Decided on April 24,1957



- (1.) JAI Bharat Woollen and Silk Mills of Amritsar is a partnership concern and carries on the business of manufacturing woollen and silk textiles as its name indicates, On 27 April 1956 the firm gave a notice to all its workers in the following terms: The management regrets that due to financial difficulties, other trade reasons and differences between the partners and consequent decision to dissolve the firm, it has been decided to permanently close down its entire factory and business with effect from the close of the first shift on 31 May 1956, from which date the services of all the workers will stand terminated. The firm, however, decided to stop working of the mills with effect from about 1-30 a. m. of 28 April 1956. Naturally the workers complained to the labour inspector on the same day complaining of this closure of the mills and also, of the notice dated 27 April 1956. The labour inspector sent a copy of this complaint to the firm on 1 May 1956. The Textile Labour Association sent its demands to the firm on behalf of its workmen making certain claims. Thereupon conciliation proceedings wore started and ultimately on 13 June 1956 the parties agreed under Section 12 (3) of the Industrial Disputes Act, 1947, to get their disputes reduced into five issues to be decided by the industrial tribunal. These issues read: (a) Whether any bonus for year 1955-56 is due to the workers? If so, what should be the quantum of such bonus and with what conditions, if any? (b) Whether the workers are entitled to full wages during the notice period irrespective of the fact whether they have been laid off? If so, what is the amount due to each one of them? (c) Are the workmen entitled to retrenchment relief under Section 25f of the Industrial Disputes Act due to closure of the factory on 31 May 1956? If so, what is the quantum of such relief? (d) Are the workers entitled to any other compensation and the amount in lieu of the leave with wages under the Factories Act? (e) Was the dismissal of Piara Lal, warper, legal and justified? If so, to what compensation is he entitled? Accordingly on 1 September 1956 these very disputes were referred to the industrial tribunal by the Governor of the Punjab under Section 10 (1) (c) of the Industrial Disputes Act. The validity of this reference is challenged by the firm under Article 226 of the Constitution in the present petition on the ground that the factory had ceased to work in the early hours of 28 April 1956 and all these disputes had arisen thereafter and therefore the agreement under Section 12 (3) and also the reference are invalid. This petition is contested on behalf of the State.
(2.) BOTH parties rely on the decision of the Supreme Court in Pipraich Sugar Mills v. Pipraich Sugar Mills Mazdoor Union 1957 I L. L. J. 235, and the learned Counsel of each side urges that the judgment supports his contention. It is therefore necessary to discuss this judgment at some length. Their lordships of the Supreme Court in this judgment held as a matter of law that The view therefore expressed in Indian Metal and Metallurgical Corporation v. Industrial Tribunal, Madras 1952 II L. L. J. 364, and K. M. Padmanabha Ayyar v. State of Madras 1954 I L. L. J. 469 that the industrial dispute to which the provisions of the Act apply is only one which arises out; of an existing industry is clearly correct. Therefore, where the business has been closed and it is either admitted or found that the closure is real and bona fide, any dispute arising with reference thereto would, as held in K. M. Padmanabha Ayyar v. State of Madras 1954 I L. L. J. 469, fall outside the purview of the Industrial Disputes Act. And that will a fortiori be so, if a dispute arises if one such can toe conceived after the closure on the business between the quondam employer and employees. Their lordships construing Section 3 of the Act further held that That section only requires, apart from other conditions, with which we are not concerned, that there should be an industrial dispute before there can be a reference and we nave held that it would be an industrial dispute if it arises out of an existing Industry. If that condition is satisfied, the competence of the State for taking action under that section is complete, and the fact that the industry has since been closed can have no effect on it. The test for determining1 the power to refer the dispute is laid down by their lordships of the Supreme Court in these words- We think that, on a true construction of Section 3, the power of the State to make a reference under that section must be determined with reference not to the date on which it is made but to the date on which the right which is the subject-matter of the dispute arises, and that the machinery provided under the Act would be available for working out the rights which had accrued prior to the dissolution of the business.
(3.) ON the basis of these principles the learned Counsel for the petitioners urges that the work in the present case ceased on 28 April 1956, on which date the business ceased to be in existence and that all the disputes in the present case arose thereafter.;

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