S.K.DAS - (1.) , J. : This appeal by special leave from an award dated 10-10-1956, made by the Industrial. Tribunal, Bihar, raises an important question of interpretation in the matter of a disqualification for lay-off compensation under S. 25E read with S. 25C of the Industrial Disputes Act, 1947 (hereinafter called the Act), and so far as we know, this is the first case of its kind in which the expression "in another part of the establishment" occurring in cl. (iii) of S. 25E has come up for an authoritative interpretation.
(2.) THE facts are simple and are shortly set out below. THE Associated Cement Companies Ltd., hereinafter called the Company, have a number of cement factories in different States of the Indian Union as also in Pakistan. THEre are two such factories in the State of Bihar, one at Khelari and the other at a place called Jhinkpani in the district of Chaibasa in Bihar. THE latter factory is commonly known as the Chaibasa Cement Works. THEre is a limestone quarry owned by the same Company situate about a mile and a half from the Chaibasa Cement Works, the quarry being known as the Rajanka limestone quarry. Limestone is the principal raw material for the manufacture of cement and the Chaibasa Cement Works depended exclusively for the supply of limestone on the said quarry. At the time relevant to this appeal there were two classes of labourers at the quary, those employed by the Company through the management of the Chaibasa Cement Works and others who were engaged by a contractor. THEre was one union known as the Chaibasa Cement Workers' Union, hereinafter called the Union, of which the Company's labourers both at the Cement Works and the quarry were members. THEre was another union consisting of the contractor's labourers which was known as the A. C. C. Limestone Contractor's Mazdoor Union. On 3-1-1955, the Union made certain demands on the management on behalf of the labourers in the limestone quarry, but these were rejected by the management. THEn by a subsequent letter dated 18-2-1955,the Central Secretary of the Union gave a notice to the Manager of the Chaibasa Cement Works to the effect that the Union proposed to organise a general stay-in-strike in the limestone quarry from 1-3-1955, if certain demands, details whereof are unnecessary for our purpose, were not granted on or before 28-2-1955. A similar notice was also given on behalf of the A. C. C. Limestone Contractor's Mazdoor Union. THEse notices led to certain efforts at conciliation which, however, failed. On 24-2-1955, the management gave a notice to all employees of the Chaibasa Cement Works, in which it was stated that in the event of the strike materalising in the limestone quarry, it would be necessary for the management to close down certain sections of the factory at Jhinkpani on account of the non-supply of limestone; the notice further stated that in the event of such closure, it would be necessary to lay off the workers not required during the period of closure for the sections concerned. THE strike commenced on 1-3-1955, and lasted till 4-7-1955. On 25/03/1955, the management wrote to the General Secretary of the Union intimating to him that the workers in certain departments referred to in an earlier letter dated 19-3-1955, would be laid -off with effect from 1-4-1955. On 28/03/1955, the management gave the lists of employees who were to be laid-off with effect from 1-4-1955, and they were actually laid-off from that date. During the period of the strike fresh efforts at conciliation were made and ultimately the strike came to an end on 5-7-1955, when the Central Government referred the dispute between the management and the workers of the limestone quarry to the Central Industrial Tribunal at Dhanbad. This reference was, however, withdrawn by mutual consent in terms of a settlement arrived at 7-12-1955. THE details of this settlement are not relevant to this appeal. Thereafter, a demand was made by the Union for payment of lay-off compensation to those workers of the Chaibasa Cement Works who had been laid-off for the period 1-4-1955 to 4-7-1955. This demand was refused by the management. This gave rise to an industrial dispute which was referred by the Government of Bihar under S. 10 of the Act of the Industrial Tribunal, Bihar. The terms of reference set out the dispute in the following words: "Whether the workmen of the Chaibasa Cement Works are entitled to compensation for lay-off for the period from 1/04/195 5/07/1955". The parties filed written statements before the Industrial Tribunal and the only witness examined in the case was Mr. Dongray, Manager of the Chaibasa Cement Works, Jhinkpani. At this point it is necessary to read the two sections of the Act which relate to the right of workmen to lay-off compensation and the circumstances in which they are disqualified for the same. The right is given by S. 25C and the disqualification is stated in three clauses of S. 25E, of which the third clause only is important for our purpose. We now proceed to read Ss. 25C and 25E so far as they are material for our purpose. "Section 25C. (1) Whenever a workmen (other than a 'badli' workman or a casual workman) whose name is borne on the muster rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer is laid-off, he shall be paid by the employer for all days during which he is so laid-off, except for such weekly holidays as may intervene,. Compensation which shall be equal to fifty percent, of the total of the basic wages and dearness allowance that would have been payable to him had he not been so laid-off." "Section 25E. No compensation shall be paid to a workman who has been laid-off- (i) ................ (ii) ............ (iii) if such laying-off is due to a strike or slowing-down of production on the part of workmen in another part of the establishment." Now, the central point round which the controversy between the parties has raged is this. Was the lay-off of the workers in certain sections of the Chaibasa Cement Works due to a strike on the part of workmen in another part of the establishment within the meaning of cl. (iii) of S. 25E? In other words, was the limestone quarry at Rajanka part of the establishment known as the Chaibasa Cement Works? The contention of the management was and is that the Cement Works and the limestone quarry form one establishment within the meaning of cl. (iii) aforesaid. The contention on behalf of the workmen is that they are not parts of one establishment but are separate establishments. The learned Chairman of the Industrial Tribunal held for reasons which we shall presently discuss, that the limestone-quarry was not part of the establishment known as the Chaibasa Cement Works and the workmen in the latter were not disentitled to lay-off compensation by reason of cl. (iii) of S. 25E. The correctness of this view is the principal point for decision in this appeal. On behalf of the respondent workmen it has been contended that the conclusion of the Industrial Tribunal that the factory at Jhinkpani and the limestone quarry at Rajanka are not parts of one establishment is a finding of fact and this appeal should be disposed of on that footing. We do not think that this contention is correct and we shall presently deal with it. We propose, however, to examine first the relation between the limestone quarry at Rajanka and the cement factory at Jhinkpani in the light of the evidence given before the Tribunal and the findings arrived at by it; because they will show the process of reasoning by which the Tribunal came to its final conclusion.
(3.) THE evidence was really onesided and the only witness examined was Mr. Dongray, Manager of the Chaibasa Cement Works. Now, the relation between the limestone quarry and the factory can be considered from several points of view, such as (1) ownership, (2) control and supervision, (3) finance, (4) management and employment, (5) geographical proximity and (6) general unity of purpose and functional integrality, with particular reference to the industrial process of making cement. On all the above points Mr. Dongray gave evidence. It was not disputed that the Company owned the limestone quarry as also the factory and there was unity of ownership. Mr. Dongray's evidence further showed that there was unity of control, management and employment. He said that the limestone quarry was treated as a part and parcel of the Chaibasa Cement Works, that is, as a department thereof and he as the Manger was in over all charge of both, though there was a Quarry Manager in charge as a departmental head under him. On this point Mr. Dongray said : "THEre is a Manager appointed for the quarries. THE Manager is working under me. THE Cement Work itself has about eight or nine departments under it. THEre are heads of each department. THE Manager of the quarry has the same status as the heads of other departments at the Cement Works." This was supported by a circular letter dated 11/03/1952, which said that the entire factory and the associated quarries were under the sole control of the Manager, who was responsible for maintaining full output at economic cost up to the expected standard. THE circular letter further stated that all orders and contracts were to be issued by the Manager for the working of the factory and quarries and the relevant bills were to be passed by him. As to finance and conditions of employment, Mr. Dongray said : "All requirements of the quarry are sent by the Manager there to the office of the Cement Works and if they are available in the Cement Works Stores, they are issued from there; otherwise I indent them from the Bombay office or purchase them locally. THEre is no account office in the quarries and their account is maintained in the Cement Works' Office. I as Manager of the Chaibasa Cement Works make payment for the indents or requirements of the quarries stated above. THE quarry has no separate banking account. THE Quarry Manager is not entitled to operate banking account apart from myself. At the quarries there are daily-rated workers and monthly paid staff. To the daily-paid workers in the quarries, the cashier of the Cement Works or his Assistant makes payment, when required. THE monthly-paid staff of the quarries come to the Cement Office for receiving payment. In the Cement Works we have got a system of allocation of work for different jobs every day. It is done by the Departmental Heads. Same system privails in the quarries also. THE Quarry Manager does the distribution as head of that department. Attendance Register is maintained at the quarry in the same way as it is done in the different departments of the Cement Works. THEre is only one common pay sheet for all the monthly-paid staff, whether he is at the factory or in the quarries. For the daily-rated workers we have got different sheets departmentwise and there is one such sheet for the daily workers of quarry as well. THEre is one summary sheet of the payment showing the payment of all the departments including to payment in the quarries as well. I have to send statutory intimation to the authorities under the Mines Act regarding the quarries for working faces and other accidents etc. THE staff and workers working in the quarries are transferable to the Cement Works according to the exigencies of the work and also vice versa. THEre have been a few instances of such transfer. THE terms and conditions of service, for instance, T. A., leave, provident fund, gratuity, etc., are same for workers in the Cement Works as also the workers in the quarries. We got the application of the statutory provident fund rules extended to our department in the quarries also. THE report of the working of the quarry comes to me from the Manager there from time to time. I as Manager of the Cement Works make payments of royalties in respect of limenstones raised from the quarries. Payments for compensation maternity benefits, accidents, etc., in the quarry are made under my authority by the factory office and not by the Quarry Manager." Exhibits, 1 to 26 filed on behalf of the management, which showed the working of the quarry and the factory, supported the aforesaid evidence of Mr. Dongray; they showed, as has been observed by the Tribunal itself, that the management was maintaining one common account and the final authority on the spot in respect of the quarry as also in respect of other departments of the factory was Mr. Dongray, the Manager. THEre were also other documents to show that the transfer of members of the staff from the quarry to the factory and vice versa was made by Mr. Dongray according to the exigencies of service. It is worthy of note here that the Union itself gave notice to the Manager of the factory with regard to the intended strike in the limestone quarry. THE geographical proximity of the limestone quarry was never in dispute. It was adjacent to the factory, being situate within a radius of about a mile. As to general unity of purpose and functional integrality, this was also not seriously in dispute. Mr. Dongray said that limestone was the principal raw material for the manufacture of cement and the cement factory at Jhinkpani depended exclusively on the supply of limestone from the quarry at Rajanka. His evidence no doubt disclosed that some excess limestone was sent to the factory at Khelari as well. On this point Mr. Dongray said : "Limestone from this quarry is at times sent to the Khelari Cement Works, but that is very rare and in small quantity. It is done only in cases of emergency." Mr. Dongray explained that the normal number of departmental workers in the quarry before the strike was in the neighbourhood of 250; but there were about 1,000 workers employed by contractors. THE number of daily-rated workers was in the neighbourhood of 950 and the total monthly-paid staff varied from 100 to 105. THE wages paid to the workers in the quarry were debited to limestone account of the Cement Works, and in the matter of costing, the amount spent on limestone was also debited. THE bank accounts, however, were in the name of the Company and the persons who were entitled to operate on those accounts were Mr. Dongray, the Manager, the Chief Engineer and the Chief Chemist of the Cement Works. All the aforesaid evidence, oral and documentary, was apparently accepted by the Tribunal as correct; for the learned Chairman summarised the evidence of Mr. Dongray without any serious adverse comment. He then referred to certain contentions urged on behalf of the Union, which he said were not without force. We may now state those contentions. The first contention was that under the provisions of the Act, the appropriate authority in respect of the factory at Jhinkpani was the State Government of Bihar, whereas the appropriate authority in respect of the limestone quarry, which was a mine as defined in the Mines Act, 1952, was the Central Government. The second contention was that there were two sets of Standing Orders one for the workmen of the factory and the other for the workmen in the limestone quarry. The third contention was that the limestone quarry had an office of its own and a separate attendance register, and the fourth contention was that under the provisions of the Mines Act. 1952 Mr. Dongray was an Agent in respect of the limestone quarry and there was a separate Manager who was responsible for the control, management and direction of the mine under the provisions of S. 17 thereof. The learned Chairman referred to certain criticisms made in respect of the evidence of Mr. Dongray. One criticism was that though the Company was the owner of both the factory and the limestone quarry, it had also factories and limestone quarries at other places in India and Pakistan and if the test of one ownership were the determining test, then all the factories and limestone quarries of the Company wherever situate would be one establishment. This criticism was not, however, pertinent, because the Company never claimed that all its factories in different parts of India and Pakistan formed one establishment by reason of unity of ownership only. The other criticism was that Mr. Dongray admitted that, if necessary in the interest of service, the workmen at the Chaibasa Cement Works could be transferred to some other factory of the Company and therefore transferability was not a sure test. This criticism was also not germane, because the Company never claimed that transferability was the only sure test. A third criticism also advanced on behalf of the workmen was that Mr. Dongray admitted that all the accounts of the different factories and limestone quarries of the Company were ultimately consolidated into one Profit and Loss Account, a criticism which in our view was equally not pertinent to the question at issue. The learned Chairman then expressed his final finding in the following words : "From these and other admissions made by Mr. Dongray it would appear that it is only for economy and convenience that he was given charge of the control of both the concerns but his capacity was dual. While he was controlling the Cement Works as its Works Manager he had the control of the quarries as its Agent under the Mines Act. It has also to be noted that if both these establishments which are inherently different by their very nature are treated as one and the same, anomalous position may arise in dealing with the employees in the quarries in matters of misconduct and such other things if there is a pendency of a dispute in the Cement Works and vice versa. Obviously, the employees of the Cement Works have to be dealt with by the State Tribunal while the employees of the quarries by the Central Tribunal. This also nullifies the force of the management's contention that both are parts of the same establishment. Considering these it has to be held that the contention of the management fails and that of the Union must prevail." We now revert to the contention urged on behalf of the respondent that this appeal should be disposed of on the footing that the final conclusion of the Industrial Tribunal is a finding of fact. The Judgment of the Tribunal itself shows that the final conclusion was arrived at by a process of reasoning which involved a consideration of several provisions of the Act and some provisions of the Mines Act, 1952. The Tribunal accepted a major portion, if not all, of the evidence of Mr. Dongray; but it felt compelled to hold against the appellant despite that evidence by reason of an anomalous position which, it though, would arise if the factory and the quarry were held to be one establishment. The question before the Tribunal, and this is also the question before us, was the true scope and effect of cl. (iii) of Section 25E of the Act, with particular reference to the expression "in another part of the establishment" occurring therein. That question was not a pure question of fact, as it involved a consideration of the tests which should be applied in determining whether a particular unit is part of a bigger establishment. Indeed, it is true that for the application of the tests certain preliminary facts must be found; but the final conclusion to be drawn therefrom is not a mere question of fact. Learned counsel for the respondent is not, therefore, justified in asking us to adopt the short cut of disposing of the appeal on the footing that a finding of fact should not be disturbed in an appeal by special leave. In this case we cannot relieve ourselves of the task of determining the true scope and effect of cl. (iii) of S. 25E by adopting the short cut suggested by learned counsel. ;