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PETITIONER: MADURA COATS LIMITED

       Vs.

RESPONDENT: INSPECTOR OF FACTORIES, FIRST CIRCLE, MADURAI & ANR.

DATE OF JUDGMENT02/12/1980

BENCH: SEN, A.P. (J) BENCH: SEN, A.P. (J) GUPTA, A.C.

CITATION:  1981 AIR  340            1981 SCR  (2) 302  1981 SCC  (1) 590

ACT:      Tamilnadu  Industrial   Establishments  (National   and Festival Holidays) Act 1958 SS. 3 and 5(1) and (2)-Scope of.      Workmen going  on strike-Natural  holiday  intervening- Liability of  Management    to  pay wages  for the  National holiday-When arises.

HEADNOTE:      The Tamil  Nadu Industrial  Establishment (National and Festival Holidays)  Act, 1958  was a legislation intended to provide for  national and  festival holidays  in  industrial establishments in  the State of Tamil Nadu. Section 3 of the Act  provides   that  every   employee  in   an   industrial establishment shall  be entitled  to four  national and five festival holidays  in each calender year. Sub-section (1) of section 5 provides that ‘notwithstanding any contract to the contrary every  employee shall be paid wages for each of the holidays allowed  to him under section 3. Sub-section (2) of section 5  confers upon  the employer the right to call upon the workmen  to come  and  work  on  such  holidays  on  the fulfilment of the conditions set out therein      The appellant  was an  industrial establishment  owning textile mills  in the  State of  Tamil Nadu. In respect of a claim for  bonus for  the year  1974-75 there  was a dispute between the  management and  its workmen. This resulted in a strike by  the workmen, from January 21, 1976 to February 5, 1976 which  was called  off by  the workmen  on February  6, 1976. The management paid the workmen wages for the month of January 1976 after excluding therefrom the wages payable for the period  of strike  during January  namely January  21 to January 31,  1976. The  Management having withheld the wages payable for  January 26, 1976 the first respondent addressed a communication stating that in view of section 5 of the Act payment of wages for January 26, 1976 had to be made.      The management  challenged the order by a Writ Petition in the High Court. The High Court held that having regard to the provisions  contained in sections and sub-section (I) of section 5  of the  Act, the  appellant was  bound to pay the workmen wages  for January  26, 1976 even though the workmen were on strike on that date and dismissed the Writ Petition      Allowing the appeal to this Court ^

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    HELD: (1)  The liability of the Management to pay wages for the  national and festival holidays under section 3 read with sub-section  (1) of  section 5 of the Act is subject to the rights  under sub-section (2) of section 5 of the Act to call upon the workmen to come and work on such holidays. 303      (2) The  construction placed  by the High Court on sub- Section (2)  of section  5 of  the Act  cannot be  accepted. Under the  scheme of  the Act  the workmen  are  entitled to wages for the national and festival holidays under section 3 read with  sub-section (I)  of section  5, but this right of theirs’ is  subject to  the right  of management given under sub-section (2)  of section  5 to  call upon  the workmen to come and work on such holidays. Any other construction would make the provision contained in sub-section (2) of section 5 wholly nugatory. [308H; 309A]      (3) Both  sub-sections (1) and (2) of section 5 contain non obstante  clauses. While the non obstante clause in sub- section (I)  of section  5 gives to the workmen the right to claim  wages   for  the   national  or   festival   holidays ‘notwithstanding any  contract  to  the  contrary’  the  non obstante clause in sub-section (2) of section 5 subordinates the right  of the workmen to claim wages for the national or festival holidays  ‘notwithstanding  anything  contained  in section 3.  sub-sections (1)  and (2) of section 5 have been enacted with  separate and distinct objects and they operate on different planes. [306H; 307A]      Vasudevan, R.M.S.  Union v.  Lotus Mills Ltd. [1977] II LLJ 483 overruled.      (4) It  would depend  on the facts and circumstances of each case whether or not wages become payable in the context of strike.  When a  Strike is  neither illegal  being not in contravention of  any statutory  provision, nor  unjustified having been  lodged as  a protest  against the  unreasonable attitude of  the management,  there is  no reason to deprive the workmen of their wages. [309B]      Buckingham and  Carnatic Co.  Ltd. v.  Workers  of  the Buckingham and  Carnatic    Co.  Ltd.  [1953]  SCR  219  and Management of  Chandramalai  Estate,  Ernakulam  v.      Its Workmen [1960] 3 SCR 451 referred to.      In the  instant case the workmen went on strike without serving a  notice under section 22 of the Industrial Dispute Act 1947.  That being  so the  strike  resorted  to  by  the workmen was  wholly unjustified  if not  illegal.  When  the workmen themselves  brought about  a situation by going on a strike they  cannot be  permitted to  claim wages under sub- section (1)  of section  5 of  the Act  since the management were deprived  of  their  right  under  sub-section  (2)  of section 5 of the Act. [309E]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No.  34 of 1980.      From the  Judgment and  Order dated  7-11-1979  of  the Madras High Court in Writ Petition No. 2886/76.      Soli J.  Sorabjee, D.N.  Gupta and  H. K.  Dutt for the Appellant.      R. K. Garg and V. J. Francis for the Respondent.      The Judgment of the Court was delivered by      SEN, J.  This appeal  on certificate, from the judgment of  the   Madras  High  Court  raises  a  question  of  some complexity. The ques- 304

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tion is,  whether an  employer is  statutorily bound  to pay wages if  the workmen are on strike, for any of the national or festival  holidays falling  within the  period of strike, under s.3  read with  sub-s.(1) of  s.5 of  the  Tamil  Nadu Industrial Establishments  (National and  Festival Holidays) Act, 1958 (hereinafter to referred to as ‘the Act’).      The facts of the case are not in dispute. Messrs Madura Coats Limited  are an  industrial establishment  within  the meaning of  s.2(e) of  the  Act,  owning  textile  mills  at Madurai, Ambasamudram  and Tuticorin  in the  State of Tamil Nadu. The  cotton textile industry had been declared to be a public  utility  service  for  purposes  of  the  Industrial Disputes Act,  1947. In  respect of  claim for bonus for the year 1974-75  a settlement  was  entered  into  which  stood superseded by  the Payment  of Bonus  Ordinance,  1975.  The management accordingly  took the  view  that  no  bonus  was payable for the year in question, since its payment would be against the  provisions  of  the  Act,  as  amended  by  the Ordinance. This  resulted in  a strike by the workmen of the concerned mills. The workmen were on strike from January 21, 1976 to  February 5,  1976. The strike was called off by the workmen on  February 6,  1976 due to the intervention of the Commissioner  of   Labour,  Madras,   who  brought  about  a settlement. The  proceedings of  the Commissioner  of Labour dated February  5, 1976  show that  the parties,  i.e.,  the management and  the workmen,  had agreed  to  abide  by  his decision in  the matter.  The terms  of the settlement were, inter alia,  that the  strike was to be called off forthwith and the  workmen would  commence work  on February  6, 1976, that the  management’s proposal 10 make a penal cut of eight days’ wages  of the  workmen for  going on an illegal strike would be waived and that there would be no wages payable for the period  of the  strike.  In  accordance  therewith,  the workmen resumed  work on February 6, 1976 and the management paid them  wages  for  the  month  of  January,  1976  after excluding there  from the  wages payable  for the  period of strike during  January, namely,  for the period from January 21 to  31, 1976.  The management  having withheld  the wages payable for  January 26,  1976, the  Inspector of Factories, Ist Circle,  Madurai addressed a communication dated May 22, 1976 stating  that in  view of  s.5 of  the Act,  payment of wages for  January 26,  1976 had  to be made. The management challenged the  order by  a writ petition but the High Court declined to  interfere. It held that the appellant was bound to pay  to the  workmen wages  for January  26, 1976, having regard to  the provisions  contained in s.3 and sub-s.(1) of s.5 of  the Act,  even though  the workmen were on strike on that day. The correctness of that decision is in question. 305      It is urged firstly that in view of the term ‘wages’ in s.2(g) of  the Act, no wages were payable to the workmen for January 26,  1976, in  terms of  the contract  of employment since they  were not  available for  work  and  thereby  the management were  deprived of  the right  given to them under sub-s.(2) of  s.5 of  the Act,  to call  upon the workmen to come and  do the work and secondly, the right of the workmen to receive wages for the national or festival holidays under s.3 of  the Act,  is subject  to the right of the management under sub-s.(2) of s.5 to call upon them to come and work on such holidays.  It is  said that  when a  person  creates  a situation by  going on  a strike whereby he is not available for work,  the terms  of employment cannot be fulfilled and, therefore, a  fortiori no wages are payable. It is suggested that the  right of  the workmen to wages is not dependent on their status  as such, but on the fulfilment of the contract

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of employment.      It would be convenient in the first instance to set out the relevant  provisions of  the Act.  In the  Act the  term ‘wages’ as  defined in  s.2(g), insofar  as relevant,  is in these terms:           "2(g) "Wages"  means all  remuneration capable  of      being expressed  in terms of money, which would, if the      terms  of   employment,  express   or   implied,   were      fulfilled, be  payable to an employee in respect of his      employment  or   of  the  work  done  by  him  in  such      employment.. ".      Section 3 of the Act provides as follows:           "3. Grant  of National and Festival holidays-Every      employee shall  be allowed  in  each  calendar  year  a      holiday of one whole day on the 26th January, the first      May, the 15th August and the 2nd October and five other      holidays each  of one  whole day  for such festivals as      the Inspector  may, in  consultation with  the employer      and the employees, specify in respect of any industrial      establishment." Sub-sections (1) and (2) of s.5 of the Act provide:      "5.  Wages-(1)  Notwithstanding  any  contract  to  the      contrary, every  employee shall  be paid wages for each      of the holidays allowed to him under section 3.           (2)(a)    Notwithstanding  anything  contained  in      section  3,  any  employee.  may  be  required  by  the      employer to work on 306      any holiday  allowed under that section if the employer      has,  not  less  than  twenty-four  hours  before  such      holiday,-           (i)  served   in  the  prescribed  manner  on  the      employee a  notice in  writing requiring him to work as      aforesaid; and           (ii) send  to the  Inspector  having  jurisdiction      over the  area in which the industrial establishment is      situated  and   displayed  in   the  premises   of  the      industrial establishment a copy of such notice.           (b) Where an employee works on any holiday allowed      under section  3, he  shall, at his option, be entitled      to-           (i)  twice the wages; or           (ii) wages  for such day and to avail himself of a      substituted holiday with wages on one of the three days      immediately before  or after  the day  on which  he  so      works."      The legislation is intended to provide for national and festival holidays in industrial establishments in the State. Section 3  of the  Act provides  that every  employee in  an industrial establishment  shall be entitled to four national and five  festival holidays  in  each  calendar  year.  Sub- section  (1)  of  s.5  provides  that  ‘notwithstanding  any contract to the contrary’ every employee shall be paid wages for each  of the  holidays allowed  to him  under  s.3.  The matter is  thus taken out of the realm of contract. There is a  statutory   obligation  cast   on  the   employer  and  a corresponding benefit  conferred on  the employees. The word ‘allowed’ in  sub-s. (1) of s.5 means holidays allowed under s.3. In  other words,  the employer  has no  option  in  the matter. There  can be no contracting out of the liability to pay wages for such holidays.      It will be noticed that both sub-ss. (1) and (2) of s.5 contain non  obstante clauses. While the non obstante clause in sub-s.(1)  of s.5 gives to the workmen the right to claim wages for such holidays ‘notwithstanding any contract to the

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contrary’, the  non obstante  clause in  sub-s. (2)  of  s.5 subordinates the right of the workmen to claim wages for the national  or  festival  holidays  ‘notwithstanding  anything contained in s.3’. Sub-sections (1) and (2) of s.5 have been enacted with  separate and distinct objects and they operate on different planes. Sub-section (2) of s.5 confers upon the employer the right to call 307 upon the  workmen to  come and  work on such holidays on the fulfilment of the conditions set out therein.      As a  matter of  construction, the  non obstante clause contained in sub-s. (2) of s.5 has an overriding effect over s.3. The  right of  the workmen  to claim wages under sub-s. (1) of  s.5 for  any of  the national  and festival holidays under s.3  is, therefore, co-extensive with the right of the management under  sub-s.(2) of  s.5 to call upon the workmen to come  and work on such holidays subject to the compliance with the conditions laid down therein.      On the  construction of sub-s.(2) of s.5 of the Act and its impact  on s.3 and sub-s.(1) of s.5 of the Act, there is a conflict  of opinion  in the  High  Court.  In  Vasudevan, R.M.S. Union v. Lotus Mills Ltd. Koshal J. in dealing with a case where  the workers  of a textile mill went on a strike, and in-between there were two paid holidays, held that wages for the holidays in question were payable despite the strike since sub-s.(1)  of s.5  was absolute  and unconditional and gave to  the employees  the right to stay away from work. He was of  the view  that s.3  and  sub-s.(1)  of  s.5  operate independently without  reference to  sub-s.(2) of s.5 and as such, even if the management had no opportunity to call upon the workmen  to come  and  work  on  national  and  festival holidays as  provided for  in sub  s.(2) of  s.5, they  were bound to  declare such  national and festival holidays under s.3 and  pay wages  for these  holidays to  the  workmen  as provided by sub-s.(1) of s.5. In substance, Koshal J. was of the view that the legislature never intended to give to sub- s.(2) of  s.5  an  overriding  effect  so  as  to  make  the fulfilment of the terms of contract of employment and of the work done  a condition prerequisite for the payment of wages for the national or festival holidays.      When the  matter came before Natarajan J., he expressed his doubts  about the correctness of the view taken in Lotus Mills case. In his view the benefit conferred on the workmen under s.3  and sub-s.(1)  of  s.5  cannot  be  taken  to  be independent of  sub-s.(2) of  s.5 which  confers  a  special right on the management to call upon the workmen to come and work on  national and  festival holidays declared under s.3, and so  long as  that right  of the  management could not be exercised as  the workmen  were on strike on these days, the benefits cannot be enforced by the workmen. He, accordingly, referred the  case to a Division Bench for a reconsideration of the  decision in  Lotus Mills  case. The  Division  Bench (Ramanujam and Padmanabhan JJ.), however, disagreed with him and preferred to 308 follow the  view taken by Koshal J. expressed in Lotus Mills case. The  question is  which of  the two views is in accord with the provisions of the Act.      Ramanujan J.,  speaking for  the Division  Bench, while accepting that  ’sub-s.(2) of  s.5 conferred a special right on the  management, which  is somewhat inconsistent with s.3 and sub-s.(1) of s.5, comments that ’these provisions confer two benefits  on the  employees, viz.,  (1) not to work on a holiday, and  (2) to  get wages from the management for such holiday’, and observes:

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         "If the  right conferred  on the  management under      section 5(2) is intended to override the right given to      the employees under section 3 and 5(1), the legislature      would have  specially said  so by  giving an overriding      effect to  section 5(2).  But so  long as  section 5(2)      does not  specifically override  section 3 and 5(1), it      is not  possible for us to say that sections 3 and 5(1)      are subject to section 5(2). The right conferred on the      management under  section 5(2)  and the right conferred      on employees  under sections 3 and 5(1) should be taken      to be independent of each other."                                          (Emphasis supplied)      This observation  virtually renders  sub-s.(2) of s.5 a mere superfluity.  Furthermore, the  assumption that the Act confers the  right not  to work  on a holiday’ appears to be unwarranted.      The ultimate  conclusion of the High Court was that the contract of  service continues  even during  the  period  of strike and,  therefore,  though  in  the  instant  case  the employees were  on strike, they still continued to enjoy the benefits of  the Act  and must  be paid their wages for 26th January, 1976 even though they were on strike.      In our  judgment, the  construction placed  by the High Court on  sub-s.(2) of s.5 of the Act cannot be accepted. It is apparently  wrong in  observing that  ’if the legislature intended such  a result,  the language  used would have been different’. That precisely is the effect of the non obstante clause in  sub-s.(2) of  s.5 which clearly has an overriding effect over  s.3. Under  the scheme  of the Act, the workmen are entitled to wages for the national and festival holidays under s.3  read with  sub-s. (1)  of s.5,  but this right of theirs’ is  subject to  the right  of the  management  given under sub-s.(2) of s.5, to call upon the workmen to come and work on such holidays. Any other construction would make the provisions contained in sub-s. (2) of s.5 wholly nugatory. 309      It would  depend on the facts and circumstances of each case whether  or not  wages become payable in the context of strike. It  is true  that where  a strike is neither illegal being not  in contravention  or any statutory provision, nor unjustified having  been lodged  as a  protest  against  the unreasonable attitude  of the management, there is no reason to  deprive   the  workmen   of  their   wages.   It   must, nevertheless, be  observed that  workmen  cannot  resort  to strike with  impunity for  any kind  of demand without first exhausting reasonable  avenues for  possible achievement  of their object.      In the  present case, the affidavit of the Inspector of Factories, First  Circle, Madurai  shows  that  the  dispute between the  management and  their workmen  as to payment of bonus for  the year 1974-75 had been referred to the Special Industrial Tribunal  Madras which  gave a decision in favour of the  workmen. That  has a  bearing on the claim for bonus but has  no relevance  to the  question in  controversy.  It appears that  the workmen went on a strike without serving a notice under  s. 22  of the  Industrial Disputes  Act, 1947. That being  so, the  strike resorted  to by  the workmen was wholly  unjustified   if  not   illegal.  When  the  workmen themselves brought  about a  situation by going on a strike, they cannot  be permitted  to claim wages under sub-s.(1) of s.5 of  the Act, since the management were deprived of their right under sub-s.(2) of s.5 of the Act.      In Buckingham  and Carnatic  Co. Ltd. v. Workers of the Buckingham and  Carnatic Co. Ltd. the night-shift operatives of a textile mills stopped work from about 4 p.m. upto about

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8 p.m.  on a  certain day,  the apparent cause of the strike being that  the management  had expressed their inability to comply with  the request  of  the  workers  to  declare  the forenoon of  that day  as a  holiday for  solar eclipse. The stoppage of  work was  the result  of a concerted action and fell within  the definition  of a  ’strike’ in s.2(q) of the Industrial Disputes  Act, 1947.  The strike  was an  illegal strike as  the textile  mills was  a public utility industry and no  notice had been given to the management, even though the refusal  to work  continued only for a few hours. It was held that  the continuity  of service  of  the  workers  was interrupted by  the illegal strike and, therefore, they were not entitled  to claim holidays with pay under s. 49-B(1) of the Factories  Act,  1934.  In  Management  of  Chandramalai Estate, Ernakulam  v. Its  Workmen the  workmen made certain demands and  the matter was referred for conciliation. After conciliation efforts  failed the  workmen struck  work.  The question was whether the workmen were entitled to 310 paid holidays  for the period of strike. It was held, on the facts of  the case,  that the strike was unjustified and the workmen were not entitled to any wages for the period.      The question  ultimately is  one of fact. The liability of the management to pay wages for the national and festival holidays under  s.3, read  with sub-s.(1) of s.5 of the Act, is subject  to their right under sub s.(2) of s.5 of the Act to call  upon the workmen to come and work on such holidays. That depends  upon whether  or not the strike was illegal or unjustified.      In the  result, the appeal succeeds and is allowed. The judgment of  the High  Court is  reversed. The writ petition filed by  the appellant  is allowed  and the impugned notice issued by the Inspector of Factories is quashed.      We wish to mention that the appellant has undertaken to pay wages to the workmen for 26th January, 1976 irrespective of the result of the appeal.      There shall be no order as to costs. N.V.K.                                       Appeal allowed. 311