38.C.R.

SUPREME COUR'i: REPORTS 589

been paid on the basis of the trading results of the previous year and depended upon the profits earned in the previous year. In the .oircumstances it cannot be held that one month's pay as closing bonus is payable as an implied condition of service irrespective of the profit made by the appellant. It seems to have been of the nature of profit bonus, even though it may have been paid at a uniform rate for ten years.

We therefore allow the appeal, set aside the order of the tribunal and reject the claim of the. workmen for any closing bonus over and above that paid by the appellant for the year 1958.

In the circumstances we order the parties to bear their own costs.

Appeal aUowed.

THE MANAGEMENT OF INDIAN CABLE CO.,

LTD., CALCUTTA

ITS WORKMEN

(B. P. SINHA, C.J., K. SuBBA Rao, N. Ra.r.AGOPA.LA

AYYANGAR, J. R. MuDHOLKAR and T. L.

VENK.AT.AR.AM.A AIY.AR, JJ.) Industrial Dispute-Closure of branch-Retrenchment of workmen-Right to be absorbed in other branches-Branch if an industrial establishment-Individual dispute and industrial dispute-DiBtinction-Dispute raised by majority of workmen if an industrial dispute-Competence of State Government t~ make reference-"lndustrial dispute" "industrial establishment", meaning of-Industrial Dispute. Act, 1947 (14 of 1947), ss. 2(k), 10, 25G.

Section 25-G of the Industrial Disputes Act, 1947 provided : "Where any workman in an industrial csta: blishment •... is to be retrenched and he belongs to a

Jardine ilendersen '

Lit.

V, The W 011'mtn

Wonchoo J.

1961 ·-- March 6.

Tiu M augnn1nl of

lndiata Cabl1 C..,

lid. a a/cull•

v. 111 Wor.bntn

590 SUPREME <; JOURT REPORTS [1962] SUPP.

particular category of workmen in that establishment .... the employer shall orclinariJy retrench the \\orkrnan who was the last to be employed in that category .... "

The appellant company which was carrying on business in the 1nanufacture and sale of electric cables, wires etc., had a nurnber of branch(:; iucluding Arn!Jala all over India. ta registered office was at Calcutta.

The business of the Ambala branch consisted, apart from the sale of goods manufactured by the appellaut, in the execution of cc1 tain contracts with the Government. After the contracts were completed the appellant considered that, having regard to the volume of its own busi.ness in that area, the 1naintcnancc of a branch at Arnbala was unrcmunerativc, and decided to close it.

Accordingly on May 8, 1958, the appellant terminated the , erviees of all its workmen at 1\mbala, numb, ering 11 in all, paid them their salaries etc., and wound up the branch.

On a repre!entation made by six of the workmen who had hem discharged that the closure of the branch \Vas unjustified, that all the branches of the company formed 'one unit the retrenchment should be done according to All-India scnioritr basis, and that the workmen had a legal right to get employment in the other branches, the Punjab Government referred the matter for adjudication to the Industrial Tribunal, Punjab, on the questions whether the retrenchment was justified and legal under s. 25-G of the Industrial Disputes Act, !947, and whether the seniority of workmen in all the branches of the company should be pooled for the purpose of effecting retrenchment. By an order dated February 11, 1960, the Tribunal directed the appellant company to take back the six workmen in their employment with effect from May 8, 1958, so that there was no break in the continuity of service of any of them.

The appellant challenged the legality of the order on the grounds, inter alia, (I) that after the closure of the branch at Ambala it had no place of business on the State of Punjab and that, in consequence, the Government of Pu?jab had no jurisdiction to make the reference, (2) that the disputes of the workmen were individual disputes and not industrial disputes as defined in the Act and that, therefore, the Governme.nt had no power to refer the same for adjudication, and (3) that, in any case, the branch at Ambala wa'i an industrial establish ment within s. 25G of the Act and that having been ciosed no relief cou!d be granted to the \\'Orkrncii under that section. After theGovernment of Punjab had made the reference, the Delhi Union and the Union of Kanpur branch appeared before the Tribunal and supported the cause of the six workmen.

The

evidence in this case showed (I) that though all the employees of the company were treated alike in the matter of provident fund, bonus and similar benefits, the rules relating to the category of workmen and their scales of wages for the various branches w81 e different, (2) that each branch had its own labour union, maintained its own accounts and had its own banking accounts, and (3) that the workmen when recruited for the particular branch were to be employed only there.

Held, (I) that in coming to a decision on the question whether a particular branch of company is an industrial establiShment under s. 25 G of the Industrial Disputes Act, 1947, the decisive elements are the location of the esiablishmen'I: and the functional integrality i.e., the. existence of one code relat .. ing to the categories of workmen "and their scales of wages, and that, as in the present case, the branches Were located in different places and there was also a lack of functional integrality, the Ambala branch was a separate industrial establishment.

Associated Cement Companies v. Their Workmen, (1960) I S.C .R. 703, relied on.

India Tyre and Rubber Co. v. Their Workmen,(1957)2 L.Il.J. 506 and Tulsidas Khimji v. F. Jeejeebhoy, (1960) 19 F.J.R. 396, approved. The question whether a branch or a department is in itself an industrial establishment within s. 25 G of the Act is one of mixed fact and law, and the correct inference to be drawp from the facts established is one of law open to con• sideration by the Court.

(2) that what imparts to the dispute of a workman the

1 character of industrial dispute is that it affects the rights of the workmen as a class, so that where the dispute of a workmen is sponsored by a Union or by a considerable number of workmen it becomes an industrial dispute withiH s, 2(k) of the Act.

In order that an individual dispute can validly become an industrial dispute by being supported by a Union or by a considerable number of workmen such support must precede the reference. ·

Central Provinces Transport Services Ltd. v. RaghuntUh Gopal Patwardhan, (1956) S.C.R. 956, The newspapers Ltd.

v. The State Industrial Tribunal, U.P., (1957) S.C.R. 754 and Bombay Union of Journalists v. "Hindu'', Bombay, (1961) 2 L.L.J. 436, relied on.

The Management of Indian Cable Co.,

Lid. Calculla

v. lta Workmen

1'62

'Thi ?J ano11ment of

"lndt4n c.blt Ce.,

Ltd.; Caktllla v.

I ts-Workmen

li92 SUPRE.ME COUR'i. REPORTS [1962] SUP!'.

(3) that in considering whether the Punjab Goverhment \\'as cotnpctcnt t~ n1ake die order of reference, the principle that a court or tribunal \'lould have jurisdiction if the parties reside v..ithin ju1is<liction or if the subject matter of the dispute

ubstantially arises Vl'ithin jurisdiction, \Vas applicable.

L<,/bhai Tricum/a/ .!Jtills Ltd.'" l'in and otltera, ( 1956) I. L.L.J. 557, approvtd and applied.

In the instant case, as the majority of the \vorkmen in tbc A1nbala branch had joined in the dispute, it was an industrial dispute, and as the dispute \Vas in Punjab, the reference ma'1e by the Punjab Goverrunent was proper, but as the cstahlishment had been closed and the closure itself was not impugned, s. 25 G had no application, and therefore, the respondent workmen were not entitled to any relief under that section.

Crvu, APPELLATE Jc:RISllICTION : Civil Appeal No. 402 of 1961.

Appeal by special leave from the award dated February 11, 1960, of tho Industrial Tribunal, Punjab, Reference No. 5 of 1959.

G. B. Pai, J. B. Dadachanji, 0. C. Mathur and Ra1.1inder Narain, for the appellant.

C. B. Aggarwal, H. C. Aggarwal apd Janardan Sharma, for the respondents.

1962. March 5. The Judgment of the Court was delivered by VENKA'J'ARAMA AIYAR, J.-This is an appeal by spt,'<lial leave against the award of the Industrial Tribunal, Punjab, passed in Reference Ko. 5 ofl959 on February 11, 1960.

The appellant is a Public Limited Company incorporated under the Indian Companies Act, 1913, and it carries on business in the manufacture and sale of electric cables, wires

etc. Its registered office is at Calcutta and its fao- . tory is located at Jamshedpur. Before January I, '1956, it had no branches and was selliIJg its goods through McEsrs Gillanders Arbuthnot and Co., as its agents. During this period, a company incorporated in England and called the British Insulated

3 S.C.R.

SUPREME COURT ~EPORTS 593

Callendars Cables Ltd. referred to as the B.I.C.C.

Ltd., in these proceedings was carrying on business in the sale of cables and wires in India with , branches at Bombay, Madras, Calcutta, Delhi, Trivandrum, Ahmedabad, Nagpur, Kanpur, Bangalore and Ambala. Towards the end of 1955, the B.I.C.C. Ltd. decided to stop its trading in India and to close its branches. The appellant Company then decided to take them over and run them as its own.

The workmen in the service of the B.I:C.C.

Ltd. were most of them offered re-employment on terms and conditions contained in a communication dated November 23, 1955, sent by the a, ppellant to them, and they having accepted them the branches began to function as those of the appellant from January l, 1956.

Among the branches thus taken over was the one at Ambala. The business of that branch consisted, apart from the sale of goods manufactured by the appellant, in the execution of the contracts of the B.I.C.C. Ltd., with the Government of Punjab, which it had taken over. These contracts were about to be completed in the beginning of 1958, and as, having regard to the volume of its own business in that area, the appellant considered that the maintenance of a branch at Ambala was unremunerative, it decided to close it. Accordingly on May 8, 1958, it terminated the services of all its workmen at Ambala, numbering 11 in all, paid them their salaries, wages in lieu of notice, retrenchment compensation, gratuity, and provident fund, and wound up the branch.

According to the appellant, the workmen accepted these amountB without any protest and cooperated with the management in the despatch of its goods to Delhi and other places. It is the case of the work; men that they received the amounts uuder protest.

But nothing, however, turns on thi"· On June 5, 1958, six of the workmen who had been discharged on

The M anagn,;..t•J . lntlian Gahl~ c,,., ·

Ltd

Y, . , Its Worhnen

Aiy11rJ.

Th. JI-'"""' of l11iia O.bl• Co.,

Lt&. Oalcutto

•• /l.s Worl:men

A\>.•r J.

594 SUPREME COURT REPORTS [1962] SUPP.

:lfay 8, 19;!8, sent a representation to the managemont complaining th>tt the closL1re of tho branch was

unjL1stilied, that as all the branchos of tho Company

formed one unit, tho retrenchment should be done

according to "All India soniority basis" and that the workmen. had a legal right to get employment in the other branches. A copy of this representation

was sent to the Punjab Government, which issued a notification on .February :!, 1959, referring the dispute for adjudication to the Indus'trial Tribunal.

Punjab, under s. (I )(d) of the Industrial Disputes Act, J 947, hereinafU-r referrrd to as "the Act." The

reference was in these terms :-

"Whether the retrenchment of the following workmen of Ambala Branch of the Indian Cable Company Ltd., is justified and legal under the provisions of section 25 G of the Industrial Disputes Act, 1947, and whether the soniority of workmen in all the branches of the company was pooled for tho purpose of effecting retrenchment? If not, to what relief are the following workmen entitled ?

Then follow the names of the six workmen.

Bofore the Tribunal, the appellant raised certain preliminary objections to the maintriinability

of the referedce. By its order dated August Ii, 1959, the Tribunal overruled these objections. Then the matter was heard on the merits, and on February II, 1960, the Tribunal pronounced its award directing tho appellant to take back the "six workmen in thoir employment with effect from 8-5·1958 so that there is no break in tho continuity of service of any of them" and to pay them "their full wages from 8-5-1958 till the date they are absorbed". It is against this a.\l'ard that the present appeal by special leave has beon brought.

:...

The appellant has urged the following contentions in support .of this appeal:- ( 1) The Tribunal was not competeµt to entertain or adjudicate on the reference.

(2) The Punjab Government was not competent to make the order of reference dated February 2, 1959.

(3) The disputes of the workmen were individual disputes and not industrial dispputes as defined in the Act and that, in consequence the Government had no power to refer the same for adjudication.

(4) The branch at Ambala was an industrial establishment within s. 25G and that having been closed no relief could be granted to the workmen under that section. ( 1) The question' as to the competence of the Tribunal to entrtain or adjudicate on the reference could shortly be disposed of as it is covered by our decisions in The Atlas Cycle Industries Ltd. v. Their Workmen (I) and M/s. Dalmia Dadri Cement Ltd. v.

Bhri A.N. Gujral and others(') with whioh the present appeal was heard. The material facts bearing on this question are that Shri A.N. Gujral was appointed to the Industrial Tribunal on April 28, 1953, when he was over sixty years of age. The validity of his appointment is impugned on the ground that it is not in accordance withs. 7(3)(c) of the Act.

Then, on April 9, 1957, Shri A. N. 'Gujral was appointed as presiding officer of a new Tribunal constituted under s. 70 of the Act. The validity of this appointment is attacked on the ground that as his appointment as Tribunal on April 28, 1953, was invalid he was not qualified to be appointed under s. 7A(3)(b) of the Act.

Then again, under s.7C(-b), Shri A. N. Gujral would have had to retire on June 4, 1957, when he would have attained the age of

(1) C.A. No. 18B of 1961 decided on February 8, 1963.

(2) C.A. No. 375 of 1960 decided on Februaty 12, 1962.

J96:1

The JL ana, nn&il oJ

Indian C•ble c,, .. ,

Ltd., CtJlcuttd

Its Workmen

Ai}iar J.

llMI

TM M 411•tt""111 of

lnJian C"blt Co.,

Ltd. Calctltta

•• Ila Workmen

A.iymJ.

596 SUPREME COURT REPORTS [1962] SuPP.

sixty-file.

But the Punjab Log!slature then enacted Act 8 of 1957 raising tho ago of retirement under s. iC (b) from sixty-fivo to sixty-seven.

This law, it is said, is repugnunt to Art. 14 of the Constitution as its object was to benefit one individual Shri A. N.

Gujml am! tho notifications under the Act extending his term of office from time to time am in opera.ti ve.

The present reference which was made to him on February :l, 1959, is said to he invalid on the ground that Sbri Gujra.l was not validly in office. On June 4, 1959, the term of office of Shri A. N. Gujral expired, and Shri Passey, retired .Judge of the Punjab High Court was appointed as Tribunal in his place. The present reference came up before him and resulted in the award dated February 11, l!J60, which is the subject matter of the present appeal It is said that a.s the reference was not validly pending before Shri A. N. Gujral, Shri Passey Wll.B not seized of it as his successor and that as there was no fresh reference to him, the proceedings are without jurisdiction and void.

We have held in our Judgments in The Atl.as Cycle Industries case. (1) and M /s Dalmia Dudri Cement case(') tha.t the notification Jated April 28, 1953, appointing Shri A. ~- Gujral as Tribunal under s 7(3) of the Act and the notification dated April 19, 1957, appointing him as the Presiding Officer under s .. 7C are valid, that the Punjab Act 8 of 1957 is not unconstitutional, and the notifications extending the tenure of office of Sbri A. N. Gujral till , Juno 4, 1959, are intra iires. 1<, ollowing the8e decisions, we must overrule this contention.

(2) We shall nox:t consider the question as to the competence of the Punjab Government to make the order of reference dated February 2, 1959.

The contention of tho appellant is that after the closure of the branch at Ambala 011 May 8, 1958, it had no place of business in the State of Punjab,

(1) C.A No. IBB of 1''61 decided OD February S, 1962.

(2) C.A. No. 375 of 1960 decided OD February 12, 1962.

and that, in consequence, on February 2, 1959, the Government of Punjab had no jurisdiction to make the reference. Section 10 of the Act provides that when an industrial dispute exists or is apprehended the appropriate Government may refer it to a Tribunal for adjudication. Section 2 (a) defines appropriate Government as meaning the Central Government in relation to certain classes of disputes and State Government in relation to other industrial disputes. It is common ground that the dispute with which we are concerned is not one falling within the jurisdiction of the Central Government and that it is only the State Govern ment that has the competence to make the refer. ence. The point in controversy is as to which of the States has jurisdiction to do so.

The Act contains no provisions bearing on this question, which must, consequently, be decided on the principles governing the jurisdiction of Courts to entertain actions or proceedings. Dealing with a similar question under the provisions of the Bombay Industrial Relations Act, 1946, Chagla, C. J. observed in Lalbhai Tricumlal. Mills Ltd, v.

Vin and other (1):

"But what we are concerned with to decide is : where did the dispute substantially arise? Now, the Act does not deal with th'e

cause of action, nor does it indicate what factors will confer jurisdiction upon the Labour Court.

But applying the well-known tests of jurisdiction, a court or tribunal would have jurisdiction if the parties reside within jurisdiction or if the subject matter of the dispute substantially arises within jurisdiction .. -In onr o'pinion, these principles are applicable for deciding which of the States has juris diction to make a reference under s. 10 of the Act.

(I) [1955]1.L, L.J. 557,558.

The M (lnagem1nl of 1 ndiaii COO/I Co., ·

Ltd. Calcutta

'v, lit Workmen

AYar J.

Tiu JI"""'""'"' •f I ru/icn Cblt C..,

Ltd. Cd-u11• ..

Its Workmt"

SUPREM~ COURT REPORTS [1962] SUPP.

Discussing the question on the principles stated above, it is not m dispute that the appellant was not carrying on business anywhere in Punjab

on the date of the reference. The Punjab Government would, therefore have jurisdiction to make the reference only if the ca.use of action had arisen wholly or in part within the State. If the validity of the closure of the br<inch had itself been in dis· pute, the ca.use of action must undoubtedly be held to have arison within the State and the reference would be competent. It is argued for the respondents that as the retrenchment on which, the dispute h'18 arisen was made in Amhala, the State of Punjab had jurisdiction to refer under s. IO of the Act, the question of the appropriate reliefs to be granted under s.

25G.

But the appellants contend that when once the closure itself is accepted as valid and binding, then there could be no queRtion of retrenchment, which can only be with reference to a continuing industry as held by this Court in Pipruioh Sugar Mill.s J, td. v. P.ipmidi Sugar

Mil/.s Jfazdoor Union(')and llariprasarl Shii:slwnkar Shukla v. A. D. /Jivikar (') :<nd that to attract s. 2.'iG. it must be hold that the Calcutta office and the branches all form one establishment and that in that viow RR relief under that section could be granted only in relation to branches situate in other States, no part of the ca.use of action could be held to havo arisen within the State of Punjab.

In the view we are taking on the question as to whether. the branch at Ambala was an industrial establishment within s. 25G, we do not consider it necessary to express any opinion on this question.

(3) It is next contended for the appellant that the disputes raised by the respondent-workmen were not industrial disputes as defined in the Act but merely individual disputes, and that in consequence the Government had no power to refer

(I) [1956] S. C.R. 872.

(2) [1957) S.C.R. 121. '

them to a tribunal under s. 10 of the Act.

Section 2 (k) defines industrial dispute as meaning "any dispute or difference between employers and employers, 01 between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person." According to the appellant a dispute can be an industrial dispute within this definition only when it is raised by workmen and not merely by one of them. The respondents. on the other hand, contend that on its true construction, s. 2(k) will comprehend even a dispute between an employer and a single workman, and the observations in R v. National Arbitration Tribunal (') are relied on as supporting that position. There the question discussed was whether the expression "dispute or difference between . employers and workmen" in Article 7 of the Conditions of Employment and National Arbitration Order, 1940, would cover a dispute between an employer and one workman, and Lord Goddard, C. J., answered it in the affirmative, basing himself on s. I (1) of the Interpretation Act, 1889, which provides that words in the plural shall include the singular.

The argument is that, having regard to the rule of interpretation embodied in s. 13 (2) of the General Clauses Act, 1897, the ratio of this decision is equally applicable to the construction of s. 2 (k) and that it must be held to include a dispute between an employer and a single workman.

This question however is not res integra. It has been considernd in a number of cases in this Court and decided adversely to the present contention of the respondents. In Central Provinces Transport Services Ltd. v. Raghunath Gopal Patwardhan (')

the point in controversy was whether an individual

(1) (1951] 2 All. E.R. 828,831.

(2) [1956] S.C.R. 955 . . .

The ManaRement of

Indian Cable Ct.,

Ltd. Co/cull•

Its Workmen

.A{yar J,

Thi M""ag"""'I of

lndi.,. Coblt C..,

Lid. c./au14

v. /Is. Jf 01km, n

""'"" '

600 SUPREME COURT REPORTS [1962] SUPP.

dispute was an industrial dispute within s. 2 (k)

o~ the Act.

After stating that three divergent vwws had been expressed on the question and that tho preponderance of judicial opinion was in favour of t.he view that a dispute between an employer and a single employee could not per se be an industrial dispute but that it might beoome one if it was taken up by a Union or a number of workmen, this Court observed:

"there is considerable reason behind it.

Notwithstanding that the language of s. 2 (k) is wide enough to cover a dispute between an employer and a single employee, the scheme of the fodustrial Disputes Act does appear to contemplate that the machinery provided therein should he set in motion, to settle only disputes which involve the rights of work men as a class and that a dispute touching the individual rights of a workman was not . intended to be the subject of an adjudication under the Act, when the same had not been taken up by the Union or a number of workmen." (p. 964 ).

This view was adopted in Th,; Newspapers

LW..

v. '/'he State l11d1rnt.rial '/'rihmzal,

C. P. (1) where the point arose directly for decision.

Discussing th<.' meaning of the expression "industrial dispute" in the U.P.

Industrial Disputes Act which is the same as s. 2(k) of the Act, this Court observed that though on the rule of construction laid down in s. 13(2) of the General Clauses Act, 1897, the plural would include the singular, in the context of the legislation, the word "workmen" did not include "a workman", and that a disput-0 between an employer ancl a single workman did not fall within the dofinition of industrial dispnte. Both these decisions were followed by thia Court in Bombay Union of

(1)':.(1~571 S. C.~R. 754.

Journalists v. "Hindu", Bombay (1) and the law was thus stated :- "Therefore, the applicability of the Industrial Disputes Act to an individual dispute as diHtinguished from a dispute involving a group of workmen is excluded, unless the workmen as a body or a considerable section of them make common cause with the individual workman". (p. 439).

The respondents seek to distinguish these decisions on the ground that in all of them the dispute was raised by a single workman, whereas in the present case six of the workmen have joined in making a demand. They urge that a dispute ceases to be an individual dispute and becomes an industrial dispute when more than one workman joins in it. It is true th'.it in the decisions citerl above the dispute was raised by a single workman. But the reasons on which these decisions rest, viz., that the policy behind the Industrial Disputes Act is to protect workmen as a class against unfair labour practices and not to enact. special provisions for enforcing the claims of individual workmen, would equally militate against the contention that a dispute which is essentially individual in character would become an industrial dispute merely because two persons haye joined in it. What imparts to the dispute of a workman the character of industrial dispute is that it affects the rights of the workmen as a class. That is why the above decisions lay down that the dispute of a single workman would become an industrial dispute when it is sponsored by a Union or by a considerable number of workmen; for it can then be taken that it does affect them as a class. No hard and fast rule can laid down as to the number of workmen whose association will convert an individual into an industrial dispute; That must depend on the facts of each case, and the nature of ·

(1) [1961] 2. L, L.J. 436.

The Managem1mt of Indian Cable Co.,

Ltd Calcutta

Its Workmen

Aryar J.

Tiu Manot1t1llnl of

Indian Cab/, Co.,

LJd. C•k11Ua

Its Workmm

602 SUPREME COURT REPORTS [1962] SUPP.

the dispute. The group might even be a minority, as held by this Court in Associal.ed Cement Companie.~

Lt, d. v. Their Workmen(l).

But. it must he such as to lead to an inference that the dispute is onf> which affects workmen as a clas~.

In this veiw, we shall have now to consider whether the dispute of tho respondents was taken up by a Union, or by a largo number of workmen. The Ambala branch had a Union of the workmen of the appellant company, and that has not moved in the matter. The Delhi branch of the appellant has its own union, and it wrote to the Con'cilation Officer.

Delhi, on December IO, I 958, to intervene in the dispute, but he replied on December Ii, 1958 that ho had no jurisdiction in the matter. Thereupon the union withdrew its application. According to the respondents the Commercial Elll ployees' Union in Delhi was also moved hy them to take up their ca ust• and it did so, hut this is not established. for1•over as it is admitted that no other employees of the appPllant company were members of this Union, it would have had, un the decision of this Court in Hombay Union of Journali'.sts v. "Ilindn", Bombay('), 110 locus standi to take up the dispute.

After the Government of Punjab had made tho reference on February

2, 1959, the Delhi Union appeared before the Tribllllal in Mareh 19ii9, and so did the Union of the Kanpur branch in April 19.59, and both of them supported the respondents. It is argued that this was sufficient to clothe the disputes of the respondents with the character of indurtrial dispute. But if a reference can validly be made only if an industrial dispute exists or is apprehondcd, and if an individual dispute becomes an industrial di8pute only when it is supported by a Union or hy a considerable number of workmen, that support mtrnt necessarily precede the reference and from the foundation for it. The intervention, therefore, of tho Delhi Union

(1) [1960] 3. S.C, R. 157.

(2) [1961] 2 L. L. J. 436,

in March, 195.9 and of the Kanpur Union in April, 1959, cannot give vali<lity to the reference, if it was not valid when it was made. That has been held by this Court in Bombay Union of .Journalists v. "The Hindu", Bombay(l), where it was observed that the validity of a reference must be judged on the facts as they stand on the date of . reference and that just as a withdrawal of the support by a union after a reference is made cannot render it invalid, likewise the support by it after the date ofreference cannot make it valid. If, therefore, the validity of the reference dated February 2, 1959, depended upon whether the cause of the respondents had been taken up by a Union, the question will have to be answered in the negative.

It is then contended for the respondents that even apart from the support of the union, their dispute mu.st be considered to be an industrial dispute, because six of the workm•:n have joined in it, and if regard is had only to the Ambala branch, they even constituted a majority. To this the appellant replies that th" claim of the respondents that retrenchment should have been made nuder s. 25 G of the Act after pooling for purposes of seniority all the branches proceeds on the footing that all the branches from one establishment, that that is also the basis on which the refnence dated February 2, 1959, is made, that therefore in deriding whether a considerable number of workmen have joined in the dispute, regard must bR had to the number of workmen in all-the branches, and that was 860, and that six out of 860 was an infinitesimal number, a mere drop in an ocean, and that therefore the disputes did not become industrial disputes.

The respondents retort that the contention of the appellant that in discharging the respondents, it had not violated s. 25 G proceeds on an assertion that the Ambala branch is a distinct industrial establishment,

(I) [1961] 2. L.L.J. 436 .

196Z

The Manag1ment oj

lndi•n Cable Co., W. Calcutta

y, Ies Worlmen

A.!Jiar J.

Tire ·.lft111agtmtnl of

lndioJt Cabk Co.,

Lid. Calculi a

It> W ., kmen

Ai]or J,

604 SUPRE~IE COURT REPORTS [1962] SuPP.

and that on th:1t footing the rospondentA from a

majority of the workmen hPing Rix out of eleven. ft is manifest that the st11, nd t11, ken hy both the parties on tho question whether the <lispu til in backed by a considerable number of workmen is inconsistent. with the stand t:1ken by them on the question whether tho discharge of the workmen at Ambala

wa~ in contravention of s. 2!lG of tha Act. In this situation tho course which we propose to adopt is first to determine whethor the branch at Amba.la is a sep;1rat{l industrial establishment withins. 25 G of the Act, and then ciecidc the rights of the parties in nccordancc therewith.

( 4) Section 25 G provides tha.t when it is proposeci to retrench workinen on thi> ground of s1irpl11sage the rule tha.t the List t<i eorne should ho

the first to go should ordinarily be observed. Rut this is subject to two limitations. It operates only within the establishment in which the retrenchment

i~ to be m>1dc and to the c; itogory to which the retrenched workmen belong. It is these two factors that are determin11, tive of the true scipe of the section.

ow what is an industrinl establishment ?

Then is a definition of it given in the Explanation

to s. 2:3 A(:!} but that is limited to ss. 2;>C, :!5D 'lnd

2.~E. There being no definition of th() expression in thn.t Act applicable to s. '.!.5Q, w" must construct it in its ordinary sonRe, guideci by such indir, ations as th" context might furnish. [n Prai:at Kumar ](ar

v. W.'J'.C. Parker ('), Harries, C .• T., observed that the words "indu&rial establishment" meant tho place at which the workmen were employed, and that accordingly s. 2;{ of the Act which impo, cs 11 prohibition 11gain"t strikes by any "workman who i~ employed,

in anv industrial establishment.", "could n'lt cover a case Zlf workmen in Bombay strikiug against an employer with whom employees in Calcutta hav~ a

(I) 1949] J.F.J.R. 245.

dispute." According to this view, it is of the essence of the concept of an industrial establishment that it.is local in its set-up. This is also implicit in the Explanation to the definition of "layoff" in s.2(kkk) of the Act, that "every workman whose name is borne on the muster rolls of the industrial establish ment and who presents himself for work at the establishment at the time appointed for the purpose during normal working hours on any day and is not given employment by the employer within two hours of his so presenting himself shall be deemed to have been laid-off for that day within the meaning , of this clause."

If this be the correct connotation of thll words "industrial establishment", then the branches of a company located in different places must be held to be distinct "industrial establishments", for purposes of s. 25G.

This question came up directly for decision before ohe Madras High Court in I ndi.a

Tyre and Rubber Co. v. Their workmen('). In that case, a company whose business was to manufacture and sell tyres had its head office in Bombay and a branch office at Madras. There were sub-depots at Ernakulam, Bangalore and Vijawada within the jurisdiction of the Madras Branch. The company retrenched some of the workmen at the Madras office as surplus, and on that a dispute was raised by them that as the retrenchment had been made without pooling all tbe depots as one unit, s. 25G had been infringed. The Tribunal accepted that contention and held that the retrenchment was bad. The correctness of this decision having been questioned in a petition under Art. 226, the Madras High Court held on an examination of the scheine of the Act and on a review of the authorities, that if an industry had establishments located in different places, each of them would be a separate industrial establishment within s. 25G of the Act, and that accordingly the office at Madras was one industrial establishment

(1) [1957] 2 L.L.J. 506.

The M tmgettwnt of

I nd; on Cable Co.,

Ltd. calcUlli2

V,· Its Wolkintn ·

Aiyar J.

196?

"fh1 .If ""'fl••""' of Indian Cablt Co.,

Lu. C.lcu114

Ii. Werkmrn

006 SUPREME COURT REPORTS [1962] SUPP.

and that the sub-depots in the different States were separate industrial establishments.

On the factf1, this decision is very near the present case and is strongly relied on for the appellant.

We should, in this connection, refer also to s. lO(lA) of the Act, wherein it is provided" that when the dispute relates to industrial establishmonts in more than one State, tho Central Government might refer it for adjudicat10n to a National Tribunal.

This provision is based on the notion that the industrial establishments of a concern situated in different States are distinct establishments.

Then again on the terms of s. 250, the relief provided therein is to be granted within the category of workmen who are proposed to be discharged. This posits that there is one code governing the grades of workmen an<l their scales of wages and that is ordinarily possible only when the establishment is functioning at a given plaoe. If there arc different branches in different places and there are different scales of wages, the rule laid down in s. 250 would be incapable of compliance unless all the branches have one sea.le of wages and the rules provide for automatic transfer from place to place having regard to the seniority and grades.

Thus whether we have rogar<l to the popular sense of the words 'industrial establishment', or to the limitation of relief under s. 25G to workmen in the same category, the conclusion would appear to bo inescapable that each branch of a company should normally be regarded as a distinct industrial establishment.

Bearing th.e above principles in mind, we may now proceed to consider whether, on the facts found the Amba.la branch is an industrial establishment. The Tribunal bas held tha.t it is not and the respondents insist that it is a finding of fact with which thia Court cannot interfere in an appeal

1962 under Art. 136 of the Constitution. We are unable to agree.

In Associated Central Companies v.

Their W orlcmen (1), this Court has held that the question whether a factory at Chaibasa and a quarry at Rajanka owned by the appellant were two different establishments for the purpose of s. 25E was not merely one of fact, as its determination involved the application of the correct tests underlying s. 25E, and in that view, this Court examined the correctness of the conclusions of the Tribunal and reversed its decision on the merits. In our judgment, the question whether a branch or a department is in itself an industrial establishment within s. 25G is likewise one of mixed fact and law, and the correct inference to be drawn from the fact established is one of Jaw open o consideration by this Court, vide also the decision of the Born bay High Court in Tulsidas Khimji v. Ji'. Je, ejeebhoy (2), where a .finding by the Tribunal that four departments of a firm which were all parts of one establishment was set aside in an application under Art. 226, the Court holding that it was not purely a question was fact.

T111 M "tlnagemen t OJ '

Indian Cable Co.,

Ltd. Caleutta

We may now proceed to examine the facts of the present case.

The Tribunal begins its award with the statement, "it. may be held straightaway that the workmen have not been able to prove strictly any common pool of seniority". The appellant contends that having regard to the scope of the reference, the Tribunal should have on this finding answered it against the respondents. What the Tribunal did was that it then went on to examine certain other facts and stated its conclusion thus:-

"All these facts establish abundantly that each of the branches of the I. C. C. is ot a separate industrial entity or establishment but only a component part of the central unit a "" Calcutta to which it belongs. It is thus the

(l) (1960] l S.0.R. 703.

(2) [1960] 19 F:J.R. 396. ·

•• Its Wo, kmen'

AV-tar J,

Thi JI onagtmt11I of

l11dian CJbk lo"

Lid. Calcutta

Its Jf orkmtn

Ai.JarJ.

tlos SUPREME cou1rr HEPORTS [1962] SUPP.

Company (f. C. C.) that forms the industrial unit and it must have as required by s. 25G of the Industrial Disputes Act given effect to the principle of last come first go when the occasion for the retrenchment had arisen." Now the facts on which the above conclusion was reached may be classed into two categories-those which have reference to the managPment of the industry. and those which '>ear on the service conditions of the workmen.

Dealing with tho former, the Tribunal finds that it is the company with its registered office at Calcutta that controls and runs all the branches, that it is the company that employs the workmen and dismisses them, thqt the six respondents were appointed not by tho Ambala branch but by the company and that they were discharged on May 8, 1958, by the company, that the branches do not prepare each its own individual annual balance sheet but that it is only the company that prepares its annual balance sheet including therein the accounts of all the branches and that. it is the company that meets the financial requirements of the br, mches.

These facts, it is 11a.id, show that the brn.nches have no separate existence of their own.

We are

0of the opinion that the facts stated above do not support the conclusion of tho Tribunal that all tho branches from one unit of industrial establishmunt. If a Company establishes several branches, the control of these branches must necessarily vest in it, and under thEl provisions of the Indian Companies Act, there can be only one annual balance sheet for the whole company. Un this point R. W. I gave the following evidonco :-

"My duty consists of amalgamation of all the accounts of the various branches of the Co., and to get them audited. The audited account.8 are forwarded to the head office at Calcutta,

3 S.C.R.

SUPREME couRT REP01ii's 609

under my signatures and they are later incorporated in the Company's accounts. The branches prepare their own accounts and forward them to me.

I then make a consolidated statement and get the accounts audited and send them to the head office." It is therefore dear that while the branches have their own separate accounts the company has its own consolidated annual balance sheet as required by the provision of the Companies Act. In mir opinion, the facts stated above do not necessarily lead to the conclusion that the head office and the branches must all be regarded as forming one industrial establishment. On the reasoning of the Tribunal, where the industry has a head office, and branches in other places,-it may be, even in different States-all of them will have to be regarded as forming one establishment. Such a conclusion would in our opinion, be wholly erroneous.

Turning next to the facts relating to service conditions of the workmen, the finding is that the rules of the company relating to provident fund, gratuity and bonus and service conditions in general are applicable to the employees of the company in all its branches. But this again appears to us to be not of much consequence. It only signifies that all the employees of the company were treated alike in the matter of provident fund, bonus and similar benefits. It does not lead to the inference that all the branches were treated as one. What is material for the purpose of the present discussipn is whether the same rules relating to the category of workmen and their scales of wages are in force in all the branches. It is only then that the s. 25G could be applied.

On that the uncontradicted evidence of R. W. 1 is that "the I. C. C. has different scale of pay for different branches".· On this evidence, there can be no question of integrating workmen trenched in one branch in another branch and, in

The Jlanazanen.t ti

Indian Ga6le Co.,

Ltd Calcutto

v. /tJ :workmen

AfvarJ.

I IM 11.._1 of

Indian CMJ. Co.,

ltd., Cakullc

v, ruwor....,,,

"'"" J.

BIO

SUPREJ.IE COURT REPORTS [1962) SUPP.

consequence, the establishment in each branch must be treated as a separate entity. An attempt was made on behalf of tho rni' pondentd to get over this evidence by showing that transfors from one branch to another were uoual. R W. l denied that there was any provision in the rulos for transfor of the employees from one brancfi to another, and cross.examined with reference to the transfer of some of the employees from Bombay to Delhi, he

stated:

"The Delhi branch wanted a typist very very urgently and we sent Mr. l\Iamm from Bombay. After doing his work at Delhi, he was reverted to Bomhay. The same was the cai; e with regard to l\Ir. Tamboowala.

Mr. Tamboowala was <ibo sent from Bombay.

Aftor having been at Delhi for several weeks he returned back to Bombay.

No employee of one branch is sent to another even for a temporary period without his consent." This oviden<"e is fully borne out. by the communication dated November 2:1, l 95!i, containing the terms on which thP respondents and other workmen in the branchc8 were employed. It expressly provides that the "will be stationed in the same place to do work of a similar nature as at present with British Insulated Callender's Cables Ltd.". This clearly establishM that the workmen were recruited only for the particular branch where they were employed, and that is destructive of the contention that all the establishments are to be l'flgarded as forming one unit.

How unrealistic the contention <Jf the resp on den ts i8 will he easily seen when we examine how it will work in the case of some of the respondents.

For example, Shrimati Chameli is a swocpress, who has been in service for 9 yen, r~. Is she to be sent to Trivandrum branch, displacing a swecpress, employed there more recently, and on a lower scale of wages ?

' •

Then again Shri Ram Avatar is a peon employed less than two years previously. Is he to be absorbed in the Madras branch, displacing a peon employed one year ago, on lower wages ? There are likewise two clerks recruited some 2 1/2 years previously. It is these workmen that go to. make up the majority of six.

The appellant also contends that each branch has its own Labour Union, maintains its own accounts and has its own banking accounts and that these facts go to show that each branch is a distinct industrial establishment.

Now the question is whether on the facts found the Ambala branch is a separatP industrial establishment or whether the Head Office and the branches all constitute one establishment. In Associated Cement Companies v. Their Workmen (1) considering the tests applicable for <letermining what constitutes one establishment for purpose of s. 25E(3) of the Act this Court observed:-

"Several tests were referred to in the course of arguments before us such as, geographical proximity, unity of ownership, management and control, unity of employment and conditions of service, functional integrality, general unity of purpose etc ......

It is, perhaps, impossible to lay down any one test as an absolute and invariable test for all cases.

The real purpose of these tests is to find out the true relation between the parts, branches, unit etc. If in their true relation they constitute one integrated whole

we say that the establishment is one; if on the contrary they do not constitute one integrated whole, each unit is then a separate unit." (pp. 7W-717) (ll [1960J l s.c.R 103.

The Management of

Indian Cable Co.,

Ltd., Calcutta

v. tes Workmen

Aiyar J.

J96Z

Th< Man•t•- of

Indian Cobl, Co.,

W. CaluUa

v, /es Work"""

612 SUPRE?liE COURT gEPoH.TS (1962] SUPP.

Relying on the abov•~ observations the respondents conterul th:it as there is unity of ownership: management and control. •md of conditions of service between tho Head Office and tho branches they should be held to he one establishment, where as the appellant contends that as there is absence of geographical unity and functional integrality, each branch should be held to be a separate establishment. In Assuciated Cement Companies case(') it was held that all the tests referred to in the judgm1mt were satisfied and therefore the quest.ion of tho comparative weight to be attached to the several tests did not arise for consideration.

Having regard to the principles deducible from the language of tho section alrnady stated the decisive elements in our judgment are the loeatio!J of the establishment am! the functional integrality i.e. the existence of one code relating to the categories of workmen and their scales of wages.

In 'hdsidas lihirnji's case (') the quest.ion was whother four Departments of a business ostablishment in the city of Bombay were distinct industrial establishments within H. 25G and it was held that as there was no fun et i., nal integrality between them, they should be held to be different ostablishmonts, notwithstanding they were located in the same place.

And in this case ho branches are located in different places and there is also a Jack of functional integrality.

Wo are of opinion that oach branch is a separate industrial establishment. ·

On. this finding it follows that the dispute of the respondents is an industrial dispute as defined in s. 2(k) as that has been raised by the majority of the workmen of tho Ambala branch, which is an industrial establishment. But Ill! the osta.blisbment has been closed and the closure itself is nut impugned as bad on the ground that it

(I) [1960J I. S.CR. 703.

(2) [l!ltiOJ 'O F.J.R. 396.

3 s.c.R.

SUPREME COURT REP(_)RTS 613

is oolonrable and not bona fide, s. 25G has no application and the respondents, therefore, are not entitled to any relief under that section. In the result the appeal is allow0d, the order of the Tribunal is set aside and the reference answered against the respondents. In the circumstances the parties will bear their own costs throughout.

Appeal allowed.

KEWAL Kl{ISHAN

STATE OF PUN.JAB

(J. L. KAPUR, P. B. GAJENDRAGADKAR and T. L.

VENKATARAMA AIYAR, JJ.)

Sea Customs-Goods eeized in reasonable . belief that they are smuggled-Burden of proof-If on person from whose possession goods are seized-Con8litntionality of statutory provision-

The Sea Custom; Act, 1878(8 of 1878),

88 . .167(81), 178A- Foreign Exchange Regu.lation Act, J.947(7 of 1947), 8. 23A.

The appellant was searched by a Customs Official .and some bars of gold were found tied round his walst.

Out. of those bars some were of base metal and the ret of pure g-old which bore foreign marks.

Th~ appellant had no permit from the Reserve Bank of India to import the gold.

He was prosecuted and convicted un.cler :;·. 23i\ of the FQrcign Exchange Regulation Act ands. 167(81) of the Sea Customs Act.

He brought an appeal to the Supreme Court by special leave.

Held, thats. l 78A of the Sea Customs Act, 1878, is constitutiona.1.

The contention that before the presumption under s. l 78A of the Sea Customs Act could he raised the prosecution had to prove that the gold was of foreign origin was rejected and it was held thats. l 78A provides that when the goods are seized in the reasonable belief that they are smuggled goods the onus is on the accused to show that they are not smuggled.

Collector of Customs, Madras v. Nat/iella Sampathu~Chetty \1962) 3 S.C.R. p. 786 followed. ·

1 he Managt111111I of

Indian Gabie Co., Ltd., Calcutta

Its Workmen

AVar J,

A1areh 6.

ITS WORKMEN

B. P. SINHA, C.J.

K. SuBBA Rao

AYYANGAR, J.

R. MuDHOLKAR

ss. 2(k), 10, 25G

Section 25

Industrial Disputes Act, 1947

s. 25

Industrial Disputes Act

s. 25G

s. 25

Industrial Disputes Act, 1947

s. 25

s. 25

Industrial Disputes Act

section 25

Industrial Disputes Act, 1947

s. 25G

s. 70

s. 7A(3)(b)

Art. 14

s 7(3)

Section 10

Section 2

s. 10

s.

25G

s. 2

s. 25G

s. 10

Section 2

s. 2(k)

Article 7

Interpretation Act, 1889

s. 13

General Clauses Act, 1897

s. 2

s. 2

s. 2

Industrial Disputes Act

s. 2(k)

s. 13(2)

General Clauses Act, 1897

Industrial Disputes Act

Industrial Disputes Act

s. 25

s. 25

s. 2

Section 25

s. 2

ss. 2

s. 2

s. 25G

s. 25G

Art. 226

s. 25G

s. 250

s. 250

s. 25G

Art. 136

s. 25E

s. 25E

s. 25G

Art. 226

s. 25G

Industrial Disputes Act

s 609

Companies Act

s. 25G

s. 25E(3)

s. 2(k)

s. 25G

Customs Act

Sea Customs Act, 1878

Customs Act


3 s.c.R.

SUPREME COURT REP(_)RTS 613

is oolonrable and not bona fide, s. 25G has no application and the respondents, therefore, are not entitled to any relief under that section. In the result the appeal is allow0d, the order of the Tribunal is set aside and the reference answered against the respondents. In the circumstances the parties will bear their own costs throughout.

Appeal allowed.

KEWAL Kl{ISHAN

STATE OF PUN.JAB

(J. L. KAPUR, P. B. GAJENDRAGADKAR and T. L.

VENKATARAMA AIYAR, JJ.)

Sea Customs-Goods eeized in reasonable . belief that they are smuggled-Burden of proof-If on person from whose possession goods are seized-Con8litntionality of statutory provision-

The Sea Custom; Act, 1878(8 of 1878),

88 . .167(81), 178A- Foreign Exchange Regu.lation Act, J.947(7 of 1947), 8. 23A.

The appellant was searched by a Customs Official .and some bars of gold were found tied round his walst.

Out. of those bars some were of base metal and the ret of pure g-old which bore foreign marks.

Th~ appellant had no permit from the Reserve Bank of India to import the gold.

He was prosecuted and convicted un.cler :;·. 23i\ of the FQrcign Exchange Regulation Act ands. 167(81) of the Sea Customs Act.

He brought an appeal to the Supreme Court by special leave.

Held, thats. l 78A of the Sea Customs Act, 1878, is constitutiona.1.

The contention that before the presumption under s. l 78A of the Sea Customs Act could he raised the prosecution had to prove that the gold was of foreign origin was rejected and it was held thats. l 78A provides that when the goods are seized in the reasonable belief that they are smuggled goods the onus is on the accused to show that they are not smuggled.

Collector of Customs, Madras v. Nat/iella Sampathu~Chetty \1962) 3 S.C.R. p. 786 followed. ·

1 he Managt111111I of

Indian Gabie Co., Ltd., Calcutta

Its Workmen

AVar J,

A1areh 6.

litu:al Krishan

v, Stale 11/ Punjab

614 SUPREf~ COURT REPORTS [1962) SUPP.

CRIMINAL APPELLATE .TURJSJJICTIOX : Criminal A p1wn 1 No. I '.!6 of l!J5!l.

Appeal by special leave from the judgment and order dated .June 19, l!J5!1, of the Punjab High Court in Criminal Reviion :No 144 of 195!1. ·

R. L. Kohli'., for the appellant.

G. C. Matlwr and P. D. Jfenon, for tho respondent.

l 9fi2. jfarch 6.

The .Judgment of the Court was deliverc>d by

KAPl'H, J.-This is ~.n appeal by special leave against the judgment and order of the High Court of the Punjab and raises tho constitutionality of s.l lliA of the Sc:1 Customs Act, 18iS (Act 8 of 1871'), which ha.H bellfi held by this Court to be constitutional in the Colleclor of Custom.~, Jfa.dra.~ v.

N at!u:lla Sarnpa.tl:n Chcll.1f ( 1).

At the time of arguments before us further point was raised that in order that s. J 78A of the

ea Customs Ac:t may become applicable, the prosecution must. further prove that the goods which wcrn sought to h" affeckd by the order of the Customs Offirer 1rnre goocls of foreign origin and them

must be evidence in Rupport of the reasonablcnes of thl' belief of thP Customs Officer that the goods were &mugglcd goods. The question now 8011ght. to he raised was not agitated in any of thn courts below.

The nppcllant on .February I I, I 958, whm1 he wa" sitting in a th ire! class compartment of the Amritsa Kalka train tanding on Platform No. ii of

the .Amrsar n~.ilway Rta t.ion, Wall searched hy a Customs Offidal anci' S(•mc b3rn of gold were fm; nd tied round his waist.

TheHe gold bars were sPized and a recovery memo was prepared. Out oftheRe gold

(!) [1%2~ 3. S.C..R. 786,

bars four were of base metal and the rest were of pure gold some bearing the stamp of Johmon Mathey & Co. Ltd., 999-10 tolas and 2-1/4 bars bore marks of N.M. Rothschild & Sons 10 tolas (990-0). No permit from the the Reserve Bank to import this gold was produced by the appellant. Under the Foreign Exchange Regulation Act, 11:147, the importation of gold witho11t such permit is prohibited and such contravention is punishable under s.23-A of the said Act read with s.167 (81) of the Sea Customs Act.

The app"llant was prosecuted under.s.23A of the Foreign Exchange Regulation Act and 167( 81) of the Sea Customs Act and his defence was that he was not in possession of the gold bars which were taken from an attache case left by a stranger under the seat where he (the appellant) was sitting. The Additional District Magistrate held the offence to be proved and convicted the appellant of the offence and sentenced him to one year's rigorous imprisonment. An appeal to the Sessions Judge 'resulted in the reduction of the sentence to 8 months' rigorous imprisonment. On revision to the High Court the sentence was reduced to six months' rigorous imprisonment. The appellant has come in appeal by special leave.

The trial court accepted the testimony of the Customs Officials and held that the defence of the appellant was false and that gold worth Rs. 14,000/-

was found in his possession. The learned Sessions Judge in appeal also accepted the testimony of the Cu; toms Officials and hld the defence to be false and canie to the conclusion that the gold was found in possession of the appellant. In the High Court the same plea was taken and was rejected.

For the first time in t.his Court it is contendod that before the presumption under s.178A can be made applicable, it must be proved by the prosecution that the goods were of foreign origin, i.e. had beeH

Kewal Eris/tan

Stol• of Punjab

Kapur J.

l~I

Kewol Kri1hcn

•• St•le of Punjei

616 SUPREME COURT REPORTS [1962] SUPP.

i mpoited from abroad and only then does the presumption under s. l i8A arise which relates only to tho question of Customs duty having been paid. In other words tho contention comes to this that th~ prosecution must first prove that the goods in dispute in a particular case have been imported from a foreign country and once that is proved the onus then will be on the person in whoso possession tho goods :ire found that he had paid the Customs duty. Apart from the fact that this question has never been raised, that is not the effect of s.178A of the Sea Customs Act which provides:-

" l 78A. (1) Where any g1; ods to which this section applies ar<> seized under thiR Act in the reasonable belief that they are smuggled goods, th.) burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.

(2) This section shall apply to gold, gold manufactures, diamonds and other precious

stons, cigaretters and cosmetics and any other goods which th" Central Government may, by notification in the Official Gazette,

sperify in this behalf.

(3) Every notification isgued under sub. section (2) shall he laid before both Houses of Parliament as soon as may be after it is iRBued".

Two Customs officers appeared a.s witnesses, Inspector Satnam Singh and Deputy Superintendent A.N.

Kapur, the former is an Inspector of Land Customs and the latter a Deputy Superintendent of Customs.

There is nothing to indicate in their cross-examination that the officern did not have a reasonable

belief that the goodH werti smuggled goodR and tho question that the officers di1! not have reaimna.- hle belief is not suggested either from the crossll; amina.tion of these witnesses of from the findings

of the courts below.

Even in his statement of case it is contended that the mere existence of stamp of foreign companies on gold does not necessarily prove that the gold is of foreign origin. It might be put on spurious gold which may be of Indian origin. In our opinion .apart from the fact that this question has not been raised, it is quite clear that what s. l 78A of the Sea Customs Act provides is that when the goods are seized in the reasonable belief that they are smuggled goods then the burden of proving that they are not smuggled goods is on the person from whose possession the goods are seized. The onus is on him to show that the goods are not smuggled; that is, not of foreign origin on which duty is not paid. The onus is not on the prosecution to Ehow that the goods are not of Indian origin. That appears to be the view taken in the Collector of OuBtoms, Madras v. Nathella Sampathu Ohetty (1) where at the learned Judges observed : - -

"We are therefore of opinion (1) that section l 78A was constitutionally valid, (2) that the rule as to the burden of proof enacted by that section applies to a contravention of a notification under section 8(1) of the Foreign Exchanges Regulation Act 1947 by virtue of its being deemed to be a contravention of a notification on under section l9 of the Sea Customs Act, ( 3) that the preliminary requirement of section l 78A that the officer seizing should entertain "a reasonable belief that the goods seized were smuggled" was satisfied in the present case." . I~ or opinion there is no merit in this appeal and it is d1sm1ssed.

The appellant will surrender to his bail-bonds.

Appeal dismissed,.

(!) [19G2] 3 S.C.R, 78~.

Kewal Krish1.1n

•• S ta/.1 of Punjab

KapurJ.

s. 25G

STATE OF PUN.JAB

L. KAPUR

P. B. GAJENDRAGADKAR

Customs Act

Sea Customs Act, 1878

Customs Act

Customs Act

Customs Act

Customs Act

Customs Act

Customs Act

section 8(1)

Foreign Exchanges Regulation Act 1947

Customs Act


J962

}r! arch 6

618 SUPRE!IIE COURT REPORTS [Hl62] SUPP.

STRAWBOARD MANUFACTURING CO.

GO BIND

(P. B. GAJElWRAGADKAR, A. K. SAHKaR, and

K. N. \VANCHOO, JJ.)

Industrial Dispute-Autliority of emplovcr to dismiss employee before appro1:a./ of Tribunal-Rule of 111-lerpr(; fation of stalute-['niteil Provinc<S lndu.•lrial Di"putrs Act, J!i47, (L'. P. 28 ~{ J.?47), s.6-E(2)(b)-lndustrial1Xspufos Act, J.'t.Ji), r 14 o'

lfl47), as amended by Act 36 of J!J!jlj, s. 33(2)(b). ' ·

1, he respondent \vas in the r.mplo)ment rif the appellant company.

I-le refused to comply \\'ith orders ghcn to hin1 by various officers of the appellant con1pany from 1iJnc to time.

He ,, as suspended and chargr.-shee1ed.

An c1quiry \Vas heJd.

After the enquiry, thr appellant referrer! thr matter .for the decision of the Labour Comrnissioncr \\'ithCJlil giving a11y prior decision of its ov.111. !Iowever, the Labour Con1missioncr refused to pas; any order and dire.cted the appellant to takr. such action as it thought fit. rhcrcupon, the appellant <lismh:sc<l the appellant. .i\s t\\'O di ... putcs \\Tre pending bet\\ocen the appellant and its \\'orkmen at .'\llahahad and Meerut, the appellant sent applications by post on the sarne day to the tv.o authorities for appro\•al of the ar.tion ra.ken.

The Tribunal at Allahabad approvrd of the action Lut the Labour Court at Meerut refused to approv•: tl.1 <amc.

However the Labour Court held that the appellant \\";-t!i not moti vated by victimisation and a prima fncic rasc had hc:cn 111adc out for the dismissal of the respondent.

Thr. appro\'al was refused on the ground that the application for appro\al ha<l bcr.n made after the dismissal of the rcsponrle11t and the same should have been made before dismissing hin:.

field, that the employer ran disl'hargc or dismiss the employee hr.fore obtaining the approval of 'I'ribunal or the I .. abour Court concerned. The uc of tl:e \\ord ''approval"

suggests that something has been <lone hy tlic en1ploycr "ho seeks approval of. the same fro1n the 'I'ribunal.

If the intention had bce.n that the etnploycr could not pas the order of dismissal or discharge "ithout first obtaining the approval, the language usec.l "otild have bcc11 diffcrer11.. 'fhe legislature intended that the cn1ployer \\ould ha\'e the right to pass an order of <lischare or dismbsal ... ubject to tv.•o conditions, namely, pavment of wages for one n1onth an<l making of an applicaiion to the authority concerned for

approval of the action taken. If the Tribunal does not approve of the action taken by the employer, the result would be that the action taken by him would fall and the workmen would be deemed never to have been dismissed or discharged and would continue to be in the service of the employer.

The dismissal or discharge of an employee, payment of wages and the making of an application for approval should be simultaneous and part of the same transaction.

When an employer dimisses or discharges an employee. he should immediately pay him or offer to pay him wages for one month and also make an application to the Tribunal for approval at the same time. Although all this cannot be done literally• simultaneously, the conduct of the employer should show that the three things were done as a part of the same transaction.

Metal Press Works Ltd. v. Deb (H. R.) and Others, (1962) L. L. j. 7 5, approved. .

The Premier Automobiles Ltd. v. Ramchandra Bhimayya, J.L.R.'(1950) Born. 289 and Indian Extractions Private Ltd. v.

A. V. Vyas, Conciliation Officer,

A. I. R. 1961 Guj. 22, disapproved. '

It is agatnst the rules of interpretation to add words to a provision, \Vhen the provision, as it stands, is capable of a reasonable n1eaning which will give effect to the intention of the legislature even on the words a-; they stand.

CrvIL APPELLATE JuRISDICTION : Civil Appeal No. 387 of 1961.

Appeal by special leave from t, he judgment and order dated April 29, 1960, of the Labour Court, Meerut in case No. 1 of 1960.

B. 0. Misra, for the appellant.

Ranganadham Ohetty, A. V. Rangam, A.

Vedavalli and P. 0. Agarwala, for the respondent.

1962. March. 6.

The Judgment of the Court was delivered by

WANCHOO, .J.- This appeal by special leave raises th~ question. of interpreta:tion of s. 6-E (2l(h) of the Umted Provmces Industrial Disputes Act, U.P.

Act No, XXVIII of 19-li, (hereinafter called the

Strawboa1d Manfacturing Co.

Go-bind

T1'af'lchoo J,

Strawbr.ard Al cnujactttring Co v.

Gob ind

Wancllao J.

620 SUPREME COl'RT REPORTS [191l2] SUPP.

U. P. Act), which is in exactly the Aame terms as s. 3:1 (2)(b) of the Industrial Disputes Act, No. XIV of 1947, (hereinafter referred to aH the Act), 118 amended by Act 36 of LH:"i6.

The question arises in this way. The appellant is a Strawboard Mill. The respondent was in the employ of the appellant. On August 12, I 959, the respondent was 'given certain orders by the Technfoa.l Director of the appellant, but he refused to comply with them.

The same day the respondent refused to comply with certai11 similar order~ given by the machinoman. Again on August 13, l 959, he refused to obey similar orders of the shift in.charge.

Finally, on August 14, he refused to obey similar orders of another shift in-charge. Consequently a notice was rnrved on the respondent to show cause why he should not be dealt with under cl. 22(a) of t.he Standing Orders which provided that wilful insubordination or disohcdicnc(' of anv lawful orders of superior was miAconduct. The respondent submitted his explanation. HP was then suspended and a ebarge-sheC't was served on him nu August 16, l!.l.J9.

Thereafter an inquiry was hcl<l. into th" alleged mi8condnct.

After t.ho inquiry was over t!l<' appellant referred th<' rnattN for the clccision of the Labour CommiHsioncr without gidng any prior dedson of its own as provickd in cl. :10 of the ::lta.m]. ing Orders. The Labour Commission, howc'l'cr, rcfusC'd to give a decision and informed the appellant that it could take such action as it was entitled to under the Standing Ordern. Tho appollant again approached the Labour Commisioner for giving an order as envisaged by cl. 30 of the 8Urnding Orders, but the Labour Commissioner finally refused to pass any order :m(] directed tho appellant to t:ike such action as it thought fit and as was within its power. 'l'hcr<, upon the appellant clismisHctl the r<>spondcnt on February' l, I 960.

As however. two disput-0s were pending between t.he appullant and its workmen one before the Industrial Tribunal

No. 3. at Allahabad and the o\her before the Labour Court at Meerut, the appellant sent applications by post on the same day to the two authorities for approval of the action taken, namely, the dismissal of the respondent. It appears that the tribunal at Allahabad approved of the action on March 22,

1960. When however the same matter came before the labour court at Meerut on April 29, 1960, it refused to approve the action taken, even though the order pas3ed by the tribunal at Allahabad already was brought to its notice. The labour court at Meerut held that the appellant was not motivated by victimisation. It further held that in the inquiry held by the appellant, prima f acie case had been made out rufthe dismissal of the respondent ; but the labour court said that though ordinarily the application of the appellant should have been granted in these circumstances it refused to approve the dismissal on the ground that the application for approval had been made after the respondent had already been dimissed; therefore it held that the application was not bona fide and in the circumstances the prayer that the order of dismissal should be approved was not granted. It was of the view that the proviso to s. 6E(2)(b) required that the application for approval should be made before the dismissal of the workmen concerned, and failure to do so amounted to contravention of the terms of the section. Therefore as the application in this case was made after the dismissal, approval could not be granted and on this narrow ground the la.hour court refused to approve of the dismissal of the respondent. Thereupon the appellant obtained special leave from this Court and that is how the matter has come up before us.

The question thus raised depends upon the interpretation of the terms . of s. 6E (2) which as we have said already correspond word for word with the provisions of s. 33 (2) of the Act. We shall

Strawboard Manufacturing Co.

Gobind •

Wonchoo J.

Strawboard Manufacturing Co.

Oobind

J.t'anchoo J.

622 SUPREME COURT REPORTS [1962] SUPP

therefore set out the provisions of s. 33 (2) which reads as below :-

"(2) Durin!! the pcnde11c:y of any Ruch procceding in respect of an industrial dlRputc, the employer may, in 11ccordanc(J with the standing orders applicablo to a workman concerned in such dispute-

( a)

"(b) for any misconduct not <:onnected with the dispute, discharge or punish, whether by dismissal or otherwise, that workman;

Provided that no such workman shall Le discharged or dismissed, unless he has been paid wages for one month and an application has been ma.do by the employer to the authority before which the proceeding is pending for approval of the ac:tion taken by the em ployer."

We aro concerned in the present appeal with the interpretation of the proviso to cl. (b) which says that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application haH been made by thn employer to the authority before which the proceeding is pending for approval of the action taken by the employer. It is unnecessary to consider in the present case whether applications have to be made, where more than one dispute is pending before more than one tribunal, to all the tribune.ls where the disputes are pending or whether an application to oniy ono of them would be enough. In the present case disputes were pending before two authorities and applications were made to both of them, though curiously the result has been rather unfortunate for the appellant, for one tribunal has approved of the action while the other has not.

Before however we turn to the interpretation of the proviso we may refer to the circumstances in which s. 33( 2) came to be enacted. Originally there was no such provision like s. 33(2) in the Act and the only provision to be found therein corresponded to the present section 33( 1 ).

The objAct behind enacting s. 33 as it was before the' amendment of 1956 was to allow continuance of industrial proceedings pending before any authority prescribed by the Act in a calm and peaceful atmosphere undisturbed by any other industrial dispute. The plain obje<Jt of the section was to maintain the status quo as far as possible during the pendency of any industrial dispute before a tri- . bunal. But it seems to have been felt that s. 33, as it stood before the amendment of 1956, was too stringent for it completely took away the right of the employer to make any alteration in the con ditions of service or to make any order of discharge or dismissal without making any diatinction as to whether such alteration or such an order of discharge on dismissal was in any manner connected with the dispute pending before an industrial authority. It seems to have been felt therefore that the stringency of the provision should be softened and the em ploy er should be permitted to make changes in oonditi!:ms of service etc. which were not connected with the dispute pending before an industrial tribunal.

For the same reason it was felt that the authority of the employer to dismiss or discharge a workman should not be completely taken away where the dismissal or discharge was dependent on matters unconnected with the dispute pending before any tribunal. At the same time it seems to have been felt that some safeguards should be provided for a workman who may be discharged or dismissed during the pendenoy of a dispute on account of some matter unconnected with the dispute.

Consequently s. 33 was redrafted in 1956 and considerably expanded. It is now in five sub-sections

Strawboard Manufacturing Co. v.

Gob ind

Wanchoo J.

StrOUJl><i ord Milflff!W#ri•g Co. v.

Goliod

IV an<hoo J.

624 SUPREME COURT HEPORTS [1962] SUPP.

while before 19;)6 it consisted practically of what

is now sub-s. (l).

The present scheme thereforo of s. 33 is as follows :-Sub-section (l) refers t" matters connected with a dispute which might be pending and forbids any alteration to the prejudice of the workmen concerned in such dispute, in the conditions of eervice applicable to them immediately before the commencement of the industrial proceedings resulting from such dispute and also forbids the employer from discharging or punishing any workman whether by dismissal or otherwise in connection with any matter connected with the dispute; and the employer, if he wants to make any alteration i11 the conditions of service or to punish any workman or discharge him, must get the express permission of the authority before which the proceeding relating to tho dispute might be pending.

Thus sub-s. (l) lays down that if an employer proposes to alter any conditions of service or proposes to punish or discharge a workman in relation to a matter connected with the dispute which might be pending befor<' a tribunal the employer must put such proposal before the tribunal and obtain itl! express permiBl!ion in writing before carrying out the proposal wlwther it be for alteration of any conditions of service or for punishment or discharge of a workman by dismissal or otherwise. Sub-se!]tion (2) (a) on the other hand gives power to the employer to alter any conditions of service not connected with the dispute and this the employer can do without approaching at all the tribunal where tho dispute may be pending. It further permits the employer to discharge or punish, whether by dismissal or otherwise, any workman where tbis may be 'on account of any matters unconnected with the dispute pendinit

before the tribunal; but such discharge or dismissal is subject to the proviso, which imposes certain

Strawboard conditions on it. The intention behind enacting sub-s. (2) obviously was to free the employer from the fetter which was put on him under s. 33 as it was before the amendment in 1956 with respect to action for matters not connected with a dispute pending before a tribunal. So far as conditions of service were concerned, if they were unconnected with matters in dispute the employer was iven complete freedom to change them, but so far as discharge or dismissal of workmen ws concerned, though the employer was given freedom, it was

.i:ll anufacturing Co.

not complete and he could only exercise the power of discharge or dismissal subject to the conditions / laid down in the proviso. Even so, these condi-,, ' tions in the proviso cannot be so interpreted, unle1>ii

of course the words are absolutely clear, as tr.f require that the employer must first obtain approval of the tribunal where a dispute may be pending before passing the order of discharge or dfismissal of a workman, for on this interpretaticfn there will be no difference between s. 33 (1 }' (b) and s. 33(2)(b) and the purpose of the amerndment of 1956 may be lost. / Then we come to sub-s. (3) whch provides that notwithstanding anything contained n sub-s. (2) certain workmen who are called protected workmen shall not be dealt with except with the e)i:press permission in writing of the authority before\which the proceeding is pending. Thus the freedom which was given to the employer under sub-s. (2) jth respect to conditions of service unconnected with the dispute or with respect to discharge or punishment of workmen on the ground of matters unconnected with .the dispute was cut down by sub-s.(3) with respect to a small class of workmen, even though the action of the employer may be unconnected ' with any matter in dispute before the tribunal. The explanation to sub-s. (3) defines who is a protected workmen and sub-s. ( 4) makes consequential provisions with respect to him.

Gobind

Wonchoo .1,

Strawloard MtttrUjacturing Cu.

Go; i1ui

Wanchoo J. \ \ \ \ \ ' •

!i26 SUPREME COURT REPORTS [1962] SUPP.

Lastly we come to sub-s. (5) which lays down that where an employer makos an application under the proviso to Bubs. (2) for approval of thu action taken by him, the authority concerned shall without delay hear such application and pass as expeditiously as possibl<' such order in relation thereto as it deems fit.

Let us now turn to the words of the vroviso in the background of what we have said above. The proviso lays down that no workman shall be discharged or dismissed unless he has been paid wages for one month and an application has been mad~ by the employer to the authority before which the p.r?ceeding is pending for approval of the action ta.ken by the employer. It will be clear that two kinds 1-:>f punishment are subject to the conditions of the pr1oviso, namely, discharge or dismissal. Any other ki.µd of punishment is not within the proviso.

Fnrther \ the proviso lays down two conditions, namely (f,) payment of wages for one month and (ii} making o'f an -application by the employer to the authority lleforc which the proceeding is pending for approval of the action taken. It is not disputed before us tht when the proviso lays down tho condition as t<;> payment of one month's wages, a.II that the employer is required to do in order to carry out that condition is to tender the wages to the l'mployeo. 1 But if the employee chooses not to accept the wages, he canot come forward and say that there has been no payment of wages to him by tho employer. Therefore, though s. 33 speaks of payment of one month's wages it can only moan that the employer has tendered the wages and that would amount, for payment, for otherwise a work man could always make the section unworkable by refusing to take the wages.

So far as the second condition about the making of the application is concerned, the proviso requires that the application should be ma.de for approval of the action taken by tho employer. It has been urged on behalf of the

' ..

3 s.c.Ji.

SUPREMlli COURT REPORTS 627

respondent that the words "action taken" in this part of the proviso mean the action proposed to be taken and therefore all that the employer can do is to make an application to the tribun11, l asking it to approve the action proposed to be taken by it and it is only after the approval that the employer

can proceed to dismiss or discharge the workman.

We are however of opinion that on this interpl'etation there would really be no dilference between sub-s.(2) and subs. (I) of s.33 and the intention of the legislature in making the amendment in 1956 would be rendered nugatory.

Moreover, it is against the rules of interpretation to add words to a provision, when the provision, as it stands, is capable of a reasonable meaning which will give effect to the intention of the legislature even on the words as they stand. On the plain meaning of the proviso, it is clear that it gives the employer the power to discharge or dismiss the employee before obtaining the approval of the tribunal concerned; but at the same time the protection afforded to the employee by the proviso has to remain effective. It seems to us therefore that when the proviso speaks of an application for approval of the action taken, the action taken there is the order of actual discharge or dismissal made by the employer and it is for the approval of this order that the application . is to be made. This is borne out by form 'K' under r. 60 of the Rules framed under the Act which corresponds to form XV under r. 31 of the U.P. Rules. Further the use of the word "approval" in the proviso also suggests that something has been done by the employer who seeks approval of that from the tribunal. If the intention was that in view of. the proviso the employer could not pass the order of dismissal or discharge without first obtaining the approval of the tr\ bunal, we see no reason whv the words in the proviso should not have been similar to those sub-ss. (I) and (3), namely, that no workmen shall be discharged or dismissed without the express permission

.Strawbrtl Jlt111uJacturfrig Co

•• Gob ind

Wanckoo J.

SIYouboard Al .nufatturing Co •

•• Golit1d

628 ::H.:PHEME COUl~T ltEPURTS [19ti2] SUPP.

writing of the authority concerned. The change therefore in the la111mage used in the proviso to u b-s. 2

(b) clearly. shows in our opinion that the lngislat?re intended that the employer would have the nght to pass an order of discharge or dismiseal subject to two conditions, namely, (i) paymnt of wages for one month and (ii) ma.king of an appli oatic:in to the authority concerned for approval of the action taken. The use of the word "approval" also suggests that what has to be approved has already taken place, though sometimes approval ma.y also be sought of a proposed action.

But it seems to us in the context that the approval here is of something <lorn;, as otherwise it wonld have been quite easy for the legislature to use the words ."for approval of the action proposed to be taken"'

in the proviso.

Further sub.s. ( 5) also suggests when. it uses the words "approval of the action taken" that some action has been taken and it is that action which the employer wants to be approved by his application. The difference between sub-s. ( 1) and sub-s.(2) is therefore that under sub-s. (1) the employer proposes what he intends to do and asks for the express permission of"thc authority concerned to do it; in sub-s. (2) the employer takes the action and merely asks for the approval of the action taken from the authority concerned by his application. There can therefore be no doubt that sub-s. (2) (b) read together with the proviso contemplates that the employer may pass an order of dismissal or discharge before obtaining the approval of the authority concerned ancl at the same time make an application for approval of the action taken by him. It is however urged on behalf of the respondent that if the employer dismiBses or dfaeharges a workman and then applies for approval of the action taken and the tribunal refuses to approve of the action tho workman would be left with no remedy as there is nu

provisions for reinstatement ins. 33 (2). We how ever see no difficulty on this score. If the tribunal does not approve of the action taken by the employer, the result would be that the action taken by him would fall and thereupon the workman woufd be deemed never to have been dismissed or discharged and would remain in the service of the employer. In such a case no specific provision as to reinstatement is necessary and by the very fact of the tribunal not approving the action of the

employer, the dismissal or discharge of the workman would be of no effect and the workman concerned would continue to be in service as if there never was any dismissal or discharge by the em- . ployer. In that sense the order of discharge or dismissal passed by the employer does not become final and conclusive until it is approved by the tribunal under s. 33(2).

The next question is as to when should an application be made. In this connection our attention was drawn to s. 33A of the Act which gives a right to the employer to apply for redress in case an employer contravenes the provision of s. 33 and there is no doubt that the proviso to s. 33 (2) (b) should be so interpreted as not to whittle down the protection provided by s. 33-A. As we read the proviso, we are of opinion that it contemplates the three things mentipned therein, namely, (i) dismissal or discharge, (ii) payments of wages and (iii) making of ; m application for approval, to be simultaneous and to be part of the same transaction, so that the e'.11.ployer when he takes action .under s. 33 (2) hy dismissing or discharging an employee, should immediately pay. him or offer to pay him wages for one month and also make an application to the tribunal for approval at the same time.

When however we say that the employer must take action simultaneously or immediately.we do not mean that literally, for when three things are to be done they cannot be done simultaneousl; v bu~

Strawboard Manufacturing Co.

Gobind

W anchoo J.

St1aw•1tl .\/ anufacluring C1 . ..

w .. ei... J.

630 SUPREME COURT REPORTS [19G2] SUPP

can only be dom., one after the other. What we mean is that th<' employer's conduct should Hhow

that the three things 0ont€mplatcd under the proviso, namely, (i) dismissal or discharge, (ii) payment of the wages, and (iii) making of the application, are parts of the same transaction. If that is done, there will be no oocasion to frar that the employee's right under s. 33-A would bo affected. The question whether tho application was made as part of tho same transaction or at the same time when the action was taken would be a question of fact and will depend upon the circumstances of each case.

We may now refer to certain caaes which have ooen relied upon by either side.

The main ea8e on which learned couusel for the respondents relies is The Premier A ulomobiles f, imited ,. . Ramclw.ndra

Bhim.ayyri(').

In that case the Bombay High Court held that thti application should be made before the action has been taken by the employer and that it was not correc:t to infi>r from the us" of tho word "approval" in the proviso that. the legislature intended that such an applicatio11 should bu made a.fter the action had been takon. The High Court

haR pointecl out that there is 1ippara.nt conflict betwt>cn the first and last part of the proviso and the view it took was with the object of harmonising the two parts.• 'fhiR view has been followed by the Gujarat High Court in Indian E:rtraction-< Prii:al.e LimifR; J, v. A. V. Vyan, Conciliation Offic£r(') though with some hesitation. With respect we foe] t, hat it is not necessary to read tho words "action taken•• in tho proviso as "qual to "action proposed to be takon", as the Bombay High Court has done and that the apparent conflict between tho two parts of the proviso can be harmonised, as we ha.ve indicated above, leaving it open to the employer to dismiss or discharge the employee and at tho same time pay him the ncecssary wages and

(ll f.LR. [1960] Born. 289.

(2) A.J.R, 1961 Guj. 22.

make an application to the authority concerned for approval of the action taken. The c.mtrary view has been taken by the Calcutta High Court in Metal Press Works Limit'!, f], v. Dib (ll.R.)(') where it has been held that payment of wages and the making of the application should be simultaneous with the order of discharge or dismissal. It has further been pointed out that the word "simultaneously" must of course be taken reasonably and a notion of splitsecond timing should not be imported. It should be done at once and without delay", and it will depend upon the facts of each case whether the application has been made at once or without delay. This, we think, is the correct view to take.

Let us therefore see what has happened in this case, The appellant-concern is situate at Saharanpur while one tribunal was at Meerut and the othe-r at Allahabad. What the appellant did was to pass an order of dismissal on February I,

1960. On the same day he sent two applications by post addressed to the two tribunals. The application at Meerut was received on February 3 and the application at Allahabad on February 4, 1960.

In these circumstances we are of opinion that the appellant had made the application to the tribunal simultaneously and without delay on its passing the order of dismissal and its action was thnefore in accordance with the proviso. The view taken by the labour court that the application must be made before dismissing the respon<lent is not correct.

The appellant in this case had complied with the proviso to.s. 33 (2) (b) when it diemissed the workman, paid him or offered to pay the necessary wages and at tho same time sent the application by post to the tribunal concerned for approval of th<)

action taken by it. ·

\IJ [1962] I. T. L.J. 75.

J96S

StrawbOard Manufacturing Co. v.

Gobind

Wanchoo J,

I96Z s1; dr; J;;; rd M tnU}aeturing Co. . v. "G'obind

v,;;:;~J;

March 7.

632 Sl)'PREl\lE COURT RE; E'ORTS [1962] SUPP.

This being the only'poin~ on whioh the labour court had refued to give approval, the appeal mst suc'ceed. We therefore allow the appeal, .set.aside

the order of the labour court and approve the action taken by 'the appellant. In the circumstances we pass na order as to costs.

{l.ppool allowed.

JOSEPH KURUVILLA •VELLUKUNNEL

THE RESERVE BANK OF INDIA AND OTHERS

(With connected petition)

Banking Companies-Winding up-Enactment providing for an order for winding up by High Court on the basis of

Reser11e Bank's opinion-Constitutional validity-Banking Companies Act, 1949 (10 of 1949), ss. 2, 35, 35A, 36, 38- -Reserve Bank of India Act, 1934 (2 of 1934), ss. 7, 8, 38- Companies Act, 1956 (I of 1956), ss. 433, 450(2)-Constitution of Inaia, Arts. U, 19(1)( f) and (g), 301, 302. ·

Subsection (l) of s. 38 of the Banking Companies Act, 1949, provided : '1Notwithstanding anything contained in ss. 391, 392, 433 and 583 of the Companies Act, 1956 .... the High Court shall order the win'ding 'up for a banking company . ... if an application for its winding up has been made by the Reserve Bank under s. 47 of this .section."

Under s. 38(b)(iii) of the Act .''the Reserve Ban'k may make an application under this section for the winding up of a banking company• if in the opinion of the Reserve Bank the . 1 continuance of the banking company is prejudicjal to the interests of its depositors."

 rn exercise of, the p9wers vested in it by the Banking companies Act, 1949, as w'ell -as the Reserve Bank of India Act, 1934, the Reserve Bank had been inspecting the Palai Central Bank Ltd., periodically, and had been warning the Bank that its business was being .conducted in a manner detrimental to the .interest of its depositoi-s.

In June 1960, there was a run on several branches of the Bank.

The Reserve Bank was of the opnion that the Palai Bank was not jn a positipn to fay its depositors in f'lll and h11t lhr

STRAWBOARD MANUFACTURING CO

s. 33(2)(b)

s. 6

Industrial Disputes Act

s. 3

Industrial Disputes Act

cl. 22(a)

cl. 30

s. 6E(2)(b)

s. 6E

s. 33

s. 33

s. 33( 2)

s. 33(2)

section 33( 1 )

s. 33

s. 33

s. 33

s. 33

s. 33

s. 33

s. 33(2)(b)

s. 33

s. 2

s. 33(2)

s. 33A

s. 33

s. 33

s. 33

s. 33

s. 33

s. 33

ss. 2, 35, 35A, 36, 38

Reserve Bank of India Act, 1934

ss. 7, 8, 38

Companies Act, 1956

ss. 433, 450(2)

s. 38

Banking Companies Act, 1949

ss. 391, 392, 433 and 583

Companies Act, 1956

s. 47

s. 38(b)(iii)

Banking companies Act, 1949

Reserve Bank of India Act, 1934