Decided on January 15,1960


Cited Judgements :-



- (1.)THE facts in this case are shortly as follows :-The petitioner is a company, incorporated under the Indian companies Act, as a private limited company, and had been carrying on business as manufacturer of rubber products and/or rubber goods of diverse descriptions. The company had its factory at 174, Jessore Road, bum Dum Actually, the business was started by Sri Deven Bhattacharjee, the Chairman of the Board of Directors, who belongs to Faridpur and some of the officers of the company are his relations. Originally, in 1956 there was only a Committee of Workers who used to represent the workmen, but since 1956 there have been two unions functioning within the company, being the respondent No. 1 known as "bhattacharjee Rubber Works Workers' Union" and the respondent No. 2 known as the "bhattacharjee Rubber Silpa Karmi Sangha". These unions appear to be rivals and there was continuous friction with each other. It is stated on behalf of the workmen belonging to the respondent No. 1, that the "karmi Sangha" was started by the Bhattacharjees, composed of their own men, in order to split the ranks of the workmen. Be that as it may, the two unions were seriously in conflict. There were lockouts, strikes and slow-down methods indulged by the workmen. It is in evidence that after the lock-out was lifted there was peace inside the factory only for a short time and thereafter disturbances commenced with greater vigor. Work was slewed down and a worker, B. Thakur, was assaulted inside the factory. One Bidyut Babu, a prominent member of the Workers Union declared in front of the factory gate, over a loud-speaker, that there was going to be bloodshed. A bomb was thrown into the canteen and there were several cases of stabbing. In April, 1957 some machinery was being removed for repairs. Some of the workmen obstructed the transfer of the machinery which, they stated. were being taken away to Durgapur for opening another factory. In July, 1957 the President of the Workers' Union wrote to the Manager of the company to say that he was writing with the utmost urgency and did not know whether the manager appreciated the fast deteriorating situation. One Suresh Das. workman, was alleged to have been stabbed by B. Bose and a gang of 50 other workmen on 5th November, 1956. There was a criminal case over this occurrence, but after a protracted trial, the accused persons were acquitted. On 7th May, 1957 one Upadhya was assaulted by Sitaram and four others and he was stabbed by Dhanai Singh. All these five persons were criminally prosecuted and were convicted on a charge under section 147 I. P. C. On 10th and 16th November, 1956 hand-bombs were thrown, and one of them hit the factory premises. There were reports made to the police, of explosion of crackers outside the factory wall on 5th August, 1957. but no prosecution was, however, launched. A machine was broken, but no charge-sheet could be served, presumably because the miscreant could not be traced
(2.)THERE were attempts to settle the dispute and conciliation proceedings were started. Ultimately however, the founder-director and other directors of the company found it impossible to carry on the business and were forced to close it down on or about 24th September, 1957. Letters were written to the Labour Commissioner and the District Magistrate, 24 Parganas about the closure. On the 27th September. 1957 the management of the company wrote a letter to the Registrar, Joint Stock Companies, stating that the business was closed with effect from September, 1957. On or about 21st April, 1959 an alleged industrial dispute between Bhattacharjee Rubber Works Private Ltd. and their workers, represented by Bhattacharjee Rubber Work Workers' Union and Bhattacharjee Rubber Silpa Karmi Sangha, was referred to the 4th Industrial Tribunal, Calcutta. The two issues that were referred, were as follows: (1) Is the closure of the factory justified? (2) To what reliefs are the workers entitled?
(3.)THE Tribunal heard the parties and made its award dated 7th April, 1959. A copy of the award is annexed to the petition and marked as Ext. 'a'. With regard to the first issue, it was contended on behalf of the respondent No. 1 that the closure was not real but a pretended one and was, in reality, a lock-out and not a closure at all. The Tribunal held against this contention. The Tribunal pointed out that the management informed the employees that the factory had been closed down on account of unavoidable circumstances beyond the control of the employer. The Registrar of Companies was intimated about the closure from September 1957. Excise licenses of the factory had been surrendered, and pending adjudication proceedings the shareholders in a general meeting adopted a resolution to wound up the company, and in fact a Liquidator was appointed and it was the Liquidator who defended the case before the Tribunal. In view of these facts, the Tribunal held that the closure was a real and not a pretended one. In view of this finding, the question arose as to what reliefs the workers were entitled to. The Tribunal rightly pointed out that we must turn for this purpose to two sections of the Industrial Disputes Act, 1947 (hereinafter called the Act ). The first section is 25f, which lays down the conditions precedent to the retrenchment of workmen. It has been provided therein that no workman employed in any industry who has been in continuous service for not less than one year shall be retrenched without one month's notice in writing or wages for the period of notice, together with retrenchment compensation equal to 15 days' average pay for every completed year of service or any part thereof in excess of six months. I need not refer to the other provisions. The next section to be considered is section 25fff. The matter in this case comes directly under this section, the relevant part whereof runs as follows:-
"25fff (1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of section 25f, as if the workman had been retrenched: provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of section 25f shall not exceed his average pay for three months. Explanation-An undertaking which is closed down by reason merely of financial difficulties (including financial losses) or accumulation of undisposed of stocks shall not be deemed to have been closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub-section. . . . "


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