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PETITIONER: MESSRS.  SHALIMAR WORKS LIMITED.

       Vs.

RESPONDENT: THEIR WORKMEN

DATE OF JUDGMENT: 08/05/1959

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. SINHA, BHUVNESHWAR P. GAJENDRAGADKAR, P.B.

CITATION:  1959 AIR 1217            1960 SCR  (1) 150

ACT: Industrial                     Dispute-Reinstatement-Pending adjudication--Illegal    strike    by     workmen-Management discharging   workmen   without  Permission   of   Tribunal- Reference,  delayed  and vague-Whether workmen  entitled  to reinstatement on such reference.

HEADNOTE: On  March  23,  1948,  while  certain  disputes  were  under adjudication  the workmen pressed the same demands upon  the company for immediate solution without awaiting the award of the  tribunal.  The company refused to meet the demands  and thereupon  the workmen went on an illegal  sit-down  strike. The company closed the works indefinitely and notified  that all  those  workmen who had resorted to the  illegal  strike were  discharged  from  that date.  On July  5  the  company notified  that  the works would open on July 6 and  all  old employees  could  apply for reengagement upto  July  21.   A majority of them applied for being retaken and all those who applied upto July 21 were taken but those who applied  after that   date  were  refused.   On  November  18,  1953,   the Government made a reference in respect of the  reinstatement Of  250 old -workmen who had not been retaken.  No  list  of the 250 workmen was sent to the tribunal nor was such a list filed even during the adjudication proceedings but after the arguments  on behalf of the company were over  a  carelessly prepared  list Of 220 persons was filed before the  tribunal by  the workmen on December 14, 1953.  The Tribunal  ordered reinstatement without specifying who were to be  reinstated. It  directed the company to give a general notice  notifying the  strikers to come and join their duties on a fixed  date and to reinstate those who applied within the time  allowed. On appeal, the Labour Appellate Tribunal upheld the order of reinstatement in respect Of 15 workmen only. Held, that there was no reason for ordering reinstatement of any of the workmen-on such a vague reference made after such an  unreasonable  delay.  It was  reasonable  that  disputes should be referred as soon as possible after they had arisen and after conciliation proceedings had failed,  particularly in cases of wholesale discharge of workmen followed by fresh recruitment  of labour.  Though the workmen were  discharged

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during  the pendency of a dispute in violation of s.  33  of the Industrial Disputes Act, 1947, the remedy of the workmen was  to  apply under s. 33-A of the Act; but  that  was  not done.  This defect in the discharge of the workmen could  be ignored in the circumstances of this case on account of  the illegal strike, the failure to 151 avail  of  the  remedy  under S.  33-A  and  the  delay  and vagueness  of the reference which all show that the  workmen were not interested in reinstatement.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos. 317 &  318 of 1950. Appeals  by special leave from the judgment and order  dated the 29th June 1955 of the Labour Appellate Tribunal of India at Calcutta in Appeals Nos.  Cal. 61 and 81 of 1954. N.   C. Chatterjee, S. N. Mukherjee and B. N. Ghose, for the appellants in C. A. No. 317 of 56 and respondent No. 1 in C. A. No. 318 of 56. A.   V. Viswanatha Sastri, A. K. Dutt and B. P.  Maheshwari, for the appellants in C. A. No. 318 of 56 and respondents in C. A. No. 317 of 56. 1959.  May 8. The Judgment of the Court was delivered by WANCHOO  J.-These are two appeals by special  leave  against the same decision of the Labour Appellate Tribunal of  India in  a dispute between Messrs.  Shalimar Works  Ltd.,  Howrah (hereinafter called the company) and its workmen represented by two unions (hereinafter called the workmen).  Appeal  No. 317  is  by  the  company while appeal No.  318  is  by  the workmen.  We shall dispose them of by one judgment. There was a dispute between the company and its workmen on a number  of  matters  and  it  was  referred  to  the   Sixth Industrial  Tribunal for adjudication by the  Government  of West  Bengal.  Only two matters now survive out of the  many referred  to the Tribunal, namely, (1) profit sharing  bonus and (2) reinstatement of 250 old workmen. We  shall  first deal with the question  of  profit  sharing bonus.   It  appears that the company had a  profit  sharing bonus  scheme in force on the following lines.  It  provided that  after  making  certain deductions,  if  the  remaining profit  was  between  Rs. 1,50,000  and  Rs.  1,99,999,  the workmen  would be entitled to quarter of a  month’s  average basic pay as bonus, When the 152 remaining  profit  was  between  Rs.  2-00  lakhs  and   Rs. 2,49,999,  the  bonus went up to half of a  month’s  average basic  pay.   When  the remaining  profit  was  between  Rs. 2,50,000  and  Rs.  2,99,999,  the bonus  was  to  be  three quarters  of  a  month’s  average basic  pay  and  when  the remaining  profit  was Rs. 3 lacs or more the bonus  was  to equal one month’s basic pay.  No bonus was to be paid if the profit  was less than Rs. 1,50,000.  There  were  provisions that  the  full  bonus would be paid to a  workmen  who  had attended 275 days in a year (inclusive of holidays and leave with  pay) while those with less attendance were to be  paid proportionately with the condition that if the attendance of any  workman was less than 100 days he would be entitled  to no bonus.  The workmen wanted this scheme to be revised  and the  main  revision they desired was that the  bonus  should begin with a profit of Rs. 25,000 after the usual deductions when  it  would  be  one  week’s  wages  and  should  go  on increasing  till it came to three months’ wages  for  profit

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above Rs. 1 lakh and upto Rs. 3 lakhs; thereafter it  should increase further at the rate of 21 days’ wages for each lakh over  3 lakhs.  This was opposed by the company, though  the company  agreed  to a change in the quantum  of  bonus  when profit  after deductions was Rs. 3 lakhs or above.   In  the scheme  in force, the bonus was equal to one  month’s  basic pay  when  the  profit was Rs. 3 lakhs  or  above,  with  no further  increase  whatsoever be the profits.   The  company agreed  to revise this term and suggested that  when  profit was- (i)between Rs. 3 lakhs to Rs. 4 lakhs, bonus should be  four weeks’ wages; (ii) above Rs. 4 lakhs upto Rs. 5 lakhs, bonus should be five weeks’ wages. (iii)above Rs. 5 lakhs, it should be six weeks’wages The Industrial Tribunal did not accept fully the contentions of  either  party in this connection, though it  varied  the scheme in force in certain particulars.  After the variation the scheme was as below                             153 For remaining profit after the usual deductions - (i)from  Rs.80,000  to          bonus at the rate of one          Rs.1,99,999,           week’s average basic pay; (ii) from Rs.2-00 lakhs to      bonus at the rate of half           Rs. 2,49,999,         of a month’s average                                       basic pay; (iii) from Rs.2-50 lakhs to     bonus at the rate of three-            Rs. 2-99,999,        quarters of a month’s                                 average basic.pay; (iv) from Rs. 3-00 lakhs to    bonus at the rate of four           Rs. 4-00 lakhs,      weeks’ average basic                                       pay; (v) from above                 bonus at the rate of six      Rs.4-00 lakhs up          weeks’ average basic    toRs. 5-00 lakhs                pay ; and (vi) from above               bonus at the rate of two      Rs. 5-00 lakhs,          months’ average basic                                  pay. The Industrial Tribunal  also accepted 275 days’  attendance for earning full    bonus and proportionate  bonus when  the attendance     fell  below 275 days and the minimum  of  100 days’ attendance for earning any bonus at all.  It also held that bonus for the years 1951 and 1952 should be paid at the existing  rates while revised rates should be  applied  from the year 1953 onwards. Both  parties  appealed  to the  Labour  Appellate  Tribunal against  this  revision.   The  company  contended  that  no greater revision than what it had agreed to should have been ordered.  In the workmen’s appeal it was contended that  the scheme  put  forward  on  their  behalf  should  have   been accepted.   They  further contended that  the  condition  of minimum  attendance for 100 days should not have  been  laid down  and that the bonus for the years 1951 and 1952  should have been awarded at the revised rates. The  Appellate Tribunal saw no reason to interfere with  the award  of  the  Industrial  Tribunal  in  this  respect  and dismissed  the  appeals with one modification,,  namely,  it added that if in any year it was found 154 that  the  bonus worked out according to the  award  of  the Industrial  Tribunal was less than profit bonus,  calculated according  to  the Full Bench formula evolved in  the  Mill- Owners’  Association, Bombay v. The Rashtriya  Mill  Mazdoor Sangh,  Bombay (1), the workmen would be entitled  to  bonus under the formula; otherwise they would get bonus under  the

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scheme as modified by the Industrial Tribunal., In  the  appeals  before us, the company  has  attacked  the revision  ordered  by  the Industrial  Tribunal,  which  was upheld  by  the Appellate Tribunal, as  also  the  condition added  by  the latter; while the workmen have  attacked  the scale fixed by the Industrial Tribunal as also the order  of payment  of bonus for the years 1951 and 1952, according  to the  scheme in force before the revision by  the  Industrial Tribunal,  and  the conditions as  to  attendance.   Learned counsel for the parties, however, agreed before us that  the revision  made by the Industrial Tribunal was acceptable  to both  the  parties and that the condition laid down  by  the Appellate  Tribunal  that where the bonus according  to  the scheme  is less than the bonus worked out according  to  the Full Bench formula that formula should be applied, should be deleted.   In view of this agreed statement, we  delete  the condition laid down by the Appellate Tribunal and order that bonus  should  be  paid in accordance  with  the  scheme  as revised by the Industrial Tribunal.  Learned counsel for the workmen,  however,  urged that the condition as  to  minimum attendance  of 100 days for entitlement to any bonus at  all and  of  minimum attendance of 275 days for  entitlement  to full  bonus  was arbitrary and should be  set  aside.   This condition  has  been  accepted by  both  the  Tribunals  and appears  reasonable and we see no reason to  interfere.   It was further contended that bonus for the years 1951 and 1952 should have been ordered to be paid according to the revised scheme.   This  contention  was also negatived  by  the  two Tribunals and we see no reason to differ from them.  The two appeals  therefore  with  respect  to  bonus  are  dismissed subject to the modification given above. (1)  1950 L.L.J. 1247.                             155 We  now  come to the question relating to the  term  in  the reference as to the reinstatement of 250 old workmen. it  is necessary  to  state certain facts in this  connection.   It appears that a Major Engineering Tribunal was set up by  the Government of West Bengal in October 1947 to decide disputes between  major  engineering firms and  their  workmen.   The company as well as the workmen were parties to the  disputes which  was pending before that tribunal.  The issues  before that  tribunal  were  of a  very  comprehensive  nature  and included  all  kinds of disputes that  could  arise  between employers  and  employees.   While  that  adjudication   was pending  the workmen suddenly pressed certain  demands  upon the  company  for immediate solution  without  awaiting  the award  of  the  tribunal, even though  the  demands  so  put forward  were  under adjudication.   The  company  naturally refused   to   meet  the  demands  when  they   were   under investigation  by the tribunal.  Consequently,  the  workmen who  had come to work on March 23,1948, started  a  sit-down strike after they had entered the company’s premises.   This strike continued from March 23 to 27, and it was on March 27 that  the  workmen  were ejected from the  premises  by  the police according to the case of the company or were  induced to leave the premises by the police according to the case of the workmen.  Anyhow, after the workmen left the premises on 27th,  the  company gave notice on that day that  the  Works would be ’closed indefinitely.  Another notice was given  by the company on April 6, 1948, in which it was notified  that all those who had resorted to illegal strike from March  23, 1948,  would  be deemed to have been  discharged  from  that date.   Thereafter no work was done till May 15,  1948.   On that  date  the  company gave a notice  that  if  sufficient suitable men applied for employment on or before May 19, the

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works  would be opened on a limited scale from May  20.   It seems,  however,  that  nothing came  out  of  this  notice. Eventually on July 5, the company gave another notice to the effect that the works would reopen on July 6, 1948, and  all old  employees  could  apply, and if  reengaged  their  past services would 156 be  counted  and  their conditions of service  would  be  as awarded by the Major Engineering Tribunal, which, it  seems, had  given its award in the meantime.  It was also  said  in the  notice  that  upto  July 21,  the  company  would  only consider engagement of former employees and no fresh  labour would be recruited till that date.  Thereafter the  majority of the old workmen applied for being retaken in service  and everyone who applied upto July 21 was reengaged.  Thereafter the company refused to reengage the old employees, a few  of whom  are  said to have applied in  November  and  December, 1948, August, 1951, February, 1952 and January, 1953. It  appears  that in November, 1949,  the  Assistant  Labour Commissioner was moved by one of the trade unions about non- employment of 249 workmen.  He wrote to the company in  that connection  and  it  replied  that  the  workmen  had   been discharged for having taken part in an illegal strike and it could  not  see its way to reemploy them.  For a  long  time nothing  seems to have happened thereafter till we  come  to October  7,  1952, when the first reference  was  made  with respect  to  the  reinstatement of  250  old  workmen.   The original  reference was to the tribunal consisting  of  Shri S.K.  Niyogi.  That gentleman went on retirement  before  he could  dispose  of the reference  and  consequently  another reference  was  made  on November 18, 1953  to  the  present tribunal  consisting of Shri M.L. Chakraborty.  No  list  of 250  workmen was sent to the Tribunal about whom it  was  to consider  the question of reinstatement.  No list  of  these workmen was filed even before the Industrial Tribunal during the   adjudication  proceedings:  It  was  only  after   the arguments  on  behalf of the company were over  on  December 14,1953,  that  a  list  of  names  was  filed  before   the Industrial  Tribunal.   This list consisted of  220  persons only  though the reference was with respect to 250.  As  has been  pointed  out  by  the Appellate  Tribunal,  it  was  a carelessly prepared list in which some names were  repeated. Against  some  serial numbers there were neither  names  nor ticket  numbers.  In spite of this, the Industrial  Tribunal ordered  reinstatement  without specifying who  were  to  be reinstated; it really 157 did not know who were the persons to be reinstated.  What it did  was to order the company in order that identity of  the workmen  to  be reinstated might be established  to  give  a general notice on its notice-board notifying the strikers to come and join their duties on a fixed date and to  reinstate whichever striker applied within the time allowed. This  award  of  the Industrial Tribunal  has  been  rightly criticised by the Appellate Tribunal, which has charactrized this  reinstatement as " vague and highly  objectionable  ". The Appellate Tribunal was of the view that " no award could be  so  loosely  or vaguely made ". It further  went  on  to consider whether identity could in any manner be fixed.   In this connection it relied on the remarks made by the company (which had, however, objected to the production of the  list at that late stage) on this list under orders of the Indust- rial  Tribunal.  From these remarks the  Appellate  Tribunal came to the conclusion that the identity of 115 workmen  had been  established.   It  found  that 100  out  of  them  had

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withdrawn their provident fund.  It, therefore, held that so far as these 100 were concerned, they accepted the order  of discharge because of the with. drawal of the provident  fund and no further relief could be granted to them.  As for  the remaining fifteen workmen, it pointed out that they had  not withdrawn  their  provident fund.   It,  therefore,  ordered these fifteen workmen to be reinstated.  Finally, it ordered that no compensation could be allowed to the workmen for the period  between  their  discharge  and  their  reinstatement because  of the delay on their part in asking  for  redress. The  reason which impelled the Appellate Tribunal  to  order reinstatement  was that the notice of discharge dated  April 6,  1948,  was not served on the  workmen  individually  and though  the  notice  of July 5, 1948,  inviting  the  former workmen  to  come  and  join  the  company  was  given  wide publicity,   it   was  also  not  served  on   the   workmen individually.   According to the Appellate Tribunal,  "  the net  result  was that there was defective  communication  of notice  of discharge to the workmen and the notice  offering reinstatement was not also sufficiently published to  enable it to hold 158 that  the  defect  was cured ". As to  the  sit-down  strike itself, both the Tribunals were of the view that the  strike was  the  result of pre-concerted action and  there  was  no justification  for it when the matter was pending  before  a tribunal for adjudication.  The plea of the workmen that the strike resulted spontaneously because of the insult  offered by  the manager to a deputation of the workmen on  March  23 was disbelieved by both the Tribunals. The  main  contention  on  behalf of  the  company  in  this connection  is  that when both the Tribunals had  found  the sit-down strike unjustified, they should have held that  the company  was  entitled  to discharge  the  workmen,  in  the particular  circumstances  of this case.  It is  also  urged that  the  discharge  took -place in  April,  1948  and  the company reopened in July, 1948; the reference of the  matter more  than four years after without the list of the  workmen said to have been discharged, was not proper.  On the  other hand  it has been urged on behalf of the workmen that as  a, dispute was pending between the company and its workmen, the company  could not discharge the workmen  without  obtaining permission  of  the tribunal under s. 33 of  the  Industrial Disputes  Act,  and inasmuch as the notice of  discharge  of April  6, 1948, was given without obtaining the sanction  of the  tribunal before whom the dispute was then  pending,  it was  a breach of s. 33 and therefore the order of  discharge being  in  breach  of  law the  -workmen  were  entitled  to reinstatement. There  is no doubt that strictly speaking the order  of  the company  discharging  its workmen on April 6, 1948,  when  a dispute  was admittedly pending was a breach of s. 33;  (see Punjab  National  Bank Ltd. v. Employees of  the  Bank,(1)). The remedy for such a, breach is provided in s. 33-A and  it can be availed of by an individual workman.  If therefore it was  felt  by the workmen who were discharged  on  April  6, 1948,  that there was breach of s. 33 by the  company,  they should  have  applied individually or  collectively  to  the tribunal under s. 33-A.  None of them did this.  It is  true that some kind of letter was written to the Assistant (1)  [1953] S.C.R. 680. 159 Labour  Commissioner  in November, 1949, but that  was  also very late and nothing seems to have happened thereafter  for almost  another  three years, till the first  reference  was

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made  on  October  7, 1952.  It is true  that  there  is  no limitation  prescribed  for  reference  of  disputes  to  an industrial  tribunal;  even so it is  only  reasonable  that disputes  should be referred as soon as possible after  they have arisen and after conciliation proceedings have  failed, particularly so when disputes relate to discharge of workmen wholesale,  as in this case.  The industry has to  carry  on and if for any, reason there has been a wholesale  discharge of  workmen  and  closure of the industry  followed  by  its reopening  and fresh recruitment of labour, it is  necessary that a dispute regarding reinstatement of a large number  of workmen  should  be  referred  for  adjudication  within   a reasonable time.  We are of opinion that in this  particular case the dispute was not referred for adjudication within  a reasonable  time as it was sent to the  Industrial  Tribunal more than four years after even reemployment of most of  the old  workmen.  We have also pointed out that it was open  to the  workmen themselves even individually to apply under  s. 33-A in this case; but neither that was done by the  workmen nor  was  the  matter referred  for  adjudication  within  a reasonable time.  In these circumstances, we are of  opinion that the tribunal would be justified in refusing the  relief of  reinstatement to avoid dislocation of the  industry  and that  is  the  correct  order to  make.   In  addition,  the reference  in this case was vague inasmuch as the  names  of 250 workmen to be reinstated were not sent to the Industrial Tribunal  and  no  list of these men was given  to  it  till practically  after the whole proceeding was over.  Even  the list  then supplied was so bad that the Industrial  Tribunal did not think it worthwhile to act upon it, and directed the company  to  give a notice to the strikers to  ask  for  re- employment  within  a certain time.  This  the  company  had already  done on July 5, 1948.  That notice had gained  con- siderable  publicity,  for the majority of the  workmen  did appear  thereafter  for re-employment by July  21.   In  the circumstances there was no reason for ordering 160 reinstatement  of  any one on such a vague  reference  after such  an  unreasonable length of time.  The defect,  in  the order-of discharge of April 6, due to permission not  having been  obtained under s. 33 can in the circumstances of  this case  be ignored on the ground that the workmen who did  not rejoin  in July 1948, were not interested in  reinstatement: firstly, on account of the circumstances in which that order came  to be made after an illegal and  unjustified  sit-down strike, secondly, because the workmen in their turn did  not avail themselves of the remedy under s. 33-A which. was open to  them, and thirdly, because the reference was made  after an  unreasonable length of time and in a vague  manner.   We are therefore of opinion that the Appellate Tribunal  should not  have  ordered  the reinstatement of  even  the  fifteen workmen  in the circumstances as their case was exactly  the same  as  the  case of the hundred workmen,  except  in  the matter of the withdrawal of the provident fund. After  the  application for special leave was  allowed  this Court made an order on September 26, 1955, that seven  days’ wages  every  month  should be paid by the  company  to  the fifteen  workmen  who  had been ordered  to  be  reinstated. Learned  counsel  for the company informs us that  of  these fifteen,  only  seven have been turning up to  receive  this payment  while eight men never turned up.  This  shows  that these eight are not interested in the reinstatement.  Of the remaining  seven, two, according to the learned counsel  for the  company, have obtained other jobs while one is said  to be  a  member of Parliament.  The company  was  prepared  to

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reinstate,  out  of human considerations,  the  other  four, though,  it contends that legally and rightly so-it  is  not bound to reinstate any one of these fifteen workmen.   These four  workmen whom the company is prepared to take back  are Nitai Manji, Satya Charan Das, Mustafa Khan and Akil-ud-Din. The  appeal  of the company must therefore be  allowed  with respect  to  the  remaining eleven  workmen  who  have  been ordered  to  be reinstated by the Appellate  Tribunal.   The order  of the Appellate Tribunal will stand with respect  to the four workmen named above in 161 view  of the company’s willingness to take them  back.   The appeal of the workmen on the question of reinstatment  fails and  is  hereby dismissed.  We may, however, make  it  clear that  payment made pursuant to the order of this Court  will not  in  any event be refundable or adjustable  towards  the future wages of those workmen who will be reinstated by  the company. Both the company and the workmen have raised other points in their  respective  grounds of appeal; but as they  have  not been pressed before us we need not say anything with respect to them.  In these circumstances we are of opinion that both the parties will bear their own costs of this Court.                            Appeal  No. 317  allowed.                            Appeal  No. 318 dismissed.