D.M. Bhandari, C.J.
1. The Government of Rajasthan Industries Department through its notification No. D244/F. 5 (67) Lab./58, dated 15 May 1959, referred to the industrial tribunal, Rajasthan, Jaipur, the industrial dispute between the management of Bijey Cotton Mills, Ltd., Bijeynagar, and the Rashtriya Mill Mazdoor Sangh, Bijeynagar, in respect of certain matters which are specified in that notification. Before we refer to the points which were referred for giving an award to the industrial tribunal, it is necessary to refer to certain facts on record. Bijey Cotton Mills, Ltd., Bijeynagar, was registered under the Indian Companies Act and had its registered office at Bijeynagar. It appears that from the year 1953 it had had a very tottering career. It was closed on 1 April 1953. It resumed work on 15 May 1954 and after about three years it was again closed on 22 June 1957. It again resumed work on 3 March 1958. Services of some workers of the weaving department were retrenched on 30 April 1958 and of some others on 11 May 1958, Thereafter the mill was closed on 23 June 1958. Naturally all these closures and retrenchments from time to time raised disputes with the workers of the mill who are represented by the Rastriya Mill Mazdoor Sangh, Bijeynagar. Eventually all these points in dispute along with one more mentioned in the notification were referred to the industrial tribunal by the Government of Rajasthan. The matters which were referred were as follows :-
(1) Whether the workers of weaving department whose services were terminated on 30 April 1958 and 11 May 1958 should be reinstated with full compensation ?
(2) Whether the workers whose services were terminated on 24 June 1958 should be reinstated with full compensation ?
(3) Whether all the permanent workers on 24 June 1957 should be paid compensation on account of lockout from 24 June 1957 to the date of reinstatement ?
(4) Whether Jawara, son of Onkar, should be reinstated and paid his compensation ?
The award of the tribunal on points (1) and (2) is that the workers could not claim to be reinstated because the mill had closed and the reinstatement of any of the workers was out of question. The tribunal also took the view that compensation asked for on account of closure was incidental to reinstatement and in the absence of reinstatement the question of the payment of compensation could not be considered. The finding of the tribunal is that the workers were entitled neither to the reinstatement nor to any compensation consequent upon reinstatement. On point (3) the finding of the tribunal is that the closure of the mill by the management from 24 June 1957 to 3 March 1958 was not a lay-off. The workers were entitled to get compensation under Section 25FFF which had been made applicable from 28 November 1956. The view of tribunal is that.the issue of one month's notice in writing or payment of wages in lieu of such notice for the period of the notice as also payment of compensation in accordance with Section 25F(b) as if the worker had been retrenched was necessary.
Then the tribunal proceeded to observe that in this case the notice (Ex. W. 8) by which the workers were discharged was not a valid notice and
the discharge of the mill employees under such a notice cannot be treated as a valid discharge.
The tribunal further held that the mill employees were re-employed on their previous jobs on 3 March 1958 by the management under a settlement between the management and the said sangh; the compensation that should be awarded to the permanent workers of the mill was to be equivalent to 50 per cent of the total of the basic wages and dearness allowance for the entire period of unemployment from 24 June 1957 to 18 February 1958.
2. The award of the industrial tribunal is challenged on various grounds bythe Rashtriya Mill Mazdoor Sangh in Writ Petition No. 431 of 1960 and by the Bijey Cotton Mills, Ltd., Bijeynagar, in Writ Petition No. 351 of 1960. During the course of arguments the contentions on either side we're confined within narrow margins. On behalf of the mills it is urged that the mill had ceased to function on the date when the matter was referred by the Government Of Rajasthan to the industrial tribunal and as such there remained no dispute between the management of existing industry and the workers on the date when the reference was made. It is further contended that the permanent workers of the mill could claim compensation at the most under Section 25FFF of the Act and they could not have been awarded compensation on the basis of their period of unemployment.
3. On behalf of the sangh, it is contended that under point (1) it was the duty of the tribunal to decide whether in the absence of their reinstatement the workers who had been retrenched on 30 April 1958 and 11 May 1958 were not entitled to any compensation under Section 25F of the Act though it may be that they could not be reinstated.
4. We insert take up Writ Petition No. 351 of 1960 filed on behalf of the Bijey Cotton Mills, Ltd., Bijeynagar. The mill was functioning on 24 June 1957 when it was closed without any previous notice and without giving any compensation to the permanent workers as required under Section 25FFF of the Act. Thus the dispute between the workers and the management of the mill arose on the date when it was functioning. Subsequently it might have been closed, but the requirement of the law is that the dispute must arise at the time when the industry is functioning. It is not the requirement of law that at the time when the reference is made under Section 10 of the Act that the industry should be functioning. This point is directly covered by the decision of their lordships of the Supreme Court in Pipraich Sugar Mills, Ltd. v. Pipraich Sugar Mills Mazdoor Union 1957-I L.L.J. 235 at 240 wherein it has been laid down that Section 3 requires that-
The power of the State to make a reference under that section most be determined with reference not to the date on which it is made but to the date on which the right which is the subject-matter of the dispute arises, and that the machinery provided under the Act would be available for working out the right which had accrued prior to the dissolution of the business.
We may also point out that Section 25FFF provides for compensation to workers in case of closing down of an undertaking. This provision will be altogether useless if the dispute under Section 25FFF cannot be referred to the industrial tribunal even when the undertaking has been closed down. The compensation being incidental to the closing down of the undertaking, it must be deemed to be a dispute when it arose between the existing industry and the workmen.
5. Now we come to the second contention urged on behalf of the mills. It is urged that under Section 25FFF on the closure of the undertaking every workman who had been in continuous service immediately before such closure shall, subject to the provision of Sub-section (2), be entitled to notice and compensation in accordance with the provisions of Section 25F as if the workers bad been retrenched. This is subject to the proviso in Sub-section (1) and to Sub-section (2). In spite of the use of the word 'lookout' in question framed for reference, the tribunal has taken the view that these words were being used in wider sense by the Government of Rajasthan when it made the reference and the case that it was to adjudicate upon even on the question as framed was that of compensation due to the closure of the mills for which compensation was provided under Section 25FFF. Now the view taken by the tribunal is that the workmen were entitled to notice and compensation in accordance with the provisions of Section 25FFF and that in this case there being no notice, it must be taken as if they were not retrenched. Taking this view of the matter, the tribunal has awarded compensation for non-employment. With due respect, we are of the opinion that this view is not sound. The effect of want of notice is not that the workman should be deemed to continue in service or that be is entitled to the wages for the period of notice in lieu of notice. This is the interpretation which has been placed on Section 25FFF by their lordships of the Supreme Court in Hathisingh ., Ahmedabad, v. Union of India andOrs. 1960-II L.L.J. 1 at 6-7. We may in this connexion refer to the following observations :-
There is between the text of Section 25F and Section 25FFF(1) a significant difference in phraseology.... Payment of compensation and payment of wages for the period of notice are not therefore conditions precedent to closure.
6. The aforesaid observations clarify the position. It cannot be said that in the absence of any notice there was no closure. If there is closure, the workmen cannot be deemed to be under the employment of the mill. As already pointed out, the tribunal has held that this was not a case of lay-off. Nor can it be deemed to be a case of lookout. Hence the workmen could at the most have been awarded compensation calculated as if they are retrenched. This compensation is the amount equal to wages for one month if no notice has been given and fifteen days' average pay for every completed year of service or any part thereof in excess of six months. The tribunal has awarded compensation on a different basis which is not(?) warranted by the provision of Section 25FFF.
7. We find that in the calculation of compensation the tribunal has committed an error of law which is apparent on the face of the record. We, therefore, quash the finding of the tribunal so far as the amount of compensation to be awarded to the permanent workers in respect of item (3) is concerned and we direct the tribunal to compute the compensation in accordance with the provisions of Section 25FFF. No other point has been raised in this petition.
8. Now we come to the writ petition filed on behalf of the sangh. As already pointed out, here the challenge is to that portion of the award by which the tribunal has refused to award any retrenchment compensation under Section 25F to the workers whose services were terminated on 30 March 1968 and 11 May 1958. The ground taken up by the tribunal for taking this view of the matter is that the phraseology of the questions (1) and (2) submitted for decision by the Government signified that it is only in case of the reinstatement that the question of fall compensation was to be considered and as the tribunal did not grant the prayer for reinstatement it refused to award any compensation. Learned counsel for the sangh has argued that determination of compensation on account of retrenchment under Section 25F was incidental to the points in dispute and as such the tribunal should have gone into the question and awarded such compensation as was legally admissible to the workmen under Section 25F. On the other band, the contention on behalf of the mills is that the tribunal very rightly confined itself to the points which were referred to it and it could not have gone into the matter of awarding compensation in lieu of retrenchment as this matter was not referred to it. It is true that the phraseology of points (1) and (2) is not very appropriate, yet the genuineness of the dispute clearly shows that the workmen claimed reinstatement and compensation both, on account of their retrenchment. Under Section 10, Sub-section (4), the tribunal is directed to confine its adjudication to the points of dispute referred to it and matters incidental thereto. The question, therefore, is whether in the instant case it was not a matter incidental to the determination of the questions referred to. In spite of the defective phraseology of these questions we are of the opinion that the questions are comprehensive enough to cover the point of compensation to be awarded on account of retrenchment even when there is no (sic) of retrenchment and that it was the duty of the tribunal to have determined whether the workmen who had been retrenched ware entitled to any compensation under Section 25P of the Act. Inasmuch as the tribunal failed to discharge this duty, its award is liable to be quashed. We are not disturbing the finding of the tribunal that the workmen should not be reinstated but in spite of this finding it was the further duty of the tribunal to go into the question of compensation on account of retrenchment. In this view of the matter, we are of the opinion that the tribunal should be directed to examine the matter of compensation on account of retrenchment and award such compensation as it thinks fit consistent with the provisions of the law.
9. As a result, both the writ petitions are partly allowed and the award of the Industrial tribunal is set aside to the extent mentioned hereinbefore. The industrial tribunal is directed to give a fresh award in accordance with the directions given above. Parties shall bear their own costs.