MITTER - (1.) THESE two appeals by special leave arise but of an award of the Industrial Tribunal, Allahabad following two references dated 24/01/1962 by the State of U. P. under Section 4-K of the U. P. Industrial Disputes Act. 1947. The subject matter of both the references was, whether the employers (the appellants before this Court) should be required to pay bonus to their workmen for the year 1960-61, and if so, at what rate?
(2.) THE U. P. Electric Supply Co., Ltd. (the appellants herein) had two electricity undertakings, one at Allahabad and the other at Lucknow. It carried on the business of generation and distribution of electricity under two licences one for Allahabad and the other for Lucknow within the areas specified therein. In pursuance of the provisions of paragraph 12 of the said licences the U. P. Electricity Board compulsorily acquired the said undertakings of the company including the business of generation and distribution of electricity in the areas covered by the licences with effect from 16/09/1964. THE Tribunal had however entered on the reference on 29/01/1962 and its proceedings continued down to 16/11/1965 when a common award was made directing the employers to pay three months' basic wages as bonus to all the workmen entitled thereto for the year 1960-61. THEse appeals are against the said award. On behalf of the appellant, a preliminary point was raised, viz., that after the appellants' undertaking was taken over in September, 1964 the industrial dispute, if any, between it and its workmen ceased to exist. The reasoning behind the argument was that if the industry itself disappeared any adjudication with regard to a dispute which had arisen in the past would be a fruitless errand and any award made on the reference thereafter would be ineffective. Our attention was drawn to certain decisions of this Court in support of the above reasoning. Before we proceed to do so, we think, it will be proper to examine the question as if it were res integra. In our view, the broad proposition put forward by counsel for the appellant that as soon as a particular industry ceases to function any adjudication in respect of a dispute which had occurred prior thereto becomes abortive cannot be accepted. It may be that an adjudication which concerns only the future working of the industry becomes redundant when the industry itself comes to an end. If the dispute is one which relates to the past working of the industry and in particular where the claim of the workmen is for benefits which according to their view had accrued to them in the past it can hardly be said that the adjudication is without any purpose. If the workmen ask for better service conditions like the revision of wage scales, dearness allowance, medical and other facilities, gratuity etc. it would be useless for the Tribunal to complete the adjudication and award how the dispute vice conditions etc, ought to be bettered or revised where the industry is non est. Where however the dispute as in this case, is over a claim to benefits by way of bonus for work done in the past, it would be the duty of a for Tribunal to complete the adjudication and make its award. If the Tribunal finds that because of the service rendered by the workers in the past an industry reaped profits whereof a portion should go to the workmen it should not lie in the mouth of the employers to say that inasmuch as they have ceased to carry on business their obligation to pay for service rendered in the past should be wiped out. There is no logic in the submission made on behalf of the appellants that the ascertainment of the liability even with regard to the working of the industry in the past can take place only during the subsistence of the relationship of master and servant between the employers and the employed.
(3.) COUNSEL for the appellant referred to certain provisions in Chapter V-A of the Industrial Disputes Act, 1947 as illustrative of his argument that in cases where legislature felt it necessary to provide for relief to workers even after the closure or transfer of an industry it made express provisions therefor. In particular reference was made to Ss. 25-FF and 25-FFF to show that by the first of the above provisions the legislature had provided for compensation to certain workmen. where the ownership or management of an undertaking was transferred, whether voluntarily or by operation of law. Similarly compensation had been provided for in S. 25-FFF for workmen in cases where on the closing down of an undertaking for any reason whatever workmen were to be treated as having been retrenched thus giving them the benefit of retrenchment compensation. Reference was also made to S. 33-C of the Act under which a workman could approach the appropriate Government for recovery of moneys due to him under, a settlement or an award under the provisions of Ch. V-A of the Act. In our view, by these provisions the legislature sought to give redress to work in the contingencies mentioned in the said sections which are of common occurrence. These sections do not lay down that on the closure or transfer of an undertaking the employers were to be relieved of all other obligations to or claims of the workers. The preamble to the Industrial Disputes Act which expressly aims at preventing strikes and lockouts is in pari materia to the U.P. Industrial Disputes Act i.e. "to make provision for the investigation and settlement of industrial disputes, and for certain other purposes" cannot be read down to mean that the statute was being enacted only for the purpose of securing industrial peace so far as the future working of the industry was concerned. No doubt the main object of the Act is to ensure industrial peace but equally important is the purpose behind the Act that the workmen should not be deprived of by the legitimate share of profits made by the industry. The central object of the Act is to preserve industrial harmoney which would be meaningless if the workers of a particular industry were to be deprived of benefits of services rendered in the past. The first decision of this Court which bears on this points is the case of Pipraich Sugar Mills, Ltd, v. Pipraich Mills Mazdoor Union., 1956 SCR 872 = ( AIR 1957 SC 95). The facts in that case were shortly as follows: Owing to continued losses suffered by the appellant its management asked the State Government either to increase its quota of sugarcane or to permit it to sell the mills. In pursuance of the Government's permission to sell, the mills were sold to a Madras party. As the crushing season was on at that time the appellant obtained from the purchaser a lease of the mills for the then current season agreeing to deliver possession of the mills on the termination of the lease. There were negotiations between the appellant and the Madras party for the former dismantling the machinery and erecting it at Madras for a lump consideration expecting to perform the contract through its own workmen. On coming to know of this the workmen assumed a hostile attitude to the whole transaction and gave a notice of strike. There were negotiations between the parties thereafter which averted the strike and the crushing went on till the season came to an end. Thereafter the workmen refused to help in the dismantling of the mills. The Government however declined to interfere with the sale of the machinery and the management discharged the workers. In view of the inability of the appellant to take up the contract, the purchaser entered into direct negotiations with the workmen and concluded an agreement with them for dismantling the machinery. The net result was that the appellant lost the contract, on which as admitted by the respondent, it would have earned a profit of at least Rs. 2 lakhs. The workers having taken the benefit of a direct contract with the purchaser for dismantling the machinery, next turn their attention to the appellant, and on the basis of certain earlier letters sent a notice to it on 19/04/1951 asking for distribution among the workers of the 25 Per Cent labour-share of the profits on sale of machinery. The State Government referred to an Industrial Tribunal the dispute: "Whether the services of workmen, if so how many, were terminated by the concern without settlement of their due claims and improperly; and if so, to what relief, are the workmen concerned entitled?" The Tribunal held the closure of the business and the sale of the machinery to be bona fide, that the conduct of the workmen had been throughout unfair and, such as to disentitle them to compensation but that the promise contained in certain letters of the company to pay 25 per cent profits realised by the sale of the mills was binding on the management. It was held that Rs. 45,000.00 was thus payable to the workmen. The appeal of the management to the Labour Appellate Tribunal being rejected, the matter came to this Court by special leave. One of the points urged on behalf of the appellants was that it was a condition precedent to the exercise by the State of its power under S. 3 of the U. P. Industrial Disputes Act that there should be an industrial dispute and that there could be no industrial dispute unless there was a subsisting relationship of an employer and an employee; and inasmuch as the appellant had sold its mills and discharged the workmen on 21/03/1951 no question of any relationship of employer and employee surviving thereafter could arise and the notification under S. 3 of the Act on 16/11/1951 was incompetent. ;