1. This appeal against the Judgment of RajagopalaAiyangar J., arises out of a reference by the Government to the Industrial Tribunal, Madras, foradjudication of a dispute between the workersand the management of the East India Industries(Madras) Ltd., in respect of the discharge of oneA.K. Gopal. Gopal was a time-keeper in thecompany's factory till 6-3-1951, when he was transferred to the Stores Department. He apparentlytook this transfer as a de-promotion and enquired from the management on what ground he hadbeen thus published. . The management repliedthat the transfer did not involve any de-promotion. On the allegation that Gopal refused to dothe new work assigned to him, the managementdismissed him by their order dated 14-3-1951.The General Industrial Workers' Union, of workers in the establishment of the company, raiseda dispute regarding the justification of the dismissal of Gopal. It was suggested that the dismissal was due to the fact that he was the Secretary of the Union.
It was this dispute that was referred by the Government for adjudication to the Industrial Tribunal, Madras. On an enquiry, the Industrial Tribunal held that Gopal was not discharged for any just or sufficient reasons or in a valid manner and that he should be reinstated and all arrears of wages, allowances, etc., due to him should be paid. On these findings, the Tribunal passed an award on 13-11-1951 directing the management to reinstate the employee, A. K. Gopal, in the position occupied by him on 14-3-1951, and to pay him all the arrears of salary and allowances due to him till the date of reinstatement. This award was duly published by the Government in the Fort St.. George Gazette. The management of the company thereupon filed a writ petition No. 836 of 1951, praying that the records before the Industrial Tribunal on the above reference may be called for and the award passed therein may be quashed.
2. Before Rajagopala Aiyangar J., three contentions were raised by Sri. M.K. Nambiar, namely, (1) that Gopal was not a 'workman', within the meaning of the Industrial Disputes Act. and consequently the reference by the Government was Invalid. (2) that the direction to reinstate. Gopal was beyond the powers of the Tribunal, and (3) that if the Tribunal had such power, the reinstatement would infringe on the fundamental right guaranteed under Art. 19(1)(g) of the Constitution and could not be deemed to be a reasonable restriction in the interests of the public within the meaning of Article 19(6), The learned Judge overruled all the three contentions and dismissed the writ petition. Hence the appeal.
3. Before us Mr. M. K. Nambiar, learned counsel for the appellant, did not press again the first contention that Gopal was not a workman' within the meaning of the Industrial Disputes Act. The second contention is, in our opinion, no longer open to him in view of the decision or this court in - 'Bhaktavatsalu Naidu v. Chrome Leather Co.', : (1949)NULLLLJ1Mad (A), and the decision of the Federal Court in - 'Western India Automobile Association v. Industrial Tribunal, Bombay AIR 1949 PC 111 (B), which affirmed the decision of a Division Bench of the Bombay High Court.
4. We are left with the third contention based on the provisions of the Constitution. A preliminary objection was raised on behalf of the workmen that the company was not entitled to the benefits of the fundamental rights guaranteed by Article 19, because the company would not be a 'citizen' within the meaning of the Constitution. In the opinion of Rajagopala Aiyangar J. this objection was well founded because a limited liability company would not be a 'citizen' within the meaning of the Constitution and therefore could not claim the benefit of the freedoms enumerated in Article 19. It is not necessary to deal with this point, as in our opinion the appellant must fail even assuming that Article 18 can be applied to a company.
5. In the first place, we are not convinced that an award directing the reinstatement of a dismissed workman fn any way curtails the freedom guaranteed to a citizen under Article 19(1)(g)| of the Constitution. The appellant's right to carry on its business as such is not in any way Interfered with by such an award. When a dismissed workman challenges the validity of the dismissal aid the matter is adjudicated upon by an Industrial Tribunal and the Tribunal arrives at the conclusion that the dismissal was not valid, the position is that the workman must be deemed never to have been dismissed at all and, BO continues in service. It may be that an ordinary court of law would-only award damages to the dismissed workman. But nothing prevents the Tribunal from giving the alternative relief of a declaration that the dismissal was wrongful and the consequential relief that he be continued In service.
The argument on behalf of the employer usually is that he cannot be compelled to employ any one against his will. But the proper way of looking at it is that an employer is not allowed to terminate the services of a workman except in a lawful manner. The following observations of Mahajan J. as he then was, in AIR 1949 FC 3 (B). are. apposite in this connection: 'This relief of- reinstatement is on the flame footing as a relief of restitution. Restitution can be granted in integrum In certain cases. All that is required is that the ex-employee should be restored to his previous position sO far as capacity; status and emoluments, are concerned and there is nothing extraordinary in such restoration being ordered when considered necessary in the interests of peaceful settlement of Industrial disputes. Adjudication does not, in our opinion, mean adjudication according to the strict law of master and Servant The award of the Tribunal may contain provisions for settlement of a dispute which no. Court could, order if it was bound by ordinary law, but the 'Tribunal is not fettered in any way by these limitations.'
6. Even on the assumption that a direction to reinstate a dismissed workman infringes the freedom to carry on business, there can be no doubt that it would be a reasonable restriction on the exercise of the right in the interests of the general public. In --. 'Indian Metal and Metallurgical . Corporation v. Industrial Tribunal', Madras', : (1952)ILLJ364Mad (C), it was pointed out by a Division Bench of which one of us was a member, , that the right conferred by Article 19(1)(g) to carry on business is not absolute, that the State has got the right to regulate any business and that in the interests of a large section of the public, namely, industrial workers, the legislature may provide, whether directly or indirectly through administrative bodies, for the fixing of reasonable and adequate wages and generally regulate the conditions of service. It was said that,
'In the absence of a guarantee of the freedom .of contract, we do not think it unreasonable to presume that the freedom of contract can, to a certain extent, be curtailed if such curtailment is reasonable and in the general interests of the general public. This may be necessary In regard to the relationship between the employer and employees in a large industrial concern, where 'it is clear that the contracting parties, namely, the employer and the employee do not stand on the same level.'
In -- 'Dindigal Skin Merchants Association v. industrial Tribunal, Madurai', : AIR1953Mad102 (D), Subba Rao J., as He then was, followed this decision. He found it Impossible to held that legislation in India to bring about harmonious relationship between the employers and the employees in the interests of industrial peace is an unreasonable restriction upon the fundamental right guaranteed under Article 19(1)(g) of the Constitution. Indeed, according to him, the Industrial Disputes Act, by providing a machinery to smoothen out the disputes between the employers and employees enabled the employer to carry on his trade or business mote effectively than otherwise he could do. (Vide also the observations of Venkatarama-Aiyar J. in -- 'Santhanakrishna Odayar v. Vaithllingam', : AIR1954Mad51 (E), where he refers to labour laws which provide not merely minimum wages for labourers - but also for their reinstatement in' ceases of improper dismissal).
7. Mr. M. K. Nambiar, learned counsel for the appellants, relied on two decisions of the Supreme Court of the United States. But these decisions are of no assistance to us, as they are as much based on the conception of freedom of contract guaranteed to the citizens of the States as on the right to carry on business. In --Adair v. United States', (1907) 52 Law Ed. 436 (F), a law which made it a criminal offence for an officer of an inter State carrier to' discharge an employee from service because of his membership in a labour organisation, was struck down as inconsistent with the Constitution, because the provision was an invasion of the personal liberty as well as the right of property guaranteed by the Fifth Amendment. Harlan J. said: 'Such liberty and right embrace the right to . make contracts for the purchase of the labour of others and equally the right to make contracts for the sale of one's own labour.' The following citation was made from -- 'Lochner' v. New York', (1904) 49 Law Ed. 937 (G) :
'The general right to make a contract in relation to .his business is part of the liberty of the individual protected by the 14th Amendment of the Federal Constitution......... The, right to purchase or to sell labour is part of the liberty protected by this Amendment, unless there are circumstances which exclude the right'.'
In -- 'Coppage v. Kansas', (1914) 59 Law Ed 441 (H), the , same principle was enunciated. A similar piece of legislation was impugned in that case, and the court observed:
'If freedom of contract is to be preserved an employer must be left at liberty to decide for himself whether such membership (of a labour organisation) by his employee is consistent with the satisfactory performance of the duties of the employment.'
It is interesting to notice the court expressing the following opinion, when pressed with the inequalities between the employer and employee: 'No doubt, wherever, the right of private property exists, there must and will be inequalities of fortune; and thus it naturally happens that parties negotiating about a contract are not equally unhampered by circumstances. This applies to all contracts, and not merely to that between employer and employee. And, since it is self-evident that, unless all things are held in common, some persons must have more property than others, it is from the nature of things impossible to uphold the freedom of contract and the right of private property without at the same time recognising as legitimate those inequalities of fortune that are the necessary result of the exercise of those rights.' This view is obviously opposed to the fundamental principles on which our Constitution is based.
8. We are in entire agreement with the opinion of Rajsgopala Aiyangar J. that the reinstatement of a worker might be needed to restore industrial peace between the management and the employees as a body; and would therefore be a reasonable restriction in the interests of the general public.
9. In this view, it Is unnecessary to deal with the question whether the award of the Tribunal is a law within Sub-clause (3) of Article 13 of the Constitution. The appeal fails and is dismissed with costs (Rs. 200).W. A. No. 89 of 1954: No separate argumentswere addressed in this appeal, which is also dismissed. No costs.