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Hajee Ismail Said and Son (Pvt.) Ltd. Vs. Fourth Industrial Tribunal and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. Nos. 287 and 371 of 1961
Judge
Reported inAIR1966Cal375,[1966(12)FLR69],(1966)IILLJ59Cal
ActsIndustrial Disputes Act, 1947 - Section 2
AppellantHajee Ismail Said and Son (Pvt.) Ltd.
RespondentFourth Industrial Tribunal and ors.
Appellant AdvocateP.P. Ginwalla and ;Puspamay Das Gupta, Advs.;D.N. Basu, Adv.
Respondent AdvocateA.K. Dutta, ;N.M. Sha and ;N.R. Mukherjee, Advs.
DispositionAppeal partly allowed
Cases ReferredBanaras Ice Factory Ltd. v. Its Workmen
Excerpt:
- p.b. mukharji, j. 1. this is an appeal from the judgment and order of d.n. sinna, j. discharging the rule obtained by the appellant company in respect of 246 of its workmen.2. the significant point for determination in this appeal is whether termination of service in accordance with the standing orders is always and necessarily a retrenchment within the meaning of section 2(oo) of the industrial disputes act, and if it is not so always, in which cases such termination is retrenchment.3. the petitioner is a private limited company carrying on business in the manufacture of country spirit and rectified and denatured spirit. this business is exercised and can only be exercised in terms of an excise license issued to the petitioner appellant and under its terms the government fixed the price.....
Judgment:

P.B. Mukharji, J.

1. This is an appeal from the judgment and order of D.N. Sinna, J. discharging the Rule obtained by the appellant company in respect of 246 of its workmen.

2. The significant point for determination in this Appeal is whether termination of service in accordance with the Standing Orders is always and necessarily a retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act, and if it is not so always, in which cases such termination is retrenchment.

3. The petitioner is a private limited company carrying on business in the manufacture of country spirit and rectified and denatured spirit. This business is exercised and can only be exercised in terms of an Excise license issued to the petitioner appellant and under its terms the Government fixed the price of the spirit and sanction from the Commissioner of Excise was necessary in order to exceed such a price. The workmen employed by the petitioner company are opposite party No. 4, and are represented by the Russa Distillery Workers' Union. There is another Union by the name of the Bussa Distillery Employees' Union which represented 87 of the workers.

4. The events involved in this dispute relate back to the incidents that happened in 1959. It is the appellant's case that on the 23rd April, 1959, the situation was such that the appellant was compelled to close the Distillery. Then there was an agreement between the appellant and its workmen. A brief account of these facts may be helpful at this stage. The workmen after a strike notice dated the 9th March, 1959, on the issues relating to the retrenchment and change of service conditions struck work from the 9th April, 1959. The Management notified to the workmen on the 23rd April, 1959 of their decision to close the factory for the reasons stated in that notice. The dispute was then taken up in conciliation proceedings. The Management was thereafter informed by the Excise Directorate that they would be receiving a certain quantity of molasses in a year although that meant a reduction of their previous quantity. The Management thereafter decided to reopen the establishment with about 64 workmen, The workmen not having agreed to accept the offer of the management, the Establishment could not be reopened. After discussion in conciliation proceedings on the 21st May and 22nd May, 1959, a certain Agreement was reached on or about the 25th May, 1959. The essence of this agreement is that the Establishment shall reopen on the 25th May, 1959, with all workmen on roll on the 8th April, 1959, and this complement will work until the 30th May, 1959 on their normal wages. From the 1st June, 1959, the daily complement of workmen in the establishment would be 100 and the establishment would work on weekly rotation basis and another complement of 100 would be replaced each week. The list was to be drawn up jointly by the management and the Union. It was also agreed that in working out the programme of work, the workmen who would be out of employment from the 1st June, 1959, should be considered as on lay off and was entitled to the lay off benefits. The attempt, however, to work this agreement did not succeed for reasons beyond the, control of the appellant.

5. The main reason for the failure of this agreement' was that the Excise Department of the Government failed to supply the quantity of molasses and did not renew the license for the manufacture and sale of the country spirit Without these two, it was natural that this particular business in distillery could not be carried on. The foundation on which the agreement could be worked failed. In fact the appellant's case is that there was no work for these workers. The facts are stated in the appellant petitioner's notice dated the 9th April, 1959.

6. This notice was followed by the notice of termination of service which the appellant petitioner gave to its workmen. The notice of termination is dated the 10th July, 1959 and reads as follows:

'This is to inform you that your employment with the Company is hereby terminated as per Clause 13 of the Company's Standing Order, with effect from the 11th July, 1959.

You will be paid one month's wages in lieu of notice. You will also be paid all earned and unpaid wages, if any.'

7. This is the termination which started the present Industrial dispute out of which this appeal arises.

8. The matter was referred to the Industrial Tribunal on the issue 'Whether the retrenchment of the 313 workmen, (names given in the attached list) is justified? To what relief, if any, are they entitled?'

9. Neither parly adduced any oral evidence before the Tribunal but relied on the documents. It is admitted by the Tribunal in its Award that there was no controversy on the point that the company had terminated the services of 313 workmen and that only a skeleton staff out of the total complement of 340 workmen had been retained. The Tribunal appears to come to the conclusion that this termination was retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act and as such the workmen were entitled to compensation as provided in Section 25F of that Act. The Tribunal awarded compensation to all the workmen.

10. The first mistake that the Tribunal made in its award was its failure to notice that 67 workmen out of this total number were represented by another Union who never raised a dispute and these 67 workmen had taken what was given to them in full satisfaction of their dues. That objection was expressly taken by the appellant company before the Tribunal and in support of which an affidavit also was filed giving the particulars and names of these 67 workmen. The Tribunal never even mentioned that fact far less decide that question. If 67 workmen had taken their dues in complete satisfaction, there could be no industrial dispute in respect of the same of which the Tribunal could make an award. The affidavit of Basanta Chowdhury on record is a part of the evidence. Naturally the learned Judge rightly quashed the Award in respect of these 67 persons and made the Rule absolute in respect of these 67 workmen.

11. With regard to the rest of the workmen, the learned Judge discharged the Rule on the ground that he did not like to interfere with what he described as the conclusion of fact arrived at by the Tribunal that the termination in this case was retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act.

12. The whole question in this appeal is whether the termination of service in the present case is retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act. The main defence of the appellant petitioner all through was that this was not a retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act at all and that it was a case of termination under the conditions laid down in the Standing Orders. That is not a question of fact in this case but a question of law, In fact there was no dispute on questions of fact and nobody gave any oral evidence in these proceedings at any stage.

13. Numerous decisions have been cited before us on this point at great length. Before discussing at least some of these decisions it will be appropriate to have a good look at the sections of the Industrial Disputes Act relevant for this purpose.

14. Section 2 of the Industrial Disputes Act contains the definitions. The definitions are as usual subject to 'anything repugnant in the subject or contest'. The crucial definition on which the decision of this appeal turns is of retrenchment in Section 2(oo) of the Industrial Disputes Act defining retrenchment in the following terms: ''Retrenchment' means the termination by the employer of the service of a workman for any reasons whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include:

(a) voluntary retirement of the workman; or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or

(c) termination of the service of a workman on the ground of continued ill-health.'

15. On behalf of the workman it has been contended that the definition is an unqualified and unmitigated definition covering all termination of service for any reason whatsoever with the three limited exceptions made in Sub-clauses (a), (b) and (c) above. For the appellant company the contention is that it is not such unqualified definition. The expression 'termination of the service of a workman for any reason whatsoever' appearing in Section 2(oo) of the Industrial Disputes Act contains within itself its own limitations. Such limitations are that such termination must be a termination for a 'reason' In other words the words 'termination' and 'reason' imply a certain amount of volition and choice and free action on the part of the employer. If that volition or free choice is not available by compelling circumstances which leave no option to the employer but to terminate the service, then in such a case termination is not within the real significant ambit and connotation of the words ''termination for any reason whatsoever' if the objective situation is such that both the termination and the reason are beyond the control of the employer, then termination in that context would not be retrenchment. Therefore, while all retrenchment is termination of service. all termination is not retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act. The appellant Company's case is that termination under specified conditions laid down by the Standing Orders is not necessarily and always a retrenchment.

16. The present judicial opinion seems to Favour the view that some limitation must be imposed on the apparently wide definition in Section 2(oo) of the Industrial Disputes Act defining retrenchment to mean termination by the employer of the service of the workmen for any reason whatsoever save and except the exceptions expressly made therein. Obviously termination of service as a punishment inflicted by way of disciplinary action is not retrenchment, as it is expressly excluded by the definition. Similarly, retrenchment either voluntarily or reaching superannuation age even though it terminates the service is not a retrenchment. So termination of service on the ground of continued ill-health is not retrenchment. The other case of termination of service where it is not retrenchment is when the termination is not in the volition, option and free choice of the employer or within the control of his reason. If the situation is compelling then termination in such force of circumstance's is not retrenchment.

17. The Supreme Court in Hariprasad Shivshankar Shukla v. A.D. Divelkar, reported in AIR 1957 SC 121 expressed the following view at p. 132:

'. . . .retrenchment as defined in Section 2(oo) and as used in Section 25F has no wider meaning than the ordinary, accepted connotation of the word.'

Therefore, the bounds of the ordinary connotation should not bo excelled on the ground of amplitude of expression used. The Supreme Court was definite also in observing at the same page as follows :

'On our interpretation, in no case is there any retrenchment, unless there is discharge of surplus labour or staff in a continuing or running industry.'

In other words the Supreme Court lays down that unless business is continuing or running there is no question of any retrenchment. In this case the admitted fact is that, without license and without molasses, the business of the company could not run and in fact this business had closed on the 23rd April, 1959 and the attempt to reopen it by mutual agreement for reasons stated above could not succeed. Indeed the appellant employer tried its best to revive the business but could not clue to the refusal of the Government lo grant license at the relevant time and supply the molasses, which were the very raw materials for the business. Therefore the distillery could not be continued or run and hence according to the test laid down by the Supereme Court this termination cannot he etrenchnient.

18. The Supreme Court had again occasion to discuss the question of retrenchment in Hathising . v. Union of India, reported in : (1960)IILLJ1SC and upheld the constitutional validity of Section 25FFF of the Industrial Disputes Act, a point which does not arise in the Appeal before us.

19. But this question came up again in connection with Standing Orders in a number of cases in the Supreme Court. In Nagpur Electric Light and Power Co. Ltd. v. K. Shreepathirao, reported in : (1958)IILLJ9SC the Supreme Court upheld the validity of the discharge of the employees by the Company in that case. The Supreme Courl took the view that the Standing Orders applied to the workmen and that was decisive of the question. The following observations relevant for the decision in this appeal before us were made by the Supreme Court at p. 664:

'The company paid his salary to the respondent from the date of suspension to January 31, 1956, which also showed that no order was passed by way of punishment for misconduct. The Company chose to terminate the service of the respondent in accordance with Standing Order No. 16, and did not think fit to proceed against the respondent for any alleged misconduct, and it was open to the Company to do so. So far as Standing Order No. 16 is concerned, all the requirements thereof have been complied with. That being the position, no other point remains for decision in the present case.'

20. If that test is applied then a termination under the Standing Orders and in compliance thereof would not be retrenchment. The actual Standing Order in this case reads as follows:

(1) 'For termination of employment a notice shall be given in writing either by the employer or by the workmen for the periods noted below;

In the case of monthly paid permanent workmen, probationers and apprentices and those who have completed 240 days work during the calendar year one month's notice will be neces sary.

It will be optional for the employer to pay wages for the notice period in lieu of notice. No notice shall be necessary in the case of other badli, temporary or casual workmen.

2. Where the employment of any workman is terminated all wages earned and unpaid shall be paid to him at the lime of discharge, if convenient, or in any case, within the period of time prescribed by the Payment of Wages Act 1936.'

21. Now this is Clause 13 of the Standing Orders of the appellant Company. It is certified under Section 5(3) of the Industrial Employment (Standing Orders) Act, 1946 and was so since the 17th of March, 1958. It is binding on both the appellant company and workmen concerned. That means one month's notice is necessary for the termination as well as one month's pay in lien of notice.

22. No doubt the Standing Order should not be used for termination as a colourable device for defeating retrenchment compensation under Section 25F of the Industrial Disputes Act. In such a case termination purporting to be under the Standing Order could not be really a termination under the Standing Order but a fraud upon it and a fraud upon the statute.

23. In fact the Supreme Court in the Chartered Bank. Bombay v. Chartered Bank Employees' Union reported in : (1960)IILLJ222SC lays down the principle that the Industrial Tribunal can always go behind the form of the order and see whether it is a mere camouflage for a dismissal for misconduct without following the prescribed procedure. Where the termination of service is capricious, arbitrary or unneces sarily harsh on the part of the employer judged by normal standards of a reasonable man, that may be cogent evidence of victimisation or unfair labour practice. This point was further considered by the Supreme Court in Management of U.B. Dutt and Co. (Private) Ltd. v. Workmen of U.B. Dutt and Co. (Private) Ltd. reported in : (1962)ILLJ374SC . The principle laid down by the Supreme Court in that case is that the company cannot rest its case merely on Standing Order and say that having acted under that rule there was nothing more to be said and that the Industrial Court could not inquire into the causes that led to the termination of service under the Standing Order. The ratio of this decision is that the Industrial Court has the right to inquire into the causes that might have Ted to termination of service, and if it was satisfied that the action taken under such a Standing Order was a colourable exercise of power and was not bona fide or was a result or victimisation or unfair labour practice it would have jurisdiction to intervene and set aside such termination. In that particular case the Tribunal had held that the exercise of power was colourable.

24. In the instant case before us there is no question at all of any colourable or mala fide exercise of power or of victimisation or unfair labour practice. In the absence of such circumstances it would appear from the decision of the Supreme Court that the Standing Order and a bona fide action under the Standing Order is not liable to be interfered with.

25. The Standing Orders have a sanctity and importance of their own. It is idle to say that they are mere parts of a contract or private agreement between labour and the management. They have got certain statutory implications under the Standing Orders Act. There is a very limited scope in such Standing Orders of one party victimising the other. The Industrial Employment (Standing Orders) Act 1946 has the primary object of requiring employers in industrial establishments formally to define conditions of employment under them. The Standing Orders must be made by the employers. It is a compulsory legal duty. The draft must be submitted for consideration by the Certifying Officer (Section 3). It is the function of the Certifying Officer who is the statutory authority or the appellate authority under the Act to adjudicate upon the fairness or reasonableness of the provisions of the Standing Order (Section 4). It is only then that the certification follows of the Standing Order under Section 5. There are even appeals provided before the Appellate Authority. There has to be a Register of Standing Orders. The Standing Orders must be posted at the most important places and on special gates of the establishment. These Standing Orders finally certified under the Act shall not, except on agreement between the employer and the workmen, be liable to modification until the expiry of six months. Thereafter modifications may be sought in the Standing Orders either by the employer or by the workmen. Indeed there are penalties provided for the acts and conduct in contravention of these provisions, This much, therefore, is clear that the whole procedure is statutory with the tripartite participation of the employer, the workmen and the authorities under the Act, and should not be confused with or reduced to a mere private contract between a stronger party and a weaker party. The grounds on which the Courts have allowed Industrial Tribunals to interfere with contractual arrangement between employer and employees in cases of private agreements, may not be available in interfering with action under the Standing Orders, except in the limited oases mentioned because of the statutory procedure providing protection by public authorities and the participation of both the workmen and the employer in the ultimate formulation of the Standing Orders.

26. The Supreme Court in Buckingham and Carnatic Co. Ltd. v. Venkatiah, reported in : (1963)IILLJ638SC made some important and relevant observations on the poiut under consideration by us. It is laid down by the Supreme Court in that decision that the certified Standing Orders represent the relevant terms and conditions of service in a statutory form and they are binding on the parties at least as much, if not more, as private contracts embodying similar terms and conditions of service. Indeed the ratio of that decision is that the question of abandonment or relinquishment of service should be decided by consideration of such relevant terms and conditions of service and not by the doctrine of common law or considerations of equity. See the observations of the Supreme Court at page 1275.

27. No doubt it is always open to the employees to raise a dispute and ask the Standing Orders to be amended for instance in Guest, Keen, Williams P. Ltd. v. P.J. Sterling, reported in : (1959)IILLJ405SC . The issue in that case was whether the system of forced retirement of workmen at the age of 55 introduced by the management by its Standing Orders was justified. In dealing with an issue of that kind the Tribunal certainly had to consider not only the property, reasonableness and fairness of the rule. but it had also to deal with the question whether the said rule could and should be made applicable to employees who had already been employed by the appellant in service without any limitation as to the age of retirement. It is necessary, however, to point out that the issue was directly raised there and placed before the Tribunal (which it has not been done in the present case before us) and also before the Supreme Court. The Supreme Court decision was given on facts before the amendment of 1956, when if the employees wanted to challenge the reasonableness or fairness of any Standing Orders the only course open to them was to raise an industrial dispute in that matter and the Supreme Court observed at page 1283 of the report : (1959)IILLJ405SC as Mows:

'This position has been substantially altered by the two amendments to which we have just referred; but we are concerned in the present appeal with the state of the law as it prevailed prior to the said amendments, and so it cannot be denied that the employees had a light to claim a modification of the Standing Orders on the ground that they were unreasonable or unfair by raising an industrial dispute in that behalf.'

28. It is necessary to emphasise that the schedules to Industrial Disputes Act also have an important bearing on this question. The Standing Orders are expressly mentioned in items 1 and 2 of the second schedule, item 6 of the Third Schedule, and items 6 and 9 of the Fourth Schedule. Item 1 of the Second Schedule of the Industrial Disputes Act reads as follows:

''The propriety or legality of an order passed by an employer under the standing orders.' That in our view means not the standing order itself but an order passed under the standing orders on the ground that it is not a proper or a legal order under the standing orders. Item 2 in the Second Schedule mentions 'The application and interpretation of standing orders'. It does not say the legality or propriety of the standing order itself or the whole scheme of it. What it does say is the application and interpretation of standing orders. The indication seems to be that the standing order as such is not intended to be put into the melting pot as an industrial dispute under the Industrial Disputes Act under Section 7 thereof and read with the Schedules thereunder. The reason may not he far to seek.

29. After all the Industrial Employment (Standing Orders) Act, 1946 is a special statute with regard to the conditions of employment and lays down a special procedure as to its formulation and modification. It was not intended that a number of institutions, authorities and administrative agencies should thereafter be working at cross purposes and dealing with the same problem for that would lead not only to conflicts of decisions, but utter confusion in the field.

30. The law has been indicated and laid down by the latest decision of the Supreme Court in Murugan Mills Ltd. v. Industrial Tribunal, Madras reported in : (1965)ILLJ422SC . The right of the employer to terminate the services of his workman under the Standing Orders by giving a notice or by paying him wages in lieu of such notice which amounts to a claim 'to hire and fire' an employee as the employer pleases and thus completely negatives security of service which has been secured to industrial employees through industrial adjudication, was considered by the Labour Appellate Tribunal in 1951-2 Lab LJ 314 (L. A. T. I. - Cal.) and the view taken therein was approved in the decision of the Supreme Court in : (1960)IILLJ222SC and : (1962)ILLJ374SC . There also the Supreme Court emphasised that even in such a case the requirement of bona fides was essential. If the termination of service was a colourable exercise of the power or as a result of victimisation or unfair labour practice the Industrial Tribunal would have the jurisdiction to intervene and set aside such termination. The form of the order in such a case is not conclusive. In that case before the Supreme Court the services of the concerned employee were terminated under the relevant standing order without assigning any reasons.

31. Now if these tests be applied to the present appeal before us we are bound to hold that this was not a case of 'hiring and firing' at all. In fact even the Tribunal itself had to come to the finding that the retrenchment was justified. It could only be justified on the grounds--

(a) that there was no license, (b) that there was no raw materials supplied and (c) that there; was no work for its workmen. Otherwise if it came within the 'hiring and firing' doctrine the retrenchment would be illegal and a colourable exercise of powers to terminate service. Here the notice dated the 9th July, 1958, gave only the reasons for the .situation that was coming. It expressly .stated the situation created by the Government's refusal to grant the license and the necessary raw materials leading to no work in the distillery which could be given to the workmen. In that context of tacts the appellant employer could only act in the manner that it did by termination of services under Clause 13 of the Standing Orders. There was no other option for the appellant employer. In such a compelling circumstance where the employer has to terminate without any other option we are bound to hold that it is not retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act both on our interpretation of the section as well as on the basis of the decisions of the Supreme Court construing that section. Nor can we shut our eyes to the fact that as many as 67 workmen out of these 313 accepted the situation under the Standing Orders as being the only way out.

32. We are inclined to lake in this context the view of the Standing Orders taken by the Madras decision in Mettur Industries Ltd. v. A.R. Varma reported in : (1958)IILLJ326Mad . A learned Single Judge of the Madras High Court there takes the view that reading the Industrial Employment (Standing Orders) Act, as a whole it is clear that the standing orders form part of the contract between the Management and every one of its employees. In tact he lakes the view that these Standing Orders take the place of the service rules relating to Government servants. Standing Orders cannot be ignored and they are binding and effective between the parties. There is in that context no scope for the application of the principle of natural justice to a relationship where the rights of parties are provided for and determined by statutes, rules framed under the statutes and other statutory instruments. II lays down that the Labour Courts are the creatures of statute and they have no power or authority whatever except those conferred by the relevant statutes which have been passed from time to time. Balkrishna Ayyar, J. who decided that case at p. 484 of the report observed as follows:

'Mr. Lakshminarayan Reddi next said that notwithstanding the provisions of Standing Order 18(a), the management cannot terminate the services of an employee except for misconduct. I can find no support to this argument anywhere. The decisions I have already referred to are authorities for quite the contrary position. The general position is this: leaving out of account situations created by strikes and lock-outs, a management can put an end to the employment of a worker in the following ways:

(1) By dismissing him for misconduct. In that case a fair and proper enquiry will have to be held and the worker concerned given an adequate and reasonable opportunity of defending himself. (2) By retrenchment that is to say, by his services being terminated on the ground that the staff is surplus to the requirements. Vide the decision of the Supreme Court in Barsi Light Rly. Co. Ltd. v. K.N. Toglekar. 1957-1 Lab LJ 243: (S) AIR 1957 Cal 121 at p. 132. Where workers are retrenched they will been titled to compensation in the manner provided for by the statute. (3) Lay off. This would be so to speak temporary retrenchment. (4) Termination in conformity with the conditions of the contract between the parties'.

The learned Judge there in the Madras decision took the view that termination in conformity with the conditions of the contract between the parties under the standing orders was not always and necessarily a retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act. We respectfully agree with that view.

33. It is not necessary here at this stage to discuss in detail the view taken by the Bombay High Court in Municipal Corporation of Greater Bombay v. Labour Appellate Tribunal of India. reported in : (1957)IILLJ37Bom on the point that retrenchment is discharge of surplus labour or staff following the Supreme Court decision in (S) AIR 1957 SC 121. But then in the Bombay decision in Devidayal Nanakchand v. State Industrial Court Nagpur, reported in : (1961)ILLJ167Bom it has been said that the definition of 'retrenchment' in Section 2(oo) of the Industrial Disputes Act though an artificial one is certainly very wide and would include termination of services even in pursuance of the Standing Order. It is laid down by the Bombay decision that the observance of the provisions of Section 25F is a condition precedent to retrenchment of a workman to whom this section applies. One part of this decision is no longer good law having regard to the Supreme Court decision that the payment of compensation under Section 25F is not a condition precedent. The other part of the decision is also not in our opinion contrary to the view and interpretation we are laying down.

34. The Supreme Court decisions have laid down that even termination of services under the Standing Orders can in certain circumstances, such as colourable exercise of power, unfair labour practice or victimisation or mala fide, could be retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act. But outside such cases, termination under the Standing Order is not retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act.

35. That is why this Court is of the opinion that while all retrenchment is termination of service all termination of service is not retrenchment under Section 2(oo) of the Industrial Disputes Act. It depends on the facts and circumstances of each case. Mere invocation of the Standing Order for termination of service will not ipso facto take the termination beyond the jurisdiction of the Industrial Tribunal under the Industrial Disputes Act, for that Tribunal will even then in appropriate cases have jurisdiction to find that the invocation of the Standing Order was capricious or arbitrary or mala fide or was the result of victimisation or unfair labour practice and set aside the termination or award compensation as under retrenchment as the facts may justify. In other words, termination under the: Standing Order is not necessarily and always retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act. To come to any other conclusion in our opinion, would be meaningless for that would practically repeal the validity of the standing orders on the point of termination of service and payment of compensation, a result which we do not think was intended either by the Industrial Disputes Act or by the Standing Orders Act.

36. In the case of Workmen of Dewan Tea Estate v. Their Management reported in : (1964)ILLJ358SC the Supreme Court again emphasised the importance of the Standing Orders and discussed the question of conflict between the Act and the Standing Order. But then there the question turned more on the ambit of Section 2(kkk) dealing with lay-off, with which we are not concerned in the present appeal.

37. The Tribunal and the judgment under appeal mention the fact of closure. Closure however, was not the case made by the appellant company. The point about closure is really taken here in the ground of appeal before us. It is only material in computing the compensation under Section 25FFF of the Industrial Disputes Act because it limits in the proviso the amount of compensation in this way:

'Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under Clause (b) of Section 25F shall not exceed his average pay for three months'.

It is not necessary for us to discuss in detail the arguments about closure. The appellant contends that both the Tribunal and the learned fudge went wrong in coming to a conclusion that there was no closure. The notice dated the 9th July, 1959, definitely stated that there was no work for the workmen in the distillery. A skeleton staff only was working. The immediate history also shows that from the 23rd April, 1959 there was in fact a closure and on agreement on the 25th May, 1959 to revive the business became abortive on the grounds mentioned above Therefore, the appellant contends that on these admitted facts which were on the record before the Tribunal and before the learned Judge and there being no oral evidence disputing the facts, the decision should at least have been that it was a closure as an irresistible inference from these admitted facts. It was not a question whether they made a case of closure. The appellant submits that it could not make a case of closure and it did not on the ground that its whole case proceeded on the ground that it was a case of termination under the express provision of Clause 13 of the Standing Orders Act and therefore, they invoked the Standing Orders to terminate the services. It is not necessary for them to plead closure in that context.

38. We are satisfied that the appellant's defence under Clause 13 of the Standing Orders must be upheld in this case independently of any question of closure. The appellant, therefore, is only liable to pay in accordance with the terms and conditions laid down in Clause 13 of the Standing Order.

39. We shall make only a passing reference on this point to Section 25J of the Industrial Disputes Act. It only provides that the provisions of this Chapter VA dealing with layoff and retrenchment under the Industrial Disputes Act shall have effect notwithstanding anything inconsistent therewith contained in any other law including standing orders made under the Industrial Employment (Standing Orders) Act 1946. As we have held that it is not retrenchment nor lay-off, the provisions of this Chapter VA consequently have no application whatever.

40. If we had come to a different conclusion that this termination was retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act even then we would have come to the conclusion that in am event Section 25FFF could have applied to the rase of the appellant on the ground that from the surrounding circumstances the only possible conclusion would be that there was in fact a closure of the business of the distillery under proviso to Sub-section (1) thereof.

41. We shall make here a reference to the principles laid down by the Supreme Court in Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union, reported in : (1957)ILLJ235SC . The Supreme Court in that case laid down us follows:

'The object of all labour legislation is firstly to ensure fair terms to the workmen, and secondly to prevent disputes between employers and employees, so that production might not be adversely affected and the larger interests of the public: might not suffer'.

But the Supreme Court there lays down this wholesome principle:

'Both these objects again can have their fulfilment only in an existing and not a dead industry. Hence the industrial dispute to which the provisions of the Act apply is only one which arises out of an existing industry'.

Therefore, the Supreme Court says that--.Where the business has been closed down and it is either admitted, or found that the closure is real and bona fide, any dispute arising with reference thereto will fall outside the purview of the Industrial Disputes Act. And that will a fortiori be so, if a dispute arises--if one such can be conceived, after the closure of the business between the quondam employer and employees'.

On that principle the Supreme Court in that case set aside the award of compensation to the workmen made by the Tribunal. As already pointed out here, what else can be said in the case of a distillery business where the very license under which it was being carried on was not granted and the very raw materials on which it is prepared was not supplied. Those are admitted facts in this case, The natural inference which could be drawn from the surrounding circumstances in that event would have been to hold that it was a closure.

42. This conclusion is all the more reinforced by the fact that the appellant company was anxious to start the work in some form or other even with 100 workmen on rotation basis provided the licence was obtained and the raw materials were supplied. But neither eventuality helped the appellant company actually to start the business and lift the closure. Observations to the same effect were also made by the Supreme Court in Banaras Ice Factory Ltd. v. Its Workmen, reported in : (1957)ILLJ253SC . Although that was not a case of closure out the Supreme Court reiterated the view that the objects mentioned above can have fulfilment only in an existing and not a dead industry.

43. For these reasons we set aside the judgment of the Industrial Tribunal. We also set aside the judgment and order of D.N. Sinha, J. in so far as he discharged the Rule but confirm his judgment in so far as he made the Rule absolute in respect of 67 workers represented by the Russa Distillery Employees' Union. In other words, the order of D.N. Sinha, J. discharging the Rule in respect of the remaining 246 workmen represented by the Russa Distillery Workers' Union is set aside and a Writ in the nature of certiorari quashing the Award in respect of them do issue.

44. There is a cross-appeal by the respondent opposite part) No. 4 in respect of these 67 workers. For reasons already stated in this judgment the cross-appeal is dismissed.

45. There will be no order as to costs either in this appeal or in the cross-appeal.

Masud, J.

46. I agree.


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