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Rama Krishna Iyer Vaidyanathan Vs. Fifth Industrial Tribunal of West Bengal and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKolkata High Court
Decided On
Case NumberMatter No. 345 of 1966
Judge
Reported inAIR1968Cal159,71CWN755,(1968)IILLJ597Cal
ActsIndustrial Disputes Act, 1947 - Sections 2, 10, 15 and 25FF; ;Constitution of India - Article 226
AppellantRama Krishna Iyer Vaidyanathan
RespondentFifth Industrial Tribunal of West Bengal and ors.
Appellant AdvocateGinwalla, Adv.
Respondent AdvocateA. Roy Mukherjee, Adv.
DispositionPetition allowed
Cases ReferredLilavati Bai v. State of Bombay
Excerpt:
- orderb.c. mitra, j.1. the petitioner is a chartered accountant and is a partner of a firm carrying on business under the name of ford rhodes parks & company (hereinafter referred to as the firm). prior to september, 1958, the firm employed at calcutta about 19 audit clerks in order to carry out audit of the account of companies. the firm also employed about six persons as subordinate staff.2. the petitioner's case is that since the coming into operation of the companies act, 1956, which introduced stringent provision as to the manner in which a company should keep its books, the partners of the firm found that they could not rely on the audit clerks even for the work they used to do formerly and the firm accordingly was compelled to employ qualified chartered accountants for that purpose......
Judgment:
ORDER

B.C. Mitra, J.

1. The petitioner is a Chartered Accountant and is a partner of a firm carrying on business under the name of Ford Rhodes Parks & Company (hereinafter referred to as the Firm). Prior to September, 1958, the Firm employed at Calcutta about 19 audit clerks in order to carry out audit of the account of companies. The Firm also employed about six persons as subordinate staff.

2. The petitioner's case is that since the coming into operation of the Companies Act, 1956, which introduced stringent provision as to the manner in which a company should keep its books, the partners of the Firm found that they could not rely on the audit clerks even for the work they used to do formerly and the Firm accordingly was compelled to employ qualified Chartered Accountants for that purpose. On September 30, 1958, the Firm terminated the employment of eight audit clerks and again on November 28, 1958, the services of the remaining 11 audit clerks and one member of the subordinate staff were also terminated with one month's salary in lieu of notice. Therefore, since November 28, 1958, the Firm had no audit clerks in its pay roll.

3. On or about January 8, 1959, the State Government made an order of reference referring an industrial dispute between the Firm and its employees represented by the respondent No. 2 herein. The issues framed by the order of reference were as follows:--

'Whether the employees mentioned in the Annexure are entitled to the following benefits and or any other relief:--

(1) Half a month's gross earnings (last drawn) for each year of service together with a month's basic pay (last drawn) for each year of service subject to a maximum of 15 months' pay as retrenchment benefit and gratuity;

(ii) a month's basic pay as Puja Bonus lor 1958;

(iii) gratuity for the period not covered by the Provident Funds Scheme; and

(iv) immediate payment of Provident Fund dues.'

Upon this reference being made, one of the partners of the Firm moved an application under Article 226 of the Constitution for appropriate writs to quash the proceedings, and to prohibit or restrain the continuity thereof On March 13, 1959, a rule nisi was issued by this Court. The respondents neither appeared nor filed any affidavit-in-op-position to that writ petition, and thereupon the application was heard ex parte and the rule was made absolute on August 6, 1959 On February 6, 1960, the respondent No. 2 moved an application for setting aside the ex parte order made on August, 1959, on the ground that it had not been served with the rule nisi On December 8. 1960, this application was dismissed. An appeal was preferred against the order of dismissal and on January 10, 1962, the Court of appeal set aside the said ex parte order and directed the application to be heard after the respondents had filed their affidavit This matter came up for hearing and on November 19, 1964, an order was made by consent of parties as follows:--

'The said rule nisi do stand disposed of with a direction to the respondent G. Palit, Chairman, Fifth Industrial Tribunal, West Bengal abovenamed to dispose of the issue as to whether the said petitioner carries on an industry as a preliminary issue, and if that issue be in the affirmative then only to go into the other questions involved in the reference.'

In the meantime, however, G. Palit had ceased to constitute the Fifth Industrial Tribunal. In August. 1959. G. Kumar constitut-td the Filth Industrial Tribunal, and on receiving information that the rule nisi has been made absolute as hereinbefore mentioned, he struck out the said reference on August 18. 1959. Thereafter G. Kumar also ceased to constitute the Fifth Industrial Tribunal and in August, 1965, the Fifth Industrial Tribunal consisted of K. P. Mukherjee. In July 1965 the second respondent applied before the respondent No 1 for setting aside the order dated August 18, 1959, striking out the reference and for adjudicating upon the reference The Firm filed an affidavit-in-opposition contending that the said K. P. Mukherjee had no jurisdiction to adiudicate upon the reference On August 21 1965 an order was made by K. P Mukherjee restoring the reference and directing that the case be heard on the preliminary issue. Thereafter K. P. Mukherjee ceased to be the Fifth Industrial Tribunal and A. K. Dey became and was the Fifth Industrial Tribunal at the time when the reference was heard. On April 22, 1966, A. K. Dey constituting the Fifth Industrial Tribunal made an order holding that the Firm carried on an industry under the Industrial Disputes Act, 1947 (hereinafter referred to as the Act). It is this order which is the subject matter of challenge in this application.

4. The first contention of the learned Counsel for the petitioner was that the order made by this Court on November 19, 1964, directed G. Palit, Chairman, Fifth Industrial Tribunal, to deal with and dispose of the question whether the petitioner carried on an industry, and therefore G. Palit as Chairman of the Tribunal alone was competent to make the award. But, it was argued, the award had been made by A. K. Dey as the Chairman of the Fifth Industrial tribunal and therefore it was argued, the award was illegal and invalid as A. K. Dey had no jurisdiction to deal with the matter. It was argued that under the order of this Court mentioned above A. K. Dey as the Chairman of the Tribunal had no jurisdiction and therefore the award was void.

5. The next contention on behalf of the petitioner was that the activities of the Firm of which the petitioner was a partner was not an industry within the meaning of the Industrial Disputes Act. The services rendered by the said Firm and its partners, were services entirely dependent upon the personal qualifications, skill and knowledge of the principles of accountancy, and also upon the integrity and reputation of the partners of the Firm. It was further contended that the fees paid to the said Firm by its clients were paid for the personal opinions, advice and reputation of the partners of the Firm It was also contended that by far the greatest portion of the fees of the Firm was derived from service rendered as auditors of limited companies and the purpose of such audit was not to check the arithmetical accuracy of the accounts maintained by the companies, but the purpose was to enable such companies to produce a certificate from a firm embodying a report and opinion under Section 227 of the Companies Act, 1956. It was further contended that the opinions expressed in the report of the Firm were opinions dependent on matters of law and principles of accountancy and it was on these points that the partners had to satisfy themselves.

6. The next contention of the petitioner was that in the impugned order of the respondent No. 1 it had heen held that the Firm still carried on an industry in Calcutta inspite if the uncontradicted evidence that the Firm did not employ any audit clerks and all the services rendered by the Firm to its clients were rendered by the partners of the Firm assisted by qualified assistants who were themselves Chartered Accountants. The impugned order was also attacked on the ground that it had been held that the audit clerks rendered services which could not be called wholly subsidiary. In effect and in substance, the petitioner's contention was that the undertaking carried on by the Firm was not an industry as defined in Section 2(j) of the Act, and not being an industry no valid reference could be made by the State Government to the respondent No. 1 under the Act, and therefore, the award made by the respondent No. 1 was illegal and void.

7. In support of the contentions raised on behalf of the petitioner, Mr. Ginwalla argued that an undertaking could be treated or held to be an industry if there was cooperation between capital and labour and between employer and employee. This cooperation, it was argued, was the basic and fundamental characteristic feature of an industry, and if there was no such co-operation an undertaking or venture could not be held to be an industry. It was argued that in the case pf a solicitor who practised his profession there was no co-operation between the employer and the employee and the solicitor rendered his services to his client by reason of his experience, knowledge, skill and intellectual attainments. The client, it was argued, paid for the services rendered by the solicitor in giving advice or in dealing with other matters, but the fees were not paid to the solicitor because of the work done by the typists or other clerks in the solicitor's establishment. Similarly, it was argued, that in the case of a Chartered Accountant whose work consisted of two distinct parts, namely, auditing of books of account and dealing with taxation matters, fees were paid to the Chartered Accountant not because of the services rendered by the audit clerks and other staff at his establishment, but because of the reputation, skill, knowledge and intellectual attainments of the Chartered Accountant himself. It was next argued that the Companies Act 1956, had introduced complicated system and method of keeping books by a company and had also imposed restrictions upon the company in dealing with its funds and assets. Under the provisions of the new Companies Act, it was submitted, it was impossible for the directors and other managerial staff of a company to comply with the requirement of the statute except with the expert and skillful advice of a qualified Chartered Accountant. It was for this reason, it was argued, that the services of the audit clerks had been dispensed with by the Finn. Audit clerks, it was argued, did not have the equipment or training to render any assistance to a Chartered Accountant in dealing with matters of a client having regard to the stringent provisions of the Companies Act, 1956.

8. It was next argued that under the said consent order made on November 19, 1964, G. Paiit alone had the jurisdiction to deal with the matter which was referred to him under the order. He was a person named in the order and therefore he alone had the judisdiction to deal with the matter. A. K. Dey who made the award, it was argued, had no jurisdiction under the said consent order to deal with the matter at all.

9. In support of his contentions, Mr. Ginwalla firstly relied upon a decision of this Court reported in : (1958)IILLJ190Cal , Brijmohan Bagaria v. N. C. Chatterjee. In that case, the question raised was whether the undertaking or calling of a solicitor could be regarded as an industry under the Act. It was held that normally the avocation of an attorney was entirely dependent upon his own intellectual attainment and individual skill and that an attorney might employ many assistants and a large staff, but that made no difference because the employment of a staff was not decisive of the question if the undertaking or a calling of a solicitor was an industry. At p. 482 of the report (Cal WN) = (at p. 464 of AIR) it was held as follows:--

'Under section 2(j) of the Act, the word 'industry' means any undertaking or calling of employers. If it is given a very wide and literal meaning, then it will include every undertaking or any calling and would necessarily include that of a solicitor and his profession. But the word has to be construed in the context of the Act and the scheme of it. Can it be said that in such a case there is co-operation of Labour and Capital to produce wealth or services? In my opinion, however extended the meaning be given to the expression 'industry' or 'industrial dispute' or to the expression 'undertaking' or 'calling' we cannot include within their concept the case of an individual who carries on profession, dependent upon his own intellectual skill.'

10. Reliance was also placed on another decision of this Court reported in : (1958)IILLJ183Cal . Dunder-dale v G. P. Mukherjee. In that case also the same question was raised, namely, if the undertaking or calling of a solicitor could be treated or held to be an industry within the meaning of the Act. In that case, it was held that where the product of an undertaking was not the joint result of labour and capital, the basic test of industry was absent. It was further held that a solicitor who gave legal advice to his client might give it orally, or might write it in his own hand, and that the fact that instead of writing his legal advice in his own hand he employed a typist, did not make it an industry nor did make the legal advice the joint produce between him and the typist. It was, therefore, held that a firm of solicitors carrying on a profession of lawyer was not an industry within the meaning of the Act and that the Act had no application to any dispute between such a firm and its employees.

11. Mr. Ginwalla next relied upon a decision of the Supreme Sourt in National Union of Commercial Employees v. M. R. Meher, Industrial Tribunal, Bombay : (1962)ILLJ241SC . In that case also the question was whether a solicitor's firm was an Industry. Dealing with this question the Supreme Court held at pp. 1983-84 of the report as follows:--

'It would be realised that the concept of industry postulates partnership between capital and labour or between the employer and his employees. It is under this partnership that the employer contributes his capital and the employees their labour and the joint contribution of capital and labour leads directly to the production which the industry has in view. In other words, the cooperation between capital and labour or between the employer and his employees which is treated as a working test in determining whether any activity amounts to an industry, is the co-operation which is directly involved in the production of goods or in the rendering of service. It cannot be suggested that every form or aspect of human activity in which capital and labour co-operate or employer and employees assit each other is an industry, The distinguishing feature of an industry is that for the production of goods or for the rendering of service, co-operation between capital and labour or between the employer and his employees must be direct and must be essential.'

Regarding the work of a solicitor it was held that the service rendered by a solicitor functioning either individual or working together with other partners was service which was essentially individual and depended upon the professional equipment, knowledge and efficiency of the solicitor concerned. It was further held that subsidiary work which was intended to assist the solicitor in doing his work had no direct relation to the professional service rendered by the solicitor

12. The next case relied upon by Mr. Ginwalla was another decision of the Supreme Court in State of Bombay v. Hospital Mazdoor Sabha, : (1960)ILLJ251SC . In that case the question considered by the Supreme Court was if the undertaking carried on by the State when it ran a group of hospitals for the purpose of giving medical relief to citizens was an Industry within the meaning of Section 2(j) of the Act. It was held that the character of the activity involved in running a hospital brought the institution of the hospital within Section 2(1) of the Act. In considering the attributes made an activity an undertaking within Section 2(f) of the Act, it was held at p. 616 of the report as follows:-

'It is difficult to state these possible attributes definitely or exhaustively: as a working principle it may be stated that an activity systematically or habitually undertaken for the production or distrubution of goods or for the rendering of material service to the community at large or a part of such community with the help of employees is an undertaking. Such an activity generally involves the co-operation of the employer and the employees, and its object is the satisfaction of material human needs. It must be organised or arranged in a manner in which trade or business is generally organised or arranged. It must not be casual nor must it be for oneself nor for pleasure. Thus the manner in which the activity in question is organised or arranged, the conditions of the co-operation between employer and the employee necessary for its success and its object to render material service to the community can be regarded as some of the features which are distinctive of activities to which Section 2(1) applies. Judged by this test there would be no difficulty in holding that the State is carrying on an undertakine when it runs the groups of Hospitals in question.'

Referring to this decision learned counsel for the petitioner argued that the attributes, which are necessary for the purpose of making an undertakine an industry within the meaning of the Act, were totally absent in the case of the undertaking carried on by the petitioner's Firm. The Firm did not carry on any undertaking for the production or distribution of goods or of rendering material service to any part of the community, nor was there any co-operation between the employer and the employees. There was no question, it was argued, of cooperation between labour and capital or between employer and the employees as it was possible for a Chartered Accountant to carry on his profession without any employees at all or without investment of any capital. The profession of accountancy was practised by the partners of the Firm by employment of their individual skill, knowledge, intellectual attainment, reputation, efficiency and ability in advising clients. This activity, it was further argued, could be carried on without any employees at all and without the employment of any capital whatsoever. It was therefore, argued, that in the light of the decision laid down by the Supreme Court in the Hospital Mazdoor Sabha's case : (1960)ILLJ251SC (supra) the undertakine of the petitioner could not be held to be an industry within the meaning of Section 2(i) of the Act

13. The next case relied upon by the learned Counsel for the petitioner was a Bench decision of the Kerala High Court reported in AIR 1967 Ker 31, T. K. Menon & Co. Calicut v District Labour Officer, Kozhikode-2. In that case also the question raised was whether the business or profession of a Chartered Accountant could be held to be an industry within the meaning of Section 2(j) of the Act. It was held that a profession was an occupation carried on by a person by virtue of his personal qualifications It was also held that Chartered Accountants constituted a skilled professional class and just as there was no direct and essential co-operation between a solicitor and his employees in the rendering of services to clients similarly in the case of Chartered Accountants the rendering of service to clients was not the result of any partnership or any essential co-operation between the employer and employees. It was further held that a Chartered Accountant was allowed to practise as Chartered Accountant in view of the special and techi-nical qualification he possessed and there was no investment of any capital in the practice of the profession except the qualification and experience he possessed.

14. Relying upon the decisions of the Supreme Court reported in : (1960)ILLJ251SC (supra) arid : (1962)ILLJ241SC (supra), it was argued that the work of a Chartered Accountant was not included in the definition of the word 'industry' in Section 2(j) of the Act, It was further argued that if the work of an individual Chartered Accountant, in which case the entire work was done by him, was not an industry under Section 2(j) of the Act, the fact that he had secured a large volume of work and for that purpose had to maintain employees, could not make the business or profession carried on by him an industry within the meaning of the Act.

15. Mr. Ginwalla next referred to a decision of this Court reported in : AIR1963Cal310 , Rabindra Nath Sen v. First Industrial Tribunal, West Bengal. In that case also the question whether the business of a Chartered Accountant was an industry or not was considered. In that case it was held that a significant test of industry was the co-operation between labour and capital, the employer providing the latter and the workers providing the former, and the final product was the product of co-operation between capital and labour Thus characteristic of co-operation between capital and labour, it was held, was the dominating characteristic when the in-dustry was a manufacturing business or trade. In distinguishing the business or profession of a solicitor from that of a Chartered Accountant, Banerjee, J. observed that the services rendered in auditing by the employees of a Chartered Accountant were not wholly of the subsidiary type which a solicitor received from his stenographer typist, accountants, clerks or menial servants. It was further observed that the report prepared by the auditor might be the production of the auditor himself, but the service rendered by the audit clerks had a direct bearins on the preparation of the report. After referring to the provisions in the Companies Act, 1956, regarding the powers and duties of auditors, it was held that if it was permissible for a Chartered Accountant to utilise the services of audit clerks in the examination of accounts, on which his report was based, it could not be said that such a report was his individualistic production having no connection with the labour put in by his employees. But the learned Judge, however, made a clear distinction between a Chartered Accountant who did all the work of auditing, examination of accounts and making of report by himself and a Chartered Accountant who carried on business on a large scale with numerous clients and was, therefore, compelled to have a division of labour, the clerks doing the examination of accounts and the accountant drawing up the report. In the case of the former, that is to say, a Chartered Accountant doing all the work himself, it was held that he might not be carrying on an industry. The observations of the learned Judge at p. 251 of the report (Cal W. N.) = (at pp. 319-320 of AIR) are as follows:--

I desire, however, to make one position clear. A Chartered Accountant doing audit work assisted by stenographers, personal clerks and menial servants, that is to say, doing the entire auditing work, from examination of accounts to the making, of the report, all by himself but only with such subsidiary and incidental help as may be rendered by his stenographers, typists, personal clerks and servants may not be carrying out an industry. But if a Chartered Accountant carries on auditing work in a magnified scale with more clients then he can himself manage, and is perforce compelled to have a division of labour, his clerks doing the examination of accounts and he himself drawing up the audit report, on the result of such examination, it may not be said that this type of co-operation is not industry.'

Mr Ginwalla contended that the instant case was clearly distinguishable from the facts in Rabindra Nath Sen's case, : AIR1963Cal310 (supra). In the latter case learned counsel submitted, that there were 140 clerks in the office out of whom 10 were employed in taxation and secretarial work and the rest were employed in the auditing department. In the instant case, on the other hand, there were no audit clerks at all and the entire work was done by qualified Chartered Accountants who carried on the work of auditing of books of clients examination of the accounts and the checking of postings in the book. It was, therefore, argued that even on the basic of the decision of Banerjee, J., the audit clerks made no contribution whatsoever in the practice of the profession of the Chartered Accountant who did all the work either himself or by other qualified Chartered Accountants. That being so, Mr. Ginwalla argued, the decision of Banerjee, J., had no application to this case in which the facts are entirely different. Secondly it was argued that even if the decision of Banerjee, J. was applicable to this case, the business of the petitioner could not be treated to be an industry having regard to the observations of the learned Judge quoted above.

16. It was next argued by the learned counsel for the petitioner that the judgment in Rabindra Nath Sen's case, : AIR1963Cal310 (supra) was passed before the Companies Act, 1956, came into force and therefore Banerjee, J. had no occasion to take into consideration the requirement of the two new Companies Act relating to company management. It was argued that before the new Companies Act came into force, most of the time of a Chartered Accountant was taken up in auditing the books of account of a company; but after the new Act came into force a Chartered Accountant was required to do entirely different type of work which could not be performed by audit clerks, but could only be entrusted to qualified accountants. The duties imposed by the new Companies Act, it was argued, required specialised knowledge and trailing, and such work could not be performed by audit clerks. It was next argued that at the point of time the reference was made the petitioner's Firm had no audit clerks at all and therefore the petitioner's business could not be treated to be an industry even according to the decision in Rabindra Nath Sen's case : AIR1963Cal310 . It was argued that the order of reference did not include the question of re-instatement of the audit clerks whose services were dispensed with, but was confined to the benefits claimed by the employees upon termination of their services.

17. While, there is good deal of force in the contention of the petitioner's Counsel that the question of reinstatment was not included in the order of reference, but the only question was about the benefits claimed by the employees upon the termination of their services, and therefore the employees accept the position that in the changed circumstances continued employment by the petitioner's firm of the audit clerks was not necessary, I cannot accept the extreme contention of Mr. Glnwalla that employment of audit clerks by a Chartered Accountant had become altogether unnecessary having regard to the requirement of the Companies Act, 1956

18. The next case relied upon by Mr. Ginwalla was a decision of the Supreme Court in Hariprasad Shivshankar Shukla v. A. D. Divelkar, AIR 1957 SC 121. The question raised in that case was if certain employees were entitled to retrenchment compensation under Section 25-F of the Industrial Disputes Act. A private railway was taken over by the Central Government under the terms of an agreement. The services of some of the employees were continued on fresh terms offered by the Government, but certain other employees declined to accept these terms and claimed retrenchment com-pensation under Section 25-F. The question raised before the Supreme Court was whether the termination of service by the employer when the business itself ceased to exist could be said to be retrenchment within the definition of that term in Section 2(oo) of the Industrial Disputes Act. After referring to certain earlier decisions the Supreme Court held at p. 128 of the report as follows:

'It would be against the entire scheme of the Act to give the definition clause relating to retrenchment such amending as to include within the definition termination of service of all workmen by the employer when the business itself ceases to exist.'

Relying upon these observations it was argued that in this case also the business or work for which the audit clerks were employed by the petitioner had ceased to exist, namely, auditing the books of account of companies and that being so, the employees could not be said to have been retrenched within the meaning of Section 2(oo) of the Act and therefore they were not entitled to the benefits claimed. It was not a case of a wrongful termination of service, and it was for that reason that re-instatement was not claimed by the employees. It was, on the other hand, it was argued, a case where the business of the employer had ceased to exist and therefore the services of the employees had been terminated. That being the position, it was next argued, that the employees could not claim nor could they be awarded the retrenchment benefits provided in the Industrial Disputes Act. In support of this contention it was urged that the termination of the services of the first batch of eight audit clerks was effected by a notice dated September HO. 1958, and of the second batch of eleven audit clerks was effected by a notice dated November 28 1958. The business or undertaking of the petitioner, therefore, ceased to be an industry in November, 1958, and since December, 1958, the work was done by qualified Chartered Accountants The order of reference, it was argued, was passed on January 8, 1959, on which date admittedly there was no industry and therefore there could be no valid reference of the dispute to the Tribunal, nor could the retrenchment benefit provided in the Act be awarded to the audit clerks whose services have been terminated

19. The next case relied upon by the learned counsel for the petitioner was a decision of the Supreme Court in Pipraich Sugar Mills Ltd v Pipraich Sugar Mills Mazdoor Union. : (1957)ILLJ235SC In that case it was held that the scheme of the Industrial Disputes Act assured that there was in existence an industry and then proceeded to provide for various steps to be taken when a dispute arose in that industry It was further held that the industrial dispute to which the provision of the Act applied was only one which arose out of an existing industry and therefore where the business had been closed and such closure was real and bona fide, any dispute arising with reference thereto would fall outside the purview of the Industrial Disputes Act. It was also submitted that the objects of the Act could have their fulfilment only in an existing and not a dead industry. On this aspect of the case, reliance was also placed on another decision of the Supreme Court in Banaras Ice Factory Ltd. v. Its Workmen, : (1957)ILLJ253SC . After referring to the earlier decisions on this question, the Supreme Court held that the provisions of the Industrial Disputes Act, 1947, applied to an existing industry and not a dead industry. It was further held in that case that retrenchment in Clause (oo) of Section 2 and Section 25-F did not include termination of the service of workmen on bona fide closure of business.

20. Relying upon the decisions mentioned above, it was argued that there could be no doubt that the closure of the business so far as the work of audit clerks was concerned, was real and bona fide. It was also urged that the audit clerks themselves realised that the closure was a bona fide closure and therefore they did not ask for reinstatement. It was clear, it was submitted, that there was no industry so far as the work of audit clerks was concerned, although the petitioner practised the profession of Chartered Accountant with qualified accountants only. The industry so far as the audit clerks were concerned, it was argued, was a dead industry and therefore the provisions of the Act regarding retrenchment benefits could not be invoked by the audit clerks nor could a reference be validly made by the respondent No 10.

21. In my view, the above contention of Mr. Ginwalla cannot be accepted. The work which the audit clerks did in the petitioner's Firm was still there and such work had not ceased to exist. It is true that such work was now performed by qualified Chartered Accountants instead of audit clerks. But that did not indicate or prove that the work which was previously done by audit clerks and which is now being done by qualified Chartered Accountants, had ceased to exist. It cannot, therefore, be said that it was a dead industry or that the industry had ceased to exist and the three decisions of the Supreme Court mentioned above have no application to the facts of this case. The business or work for which the audit 'clerks were employed was still there, although that work was now being performed by qualified Chartered Accountants instead of the audit clerks.

22. Mr. A. Roy Mukherjee, learned Counsel for the respondent No. 3. contended that there was no substance in the first contention of Mr. Ginwalla. namely, that A. K. De. Chairman of the Tribunal had no jurisdiction to make the award as the order of this Court directed G. Palit to deal with the matter. He argued that the said order dated November 19, 1964, directed the Tribunal to deal with and dispose of the matter and not a particular individual who happened to be the Chairman of the Tribunal for the time being. It was next contended by Mr. Roy Mukherjee that K. P. Mukher-jee as the Chairman of the Tribunal made an order on August 21, 1965, restoring the reference and directing the case to be heard on the preliminary issue. This order, it was argued, had become final and no writ or relief was asked for in this application against the order of restoration made by K. P. Mukherjee. This contention of Mr. Roy Mukherjee must be upheld. Although in the order the name of G. Palit was mentioned, as the Chairman of the Tribunal, in effect and in substance it was the Fifth Industrial Tribunal which was directed to deal with the matter and it was this Tribunal which was presided over by A. K. De which had made the award. Besides, I must also uphold the contention of Mr. Roy Mukherjee that no writ or relief having been asked for with regard to the order of restoration, it is not open to the petitioner to contend that the award is invalid because it was made by A. K. De as the Chairman of the Tribunal. The first contention of Mr. Ginwalla, therefore fails.

23. The next contention of Mr. Rov Mukherjee was that the petitioner's firm did not cease to be an industry merely because the audit clerks were retrenched in November, 1958. It was argued that even though the audit clerks were retrenched, the work done by them still remained and was performed by qualified Chartered Accountants. It was not a case of closure of business entirely, but the business continued to be performed by a different set of people, namely, Chartered Accountants who were doing the work, which previously was done by audit clerks. Referring to the evidence tendered before the Tribunal, it was argued that the work done by the audit clerks hnd not disappeared, but such work was, after retrenchment of the audit clerks, performed by Chartered Accountants Mr. Roy Mukh-erjee next referred to the amendment to the definition of 'workman' in Section 2(s) of the Act and argued that persons employed to do any technical work had been included within the definition of workman by the amending Act in 1956 and therefore, it was argued, qualified Chartered Accountants must be treat-ed as workmen employed in the industry. That being so, it was argued, that the retrenchment of the audit clerks by the petitioner's firm made no difference to the position as the qualified Chartered Accountants who were employed to do the work previously done by audit clerks, are workmen after the amendment to the definition of 'workman' mentioned above. On this question have already held that the work done previously by the audit clerks did not cease to exist merely because it was performed by Chartered Accountant. I accept Mr. Roy Mukherjee's contention that it was not a case of bona fide closure of business.

24. The next contention of Mr. Roy Mukherjee was that even if it was held that there was a real and bona fide closure of the business carried on by the petitioner's firm, the retrenched audit clerks would be entitled to compensation under Section 25-FFF of the Act. It was submitted that even if it was held that the work done by the audit clerks had ceased to exist and therefore they were retrenched, retrenchment compensation as provided in Section 25-FFF must be paid to the audit clerks who were retrenched. Therefore, it was argued, the Tribunal was entirely right in awarding retrenchment benefits to the audit clerk.

25. It was next argued by Mr. Roy Mukherjee that the tests laid down by the Supreme Court in : (1960)ILLJ251SC (supra) were amply satisfied in this case. It was submitted that the activity of the petitioner's firm was systematically and habitually undertaken for the rendering of material services to a part of the community with the help of employees and such activity involved the co-operation of the employer and employees and its object was the satisfaction of material human needs. It was argued that since these tests were fully satisfied, the business or undertaking of the petitioner's firm must be held to be an industry within the meaning of Section 2(j) of the Act. Mr. Roy Mukherjee also relied upon another decision of the Supreme Court in Ahmedabad Textile Industry's Research Association v. State of Bombay, : (1960)IILLJ720SC in which the tests laid down in the Hospital Mazdoor Sabha's case, : (1960)ILLJ251SC (supra) were reaffirmed by the Supreme Court.

26. Mr. Roy Mukherjee next sought to distinguish the decision of the Supreme Court in : (1962)ILLJ241SC (supra) from the facts of the instant case. He referred to the observations of the Supreme Court that no distinction could be drawn between the professional service rendered by an individual action through employees and that rendered by a firm and that what was true about a firm of solicitors would be equally true about an individual solicitor working through employees. Mr. Roy Mukherjee further contended that In that case it was held that the co-operation between capital and labour or between the employer and his employees was co-operation which was essential and necessary for the purpose of rendering material service for production. It was further contended that in the solicitor's case it was held that the service rendered by a solicitor functioning either individually or working together with partners was service which was essentially individual and depended upon the professional equipment, knowledge and efficiency of the solicitor concerned and that subsidiary work which was purely of an incidental type and which was intended to assist the solicitor in doing his job had no direct relation to the professional service ultimately rendered by the solicitor. In the case of a Chartered Accountant, on the other hand, Mr. Roy Mukherjee argued, the services of the audit clerks had a direct relation to the professional service rendered by a Chartered Accountant. Without checking of the books of account and the castings and the castings and postings therein, it would never be possible, it was argued, for a Chartered Accountant to produce his report and therefore the profession of a Chartered Accountant was entirely different from that of a solicitor

27. I am, however, not impressed by the distinction drawn between a solicitor and a Chartered Accountant by Mr. Roy Mukherjee. The Chartered Accountant can discharge his duties to his client alone and unaided in the same manner and to the same extent as a solicitor. It is possible for a Chartered Accountant, as much as it is possible for a solicitor, to do the entire job himself for the purpose of producing the re-port for which his client has engaged his services. The fact that a Chartered Accountant engages the services of clerks to do the work of checking and vouching, castings and posting, makes no difference to the position. The services rendered by a Chartered Accountant are as much essentially individual and depend as much upon his professional equipment, knowledge and efficiency as in the case of a solicitor. The subsidiary work whether done by audit clerks or other qualified accountants is purely of an incidental type and is intended to assist the Chartered Accountant in doing his job and has no direct relation to the professional service ultimately rendered by the Chartered Accountant. As I said earlier, it is quite possible for a Chartered Accountant to do the entire job himself without taking the assistance of any audit clerk or qualified Chartered Accountant for the purpose of checking and vouching, the castings and posting? in the books of account of a client

28. Mr. Roy Mukherjee next referred to a Bench decision of this Court reported in N. R. Mukherjee v. Arnold Hartman Just, : AIR1961Cal95 . In that case also the question if the business of a Chartered Accountant is an industry within the meaning of Section 2(j) of the Act, was raised and it was held that on the facts of that case the question whether the business of a Chartered Accountant was an industry was an abstract question of law which could not be decided without a specific finding of the Tribunal as to the manner in which the firm carried on its business and also on the question whether the activities of the firm were confined only to the business of a Chartered Accountant simpliciter or extended to other activities which were not connected with the business of a Chartered Accountant. The Bench decision in that case set aside that part of the judgment of the trial court which held that the business of a Chartered Accountant was not an industry within the meaning of the Act as also the finding of the Tribunal that the business was an industry within the meaning of the Act and it was held that the point would have to be decided after taking evidence on the two questions, namely, (a) whether the professional Income of the firm was earned solely by the efforts of the partners of the firm and (b) whether the firm carried on other business besides the business of a Chartered Accountant. This decision, to my mind, not only does not support the contention of Mr. Roy Mukherjee, but on the other hand, militates against the contentions raised by him. The two tests laid down by the Division Bench, it applied to the facts of this case, cannot but lead to the conclusion that the business of the Chartered Accountant in this case is not an industry. In the first place, the profes-eional income of the Firm is earned solely by the efforts of the partners and other qualified Chartered Accountants, after the termination of the services of the audit clerks. In the second place, there is no evidence at all that the Firm carried on any business other than that of a Chartered Accountant. This decision, therefore, is entirely against the contentions of Mr. Roy Mukherjee.

29. Mr. Roy Mukheriee also referred to another Bench decision of this Court reported in Deputy Secretary to the Govt. of India Ministry of Finance v. S. N. Dasgupta, : AIR1956Cal414 . That was a reference to this Court under Sections 21(1) and 21(3) of the Chartered Accountants Act. There is an elaborate discussion in that case about the duties of the Chartered Accountants, but the question whether the business of a Chartered Accountant could be treated as an industry was neither raised nor discussed and for that reason that decision is of no assistance in this case.

30. The next contention of Mr. Roy Mukheriee was that the findings of the Tribunal were based on the evidence tendered before it and this Court could not interfere with that decision as that would involve an appreciation of evidence It was argued that the writ jurisdiction of this Court did not confer a jurisdiction on this Court to reopen matters which were based on evidence even if there was a wrong appreciation of evidence in my view, there is no merit in this contention. It is now well settled that if question of facts raised in a writ petition such jurisdictional facts and if in deriding such a fact the Tribunal went wrong, the High Court might go into the question of fact and correct the wrong decision in exercise of the writ jurisdiction. That position is now clear by reason of the decisions of the Supreme Court in Raman and Raman Ltd. v. State of Madras : [1956]1SCR256 . Lilavati Bai v. State of Bombay, : [1957]1SCR721 and : AIR1963Cal310 (supra). This contention on behalf of the respondents must, therefore, be rejected.

31. To turn now to the other contention of Mr. Roy Mukherjee, namely, that Section 25-FFF provided that where an undertaking was closed down for any reason whatsoever every workman who had been in continuous service for not less than one year should be entitled to notice and compensation in accordance with Section 25-F as if the workmen had been retrenched. A reterence was also made to Section 2(s) of the Act which defines workman to include any person who has been dismissed, discharged or retrenched. It was argued that even though the audit clerks were retrenched, they still continued to be workmen and were, therefore, entitled to the compensation provided in Section 25-FFF. I must at once point out that the claim made by the audit clerks on these grounds must depend on the question whether the business of a Chartered Accountant is an industry within the meaning of the Act. The question of compensation payable to a retrenched or dismissed workman could arise only if the business in which he was employed was an industry within the meaning of the Act and if the business or undertaking was held not to be an industry, no compensation could be awarded to such a workman under the provisions of the Industrial Disputes Act.

32. To turn now to the question upon which the decision in this case must rest, namely, whether the business or undertaking carried on by the petitioner's firm is, in the facts of this case, an industry within the meaning of the Act. In the first place, it is to be seen if there is a co-operation between labour and capital and between the employer and employee. There cannot be said to be any such co-operation in the facts of this case, as it is possible for a Chartered Accountant to carry on the business entirely by himself unaided by any audit clerks or any other assistants whose services should be regarded to be essential or indispensable in the matter of audit or in the matter if preparation of the report of the auditor. In the second place, it cannot but be held that a Chartered Accountant practises his profession by reason of his individual skill, knowledge, equipment and reputation. The essential test of industry as was pointed out by the Supreme Court in : (1962)ILLJ241SC (supra) was the co-operation between capital and labour or between the employer and his employees. Can it be said that there is such co-operation between a Chartered Accountant and the audit clerks in the business carried on by a Chartered Accountant? Can it again be said that without such co-operation it would not be possible for a Chartered Accountant to practise his profession or that such co-operation is indispensable for the business or profession of a Chartered Accountant? If the answers to these questions are in the negative, and in my view they must be in the negative, the business or profession of a Chartered Ac-countant cannot be held to be an industry within the meaning of the Act.

33. The facts in this case are entirely different from the facts in : AIR1963Cal310 (supra). In the latter case, there were 140 clerks in the office of the Chartered Accountants out of whom only 10 were employed in taxation and secretarial work and the remaining 130 clerks were employed in the auditing department. In this case, on the other hand, there are no audit clerks at all and the entire volume of work of the petitioner's firm is performed by qualified Chartered Accountants. It is clear, therefore, that the co-operation of audit clerks in the practice of the profession of a Chartered Accountant is neither essential nor indispensable and in the absence of such co-operation, which must be essential between the employer and the employee, the business or profession of a Chartered Accountant cannot be held to be an industry within the meaning of the Act. In Rabin-dra Nath Sen's case, : AIR1963Cal310 (supra) there was clear evidence of co-operation between the audit clerks and their employers, namely, the Chartered Accountants and it was for that reason that it was held that the business carried on by the firm was an industry. In the instant case, on the other hand, the evidence shows that the petitioner's firm is carrying on its business without the help or co-operation of any audit clerks at all and therefore it cannot but be held that the co-operation between a Chartered Accountant and his audit clerks and other clerks is by no means of an essential and indispensable character. In this connection, reference may usefully be made to the observations of the Supreme Court on the question of co-operation between the employer and his employees in : (1962)ILLJ241SC (supra) which are as follows:

'Those observations support the view which we have taken about the character of co-operation between the employer and employees which affords a relevant test in determining whether the enterprise in question is an industry or not. Co-operation to which the test refers must be co-operation between the employer and his employees which is essential for carrying out the purpose of the enterprise and the service to be rendered by the enterprise should be the direct outcome of the combined efforts of the employer and the employees.'

It is thus clear that the co-operation necessary between the employer and employee to make an enterprise an industry must be essential for carrying out the purpose of the tnterprise and the service to be rendered should be the direct outcome of such cooperation. In the case of a chartered accountant it cannot be said that the cooperation between a Chartered Accountant and his audit clerks is of such an essential character that without such co-operation the Chartered Accountant cannot practise his profession, nor can it be said that the service rendered by the Chartered Accountant is the direct outcome of the combined efforts of the Chartered Accountant and his audit clerks It is clear on the materials in this case that it is quite possible for a Chartered Accountant to practise his profession and to render his service to his clients alone and unaided by any audit clerks.

34. In my view, the profession of a Chartered Accountant must be held to be a liberal profession which can be carried on and in fact, in this case, is carried on with-out the active co-operation of any audit clerks. In this connection the observations of the Supreme Court in : (1962)ILLJ241SC (supra) of the report may be usefully referred to:

''Looking at this question in a broad and general way, it is not easy to conceive that a liberal profession like that of an attorney could have been intended by the Legislature to fall within the definition of 'industry' under Section 2(j). The very concept of the liberal professions has its own special and distinctive feature which do not readily permit the inclusion of the liberal professions into the four corners of industrial law. The essential basis of an industrial dispute is that it is a dispute arising between capital and labour in enterprises where capital and labour combine to produce commodities or to render service. This essential basis would bp absent in the case of liberal professions. A person following a liberal profession does not carry on his profession in any intelligible sense with the active cooperation of his employees and the principal, if not the sole capital which he brings into his profession is his special or peculiar intellectual and educational equipment. That is why on broad and general considerations which cannot be ignored, a liberal profession like that of an attorney must, we think, be deemed to be outside the definition of 'industry' under Section 2(j).'

35. In my opinion, the aid or service which a Chartered Accountant may obtain from an audit clerk or any other clerk is by no means essential or indispensable to the practice of his profession. It is quite possible for a Chartered Accountant to practise his profession unaided by the service of an audit clerk or any other clerk. That being the position, the test of essential co-operation between employer and employee is entirely absent in the case of the undertaking of a Chartered Accountant Applying the other test namely the co-operation between capital and labour, it must be held that there is no such co-operation as the only capital of the Chartered Accountant is his professional qualification, skill, training and reputation. There is, therefore, no co-operation between capital and labour.

36. For the reasons mentioned above, the business or undertaking carried on by the petitioner's Firm cannot be held to be an industry within the meaning of the Act, and for that reason the order of reference must be held to be invalid. The award made by the respondent No. 1 is accordingly quashed The rule is made absolute. Each party to pay its own costs.


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