- (1.) The appellant is a limited Company, which had been carrying on business in crushing sugar cane at a place, called Pipraich in Gorakhpur District from the year 1932. In 1946 it decided to expand its business, and with that object, sold its old machinery which had a crushing capacity of 160 tons per day, and purchased a new one with 650 tones capacity. The new plant was installed in 1947, and it is actually started working in 1948-49. During this period the sugar industry was passing through a crisis owing to shortage of sugar-cane, and in consequence, the Government assumed control of its production and supply. The quota which was allotted to the appellant's Mill proved too small to its being worked profitably with the result that in 1948-49 and 1949-50 the Company sustained losses which according to the appellant came to Rs. 2, 67, 042- 7- 4. After several unsuccessful attempts at getting a larger supply, the management wrote to the Government on 11-5-1950 either to increase their quota or to permit them to sell the Mills. In October 1950 the Government granted permission for the sale of the plant and machinery, and pursuant thereto, the management sold them to a Madras party. As the crushing season was then on, the appellant obtained from the purchaser a lease of the Mills for the current season agreeing to deliver possession thereof on the termination of the lease. It should be mentioned that the appellant was also carrying on negotiations with the purchaser for itself dismantling the machinery and erecting it at Madras for a lump consideration, expecting to perform the contract through its own workmen.
(2.) When the workmen became aware of the agreement of sale, their reaction to it was thoroughly hostile, and acting through their Union the respondent herein, they decided to prevent the transaction going through, as otherwise they would be thrown out of employment. With that object, they moved the Government to cancel the permission granted to the appellant for the sale of the Mills, and they also passed a resolution on 26-12-1950 to go on strike from 12-1-1951 and communicated the same to the appellant. This led to correspondence between the parties and as that is the foundation of the claim for compensation put forward by the respondent and awarded by the Tribunal it becomes necessary to set it out with sufficient fullness. On 3-1-1951 the Managing Director offered through the manager of the Mills, to allot 25 percent of the profits on the sale transaction with the Madras party on certain terms and subject to the condition "that the notice of strike, should be withdrawn at once and today, so that arrangement of work could be made". To this, the reply of the Union on 5-1-1951 was as follows: "With reference to the assurance given by the Managing Director communicated by your goodself to us under your No. 975 dated 4-1-1951, asking us to withdraw the notice of strike we regret to inform you that our fight is with the Government, which is not solved with this only. Our members are bent upon keeping the sugar mills here at any cost, either by strike, satyagrah etc. or through any other means guided by our federation, otherwise there is no assurance of employment of thousands of creatures." Then the letter proceeded to take exception to some of the terms, and finally wound up by stating that the workmen were waiting for their President Kashinath Pandey to advise them in the matter. Replying to the objections raised by the respondent to some of the terms, the management wrote on 8-1-1951 that they were ready to reconsider them, but insisted on the withdrawal of notice of strike as "the chief point". On 9-1-1951 Kashinath Pandey came to Pipraich, and discussed the matter with the management, and following upon it, the General Manager wrote to the respondent on 10-1-1951 that "in case the strike notice was withdrawn at once, he would accede to the following points raised by the Union", and then the points were set down. The letter concluded by stating that the amount of compensation "will not be less than a lac". The respondent replied to this on the same day that the workers were waiting for the "final order" of Kashinath Pandey in the matter and assured the management that "in the meantime the strike was not coming off from the 12th". After this the appellant did not hear from the respondent, the strike also did not take place, and the crushing went on till the end of January 1951, when the season came to an end. One of the points that arises for our determination in this appeal is whether on this correspondence there was a concluded and binding agreement that the appellant should pay 25 percent of the profits on the sale transaction to the workmen.
(3.) To continue the narration, the lease having expired with the crushing season, the purchaser came over to Pipraich to take delivery of the Mills and to arrange for the machinery being dismantled and removed to Madras for being erected there. The appellant who, as already stated, was negotiating to get the dismantling done for a lump consideration found that its workman were as hostile to it as ever, and refused to help in the work. To adopt the language of the respondent in its written statement "they declined out of sentiment to dig their own graves". After fruitless attempts at getting them to co-operate in dismantling the machinery the management put up the following notice on 28-2-1951: "The workers of Pipraich Sugar Mills Ltd. should know that we have sold our Mills to Madras party under the permission of the Government. The Party has arrived for the dismantling. Under the terms of agreement we are bound to help them in this work. So the workers should know that we can do this favour that we can take contract of dismantling here and erection in Madras and keep the workers engaged and request the purchasers for providing them in their concern. Hence it is notified that workers who are not ready to co-operate they should consider themselves to be discharged from 1-3-1951: Fifteen days' notice is served on the workers. Those who create obstructions will be deprived of benefits promised to them". But the Union could not reconcile itself to the prospect of the Mills being shifted, and on 4-3-1951, Kashinath Pandey wrote a letter to the Government threatening to go on hunger strike, if the Mills were to be shifted from Pipraich. The workmen were thus in no mood to accept the terms contained in the notice dated 28-2-1951, and so, the management had to issue further notice on 14-3-1951 in the following terms: "Whereas the workers have already been notified that we have sold our entire plant to a Madras party who have arrived to take charge of the Machines and whereas we have to hand over the plant from 15-3-1951 to the purchasers and thus there will be no work for our workers and whereas the Mazdoor Union has already refused our suggestion to engage the workers in the work of dismantling and erection of Madras. Now in pursuance of our notice dated 28-2-1951, it is notified that the following workers have been discharged from the services since 1-3-1951 subject of course to the payment of 15 days wages. The workers are hereby asked to take their wages of 15 days on the 15th and 16th instant". It appears from a notice dated 16-3-1951 sent by the appellant to the respondent, that after the notice dated 14-3-1951 were issued, Kashinath Pandey had a discussion with the management, as a result of which the date of termination of service of the workers was extended from the 15th and 21st March pending the decision of the Govt. on the "future programme of the Pipraich factory", the workman agreeing on their part "to take up the dismantling of the Mill after the said date". But the government declined by its letter dated 21-3-1951 to interfere with the sale of the machinery, and in accordance with the understanding reached above, the workers should have co-operated with the appellant in dismantling the machinery from the 21st March. But they declined to do so, and thereupon, acting in accordance with its notices dated 28-2-1951 and 4-3-1951, the management duly discharged them. In view of the inability of the appellant to take up the contract, the purchaser entered into direct negotiations with the workman, and on 1-4-1951 concluded an agreement with them for dismantling the machinery. The net result was that the appellant lost a contract on which, as admitted by the respondent, it would have earned a profit at least Rs. 2 lakhs. The workers having taken the benefit of a direct contract with the purchaser for dismantling the machinery, next turned their attention to the appellant, and on the basis of the letters dated 3-1-1951 and 10-1-1951 sent a notice to it on 19-4-1951 asking for distribution among the workers of the "25 percent labour share of the profits on sale of machinery". By its letter dated 19-6-1951 the appellant repudiated the claim and stated: "Then we also refer you to our notice dated 27-2-1951 in which we appealed to the labour to co-operate with us so that we might take the contract of dismantling here at Pipraich and erection at Etikoppaka and said definitely that those who do not co-operate should consider themselves discharged. This would have given us a good saving to meet the demand of the labour, but as you inspite of our appeal and notice refused to co-operate we had to suffer heavy loss for which we are directly responsible". Thereafter, the respondent moved the Government to take action in the matter, and the result was that on 16-11-1951 the U. P. Government issued a notification under S. 3, U. P. Industrial Disputes Act (28 of 1947), hereinafter referred to as the Act, referring the following disputes to the adjudication of the Industrial Tribunal: "Whether the services of workmen, if so how many, were terminated by the concern known as Pipraich Sugar Mills Ltd., Pipraich, District Gorakhpur without settlement of their due claims and improperly; and if so, to what relief are the workmen concerned entitled -;