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Parry's (Calcutta) Employee's Union Vs. Parry and Co. Ltd. and Ors. (23.12.1964 - CALHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 90 of 1964
Judge
Reported inAIR1966Cal31,(1966)ILLJ535Cal
ActsConstitution of India - Articles 226 and 227; ;Industrial Disputes Act, 1947 - Sections 2(OO), 25F
AppellantParry's (Calcutta) Employee's Union
RespondentParry and Co. Ltd. and Ors.
Appellant AdvocateS.K. Acharya and ;Pranab Kumar Pal, Advs.
Respondent AdvocateMrigen Sen and ;Diptikana Bose, Advs.
DispositionAppeal allowed
Cases ReferredIndustries Ltd. v. Brijnandan Pandey
Excerpt:
- bose, c.j.1. this is an appeal torn an order of b'anerjee, j. dated the 13th november 1963 quashing an award of an industrial tribunal and remanding the matter for rehearing by the tribunal in accordance with the directions given in the order. 2. the respondent parry and co. ltd. carries oh business all over india as merchants, importers, selling agents and manufacturers having its head office in madras. in calcutta the principal business of the respondent company consisted ol: various agencies for sale of products of diverse well-known companies. the respondent company also carried on manufacturing activities on a small scale at a small engineering workshop at kidderpore. in 1954 the respondent company is alleged to have suffered losses due to decline in business and, effected.....
Judgment:

Bose, C.J.

1. This is an appeal torn an Order of B'anerjee, J. dated the 13th November 1963 quashing an award of an Industrial Tribunal and remanding the matter for rehearing by the Tribunal in accordance with the directions given in the Order.

2. The respondent Parry and Co. Ltd. carries OH business all over India as Merchants, Importers, Selling Agents and manufacturers having its Head Office in Madras. In Calcutta the principal business of the respondent Company consisted ol: various agencies for sale of products of diverse well-known companies. The respondent Company also carried on manufacturing activities on a small scale at a small Engineering Workshop at Kidderpore. In 1954 the respondent Company is alleged to have suffered losses due to decline in business and, effected retrenchment of some staff with the permission of the Labour Appellate Tribunal.

3. The case of the respondent Company is that the business was affected as a result of import restrictions and other factors. In 1960 and 1961 the Company had to close down three brandies in North India and twelve branches in South India and its establishments in many places became considerably reduced; and in order to reorganise its business, the Company relinquished several agencies in Bombay, Calcutta, Delhi and Madras, So far as Calcutta is concerned the Company relinquished eleven general sales and pharmaceutical and other engineering agencies between 1st August 1.960 and 1st August 1961. It is stated by the Company that in pursuance of its policy to develop manufacturing activities as opposed to General Agency business, it reorganised its business operations us a result whereof the agencies in Calcutta and elsewhere had to be relinquished and this policy was adopted for the sake of convenience and for economic utilisation of the Company's finance in the light of the changing pattern of the Company's business. 'The eleven agencies which were given up in respect of the Calcutta business were as follows:

Date of ralinguishmentName of Agency.

1-8-1960(H.A.L.) Hindusthan AntibioticsPrivate Ltd. Bombay.1-8-1960Government Oil Factory, Calicut.1-8-1960Ramaraju Surgical Cotton Mills Ltd1-8-1960Quink (Chelpark Co. Private Ltd.)14-1961Coru Products Company (India) Private Ltd1-4-1961(Confectionery) Parrys Confectionery Ltd.-1-5-1961Confectionery Vox Pastilles Parrys Confectionery Ltd.1-6-1961Cobra Altantis (East) Ltd.1-7-1961Johnson and Johnson of India Private Ltd.1-7-1961Lederle Laboratories (India) Private Ltd.1-8-1961Aspro (Nicholas of India Ltd.)

4. It appears that as a result of this reorganisation and relinquishment of the agencies, sixty-six persons engaged in connection with the work of the said agencies relinquished, became surplus to the requirements of the Company, These sixty-six persons consisted of thirty-one office clerks, seven typists, one stenographer, seven godown clerks, four office subordinate staff, one godown subordinate staff, seven godown workers, three drivers and five delivery peons.

5. In April 1961 the appellant before us, who was aware of this change of policy regarding the relinquishment of agency business, apprehending that a large number of employees might be retrenched as surplus staff as a result of this change in policy, wrote, a letter to the Deputy Labour Commissioner, Government of West Bengal, stating that retrenchment of about sixty persons was being apprehended and requesting the Deputy Labour Commissioner to intervene in the matter. The said letter which is dated the 20th April 1961 may be set out hereunder:

'Parrys (Cal) Employees' Union

23, Netaji Subhas Road,

Calcutta-I.

Dated 20th April 1961

Janab Quader Nowaz,

Deputy Labour Commissioner, W.B.,

New Secretariat Buildings,

1, Hastings Street,

Calcutta.

Dear Sir

Apprehended retrenchment by

M/s Parry and Co. Ltd. 32,

Chowringnee, Calcutta.

We have to place before you the following lads for your immediate intervention and necessary action.

M/s Parry and Co. Ltd., Calcutta Branch has in its employment about 200 employees inclusive of clerks, sub-staff and labour force excluding the operatives at the Factory.

The principal business of the Company is of commercial and mercantile nature. It has a small Workshop at 'H' Book Hide Road, Kidderpore.

The manufacturing business can be roughly estimated at 1:11 and the commercial business carried on by the Company by way of holding various agencies of highly reputed companies happens to be the major business of the Calcutta Branch of the Company. It has been a declared policy of the Board of the Directors of the Company to give up the old agencies and to liquidate agency business in its entirety. In this event there is an apprehension of heavy retrenchment of all categories of employees due to the fact that the Company has also declared in the report of the Board of Directors that they would be no longer interested in having any agency heretofore.

Under the circumstances the Union Secretary along with some of his co-workers had waited on an interview with the Manager at about the middle of March 1961. The Manager also confirmed the policy of agency business.

In the premises there is an apprehension of retrenchment of about 60 heads in the very near future and with the Company it is not a question of profit and loss or a question of business recession because the Company has also been found to hand over their own business to another Company under certain terms of agreement. As a result of all these happenings the future of the employees is very dark. The employees have been kept under suspense and fear and loss of employment Just at the beginning of the year there has been a large number of cases of retirement, resignation, dismissal and discharge. The average number of such discharge inter alia will be about 25. The Manager at a certain stage informed the Union that he could not disclose the present situation as to give the Union officials further light about their doing or their policy in relation to Calcutta Branch. The Union has tried its best to ascertain the situation by study of movements, facts and figures and has reason to believe that all things are not well with this Company. The non-disclosure of real state of affairs further confirms the doubts, suspicion and apprehension of the employees.

The Stale of West Bengal, Sir, as you are well aware is faced with the burning problem of educated unemployment and if at this crucial stage some 60 or more is added to the number of miserables then it would be really a great crisis.

In the circumstances, we would request you to take up the matter immediately and intervene and further to fix up at your earliest, a date of conciliation, if possible, by the next week.

Your kind co-operation shall he much appreciated.

Yours faithfully,

Sd/- Jiten Banerjee,

Vice-President.'

6. The Deputy Labour Commissioner thereupon on the 25th May 1961 forwarded a copy of the Union's letter dated the 20th April 1961 to the respondent Company inviting comments from the Company and requested the Company to send a competent representative to the office of the Deputy Labour Commissionerfor a joint conference with the representative of the Union.

7. On the 17th June 1961 the respondent Company replied to this letter of the Deputy Labour Commissioner and the relevant portion of the said letter is set out hereunder:

'Dear Sir,

Apprehended Retrenchment.

We refer........ ... ...... .,..,.

2. As a matter of policy a decision has been made by our head office in Madras, that the Company should dispose of a number of its agencies and the Principals concerned have been intimated to that effect so that they make their own arrangements in distributing and selling their products.

3. As a result of this decision by our Head Office, some men will unfortunately be surplus to our requirements and it is quite likely that retrenchment of some employees will have to take place in the very near future. In this connection we would confirm that the names of the staff concerned are being referred to our Principals or their incoming representative with the request that as many as possible are absorbed, but you will appreciate that this is a matter where the ultimate decision does not rest with us.

4. You may rest assured, however, that in the event of retrenchment having to take place, we will comply in every respect with the rules and regulation provided to cover the circumstances.

Yours faithfully,

for Parry and Co., Ltd.

Sc/- H.H.J. Taylor

Manager.'

8. On the 20th June 1961 a conciliation proceeding was held. On the 23rd June, 1961 the appellant Union sent a letter to the Chairman of the Board of Directors of the respondent Company's office at Madras forwarding a copy of the resolutions comprising the demands of the Union which had been adopted at a general meeting of the members of the Union held on the said date. The resolutions were twelve in number and the resolutions Nos. 8 and 12 are set out hereunder:

'8. That the transfer of service to other places in the company's organisation should be offered to those who are willing to accept such transfer before retrenchment;

12. That a list of persons proposed to be retrenched by the management should be given to the Union in advance.'

9. In answer to this letter of the Union the Company wrote a letter on the 28th June, 1961 and with regard to resolutions Nos. 8 and 12 the reply of the Company was to the following effect:

'Resolution 8: It is the policy of the Company to recruit men locally as far as practicable. Transfer of workmen from one State to the other has not in the past been frequently resorted to. However the Company will be prepared to consider transferring employees from the place to the other against available vacancies after the retrenched employees of this Company in a particular Slate are all absorbed.

Resolution 12; 35 permanent and 17 temporary employees would be retrenched on and with effect from 1st July 1961, The company will have no objection to handing over to the Union on, the 29th Tune the list of employees to be retrenched at the end of this month.'

10. On the 29th June 1961 the Company informed the workmen concerned that they would be retrenched on and with effect from 1st July 1961 and on the same date the Company served on the Government of West Bengal the prescribed notice under Section 25(F)(c) of the Industrial Disputes Act. Thereafter 52 workmen of the Company were retrenched on and with effect from 1st July 1961 and they were paid the salary for the full month of June 1961 and in addition thereto one month's pay equivalent to salary of July 1961 in lieu of notice and also other necessary retrenchment compensation in accordance with the provisions of the Industrial Disputes Act. It is alleged that in effecting the said retrenchment the Company followed the procedure prescribed in Section 25(F) of the Act. Subsequently on the 1st September 1961 the Company retrenched five other employees but the retrenchment of these five persons is not the subject matter of the present appeal. By an order of the Government of West fiengal dated the 31st July 1961 made under Section 10 of the Industrial Disputes Act the industrial dispute relating to the retrenchment of the said 52 persons was referred for adjudication to the Second Industrial Tribunal in respect of the following issues:

'1. Whether the retrenchment of the workmen named in the attached list (the said 52 persons) mentioned above is justified?

2. To what relief, if any, are they entitled?'

11. Written statements were thereafter filed before Sri P.C. Pal, Judge, Second Industrial Tribunal, by the appellant Union and the respondent Company.

12. The case of the Union before the Tribunal in substance was that as a result of agitation by the workmen the Company became vindictive and planned to create a sense of frustration amongst the workmen by releasing a hell of terror by taking recourse to large scale retrenchment and break the Union, if possible; and that the Company with that mala fide end in view in the name of alleged management policy, decided to release some of the profitable agencies and create artificially a condition to snow fall in volume of work and surplusage of staff; that the mala fide of the whole move is also apparent from the fact that the company's said policy of giving up agencies is not for all other places also but for Calcutta only where the market is the widest and best in India; that the present head office of the company being in Madras and the Chairman and powerful Board of Directors of the Company being Madrasees, there is a hidden mind to divert the Company's resources to Madras State not from the bona fide trade point of view but essentially from narrow parochial considerations and anti-trade Union perspective; this is also evident from the Company s move in December 1960 to sell out even the Company's factory at Kidderpore for which advance money was also taken from intending purchaser but hadto refund the same advance taken, at the intervention of the Government of West Bengal. The further case of the Union was that the retrenchment was m contravention of Section 25(F)(c) of the Act as no notice in the prescribed manner was given to the Government; further the retrenchment was effected on vague ground of reorganisation and was not a bona fide one and it increased the work load of the existing staff; that the principle of 'last come first go' was not also observed in the case of Sri Animesh Bhaduri, Sri Madak and Sri A.K. Mitra. This written statement of the Union is dated 5th September 1961.

13. In the written statement of the Company which is dated the 12th October 1961 it was stated inter alia that the Company's attitude towards the Union was reasonable and just; that during the last two years only one employee had been dismissed and that was for insubordination; that the agencies were relinquished not only in Calcutta but also in other places; that the Company was absolutely within its right to decide what business the Company would do and the Company's decision in that respect could not in any way be questioned; that the Company as a matter of its business policy decided to discontinue dealing in certain agencies and consequently the Company had no alternative but to retrench surplus staff as a result of such reorganisation; that the allegations as to parochial considerations were incorrect, irrelevant and irresponsible; that though the surplus number amounted to 66, the Company retrenched only 52; that the question of work load did not arise at all; that the procedure of retrenchment was complied with by ordinarily following the principle of 'last come first go' and the provisions of Section 25(F) and Rule 77 had been only complied with by the Company.

14. At the hearing before the Tribunal evidence both oral and documentary were adduced by both sides and on the 26th March 1962 the Tribunal made its Award.

15. At the hearing before the Tribunal the appellant Union questioned not only the propriety and legality of the retrenchment itself but also the propriety and reasonableness of the alleged reorganisation of business and relinquishment of agencies. The Union contended that there was no good reason for relinquishment of the agencies and the alleged policy of reorganisation had not been proved. The Union also characterised the Company's act as an artificial creation of surplus just to weaken the Union toy taking recourse to extremely narrow parochial consideration and anti-trade Union perspective with improper motives behind.

16. In dealing with the case of reorganisation as put forward by the Company the Tribunal observed;

'As regards relinquishment of agencies Ext. E shows that 3 agencies in Madras were given up between 1-6-60 and 1-6-61, 13 agencies in Bombay were given up between 1-7-60 and 1-7-61 ana 11 agencies, in Delhi were given up between 1-2-60 and 140-61. But it does not appeal anywhere--either from papers filed or from oral evidence that any retrenchment, asin Calcutta, had taken place in any other branches..........In the absence of any adequate proof as to retrenchment in the places other than Calcutta, it may well be taken that no retrenchment was effected in those places. There is nothing on record to show that the surplus hands in those places were absorbed in some way or other. This point also has some bearing on the present issue, inasmuch as a question would arise as to why retrenchment was effected only in Calcutta while some agencies in some other places were discontinued. I find no satisfactory answer to this question.'

17. Then in a subsequent paragraph of the Award the Tribunal makes these observations:

'In the retrenchment notice (Ex. 6) the reason for surplus of Calcutta employees was said to have been due to 'shrinkage of business', This shrinkage is explained to be the actual relinquished or the above mentioned agencies in Calcutta. And this discontinuance of several agencies is said to have been the Company's policy to reorganise its business. Although in paragraph 7 of the written statement of the Company it is stated that surplus and the consequential retrenchment were the result of reorganisation, the nature of the organisation was neither described nor explained. It is the Company's Manager Mr. Taylor, the only witness for the Company, who explained by saying that the re-linquishment of agencies in question was due to the Company's policy approved of by the Directors to go in for manufacturing as opposed to general agency...... ...There is no evidence to show that the policy was decided or approved of by the Directors of the Parry and Co. ............ The decision as tothe policy should be taken by the Directors of the Parry and Co. as such. But there is nothing to show this. On behalf of the Company I have been referred' to the Union's letter dated 20-4-61 (Ex. K), written by the then Vice-President of the Union to the Deputy Labour Commissioner of West Bengal in which it is stated that it has been a declared policy of the Board of Directors of the Company to give up the old agencies and to liquidate agency business in its entirety..

If the Company's policy had dated from the time of the aforesaid speech of Sri Srinivasan, a question may be raised why 4 agencies in Calcutta were withdrawn in August 1960, i.e., pretty long before that speech. If, however, it is said that the policy of the Company was actually in contemplation from before the time of the aforesaid speech, still a question may arise as to why, if the Company wanted to reorganise the business by concentrating more on manufacturing, it attempted to sell its Kidderpore factory in or about December 1900. ........... That therewas such a proposal for sale of that factory, and some money was received from the intending purchaser, has not been denied............ Sothis conduct cannot certainly be said to be an indication as to the purpose for doing manufacturing works for which relinquishment of Calcutta agencies became necessary on ground of reorganisation of business.'

18. In a later paragraph the Tribunal after dealing with certain additional reasons whichhad been given by the Manager for the relinquishments of the agencies in course of his evidence observed:

'It appears, therefore, that these agencies were given up by the Company for the sake of the Principals concerned. But the actual reasons given by the Manager in his deposition do not appear to find support from the correspondence produced ................ According to theManager there are several other letters bearing on the subject in the Calcutta Office of the Company, out he only chose important correspondence out of many. It is not the Company's case that the agencies were not profitable. So it is but natural that one should like to know as to what actually actuated the Company and the Principals to give up the profitable agencies in Calcutta^ the market where' is undoubtedly a bright one. .............. From what has beenseen above it would appear that the reasons given by the Manager as being behind the relinquisbments of agencies are not satisfactory.'

19. Then in dealing with the case of the Union that the relinquishments of the Calcuttta agencies of the Company were made essentially from narrow parochial considerations with hidden mind to divert the Company's resources to Madras, the Tribunal has referred to the evidence of the Manager of the Company bearing on this point in some detail and recorded the following conclusion:

'In the circumstances of the case taken as a whole, the reason for retention of the aforesaid agencies in Madras at the cost of the same in Calcutta do not appear to be very sound and, as such, the question of parochial considerations, as raised by the Union, cannot be lightly brushed aside.'

20. Thereafter in dealing with the question whether the suggestion of the Company that the total surplusage to the extent of 66 was as a result of the relinquishment of the Calcutta agencies was acceptable or not, the Tribunal after analysing the evidence both oral and documentary on the point came to the following conclusion:

'In view of his evidence as a whole, and in the absence of office records of the Company, the correctness of redundancy in regard to 66 persons is very much in question. Even supposing that 66 employees were redundant by reason of relinquishment of 11 agencies in Calcutta, as many as 24 persons could be retrenched in 1960 by taking an average on account of relinquishment of 4 agencies in that year. If the previously mentioned average of 4.73 or 6.5 be taken into account, then also about 18/19 or 26 persons could be retrenched in 1960. But nothing of the sort was done in that year and no retrenchment was effected for about a year or so after the discontinuance of 4 agencies in 1960, except only a case or two, as mentioned in Ex. 2, referred to above. The exact time when the Company felt the necessity of considering 66 persons to be redundant and 56 persons to be retrenched in the first instalment, remains unascertained.

21. Then in dealing with the question of the propriety and justifiability of the retrench-ment and the case of the Union that as a result of the retrenchment there has been increase in the work-load of the Company in the Calcutta Branch, the Tribunal has dealt with the evidence of the Manager and commenting on the fact of non-production of the relevant books came to the following conclusion:

'in view of all these facts and circumstances, I cannot but accept the Union's case that the work-load of the Company in Calcutta branch increased, as stated by P. W. 1 on account of the retrenchment effected there.'

22. The Tribunal after discussing the evidence on the point that the case of the Union that retrenchment in question could be avoided if the Company had given effect to the condition of service of the employees concerned, of transferring them to other branches, came to the conclusion, that there was considerable force in this case made by the Union.

23. Then again in dealing with the question of bona fides on the part of the Company in effecting the retrenchment in question and the suggestion of the Union that the Company wanted to crush the Union and victimise its members by taking unlawful and improper recourse to retrenchment, the Tribunal observed:

'As for me, T am unable to say that in view of the facts and circumstances, the Union has been able to establish a case of victimisation by the Company. Yet, the probability that the union-activities would be weakened by large-scale retrenchment cannot be ignored or overlooked. Still there remains the question of want of good faith and parochial considerations as alleged by the Union. By reason of the fact that there has been increase 'in work-load, as found above, and that the Company has been reluctant to transfer the retrenched persons from Calcutta, there is the question of want of good faith involved. The Headquarters of the Company is in Madras and it is not disputed that the Chairman and the Directors of the Company are all Madrasees. The Company has relinquished much lesser number of agencies in Madras than in Calcutta. In view of the Manager's evidence. Madras is sought to be shown as the bigger commercial market than Calcutta, which, cannot be accepted as being the correct state of things. Hence arises the question of parochial considerations as well. In view of these matters, the allegations made by the Union do not appear to be unfounded or unreasonable.'

24. Then after dealing with certain judicial decisions on the question of reorganisation of the business, the Tribunal observed:

'A person certainly has the fundamental right to reorganise his business in any manner he likes for the purpose of economy and convenience. But the thing is that the reason of economy or convenience is not specifically the case of the Company in the present dispute.'

In a subsequent paragraph the following further observations occur:

'In the present case though the Company alleges that for the purpose of reorganisation scheme it had to reliquish some of the Calcutta Agencies, there is no tangible instance of any act of reorganisation before or just about the time ofthe retrenchment in question .......... There;is a great deal of doubt as to the genuineness of purpose behind the Company's move for retrenchment. ...... In my view, the reorganisation scheme has not been sufficiently established inasmuch as, in view of the facts and circumstances taken as a whole, mere reliquishment of a number of agencies would not necessarily prove such a scheme. It is, therefore, difficult for me to accept that a good case for retrenchment has been established by the Company in the present case.

25. Besides the above findings the Tribunal has also found that the provision of the Industrial Disputes Act as contained in Section 25(G) of the Act has not been followed in this case in respect of some of the employees and the provision as contained in Section 25(F)(c) of the Act has not been followed in this case. The final conclusion which the Tribunal has recorded upon a consideration of the entire case is in the following words:

'In view of the above findings arid considerations, I hold in conclusion that the retrenchment in question along with its extent is unjustified, and also that the retrenchment itself is illegal on account of violation of the provision of Section 25(F)(c) of the Industrial Disputes Agt. The retrenched workmen are, therefore, entitled to the reliefs claimed. The Company shall reinstate them by giving them their former jobs in the Calcutta Branch as far as feasible and by making suitable transfer to the other branches of the Company as may be necessary, with continuity of their respective service. The company shall also pay them all back wages since the time of the retrenchment in question after adjusting the retrenchment compensations already laid to them. These directions must be complied with one month from the date of publication of this Award in the Calcutta Gazette '

26. As the Company was dissatisfied with this Award of the Tribunal, this Court was moved under Article 226 of the Constitution on the 8th June 1962 and Rule Nisi was issued on that day by Banerjee J. This Rule finally came up for hearing before the same learned Judge and the Rule was made absolute by his judgment and Order dated the 13th November 1963. It is against this Order of the learned trial Judge that this present appeal has been preferred.

27. It appears that before the learned trial Judge the learned Advocate for the petitioner argued that the Tribunal was wrong in condemning reorganisation of the business of the Company as a purposive move actuated by parochial considerations on a two-fold ground, namely, (i) that the Tribunal trespassed into management function by questioning the propriety of the reorganisation and (ii) that in drawing its conclusions the Tribunal started with wrong premises and fell into patent errors.

28. In support of this contention the learned Advocate for the appellant relied on the decision of the Supreme Court in the case of D. Macropolo and Co. (Private) Ltd. v. Dr Macro-polo and Co. (Private) Ltd., Employees' Union : (1958)IILLJ492SC and also on the decision of this Court in the case of Royal Calcutta GolfClub v. The Third Industrial Tribunal West Bengal, 64 Cal WN 186. The learned trial Judge in referring to these decisions has observed that so far as reorganisation of business is concerned the law on the point has been clearly stated in the said two cases and summarised the legal position in the following words;

'An employer has the right to reorganise his business in any fashion he likes for the purpose of economy or convenience and nobody has the right to question the propriety of such a course. The only limitation to the right of the employer in this respect is that he should try the reorganization bona fide and not with the ulterior object of victimising his employees so as to get rid of their services, which would not otherwise be permissible. If an employer acts within the limits of bona fide exercise of discretion, it is not for the Court or the Tribunal to find fault with the discretion and to condemn the scheme of reorganization.'

29. The learned trial Judge then proceeds to criticise the finding of the Tribunal on this point in the following manner:

'In the instant case, the Tribunal expressly found that respondent Union did not succeed in establishing a case of victimization but at the same breath came to the inconsistent finding that the probability that the Union activities would be weakened by large scale retrenchment cannot be ignored or overlooked, I am not happy with this last finding because in coming to the said finding the Tribunal proceeded not upon evidence but upon conjectural probability. If this last finding be ignored, as based on no evidence whatsoever, then the criticism of Mr. Sen that in condemning the reorganisation the Tribunal trespassed upon purely management function deserves serious consideration.

30. The learned Judge then proceeds to discuss some of the oral and documentary evidence on this question of reorganisation and has observed as follows:

'The Tribunal appears to have ignored the above considerations and confined its criticisms to Mr. Taylor's evidence and to the speech delivered by C.R. Srinivasan, the Chairman of the petitioner Company and also of East Indian Distilleries and Factories Ltd., an allied concern of the petitioner Company. In so doing the Tribunal fell into a patent error.'

31. Then the learned judge proceeded to consider the question whether the respondent Company had taken the decision to retrench not on commercial considerations but on a narrow parochial consideration; in other words, the question whether the reorganisation had been bona fide undertaken for business purposes and summarised the reasons for the finding of the Tribunal that the reorganisation scheme was not a bona fide one as follows:

'(i) There was no change over to manufacturing business from agency business in Calcutta and even the single manufacturing unit at Calcutta was at one stage sought to be disposed of although not actually disposed of.

(ii) Between August 1960 to the date of retrenchment, new hands were employed by the petitioner company in Calcutta and that alsowhen some of the Agencies had already been given up.

(iii) The agencies were given up not because they were unprofitable but because of other considerations.

(iv) The same agencies given up in Calcutta were retained in Madras.

(v) Other agencies were also given up elsewhere but there was no proof that at those places also retrenchment was effected.

(vi) That increased per capita work load after retrenchment showed impropriety of retrenchment.

(vii) Even assuming that some retrenchment was necessary the redundancy of sixty-six persons was questionable.'

32. The learned Judge then deals with these reasons one by one in the judgment and expressed his disagreement with these findings. With regard to the first reason the learned Judge observes that:

'If a company chooses to reorganise its business from selling agency basis to manufacturing basis, it is not to be expected that it must manufacture at each centre of its business. It may concentrate on manufacture at one of its centres and sell its manufactured products at other centres of business. This is what the petitioner company appears to be attempting. I, therefore, do not find any substance in the first ground hereinbefore stated.'

33. With regard to the second ground the learned judge has observed that there is no evidence that anybody excepting one Driver was employed in Calcutta after retrenchment and although it might have been that certain temporary hands were employed prior to retrenchment, such newly appointed hands except one Miss Peters were all retrenched on the 1st July 1961. The learned Judge also found that the explanation which had been offered on behalf of the Company that these temporary hands were taken in order to fill up certain vacancies caused by death, retirement or resignation at a time when the company had not decided upon large scale retrenchment was a good explanation and it should have been accepted by the Tribunal, but the Tribunal had failed to appreciate this aspect of the matter.

34. Then in dealing with the tliird, fourth and fifth reasonings the learned Judge observes;

'I am not sure, on the materials before me, that the agencies which were relinquished were not all profitable agencies. The petitioner Company had suffered losses earlier on its existing pattern of business and there is nothing to show that economic considerations also did not weigh with the petitioner Company, when it decided to reorganise its business on manufacturing basis. The immediate cause of giving up the Calcutta agencies has been as stated in the Award but these may as well have been additional grounds. On the face of the finding that the retrenchment had not been made to victimise workers, it will not be proper to infer without more, that profitable agency businesses were given up for ulterior considerations. I am, therefore, of opinion that the agency businesses in Calcutta were relinquished on commercial considerationsand it is not proper for any Court or Tribunal to criticise sucn action. Further, the decision to change over to manufacture must of necessity be a phased change over. That explains why all the agencies everywhere were not simultaneously given up. It is in evidence that the petitioner company has taken up some manufacturing business and has, in Calcutta, expanded its manufacturing endeavours. I have no materials to hold that in giving up some agencies at some centres of trade, the petitioner company did not act in its best commercial interest or in what it thought to be in its best interest. I hold further that in not retrenching workmen at other centres of trade, where also it had given up agencies, the petitioner company acted in such a, manner as would go to establish its mala fides in Calcutta. It may just be that in those centres, employees who had become surplus, could be otherwise absorbed or utilised.'

35. Then in dealing with the finding of the Tribunal that the work-load had increased, the learned Judge after referring to the reasoning of the Tribunal pointed out that there were two infirmities in the line of reasonings of the Tribunal; (1) the tribunal had displayed a spirit of hyper-criticism in coming to that finding and (2) even assuming that there had been some increase in workload as a result of retrenchment, that would not go to show any impropriety with regard to such retrenchment.

36. The learned Judge then deals with the contention of the learned Advocate appearing for the appellant Union that the Court exercising jurisdiction under Article 226 of the Constitution cannot sit in appeal over the findings recorded by a competent Tribunal and cannot revise findings of fact arrived at on evidence and observed:

'In the instant case, the findings of the Tribunal against reorganisation and against the bona fides of the retrenchment are based on inferences drawn from certain findings of fact arrived at by it. Such inferences are not themselves findings of fact, particularly when the premises do not justify the conclusion. In these circumstances, it is possible for me to differ from the inferential conclusion drawn by the Tribunal and hold that the retrenchment was effected neither mala fide nor done on parochial consideration.'

37. In a subsequent paragraph after dealing with a decision of the Kerala High Court Sundareswaran v. Industrial Tribunal, (1959) 1 Lab LJ 510 (Ker) and certain observations of Ayyanger, J. who decided that case, the learned Judge observed;

'Relying on the observations, Mr. Mukherjee contended that even if the findings of the Tribunal were wrong even then this court should not interfere with the findings. In my opinion, this contention is much too wide for acceptance. If the findings are patently wrong, this Court has jurisdiction to interfere with the findings.'

38. The learned Judge then dealt with the finding of the Tribunal as to whether the extent of retrenchment was justified or not and held that the Company was within its rights in deciding the number of workmen to be retrenched.

39. Then in dealing with the three other grounds on which the Tribunal had condemned the retrenchment, the learned Judge sets out the grounds as follows:

(a) The service of retrenched workmen was transferable service and the petitioner company could avoid retrenchment by transferring the surplus workers in Calcutta to elsewhere;

(b) The principle of 'last come first go' was not observed in the matter of retrenchment;

(c) The procedure as in Section 25(F)(c) was not observed in the matter of retrenchment.'

40. With regard to the first ground as to transfer of employees, the learned Judge has found that the Tribunal was not justified in making the failure on the part of the Company to transfer its workmen before attempting retrenchment, a point against it.

41. With regard to the second ground the learned Judge has observed as follows:

'The Tribunal also finds that in the matter of retrenchmeat of several employees, the principle of last come first go was not observed, namely in the case of A.K. Mitra, Animesh Bhaduri and S.S. Modak. That finding is based on consideration of evidence and I have to accept that finding.

That being the position, I have to hold thatalthough there was necessity for retrenchment,the petitioner company did not follow the proper procedure for retrenchment in respect ofseveral employees. The order of retrenchmentis therefore bad.

Although on that opinion, I cannot uphold the Award in all respects, I have already given my reasons therefor. The order of retrenchment may not have been irregular in respect of everybody retrenched. The best course therefore is to set aside the Award and direct the Tribunal to reconsider the matter. The Tribunal shall proceed on the basis that there is necessity for retrenchment in Calcutta but shall see that proper procedure for retrenchment be observed, namely, it shall enforce the 'last come first go' principle in the matter of retrenchment and sustain category wise the retrenchment of the junior most employees only. Any retrenchment of employees made in violation of the principle should be struck down.'

42. Then the learned Judge refers to the third ground relating to Section 25(F)(c) and finally records the conclusion that there has been substantial compliance of the procedural requirement so far as the provision of the Industrial Disputes Act is concerned.

43. The principal point which has been urged on behalf of the appellant Union at the hearing of this appeal is mat the Industrial Tribunal having arrived at the conclusion upon consideration of the evidence--oral and documentary adduced before it, that there was no necessity of retrenchment and the retrenchment was not made bona fide and that the case of the Company that it is as a result of the scheme and policy of reorganisation that retrenchment was effected has not been established, it was not open to the learned trial Judge to reappreciate or reappraise the evidence and to come to a different conclusion. It is argued that it is a well-settled principle that in exercise of its jurisdiction under Article 226 of the Constitution the High Court cannot function as a Court of Appeal and interfere with or revise findings of fact arrived at by a properly constituted Tribunal upon evidence adduced before it.

44. In the case of Hari Vishnu Kamath v. Syed Ahmad Ishaque : [1955]1SCR1104 the Supreme Court upon a review of the relevant Indian and English decisions has laid down that a Writ of Certiorari can be issued for correcting errors of jurisdiction, as when an inferior Court or Tribunal acts without jurisdiction or in excess of it or fails to exercise it. It will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice. It has been further laid down in this case that the Court issuing a Writ of Certiorari acts in exercise of supervisory and not appellate jurisdiction and one consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal, even if they be erroneous unless the error is a manifest error apparent on the face of the proceedings, as for example, when it is based on clear ignorance or disregard of the provisions of law. In other words, it is a patent error which can be corrected by Certiorari but not a mere wrong decision.

45. The same principle has been reiterated by the Supreme Court in the case of Nagendranath Bora v. Commr. of Hills Division : [1958]1SCR1240 . It has been pointed out in this case that where the errors cannot be said to be errors of law apparent on the face of the record but they are merely errors in appreciation of documentary evidence or affidavits, errors in drawing inferences or omission to draw inference; or in other words, errors which a Court sitting as Court of Appeal only can examine and if necessary correct, the High Court in exercise of its powers under Article 226 of the Constitution will not interfere with the decision or Order of the inferior Tribunal.

46. Similarly, in the case of Kaushalya Debi v. Bachittar Singh : AIR1960SC1168 it has been laid down that a finding based on no evidence is an error of law apparent on the face of the record but errors in appreciation of documentary evidence or errors in drawing inferences cannot be said to be errors of law and cannot be corrected by a Court exercising jurisdiction under Article 226 of the Constitution.

47. In a recent decision of the Supreme Court reported in Syed Yakoob v. K.S. Radhakrishnan : [1964]5SCR64 the Supreme Court has followed the three earlier decisions to which I have made reference and has again pointed out that findings of fact reached by an inferior Court or Tribunal as a result of appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ but not an error of fact however grave it may appear to be. A writ of Certiorari cannot issue on the ground that the relevant and material evidence adduced before the Tribunalwas insufficient or inadequate to sustain the impugned finding inasmuch as the adequacy or sufficiency of evidence laid on a point and the inference of fact to be drawn from the said finding is within the exclusive jurisdiction of the Tribunal and such point cannot be agitated before a Writ Court. The Supreme Court has pointed out that if findings of fact were allowed to be disturbed by High Court in such. Writ proceedings, that may lead to an interminable search for correct findings and would virtually convert the High Courts into Appellate Courts competent to deal with questions of fact and that is why in entertaining petitions for Writs of Certiorari it is necessary to remember that findings of tact recorded by a, Special Tribunal which has been clothed with jurisdiction to deal with them should be treated as final between the parties unless of course it is shown that the impugned finding is based on no evidence.

48. In the case before us we feel that what the learned trial Judge has done is to correct what are mainly errors in appreciation of oral and documentary evidence and errors in drawing inferences. It may be that some of the conclusions to which the learned trial Judge has arrived at are more in consonance with the entire record of the proceedings before the Tribunal but it appears to us that under the law as it stands, the learned Judge has exceeded his powers in pronouncing upon the merits of a controversy which the Legislature has thought fit to leave it to the Tribunal to decide. I have Quoted in extenso extracts from the findings of the Tribunal and of the learned trial Judge for the purpose of bringing out the fact that the learned Judge has gone beyond his jurisdiction in reappreciating or reappraising the evidence with regard to the merits of the controversy and substituting his own findings in place of the findings of the Tribunal.

49. It has been argued that the Tribunal in entering into consideration of the bona fides of the policy of reorganisation has really trespassed upon the managerial function of the Company and has thus acted in excess of its jurisdiction and so the decision or Award of the Tribunal should be quashed by a Writ of Certiorari, Reliance is placed on the decision of the Supreme Court in the case of : (1958)IILLJ492SC . In this case D. Macropolo and Co. (Private) Ltd. which was a private company had its Head Office at Bombay and its branches in Delhi and Calcutta. The main business of the Company was selling agency of various cigarette manufacturing concerns. Prior to 1946 in Calcutta the outdoor salesmen who sold cigarettes on behalf of the Company were in the employ of the Company's distributor but m 1946 owing to communal riots this method of distribution and sale was changed and the Company took the outdoor salesmen in its direct employment in order to organise them on communal basis. In 1954 the Company came to the conclusion that it was not practicable from business point of view to continue any longer its own outdoor Sales Department and so the Company decided to close down the Department and to retrench the outdoor salesmen and to operate through thedistributors. Pursuant to this decision the system of employing outdoor salesmen was terminated in Bombay and Delhi in 1954. Company realised that the sales were dropping and the reorganisation of its business had become necessary as a measure of economy. For the sake of convenience, however, the reorganisation was brought into force by stages in different places from time to time. The scheme was implemented by the Company last o all in Calcutta by writing letters of discharge to 14 outdoor salesmen on the 7th February 1957. These salesmen were also told that the Company was recommending to its distributors in Calcutta to give them the first option of employment on terms and conditions to be settled between them inter se. The distributor was agreeable to take up the 14 outdoor salesmen but only two of the salesmen approached the distributor and obtained appointments; but the others did not approach the distributor, with the result that the distributor waited for some time and ultimately appointed other persons in course of the next three months. Under these circumstances, an industrial dispute was raised between the Company and the Union of the employees in respect of the termination of services of the 14 outdoor salesmen. The two salesmen who had been employed by the distributor appeared before the Labour Court and informed that they were not interested in Hie dispute.

50. The case of the Company before the Labour Court was that the impugned discharge of the 14 employees was not at all an unfair labour practice; but it was in fact a bona fide act on the part of the Company inasmuch as the said discharge was a part of the scheme of reorganisation of its business adopted by the Company since 1954. The case of the Union on the other hand was that the Company's plea of reorganisation was not genuine, that there was no economic justification for adopting the said scheme and that the sole object of the Company in discharging the employees was to penalise them for their trade-union activities. The Labour Court found that the Company terminated the services of the workmen in question as a matter of unfair labour practice and thus victimised them for their Union activities and directed the reinstatement of the 12 workmen together with their back wages. The Company thereupon vent up on appeal before the Supreme Court under Article 136 of the Constitution. Before the Supreme Court it was conceded by the learned Solicitor General who appeared on behalf of the appellant Company that in an appeal under Article 186 it would not be open to him to challenge the correctness or the propriety of the finding of fact recorded ,by a Labour Court, but it was argued that as the finding of the Labour Court to the effect that the discharge of the salesmen amounts to unfair labour practice was not supported by any legal evidence and was wholly inconsistent with the material produced on the record and in other words it was a perverse finding, it was open to the Supreme Court to scrutinise the propriety of the finding and to set it aside if the finding was not justified. Accordingly the Supreme Court went into merits of the finding and found that the Labour Court wasunder a complete misconception about the appellant's case in regard to reorganisation of its business. In the Award it was specifically stated that the new system was adopted only in Calcutta and was nothing but a colourable device to throw off the 14 workmen. The Supreme Court found that this assumption was wholly inconsistent with the evidence in the case and it ran counter to what might reasonably bo regarded as matter of common ground between the parties. Appellant Company's-Director Mr. Phillippou had given reasons why the appellant adopted this reorganisation and also produced documents in support of his statement that the new scheme had been introduced by stages in all other places where the appellant Company had its branches. This evidence was not at all controverted by the respondent Union. Notwithstanding this evidence the Labour Court assumed that the so-called reorganisation was confined only to Calcutta. The Supreme Court pointed out that it was really surprising that such a patently erroneous assumption should have been made by the Labour Court in view of the evidence adduced before it and it was thus quite clear that the principal reason which weighed with the Labour Court in characterising the scheme as a colourable device was entirely unsustainable and that introduced a serious infirmity in the conclusion itself. The Supreme Court also found that if the reorganised scheme had been adopted by the appellant Company for reasons of economy and convenience and it had been introduced in all the areas of its business, the fact that its implementation would lead to the discharge of some of the employees would have no material bearing on the question as to whether the reorganisation had been adopted by the appellant bona fide or not. The discharge of the employees would have to be considered as an inevitable though very unfortunate consequence of the reorganised scheme which the employer acting bona fide was entitled to adopt. The Supreme Court ultimately came to the conclusion that the finding of the Tribunal that the plea of reorganisation was nothing but a colourable device to throw off the workmen was not only not supported by any evidence but was clearly inconsistent with it and the finding was perverse and must be reversed.

51. So in this case it was specifically found that the scheme of reorganisation had been adopted for reasons of economy and convenience? that it had been introduced in all the areas of its business in stages at different points. of times and the scheme was implemented last of all in Calcutta and it was not correct to assume that the organisation was confined only to Calcutta as found by the Tribunal.

52. In the case before us the definite finding of the Tribunal is that the Company had failed to establish that it was for economy and convenience that the so-called scheme of reorganisation was adopted. The further definite finding of the Tribunal is that retrenchment was effected only in Calcutta and not at the other branches although some agencies had been given up at the other branches. The finding of the Tribunal further is that in the matter of effectingretrenchment in Calcutta the Company was actuated by parochial considerations and consequently the retrenchment was not bona fide. The Tribunal has also very fairly and impartially recorded the finding that the Union has failed to make out a case of victimisation but it was of the view that the probability that the Union activities would be weakened by largo scale retrenchment could not be ignored or overlooked. It is moreover difficult for us to come to the conclusion that these findings are not supported by any evidence.

53. The other case on which reliance was placed is a decision of this Court reported in 64 Cal WM 186. In this case the facts were that Royal Calcutta Golf Club which maintained a Golf Course and other facilities for playing Golf in the suburbs of Calcutta had a permanent staff more than 100 persons and prior to 14th January 1957 the Club used to employ 8 female labourers whose work consisted principally of removing leaves, weeding greens etc. Since 1948 the Club had been contemplating the abolition of the said system of employing female labourers and the reasons why it wanted to do so appeared from the evidence adduced in the case. As in 1957 these 8 female labourers were discharged, an industrial dispute was raised in respect of these employees along with other disputes affecting other employees of the Club. One of such issues was whether the management was justified in discharging the 8 female workmen named in the Order of reference under Section 10 dated the 11th July 1957. With regard to this issue one Mr. Zachariah a member of the Club had given evidence. It also appeared from the evidence that the Club which was a week-end Club was not doing very well as in the first and it had to raise additional funds by issue of debentures and that from the year 1957-58 the Club had been suffering a loss. The Tribunal found that the work which was being done by the female labourers was now being done by the male labourers and so the termination of the employment of the female labourers was not permissible and it ordered reinstatement of these labourers. Being dissatisfied with the findings of the Tribunal with regard to this issue and two other issues which had been referred for adjudication by the same order dated 11th July 1957, the Club moved this Court under Article 226 of the Constitution and the question which was raised with regard to this issue of reinstatement of the female labourers was whether it was open to an employer to terminate the services of an employee as a result of the reorganisation of his business. In dealing with this question Sinha, J. before whom the Rule came up for hearing dealt with the Supreme Court decision in Macropollo's case : (1958)IILLJ492SC and observed:

'A person has the right to reorganise his business in any fashion he likes for the purpose of economy or convenience and nobody is entitled to tell him how he should conduct his business. The only limitation .is that he should do it bona fide and not for the purpose of victimising his employees and in order to get rid of their services which it would otherwise not bepermissible. Provided, however, that he acts within these limits, it is not for the Court or the Tribunal to tell him how he should conduct his business.'

54. The learned Judge found that the scheme of reorganisation put forward by the Company was justified on the ground of convenience and that the principle enunciated by the Supreme Court in Macropolo's case was applicable to the facts of the case and the finding of the Tribunal on this issue could not be supported and so it should be quashed. It will thus appear that the learned Judge in this case also recognised the proposition that the question whether the reorganisation is bona fide or not can be enquired into by an Industrial Tribunal. It is also to be noted that the question of jurisdiction under Article 226 was neither raised before Sinha, J. nor was this aspect considered by the learned Judge. I have already pointed out that Macropolo's case : (1958)IILLJ492SC was decided under Article 136 of the Constitution under which the jurisdiction is undoubtedly much wider than that under Article 226 of the Constitution. The Supreme Court found in that case that the finding of the Tribunal was perverse and so set aside the finding.

55. In the case of Western India Automobile Association v. Industrial Tribunal, Bombay it has been pointed out by the Federal Court that the Industrial Disputes Act vests jurisdiction of widest amplitude in the Industrial Tribunal or Labour Court. In holding that reinstatement of discharged employees is a relief which is within the power of Industrial Tribunal to grant, it was observed that if reinstatement could not be brought about by Industrial adjudication, it would in many cases be difficult, if not impossible, to restore industrial peace which is the object of the industrial legislation. Mahajan, J. who delivered the judgment of the Federal Court observed:

'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. In Vol. I of 'Labour Disputes and Collective Bargaining' by Ludwing Teller it is said at page 586 that industrial arbitration may involve extension of an existing agreement or making of a new one, while commercial arbitration .generally concerns itself with interpretation of existing obligations and disputes relating to existing agreement. In our opinion it is a true statement about the functions of an Industrial Tribunal in Labour disputes.'

56. The principle enunciated in this case has been followed by the Supreme Court in the case of State of Madras v. C. P. Sarathy, AIR 1938 SC 58 and in the case of Rohtas' Industries Ltd. v. Brijnandan Pandey : (1956)IILLJ444SC .

57. In the case of Tatanagar Foundry Co. Ltd, v. Their Workmen, AIR 1962 SC 1538 the Supreme Court has also pointed out that in dealing with a laying off which satisfies the tests prescribed by the definition contained inSection 2(KKK) it is not open to the Tribunal to enquire whether the employer could have avoided the lay off if he had been more diligent, more careful or more far-sighted that is a matter relating to the management of the undertaking arid unless mala fides are alleged or proved the Industrial Tribunal exceeds its jurisdiction in deciding whether a lay off was justified to sit in judgment over the acts of management of the employer and investigate whether a more prudent management could have avoided the situation which led to lay off. It will thus be clear from this decision also that it is open to the Tribunal to enter into the question or bona fides of a lay off but it has no power in embarking upon an enquiry as to whether a company has shown sufficient foresight or prudence in managing its affairs.

58. It has been argued before us that the findings of the Tribunal are perverse and are the result of bias. But merely because the Tribunal has drawn certain adverse inferences or conclusions from the evidence on record, it does not necessarily lead to the conclusion that the Tribunal was partial or biased or that the findings are perverse. The Tribunal has given reasons in great detail and it may be that in certain matters the line of reasoning is not very cogent or logical or the Tribunal may have made observations and offered criticism which the Tribunal might not properly have made. But that is far from saying that the findings are arbitrary or perverse or are actuated by bias. A perverse finding is not only against the weight of evidence but is altogether against the evidence itself. A wrong finding is not necessarily a perverse finding. A finding cannot be said to be perverse merely because it is possible to take a different view on the evidence. The Tribunal has found upon consideration of the evidence in this case that the retrenchment was not bona fide and it was actuated by parochial considerations and the Tribunal has given reasons for coming to the conclusion. It may be that this finding is a wrong one but it cannot be said that it is a finding which is based on no evidence or is a perverse finding.

59. It was also argued on behalf of the respondent Company that the Order of the Tribunal directing reinstatement of the employees to their former jobs in the Calcutta branch or by suitable transfer to other branches cannot be given effect to in view of the agencies in Calcutta being given up and as it is not clear what is meant by the expression 'suitable transfer' as used in the Order. But it appears to us that there is no force in this contention as the directions given by the Tribunal are quite clear and specific. The direction is that it is not possible to reinstate the employees to their former jobs in Calcutta branch, they can be provided with a suitable employment by means of transfer to other branches of the Company. We do not see how it can be said that such directions are incapable of implementation.

60. In the result, this appeal is allowed and the judgment and Order of the learned trial Judge are set aside and the Award of the Tribunal is upheld. . There will be no order as to costs.

61. The operation of this Order will remain stayed for four weeks from today, as prayed for.

B.C. Mitra, J.

62. I agree.


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