MADAN LAL BUDHIA Vs. STATE OF BIHAR

JUDGEMENT

(1.) IN this case the petitioners carried on the business of generation and supply of electricity in the district of Hazarihagh on the basis of a temporary sanction given by the State Government under Section 28 of the INdian Electricity Act (Act No. IX of 1910) by Notification No. 1604-Misc/ IE-159/40, dated the 25th February, 1941. IN 1952 the petitioners applied to the State Government for grant of a licence under Section 3 of the INdian Electricity Act, 1910 with regard to the business of supply of electricity. The State Government refused to grant a licence by a letter dated the 12th April, 1952, on the ground that the Government themselves proposed to distribute power at Ramgarh as soon as power from the Damodar Valley Corporation was available. Thereafter in May, 1955, a notice was served on the petitioners terminating the agreement for the supply of electricity with effect from the 1st September, 1955. The notice was served by the Defence Department Authorities and it was stated in the notice that the Defence Department would take the supply of electricity from the State Government and not from the petitioner. A copy of the notice is annexure C to the application. Thereafter the petitioners served a notice upon the employees terminating their services with effect from the 1st September, 1955, The notice dated the 1st June, 1955, is annexure D to the application. It appears that from the 1st September, 1955, the State Government obtained bulk supply of electricity from the Damodar Valley Corporation, but the State Government requested the petitioners to make arrangements for distribution of electricity for a short period till the Government could make its own arrangements. The petitioners accordingly carried on the work of distribution of electricity supplied from the State Government's grid in Ramgarh with the help of a skeleton staff for the period from the 1st September, 1955, to the 31st March, 1956, on which date the State assumed full control of the distribution system also and relieved the petitioners from the task of distributing the electricity. The workmen, however, made a demand upon the petitioners for retrenchment compensation under Section 25F of the INdustrial Disputes Act as it stood on the relevant date. The petitioners denied that they were liable to pay any such compensation, but the State Government held that the petitioners were liable to pay a sum of Rs. 35,007/4/- as retrenchment compensation to the workmen and filed a certificate with the Certificate Officer of Hazaribagh for that amount being realised from the petitioners. A copy of the certificate is annexure E to the application. The petitioners fifed an objection before the Certificate Officer, but the objection was dismissed by the Certificate Officer on the 7th June, 1956. An appeal was preferred before the Collector, but the appeal was also dismissed on the 14th September, 1956. The petitioners then took the matter in revision before the Commissioner of Chota Nagpur, who held by his order dated the 13th December, 1957, that the certificate should be kept pending without execution for a period of 6 months & the amount of liability should be determined either by agreement between the parties or by means of a civil suit to be filed by the workmen. The order of the Commissioner is based upon a decision of a Bench of this High Court in Sreo Behariji Mills Ltd. v. State of Bihar AIR 1957 Pat 488 where it was held that the State Government has no power to make an enquiry into the liability to pay compensation under Section 25F of the Act, as it stood before the amendment, if there was a dispute between the employer and the workmen whether there was retrenchment or not. There is no machinery provided in the Act for snaking such an enquiry and so any certificate of public demand for the recovery of compensation, in the circumstances, would be without jurisdiction. It appears that subsequently, on the 7th June, 1958, the State Government issued a notification, purporting to act under Section 33C, Sub-section (2), of the INdustrial Disputes Act, requiring the Labour Court at Ranchi to determine the amount of the money value of the compensation liable to be paid by the petitioners to the workmen concerned. The notification is annexure J to the application and reads as follows:

(2.) THE main argument put forward on behalf of the petitioners is that the closure of the business was real and bona fide on the 1st September, 1955, because licence was not granted to the petitioners by the State Government under Section 3 of the Indian Electricity Act and the business carried on by the petitioners of generation and supply of electricity at Ramgarh had been completely taken over by the State Government with effect from the 1st September, 1955. It was also pointed out on behalf of the petitioners that the judgment of the Supreme Court in Hariprasad Shivshanker Shukla v. A.D. Divelkar (S) AIR 1957 SC 121 was pronounced on the 27th November, 1956. It was held by the Supreme Court in that case that retrenchment as defined in Section 2(oo) of the Industrial Disputes Act and as used in Section 25F of the same Act meant the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and it had no application where the services of all workmen had been terminated by the employer on a real and bona fide closure of business or where the services of all workmen had been terminated by the employer on the business or undertaking being taken over by another employer. In order to counteract the decision of the Supreme Court there has been an amendment made in the Act by the Industrial Disputes (Amendment) Act, 1957 (Act No. 18 of 1957). Section 3 of this Act introduced a new Section 25FFF, which reads as follows: