October 24.

SUPREME COURT REPORTS [1956]

LAKSHMI DEVI SUGAR MILLS LTD. v.

PT. R.AM SARUP. (and connected appeal)

[BHAGWATI, VENKATARAMA AYYAR, s. K. DAS and ti GovINDA MENON JJ.] "

Industrial Dispute-Application for permission to dismiss workmen-Jurisdiction of Appellate Tribunal-Scope of enquiry- ! nterim order of suspension by employer pending enquiry and receipt of permission-If amounts to a lock-out-If amounts to punishment -Prior permission of the Appellate Tribunal, if required-Enquiry by General Manager-Non-co-operation by Workmen-Enquiry not held within the prescribed time-If a breach of Standing Orders- Industrial Disputes (Appellate Tribunal) Act (XL VIII of 1950), .,. 22, 28-Indiistrial Disputes Act (XIV of 1947J, s. 83( a)(b)-

Standing Orders, cl. L 12.

Seventy-six workers of the appellant company resorted to a tools-down strike in sympathy with a dismissed co-worker.

Re peated attempts to persuade them to resume work having failed the General Manager suspended them until further orders.

After mid day recess the Management sought to prevent the workers from entering the mills but they violently entered the mills and the Police bad to be called in by the company to keep the peace.

Charges of misconduct, a.nd insubordination were thereafter frame~ against the workers and they were called upon to show cause in an open enquiry to be held by the General Manager why disciplinary action should not be taken against them and the order of suspension was extended pending the enquiry.

The workers took up an attitude of total non-eel-operation and the atmosphere was tense with the result that the enquiry could not be held within 4 days.

The Management decided to dismiss the workers as a result of the en ... quiry but as an appeal was then pending before the Labour A11pel late Tribunal, the company applied to it under s. 22 of the Indus trial Disputes (Appellate Tribunal) Acit of 1950 for permission to do so and extended the period of suspension pending receipt of such permission.

The workmen in their turn filed an application under s. !13 of the Act to the Appellate Tribunal for requisite action to be taken against the company for having contravened s. 22(b) of the Act by resorting to an illegal lockout and thereby punishing them without its prior permission.

The Appellate Tribunal held that the company bad not held the enquiry within the time specified by cl. L 12 of the Standing Orders and on that ground dismissed its application. It allowed the application of the workers holding that the wholesale suspension of the workers and preventing them from continuing work after the mid-day recess amounted to a lock-out

and punishment by the company and contravened ~· 22(b) of the Act and directed their reinstatement.

The company appealed. It was contended on behalf of the company that there had been neither a breach of cl. L 12 of the Standing Orders nor a contravention of s. 22(b) of the Act.

Held, that the contentions were correct and the appeals must succeed.

The conduct of the company did not come within the definition of a lockout and even if there was any lock-out it was in con sequence of the illegal strike resorted to by the workmen and as such could not be deemed to be illegal by virtue of s. 24(3) of the Indus trial Disputes Act, 194 7.

Moreover, even assuming that the company declared an illegal lock-out it was not necessary for it to obtain the permission of the Appellate Tribunal under s. 22 of the Act before it could do so.

A lock-out was neither an alteration of tb e conditions of service within the meaning of cl. (a) nor a discharge or punishment by dismissal or otherwise within the meaning of cl. ,(b) of s. 33 of the Industrial Disputes Act, 1947 or under s. 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 and no permission was, therefore, required for its declaration. If the lockout was illegal the workmen had their remedy under s. 26 of the Industrial Disputes Act.and in any event they had the right to have the dispute referred for adjudication.

Jute Workers Federation, Calcutta v. Clive Jute Mills ([1951] II L.L.J. 344) and Colliery Mazdoor Congress, Asansol v. New Beerbhoom Coal Co. Ltd. ([1952] L.A.C. 219), approved.

The Company having been declared a public utility concern, the workets had no right to go on strike without giving a notice in terms of s. 22(1) of the Industrial Disputes Act, 194 7 and the tools down strike resorted to by them was illegal and the company was within its rights in suspending them.

Buckingham and Carnatic Co. Ltd. v. Workers of the Buckingham and Carnatic Co. Ltd., ([1953] S.C.R. 219), referred to.

Mere failure to hold an enquiry within the period of four days prescribed by cl. L 12 of the Standing Orders could not determine -' he matter before the Appellate Tribunal and where, as in the mstant case, the delay was due to the conduct of the workers it was sufficiently explained.

Where full and free opportunity was given to the workers to be present and defend themselves in a duly notified enquiry and they failed to do so, the Management was quite within its right to come to its own conclusiQn as to their guilt and the punishment to be meted out to them and it was not open to the workmen thereafter to urge that such enquiry was not fair or impartia.l or violated the principles of natural justice.

Lakshmi Devi Sugar Mills Ltd. v.

Pt, Ram Saruj>

Lakshmi Devi Sugar Mills Ud.

Pt. Ram Sarup

There could be no punishment so long as there was no offence and any action of the employer to the deteriment of the workers' interest would not amount to punishment. The law did not contemplate anything like a contingent punishment of a worker and, consequently, where there was an interim order of suspension pend ing an enquiry or the grant of permission by the Appellate Tribunal, the question of pay for the period ol such suspension depending on whether or not tbe permission would be granted, such sus pension would not amount to punishment even where it was of an indefinite duration so as to attract the operation of s. 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950.

Champdany J11te Mifls and Certain Workmen, ([1952) 1 L.L.J. 554), Joint Steamer Companies and Their Workmen, ([1954] II L.L.J. 221), Assam Oil Co. Ltd. v. Appalswami, ([1954] II L.L.J. 328), Standard Vac11um Oil Co. v. Gunaseelan, M. G. ([1954] II L.L.J. 656), relied on.

Under that section the only thing that the Appellate Tribunal he.d to consider was whether a prima facie case had been made out by the employer for lifting the ban imposed by the section and if, on thG materials before it, it was satisfied that there had been a fair enquiry in the circumstances of the case and the Management bad bona fide come to the conclusion that the worker was guilty of misconduct with which be had been charged and it would be detrimental to discipline and dangerous in the interests of the company ta continue him in its employ, a. prima jacie case was made out and the Tribunal would be bound to permit the employer to punish the workman. It would be no part of its duty to judge whether the punishment was harsh or excessive, except so far it might bear on the bona fides of the Management, and could only grant the permission as sought for or refuse it and the question of the propriety of the punishment could be decided only by the appropriate Tribunal appointed by the Government for adjudicating the industrial dis pute which would ensue upon the action of the management.

Atherton West cf) Co. Ltd. v. Suti Mills Mazdoor Union and Otlwrs, ([1953] S.C.R. 780), The Automobile Products of India Ltd.

v. R11kmaji Bala it Others, ([1955] 1 S.C.R. 1241) Champdany Jute Mills and Shri Alijan, ([1952] II L.L.J. 629), R.B.S. Lachmandas Mohan Lal if; Sons Ltd. and Chini Mill Karmachari Union, ((1952] II L.L.J. 787) and Assam Oil Companies' Case, ([1954] L:A.C. 78), referred to.

CIVIL APPELLATE JuRISDICTION: Civil Appeals Nos. 244 and 245 of 1954.

Appeals from the judgment and order dated August 19, 1952, of the Labour Appellate Tribunal of India (Calcutta) at Allahabad in Miscellaneous Cases

Nos. C-91 and 93 of 1952.

... l

N. 0. Ohatterji, H.J. Umrigar, J. B. Dadachanji, 1956 S. N. Andley and Rameshwar Nath, for the appellant in both appeals.

Lakshmi Devi Sugar Mills Ud,

Purshottam Tricumdas, R. Ganapathy Iyer and B. P. Maheshwari, for respondents in both appeals.

Pt. Ram Sarup

M. 0. Setalvad, Attorney-General for India, Porus A. Mehta and R.H. Dhebar, fo.r the Intervener.

1956. October 24.

The Judgment of the Court was delivered by

BHAGWATI J.-These two appeals by special leave arise out of an order of the Labour Appellate Tribunal of India, Lucknow Bench, by which it dismissed the application of the appellant under s. 22 of the • Industrial Disputes (Appellate Tribunal) Act, 1950, hereinafter referred to as the Act for permission to dismiss the respondents from is employ and allowed " the application of the respondents under s. 23 of the Act for reinstatement.

The respondents are 76 employees of the appellant, a limited company of Sugar Mills, situated in village Chitauni in the district of Deoria and were working in the engineering department of the.mills in the mill house, boiling house and the workshop sections. There were disputes between the appellant and its workmen and, on the date in question, i.e., Ma, y 27, 1952, there was pending before the Labour Appellate Tribunal an appeal which was registered as Cal-101/51. It appears that one Motilal Singh, an employee of the appellant, had been dismissed by it sometime prior thereto and he had been inciting the workmen to make common cause with him, and, at a meeting held th& previous night, some sort of action had been decided upon.

When the workmen of the appellant entered the mills on the morning of May 27, 1952, these 76 workmen, though they entered their respective sections of the engineering department, did not commence any work from 7 a.m. as they should have done. The sectional engineers in-charge asked these workmen as to why they did not commence their work and became aware of their intention to resort

Laksh1ni Devi Sugar Mills Ud.

Pt. Ram Sarup

Bhagwati J.

to a tools-down strike. They reported the fact to the Chief Engineer who sent a slip to the General Manager informing him that the workers had gone on a toolsdown strike. The General Manager thereupon personally went to the workshop, mill house and the boiling house and asked these workmen not to resort to such strike but the latter did not pay any heed to his ad vice. The General Manager then asked the Chief Engineer to persuade these workmen to commence the work, give them time for about 2 hours till 10-30 a.m. and report to him if, in spite of his -persuasions, they did not commence work. The persuasions of the Chief Engineer and also of the section engineers proved of no avail and the 76 workmen persisted in their attitude with the result that the section engineers made their reports to the General Manager through the Chief Engineer giving the names of the workmen belonging to their respective sections who had resorted to the tools-down strike with effect from 7 a.m. that day. These reports were endorsed by the Chief Engineer and passed on to the General Manager who, in his turn, passed an order at about 10-30 a.m. suspending these 76 workmen till further orders. The order for suspen.sion was communicated to these workmen through their sectional heads and was also pasted on the notice board of the mills.

There was a recess between 11 a.m. and l p.m. and when the gates were opened at I p.m. these 76 workmen, in spite of the warnings of the gatekeepers and Jemadar to the contrary, rushed into the mills, entered their respective sections and adopted a threatening attitude. The sectional engineers made reports to the General Manager in regard to this occurrence and these reports also were endorsed by the Chief Engineer and passed on by him to the General Manager. The situation which was created by these workmen by forcibly entering their respective sections and continuing there threatening violence was explosive and the management had to call in the police in order to avert violence and damage to the property. The police came in at 5 p.m. and order appears to have been restored.

There was no untoward incident that day

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but the management appears to have viewed the situation with seriousness and approached the Regional Conciliation Officer the next day in order to ask for advice in regard to the dismissal of these workmen. The Regional Conciliation Officer, however, pointed out to the General Manager that, in, view of the pendency of the appeal before the Labour Appellate Tribunal, he had no jurisdiction to entertain any application fol" such permission and referred the General Manager to the Labour Appellate Tribunal.

The workmen, on the other hand, got a letter dated May 28, 1952, addressed to the General Manager by the General Secretary of the Chini Mill Mazdoor Sangh to the effect that they had gone to the gates of the mills as usual at 7 a.m. that day to attend to their work but they were not allowed to enter the mill premises. They charged the management with the intention to victimise them on the charge of a toolsdown strike and stated that they had neither struck nor intended to strike but had been prevented froJ,11 attending to their work and had therefore been advised to go back to their quarters with a view to maintain peace. The last paragraph of that letter was very significant. The General Manager was told that if he did not mend his illegal mistakes and did not take the w.orkmen back on duty he would be responsible for any breach of peace.

After receipt of that letter it was evident that the workmen would resort to violent measures in order to attend to their work and a breach of peace was apprehended. The management evidently continued the police precautions and, after having waited for some time, the General Manager furnished to these 76 workmen on June 2, 1952, a charge-sheet wherein he charged them with having committed misconduct within the meaning of cl. L. 1 (a) and (b) and wilful insubordination within the meaning of cl. L. l(a), (b} and (w) of the Standing Orders. He called upon them to show cause within 24 hours of the receipt of the charge-sheef why disciplinary action should not be taken against them and gave them intimation that an open enquiry in connection with the said charges

Lakshmi Devi Sugar Mills l.Jd.

Pt. Ram Sarup

Bhagwati J.

195~

Lakshmi Devi Sugar Mills Ltd. v.

Pt. Ram Sarup

BhagwatiJ.

would be held by him at 8 a.m. on June 6, 1952. He also intimated that if all the workmen arranged to present themselves earlier than June 6, 1952, he would take up the said enquiry earlier provided, however, an intimation was received to that effect from them or from their Union. The workmen were to remain suspended till the enquiry was finished.

The workmen addressed uniform letters to the General Manager denying that there was any toolsdown strike on May 27, 1952, and alleging that the sectional heads and the Chief Engineer had conspired together "under some mysterious preconceived plans" and stated that no useful purpose would be served by holding an enquiry on the 11th day of their suspension.

They pointed out that such indefinite period of suspension during the pendency of the appeal before the Labour Appellate Tribunal and Reconciliation Board was illegal and unjustified and was in utter disregard of the Standing Orders. By their further letter dated June 5, 1952, similarly addressed to the General Manager, they voiced their apprehension that they would not get any justice from an enquiry held by the management itself and asked for investigation by an impartial tribunal. The management, however, held the enquiry as intimated at 8 a.m. on June 6, 1952. The workmen non-co-operated and did not present themselves at the enquiry.

The General Manager immediately addressed a letter to these workmen putting on record that in spite of the orders conveyed by him earlier the workmen had disobeyed the same and had not appeared at the appointed time and place for the enquiry into the tools-down strike. He pointed out that by not appearing in this manner they had made themselves liable to dismissal for insubordination, and intimated that the management was applying to the proper authorities for permission to dismiss them pending receipt of which the workmen would remain under suspension. This letter was received by the workmen at 9 a.m. that day and they replied through the General Secretary of the Chini Mill Mazdoor Sangh repeating that a demand had been made for an

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investigation by an impartial tribunal and in so far as no impartial tribunal had been appointed they were not agreeable to .present themselves and submit their defence at the enquiry which was conducted by the management itself.

The appellant thereafter made the necessary application under s. 22 of the Act before the Labour Appellate Tribunal of India, Lucknow Bench, for permission to dismiss these 76 workmen. In the affidavit which was filed in support. of that application, all the facts hereinbefore mentioned were set out in extenso and it was pointed out that the management, after giving full consideration to the explanations and offering every possible opportunity to these workmen to explain their conduct coupled with the unreasonable attitude adopted by them, had adjudged them guilty of misconduct under cl. L. l(a), (b) and (w) of the Standing Orders and considered that any further employment of these workmen would be extremely detrimental to discipline and dangerous in the interests of the industry.

The workmen, in their turn, filed on June 9, 1952, an application under s. 23 of the Act for requisite action to be taken against the appellant for having contravened s. 22(b) of the Act by inflicting on them the punishment in the shape of harassment by resorting to an illegal lockout for an indefinite period with effect from May 27, 1952, without obtaining the prior permission of the Labour Appellate Tribunal .and "thereby acting contrary to law and resorting to mala fide actions in direct violation of the provisions of the Standing Orders in continuation of the management's anti-trade (Union) activities".

Counter-affidavits were made by the workmen as also the management in reply to both the above applications. The Labour Appellate Tribunal held that the appellant did not act in strict compliance with cl.

L. 12 of the Standing Orders and was, therefore, not entitled to ask for permission to dismiss the 76 worktnen. It accordingly dismissed the appellant's application under s. 22 of the Act. In regard to the application of the workmen under s. 23 of the Act, it held

Lakshmi Devi Sugar Mills Ltd. v.

Pt. Ram Sarup

Bhagwati).

Lakshmi Devi Sugar Mills Ud;

Pt. Ram Sarup

BhagwatiJ.

that the wholesale suspension of the 76 workmen and their prevention from resuming work at 1 p.m. after the lunch hour amounted to a lockout and that this conduct of the appellant amounted to punishment of the workers whether by dismissal or otherwise and was, therefore, in contravention of s. 22(b) of the Act. It accordingly ordered the reinstatement of the workmen if they presented themselves at the office of the General Manager during office hours o.n any day within 15 days of the order. and also ordered payment of half the salary and allowances for the period of non-payment, viz., from the date of their suspension up to the date on which they were taken back in service.

Shri N. C. Chatterjee for the appellant before us has strenuously urged that the workmen had resorted to the tools-down strike which was an illegal strike and that the appellant was well within its rights in suspending them pending enquiry and also pending the application for permission to dismiss them made before the Labour Appellate Tribunal. Even if it be held that the appellant had declared a lockout, such a lockout was in consequence of the illegal strike resorted to by the workmen and could not be deemed to be illegal. He further urged that the management

hd held an enquiry into the illegal strike which had been resorted to by the workmen and found that the workmen were guilty of misconduct and insubordination within the meaning of cl. L. l(a), (b) and (w) of the Standing.Orders and the appellant rightly came to the conclusion that any further employment of these workmen would be extremely detrimental to discipline and dangerous in the interests of the industry. He also contended that the delay_in holding the enquiry was not un.reasonable and the suspension of the workmen pending enquiry for more than four days was due to sufficient reason, the atmosphere created by the non-co-operation of the workers being so tense as not being appropriate for the holding of an enquiry within those four days, that there was no breach of cl. L. 12 of the Standing Orders and that the Labour Appellate Tribunal was in error when it

refused to grant the application under s. 22 of the Act.

Civil Appeal No. 245 of 1954 which is directed against the order of the Labour Appellate Tribunal under s. 23 of the Act may be disposed of at once. The Labour Appellate Tribunal was of opinion that the conduct of the appellant in preventing the workmen from continuing work after 1 p.m. on May 27, 1952, came within the definition of a lockout and the workmen being employed in a public utility concern such lockout would be illegal without a proper notice. It was further of opinion that this conduct amounted to punishment of a worker whether by dismissal or otherwise and was, therefore, in contravention of s. 22(b) of the Act. This conclusion of the Labour Appellate Tribunal was, in our opinion, based on a misapprehension of the whole position. The position had been summed up by the Labour Appellate Tribunal in the following words:-

" As a matter of fact, the management never thought of a lockout. Their idea was to suspend the suspected persons pending enquiry for which they gave a notice".

If this was the correct position, the conclusion reached by the Labour Appellate Tribunal that the conduct of the management came within the definition of a. lockout was absolutely unjustifiable. The Labour Appellate Tribunal recorded its inability to come to a definite finding as to what was the position which obtained on May 27, 1952. h observed:-

"W e have got a number of affidavits in support of the parties' case and there is oath against oath.

We do not find ourselves in a position to hold definitely as to what was the exact situation. But it does appear to us that a mountain has been made of a mole hill and conclusions have been arrived at without going deep into the matter".

Even if the parties had made a mountain of a mole hill and had reached conclusions without going deep into the matter, it was certainly the business of the Labour Appellate Tribunal itself to record a finding of fact in regard to the situation as it obtained on

Lakshmi Devi S11gar Mills Ltd. v.

Pt. Ram Satup

Lakshmi Devi Sugar Mills Ud.

Pt. Ram Sarup

BhagwatiJ.

that day. This unfortunately the Labour Appellate Tribunal did not do and it came to record its conclusion that the conduct of the management came within the definition of a lookout without realizing that such conclusion was inconsistent with what it had stated a li.ttle earlier thatthemanagement as a matter of fact never thought of a lookout.

We have been taken through the whole evidence by the learned counsel for the appellant and there is clear documentary evidence to show that the 76 workmen resorted to a tools-down strike from 7 a.m. on May 27,

1952. The reports which were made by the section engineers and sent to the General Manager through the Chief Engineer were clear and categoric in regard to such tools-down strike having been resorted to by the workmen in question and the list of the 76 workmen which was prepared by the General Manager ordering their suspension was based on those reports. 'l'he further reports which were made by the section engineers again sent by them to the General Manager through the Chief Engineer in the afternoon of May 27, 1952, also were clear and categoric in regard to the said workmen having been asked not to enter the workshop, the boiling house and the mill house at 1 p.m. but their having entered the same threatening violence. A faint attempt was made to charge the section engineers and the Chief Engineer with having conspired "under some mysterious preconceived plans" b, ut the same rested merely on a bare allegation and was•not substantiated by any tangible evidence.

Even though there was some conflict of evidence in regard to the time when the notice of suspension was given by the General Manager to these workmen and when the notice in that behalf was pasted on the notice-board of the appellant, it is abundantly clear on the documentary evidence above referred to that the 76 workmen resorted to a toolsdown strike from 7 a.m. on the morning of May 27, 1952, that they were suspended till further orders immediately after the receipt by the General Manager of the first series of reports from the section engineers, that they were prevented from entering the premises

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at I p.m. but entered the same threatening violence.

If this is the true position it follows that there was no lockout declared by the appellant, much less an illegal lockout. The workmen had resorted to an illegal strike and the General Manager rightly ordered that the workmen indulging in such strike should be suspended pending further orders which obviously meant pending enquiry into their conduct and the obtaining of the permission to dismiss them as a result of such enquiry if the management thought fit.

If there was thus no illegal lockout at all, the conclusion reached by the Labour Appellate Tribunal in , that behalf was absolutely unjustified. Even if there had been a lockout as concluded by the Labour Appellate Tribunal the same was in consequence of the illegal strike which had been resorted to by these workmen and could not by virtue of s. 24(3) of the Industrial Disputes Act, 1947, be deemed to be illegal.

There is, however, a more fundamental objection that, even if the appellant be held responsible for having declared an illegal lockout, the lockout would not come within the ban of s. 22 of the Act. The Labour Appellate Tribunal had before it an earlier decision of its own in Jute Workers Federation, Calcutta v. Clive Jute Mills(1), in which the same question had heed considered with reference to s. 33 of the Industrial Disputes Act, 1947. In that case, a lockout had been declared which involved 4,000 workers of the company and a preliminary contention was urged that there was no contravention of the provisions of s. 33 of the Industrial Disputes Act, 1947.

The Labour Appellate Tribunal considered the question whether the lockout had (I) in fact altered the conditions of service of the workmen to their prejudice, or (2) had the effect of discharge, or (3) amounted to punishment of the workmen.

It came to the conclusion that a lockout had not the effect of a discharge, for a lockout does not automatically terminate the services of the workmen.

It did not also amount to punishment, for punishment presup-

(1) [1951] II L.L.J. 344.

Lakshmi Dei Sttgar Mills Ltd. v.

Pt. Ram SarttP

BhagwatiJ,

Laksh1ni Devi Sugar Mills Ud.

Pt. Ram Sarup

Bhagwati J.

poses an offence or misconduct.

A lockout is generaly adopted as a security measure and may in certam cases be used as a weapon corresponding to what the employees have in the shape of a strike and that, therefore, s. 33(b) would not be contravened by the company by declaring a lockout.

The Labour Appellate Tribunal then considered whether a lockout would attract the operation of s. 33(a).

It was of opinion that no automatic termination of the services of the employees was brought about by a lockout and the question was whether any of the conditions of service was altered thereby to their prejudice.

The contention of the Union was that the conditions of service were altered to the prejudice of the workmen because those employees did not in fact get their pay during the period of the lockout with the possibility of losing it.

This contention was negatived and the Labour Appellate Tribunal was of opinion that the conditions of their service would be altered by the lockout if the employees lost their right to receive their pay during the period of lockout in all circum- stances but the question whether they would be entitled to get their pay during that period could not be postulated with certainty for that would depend on a variety of considerations.

In the opinion of the Labour Appellate Tribunal to bring a case within s. 33(a), the questioned act of the employer must directly and in fact alter the conditions of service to the prejudice of the workmen concerned, that is to say, the moment the lockout was declared.

The possibility that they may or may not get their pay meant that the lockout may or may not alter the conditions of their service to their prejudice.

Section 33(a) would not, therefore, be attracted by the mere fact of a lockout.

The Labour Appellate Tribunal thus came to the conclusion that neither s. 33(a) nor s. 33(b) would be contravened by the company in declaring the lockout.

This decision of the Labour Appellate Tribunal was followed in Colliery Mazrloor Congress, Asansol,

v. New Beerbhoom. Coal Co .. Ltd.(') and t.he Labour

(1) [1952] L A.O. 219.

....

Appellate Tribunal there held that a lockout did not come within the ambit of s. 33 and, therefore, no permission under that section was required for declaring a lockout.

We agree with the reasoning adopted in the above cases and are of opinion that a lockout is neither an alteration to the prejudice of the workmen of the conditions of service applicable to them within the meaning of cl. (a) nor a discharge or punishment whether by dismissal or otherwise of the workmen within the meaning of cl. (b) of s. 33 of the Industrial Disputes Act, 1947, ors. 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950, and that, therefore, no permission of the Conciliation Officer, Board or Tribunal as the case may be is necessary to be obtained before a lockout can be declared. If the lockout is legal, no question can at all arise. If, on the other hand, the lockout is illegal, a remedy is provided in s. 26 of the Industrial Disputes Act, 1947.

The employees affected by a lock-out would in any event be entitled to refer the industrial dispute arising between themselves and the employer for adjudication by adopting the proper procedure in regard thereto.

The Labour Appellate Tribunal was, therefore, clearly in error when it came to the conclusion that the conduct of the appellant came within the definition of a lockout and that it amounted to punishment of the workmen whether by dismissal or otherwise and was, therefore, in contravention of s. 22(b) of the Act.

The application of the respondents under s. 23 of the Act was accordingly liable to be dismissed and should have been dismissed by the Labour Appellate Tribunal. Civil Appeal No. 245 of 1954 will,

therefore, be allowed and the order of the Labour Appellate Tribunal reinstating the respondents in the service of the appellant will be set aside.

Coming now to Civil Appeal No. 244 of 1954, the first question to determine is whether the respondents had resorted to an illegal strike. We have already pointed out the circumstances under which the 76 workmen resorted to the tools-down strike from 7 a.m. on May 27, 1952, and recorded the finding

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Lakshmi De'Oi Sugar Mills Ud.

Pt, Ram Sarup

Bha guati J.

Lakshmi Devi

~:•igar Mills Ud.

Pt. Ram Sarup

Bhagwati J,

that they not. only resorted to such strike but persisted in their attitude in spite of the persuasions of the Chief Engineer and the General Manager of the appellant. The appellant having been declared a public utility concern, the workmen were not entitled to resort to such strike without giving to the appellant notice of the strike in terms of s. 22(1) of the Industrial Disputes Act, 194 7, and the tools-down strike which was resorted to by them was, therefore, an illegal strike. The fact that the strike was of a short duration viz., from 7 a.rn. till 10-30 a.rn. would not exculpate the respondents from the consequences of having resorted to such illegal strike, the avowed intention of the strikers being not to resume work until their pre-concerted plan conceived at the meeting held on the previous night was carried out. The strike resorted to by the workmen was of an indefinite duration and the management, having foiled in its attempts to persuade the workmen to resume their work, was well within its rights to suspend these workmen pending further orders. (Vide Buckingham and Garnatic Go. Ltd. v. Workers of the Buckingham and Garnatic Go. Ltd.(')) . .

The Labour Appellate Tribunal did not decide this issue at all but only considered the alleged non-compliance by the appellant of cl. L. 12 of the Standing Orders as determinative of the whole enquiry before it observing that "although the delay (in holding the enquiry) was not unreasonable, there was no doubt that the management did violate the letter of the rule". It further observed that there was no sufficient reason indicated for extending the period of suspension beyond the period of four days provided in

cl. L. 12 of the Standing Orders, the tension created by the non-co-operation of the workers not having been considered sufficient to preclude the management from collecting materials for conducting the enquiry within the said period of 4 days.

This reasoning of the Labour Appellate Tribunal was unsound. Having once come to the conclusion that the delay was not unreasonable, there was no justification for the further

\1) [1953] S.C.R. 219.

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- •

conclusion reached by the Labour Appellate Tribunal that the tension created by the non-co-operation of the workers was not a sufficient reason for extending the period of such suspension. The workmen had forcibly entered the premises of the mills in spite of the warnings of the watchmen and the Jemadar and had also entered the workshop, the boiling house and the mill house and continued to stay there threatening violence. In their letter dated June 3, 1952, theyhad also threatened the General Manager that if he did not mend his illegal mistakes and did not take the workmen back on duty he would be responsible for any breach of peace. This was enough evidence of their mentality and the management naturally enough apprehended breach of peace at the hands of these workmen. If this was the tense atmosphere created by the non-co-operation of the workmen, the management was perfectly justified in postponing the enquiry by a few days and continuing the workmen under suspension. The delay which was thus caused in furnishing the charge-sheets and giving notice of the enquiry to these workmen on June 2, 1952, was, therefore, sufficiently explained and if there was any one responsible for this delay it was the workmen and not the management. It did not then lie in the mouth of the workmen to protest against thi~ delay in the enquiry and trot out their suspension for a period exceeding four days as an excuse for abstaining from the enquiry.

As a matter of fact, the management intimated to the workmen that in spite of June 6, 1952, having been fixed as the date for the open enquiry, the management would be prepared to take up the enquiry earlier provided an intimation was received either from the workmen or from their Union to that effect. Instead of responding to this gesture of the appellant the workmen persisted in asking for an independent enquiry and non-co-operated with the management in the enquiry which was ultimately held by it as notified at 8 a.m. on June 6, 1952.

We are of opinion that under the circumstances the appellant was not guilty of having contravened cl. L. 12 of the Standing Orders and the Labour Appellate

Lakshmi Devi Sugar Mills Ltd. v •• Pt. Ram Samfr-

BhagwatiJ.

Lakshmi Devi Sugar Mills Ltd, v.

Pt, Ram SaruP

BhagwatiJ.

Tribunal was in error when it came to the contrary conclusion and dismissed the application of the appellant under s. 22 merely on that ground without making any further enquiry in to the circumstances of the case. It appears that the Labour Appellate Tribunal was driven to take this step because it found itself unable to hold definitely as to what was the exact situation on May 27, 1952.

We shall only observe that if the Labour Appellate Tribunal had really applied its mind ts> the question it would have come to the conclusion that the respondents in fact did resort to the illegal strike from 7 a.m. on May 27, 1952, and that there was no contravention of cl. L. 12 of the Standing Orders by the appellant.

The next question that falls to be determined is whether the enquiry which was held by the management on June 6, 1952, was a fair enquiry and whether the General Manager observed the principles of natural justice in the conduct of that enquiry. Due notice of the enquiry was given to the respondents by the letter of the management addressed to them on June 2, 1952, and if the respondents did not avail themselves of the opportunity of presenting themselves and defending their action at the enquiry they had only themselves to blame for it. It was within the province of the management to hold such an enquiry after giving aue notice thereof to the respondents and to come to its own conclusion as a result of such enquiry whether the respondents were guilty of the charges which had been levelled against them.

If full and free opportunity was given to the respondents to present themselves at the enquiry and defend themselves it could not be said that the enquiry was anything but fair.

No principles of natural justice were violated and the management was at liberty to come to its own conclusions in regard to the culpability of the respondents and also to determine what punishment should be meted out to the respondents for the misconduct and insubordination proved against them. If the ban which is imposed by s. 22 of the Act had not been in existence, the management would have been entitled to impose the punishment on the

...

...

respondents and dismiss them without anything more, if it honestly came to the conclusion that dismissal of these workmen was the only punishment which should be meted out to them in all the circumstances of the case. The respondents would no doubt then have been entitled to refer the industrial dispute which arose out of their dismissal for adjudication by adopting the proper procedure set out in the Industrial Disputes Act, 194 7, and the Industrial Tribunal appointed by the Government for the adjudication of such dispute would have been in a position to thrash out all the circumstances and award to them the appropriate relief. This course was, however, not open to the appellant by reason of the pendency of the appeal before the Labour Appellate Tribunal and the only thing which the appellant could do, therefore, was, after coming to its own conclusion as a result of such enquiry, to apply to the Labour Appellate Tribunal under s. 22 of the Act for permission to dismiss the respondents and this the appellant did on June 8, 1952. It was not open to the respondents then, having regard to the attitude which they had adopted throughout in relation to the said enquiry, to urge that the enquixy was not fair or impartial or that the principles of natural justice had been violated by the General Manager of the appellant in the conduct of the enquiry.

It was, however, urged on behalf of the respondents that the suspension for an indefinite period beyond the period of four days provided in cl. L. 12 of the Standing Orders was a punitive measure and the appellant was not justified in imposing that punishment on them without the permission of the Labour Appellate Tribunal. It was contended +rat such suspension involved loss of pay by the rcoipondents and being of an indefinite duration inflicted such harassment on them that it could not be deemed to be anything except a punishment. We do not accept this contention. It has been rightly held by the Labour Appellate Tribunal that suspension without pay pending enquiry as also pending permission of the Tribunal under the relevant section could not

Lakshmi Devi S11ga1 Mills Ltd. v.

Pt. Ram SaruP

Bhagwati J,

Iaksh1ni Devi Sugar Mills Ltd, v.

Pt. Ra1n Sf!r11p

BhagwatiJ.

be considered a punishment as such suspension without payment would only be an interim measure and would last till the application for permission to punish the workman was made and the Tribunal had passed orders thereupon. If the permission was accorded the workman would not be paid during the period of suspension but if the permission was refused he would have to be paid for the whole period of suspension.

There is nothing like a contingent punishment of a workman and therefore such suspension could not be deemed to be a punishment of the workman at all.

Such suspension would of necessity be of an indefinite duration because to get a written permission of the Tribunal would mean delay and no Tribunal would likely issue any order without notice and without hearing all the parties concerned. Orders for suspension were meant only as security measures or precautionary ones taken in the interest of the industry itself or its employees in general. These measures were sometimes called for immediately after an incident and any delay, however small, might defeat the purpose for which such measures were intended. It would therefore be necessary to adopt these measures immediately and to suspend the workman pending the enquiry as also the permission to be o btaincd from the appropriate Tribunal for dismissing him if as a result of the enquiry the management thought fit to inflict such punishment upon him. The suspension, however, would not be a punishment by itself.

The ordinary dictionary meaning of the word "punish" is "to cause the offender to suffer for the offence" or "to inflict penalty on the offender" or "to inflict penalty for the offence" (Concise Oxford Dictionary, 4th Ed.). Punishment can be otherwise defined (Vide Law Lexicon by P.R. Aiyar, 1943 Ed.) as penalty for the transgression of law, and the word "punish" denotes or signifies some offence committed by the person who is punished.

Any action of the employer to the detriment of the workman's interest would not be punishment so long as no offence was found to have been committed by the workman. The suspension under such circumstances, therefore, could

- ...

not be a punishment even though it may be of an indefinite duration and would not attract the operation of s. 22 of the Act. It could not be contended, therefore, that suspension without pay even for an indefinite period pending enquiry or pending the permission of the appropriate Tribunal to dismiss the workman would be a punishment which would require permission under s. 22 of the Act before the same could be meted out to the workman. (Vide Champdany Jute Mills And Certain Workmen( 1); Joint Steamer Companies And Their Workmen( 2); Assam Oil Co. Ltd. v.

Appalswami(3); Standard Vacuum Oil Co. v. Guna- seelan, M. G.(4)).

The scope of the enquiry before the Labour Appellate Tribunal under s. 22 of the Act has been the subject-matter of decisions by this Court in Atherton West & Co. Ltd. v. Suti Mill Mazdoor Union and Others( 5) and The Automobile Products of India Ltd. v. Rukmaji Bala & Others(6).

The Tribunal before whom an application is made under that section has not to adjudicate upon any industrial dispute arising between the employer and the workman but has only got, to consider whether the ban which is imposed on the employer in the matter of altering the conditions of employment to \he prejudice of the workman or his disuharge or punishment whether by dismissal or otherwise during the pendency of the proceedings therein referred to should be lifted.

A prima facie case has to be made out by the employer for the lifting of such ban and the only jurisdiction which the Tribunal has is either to give such permission or to refuse it provided the employer is not acting mala fide or is not resorting to any unfair practice or victimization.

It cannot impose any conditions on the employer before such permission is granted nor can it substitute another prayer for the one which the employer has set out in his application. If the permission is granted, the ban would be lifted and the employer would be at liberty, if he so chooses thereafter, to deal out the

(1) [1952) I L.L.J. 554.

(2) (1954] II L.L.J. 828.

(3) [1953] S.C.R. 780.

(4) [1954] II L.L J. 221.

(5) [1954] II L.L.J. 656.

(6) [1955) 1 S.C.R. 1241,

Lakshmi Devi Sugar Mills Ud.

Pt. Ram Sarup

BhagwatiJ.

Lakshmi Devi Sugar Mi.Us Ltd. v.

Pt. Ram Sarup

Bhagwati}.

punishment to the workman. On such action being taken by the employer the workman would be entitled to raise an industrial dispute which would have to be referred to the appropriate Tribunal for adjudication 'by the Government on proper steps being taken in that behalf.

When such industrial dispute comes to be adjudicated upon by the appropriate Tribunal, the workman would be entitled to have all the circumstances of the case scrutinized by the Tribunal and would be entitled to get the appropriate relief at the hands of the Tribunal. If, on the other hand, such permission is refused, the parties would be relegated to the status quo and the employer would not be able to deal out the puntshment which he intends to do to the workman.

Even then an industrial dispute might arise between the employer and the workman if the workman was not paid his due wages and other benefits. Such industrial dispute also would have to be referred to the appropriate Tribunal by the Government and the Tribunal would award to the workman the appropriate relief having regard to all the circumstances of the case.

The Tribunal before whom such an• application for permission is made under s. 22 of the Act would not be entitled to sit in judgment on the action of the employer if once it came to the conclusion that a prima facie case had been made out for dealing out the punishment to the workman. It would not be concerned with the measure of the punishment nor with the harshness or otherwise of the action proposed to be taken by the employer except perhaps to the extent that it might bear on the question whether the action of the management was bona fide or was actuated by the motive of victimization. If on the materials before it the Tribunal came to the conclusion that a fair enquiry was held by the management in the circumstances of the case and it had bona fide come to the conclusion that the workman was guilty of misconduct with which he had been charged a prima facie case would be made out by the employer and the Tribunal would under these circumstances be bound to give the requisite permission to the employer to deal

out the punishment to the workman. If the punishment was harsh or excessive or was not such as should be dealt out by the employer having regard to all the circumstances of the case the dealing out of such punishment by the employer to the workman after such permission was granted would be the subjectmatter of an industrial dispute to be raised by the workman and to be dealt with as aforesaid. The Tribunal, however, would have no jurisdiction to go into that question and the only function of the Tribunal under s. 22 of the Act would be to either grant the permission or to refuse it. (Vide Champdani Jute Mills And Shri Alijari(1); R.B.S. Lachmandas Mohan Lal & Sons Ltd. And Chini Mill Karma.chari Union(9); Assam Oil Companies' case(3)).

In the circumstances of the present case, once the appellant succeeded in establishing that the workmen had resorted to an illegal strike from 7 a.m. on May 27, 1952, that a fair enquiry into the alleged misconduct and insubordination of the workmen had been held by the management without violating any principles of natural justice, that the management had as a result of such enquiry found that the workmen had been guilty of misconduct and insubordination with which they had been charged and that the management had come to the bona fide conclusion that continuing the workmen in its employ was detrimental to discipline and dangerous in the interests of the appellant, the Labour Appellate Tribunal ought to have held that a prima facie case for the dismissal of the workmen had been made out by the appellant and ought to have granted the appellant the permission to dismiss the workmen.

We are, therefore, of opinion that the Labour Appellate Tribunal was clearly in error in rejecting the application of the appellant under s. 22 of the Act and refusing it the permission to discharge the respondents from its employ. Civil Appeal No. 244 of 1954 will, therefore, be allowed and the order of

(1) [1952] II L.L.J. 629.

(2) [1952) II L.L.J, 787.

(S) [1954] L.A.C. 78. 122

Lakshmi Det'i Sugar Mills Ltd, v.

Pt, Ram Sarup

Bhagu:ati J.

Lakshmi Devi Sugar Mills Ud.

Pt. Ram Sarup

BhagwatiJ.

the Labour Appellate Tribunal dismissing the application under A. 22 of the Act will be set aside.

The appellant will be granted permission under s. 22 of the Act to discharge the respondents from its employ.

Under the orders of the Court, one-half of their salary has been already paid by the appellant to the

resiondents from 1\11!-y 27, 1952, onwards. As a result of this decision, the appellant would be entitled to recover the same back from them. Shri N. C. Chatterjee appearing on behalf of the appellant has, however, stated that the appellant would forego the recovery of that amount and would also keep the respondents on the reserve list to be employed in the mills as and when there were vacancies in their permanent cadre. We hope that the respondents will take this offer in the true spirit with which it has been made on behalf of the appellant and behave better in the furture. Shri N. C. Chatterjee has also left the question of costs of both these appeals to us and we do order that, in all the circumstances of the case, it would be proper that each party do bear and pay its own costs of both these appeals.

Appeals allowed.

. -

LAKSHMI DEVI SUGAR MILLS LTD

PT. R.AM SARUP

BHAGWATI

s. K. DAS

ti GovINDA MENON JJ.

Indiistrial Disputes Act

s. 83( a)(b)

s. 22

s. 22(b)

s. 22(b)

s. 24(3)

s. 22

s. 33

Industrial Disputes Act, 1947

s. 22

s. 26

Industrial Disputes Act

s. 22(1)

Industrial Disputes Act

Ram Sarup

s. 22

[1955] 1 S.C.R. 1241

Champdany Jute Mills

Alijan

R.B.S. Lachmandas Mohan Lal

Chini Mill Karmachari Union

CIVIL APPELLATE JuRISDICTION

H.J. Umrigar

S. N. Andley

Rameshwar Nath

Lakshmi Devi Sugar Mills Ud

Purshottam Tricumdas

R. Ganapathy Iyer

B. P. Maheshwari

Ram Sarup

Setalvad

Porus A. Mehta

R.H. Dhebar

s. 22

s. 23

Chitauni

Deoria

Motilal Singh

May 27, 1952

Ram Sarup

Bhagwati

Jemadar

May 28, 1952

Chini Mill Mazdoor Sangh

June 2, 1952

Lakshmi Devi Sugar Mills

June 5, 1952

June 6, 1952

s. 22

June 9, 1952

s. 23

s. 22(b)

s. 22

s. 23

Lakshmi Devi Sugar Mills Ud

s. 22(b)

N. C. Chatterjee

s. 22

s. 23

s. 22(b)

Lakshmi Devi

May 27,

1952

s. 24(3)

Industrial Disputes Act, 1947

s. 22

s. 33

Industrial Disputes Act, 1947

s. 33

Industrial Disputes Act, 1947

Laksh1ni Devi Sugar Mills Ud

s. 33(b)

s. 33(a)

s. 33(a)

Section 33(a)

s. 33(a)

s. 33(b)

s. 33

s. 33

Industrial Disputes Act, 1947

s. 26

Industrial Disputes Act, 1947

s. 22(b)

s. 23

Lakshmi De'Oi Sugar Mills Ud

Ram Sarup

Bha guati

Lakshmi Devi

s. 22(1)

Industrial Disputes Act

June 3, 1952

Lakshmi Devi Sugar Mills Ltd

Ram SaruP

BhagwatiJ.

s. 22

s. 22

Industrial Disputes Act

s. 22

June 8, 1952

P.R. Aiyar

s. 22

s. 22

s. 22

[1955) 1 S.C.R. 1241

Lakshmi Devi Sugar Mills

Lakshmi Devi Sugar Mi.Us Ltd.

s. 22

s. 22

R.B.S. Lachmandas Mohan Lal & Sons Ltd.

Chini Mill Karma.chari Union(9)

Assam Oil Companies

s. 22

Lakshmi Det'i Sugar Mills Ltd

s. 22


S.C.R.

SUPREME COURT REPORTS 91

admissible for the purpose.

In our judgment, the 1956 finding of the High Court on this issue was clearly Rafa Sri Silendra erroneous.

Narayan Bhanja Each of the conclusions we have arrived at on the D•o first two points is quite sufficient, by itself, to enable v. . us to dispose of this appeal and it is not necessary for Th• Slate 01 Oms"

us to deal with or express any opinion on the other - Th 1 h Das C.J. three points canvassed before us. e resu t, t erefore, is that this appeal should be dismissed with costs and we order accordingly.

MESSRS PRATAP~AL LUXMICHAND v.

COMMISSIONER OF INCOME-TAX, MADHYA

PRADESH. [S. R. DAs, C. J., BHAGWATI and VENKATARAMA

AYYAR JJ.]

Registration of firm-Deed of partnership and application for registration not signed bu all partners-Refusal to register by the In come-tax Officer-Powers of the Appellate Assistant Oommissione1- I ndian Income-tax Act (XI of 1922), 1. 26-A-Indian Income-tax Rules, 1922, rule 2.

The appellant (a firm) consisted of seven partners and a deed of partnership was executed by all the partners except one who happened to be in Jail being a security prisoner under the Defence of India Rules.

An application for registration of the firm under s. 26-A of the India.n Income-tax Act was made before the Incometa.x Officer, who, however, rejected it on the ground that the deed of partnership and the application for registration were not signed by all the partners. On appeal, the Appellate Assistant Commissioner cancelled the order of the Income-tax Officer and directed him to register the firm after obtaining the signature of the partner who had not signed before, both on the application for registration and the deed of partnership.

Held, that under Rule 2(c) of the Indian Income-tax Rules, 1922, £re.med under s. 26 A(2) of the Indian Incometax Act, the Appellate Assistant Commissioner had only the power to direct registration of the firm if an application duly signed by all the partners had been presented to him before the assessment was confirmed, reduced, enhanced or a.nnulled and tha.t he wa.s not legally

February 8

1956 competent to direct the Incometax Officer to register the firm after . obtaining the signature of the partner who had not signed before.

Messrs Pratapmal

Luxmicliand

Commissioner of

Income-tax, Madhya Pradesh

CIVIL APPELLATE JURISDICTION: No. 199 ofl955.

Civil Appeal

Appeal by special leave from the judgment and order dated the 17th day of April 1953 of the Nagpur High Court in Miscellaneous Civil Case No. 53 of 1950.

Nur-ud-din Ahmad and Naunit Lal, for the appellant.

0. K. Daphtary, Solicitoi-General of India, G. N.

Joshi and R.H. Dhebar, for the respondent.

1956. February 8.

The Judgment of the Court was delivered by

BHAGWATI J.-This is an appeal with special leave from the Judgment and Order of the High Court of Judicature at Nagpur on a reference made by the Income-tax Appellate Tribunal, Bombay Branch 'A' under section 66(1) of the Indian Income-tax Act XI of 1922 whereby the High Court answered the referred question against the appellant . . The appellant, a firm of Messrs Pratapmal Laxmichand of Betul consisted of 7 partners, viz., Misrilal Goti, Meghraj Goti, Panraj Goti, Phulchand, Basanti" bai, Ratanbai and Gokulchand Goti. A deed of partnership was executed on the 12th February 1944 by all the partners except Gokulchand Goti who happened to be in the Seoni Jail being a security prisoner under the Defence of India Rules. He was unable to sign the same in spite of all efforts to obtain his signature in prison. An application for registration of the firm under section 26-A of the Act for the assessment year 1943-44 was made on the 24th March 1944 personally signed by the other 6 partners of the firm and was accompanied by the deed of partnership which also had been signed by those 6 partners. The Special Income-tax Officer, Nagpur, rejected the application on the ground that the deed itself was not valid inasmuch as it had not been signed

by all the partners mentioned in the body and there .195/i was no signature of Gokulchand on the deed and the Messrs Pratajmlal application. An appeal was taken to the Appellate Lu.miichand Assistant Commissioner against this decision of the v.

Special Income-tax Officer on the 24th April 1944.

Commissionerof Gokulchand appended his signature to the deed of Income-tax, partnership in Seoni Jail on the 9th January 1945. Madhya Pradesh The appeal was heard before the Appellate Assistant BhagwatiJ.

Commissioner on the 20th March 1947 and he passed an order on the 17th February 1948 cancelling the order of the Special Income-tax Officer and directing him to register the firm after obtaining the signature of Gokulchand both on the application for registration and the deed of partnership. At the instance of the Commissioner of Income-tax, C. P. and Berar, an appeal was filed against this order of the Appellate Assistant Commissioner by the Income-tax Officer, Spl. I.T. cum E.P.T. Circle, Nagpur, before the Income-tax Appellate Tribunal. The Tribunal allowed the appeal by its order dated 11/16 October 1948 observing that the Special Income-tax Officer was justified in refusing to register the firm as the application for registration was not signed by Gokulchand, that Rule 2( c) of the Indian Income-tax Rules, 1922, on which the Appellate Assistant Commissioner seems to have relied did not apply and the Appellate Assistant Commissioner was not justified in directing the Income-tax Officer "to, register the firm after obtaining the signature of Seth Gokulchand both in the application for registration and the deed of partnership". The appellant applied for a reference to the High Court under section 66(1) of the Act and the Tribunal referred the following question arising out of its order for the opinion of the High Court: "Whether on the facts and in the circumstances of the case the Appellate Assistant Commissioner was legally competent to direct the Income-tax Officer to register the firm after obtaining the signature of Seth Gokulchand both in the application for registration and in the deed of partnership". When the statement of the case was being drawn up by the Tribunal, counsel for the appellant suggested that the words

Meara Prata/lfnal

Llumlchrm4

Commlaslonerof

lncottM-lax, Madhya Pradesh

BhagwatiJ.

appearing in para 6 of the statement, viz., "No application was submitted to the Appellate Assistant Commissioner seeking his permission under Rule 2(c) of the Indian Income-tax Rules" be deleted. He also suggested that the concluding words in the question referred to the High Court, viz., "after obtaining the signature of Seth Gokulchand both in the application for registration and in the deed of partnership" be deleted. With regard to the latter suggestion the Tribunal observed that they were unable to delete the same inasmuch as the words sought to be deleted were the concluding words appearing in the Appellate Assistant Commissioner's order dated the 17th February, 1948 giving directions to the Income-tax Officer and were words which were material to the question before the High Court. With regard to the first suggestion counsel for the appellant had stated that the appellant had submitted three applications to the Appellate Assistant Commissioner all dated 20th March, 1947 and that it would be wrong to state that no application was submitted to the Appellate Assistant Commissioner. The allegation made by the appellant was properly investigated subsequently and the Tribunal was satisfied that the appellant did not appear to have put in the application dated 20th March, 1947 as alleged. This .being the position the Tribunal stated that no change in the statement of case was called for as suggested by the appellant.

It was on this statement of case by the Tribunal that the referred question ca.me to be determined by the High Court. Before the High Court the appellant had applied on the 27th November, 1950 that the three certified copies of the three applications dated 20th March, 1947 made by the appellant to the Appellate Assistant Commissioner with their originals should be sent for by the High Court from the Income- . tax Tribunal and an order had been made accordingly.

The High Court was of the opinion that the Appellate Assistant Commissioner should have ordered registration of the firm provided there was an application before him duly signed by all the partners. As,

however, there was no such application, he could not 1956 have directed the Income-tax Officer to register the M P t ,_ , fi f b . . h . f G k l h d essrs ra a,, ... a. rm a ter o tammg t e signature o o u c, an on IMxmichana the application and also in the partnership deed. The v.

High Court accordingly answered the referred ques- Commiuioner of tion in the negative.

Income-tax, An application under section 66-A(2) of the Act for Madhya Pradesh a certificate for leave to appeal to this Court against BhagwatiJ. that order was dismissed by the High Court but the appellant obtained special leave to appeal against the same from this Court on the 6th December, 1954.

The main question that arises for our determination in this appeal is:-What are the powers of the Appellate Assistant Commissioner on the hearing of an appeal against the refusal by the Income-tax Officer to register a firm under section 26-A of the Act and Rule 2 of the, Indian Incometax Rules, 1922?

Section 26-A of the Act provides:-·

"(l) Application may be made to the Income-tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income-tax or supertax.

(2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed; and it shall be dealt with by the Income-tax Officer in such manner as may be prescribed".

Rule 2 of the Indian Income-tax Rules, 1922, which was in force at the relevant period, in so far as is material for the purpose of this appeal, provided:-

" Any firm constituted under an Instrument of . Partnership specifying the individual shares of the partners may, under the provisions of section 26-A of the Indian Income-tax Act,. 1922 register with the Income-tax Officer the particulars contained in the said Instrument on application made in this behalf.

Such a pp Ii cation shall be signed by all the partners

1956 (not being minors) personally and shall be made-.

r .. Sf's PrataPmal

(a) before the income of the firm is assessed for Luxmichand any year under section 23 of the Act, or v. eo, nmlssloner of

Income-tax, JJfadhya Pradesh

Bhagwatij.

(b) ........................ or

(c) with the permissii>n of the Appellate Assistant Commissioner hearing an appeal under section 30 of the Act, before the assessment is confirmed, reduced, enhanced or annulled, or

(d) ....................... .

(e) ........................ ".

The decision of the Income-tax Officer in regard to the invalidity of the deed of partnership inasmuch as it did not bear the signature of Gokulchand was not challenged by the appellant at any stage. of the proceedings nor in the statement of case before us.

Counsel for the1appellant, however, relying on a passage in the "Lw and Practice of Income-tax by Kanga and Palkhivala'', 3rd Ed., at page 754, urged that it was not necessary that the partnership agreement should be signed by all the partners and if the agreement had not been signed by one of the partners but that partner had assented to the agreement and put it forward along with the other partners for registration, the agreement would be admissible for registration. In the first instance, it was not open to the appellant to urge any point which was not taken in the statement of case and even if it was open to him to urge that contention we do not think it necessary to express any opiqion on the correctness or otherwise of the statement above referred to in view of the construction which we put on Rule 2 of the Indian Income-tax Rules, 1922.

The Rules were framed under .section 26-A(2) of the Act and had statutory force.

Under Rule 2, the a, pplication for registration of the firm was to be made to the Income-tax Officer and the particulars contained in the Instrument of Partnership specifying the individual shares of the partners w.ere to be registered with him on an application made in that behalf signed by all the partners (not being minors) personally.

No such application was submitted to the Special Income-tax Officer in this case before he

made his order on the 18th March 1944, and, on the 1956 materials as they stood on record then, the order of M

-P ,, .

Offi c l . 'fi d essrs rataJ!mal the Special Income-tax cer was periect y JUStl e .

Luxmichana No such application signed by all the partners of the v. firm including Gokulchand was also available before Commissioner of the Appellate Assistant Commissioner when he heard Income-tax, the appeal on the 20th March 194 7.

The appellant Madhya Pradesh contended that he had in fact filed in the office of the Bhaguati J.

Appellate Assistant Commissioner on the said 20th March 1947 three applications one of which was such an application signed by all the partners personally including Gokulchand and it was strenuously urged on his behalf that the Appellate Assistant Commissioner passed his order dated the 17th February 1948 ignoring the said application which had been filed in his office. It was urged that, if the Appellate Assistant Commissioner had before him the said application dated the 20th March 1947 signed by all the partners personally including Gokulchand, it was his duty to direct a registration of the firm himself without anything more inasmuch as the deed of partnership had been signed by Gokulchand on the 9th January 1945 and the application for registration of the firm dated the 20th March 1947 bore his signature.

The direction given by the Appellate Assistant Commissioner to the Income-tax Officer to register the firm was, it was contended, therefore proper and we were asked to treat the words "after obtaining the signature of Seth Gokulchand in the application for registration and in the deed of partnership" as superfluous. .

We are not impressed .with this argument. Asappears abundantly clear from the terms of the order made by the Appellate Assistant Commissioner himself and also from the statement of case prepared by the Tribunal, the application signed by all the partners personally including Gokulchand was not before the Appellate Assistant Commissioner.

An application had been made by the appellant before the Tribunal to amend the statement of case by deleting from para 6 thereof the words ''no application was submitted to the Appellate Assistant Commissioner

'lrlessrs Pratap,,.,, z

Luxtnial1and

Co11•1t1issionet' o/

lncoine-tax, lvladl1ya Pradesh

BhagwatiJ.

seeking his permission under Rule 2(c) of the Indian Income-tax Rules" but the same had been rejected by the Tribunal as a result of proper investigation conducted by it subsequently, the Tribunal stating that they were satisfied that the assessee did not appear to have put in an application dated the 20th March 1947 as alleged.

The reference was heard by the High Court on this statement of case prepared by the Tribunal and no steps were taken by the appellant before the High Court for having the statement of case amended by the Tribunal or for having a further statement of case submitted by the Tribunal recording therein the facts alleged by the appellant.

We must, therefore, decide this appeal on the facts stated in the statement of case by the Tribunal and on the basis that the application for registration dated the 20th March 1947 signed by all the partners personally including Gokulchand was not before the Appellate Assistant Commissioner.

If that was the position, the only power which the Appellate Assistant Commissioner had under Rule 2(c) was to accord permission to the appellant to make the application in proper form to the Incometax Officer signed by all the partners personally including Gokulchand before the assessment was confirmed, reduced, enhanced or annulled.

The Appellate Assistant Commissioner had, under the Rule, no power to direct the Income-tax Officer to register the firm after obtaining the signature of Gokulchand both in the application for registration and in the deed of partnership as he did. As a matter of fact the appellant did not ask for such permission from the Appellate Assistant Commissioner nor was any revision taken by the appellant before the Commissioner under section 33-A of the Act against the said order of the Appellate Assistant Commissioner. The appellant contented himself with arguing that the order made by the Appellate Assistant Commissioner was justified and the sole controversy which arose between the parties and was the subject matter of he referred question was whether the Appellate. Assistant Commissioner was legally competent to direct the Incometax Officer to register the firm after obtaining the 1956

sigi; iatur~ of Gokduchahnd dbotdh inf the atpplichtionTfhor Muwa Pratapmal reg1strat10n an m t e ee o par ners i.p. e !.u%michantl appellant attempted no doubt to have the words v. "after obtaining the signature of Seth Gokulchand Commisaionerof both in the application for registration and in the Income-tax, deed of partnership" deleted from the referred ques- Madhya Pradesh tion. '!'hat attempt, however, failed and no steps BhagwatiJ. were tsken by the appellant before the High Court at the hearing of the reference to either have the referred question amended or reframed in order to bring into prominence his contention in regard to the powers of the Appellate Assistant Commissioner.

On the question as framed, the only answer which the High Court could give was that the Appellate Assistant Commissioner was not legally competent to direct the Income-tax Officer to register the firm after obtaining the signature of Gokulchand both in the application for registration and in the deed of partnership. Rule 2(c) above-quoted did not empower the Appellate Assistant Commissioner to do anything of the sort and we are of the opinion that the answer given by the High Court in the negative was, therefore, correct.

Counsel for the appellant tried to support his argument by referring to the provisions of the earlier partnership deeds between the several partners of this firm in the years 1929and1941 which specifically provided that in the event of retirement, or death of, or relinquishment, of his share by a partner; the partnership will not be dissolved but will be continued, in case of death of any of the partn.ers, by such of the partners as remained and the legal representatives or nominees of the deceased partner and in the case of retirement of any of the partners by such of the partners as remained. We fail to understand what bearing these clauses have on the determination of the referred question. In the result, the appeal of the appellant fails and must stand dismissed with costs.

Rafa Sri Silendra

Narayan Bhanja

PRATAP~AL LUXMICHAND

BHAGWATI

Income-tax Act

Indian Income-tax Rules, 1922

s. 26

Income-tax Act

Indian Income-tax Rules, 1922

s. 26

Pratapmal

Luxmicliand

Nur-ud-din Ahmad

Naunit Lal

K. Daphtary

G. N.

Joshi

R.H. Dhebar

Appellate Tribunal, Bombay Branch

section 66(1)

Income-tax Act

Misrilal Goti

Meghraj Goti

Panraj Goti

Phulchand

Basanti" bai

Ratanbai

Gokulchand Goti

12th February 1944

section 26

24th March 1944

Nagpur

Gokulchand

Lu.miichand

Commissionerof Gokulchand

BhagwatiJ.

Assistant Commissioner

11/16 October 1948

Indian Income-tax Rules, 1922

Seth Gokulchand

section 66(1)

Meara Prata

17th February, 1948

27th November, 1950

20th March, 1947

section 66

6th December, 1954

section 26

Indian Incometax Rules, 1922

Section 26

Indian Income-tax Rules, 1922

section 26

Income-tax Act

section 23

section 30

Kanga

Palkhivala

Indian Income-tax Rules, 1922

section 26

20th March 194 7

Madhya Pradesh

20th March 1947

9th January 1945

section 33

Seth Gokulchand Commisaionerof


.....

S.C.R.

SUPREME COURT REPORTS 939

RAJ A BAHADUR MOTILAL POON A MILLS

TUKARAM PIRAJI MASALE.

[BHAGWATI, VENKATARAMA AYYAR, S. K. DAS and GovINDA MENON JJ.]

Industrial Dispute-Strike-Change in the existing system of working-Workers obiecting as illegal change and going on strike-

Strike, whether illegal-Bombay Industrial Relations Act, 1946 ( Bom. XI of 1947 ), s. 97(1)( c).

By s. 97(1)(c) of the Bombay Industrial Relations Act, 1946: "A strike shall be illegal if it is commenced or continued only for the reason that the employer has not carried out the provisions of any standing order or has made an illegal change".

The management of the appellant Mill desiring to make a change in the existing system of working started making an exper~ ment by asking a few workmen who had volunteered to work at the rate of four looms to a weaver for a period of two months. The other workers objected that this was an illegal change on the ground that the management could not legally introduce any change with

out first going through the procedure prescribed by the Act, and went on strike. The question was whether the strike was illegal.

Held, that as the workmen had gone on strike only for the reason that the change or experiment made by the appellant was an illegal change, their action came within the express terms of s. 97(1)(c) of the Act and the strike was illegal.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 323 of 1955.

Appeal from the judgment and order dated July 2, 1953 of the Bombay High Court in Special Civil Application No. 159 of 1953.

r1 R.J. Kolah and A.G. Dave, for the appellant.

H. R. Gokhale, K. R. Ghaudhury and M. R. Rangaswamy, for respondent No. 2.

1956. October 31. The Judgment of the Court was delivered by

GOVINDA MENON J.-On July 20, 1954, the High Court of Judicature at Bombay granted a certificate of fitness under Art. 133(l)(c) of the Constitution

October 3/,

Raja Bahadttr Motilal Poona Mills v.

Tttkara1n Piraji

Jf.lasale

GotJinda Mcno1~ J.

that the judgment of that court dated July 2, 1953, .passed in Special Civil Application No. 159 of 1953, was a fit one for appeal to the Supreme Court as it involved a substantial question of law, and it is in pursuance of such certification that the above appeal is now before this court. A brief resume of the facts and circumstances, which led to the application for a writ of certiorari in the High Court, becomes necessary for a correct appreciation of the question of law involved and may, therefore, be shortly stated.

The appellant which may hereafter, for the purpose of convenience, be called "The Mill", is a limited company owning and possessing a Cotton Textile Spinning and Weaving Mill situated in Poona, employing a large number of workmen who have a union of theirs.

The first respondent is a workman employed by the Mill and the second respondent is the

Poona Girni Kamagar Union of which the first respondent is a member.

Respondents 3 to 5 were formally added as parties in the first instance, but their names were struck off as unnecessary at the time of the hearing. The appellant was running 580 looms, for working which one weaver had been allotted at the rate of two looms; and when things were in that state on August 29, 1951, the Management issued a notice to the effect that from September 1, 1951, it was desired to carry on an experiment of four looms to a weaver for a period of 2 months, on 16 looms. If at the end of that period or before the expiry of the same it was found that the working was successful, the Management would introduce the scheme after giving the notice of change required under the Act. The object of this notice was ostensibly to introduce rationalization or rather efficiency system of work, if and when the suggested experiment proved successful.

As a resut of this notice on September 4, 1951, the Secretary of the Union wrote to the Manager of the appellant Mill intimating that under the Bombay Industrial Relations Act the Management could not legally introduce any change in the existing system of working without first giving notice of the change

in the prescribed form to the representatives of the Union and workers and without going through the .other procedure prescribed by the Act; and the Management were further informed that if they insisted in carrying on the change illegally, the work- • men would be free to move the proper courts. The notice also stated that the introduction of the new system would affect the workers' wages and cause great hardship; and that if anything untoward happened, the blame would be wholly on the management, as it would be impossible for the Union to control the workers in the matter.

Four workers volunteered to work the experiment and started working accordingly on the 16 looms on September 6, 1951, whereupon the other workmen raised an objection and the four loyal workmen were prevented from continuing with the experimental work. But the Management did not withdraw the notice and none except the 4, was required by the Management to take part in the experiment. The second shift among the workmen also refused to work with the result that there was a complete strike in the Mills between the 6th and the 26th of September, 1951.

On September 10, 1951 the appellant filed an application under sections 78 and 97 of the Bombay Industrial Relations Act, 1946 (Born. XI of 1947), praying that the strike resorted to by the weavers working on both the shifts commencing on September 6, 1951, and continuing till the presentation of the application be declared illegal being in contravention of the provisions of the said Act. On September 16, 1951 the Vice-President of the Mill Mazdoor Sabha filed a written statement in answer to the above complaint stating that the workers did not strike work in contravention of the Bombay Industrial Relations Act and that the weavers never refused to do their proper and usual work but refused only to do the illegal work insisted on them by the employers; in other words, they were agreeable to have two looms per weaver and not to work the attempted experiment.

Within three days of the filing of the 11, bove written

Raja Balladur

Motilal Poona Mills v.

Tttkaratn Piraji

Masale

GovifJda Menon J.

Raja Bahadur Motilal Poona

Mills v.

Tukaram Piraji

Masale

Govinda Menon J.

statement, two of the workers filed an application under sections 78 and 98 of the Bombay Industrial Relations Act before the same Labour Court against the Management praying for a declaration that the action of the Management had resulted in an illegal lockout in contravention of the Act, and, therefore, • the Management should be ordered to withdraw the said illegal change.

The appellant filed a written statement countering the allegations contained in the application for the declaration of an illegal lockout and stated that their action was not in contravention of the Bombay Industrial Relations Act, as it did not constitute an illegal change.

The Labour Court at Bombay heard both the applications together and by a combined order dated September 26, 1951, held that since the Management had not compelled any one to accept any work, their action could not be considered ari illegal lockout. At the same time, it held that the workers did not create a situation amounting to an illegal strike.

The result of these findings was the negation of the grant of the prayers contained in the respective applications, but in addition the court declared that the action of the Management was an illegal change and, therefore, the notice whereby the experiment was attempted to be tried, should be withdrawn.

The workers were content with the outcome of their application but the Management ha.;, ing been aggrieved by the declaration that their action amounted to an 'illegal change' filed an appeal before the Labour Appellate Tribunal at Bombay (Appeal No. 293 of 1951) upon which the learned Judges of the Labour Appellate Tribunal took the view that the strike by the workmen was illegal. They also concluded that there was no lockout on the part of the Management. That being the case, the order of the Labour Court declaring that there was an illegal change was set aside with the declaration that the strike in question was illegal with the necessary consequences.

In order to get the saidorder of the Labour Appellate Tribunal quashed, an application for a writ

....

of certiorari under Arts. 226 and 227 of the Constitu- 7956 tion was filed by the two of the workers before the , R . 8 h d High Court of Bombay where Chagla C.J. and Dixit ;:traz°P;:; J., took the view that since the decision of the Appel- Mills late Tribunal was erroneous, the same should be v. quashed, with the result that the decision of the Tukaram Piraji Labour Court was upheld. It is this judgment that Masale is under appeal before us as a result of the certificate Govinda Menon J. granted by the High Court of Bombay.

A reading of the relevant portions of the statute is necessary to find out whether the order appealed against is justified or not. The Bombay Industrial Relations Act, 1946 was enacted to regulate the relations of employer and employees, to make provisions for the settlement of industrial disputes and to provide for certain other purposes. This statute repealetl the Bombay Trade Disputes Conciliation Act, 1934 and the Bombay Industrial Disputes Act, 1938.

Section 3(8) defines "change" as meaning an alteration in an industrial matter and sub-s. (15) contains a definition of 'illegal change' as meaning an illegal change within the meaning of sub-ss. (4) & (5) of s. 46 which are in the following terms:-

" (1) ............................................... .

(2) ............................................... .

(3) ............................................... .

(4) Any change made in contravention of the provisions of sub-sections (1), (2) and (3) shall be illegal.

(5) ]'ailure to carry out the terms of any settlement, award (registered agreement or effective order or decision of a Wage Board), (a Labour Court or the Industrial Court affecting industrial matters) shall be deemed to be an illegal change".

Section 42 which speaks of change may also be quoted so far as it is relevant for our purpose:-

" (1) Any employer intending to effect any change in respect of an industrial matter specified in Schedule II shall give notice of such intention in the prescribed form to the representative of employees. He shall send a copy of such notice to the Chief Conciliator, the Conciliator for the industry concerned for the

Raja Bahadur Motilal Poona

Mills

Tukaram Piraji

Ma sale

local area, the Registrar, the Labour Officer and such . other person as m .. y be prescribed. He shall also affix a copy of such notice at a conspicuous place on the premises where the employees affected by the change are employed for work and at such other place as may be directed by the Chief Conciliator in any particular case.

" Govinda Menon J. 'Industrial matter' has also been defined in the Act in s. 3(18) in the following words:

" 'Industrial matter' means any matter relating to employment, work, wages, hours of work, privileges, rights or duties of employers or employees, or the mode, terms and conditions of employment, and includes:- ( a) all matters pertaining to the relationship between employers and employees, or to the dismissal or non-employment of any person;

(b) all matters pertaining to the demarcation of functions of any employees or classes of employees;

(c) all matters pertaining to any right or claim under or in respect of "()r concerning a registered agreemerit or a submission, settlement or award made under this Act;

(d) all questions of what is fair and right in relation to any industrial matter having regard to the interest of the person immediately concerned and of the community as a whole;".

Schedule II, para 4 mentions "rationalization or other efficiency system of work" and therefore when any such rationalization is introduced, it is obligatory upon the employer to give notice of such an intention in the prescribed form to the representatives of the employees.

We may also refer to s. 3(35-A) defining 'stoppage' in the following terms:-

" 'Stoppage' means a total or partial cessation of work by the employee in an industry acting in combination or a concerted refusal or a refusal under a common understanding of employees to continue to work or to accept work, whether such cessation or refusal is or is not in consequence of an industrial dispute;".

- •

S.C.lt.

SUPltEME COUltT REPORTS 945

Sub-section (36) defines 'strike' as follows:-

" 'Strike' means a total or partial cessation of work by the employees in an industry acting in combination or a concerted refusal or a refusal under a common understanding of employees to continue to work or to accept work, where such cessation or • refusal is in consequence of an industrial dispute".

Chapter XIV of the statute concerns itself with illegal strikes and lockouts of which s. 97 deals with illegal strikes, whereas s. 98 deals with an illegal lockout. According to s. 97(1)(c), a strike shall be illegal if it is commenced or continued only for the reason that the employer has not carried out the provisions of any standing order or made "an illegal change".

In considering whether the strike in question was illegal, the learned Judges of the High Court )lave expressed the opinion that there is a common law right for an employee to stop work and that it is only by statutory prohibition that certain strikes have been made illegal in the interest of labour relations.

In the present case since there had been no 'illegal change" effected by the employer, the High Court took the view that on the very finding of the Appel- ' late Tribunal that the change was a legal change, the strike in question did not come within the ambit of s. 97.

Learned counsel for the appellant has pressed two arguments before us with regard to the construction of s. 97(1)( c) of the Bombay Industrial Relations Act, 1946.

His first argument is that the High Court was in error when it held that there was any such right as a common law right of an employee to go on strike ._""' and s. 97 constituted an inroad on that right. Learned counsel has submitted that under s. 97(l)(c) a strike shall be illegal if it is commenced or continued only for the reason that the employer has not carried out the provisions of any standing order or has made an illegal change; if a st.rike is illegal when it is commenced or continued only for the reason that the employer has made an illegal change, a fortiori it must be illegal when it is commenced or continued for a legal change. The contention of learned counsel is

Raja Bahadt1r

Motilal Poona

Mills

Tttkaratn Piraji

Masnl.:

Govinda Menon J.

that by necessary implication cl. (c) condemns a strike which is commenced or continued for a change which Raja Bahadur MotitatPoona is not illegal. The second argument of learned counsel

Mills is that the true scope and effect of cl. (c) is this: the v. word 'only' occurring in the clause goes with the word Tukaram Piraji 'reason', and if the strike is commenced or continued Masate for the only reason that the employer has made an Govinda Me, onJ. illegal change, it shall be illegal. The test is not whether there was a legal or illegal change in fact but what was the reason for which the employees went on/strike, and if the employees commenced or continued a strike only for the reason that the employer had made an illegal change, the strike would be illegal within the express terms of the clause.

In our opinion it 'is unnecessary to decide in this case whether the first argument of learned counsel for the appellant is correct or not; because we are clearly of the opinion that the second argument with regard to the construction of s. 97 ( 1) ( c) is correct and should prevail. In this c'ase the workmen themselves came to court with the plea that the action of the employer amounted to an illegal change. In their application to the Labour Court, they said: "That for the above-mentioned reasons it is prayed that this Honourable Court be pleased to declare the said lockout by the opponent Mills as illegal being in contravention of the Bombay Industrial Relations Act, and the opponent be ordered to withdraw the said illegal change". It is obvious, therefore, that the workmen in this case struck work only for the reason that the change or experiment made by the appellant employer was an iflegal change. The action of the workmen, therefore, came within the express terms of s. 97(1)(c) of the Act. The learned Chief Justice did not consider this aspect of the case, and reached a conclusion with regard to the legality of the strike on a reasoning which did not give full effect to the words used ins. 97(1)(c). In our view, the true test was to find out the reason for which the strike was commenced or continued, and it was unnecessary to consider or decide whether there was a common law right of the workmen to go on strike or whether the workmen had the right to go on strike as a means of collective bargaining against a change which they did not like.

Mr. Gokhale appearing for the workmen has taken us through the different provisions of the Bombay Industrial Relations Act, 1946, and has contended that the workmen have the right to go on strike as a means of collective bargaining against any measure adopted by the employer which the workmen may consider to be detrimental to their interests, provided the strike does not come within the prohibited ambit of s. 97. Even assuming that Mr. Gokhale is right in his contention, it is clear to us that if the wol"kmen commence or continue a strike for the only reason that the employer has made an illegal change, they come within the express terms of s. 97 (1) ( c). It is immaterial whether the change is subsequently found by the Labour Court to be a legal change. It is worthy of note that there is a separate provision for imposing a penalty on an employer who makes an illegal change. The relevant consideration, however, with regard to s. 97(1)(c) is the reason fo:t which the strike is commenced or continued. That reason in this particular case is clear enough. The workmen themselves said that they commenced and continued the strike because the employr had made an illegal change. That being the position, the strike was illegal within the express terms of s. 97(1)(c) of the Act.

We are, therefore, of the opinion that, on a proper interpretation of s. 97(1)(c) of the Act, the strike which was commenced and continued from September 6, to September 26, 1951, was clearly illegal.

The appeal is, accordingly, allowed and the order of the High Court dated July 2, 1953, is set aside. The result, therefore, is that the order of the Labour Appellate Court dated September 4, 1952, stands, with the declaration that the strike in question was illegal with its usual consequences.

In this case, the appellant had agreed, while asking for a certificate from the Bombay High Court for leave to appeal to the Supreme Court, to pay the taxed costs of the respondents in one set. Learned

Raja Bahadur Motilal Poona

Mills v.

Tukaram Piraji

Ma sale

Govinda MenonJ.

Raja Bahadu,.

Motilal Poona

Mills v.

Tukaram Piraji

Ma sale

Govinda Menon J,

November 1.

counsel for the appellant himself has drawn our attention to the agreement. In view of that it is n9t necessary for us to decide in this case whether it was open to the Bombay High Court to pass any order about costs in this Court while granting a certificate of fitness under Art. 133(l)(c) of the Constitution, and we direct that the appellant should pay to the respondents the costs of this appeal in one set and bear its owncosts thereof.

Appeal allowed.

DW ARKA DASS BHATIA v.

THE STATE OF JAMMU AND KASHMIR.

[JAGANNADHADAS, B.P. SINHA and J&FER IMAM JJ]

Preventive Detention-Grounds based on alleged illicit smtigglina of three categories of essential goods to Pakistnn-Two categories found not to be essential goods-Whether order of detrntion bad- Jammu and Kashmir Preventive Detention Act, Wll, ss. 8(2)

and 12(1).

The petitioner was detained by virtue of an order of detention passed by the District Magistrate, Jammu, under s. 3(2) of the Ja.mmu and Kashmir Preventive Detention Act, 2011 and tbat order was'confirmed and continued by an order passed by the Government of the State of Jammu and K"shmir under s. 12(1) of the Act after taking the opinion of the Advisory Board.

The order recited tl!at it was necessary to detain the petitioner vdth a view to preventing him from acting in a manner prejudicial to the maintenance of supplies and services essential to the community and was based on the ground of alleged illicit smuggling by the petitioner of essential goods such as shaffon cloth, zari and mercury to Pakistan. It was '- found that shaffon cloth and znri were not essential goods.

It was not established that the smuggling attributed to the petitioner was substantially only of mercury or that the smuggling as regards shaffon cloth and zari was of an inconsequential nature.

Held, that the order was bad and must be quashed. The sub jective satif:; faction of the detaining authority must be properly based on all the reasons on which it purports to be based.

If some out of those reasons are found to be non-existent or irrelevant, the Court cannot predicate what tbe subjective satisfaction of the authority would have been on the exclusion of those rea&ons.

939

RAJ A BAHADUR MOTILAL POON A MILLS

TUKARAM PIRAJI MASALE

BHAGWATI

S. K. DAS

GovINDA MENON JJ.

Bombay Industrial Relations Act, 1946

s. 97(1)( c)

s. 97(1)(c)

Bombay Industrial Relations Act, 1946

s. 97(1)(c)

R.J. Kolah

A.G. Dave

H. R. Gokhale

K. R. Ghaudhury

M. R. Rangaswamy

GOVINDA MENON

High Court of Judicature at Bombay

Art. 133(l)(c)

GotJinda Mcno1~

Supreme Court

Poona

Poona Girni Kamagar Union

August 29, 1951

September 1, 1951

September 4, 1951

September 6, 1951

26th of September, 1951

September 10, 1951

sections 78 and 97

Bombay Industrial Relations Act, 1946

September 16, 1951

Mill Mazdoor Sabha

GovifJda Menon

Govinda Menon

sections 78 and 98

Labour Court at Bombay

September 26, 1951

Labour Appellate Tribunal at Bombay

Arts. 226 and 227

Chagla

Dixit

Tukaram Piraji Labour Court

Masale

High Court of Bombay

Bombay Industrial Relations Act, 1946

Bombay Industrial Disputes Act, 1938

Section 3(8)

s. 46

Section 42

Schedule II

s. 3(18)

Schedule II

s. 3(35-A)

s. 97

s. 98

s. 97(1)(c)

s. 97

s. 97(1)( c)

Bombay Industrial Relations Act, 1946

s. 97

s. 97(l)(c)

s. 97

s. 97(1)(c)

s. 97

s. 97

s. 97(1)(c)

s. 97(1)(c)

s. 97(1)(c)

September 6, to

July 2, 1953

September 4, 1952

Bombay High Court

Raja Bahadur Motilal Poona

Tukaram Piraji

Govinda MenonJ.

Art. 133(l)(c)

JAGANNADHADAS

B.P. SINHA

J&FER IMAM

ss. 8(2)

and 12(1)

s. 3(2)

Kashmir Preventive Detention Act, 2011

s. 12(1)

Pakistan