Grover, J. - (1.) This is an appeal by special leave against the award of the Special Industrial Tribunal, Orissa, in which the principal question which has to be determine is whether there was a closure of its undertaking by the appellant Company pursuant to a notice issued on October 3, 1967, to its workmen on account of the Gherao, if it is permissible to use that expression, of the staff and Officers of the Company in its Administrative Office building from about 2 P. M., of October 1, 1967 till 5 A. M. of the morning of October 2, 1967, and if it was not a closure whether there was a refusal by the management of the Company to employ its workmen amounting to a lock out.
(2.) The material facts may be succinctly stated. The appellant is a public Company having its registered office at Choudwar in the district of Cuttack. It maintains some branch offices at Calcutta and Madras. It carried on the business primarily of manufacturing and selling iron pipes and poles and has been employing a large number of workmen, their number being 922 on the relevant date. According to findings of the Tribunal, which have not been questioned it is a prosperous concern an between the years 1959 and 1964 the appellant paid its employees bonus equivalent to four months wages every year except in 1961-62. For the subsequent three years bonus was paid at the rate of four per cent under the Payment of Bonus Act, 1965 (Act XXI of1965). The workmen were not satisfied with the payment at the rate of four per cent an raised a dispute. On August 22, 1965, they made a demand for bonus at the rate of 20 per cent of their annual salary or wages for the accounting year 1966-67. Certain correspondence started between the Assistant Labour Commissioner, the Management and the General Secretary of the Union (Kalinga Tubes Mazdoor Sangh). On September 21, 1967, the Manager (Administration) notified that bonus at the rate of 4 per cent for the year 1966-67 had been sanctioned by the Management. The General Secretary of the Union asked the Manager to review the above notice and to send a copy of the balance sheet for the accounting year in question. On September 25, 1967, the District Labour Officer informed the Manager that he had fixed October 2, 1967, (11 A. M.) for discussion in the matter of the payment of bonus. The Manager sent a copy of the balance sheet to the General Secretary of the Union on October 1, 1967. On that day the General Secretary asked the Assistant Labour Commissioner to examine the profit and loss account for the year 1966-67 and to apply the requisite formula under the Payment of Bonus Act. On October 1, 1967 about 150 workmen assessmbled after 2 P. M. at the gates of the Administrative Building in which about 40-47 members of the staff were present. They were not allowed to leave the Building till 5 A. M. next day. Meanwhile the Officer-in-charge Choudwar Police Station, Executive Officer, Notified Area Council, Choudwar (a First Class Magistrate), the Additional Superintendent of police, Cuttack, the Sub-Divisional Officer Sadar Cuttack and the Assistant Labour Commissioner went to the place where all this was happening. The factory remained closed on October 2, 1967 on account of Gandhi Jayanti. On the morning of October 3, 1967 the Management issued a notice declaring a closure of the factory. It is common ground that uptill now the factory has remained closed. The Management offered to pay wages for one month in lieu of notice and reduced compensation under the proviso to sub-section (1) of Sec. 25-FFF of the Industrial Disputes Act, 1947 (hereinafter called the Act). It has not been disputed that out of 922 workers, 613 workers accepted compensation under the aforesaid provision. The remaining workmen, however, neither agreed to nor accepted any compensation. The reference under the Act was made on November 3, 1967 by the Government of Orissa primarily for adjudicating whether the appellant had declared a lock out by means of the notice dated October 3, 1967 or whether it was a closure.
(3.) The notice which was issued by the Management on the morning of October 3, 1967 may be reproduced: "The Management hereby notified that as a direct consequence of the continued and sustained illegal activities of the workmen and their pre-concerted and pre-meditated acts since 1st October 1967 by illegally keeping confined and forcibly resisting the exit of the staff and some of the officers of the Company in the Administrative Office building from about 2 P. M. of the 1st October 1967 till they were forcibly rescued by the Police authorities at about 5 A. M. on the morning of 2nd October 1967 and thereafter continuing with their illegal trespass into the premises of the Company in the aforesaid Administrative Office, and refusal to allow entry of any of the staff and officers of the Company into the said building; and the consequent refusal by the officers and supervisory staff of the Company to carry on their normal work and discharge their functions being reasonably apprehensive of their safety, it has become impossible to continue to run the factory and its subsidiary Sections and Departments any further. The Company hereby notifies that there will be a complete closure of the Factory on and with effect from 6 A. M. of the 3rd October 1967." Before the Tribunal the main controversy centered on the question whether there was a closure of its undertaking by the appellant or whether there was a refuse to employ the workmen which would fall within the expression 'Lock out' as defined by Section 2 (1) of the Act. The Tribunal found;- (i) Since the morning of October 3, 1967 there had been no production by the factory of the appellant and the operatives had not been employed; (ii) By September 30, 1967 there was absolutely no idea to close down the undertaking or business as the Annual General Meeting of the Company had taken place on that date and there was no evidence that there was any meeting of the Board of Directors or of the share-holders between the Annual General Meeting and the issue of notice of October 3, 1967 to workmen which would show that any decision had been taken to close down the undertaking. (iii) The trade results of the business carried on by the Company during the year 1966-67 would never have induced any business man to close down the undertaking. The Company had earned a net profit of 2.27 lacs o rupees after making payment of 20 lacs of rupees of loan to the Industrial Financial Corporation of India and incurring a loss of Rs. 63, 720 in the disposal of certain loan bonds. Orders for manufacturing pipes had been received till October 2, 1967 for more quantities than were in stock. Similarly orders had been received for manufacturing poles. Therefore the Management could not have intended the closing down of the undertaking till the notice was issued. (iv) The closure of the factory or place of work was a direct consequence of the alleged illegal activities of the work-men and of the refusal by the officers and supervisory staff to carry on their normal work and net due to shortage of raw materials, fuel or power. The Tribunal concluded at the action taken by the Management in issuing the notice on the morning of October 3, 1967 and in suspending the work in the factory amounted to a lock-out and was not a closure. The Tribunal proceeded, however, to state the other steps which were taken by the Management. A notice was given to the workers that they should hand over vacant possession of the quarters which had been allotted to them. A letter was written to the Chief Minister of Orissa on October 2, 1967 that the Management had no other alternative but to close down the factory. Information was similarly sent to the Superintendent of Police Cuttack in which a request was also made for posting a platoon of police force in the factory premises at the Company's cost. A copy of the notice of closure dated October 3, 1967 was sent to the Chief Inspector of Factories. It was pointed out to the Tribunal that the employees in the Branch Offices at Calcutta and Madras had already been discharged and the members of the staff at Choudwar had been notified that their services would be terminated within a period of three months after the closure by January 3, 1968. The Tribunal considered that all such action which had been mentioned was taken consistently with the notice of closure. It was held that the Management had in fact declared a lock-out in the guise of a closure. The Tribunal was considerably influenced by the absence of any evidence that the business of the Company was going to be wound up or the Company was going to be dissolved.;