M-13 there is a specific direction given to the various officers under the Board to the effect that pending cancellation by the Government of the-order referring the questions for adjudication, or uptil the industrial Tribunal takes decision in the matter, the employees under the Board will not be relieved. But the petitioner, no doubt, takes a rather curious stand that no work will be given to thorn except to Amber Instructors working in Parishramalayas, which have not completed the present course. It is also further mentioned that after the present course is completed, those Instructors also will not be given any work. There is also a specific direction in Ext. M-13 that if any Amber Instructors, wants to leave the Board, he can do so only after giving a report in writing to the District Industries Officer and getting a relief order from him. On the basis of Ext. m-13 again, it will be seen that a notice was issued by the District Industries Officer, under Ext. W-14, dated 31st December 1959, to the various employees, stating that they will not be relieved until further orders.

I will have to refer to Ext. W-14 a little later. Ultimately, it will be seen that under Ext. M-14, the Board issued necessary instructions to the District Industries Officer, to hold in abeyance the question of relieving the employees from their service as originally decided by the Board on 17th. November 1959.

35. Only four more documents will have to be referred to, viz., Exts. W 11, W-14, W-16 and W-19. Under Ext. W-11, dated 23rd November 1959, on the basis of the decision taken by the Board under Exts. M-10 and M 11, the District industries Officer sends the notice to the various employees, stating that their services under Kerala Khadi and Village Industries Board will be terminated with effect from the afternoon of 31st December 1959. Later on, it will be seen that under Ext. W-14, dated gist December 1959, on the basis, again, of the circular issued by the Board under Ext. M-13, the District Industries Officer clearly states that the services of the various employees will be retained under Board until further orders.

On 19th January 1960 under Ext. W-16, there is a 'letter sent by the Secretary of the employees, (stating that the employees) are ready for work, but that they are not given any work. There does not appear to be any reply to this letter from the Board. Ultimately under Ext W-19, dated 1st August 1960, 'there is a further communication issued by the Village Industries Officer, Quilon, to one of the employees in question, stating that the particular person, to whom it was issued, and who was working under the Board as Amber Instructor till 31st December 1959, the date on which the 'Parishramalayas were closed, is relieved of her duties under the Board with effect from gist December 1959. Then there is a further statement to the effect that the Board has been pleased to disburse a lump sum amount of Rs. 158, in addition to her pay for December 1959, and that the amount due to her will be disbursed in due course, after fixing her liability and recovering the liabilities, if any, due to the Board from her. That such a notice was issued' to all other employees also, is beyond controversy. Therefore, it will be seen that the final termination of the services of the employees is by the communication Ext. W-19, dated 1st August 1960. But according to the management, the termination was to take effect from an anterior date, viz., 31st December 1959.

36. The question, under, these circumstances is whether the view of the Industrial Tribunal that the termination of the services of the employees in question, is as and by way of retrenchment, is correct.

37. No doubt, Mr. K. Velayudhan Nair, learned' counsel for the Association, urged that the view of the Industrial Tribunal, that the services of the employees in question have been terminated as and by way of retrenchment, is perfectly justified. But then as I mentioned earlier, according to the learned Advocate-General, the termination of the services is really because of the decision taken by the 'Board' to close down the undertaking, in view of the report of the committee that was accepted by the Board by its proceedings, dated 14th November 1959, evidenced by Ext. M-10.

38. The question as to under what circumstances a termination of the service can be considered as and by way of retrenchment or by closure has, if I may say so with respect, been considered very elaborately by the .Supreme Court in Hariprasad v. A. D. Divelliar, (SJ A. I. R. 1957 S. C. Lal. Ultimately, in that decision, the Supreme Court expresses the view that retrenchment means the discharge of surplus working in an existing or continuing business, and the expression 'retrenchment' has acquired no special meaning so as to include discharge of workmen on bona fide closure of business. The Supreme Court sums up the position at p. 132, as follows: ---

'For the reasons given above, we hold, contrary to the view expressed by the Bombay High Court, that retrenchment as defined in Section 2(oo) and as used in Section 25F, has no wider meaning than the ordinary, accepted connotation of the word: it means the discharge of surplus labour or staff by the employer for any reasons whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and it has no application where the services of all workmen have been terminated by the employer on a real and bona fide closure of business as in the case of Shri Dinesh Mills Ltd., or where the services of all work men have been terminated by the employer on the business or undertaking being taken over by another employer in circumstances like those of the Railway Company.' The learned Judges in the same page again state:'There is in fact a distinction between, transfer of business and closure of business; but so far as the definition Clause is concerned, both stand on the same footing if they involve termination of service of the workmen by the employer for any reason whatsoever otherwise than as a punishment by way of disciplinary action. On our interpretation in no case is there any retrenchment, unless there is discharge of surplus labour of staff in a continuing or running industry..'

39. Therefore, the question is, applying the principles laid down by the Supreme Court in the above decision, whether the termination in this case can be considered to be a discharge of surplus staff in a continuing or running industry. The; view of the Industrial Tribunal is that admittedly, even after 31st December 1959, some of the Parishramalayas were run by the Board and therefore it cannot be said that on 31st December 1959, there has been a closure of the undertaking, and, as a consequence, me services of the employees have been dispensed with as from the date. The Industrial Tribunal gives three reasons as to why it cannot accept the contention of the management that the termination is because of closure. The first reason given by the Industrial Tribunal is that what happened in this case was the handing over of the Parishramalayas by the Board to co-operative societies and other institutions, to be run under the the direct control of the Board. The second reason given by the Tribunal is that the decision taken; by the Board was only to terminate the services of the employees of such of the Parishramalayas which have completed' their course, and to retain the services of the employees of the Parishramalayas which have not completed the present course, till they complete the course. The third and last reason given by the Tribunal for rejecting the contention of the management is that the management itself, in one of its communications, viz., Ext, M-14, has proceeded on the basis that what they are doing is as and by way of retrenchment.

40. The last reason given by the Industrial Tribunal can be summarily disposed of, because as to how exactly a party proceeded' is not the question; but the question ultimately is, what is the position in law? Therefore,, the fact that the petitioner, has referred to retrenchment o the employees in one of its communications is, in my view, of no consequence.

41. The other two reasons given by the Industrial Tribunal cannot be accepted. Even assuming that there has been a handing over of the Parish-ramalayas and Vidyalayas to other institutions, so far as the petitioner is concerned, it can be considered, if at all, either as transfer of business by the petitioner or closure of business by the petitioner; but in law, it cannot be a discharge of surplus labour in a continuing or running industry, as laid down by the Supreme Court. No contention has been taken before me by the Employees' Association that it should be considered to be a transfer of business by the petitioner Board to the institutions or co-operative societies. Nor has Section 25FF been invoked by the respondent either here or before the Industrial Tribunal. Even the Tribunal does not refer to Section 25FF; and, therefore, I need not consider what the position will be, if Section 25FF applies. In fact, it has not been investigated even by the Tribunal. Therefore, in my view, it must be held in this case that there, has been a closure of the undertaking by the Khadi and Village Industries Board.

42. It is also difficult to accept the further view of the Industrial Tribunal that in this case, the management admittedly continued some of the Parishramalayas and Vidyalayas even after 31st December 1959, at any rate till the period of training was over. In the decision of the Supreme Court, to which I have already made reference, there was a closure, but the discharge of workmen was staggered'. But notwithstanding that, it was ultimately held that, in the circumstances of that, case, the process was really one and it amounted to closure. In this case, the learned Advocate-General referred me to the decision of my learned brother Mr. Justice Raman Nayar, reported in John, v. Coir Yarn and Textiles Ltd'. 1960 Ker LT 127: (AIR 1960 Ker 247) wherein the learned judge has taken the view that for the closure of a business, the termination of the workmen need not be on one and the same date. No doubt, Mr. K. Velayudhan Nair, learned counsel for the Association, referred me to the decision of Mr. Justice Rajagopala Ayyangar, as he then was, in Messrs. Mckenzies Ltd. v. Presiding Officer Labour Court Madras, AIR 1960 Mad 446 wherein, after giving notice of closure and terminating the services of some of the workmen, the management continued for a considerable time to carry on the contracts, which they had already entered into. The learned Judge held that, under the circumstances, it cannot be considered that the termination of the services of the workmen js as and by way of closure.

43. In the particular circumstances of this case, I do not think it necessary to go into these, aspects referred to either by my learned brother Mr. Justice Raman Nayar or by Mr. Justice Rajagopala Ayyangar, in the decisions referred to above, as I am taking the view that the services of all the employees were terminated by the Khadi Board at the same time, by its order dated, 1st, August 1960, under Ext. W-9. Therefore, it is not necessary for me to consider as to how many employees were kept in service after 3ist December 1959 and what its legal effect is. Some difficulty has been created by the various communications issued by the Board itself, even after it originally took the decision under Ext. M-10 on 14th November 1959, to terminate the services of the employees with effect from 31st December 1959. The decision to close down the undertaking or the activities of the Board, appears clearly from the communications, to which I have already referred, and, in particular, the committee's report Ext. M-9, which was accepted by the Board under Ext. M-10 on 14th November 1959. And it is really in consequence of the recommendations of the committee, that the activities of the Board were decided to be wound up. As in future, the running of the Parishramalayas and Vidyalayas were to be entrusted to co-operative societies and other institutions, the Board decided to issue the notice terminating the services of the employees in question, with effect from 31st December 1959. But if the Board had stuck to its original decision to terminate the services of the employees with effect from 31st December 1959, and then, having terminated the services of a substantial number of employees in question if they had continued the Parishramalays and Vidyalayas, which had still to run their course, then it would have become necessary for me to consider the real scope of the decisions of Mr. Justice Raman Nayar and Mr. Justice Rajagopala Ayyangar in the decisions referred to above. But as I mentioned earlier, it becomes unnecessary because, even after taking the decision to terminate the services of the employees with effect from 3ist December 1959, and also actually issuing the notice Ext. W11 on 23rd November 1959, it will be seen that the Board cancelled, the previous orders and allowed the employees to continue under them. As I mentioned earlier, that is clear from the resolution of the Board, viz., Ext. M-13, dated 31st December 1959 and the communication Ext. W-14 issued by the Industries Officer. Whatever may be the reasons, which prompted the Board to take that decision, one thing is clear, viz., that even on 31st 'December 1959 under Ext. M-13, the Board has categorically given the go by to their previous resolution to terminate the services of the employees with effect from 31st December 1959 and decided to keep in abeyance the order to terminate the services of the employees, pending further decision; by the Industrial Tribunal in respect of the questions that were referred to it for adjudication by the Government. In fact, on this basis, the Board issued the circular Ext. M-14, dated 31st December 7959 to the various officers, not to relieve the employees pending further instructions. There is a significant statement in the circular, Ext. M-14, to the effect that those employees, who want to be relieved' from the service of the Board, will have to take the permission of the District Industries Officer, in the circumstances mentioned therein, and the District Industries Officer is to follow those conditions in giving relieving orders to the employees.. There-fore, it will be seen that, even after 31st December 1959, the employees must be considered in law to continue in the employment of the Board. In particular, Ext. W-14, dated 31st December 1959, which is the circular issued by the Industries Officer and communicated to the employees clearly shows that the previous decision of the Board to terminate their services had been cancelled and their services would be retained until further orders.

44. Under Ext. W-16, dated 19th January 1960, the Secretary of the Association sends a communication to the Board, stating that the workmen are offering themselves for work, but that they are not given work. No doubt, the decision of the Board to retain the workers is referred to; but it is stated' that the workers have not been paid their salary for December 1959 so far, and that no work is given to them. As to whether the management should give work once they continue the services of the employees, is a totally different matter. In my view, that has absolutely no bearing on the question. But, as I mentioned earlier, the question is, once I come to the conclusion that the termination of the services of the employees in question is as and by way of closure, as to when exactly the closure can be considered to have taken place in this case,

45. Ultimately, it is seen that it is only under Ext. W-19, dated 1st August 1960, that the services of the employees were finally terminated, but, curiously enough, not from tho date of Ext. W-19, viz., 1st August 1960, but with effect from 31st December 1959. No doubt, the learned Advocate-General had at one stage suggested that the question, as to when the closure can be considered to have taken place, in this case, can very well be left to the Industrial Tribunal, because the question of compensation to be paid has to be again considered by the Tribunal. I am not inclined to accept this contention, because all the materials were available before the Tribunal itself, and the Tribunal has also expressed the view that the termination of the services of the employees on 1st August 1960 with effect from 31st December 1959, is not correct. Hut the Tribunal has not considered the question from the point of view that I am considering, viz., as to when exactly the closure can be considered to have become effective. The Tribunal could not, have considered this aspect because of the fact that it took the view that the termination in this case is not because of closure, but is by way of retrenchment; and thus it had no occasion to consider it. Therefore, it will be seen that the final termination of the services of the employees in question, was only as and by the order Ext. W-19 dated 1st August 1960. No doubt, it is -said, as I mentioned earlier, that the termination is from 31st December 1959. But, in my view, there cannot be a closure in the eye of law with retrospective effect. No doubt, it was perfectly open to the management to take up the position that there was already a termination evidenced by Ext, W-11, long before 3rst December 1959, and that the continuance of some of the workers after 31st December 1959, to complete the training that had to be put in by some of the Parishramalayas and' Vidyalayas, cannot amount to retrenchment. But this is not the attitude that the management took; they have ultimately closed the undertaking and terminated the services of the employees; and that termination in my view, can have effect only from 1st August 1960. I have already shown that under Ext. W-14, the employees were informed that they will continue in service, and in Ext. M-13, the Board' has stated that nobody can leave the service of the Board without applying to the District Industries Officer and obtaining relief orders.

46. Finally, the position is this. The view of, the Industrial Tribunal, that the activity of the Board, which was under consideration at the hands of the Tribunal, is an 'industry' under Section 2(j) of the Industrial Disputes Act, is correct. But the further view of the Tribunal, that the relief to be granted to the employees in question, whose services were terminated, is on the ground that it is retrenchment, cannot be sustained. In my view, the relief to be granted' is on the basis of Section 25FFF of the Industrial Disputes Act, because the termination of the services of the employees in question is in consequence of bona fide closure of the activities of the Board. If that is so, the question of the actual relief that is to be granted on this basis, will have to be considered by the Industrial Tribunal, and to that extent the, award of the Industrial Tribunal, that is under attack in these proceedings, is set aside. The Industrial Tribunal is directed to consider the question of the nature of the actual relief that is to be granted to the employees under Section 25FFF of the Act. The Tribunal will also proceed on the basis that the actual termination of the services of the employees has taken effect only from 1st August 1960. In view of the wide nature of issue No. 2, that has been referred to the Tribunal, the Tribunal will also give proper directions regarding the payment of salary due for the period from 3ist December 1959 to 1st August 1960. In that connection, the Tribunal has also to take into account the fact that some of the employees at any rate appear to have obtained relieving 'orders and sought service elsewhere, as also the further circumstance that the Board appears to have made a lump sum payment of Rs. 158. This amount must be directed to be adjusted in the reliefs to be granted, viz., salary from 1st January 1960 to 31st July 1960, and compensation to be fixed under Section 25FFF of the Industrial Disputes Act.

47. Subject to these directions and observations, that part of the award of the Industrial Tribunal referred to above, is set aside and the Tribunal is directed to pass a fresh award regarding the points mentioned in this judgment. In all other respects, the award is confirmed. Parties will bear their respective costs.


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