Skip to content


Jaya Bharat Tiles Works Vs. State of Madras and Three ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported inAIR1953Mad603; (1953)IMLJ329
AppellantJaya Bharat Tiles Works
RespondentState of Madras and Three ors.
Cases ReferredIn Shamnugger Jute Factory Co. Ltd. v. Modak
Excerpt:
- - in arriving at this conclusion he also found that the plea of the works that mud was not available was not well founded. on this finding the award was perfectly justified......proceeded on the footing that there was a discontinuance of the business and that there was no lockout, lockout is defined in the industrial disputes act as meaningthe closing of a place of employment or the suspension of work or the refusal by an employer to continue to employ any number of persons employed by him.mr. bhashyam, learned counsel, who appeared for the workers in that case, conceded that there had been no lockout in that case. a lockout is different from the discontinuance of a business. occasionally some confusion is caused by the use of the word 'closing.' lockout does not mean closing down of a business. it only means the closing down of the place of business. it means the suspension of work, not a discontinuance of the carrying on of the business. it means the.....
Judgment:
ORDER

P.V. Rajamannar, C.J.

1. This is an appeal under the Letters patent against the judgment of Subba Rao, J., dismissing the appellants' application under Article 226 of the Constitution for the issue of a writ of certiorari to quash the order of the Labour Appellate Tribunal of India at Bombay in so far as it related to the appellants. The appellants are a partnership firm doing business under the name and style of the Jaya Bharat Tile Works at Samalkot. The business was started in 1949. By G.O. Ms. No. 5990, Development, dated 6 December 1948, certain disputes relating to wages, etc., between the workers and the managements of four other tile works at Samalkot were referred to the industrial tribunal at Vijayawada for adjudication. The tribunal gave its award on 13 August 1949. It was accepted by the Government and under the provisions of Section 18 of the Industrial Disputes Act, which will hereafter be referred to as 'the Act,' the award remained in force till 23 August 1950. These four factories who were parties to the award discontinued their business and closed down on 25 September 1950 after giving due notice under the Act. The appellants who were not parties to the reference or the award closed their works on 24 August 1950 and resumed work on 13 December 1950. By G.O. Ms. No. 4303, Development, dated 27 October 1950, the Government referred to the industrial tribunal, Vijayawada, having its place of sitting at Guntur, an industrial dispute between the workers and the managements of the appellants and the other four tile works for adjudication. The industrial dispute was mentioned as being in respect of the following matters, namely, (1) whether the closure of the tile works was justified, and (2) if so, what relief should be given to the workers. The industrial tribunal made an enquiry after notice to the parties. The following issues were framed for disposal by the tribunal, namely:

(1) whether the closure of the works was bona fide due to loss in trade, lack of demand of tiles and exhaustion of mud as contended by the works or does it amount to illegal lockout, victimization and unfair labour practice; and

(2) whether the workers were entitled to be reinstated or compensated and if so, for what period and at what rate?

The tribunal held that the closure of the five works was not bona fide and was with a view to victimize the labour. In arriving at this conclusion he also found that the plea of the works that mud was not available was not well founded. The tribunal also held that the workers were entitled to be reinstated within one month from the publication of his award and that they should be properly compensated for the period of unemployment. He fixed the compensation at Re. 1 per day in the case of men, 12 annas a day in the case of women and 8 annas a day in the case of boys. All the five factories filed appeals to the Labour Appellate Tribunal of India at Bombay. The Appellate Tribunal allowed the appeal so far as the other four tile works were concerned, but dismissed the appeal in so far as the appellants were concerned. They held that neither Section 22 nor Section 23 of the Act applied to the four works because the closure was made by them after the lapse of the award and after two months from the date of the notice given by them. They considered that the question whether the closure was justified or not did not arise. They however were of opinion that the case of the appellants stood on a different footing. To use their own words:

The case of Jaya Bharat Tile Works stands on a different footing. They closed on 24 August 1950 and reopened on 13 December 1950. We are doubtful if the closure from 24 August which was effected in order to avoid the payment of wages at a higher rate was a closure at all when subsequently under the same circumstances the mill has been reopened. We are of opinion that it amounted to an unfair labour practice and was effected in order to bring pressure to bear on the workers to accept their rates.

The appellants thereupon filed the application under Article 226 abovementioned, and that was dismissed by Subba Rao, J. The learned Judge accepted the finding of the industrial tribunal confirmed by the Appellate Tribunal that the closure by the appellants was not bona fide and that it amounted to an unfair labour practice, An objection was taken before him that the industrial tribunal had no jurisdiction to decide whether the closure was justified or not. But the learned Judge overruled the objection holding that the question whether the closure wag in fact an illegal lockout or a subterfuge adopted by the employers to bring the employees down to their knees, as it were, was one which could be decided by the industrial tribunal. Hence the appeal.

2. Mr. Narasaraju, learned Counsel for the appellants, pressed on us two points. The first was that in the circumstances of the case the industrial tribunal had no jurisdiction to decide the question whether the closure was justified or not, because that question did not fall within the scope of the Act. It could not, according to him, be deemed to be an industrial dispute. In support of this contention Mr. Narasaraju strongly relied on a ruling of this Bench in Indian Metal and Metallurgical Corporation v. Industrial Tribunal, Madras 1952 I L.L.J. 365. In our opinion the ratio decidendi of that ruling does not apply to the facts of this case. As there appears to be a misconception as to the exact scope of that ruling we shall deal with it at some length. The petitioner in that case was a partnership firm carrying on inter alia the business of manufacture of brass, copper and aluminium sheets at Mettur. It had also a factory at Tondiarpet in Madras where brass and stainless steel utensils were manufactured. On 3 February 1951 the management gave notice that the factory at Tondiarpet would be closed down from 17 February. The reasons for the closure were given as unfavourable conditions in the local market and the non-availability of raw materials. The notice intimated that the work would be suspended for an indefinite period till they were able to complete the erection of new machinery intended to economies production and till they could get raw materials. On 18 April 1951 the Government made a reference under the Act to the industrial tribunal at Madras. The annexure to the order mentioned four matters in dispute, one of which was whether the closure of the factory was justified. The finding on this issue was that none of the reasons given by the management would justify the closing down of the factory though the apparent shortage of material to some extent and the necessity for the installation of new machinery had justified the actual factory work being reduced to some extent. The tribunal therefore directed the corporation to continue to carry on the business. By its award the tribunal directed the payment of arrears of pay, etc., from 17 February 1951 till the workers were taken back to work, The benefit of the award was to go to a moiety of the personnel in different branches, the selection being determined in strict seniority. The award also directed the reinstatement of the remaining personnel within a period of four months of the publication of the award. The tribunal therefore in effect directed the continuance of the business. It was to quash this order that the corporation filed a petition under Article 226 of the Constitution. We quashed the order on the ground that the tribunal had no jurisdiction to direct the firm to continue to carry on the business against their wish. We also held that discontinuance of a business, that is, ceasing to carry on the business, cannot give rise to an industrial dispute within the meaning of that term as used in the Act.

3. At the outset it is important to notice that the argument in that case proceeded on the footing that there was a discontinuance of the business and that there was no lockout, Lockout is defined in the Industrial Disputes Act as meaning

the closing of a place of employment or the suspension of work or the refusal by an employer to continue to employ any number of persons employed by him.

Mr. Bhashyam, learned Counsel, who appeared for the workers in that case, conceded that there had been no lockout in that case. A lockout is different from the discontinuance of a business. Occasionally some confusion is caused by the use of the word 'closing.' Lockout does not mean closing down of a business. It only means the closing down of the place of business. It means the suspension of work, not a discontinuance of the carrying on of the business. It means the refusal by an employer to continue to employ the persons employed by him and not the refusal by an employer to carry or any longer his business. In the following passage in my judgment I sought to bring out the distinction between a lockout and discontinuance of business:

Closing down a business even temporarily is distinct and different from a lockout just as the discontinuance from service of an employee is not the same thing as a strike. While therefore the industrial tribunal has got the jurisdiction to adjudicate on the question whether a particular lockout was justified or not, it cannot decide the question whether an employer can close down his business temporarily for an indefinite period or permanently. There cannot be dispute strictly so called between an employer and an employee as regards the continuance of the business itself.

In other words, the closing-down of a business is different from the closing of a place of business. The extreme position taken up by Mr. Bhashyam in that case was that even if an employer bona fide decides to close down the business, that is, cease to carry on the business because he does not want to. continue it, he cannot be permitted to do SL We refused to accept that contention, and speaking for myself I still adhere to that opinion. As I pointed out therein, just as a person cannot be compelled to commence a new business to provide employment for several unemployed persons, so too a person cannot be compelled to continue a business though he decides for reasons of his own to stop it. If, however, the employer does not wish to discontinue the business but only to close down the place of business temporarily, then the tribunal can go into the question whether such closure is bona fide and for proper reasons or whether it was with the object of victimizing the workmen and coercing them to accept his own terms.

4. Now, in this case, we understand the finding of the tribunal which has been confirmed by the Appellate Tribunal to mean that the appellants had closed down the place of business, that is, the tile works, to bring pressure to bear on the workers to accept their rates. On this finding the award was perfectly justified.

5. Mr. Narasaraju contended that the Act does not lay down when a lockout is justified, though it does lay down when a lockout is illegal (vide Sections 22 and 23 of the Act). This is true. But this does not mean that the question whether a lockout is justified or not is not an industrial dispute within the meaning of that term. In Shamnugger Jute Factory Co. Ltd. v. Modak 1949 F.L.J. 370 it was held by the Federal Court that the question whether the employers were justified in locking out their workmen would be an industrial dispute covered by the words 'dispute which is connected with the employment or non-employment and with the terms of employment of such workmen.' It may, in this connexion, be mentioned that the Act itself does not lay down anywhere when the dismissal of a workman is wrongful. But it has been held over and over again that a dispute as to the validity of the dismissal of a workman is an industrial dispute which can be adjudicated upon by an industrial tribunal, which can also direct the reinstatement of a workman wrongfully dismissed.

6. Mr. Narasaraju next contended that the finding of the Appellate Tribunal is vitiated by an error apparent on the face of the record which calls for interference by the issue of a writ of certiorari. According to him the error consists in this. The Appellate Tribunal based its findings almost entirely on the fact that the appellants reopened on 13 December 1950 and that was not a relevant circumstance. We do not agree that the conclusion of the Appellate Tribunal is based entirely on this fact. Apparently the Appellate Tribunal was impressed by this fact as conclusively confirming their conclusion otherwise reached, namely, that the closure was not bona fide. The Appellate Tribunal referred to the reason for the closure, namely, to avoid the payment of wages at a higher rate, and also expressed the opinion that the action of the employer amounted to an unfair labour practice and was effected in order to bring pressure to bear on the workers to accept their rates. The Appellate Tribunal was confirming the finding of the industrial tribunal and evidently thought it unnecessary to repeat all that had been said by the industrial tribunal.

7. We see no error such as would Justify our interference. We agree with the judgment of Subba Rao, J., and dismiss this appeal with costs. Advocate's fee Rs. 150.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //