DR. G. B. GRANT v.

STATE OF BIHAR March 30, 1965

[K. SUBBA R.Ao, J. C. SHAH AND R. S. BACHAWAT, JJ.) Land Acquisition Act, 1894 ss. II, 18, Ja-Bihar Land Reforms Act, l950, s. 3-Award fi; rinp compenaation for land acquired-Land Reform-Acquired land vestinp in State-State whether entitled to compensation under award-Reference under s. 30 to decide claim of State whether competent. The appellant owned certain lands in the State of Bihar in respect of which proceedings under the Land Acquisition Act were started. Under s. II of the Act the Collector fixed the area of the land to be acquired and the compensation payable, and also apportioned the compensation between the appellant and the members of the vHlage community who had claimed compensation for some portions of the land. The award was then filed under s. 12. The appellant and members of the village community being dissatisfied asked the Collector to make reference• under s. 18 to the Court. After the award was given but before possession under s. 16 of the Act was taken the Bihar Land Reforms Act, 1950 was passed and by the operation of s. 3 of the Act the appellant's land became vested in the State. On behalf of the State an application wa• made to the Collector to make a reference to the Court under s. 30 of the Act claimin~ that the compensation under the award was payable to it as it had acquired the appellant's title to the land. The District Court held that the compensation was not payable to the State but, on appeal, the High Court held in favour of the State. The appellant came to this Court with certificate.

It was contended on behalf of the appellant that (1) the O>llector had no authority to refer the matter under s: 30 after he had apportioned the amount of compensation under s. II; (2) since title to compensation is derived solely from and on the date of the award, the notification under s. 3 of the Bihar Land Reforms Act did not deprive the appellant of his right to receive compensation; and (3) the State Government was not 'a person interested' within the meaning of the Land Acquisition Act, and could not apply for a reference under s. 30.

HELD: Per Shah and Bachawat, JJ.-ii) There are two provisiol'IS in the Act under which the Collector can make a reference to the Court, namely. s. 18 and s. 30. The powers under the two sections are distinct and may be invoked in contingencies which do not overlap.

A person shown in that part of the award which relates to apportionment of compensation who is present either personally or through a representative or on whom notice is issued under s. 12(2), must, if he does not accept the award, apply to the Collector to refer the matter to the Court under s. 18 within the time prescribed thereunder. But a person who has not appeared in the acquisition proceedings before tlie Collector may, if he is not served with notice of filing, raise a dispute as to apportionment or as to the persons to whom it is payable and apply to the Court for a reference under s. 30, for determination of his right to compensation which may have existed before the awan.l. or which may have devolved upon him since the award. For a reference under s. 30 no period of limitatio:i is prescribed. [583E-

584A]

~76

G. H. GRANT ti. SrATE 577

(ii) It is not predicated of the exercise of the power to make a reference under s. 30 that the Collector has not apportioned the compensation money by his award. [584D]

Boregowda and Anr. v. Subbaramiah and Ors., A.I.R. (1959) Mysore, 265, disapproved.

(iii) The award made by the .Collector under s. ~1 is not the source of the right to compensat10n. An award Is stncUy speakmg only an offer made by th~ .Government to the person mterested m the land notified for acqmsit10n; the person mterested IS not bo<:nd to accept it and the Government can also \V1thdraw the acqu1s1t1on under s. 48. It is only when possession of the land has been taken by the Government under s. 16 that the right of the owner of the land is extinguished. Therefore the appellant's contention that title to compensation is derived solely from and on the date of the award, could not be accepted. [584H-585C]

(iv) The liability of the Government under s. 31 to pay compensation to the person entitled thereto under the award does not imply that only the persons to whom compensation is directed to be paid under the award mav raise a dispute under s. 30. The scheme of apportionment by the Collector under s. 11 is conclusive only between th: Collector and the persons interested and not among the persons interested. Payment of compensation under s. 31 to the persons declared in the award to be entitled thereto discharges the State of its liabilitv to pay compensation leaving it open to the claimant to compensation to agitate his right in a reference under s. 30 or by a separate suit. r586B-F]

(v) Under the Bihar Land Reforms Act the title of the appellant to the land notifiea for acquisition became vested in the State and therefore the right to compensation for the land ;>Cquired devolved upon the State. A dispute then arose between the State Government and the appellant "as to the persons to whom:t compensation was Pavable. The State had no right to the compensation payable for the land under a title existing before the date of the award of the Collector and no application could be made bv it as a person interested within the meaning of s. 18. But a dispute between the appellant and the State as to their conflicting claims to the compensation money was clearlv a dispute which could be referred under s. 30 of the Act to the Court. There is nothing in s. 30 which excludes a reference to the Court of a dispute raised by a oerson on whom the title of the oi, vner of the land has s; nce the award, devolved. [584G; 586A. G, HJ

Promotha Nath Mitra v. Rakhal Das Addy, 11 Cal. L.J. 420, referred to.

Per Subba Rao, J.-(i) The Land Acquisition Officer cannot make a reference under s. 30 of the Act in the matter of apportionment of compensation aft';;'r the award has been made by him apuortioning the compensation under s. 11 and has been filed under s. 12.

The Land Acquisition Act discloses a well knit scheme in the matter of making an award. The Land acquisition Officer after issuin~ notice calling for objections decides on the three matters nrescribed in s. 11 i.e. the true area of the land. the .amount of comp€nsation ad the apportionmet of the comoensation. Before making the apportionment he can resort to any of the follo\ving thrPA method~·

(i) to accept an agreed formula:

(ii) to decide for himself; and

5i8 8UI'RF.tE COl:RT Rl-:PORTS {.\%\'i\ '3 S.C.R

(iii) to refer to the Court if he thinks that the decision of the

Court is neccssar.v-. But once the a\i.ard is made, it becomes final and it can be reopened only in the manner pr., scribed

i.e. by way of a referrnce und"r s. 18 of the Act.

It is not rorrcct to sav that on the above viev.• a person who .acquires a right after the award by transfer inter vivos or by devolution of interest w:ll be \\'ithout a rcmrdy. Such a person ma:-· ask for a reference under s. 18 !fr may apply to be brought on rernnl after the rcfcrt=>ncc is madr to the Court. Ile ma~· proceed to thP. Civil Court to rcrovcr the compensation from thr pc-rsons v.ho rcceivd it en the basis of his title. On the other hand th<> contrar: view wiE lead to an incongruous position. It enables the Lar.d Acquisition Officer to reopen a final award in thr teeth of the express provisions of s. 12 of tht' Act. It further enables him to make a reference without any period of J; mitation and thus to disturb tl:c rights finally settled by the award. roBOB-G]

Ov11. APPELLATE Jt:RISDICTION: Ci\il Appeals Nos. 262 to .l64 of 1964.

Appe3Js from the judgment and decrees dated January 5, and January 22, 1959. and 24th November 1960 of the Patna High Court in appeals from Original Decrees Nos. 401 of 1953. and 297 and 298 of J 954 respectively.

S. R. Ghosa/ and R. C. Prasad. for the appellant lin all the appeals).

D. P. Singh, R. K. Gar/?. S.C. Agarwa.'a and M.K. Ramam11rthi for th~ respondent (in all the appeals).

SuuBA RAO J. delivered a dissenting opinion. The Judgment of S11A11. and BAC'llAWAT JJ. was delivered by SHAH J.

Subba Rao, J. I regret my inability to agree with brother Shah.

J .. on one of the questions raised in the appeals. namely. whether the Land Acquisition Officer can. after making the award under s. 12 of the Land Acquisition Act. 1894. hereinafter called the Act, fixing the compensation for the land acquired and apportioning the same among the persons interested in the land. refer the question of apportionment under s. 30 of the Act to the decision of the Court. Shah. J .. held he could; but. with great respect to him. I take a different view.

The facts arc fully stated in the judgment of Shah. J.. and they need not. therefore. be restated here.

The answer to the problem raised falls to be decided on a conspectus of the relevant provisions of the Act. Section 9 of the Act enjo; ns on the Collector to cause public notice to be givm at convenient places on or near the land to be taken. stating that the Government intends to take possession of the land. and that claims to compensation for all interests in such land may be made to him; under sub-s. (2) thereof such notice shall state the particulars of the land so needed and shall require persons interested in the land to appear personally or by agent before the Collector at a time and place therein mentioned and to state the nature of their respective interests in the land and the amount and particulars of

o. n. GRANT v. STATE (S11bba Rao, J.) 579

their claims to compensation for such interests, and their objections, if anv. to. the measurements made under s. 8. Under s. 11, on the day fixed or on any other day to. which the enquiry has been adjourned. the Collector shall proceed to make an enquiry and shall make an a\'>ard under his hand of (i) the true area of the land; <ii) the compensation which in his opinion should be allowed for the land; and (iiil the apportionment of the said compensation among all the persons known or believed to be interested in the land, of whom. or of whose claims. he had information, whether or not they have respectively appeared before him. Under s. 12, "such award shall be filed in the Collector's office and shall, except as hereinafter provided, be final and conclusive evidence, as between the Collector and the persons interested, whether they have respectively appeared before the Collector or not, of the true area and value of the land, and the apportionment of the compensation amtmg the persons interested." The group of sections, viz., ss. 9 to 15, describes the subject-matter and the nature of the enquiry to be held by the Collector and provides for the making of the final award in respect of the said subject-matter; ss.18 to 28 provide for reference to Court and the procedure to be followed therein in respect thereof. Sections 29 and 30 fall under part IV of the Act under the heading "Apportionment of compensation".

As the decision mainly turns upon these provisions, it will be convenient to read them.in full.

Section 29. Particulars of apportionment to be specified- Where there are several persons interested, if such persons agree in the apportionment of the compensation, the particulars of such apportionment shall be specified in the award, and as between such persons the awrrd shall be conclusive evidence of the correctness of the apportionment.

Section 3[' Dispute as to apportionment-When the amount of compensat; or. has been settled under Section 11, if any dispute arises as to the apportionment of the same or any part thereof, or as to the persor.s to whom the same or any part thereof is payable, the Collector mo y refer such dispute to the decision of the Court.

While s. 11 imposes a statutory duty on the Collector to enquire in respect of the three matters mentioned therein, ss. 29 and

30 deal with. the manner of deciding the dispute in respect of one of the said matters, viz .. apportionment of the compensation fixed; under s. 29. if the claimants agree in the apportionment of the compensation, the agreed particulars shall be specified in the award and the said award is final as between them. It is manifest that this acrreement necessarily refers to the apportionment to be made under s."' 11 before the award is made, for the section in terms says that the agreed particulars shall e entered in the award. If there is no such agreement, s. 30 comes rnto play. It also refers to a stage after the compensation has been settled and before the apportionment is made and included in the award. If there was no agreed formula, the Land Acquisition Officer has the discretion, presumably when

580 St:l'HEME COt:HT RF:l'OJtT~

( 196~) 3 ~.C.R.

there is a .complicated question. to refer the dispute in respect of A the apportionment to the Court. But he need not do so if he thinks fit to decide the dispute for himself.

The Land Acquisition Act d:sclo:.e> a well knit scheme in the matter of making an award. The bnd Acquisition Officer, after issuing notice calling for object:om. decides on the three matters B prescribed in s. 11, i.e., the true area of the land, the amount of compensation anJ the apporionment of the compensation. Before making the apportionment of the compensation he can resort to any of the following three methods: Iii to accept an agreed formula; (iii to decide for himself; and n:; I to refer to the Court if he thinks that the decision of the Court is necessarv. But once the award is made, O it becomes tin:iJ and it can he reopened only in the manner prescribed. i.e., by way of a reference under s. 18 of the Act. This construction makes for the smooth working of the provisions of the Act and docs not lead to aDy anomalies. It also does not affect the right of the aggric, ed parties to proceed in the manner prescribed hy the Act for ?Ctting the award vacated or modified. as the case D may be. It is said that if this view he accepted, a person who acqu:res a right after the award by transfer inter vivos or by devolution of interest will be without a remedy. I do not sec any difficulty in that regard. Under s. 18 he m:iv ask for a reference. He may apply to be brought on record after the reference is made to the Court. It may also be that he may proceed in a civil Court to re- E cover the compensation from the persons who received it on the basis of his t; tle. On the other hand. the contrary view will lead to an incongruous position. It enables the Land Acquisition Officer to reopen a final aw; ird in the teeth of the express provisions of s. 12 of the A ct. It further enables him to make a reference without any period of lim'tation and thus to disturb the rights finally settled by F the award. I, therefore, hold that the Land Acquisition Officer cannot make a reference under s. 30 of the Act in the matter of apportionment of compensation after th~ award has been made by him apportioning the compensation under s. 11 and has been filed under s. 12 thereof.

During the course of the arguments it was suggested that as the interest of Or. Grant devolved on the Government ; t may be held that the Government was in substance brought on record in the place of Dr. Grant ; n the reference made under >. 18 of the Act to the District Court. But the point was not raised at any stage

of the proceedings. Indeed no application was filed in the District 1; Court for bring; ng the Government on record in the place of Dr.

Grant. In the circumstances I am not justified in permitting the res pondent to raise the said point for the first time before this Court.

In the result, I set aside the decision of the High Court and restore that of the District Court. The appellant will have his costs throughout.

Shah, J. Dr. Gregor Hug Granthereinafter called 'Dr.

Grant'-was the proprietor of the Dumka Estate in the District of Santhal Parganas in the State of Bihar. By a notification under s. 4(1) of the Land Acquisition Act, 1894 published on June 8, 1949 the Government of Bihar notified for acquisition a larger area of land out of the estate of Dr. Grant for establishing "an agricultural farm." The Collector made on March 25, 1952 awards setting out the true area of the land notified for acquisition, compensation which in his opin'on should be allowed for the land and apportionment of the compensation among all the persons known or believed to be interested in the land. The awards were filed in the Collector's office on the same day. In respect of Plot No. 142, Rs. 575I14/- were awarded by the Collector as compensation in equal shares to Dr. Grant and the members of the village community, who had also made a claim for compensat; on. In respect of Plot No. 68, the Collector awarded Rs. 294/6/- as compensation. In respect of acquisition of an area admeasuring 88.91 acres consisting of several plots, the Collector awarded Rs. 1,64,446/5/10 as compensation and directed apportionment in the manner set out in the award.

On May 5, 1952 Dr. Grant applied to the Collector under s. 18 of the Land Acquis; tion Act that the three matters be referred for determination by the Court of the amount of compensation payable to the owners. Similar applications were filed in respect of Plot Nos. 68 & 142 by the members of the village community. In consequence of a notification issued under s. 3 of the Bihar Land Reforms Act 30 of 1950 the Dumka Estate vested on May 22, 1952 in the State of Bihar. In exercise of the power under s. 16 of the Land Acquisition Act, the Government of Bihar took over possession on August 21, 1952 of the Lands notified for acquisition.

On October 15. 1952 the Government Pleader submitted a petition before the Collector claiming that the compensation money awarded to Dr. Grant had since the publication of the notification under the Bihar Land Reforms Act become payable to the State Government, and the dispute between Dr. Grant and the State Government regatding the right to payment may be referred to the Court under s. 30 of the Land Acquisition Act.

The Collector made on November 5, 1952 three references to the District Court, Santhal Parganas. Two out of those references were made in exercise of powers under ss. 30 & 18 of the Land Acquisition Act, and the third under s. 30. The District Judge by his order dated April 9, 1954 held that the State of Bihar had no interest in the property notified for acquisition when the award was filed before the Collector under s. 12 of the Land Acquisition Act, and the State could lay no claim to the compensation money awarded. The District Judge upheld the apportiomnent of compensation between Dr. Grant and the village community and enhanced the valuation of the land and directed that compensation at the enhanc ed rate be awarded.

IS92 8PPJlli:l1E f'OURT R&PORTS

Against the order of the District Judge in the references. three A appeals Nos. 401 of 1953, 297 of 1954 and 298 of 1954 were preferred by the State to the High Court of Judicature at Patna. The High Court held that title of the owner to the land acquired under the Land Acquisition Act could not be extinguished under that Act till possession was taken under s. 16 of the Act, and that since the title of Dr. Grant in the land acquired sto<xl statutorily vested in th~ B State by virtue of the notification issued under the Bihar Land Reforms Act, he was not entitled to receive the compensation money. In the view of the High Court, title to the compensation money had vested in the State Government before possession was obtained by the State Government under s. 16 of the Land Acquisition Act, and that it was open to the Collector. on a dispute ra; sed 0 by the State about the right to receive the compensation money, to make a reference to the Court under s. 30 of the Act. With certificate granted by the High Court, these three appeals have been preferred by Dr. Grant.

Three contentions have been urged in support of the ap- D peals: (!) the Collector had no authority to refer the matter under s. 30 after he had apportioned the amount of compensation under s. 11 (2) since title to compensation is derived solely from and on the date of the award, the notification under s. 3 of the Bihar Land Reforms Act did not deprive Dr. Grant of his right to receive compensation, and (3) the State Government was not "a person interest- E ed" within the meaning of the Land Acquisition Act, and could not apply for a reference under s. 30.

After a notification is issued under s. 6 of the Land Acquisition Act, the appropriate Government may acquire the land notified in the manner set out in ss. 7 to 16. Section 9 provides for an en- F quiry inio the area of the land, into compensation which is payable and apportionment of compensation. The Collector is by s. 11 authorised to make an award setting out the true area of the land. the compensation which, in his opinion, should be allowed for the land and the apportionment of the said compensation among all the persons known or believed to be interested in the land, or of G whose claims, he has information, whether or not thev have respectively appeared before him. The award when filed in 'the Collector's office becomes final and conclusive evidence as between the Collector and the persons interested whether they have respectively appeared before the Collector or not, of the true area and value of the land and the apportionment of compensation among the per- H sons interested. The land vests absolutely in the Government. free from all encumbrances when possession is taken by the Collector under s. 16. Bys. 17 authority is conferred upon the Collector, when in cases of urgency the appropriate Government so directs, to take possession of waste or arable land even before making an award. Section 48 authorises the Government to withdraw from the acquisition any land ot which possession has not been taken.

By s. 18 the Collector is en joined to refer to the District Court for determination, objections as to the measurement of the land, the amount of compensation. the persons to whom i.t is payable, or the apportionment thereof among the persons interested. Part IV deals with apportionment of compensation. If the persons interested agree in the apportionment of the compensation, the particulars of such apportionment shall be specified in the award (s. 29): if there be no such agreement, the Collector may, if a dispute arises as to the apportionment of the compensation or any part thereof or as to the persons to whom the same or any part thereof is payable, refer such dispute under s. 30 for decision by the Court. Part V of the Act which contains ss. 31 to 34 deals with payment of compensation. Under s. 31 the Collector has to tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award. By the third proviso to sub-s. (2) of s. 31, liability of any person, who may receive the whole or any part of the compensation awarded under the Act, to pay the same to the person lawfully entitled thereto, is not affected. Sections 32 & 33 deal with investment of money deposited in respect of land belonging to persons incompetent to alienate the land and in other cases, but with these we are not concerned. Section 34 obliges the Collector to pay interest at the rate of six per centum per annum if compensation is not paid or deposited on or before taking possession of the land from the time of taking possession until it is so paid or deposited.

There are two prov; sions ss. 18(1) and 30 which invest the Collector with power to refer to the Court a dispute as to apportionment of compensation or as to the persons to whom it is payable.

By sub-s. (!)of s. 18 the Collector is enjoined to refer a dispute as to apportionment, or as to title to receive compensation, on the application within the time prescribed by sub-s. (2) of that section of a person interested who has not accepted the award. Section 30 authorises the Collector to refer to the Court after compensation is sett!~-<! under s. 11, any dispute arising as to apportionment of the same or any part thereof or as to the persons to whom the same or any part thereof is payable. A person shown in that part of the award which relates to apportionment of compensation, who is present either personally or through a representative, or on whom a notice is served under sub-s. (2) of s. 12. must, if he does not accept the award, apply to the Collector within the time prescribed under s. 18(2) to refer the matter to the Court. But a person who hai; not appeared in the acquisiHon proceeding before the Collector may, if he is not served with notice of the filing. raise a dispute as to apportionment or as to the persons to whom it is payable, and apply to the Court for a reference under s. 30, for determination of his right to compensation which may have existed before the award, or which may have develoved upon him since the award. Whereas under s. 18 an application made to the Collector must be made within the period prescribed by sub-s.(2) cl. (b), there is no such period

Sl.'l'REME CO\'HT REPORTS

prescribed under s. 30. Again under s. 18 the Collector is bound to make a reference on a petition tiled by a person interested. 1 he Collector is under s. 30 not enjoined to make a rcfcrenc~: he may relegate the person raising a dispute as to apportionment, or as to the person to whom compensation is payable, to agitate the dispute in a suit and pay the compensation .; n the manner declared by his award.

We are unable to agree with the view expressed by the Mysore High Court in Boregvwda and another v. Sribbaramiah anti (,/hers l'I that if the Collector has made apportionment of the compensation money b)! his award h; s power to refer a dispute under s. 3\l cannot be exercised. Clause (iii) of s. 11 enjoins the Collector to apportion the compensation money among persons known or believed to be interested in the land: he has no discretion in the matter. Exercise of the power under s. 30 to refer the dispute relating to apportionment or as to the persons to whom it is payable is, it is true, discretionary: the Collector may. but is not bound to exercise that power. It is however not predicated of the exercise of that power that the Collector has not apportioned the compensation money by his award. We are also unable to agree with the Mysore High Court that the power urclcr s. 30 of the Land Acquisition Act has to be exercised on a motion within the pcri'od prescribed by s. 18(2) of the Land Acquisition Act. In our judgment the

pwcrs exercisable by the Collector under s. 18(1) and under s. 30 arc distinct and may be invoked in contingencies which do not overlap.

By virtue of the notification issued under the Bihar Land Reforms Act the right of Dr. Grant vested in the State of Bihar.

On March 25, 1952 when the Collector made an award under s. 11, the only .persons interested in the award were. Dr. Grant and the members of the village community. but the title of Dr. Grant in the land notified for acquisition stood, by operation of the Bihar Land Reforms Act, transferred as from May 22, 1952 to the State of Bihar. A dispute then arose between the State Government and Dr. Grant "as to the persons vhom" compensation was payable.

The State had no right to the compensation payable for the land under title existing before the date of the award of the Collector. and no application for reference could be made by the State. as a person interested within the meaning of s. 18(1). The title of the State to receive compensation arose only when in consequence of the notification under s. 3 of the Bihar Land Reforms Act. the title of Dr. Grant to the Estate was divested.

An award by the Collector is strictly speaking an offer made to the person interested in the land notified for acquisition: the latter may accept the offer. but is not bound to accent it. He may ask for a reference to the Court for adjudication of his claim for adequate compensation. The person interested may even accept

(') A.l.R. 1959 1\!yoo,. 2M.

A the compensation under protest as to the sufficiency of the amount ar, d ask for a reference. It is also open to the Government, even after the award is made, but before possession is taken, to withdraw from acquisition of any land in exercise of the powers conferred by s. 48 of the Land Acquisition Act. It is therefore not the award of the Collector which is the source of the right to compensation: the B award quantifies the offer of the appropriate Government, which

1s made because the Government has taken over, or intends to take the land of the owner under the authority conferred by the Land Acquisition Act. In Serju Prasad Sahu v. The State of Uttar Pradesh and Others(') it was observed by this Court in considering the scheme of the Act that the right of the owner of the land is extin- C . guished when Government takes possession of the land after an award of compensation is made. This is also supported by the scheme of the Act. Interest is made payable under s. 28 on the additional amount of compensation awarded by the Court from the date on which the Collector had taken possession. Similarly under s. 34 interest is made payable on the compensation from the date on which D the possession is taken, if the same be not paid or deposited on or heiore taking possession of the land.

The right of the State of Bihar arose on May 22, 1952 when the title to the land vested in it by virtue of the notification issued ur, ier the Bihar Land Reforms Act. There is nothing in the Land Acquisition Act which prohibits the Collector from making a relerence under s. 30 for determination of the title of the person who has since the date of the award acquired a right to the compensation. If after a reference is made to the Court, the person interestea dies or his title devolves upon another person, because of inheritance, succession, insolvency, forfeiture, compulsory winding up 01 other form of statutory transfer, it would be open to the party upon whom the title has devolved to prosecute the claim which the person from whom the title has devolved could have prosecuted. In

Pr.Jmotha Nath Mitra v. Rakhal Das Addy(') it was held that a reference made by the Collector under s. 30 of the Land Acquisition Act at the instance of a proprietor of land may be prosecuted by the purchaser of his rights after the award at a revenue auction. If the right to prosecute a reference by a person on whom the title of the person interested has devolved be granted, there is no reason why the right to claim a reference of a dispute about the person ent; tled to compensation may not be exercised by the person on wl1om the title has devolved since the date of the award.

The scheme of the Land Acquisition Act is that all disputes about the quantum of compensation must be decided by resort to

th~ procedure prescribed by the Act; it is also intended that disputes about the rights of owners to compensation being ancillary to the principal dispute should be decided by the Court to which power is entrusted. Jurisdiction of the Court in this behalf is not restricted

(') A.I.R. 1965 S.C. 1763. (') 11 Cal. L.J. 420.

St:PREME COURT REPORTS [1965] 3 •.a...

to cas~ of apportionment, but extend! to adjudication of disputes as to the persons who are entitled to receive compensation, and there is nothing in s. 30 which excludes a reference to the Court of a dispute raised by a person on whom the title of the owner of land has, 'ince the award, devolved.

It was strongly pressed that under s. 31 of the Land Acquisition Act the Collector is bound to tender payment of compensation awarded by him to the persons entitled thereto according to the award and that implied that a right in the amount of compensation arises to the person to whom compensation is directed to be paid under the award, and therefore the only persons who can raise a dispute under s. 30 arc those whose names are set out in the award.

Thi~ contention stands refuted by the plain terms of s. 30. The Collector is not authorised to decide finally the conflicting rights of the persons interested in the amount of compensation: he is primarily concerned with the acquisition of the land. In detennining the amount of compensation which may be offered, he has. it is true, to appc.rtion the amount of compensation between the persons known or believed to be interested in the land, of whom, or of whose daims, he has information. whether or not they have appeared before him. But the scheme of apportionment by the Collector does not finally determine the rights of the persons interested in the amount of compensation: the award is only conclusive between the Collector and the persons interested and not among the persons interested. The Collector has no power to finally adjudicate upon the title to compcnsatio11. that dispute has to be decided either in a reference under s. 18 or under s. 30 or in a separate suit. Payment of compensation therefore under s. 31 to the person declared by the award to be entitled thereto discharges the State of its liability to pay compensation (subject to any modification by the Court), !saving it open to the claimant to compensation to agitate his right in a reference under s. 30 or by a separa ta suit.

The dispute between the State of llihar and Dr. Grant has been expressly referred by the Collector to the Court for decision.

Under the Bihar Land Reforms Act. the title of Dr. Grant to the land notified for acquisition became vested in the State, and there fore the right to compensation for the land ftcquired devolved upon the State. A dispute between Dr. Grant and the State as to their conflicting claims to the compensation money was clearly a dispute which could be referred under s. 30 of the Land Acquisition Act to the Court and was in fact rctcrred to the Court. We are unable to agree with counsel for Dr. Grant that the reference made by the Collector under s. 30 was incompetent. because the State was not interested in the compensation money on the date when the award was made. The right ,, f the State of Bihar has undoubtedly arisen a<ter the award was made. but once the title which was

origi., lly ve, ted in Dr. Grant stood statutorily transferred to the State, it was open to the State to claim a reference, not because the

(}. Ir. /}RANT V. STATE (Shah, J.) 587

A State was a person interested in the compensation money before the date. of the award, but because of the right which has arisen since the award was made.

We therefore dismiss the appeals with costs. There will be one hearing fee.

ORDER B Following the judgment ef the majority, the appeals are dismissed with costs. There will be one hearing fee.

G. B. GRANT

March 30, 1965

C. SHAH

R. S. BACHAWAT, JJ.

Land Acquisition Act, 1894

Ja-Bihar Land Reforms Act

s. 3

s. 30

the State of Bihar

s. 12

s. 18

s. 16

s. 3

s. 30

s. 3

s. 30

Shah

Bachawat

s. 18

s. 30

s. 12(2)

s. 18

s. 30

s. 30

G. H. GRANT

s. 30

s. 48

s. 16

s. 31

s. 30

s. 11

s. 31

s. 30

s. 18

s. 30

s. 30

Subba Rao

s. 30

s. 11

s. 12

s. 11

s. 18

s. 18

s. 12

Patna High Court

S. R. Ghosa/

R. C. Prasad

D. P. Singh

R. K. Gar/

S.C. Agarwa

M.K. Ramam11rthi

SuuBA RAO

BAC'llAWAT

SHAH J.

Shah

s. 12

s. 30

Section 9

s. 8

s. 11

s. 12

ss. 9 to 15

ss.18 to 28

Sections 29 and 30

Section 29

Section 3

Section 11

s. 11

ss. 29 and

30

s. 29

s. 30

s. 11

s. 18

s. 18

s. 12

s. 30

s. 11

s. 12

Grant

Gregor Hug Granthereinafter

s. 4(1)

Land Acquisition Act, 1894

Government of Bihar

March 25, 1952

May 5, 1952

s. 18

s. 3

May 22, 1952

s. 16

August 21, 1952

October 15. 1952

s. 30

November 5, 1952

District Court, Santhal Parganas

ss. 30 & 18

s. 30

April 9, 1954

State of Bihar

s. 12

High Court of Judicature at Patna

s. 16

s. 16

s. 30

s. 30

s. 11

s. 3

s. 30

s. 6

ss. 7 to 16

Section 9

s. 11

s. 16

Section 48

s. 18

s. 29

s. 30

Part V of the Act

ss. 31 to 34

s. 31

s. 31

Sections 32 & 33

Section 34

ss. 18(1) and 30

s. 18

Section 30

s. 11

s. 12

s. 18(2)

s. 30

s. 18

s. 30

s. 18

s. 30

Mysore High Court

s. 3

s. 11

s. 30

s. 30

s. 18(2)

s. 18(1)

s. 30

s. 11

s. 18(1)

s. 3

s. 48

s. 28

s. 34

is nothing in the Land Acquisition Act

s. 30

s. 30

PREME COURT REPORTS [1965] 3

s. 30

s. 31

s. 30

s. 30

s. 18

s. 30

s. 31

s. 30

s. 30

s. 30


WORKMEN OF MOTIPUR SUGAR FACTORY (PRIVATE) . A

LIMITED v.

MOTIPUR SUGAR FACTORY

March 30, 1965

(P. B. GAJENDRAGADKAR, C J:. K. N. WANCHOO, M. HIDAYATULLAH

AND V. RAMASWAMI, JJ.J B Industrial Disputes-Discharge of workmen on account of fJOslow-Reference as to whether discharge justified-Tribunal, if could decide go-slow-No enquir11 before discharge-If discharf}e could be justified before Tribunal.

The workers of the respondent started a go-slow in its sugar factory. Therefore, the respondent issued a general notice to those wokmen and individually to each workman notifving that unless he recorded his willingness to discharge his duties faithfully and diligently so as to give a certain minimum output, he will be no longer employed; and that he must record his willingness in the office by a certain time, failing which he shall stand discharged from the service of the respondent without any further notice.

Because the appellrnts. who were 119 of such workmen, failed to record their willingness, the respondent issued a notice discharging their services. The respondent held no enquiry as required by the Standing Orders before dispensing .,;; th the services of the appellants. A general strike followed resulting in a joint application by both the parties to the Government and the Government referred the question to the Tribunal, whether the dischar; ie of the workmen was justified. The Tribunal came to the conclusion that there was

go-slow during the period, and consequently held that the discharge of the workmen was .fully justified. In appeal by Special Leave the appellant contended that (i) all that the Tribunal was concerned with was to decide whether the discharge of the workmen for not giving an undertaking was justified or not, and that it was no part of the duty of the Tribunal to decide whether thee was go-<; Jow which would justify the order of discharge; (ii) Since the respondent held no enquiry as required by the Standing Orders, it could not justify the discharge before the Tribunal and (iii) the finding of the Ttibunal that go-slow had been proved was perverse and the Tribunal had ignored relevant evidence in coming to the concluiion.

HELD: The contentions must le rejected.

(i) Taking 'into account the wide terms of reference, the manner in which it was understood before the Tribunal, and the fact that it must be read alongwith the two notices, particularly because it was made soon thereafter at the joint application of the parties, the Tribunal was entitled to go into the real dispute between the parties, namely whether the discharge was justified on the ground that there was misconduct in the form of go-slow by the workmen concerned. [596D]

(ii) No distinction can be made between cases when the domestic enquiry is invalid and those where no enqu.iry has in fact been held.

This Court has consistently held that if the domestic enquiry is irregular, invalid or improper, the Tribunal may give an opportunity

WORKMEN v. MOTIPUR FACTORY (Wanchoo, J.) 589

A to the employer to prove his case and in doing so the Tribunal tries the merits itself. [598A-C] Case law referred to.

(iii) As the case involved the discharge of 119 workmen, this Court went into the evidence, and the evidence showed that the decision of the Tribunal was not wrong that there was go-slow and B that the discharge was fully justified, [598E]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 108 of 1964.

Appeal by special leave from the Award d; ited May 11, 1962, of the Industrial Tribunal, Bihar, Patna in Reference No. 4 of 1961.

Ranen Roy, Jai Krishan, G. S. Chatterjee, E. Udayarathnam for A. K. Nag, for the appellants.

Niren De, Addi. Solicitor-General and Naunit Lal, for the respondent.

The Judgment of the Court was delivered by Wanchoo, J.

This is an appeal by special leave against the award of the Industrial Tribunal, Bihar. It relates to the discharge of 119 workmen of the respondent who were employed as cane carrier mazdoors or as cane carrier supervisors or jamadars.

All these were seasonal workmen. It is necessary to set out in some detail the circumstances leading to the discharge. The respondent is a sugar factory and the crushing season starts usually in the frrst half of November each year.

We are concerned in the present appeal with November and December 1960. It appears that from the season 1956-57, the respondent introduced an incentive bonus scheme in the factory.

The scheme continued thereafter froin season to season with certain changes. It also appears that in the beginning of each season, the respondent used to put forward the incentive bonus scheme and consult the workmen.

The same thing was done when the season 1960-61 was about to start in November 1960.

But the scheme for this season proposed by the respondent contained certain changes which were apparently not acceptable to the workmen.

One of the features in the scheme was that the crushing of sugar cane per day should be 32,000 maunds. The general secretary of the union of the workmen suggested certain alterations for the consideration of the respondent on November 7, 1960," and one of the main alterations suggested was that the norm for per day's crushing should be 125,000 maunds of cane and thereafter incentive bonus should be given at a certain rate.

No agreement seems to have reached on the incentive bonus scheme, and the complaint of the respondent was that the secretary incited the workmen to go slow in consequence of the change in the scheme. Consequently mild go-slow in the can: carrier department which is the basic department in a sugar mill began from the very start of the season on November 10, 1960. Thu

L/P(N)4SCI

SUPREME COURT REPORTS

(1965) 3 s.c.R.

respondent's case further was that on. November 27, 1960, the workmen -in the cane carrier department started in combination with one another to go-slow deliberately and wilfully and in a planned manner and thus reduced the average daily crushing to 26,000 maul)ds cane which was much less than the average crushing in previous seasons. This conduct of the workmen .was said to be highly prejudicial to the respondent and besides being technically unsafe, had brought into existence an acute shortage in the fuel position which might have resulted in the complete stoppage of the mill and a major breakdown of the machinery.

When the position became serious the respondent issued a general notice on December 15, 1960 inviting the attention of the workmen concerned to this state of affairs which had been continuing of any rate since November 27, 1960. This notice was in the following terms: -

"At the instigation of Shri J. Krishna, the General Secretary

of your Union, you since the very beginning of this season, have been failing in your duty to ensure adequate and regular loading of the ne carrier, and with effect from the 27th November, 1960, you, in combination with each other, have deliberately and wilfully resorted to a clear 'go-slow' tactics, a fact openly a1lmitted by the above-named General Secret2ry of your Union in presence of the Labour Superintendent and Labour Officer Muzzffarpur, in course of discussions E held on the subject in the office of the Assistant Labour Commissioner on the 6th December, 1960. You have deliberately reduced the average daily crushing to more or less 20,000 maunds out of which more than 2,000 maunds is due to the newly introduced device of direct feeding of the cane carrier by cane carts weighed during nights and not attributable to any effort on your part.

Thus the actual crushing given by you is practically something between 23,000 and 24,000 maunds only which is highly uneconomical and technically unsafe for this factory with the installed crushing capacity of more than 1,200 tons a day. "About 14,000 bales of extra bagasse kept in stock as re-

, erve have already been consumed in !he past 12 days or so and now the factory is faced with a situation when at any mom1mt "its boilers may go out of steam for want of bagasse-fuel leading to an abrupt stopr-age of the mills and finally resulting into a major breakdown of machineries.

"It is therefore hereby notified that unless you voluntarily

record your willingness individually. to discharge your duties faithfuJly ond diligentiy by feeding the cane currier so as to give a minimum average daily crush of 32,000 maunds, exclud111g •toppages other than those

WORKMEN v. MOTIPUR FACTORY (Wano/too, J.) 591

due to overloading or underloading of.the cane carrier, you will be considered to be no longer employed by the company. You must record your willingness in the office of the Factory Manager on or before 4 P.M. of Saturday the 17th December, 1960, failing which you shall stand discharged from the service of the company without any further notice with effect from 18-12-1960 and your place will be filled by recruiting other labour to man the cane carrier station." This notice was put on the notice-board along with translations in Hindi and Urdu and it was also sent individually to the workmen in cane carrier department.

A copy was also sent to the Secretary of the union with the workmen concerned to submit their willingness as desired by the respondent in the notice in ques- . tion either individually or even collectively through the union. The secretary of the union replied to this notice on the same day and said that it was "full of malicious!y false and mischievous statements". The secretary also denied that the workmen had adopted go-slow tactics or that he had advised the workmen to adopt such tactics.

Finally the secretary said that it was simply fantastic to ask a worker to give an undertaking to crush at least 32,000 maunds per day and if the service of any workman was terminated on his not giving the undertaking, the responsibility would be that of the respondent itself. The respondent's case was that three workmen gave undertakings as required in the notice while the rest .did not. Thereafter the situation in the factory deteriorated and the workmen grew more and more unruly and even started entering the factory without taking their attendance token.

In consequence of this attitude of the workmen, the respondent issueJ a notice at 5 p.m. on December 17, 1960 which was in the following terms:

"The following workers of the cane carrier srnt1011 who

failed to record their willingness in factory manager's office by 4 p.m. this day the 17th December, 1960, to work faithfully and diligently in accordance with the management's notice dated 15-12-1960, stand discharged from the company's service and their mmes have been struck off the rolls with effect from 18th December 1960.

From now on, the workers concerned have forfeited their right to go to and occupy their former place of work and any action contrary to this on their part will make them liable to prosecution for crimim1 I trespass. "Their final account will be ready for payment by 4 p.m. on the 19th December 1960, when, or wherrnfter, they may present themselves at the company\ Office fo;- receiving payment of their V\':lges and other (l\1es. if any. during working hours", and then mentions the names of 119 workmen of the cane carriers Jeparnnent.

592 SUPRlllJ.IE COURT REPORTS

(1965] 3 8.0.R.

Thus the services of the workmen concerned stood discharged from A December 18, 1960 under this notice. This was followed by a general strike in pursuance of the notice served on the respondent by the union on December 17, 1960. The strike continued upto / December 22, 1960 when as a result of an agreement it was decided that the case of the discharged workmen and the question of wages for the strike period be referred to adjudication.

Conse- B quently a joint application by both parties was made to Government on December 21, 1960. The Government then made a reference of the following two questions to the tribunal on January 25, 1961 :-

!. Whether the discharge of workmen mentioned in the Appendix was justified. If not, whether they should be re-instated and/ or they are entitled to any other relief?

2. Whether the workmen be paid wages for thi;_ period

16-00 hrs. on December 18, 1960 to 8-00 hours on December 22, 1960?

D It may be mentioned that the respondent had held no enquiry aJ required by the standing Orders before dispensing with the services of the workmen concerned. Therefore, when the matter went before the tribunal, tlie question that was tried was whether there was .go-slow between November 27, 1960 and December 15,

1960. The respondent led evidence, which was mainly documentary and based on the past pedormance of the factory to show that there was in fact go-slow by the workmen. concerned during this period. The appellants on the other hand also relying on

the record of the respondent tried to prove that the cane carrier department had been giving normal work in accordance with what had happened in the past in connection with cane crushing. That is how the tribunal considered the question on the basis of the relevant statistics supplied by both parties and also oral evidence whether there was go-slow during this period or not.

After considering all the evidence it came to the conclusion that there was goslow during this period. Consequently it held that the discharge of the workmen was fully justified. It therefore answered the first question referred to it in favour of the respondent. The Becond question with.respect to wages for the strike period was not pressed on behalf of the appellants and was therefore decided against them.

Thereafter the appellants came to this Court and obtained special leave ; and that is how the matter has come up before us.

We are concerned in the present appeal only with the first question which was referred to the tribunal. Learned counsel for the appellants has raised three main contentions before us in support of the appeal.

In the first place it is contended that the tribunal misdirected itself as to the scope of the reference and that all that the tribunal was concerned with was to decide whether the discharge of the workmen for not giving an undertaking was justified

WORKMEN v. HOTIPUR FACTORY (Wanchoo, J.) 598

or not. and that it was no part of the duty of the tribunal to decide whether there was go-slow between the relevant dates which would justify the order of discharge. Secondly, it is urged that the respondent had given no charge-sheets to the workmen concerned and had held no enquiry as required by the Standing Orders. Therefore, it was not open to the respondent to justify the discharge before the tribunal, and the tribunal had no jurisdiction to go into the merits of the question relating to go-slow. Lastly it is urged that the finding of the tribunal that go-slow had been proved was perverse and the tribunal had ignored relevant evidence in coming to that conclusion. We shall deal with these contentions seriatlm.

Re. (J).

We have already set out the relevant term of reference and it will be seen that it is wide and general in terms and asks the tribunal to decide whether the discharge of the workmen concerned was justified or not. It does not mention the grounds on which the. disc ha •ge was based and it is for the tribunal to investigate the grounds and decide whether those grounds justify discharge or not.

So if the tribunal finds that the discharge was due to the use of go-slow tactics by the workmen concerned it will be entitled to investigate the question whether the use of go-slow tactics by the workmen had been proved or not.

But the argument on behalf of the appellants is that the notice of December 17 gives the reason for the discharge and the tribunal is confined only to that notice and has to consider whether the reason given in that notice for discharge is justified. We have already set out that notice and it certainly says that the workmen mentioned at the foot of the notice had failed to record their will ingness to work faithfully and diligently in accordance with the respondent's r.otice of December 15, 1960, and therefore they stood discharged from the respondent's services and their names had been struck off the rolls from December 18, 1960.

So it is argued that the reason for the discharge of the workmen concerned was not go-slow but their failure to record their willingness to work faithfully and diligently. The tribunal had therefore to see whether this reason for the discharge of the workmen was justifiable. and that it had no jurisdiction to go beyond this and to investigate the question of go-slow.

We are of opinion that there is no force in this argument.

Apart from the question that both parties before the tribunal went into the question of go-slow and voluminous evidence was led from both sides either to prove that there was go-slow or to disprove the same, it appears to us that it would be taking much too technical a view to hold that the discharge was due merely to the failure of the workmen to give the undertaking and that the go-slow had nothing to do with the discharge.

We are of opinion that the two notices o.f December 15 and December 17 have to be read together and it may be pointed out that the notice of December 17th does refer to the earlier notice of December 15th. If we read the two

594 SuPR~~ME COURT REPORTS [1965) 3 s.c.R

notices together, there can be in our opinion be no doubt that A though the discharge is worded as if it was due to the failure to !\>cord their willingness to work faithfully and diligently, it was really due to the workmen concerned using go-slow tactics. Notice of Dec-ember 15, is in two parts. The first part sets out the facts and states what the workmen had been doing from the very beginning of the season and particularly from November 27, 1960. It il states that on the instigation of the secretary of the union, the work

men had been failing in their duty to ensure adequate and regular loading of the cane carrier from the very beginning of the season.

It further charges that with effect from November 27 they had in combination with one another deliberately and wilfully resorted t<) a clear go-slow, a fact said to have been openly admitted by the C secretary in the presence of the Labour Superintendent and Labour Officer, Muzaffarpur, in course of discussions held in the office of the Assistant Labour Commissioner on December 6,' 1960. The notice then says that the average daily crushing is 26,000 maunds out of which more .han 2,000 was due to the newly introduced device of direct feeding of the cane carrier by cane carts weighed

JJ , during nights and not attributable to any effort on the workmen's parts; thus the actual crushing had been practically reduced to

wmething between 23,000 to 24,000 maunds per day, which was highly uneconomical and technically unsafe for the factory which had an installed crushing capacity of more than 1,200 tons a day i.e. over 32,000 maunds a day. The notice also says that about E 14.000 bales of extra bagasse kept in stock as reserve and already been consumed in the last twelve days and the factory was faced wit.h a situation when at any moment its boilers might go out of , team for want of bagasse-fuel'Jeading to an abrupt stopJ?age of the

mill and finally resulting in a major break-down of machinery.

These facts which were given in the first part of the notice dated December 15, 1960 really show the charge which the respondent was making against the workmen concerned.

I; Iaving made this charge of go-slow in the manner indicated in tlie first part of the notice (and it may be mentioned that this notice was

not only put on the notice-board but was given to each workmen G individually), the respondent then indicated in the second part what action it intended to take.

In this part the respondent told the workmen concerned that unless they voluntarily recorded their willingness individually to discharge their duties faithfully and dili gently by feeding the cane carrier so as to give a minimum average daily crush of 32,000 maunds, excluding stoppages other than H those .due to over-loading or under-loading of the cane carrier, they would be considered to be no longer employed by the respondent.

They were given time up to 4 p.m. on December 17, 1960 to record their willingness failing which they would stand discharged from the respondent's service without any further notice with effect from December 18, 1960. The second part of the notice thus jndicated to the workmen concerned how much they had to crush every

day to avoid the charge of go-slow. It further ind_icatcd that the respondent was prepared to let bygones be bygones 1f the workmen concerned were preparl!d to give an undertaking in the n1anner desired. Assuming that this course adopted by the respondent was unjust and even improper. reading of the two parts of the notice of December 15. 1960 shows that in the opinion of the res pondent was the normal cane crushing per day and what was the charge of the respnndent against the workmen concerned in the matter of go-slow and what the respondent was prepared to accept if i11e workmen were agreeable to the claim of the respondent. It is clear therefore from the notice which was given on December IS, 196'.l that the respondent thought that 32,000 maunds should be the normal crnsh every day excluding stoppages other than those due to over-loading or under-loading of the cane carrier. It also charged the workmen with producing much less than this for the. peiiod from November 27, 1960 to December IS, 1960, though it was prepared to l st bygones be bygones, provided the workmen in future undertook to give normal production. It is in the background of this charge contained in the notice of December lS,

1960 that we have to read the notice of December 17, 1960. That notice says that the workmen had failed to record their willingness to work faithfully and diligently in accordance with the notice of December IS. 1950 and therefore they stood discharged, meaning therel:Jy that the respondent was charging the workmen with goslow as indicated in the notice of December 15, 1960 and that as they were not prepared to give normal production even in future they were being discharged.

Therefore, though in form the notice of December 17, .1960 reads as ; f the workmen were being discharged for not giving the undertaking as desired. the real basis of the notice of discharge of December 17, 1960 is the use of goslow which had already been indicated in the notice of December 1 S given to each workman individually also.

The reference was made on the joint application of both parties. If all that the workmen desired in their joint application for reference was that it should only be considered whether the discharge of the work.men for refusing to give an undertaking was justified, there was nothing to prevent the workmen to insist that in the joint application this matter should be specifically mentioned.

Tn the joint application the first matter which was specified was in these lerms:

"Whether the discharge of workmen mentioned in the appendix was justified? If not, whether they should be reinstated and I or they are entitled to any other relief?" Now if all that was desired was that the tribunal should go into the question whether the discharge of the wor!cmen on the ground that they had failed to give the undertaking should be investigated. it woulrl have been easy to put this term only in the reference in the joint aooliction thus; "Whether the discharges of the workmen mentioned in the appendix on the

(1985] 3 S.C, R.

ground of their failure to give an undertaking was justified?" The A very fact that the matter specified as in dispute was put in the wide words already quoted above shows that the parties did not wish to confine their dispute only to the question whether the discharge on the ground of failure to give an undertaking was justified.

Further we have already indicated that both parties understood the dispute to be whether gc;-slow was justified or not and B that is why voluminous evidence was led before the tribunal. The wide terms in which the reference was made along with the notice of December 17th read with the notice of December 15th leave no doubt in our mind that the reference included investigation of any cause which might have led to the discharge of the workinen. There is no doubt in this case that even though notice of discharge was 0 pharsed as if the discharge was being made on account of the failure to give an undertaking the real reason for the discharge was that the workmen had been guilty of go-slow between November 27 and December 15 and were not prepared in spite of the respondent's giving them a chance to in; iprove to show better results. Therefore taking into account the wide terms of reference, the manner D in which it was understood before the tribunal, and the fact that it must be read along with the two notices of Der.ember 15 and 17,

1960, particularly because it was made soon thereafter at the joint application of the parties, we have no doubt that the tribunal was entitled to go into the real dispute between the parties, namely whether the discharge was justified on the ground that there was E miscon:luct in the form of go-slow by the workmen concerned between November 27, 1960 workmen therefore on this head must be rejected.

Re. (II).

Then we come to the question whether it was open to the F tribunal when there was no enquiry whatsoever by the respondent to hold an enquiry itself into the question of go-slow. It was urged on behalf of the appellants that not only there was no enquiry in the present case but there was no charge either. We do not agree that there was no charge by the respondent against the workmen concerned. The first part of the notice of December 15, G 1960 which was served on each individual workmen was certainly a charge by the respondent telling the workmen concerned that they were guilty of go-slow for the period between November 27 and December 15, 1960. It is true that the notice was not headed as a charge and it did not specify that an enquiry would follow, which is the usual procedure when a formal charge is given. Even H so, there can be no doubt that the workmen concerned knew what was the charge against them which was really responsible for their discharge from December 18, 1960.

It is now well-settled by a number of decisions of this Court that where an employer has failed to make an enquiry before dismissing or discharging a workman it is. open to him to justify the action before the tribunal by leading all relevant evidence before it.

WORKHEN v. :MOTll'UR FA.CTORY (Wanchoo, J.) 597

In such a case the employer would not have the benefit which he had in cases where domestic inquiries have been held. The entire matter would be open before the tribunal which will have jurisdiction not only to go into the limited quetions open to a tribunal where domestic inquiry has been properly held (see Indian Iron & Steel Co. v. Their workmen(') but also to satisfy itself on the facts adduced before it by the employer whether the dismissal or discharge was justified. We may in this connection refer to MI s Sasa Musa. Sugar Works (P) Limited v. Shobrati Khan('), Phulbari Tea Estate v. Its Workmen(') and the Puniab National Bank Limited v. Its Workman(') There three cases were further considered by this court in Bharat Sugar Mills Limited. v.

Shri Jai Singh('), and reference was also made to the decision of the Labour Appellate Tribunal in Shri Ram Swarath Sinha v.

Belaund Sugar Co. (') It was pointed out that "the import effect of commission to hold an enquiry was merely this: that the tribunal would not have to consider only whether there was a prima fade case but would decide for itself on the evidence adduced whether the charges have really been made out". It is true that three of these cases, except Phulbari Tea Estate's case('), were on applications under s. 33 of the Industrial Disputes Act, 1947. But in principle we see no difference whether the matter comes before the tribunal for approval under s. 33 or on a reference under s. 10 of the Industrial Disputes Act, 1947. In either case if the enquiry Is defective or if no enquiry has been held as required by Standing

Orders, the entire case would be open before the tribunal and the. employer would have to justify on facts as well that its order of dismissal or discharge was proper. Phulbari Tea Estate's(') was on a reference under s. 10, and the same principle was applied there also, the only difference being that in that case, there was an enquiry though it was defective. A defective enquiry in our opinion stands on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to satisfy the tribunal that on facts the order of dismissal or discharge was proper. ·

If it is held that in cases where the employer dismisses his employee without holding an enquiry, the dismissal must be set asicie by the industrial tribunal only on that ground, it would inevitably mean that the employer will immediately proceed to hold the enquiry and pass an order dismissing the employee once again. In that case, another industrial dispute would arise and the employer would be entitled to rely upon the enquiry which he had held in the mean-time. This course would mean delay and on the second occasion it will entitle the employer to claim the benefit of the domestic enquiry given. On the other hand, if in such cases the employer is given an opportunity. to justify the

(') [1958] S.C.R. 667. (') [1959] Supp. S.C.R. 836.

(3) [1960] IS.C.R. 32 •.

(') [1900] I S.C.R. 806.

(') [1962J1S!S.C.R. 684.

(') [1954] L.A.C. 697.

'. ~Ul'Rl..:ME l'Ol!RT REPOftTS ' ,

[1965] 3 S.C.R. . .. _ \" \ ', . ' , impa_cncd dismissal on the merits of his case heing considered by

. lite tribunal for itself a'nd that clearlywou1d be to the benefit of the

c;;:pioyec: That is why this Court has consistently held that if the do, nestic enquiry. is irregular, invalid or' improper, the tribunal . may give an opportunity to the employer to prove his case and in doing so the tribunal tries the merits itself. This view is consistent with the approach which industrial adjudication generally adopts with a view to do justice between the parties without relying too much on technical considerations and with the object of avoiding delay in the disposal of industrial disputes. ·· Therefore,

we are satisfied that no distinction can be made lietween cases where the domestic enquiryis invalid and those where no enquiry has in fact been held. We must therefore reject the contention c that as there was no enquiry in this case it was ncit. open to the responJcnt to justify the dis_charge before the tribunal ..

Re. (iit)

The question whether there was go-slow during the perio1 from November 27 to Dcember 15, 1960 is a question of fact and the tribunal has come to the conclusion that there was go-slow during this period. Ordinarily, this Court dcies not go into findings of fact recorded by a tribunal unkss there are special reasons, as. for example, where the finding is based on no evidence,-which of course is not the case here. Learned counsel for the appellants

howc;;:r urges that the finding of the tribunal that the. workmen concerned were guilty cf go-slow is perverse and that. evidence which was relevant and material has been ignored. As the case involves the discharge of as many as 119 workmen we liave decided to go broadly into the evidence to see whether the finding of the

trib:mal.is patently wrong. · · Fqr this purpose we may first refer to the past history of the W'lrking of the respondent factory. It appears that till this court condemned the practice of go-slow in the case of Bharat Sugar Mills('). It was not unusual in the State of Bihar for workmen to give notice of go-slow to employers as if it was a le3itimate weapon

!<J be used: in matters of dispute between the employers and the workmer.. In the present case the respondent had complained as far back at 1950 that go-slow was being resorted to. In 1950 a court of enquiry was constituted to enquire into this question and it made a report that there was a slow-down on the part of the workman for several days in February-March 1950. It also came to' the conclusion that the slow-down was instigated anJ sponsored. by. union leaders. In 1951, the workmen gave notice . of go-slow in case their demands were not fulfilled (vide Ex. A-1) Similar notices were given in 1952 (vide Ex. A-2), In 1954 (vide . Ex. A-3 and A-4) and in 1955 (vide Exs. A-5, A-6 and A-7 and

'on some occasions threats of go-slow did actually materialise.

Besi<!es these notices the management had. occasion to complain in 1955, 1957, and 1958 more than once tat go-slow was being

WORKMEN v. MOO'IPUR l/ACTOJtY (Wanrlwo, .J.)

5\J9

resorted to at the cane carrier. Thus it appears that resorting to go-slow was a common practice in this factory.

It is in the background of this persistent attitude of the workmen that we have to see what happened in November 1960. We have already referred to the fact that the workmen were dissatisfied with the new incentive bonus scheme proposed by the res pondent. It is not necessary to go into the merits of this new scheme which was proposed in September 1960.

But it appears that when there was dispute in the 1959-60 season on the question of how much cane should be crushed,- the secretary of the union had accepted in a conference with the Assistant Labour Commissioner that there had been a drop in the amount of cane crushed, though he maintained that it was still the average crush.

He had also stated then that the workmen were dissatisfied with the incentive bonus scheme in that season and had withdrawn the extra efforts they were putting iri after the introduction of the incentive scheme for the first time in 1956-57. Further it was admitted by the secretary in his evidence that when the bonus scheme was proposed in 1960-61, it was considered by the workmen in a meeting and it was decided that if the new system was introduced without the consent of the workmen they would not put in any extra effort for giving more than what was the normal crush in the mill. The evidence also show~ that there were con ferences about the new scheme and at one stage the respondent suggested that the norm should be 30,000 maunds crush per day while, the union was agreeable to 29,500 m.aunds per day.

But there was no agreement in this behalf and so that workmen carried out their resolve not to put in extra efforts to give more than the average normal crushing per day. Thus the season which began in November 1960 started with the withdrawal of extra efforts by the workmen which in plain terms means that the workman were not prepared to do what they had been doing in this previous season 1959-60 and were slowing down production as compared to what it was in 1959-60. It is in the background of this history and this admission that we have to look broadly into the evidence to see whether the tribunal's conclusion that there was go-slow is justified.

The main contention on behalf of the respondent in this con nection is that that one has to see is that is called crushing speed for a day of 24 hours and it is this crushing speed which would determine whether there was go-slow during the period in dispute.

It has been urged that crushing speed per 24 hours is different from the actual crushing per day or the average crushing for a period. for the actual crushing per day from which the crushing speed is arrived at depends on a number of factors, particularly it depends on the amount of stoppages that take place during the day and if there are more stoppages the actual crushing on a parti cular day would necessarily go down. Crushing speed per twenty four hours on the other hand is arrived a! by excluding the stoppages and then working out what would be the amount of cane

600 SUPllEME COURT REPORTS [1965] 3 s.c.R.

crushed in 24 hours if there had been no stoppages.

The case of A the respondent further is that when it gave the notice on December 15, 1960 asking for a crush of 32,000 maunds per day it really meant that the workmen should work in such a way as to give a crushing speed of 32,000 maunds per day, though the words "crushing speed" were not actually used in the notice. It is however pointed out that the notice when it mentions 32,000 maunds B as the normal crush expected per day excluded stoppages other than those due to over-loading or under-loading of the cane carrier.

Therefore, the respondent wanted the workmen to give a crushing speed of 32,000 maunds per day which would exclude stoppages, the only exception being itoppages due to over-loading or underloading, which, according to the respondent, is due to the deliberate 0 action of the cane carrier workmen to cause stoppages, We think that this explanation of what the respondent meant when it gave the notice of average daily crush of 32,000 maunds is reasonable, for it is impossible to accept that 32,000 maunds were required to be crushed irrespective of stoppages, beyond the control of the workmen. Further it is not in dispute that the labour force was D more or less the same throughout these years, and therefore we have to see whether during the period from November '},7 to December 15, 1960 there was any significant drop in the crushing speed. If there was such a significant drop that could only be due to go-slow tactics which have been euphemistically called withdrawal of extra efforts.

It is necessary therefore to look at the charts produced in this case to determine this question. The appellants mainly relay on chart Ex. W-3. That is however a chart of actual crushing per day during the period from 1954-55 to 1960-61 and has nothing to do with crushing speed which in our opinion would be the determinp ing factor in finding out whether there was go.slow. The actual crush may vary as we have alreacjy said due to so many factors, particularly due to stoppages for one reason or the other. The respondent produced another chart Ex. W-4 which shows the crushing speed for the entire season from 1954-55 to 1959-60. We consider that it would not be proper to take the figures for the Q years 1956-57 to 1959-60 in which years incentive bonus schemes were in force and which according to the workmen resulted in extra efforts on their part. But the figures of 1954-55 and 1955-56 would be relevant because in these years there was no incentive bonus scheme and no night weighment of carts. The workmen have also produced a chart showing cane crushed, actual crushing days and B crushing per day; but this chart does not show the crushing speed and does not take into account the stoppages. It merely shows the actual number of working days and the average per day. That however would not be an accurate way of finding out whether in fact there was go-slow during the period with which we are concerned. The respondent's chart Ex. W-4 while showing the same amount of actual crushing also shows what would be the crushing

WORKMEN v. MOTIPUl\ FACTORY (Wanchoo, J.) 601

speed per 24 hours after excluding stoppages. This chart in our opinion is the proper chart for determining whether there was goslow during the revelant period. Now according to this chart (Ex. W-4) tlJ.e daily average crushing speed in 1954-55 was 29,784 maunds and in 1955-56, 30,520 maunds without incentive bonus and without night weighment of carts. It appears that from the middle of 1959-60 season night weighment of carts started and it is not in dispute that that resulted in an increase in the daily crushing and this increase is put at over 2,000 maunds per day by the respondent: the secretary of the union admitted that this would result in an increase of about 2,500 maunds per day. We have already said that iu the years 1954 and 1955 there was no incentive bonus and if these figures are accepted as giving the average crushing speed per day (when there was no incentive bonus and no weighment of carts at night) it would in our opinion be not improper to accept that the crushing speed with night weighment of carts would be in the neighbourhood of 32,000 maunds per day in view of the admission that night weighment of carts resulted in an increase of crushing by about 2,000 maunds to 2,500 maunds per day. Therefore, when the respondent gave notice on December 15,

1960 that the average crushing per day should be 32,000 maunds excluding stoppages (except those due to O\ "r-loading or underloading of the cane carrier, for which the workmen would be responsible) it cannot be said that the respondent had fixed something which was abnormal. It is true that when negotiations were taking place in connection with the incentive bQnus scheme for the year

1960-61, the respondent was prepared to accept a crushing speed of 30,000 maunds per day above which the incentive bonus scheme would apply. That is however easily understood for a proper incentive bonus scheme always fixes a norm which is slightly. lower than the average in order that there may be greater incentive to labour to produce more than the average.

Even so, when the incentive bonus scheme for 1960-61, was not acceptable to the workmen and they had already decided to withdraw what they called extra effort, the respondent would not be unjustified in asking for the full average crushing speed based on the production of the years 1954-55 and 1955-56, when there was no incentive bonus scheme and no night weighment of carts.

It has been urged on behalf of the appellants that the crushing speed of 32,000 maunds per 24 hours is not correctly arrived at for it does not take into account half hour's rest per shift which is permissible under s. 55(]) of the Factories Act, No. 63 of 1948.

Thus, according to the appellants, crushing speed should be worked out on 22! hours per day and the crushing will then be less by 1116th and will only come to 30,000 maunds per day. Reliance in this connection is placed on s. 55(2) of the Factories Act, which lays down that "the State Government.. .... may by written order and for the reasons specified therein, exempt any factory from the provisions of sub-section (]) so however that the total number of hours worked by a. worker without an interval does not exceed

602 SUPREME COURT REPOR'l'S

six. It is therefore urged that the workmen were entitled to half an hour's rest per shift in any case because the shift was for eight . hours. The respondent on the other hand relies on s. 64(2) (d) for the Factories Act and its case is that the State Government had made rules under that provision in connection with sugar factories, which apply to it.

Section 64(2) (d) is in these terms:- . "The State Govrnment may make rules in respect of adult workers in factories providing for the exemption, to such extent and subject to such conditions as may be prescribed-

(d) of workers engaged in any work which for technical reasons must be carried on continuously from the provisions of sections 51,. 52, 54, 55 and 56;

We are of opinion that this provision in s. 64(2) (d) being a special provision will over-ride both sub-ss. (1) and (2) of s. 55, for it gives power to the State Government by making rules to exempt certain types of factories frQjll the application of the whole of s. 55, subject to such conditions and to such extent as the rules may provide. It appenrs lhac rules were framed in this behalf by the Government of Bihar in 1950 by which sugar fact.ories were exempted from the application of s. 55 for purposes of handling and crushing of cane, among others, subject to the condition that the workers concerned shall be allowed to take light refreshment or meals at the place of their employment, or in a room specially reserved for the purposes or in a canteen provided in the factory, once during any period exceeding four hours.

Thus cane crushing operations are exempt from.s. 55(1) ands. 55(2) subject to the condition mentioned above.

We may also refer to s. 64(5) which lays down that the rules made under this section shall remain in force for not more than three years. The rules to which reference has been made are of 1950; but there is nothing to show that these rules were not continued after every interval of three years and the position that the exemption applies to sugar factories even now as provided in these rules was not disputed.

We shall therefore proceed on the basis that the exemption applied to sugar factories in Bihar. In view of this, the workmen cannot claim half an hour's rest per shift as urged on their behalf, though sometime must be allowed for refreshment or light meals as provided in the provision graHting exemption. This means that a few minutes would be allowed to each individual in turn in each shift for light refreshment or meals in such a way that the work does not stop. If 'we make a total allowance of half an hour or so in this connection the average crushing speed would be reduced to slightly over 31,000 maunds per day and that is all the adjustment that the appellants can claim in view of the exemption under s. 64(2) (d).

Let us now turn to the actual position between November 27 and December 15, 1960. This will appear from chart Ex. W-7.

I' v

WORKMEN , .. MOTIPUR FACTORY (Wanclwo, J.) 603

That chart shows a crushing speed of 29 ,859 maunds per day from November 10 to 26, when, according to the respondent, there was only mild go-slow.

We are however concerned with the period from November 27 to December 15, 1960 and the crushing speed for 24 hours during that period was 27,830.

Now if we take the average crushing speed as 32,000 maunds per 24 hours without any adjustment or even a little over 31,000 maunds with adjustment following upon the rule relating to exemption from s. 55, there is certainly a significant drop in average crushing speed during this period. Further we find that there is a significant drop even as compared to the period between November 10 to 26, 1960, inasmuch as the drop was over 2,000 maunds per day.

Therefore it cannot be said that the tribunal was incorrect in its conclusion that there had been go-slow during the period from November 27 to December 15. It may be added that when comparisons are made on the basis of crushing speed and labour force is more or less constant, as is the case here. other minor factors to which our attention was drawn on behalf of the appellants during argument do not matter at all. Even if we take the figure of 30,000 maunds as the crushing speed which the respondent had put forward at the time of the discussion on the incentive bonus scheme, we find that thnugh there was not much difference during the period from November

10 to November 26, there was a significant drop of over 2,000 maunds per day from November 27 to December 15.

Looking at the matter in this broad way-and that is all that'we are prepared to do, for we are examining a finding' of fact of the tribunal-we cannot say that its conclusion that there was go-slow batwllen

November 27 and December 15 is not justified.

Finally, it is urged that notice was given to the workmen on December i 5 and they were discharged on December 17, 1960 without giving them a change to give the necessary production as desired in the notice. But as we have already indicated, the charge in the notice of December 15 was that the workmen had been going slow from November 27 and they were asked to give an undertaking to improve and the respondent was apparently willing to overlook the earlier lapse.

Even assuming that the demand of an undertaking was unjustified, it does appear that the attitude of the workmen was that they would do no better; and in those circumstances they were discharged on December 17, 1960 on the basis of misconduct consisting of go-slow between November 27 and December 16, 1960.

That misconduct has been held proved by the tribunal and in our opinion that decision of the tribunal cannot be said to be wrong. In the circumstances the tribunal was justified in coming to the conclusion that the discharge was fully justified.

. In this view ?f the matter, the appeal taps and is hereby dismissed.

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

Appeal dismissed.

WORKMEN OF MOTIPUR SUGAR FACTORY (PRIVATE) . LIMITED

March 30, 1965

P. B. GAJENDRAGADKAR

K. N. WANCHOO

M. HIDAYATULLAH

V. RAMASWAMI, JJ

Ranen Roy

Jai Krishan

G. S. Chatterjee

E. Udayarathnam

Niren De

Naunit Lal

Wanchoo

November 7, 1960

November 27, 1960

December 15, 1960

J. Krishna

27th November, 1960

Muzzffarpur

6th December, 1960

Saturday the 17th December, 1960

December 17, 1960

17th December, 1960

18th December 1960

19th December 1960

Jeparnnent

December 22, 1960

December 21, 1960

January 25, 1961

December 18, 1960

December 15,

Muzaffarpur

December 6,' 1960

December 15. 1960

December 17, .1960

December 15, G 1960

November 27 and December 15, 1960

Phulbari Tea Estate

s. 33

Industrial Disputes Act, 1947

s. 33

s. 10

Industrial Disputes Act, 1947

s. 10

November 27 to Dcember 15, 1960

Bharat Sugar Mills

Bihar

15,

1960

s. 55(])

Factories Act

s. 55(2)

Factories Act

s. 64(2)

Factories Act

Section 64(2)

sections 51

s. 64(2)

s. 55

s. 55

Government of Bihar

s. 55

s. 55(1)

s. 64(5)

s. 64(2)

November 27 to December 15, 1960

s. 55

November 10 to 26, 1960

November 27 to December 15

November 27 and December 16, 1960