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PETITIONER: THE  ASSOCIATED CEMENT COMPANIES LIMITED,CHAIBASSA CEMENT WO

       Vs.

RESPONDENT: THEIR WORKMEN

DATE OF JUDGMENT: 11/09/1959

BENCH: DAS, S.K. BENCH: DAS, S.K. DAS, SUDHI RANJAN (CJ) HIDAYATULLAH, M.

CITATION:  1960 AIR   56            1960 SCR  (1) 703  CITATOR INFO :  R          1960 SC1213  (5)  R          1962 SC1221  (17)  R          1963 SC1710  (8)  R          1964 SC 864  (13)  F          1974 SC1132  (10,11)

ACT: Industrial  Dispute-Lay-off   compensation-Disqualification- Cement  factory-Limestone quarry -Whether both Parts of  one establishment--Lay-off  of workers in cement factory due  to strike  in  limestone  quarry-"  In  another  Part  of   the establishment  " meaning of-Test for determining  whether  a particular unit is Part of a bigger  establishment-Factories Act, 1948 (63 of 1948), s. 2(m)-Plantations Labour Act, 1951 (69 of 1951), s. 2(f)-Mines Act, 1952 (35 of 1952), ss. 2(j) 17-Industrial  Disputes Act, 1947 (14 of 1947), ss.  2(kkk), 18(3), 25C, 25E, 33.

HEADNOTE: The  cement  factory in question which is in  the  State  of Bihar  belonged  to the appellant company  and  a  limestone quarry owned by the same company As situate about a mile and a  half  from the factory.  Limestone  being  the  principal rawmaterial  for  the  manufacture of  cement,  the  factory depended exclusively for the supply of limestone on the said quarry.  On behalf of the labourers in the limestone  quarry certain  demands were made on the management of the  company but  as  they  were rejected they went  on  strike;  and  on account  of the non-supply of limestone due to  the  strike, the  management  had to close down certain sections  of  the factory  and to lay-off the workers not required during  the period of closure of the sections concerned.   Subsequently, after the dispute between the management and the workers  of the  limestone quarry was settled and the strike came to  an end,  a  demand  was made on behalf of the  workers  of  the factory who had been laid-off during the strike, for payment of  lay-off  compensation  under s. 25C  of  the  Industrial Disputes  Act, 1947, but the management refused  the  demand relying  on cl. (iii) to s. 25E of the Act,  which  provided that  " no compensation shall be paid to a workman  who  had been  laid-off............... if such laying-off is  due  to

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strike............ on the part of workmen in another part of the  establishment ". The Industrial Tribunal took the  view that the limestone quarry was not part of the  establishment of  the  cement factory and that the workmen in  the  latter were  not disentitled to lay-off compensation by  reason  of Cl.  (iii)  of  S. 25E of the Act.   The  appellant  company appealed by special leave to the Supreme Court and contended that the decision of the Tribunal was erroneous because  the facts  of  the case showed (a) that in respect of  both  the factory  and  the  limestone  quarry  there  was  unity   of ownership,  unity  of management, supervision  and  control, unity of finance and employment, unity 704 of  labour and conditions of service of workmen,  functional integrality,  general  unity  of  purpose  and  geographical proximity,  and  (b) that the strike was decided on  by  the same  Workers’ Union which consisted of the workmen  at  the factory   and  the  quarry.   It  was  contended   for   the respondents  inter  alia  (1) that  the  conclusion  of  the Industrial  Tribunal  that  the factory  and  the  limestone quarry  are not parts of one establishment is a  finding  of fact  which should not be disturbed in an appeal by  special leave,  (2) that the effect of the Explanation to s. 25A  of the  Act  is to negative the idea of a factory  and  a  mine forming  parts of one establishment, and (3) that  since  in the  matter  of reference of industrial  disputes,  the  Act gives jurisdiction to two distinct authorities, the  Central Government in respect of the limestone quarry and the  State Government  in  respect of the factory, the two  units,  the factory and mine, cannot -be treated as one establishment. Held:     (1) that the question whether the factory and  the limestone  quarry  form one establishment depends  upon  the true scope and effect of the expression "in another part  of the  establishment" in cl.(iii)of s. 25E of  the  Industrial Disputes  Act,  1947, and involves a  consideration  of  the tests  which  should  be applied in  determining  whether  a particular  unit  is  part of a  bigger  establishment,  and though  for that purpose certain preliminary facts  must  be found,  the final conclusion to be drawn therefrom is not  a mere question of fact ; (2)  that the true scope and effect of the Explanation to s. 25A of the Act is that it explains what categories, factory, mine   or  plantation,  come  within  the  meaning  of   the expression  " industrial establishment "; it does  not  deal with  the question as to what constitutes one  establishment and lays down no tests for determining that question; (3)  that   existence   of  two   jurisdictions   does   not necessarily  imply  that for all purposes of  the  Act,  and particularly  for payment of unemployment compensation,  the factory   and   quarry   must   be   treated   as   separate establishments ; and, (4)  that  on  the facts of the present case  the  limestone quarry and the factory constituted one establishment  within the  meaning of cl. (iii) of s. 25E of the Act and that  the workmen  at the factory were not entitled to  claim  lay-off compensation.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 87 of 1958. Appeal  by  special leave from the Award dated  October  10, 1956, of the Industrial Tribunal, Bihar, Patna, in Reference No. 6 of 1956. R.   J.  Kolah,  S. N. Andley and Rameshwar  Nath,  for  the

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appellants. B.   C. Ghose and P. K. Chatterjee, for the respondents. 705 1959.   September  11.   The  Judgment  of  the  Court   was delivered by S.   K.  DAS J.-This appeal by special leave from  an  award dated  October  10, 1956, made by the  Industrial  Tribunal, Bihar, raises an important question of interpretation in the matter of a disqualification for lay-off compensation  under s. 25E read with s. 25C of the Industrial Disputes Act, 1947 (hereinafter called the Act), and so far as we know, this is the  first  case of its kind in which the  expression  "  in another  part of the establishment " occurring in cl.  (iii) of s. 25E has come up for an authoritative interpretation. The  facts  are simple and are shortly set out  below.   The Associated  Cement  Companies Ltd., hereinafter  called  the Company,  have  a number of cement  factories  in  different States  of the Indian Union as also in Pakistan.  There  are two  such factories in the State of -Bihar, one  at  Khelari and the other at a place called Jhinkpani in the district of Chaibasa in Bihar.  The latter factory is commonly known  as the  Chaibasa  Cement Works.  There is  a  limestone  quarry owned  by the same Company situate about a mile and  a  half from-the  Chaibasa Cement Works, the quarry being  known  as the  Rajanka limestone quarry.  Limestone is  the  principal raw material for the manufacture of cement and the  Chaibasa Cement  Works,  depended  exclusively  for  the  supply   of limestone on the said quarry.  At the time relevant to  this appeal  there were two classes of labourers at  the  quarry, those employed by the Company through the management of  the Chaibasa  Cement  Works  and others who were  engaged  by  a contractor.   There  was  one union known  as  the  Chaibasa Cement  Workers’  Union, hereinafter called  the  Union,  of which  the Company’s labourers both at the Cement Works  and the quarry were members.  There was another union consisting of  the contractor’s labourers which was known as the A.  C. C.  Limestone  Contractor’s Mazdoor Union.   On  January  3, 1955,  the Union made certain demands on the  management  on behalf  of the labourers in the limestone quarry, but  these were  rejected  by the management.  Then,  by  a  subsequent letter dated February 18, 706 1955,  the General Secretary of the Union gave a  notice  to the Manager of the Chaibasa Cement Works to the effect  that the  Union proposed to organise a general stay-in-strike  in the limestone quarry from March 1, 1955, if certain demands, details  whereof are unnecessary for our purpose,  were  not granted on or before February 28,1955.  A similar notice was also  given on behalf of the A.C.C.  Limestone  Contractor’s Mazdoor  Union.   These notices led to  certain  efforts  at conciliation  which however, failed.  On February 24,  1955, the  management  gave  a  notice to  all  employees  of  the Chaibasa  Cement Works, in which it was stated that  in  the event  of the strike materialising in the limestone  quarry, it  would  be  necessary for the management  to  close  down certain  sections of the factory at Jhinkpani on account  of the non-supply of limestone; the notice further stated  that in  the event of such closure, it would be necessary to  lay off  the workers not required during the period  of  closure for  the sections concerned.  The strike commenced on  March 1,  1955, and lasted till July 4, 1955.  On March 25,  1955, the  management wrote to the General Secretary of the  Union intimating  to him that the workers in  certain  departments referred to in an earlier letter dated March 19, 1955, would be  laid-off with effect from April 1, 1955.  On  March  28,

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1955, the management gave the lists of employees who were to be  laid-off with effect from April 1, 1955, and they  were, actually laid-off from that date.  During the period of  the strike   fresh  efforts  at  conciliation  were   made   and ultimately  the strike came to an end on July 5, 1955,  when the  Central  Government referred the  dispute  between  the management  and the workers of the limestone quarry  to  the Central Industrial Tribunal at Dhanbad.  This reference was, however,   withdrawn  by  mutual  consent  in  terms  of   a settlement  arrived at on December 7, 1955.  The details  of this settlement are not relevant to this appeal. Thereafter,  a demand was made by the Union for  payment  of lay-off  compensation  to those workers of  Chaibasa  Cement Works who had been laid-off for the period April 1, 1955, to July 4, 1955.  This demand 707 was  refused  by  the  management.  This  gave  rise  to  an industrial  dispute which was referred by the Government  of Bihar  under  s. 10 of the Act to the  Industrial  Tribunal, Bihar.   The terms of reference set out the dispute  in  the following words:- "  Whether  the  workmen of the Chaibasa  Cement  Works  are entitled  to  compensation for lay-off for the  period  from April 1, 1955, to July 4, 1955." The  parties filed written statements before the  Industrial Tribunal  and the only witness examined in the case was  Mr. Dongray, Manager of the Chaibasa Cement Works, Jhinkpani. At  this point it is necessary to read the two  sections  of the  Act  which relate to the right of  workmen  to  lay-off compensation  and  the  circumstances  in  which  they   are disqualified for the same.  The right is given by s. 25C and the  disqualification is stated in three clauses of s.  25E, of which the third clause only is important for our purpose. We  now proceed to read ss. 25C and 25E so far as  they  are material for our purpose.  "  S.  25C.  (1) Whenever a workman  (other  than  a  badli workman  or  a casual workman) whose name is  borne  on  the muster  rolls  of an industrial establishment  and  who  has completed not less than one year of continuous service under an  employer is laid-off, he shall be paid by  the  employer for all,days during which he is so laid-off, except for such weekly  holidays as may intervene, compensation which  shall be equal to fifty per cent. of the total of the basic  wages and  dearness allowance that would have been payable to  him had he not been so laid-off." "  S. 25E.  No compensation shall be paid to a  workman  who has been laid-off- (i) ........................ (ii)........................ (iii)     if such laying-off is due to a strike or  slowing- down of production on the part of workmen in another part of the establishment." 708 Now,  the central point round which the controversy  between the  parties  has  raged is this.  Was the  lay-off  of  the workers in certain sections of the Chaibasa Cement Works due to  a strike on the part of workmen in another part  of  the establishment within the meaning of cl. (iii) of s. 25E ? In other words, was the limestone quarry at Rajanka part of the establishment  known  as  the Chaibasa  Cement  Works?   The contention  of  the management was and is  that  the  Cement Works and the limestone quarry form one establishment within the  meaning  of  cl. (iii) aforesaid.   The  contention  on behalf  of  the workmen is that they are not  parts  of  one establishment but are separate establishments.  The  learned

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Chairman of the Industrial Tribunal held, for reasons  which we  shall presently discuss, that the limestone  quarry  was not  part of the establishment known as the Chaibasa  Cement Works and the workmen in the latter were not disentitled  to lay-off compensation by reason of cl. (iii) of s. 25E.   The correctness of this view is the principal point for decision in this appeal. On  behalf of the respondent workmen it has  been  contended that  the  conclusion of the Industrial  Tribunal  that  the factory at Jhinkpani and the limestone quarry at Rajanka are not parts of one establishment is a finding of fact and this appeal  should  be disposed of on that footing.  We  do  not think that this contention is correct and we shall presently deal  with  it.  We propose, however, to examine  first  the relation  between  the limestone quarry at Rajanka  and  the cement  factory  at Jhinkpani in the light of  the  evidence given before the Tribunal and the findings arrived at by it; because they will show the process of reasoning by which the Tribunal came to its final conclusion. The  evidence  was  really one sided and  the  only  witness examined  was  Mr. Dongray, Manager of the  Chaibasa  Cement Works.   Now, the relation between the limestone quarry  and the  factory can be considered from several points of  view, such  as  (1) ownership, (2) control  and  supervision,  (3) finance,  (4)  management and employment,  (5)  geographical proximity  and (6) general unity of purpose  and  functional integrality, 709 with  particular  reference  to the  industrial  process  of making  cement.  On all that above points Mr.  Dongray  gave evidence.   It was not disputed that the Company  owned  the limestone quarry as also the factory and there was unity  of ownership.  Mr. Dongray’s evidence further showed that there was  unity of control, management and employment.   He  said that  the limestone quarry was treated as a part and  parcel of  the  Chaibasa  Cement Works, that is,  as  a  department thereof and he as the Manager was in overall charge of both, though   there  was  a  Quarry  Manager  in  charge   as   a departmental  head  under him.  On this  point  Mr.  Dongray said:- " There is a Manager appointed for the quarries. The  Manager is working under me.  The Cement  Works  itself has  about  eight or nine departments under it.   There  are heads of each department.  The Manager of the quarry has the same status as the heads of other departments at the  Cement Works." This  was  supported by a circular letter dated  March   11, 1952, which said that the entire factory and the  associated quarries were under the sole control of the Manager, who was responsible for maintaining full output at economic cost  up to  the  expected  standard.  The  circular  letter  further stated  that all orders and contracts were to be  issued  by the Manager for the  working of the factory and quarries and the relevant bills were to be passed by him.  As to  finance and conditions of employment, Mr. Dongray said:- "  All  requirements of the quarry are sent by  the  Manager there  to the office of the Cement.  Works and if  they  are available  in the Cement Works Stores, they are issued  from there;  otherwise  I indent them from the Bombay  office  or purchase  them locally.  There is no account office  in  the quarries  and  their  account is maintained  in  the  Cement Works’  Office.  I as Manager of the Chaibasa  Cement  Works make payment for the indents or requirements of the quarries stated  above.  The quarry has no separate banking  account. The  Quarry  Manager  is not  entitled  to  operate  banking

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account  apart from myself At the quarries there are  daily- rated workers and monthly-paid staff. 90 710 To  the daily-paid workers in the quarries, the  cashier  of the  Cement  Works  or his  Assistant  makes  payment,  when required.   The monthly-paid staff of the quarries  come  to the  Cement  Office for receiving payment.   In  the  Cement Works  we  have  got  a system of  allocation  of  work  for different  jobs every day.  It is done by  the  Departmental Heads.   Same  system prevails in the  quarries  also.   The Quarry  Manager  does  the  distribution  as  head  of  that department.  Attendance Register is maintained at the quarry in  the same way as it is done in the different  departments of the Cement Works.  There is only one common pay sheet for all the monthly-paid staff, whether he is at the factory  or in  the quarries.  For the daily-rated workers we  have  got different sheets department-wise and there is one such sheet for  the daily workers of the quarry as well.  There is  one summary sheet of the payment showing the payment of all  the departments  including the payment in the quarries as  well. I have to send statutory intimation to the authorities under the  Mines Act regarding the quarries for working faces  and other  accidents etc.  The staff and workers working in  the quarries  are transferable to the Cement Works according  to the exigencies of the work and also vice versa.  There  have been  a  few  instances of such transfers.   The  terms  and conditions of service, for instance, T. A., leave, provident fund,  gratuity,  etc., are same for workers in  the  Cement Works  as  also  the workers in the quarries.   We  got  the application  of the statutory provident fund rules  extended to  our department in the quarries also.  The report of  the working  of  the quarry comes to me from the  Manager  there from  time to time.  I as Manager of the Cement  Marks  make payments  of  royalties in in respect of  limestones  raised from  the  quarries.  Payments for  compensation,  maternity benefits,  accidents, etc., in the quarry are made under  my authority  by  the  factory office and  not  by  the  Quarry Manager." Exhibits  1 to 26 filed on behalf of the  management,  which showed the working of the quarry and the 711 factory,  supported the aforesaid evidence of  Mr.  Dongray; they  showed, as has been observed by the  Tribunal  itself, that  the management was maintaining one common account  and the final authority on the spot in respect of the quarry  as also in respect of other departments of the factory was  Mr. Dongray,  the Manager.  There were also other  documents  to show  that  the transfer of members of the  staff  from  the quarry to the factory and vice versa was made by Mr. Dongray according  to  the exigencies of service.  It is  worthy  of note  here that the Union itself gave notice to the  Manager of  the  factory with regard to the intended strike  in  the limestone   quarry.   The  geographical  proximity  of   the limestone  quarry was never in dispute.  It was adjacent  to the factory, being situate within a radius of about a  mile. As to general unity of purpose -and functional  integrality, this  was  also not seriouly in dispute.  Mr.  Dongray  said that  limestone  was  the principal  raw  material  for  the manufacture  of cement and the cement factory  at  Jhinkpani depended  exclusively  on the supply of limestone  from  the quarry  at  Rajanka.  His evidence no doubt  disclosed  that some excess limestone was sent to the factory at Khelari  as well.   On  this point Mr. Dongray said:- " Limestone from this quarry is at times sent to the Khelari

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Cement  Works, but that is very rare and in small  quantity. It is done only in cases of emergency." Mr. Dongray explained that the normal number of departmental workers  in  the  quarry  before  the  strike  was  in   the neighbourhood  of  250; but there were about  1,000  workers employed by contractors.  The number of daily-rated  workers was  in the neighbourhood of 950 and the total  monthly-paid staff varied from 100 to 105.  The wages paid to the workers in  the  quarry  were debited to limestone  account  of  the Cement Works, and in the matter of costing, the amount spent on limestone was also debited.  The bank accounts,  however, were  in  the name of the Company and the persons  who  were entitled to operate on those accounts were Mr. Dongray,  the Manager,  the Chief Engineer, and the Chief Chemist  of  the Cement Works. 712 All  the  aforesaid  evidence,  oral  and  documentary,  was apparently  accepted  by the Tribunal as  correct;  for  the learned  Chairman  summarised the evidence  of  Mr.  Dongray without  any serious adverse comment.  He then  referred  to certain  contentions urged on behalf of the Union, which  he said  were  not  without  force.  We  may  now  state  those contentions.   The  first  contention  was  that  under  the provisions of the Act, the appropriate authority in  respect of  the  factory at Jhinkpani was the  State  Government  of Bihar,  whereas the appropriate authority in respect of  the limestone  quarry, which was a mine as defined in the  Mines Act,  1952,  was the Central Government.   The  second  con- tention was that there were two sets of Standing Orders, one for the workmen of the factory and the other for the workmen in the limestone quarry.  The third contention was that  the limestone  quarry  had an office of its own and  a  separate attendance  register,  and the fourth  contention  was  that under the provisions of the Mines Act, 1952, Mr. Dongray was an Agent in respect of the limestone quarry and there was  a separate  Manager  who  was  responsible  for  the  control, management and direction of the mine under the provisions of s.  17  thereof.  The learned Chairman referred  to  certain criticisms  made in respect of the evidence of Mr.  Dongray. One  criticism was that though the Company was the owner  of both  the  factory  and the limestone quarry,  it  had  also factories  and limestone quarries at other places  in  India and  Pakistan  and  if the test of one  ownership  were  the determining  test,  then  all the  factories  and  limestone quarries  of  the  Company wherever situtate  would  be  one establishment.   This criticism was not, however,  pertinent because the Company never claimed that all its factories  in different   parts   of  India  and   Pakistan   formed   one establishment  by  reason of unity of ownership  only.   The other  criticism  was  that Mr. Dongray  admitted  that,  if necessary  in  the interest of service, the workmen  at  the Chaibasa  Cement  Works could be transferred to  some  other factory of the Company and therefore transferability was not a  sure test.  This criticism was also not germane,  because the  Company 713 never  claimed that transferability was the only sure  test. A third criticism also advanced on behalf of the workmen was that  Mr.  Dongray  admitted that all the  accounts  of  the different  factories and limestone quarries of  the  Company were  ultimately  consolidated  into  one  Profit  and  Loss Account,  a  criticism  which in our view  was  equally  not pertinent  to the question at issue.  The  learned  Chairman then expressed his final finding in the following words:- "  From  these and other admissions made by Mr.  Dongray  it

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would  appear  that it is only for economy  and  convenience that he was given charge of the control of both the concerns but  his  capacity was dual.  While he was  controlling  the Cement  Works as it Works Manager he had the control of  the quarries  as its Agent under the Mines Act.  It has also  to be  noted  that  if  both  these  establishments  which  are inherently different by their very nature are treated as one and  the same, anomalous position may arise in dealing  with the  employees in the quarries in matters of misconduct  and such other things if there is a pendency of a dispute in the Cement  Works and vice versa.  Obviously, the  employees  of the Cement Works have to be dealt with by the State Tribunal while the employees of the quarries by the Central Tribunal. This also nullifies the force of the management’s contention that both are parts of the same establishment.   Considering these  it  has  to  be  held  that  the  contention  of  the management fails and that of the Union must prevail." We  now  revert  to the contention urged on  behalf  of  the respondent  that  this appeal should be disposed of  on  the footing that the final conclusion of the Industrial Tribunal is  a finding of fact.  The judgment of the Tribunal  itself shows that the final conclusion was arrived at by a  process of  reasoning  which  involved a  consideration  of  several provisions of the Act and some provisions of the Mines  Act, 1952.  The Tribunal accepted a major portion, if not all, of the  evidence of Mr. Dongray; but it felt compelled to  hold against the appellant despite that evidence by reason of an 714 anomalous  position  which, it thought, would arise  if  the factory  and the quarry were held to be  one  establishment. The  question  before  the Tribunal, and this  is  also  the question  before  us, was the true scope and effect  of  cl. (iii) of s. 25E of the Act, with particular reference to the expression  "  in  another  part  of  the  establishment   " occurring therein.  That question was not a pure question of fact,  as  it involved a consideration of  the  tests  which should  be applied in determining whether a particular  unit is part of a bigger establishment.  Indeed, it is true  that for  the application of the tests certain preliminary  facts must  be  found;  but  the  final  conclusion  to  be  drawn therefrom  is not a mere question of fact.  Learned  counsel for the respondent is not, therefore, justified in asking us to  adopt  the short cut of disposing of the appeal  on  the footing that a finding of fact should not be-disturbed in an appeal  by  special leave.  In this case we  cannot  relieve ourselves  of  the task of determining the  true  scope  and effect  of  cl. (iii) of s. 25E by adopting  the  short  cut suggested by learned counsel. We  proceed now to consider what should be the proper  tests in  determining  what  is meant by "  one  establishment  ". Learned  counsel for the respondent has suggested  that  the test  has  been laid down by the Legislature itself  in  the Explanation to s. 25A of the Act.  That Explanation states:- "  In  this  section  and in  sections  25C,  25D  and  25E, "industrial establishment " means- (i)  a factory as defined in clause (m) of section 2 of  the Factories Act, 1948; or (ii) a  mine  as defined in clause (j) of section 2  of  the Mines     Act, 1952; or (iii)     a plantation as defined in clause (f ) of  section 2 of the Plantations Labour Act, 1951." The  argument is that the Explanation states in clear  terms what  an industrial establishment means in certain  sections of the Act including s. 25E, and on a proper construction it negatives  the idea of a factory and a mineforming parts  of

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one  establishment.   Curiously  enough,  s.  25E  does  not contain the 715 expression  "industrial establishment".  It uses the word  " establishment " only.  We agree, however, that if s. 25E  is read  with s. 25C and the definition of " layoff " in  s.  2 (kkk)  of  the  Act,  as  it  must  be  read,  the  word   " establishment  "  in s. 25E has reference to  an  industrial establishment.  On the footing that the word " establishment " in s. 25E means an industrial establishment, what then  is the  effect  of  the Explanation ?  The  contention  of  the respondent is that an industrial establishment may be either a factory as defined in clause (m) of s. 2. of the Factories Act,  1948, or a mine as defined in cl. (j) of s. 2  of  the Mines Act, 1952, or a plantation as defined in cl. (f) of s. 2  of the Plantations Labour Act, 1951; but it cannot  be  a combination   of  any  two  of  the  aforesaid   categories; therefore, a factory and a mine together, as in the  present case, cannot form one establishment.  This argument proceeds on  the assumption that the Explanation while  stating  what undertakings  or  enterprises come within the  expression  " industrial establishment " necessarily lays down the test of ’one establishment’ also.  We do not think that there is any warrant for this assumption.  The Explanation only gives the meaning  of the expression " industrial establishment "  for certain sections of the Act; it does not purport to lay down any  test as to what constitutes one ’ establishment’.   Let us  take,  for  example,  a  factory  which  has   different departments in which manufacturing processes are carried  on with  the aid of power.  Each department, if it employs  ten or more workmen, is a factory within the meaning of cl.  (m) of s. 2 of the Factories Act, 1948; so is the entire factory where 1,000 workmen may be employed.  The Explanation merely states  that  an undertaking of the nature of a  factory  as defined in cl. (m) of s. 2 of the Factories Act, 1948, is an industrial establishment.  It has no bearing on the question if  in  the example taken, the factory as a  whole  or  each department  thereof should be treated as one  establishment. That  question must be determined on  other  considerations, because  the Explanation does not deal with the question  of one establishment.  In our view, the true scope and effect 716 of  the  Explanation is that it  explains  what  categories, factory, mine or plantation, come within the meaning of  the expression  " industrial establishment " ; it does not  deal with  the question as to what constitutes one  establishment and  lays down no tests for determining that  question.   We cannot,  therefore, accept the argument of  learned  counsel for  the respondent that a factory and a mine, a mine  which supplies  the raw material to the factory, can never be  one establishment  under  the Act; that we do not think  is  the effect of the Explanation to s. 25A. The  Act  not  having  prescribed  any  specific  tests  for determining  what is ’one establishment’, we must fall  back on  such  considerations as in the  ordinary  industrial  or business   sense  determine  the  unity  of  an   industrial establishment,  having  regard no doubt to  the  scheme  and object of the Act and other relevant provisions of the Mines Act,  1952, or the Factories Act, 1948.  What then is ’  one establishment’ in the ordinary industrial or business  sense ?  The  question of unity or oneness  presents  difficulties when the industrial establishment consists of parts,  units, departments, branches etc.  If it is strictly unitary in the sense  of  having one location and one unit only,  there  is little  difficulty in saying that it is  one  establishment.

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Where,  however,  the  industrial  undertaking  has   parts, branches, departments, units etc. with different  locations, near  or distant, the question arises what tests  should  be applied    for    determining    what    constitutes    ’one establishment’.   Several  tests  were referred  to  in  the course  of  arguments  before  us,  such  as,   geographical proximity, unity of ownership, management and control, unity of   employment  and  conditions  of   service,   functional integrality, general unity of purpose etc.  To most of these we  have  referred  while summarising the  evidence  of  Mr. Dongray  ,and the findings of the Tribunal thereon.  It  is, perhaps, impossible to lay down any one test as an  absolute and  invariable  test for all cases.  The  real  purpose  of these  tests  is to find out the true relation  between  the parts, branches, units etc.  If in their true relation  they constitute one integrated whole, we say 717 that  the establishment is one; if on the contrary  they  do not  constitute  one integrated whole, each unit is  then  a separate  unit.  How the relation between the units will  be judged must depend on the facts proved, having regard to the scheme  and object of the statute which gives the  right  of unemployment     compensation    and     also     prescribes disqualification  therefor.  Thus, in one case the unity  of ownership, management and control may be the important test; in another case functional integrality or general unity  may be  the  important  test; and in  still  another  case,  the important test may be the unity of employment.  Indeed, in a large  number  of  cases several tests  may  fall  for  con- sideration  at  the same time.  The difficulty  of  applying these  tests  arises because of the complexities  of  modern industrial   organisation;   many   enterprises   may   have functional   integrality   between   factories   which   are separately owned; some may be integrated in part with  units or  factories  having the same ownership and -in  part  with factories  or plants which are independently owned.  In  the midst  of  all  these complexities it may  be  difficult  to discover the real thread of unity.  In an American  decision (Donald  L. Nordling v. Ford Motor Company (1)) there is  an example  of  an industrial product consisting of,  3,800  or 4,000 parts, about 900 of which came out of one plant;  some came  from other plants owned by the same Company and  still others came from plants independently owned, and a  shutdown caused by a strike-or other labour dispute at any one of the plants  might conceivably cause a closure of the main  plant or factory. Fortunately  for  us,  such  complexities  do  not   present themselves  in the case under our consideration.  We do  not say  that  it is usual in industrial practice, to  have  one establishment  consisting  of a factory and a mine;  but  we have  to remember the special facts of this case  where  the adjacent limestone quarry supplies the raw material,  almost exclusively, to the factory ; the quarry is indeed a  feeder of  the factory and without limestone from the  quarry,  the factory cannot function.  Ours is a case where all the tests are fulfilled, (1)  (1950) 28 A.L.R., 2d. 272. 91 718 as shown from the evidence given on behalf of the  appellant to  which  we  have earlier referred.  There  are  unity  of ownership,  unity  of management, supervision  and  control, unity  of  finance  and  employment,  unity  of  labour  and conditions  of service of workmen,  functional  integrality, general  unity  of purpose and geographical  proximity.   We

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shall  presently deal with the legal difficulties  at  which the  Tribunal has hinted and which have been  elaborated  by learned  counsel for the respondent.  But apart  from  them, the  only fair conclusion from the facts proved in the  case is that the Chaibasa Cement Works consisting of the  factory and  the  limestone  quarry  form  one  establishment.   The existence  of  two sets of Standing Orders  and  a  separate attendance  register for the limestone quarry  have  already been adverted to.  They have been sufficiently explained  by Mr.  Dongray,  particularly  the existence of  two  sets  of Standing  Orders by reason of the statutory  requirement  of approval  by  different authorities-one set  by  the  Labour Commissioner,  Bihar,  and  other by  the  relevant  Central authority. We  proceed  now to consider the  legal  difficulties  which according to learned counsel for the respondent stand in the way of treating the limestone quarry and the factory as  one establishment.   The  Tribunal has merely  hinted  at  these difficulties by saying that an anomalous position will arise if   the  quarry  and  the  factory  are  treated   as   one establishment.   It  is necessary to refer  briefly  to  the scheme   and   object  of  lay-off  compensation   and   the disqualifications  therefor  as envisaged  by  the  relevant provisions  in  Chapter  VA of the Act.   That  chapter  was inserted  by the Industrial Disputes (Amendment)  Act,  1953 (43 of 1953), which came into effect from October 24,  1953. The  right of workmen to lay-off compensation  is  obviously designed to relieve the hardship caused by unemployment  due to  no fault of the employee; involuntary unemployment  also causes  dislocation  of  trade and  may  result  in  general economic  insecurity.   Therefore,  the right  is  based  on grounds of humane public policy and the statute which  gives such right should be 719 liberally  construed,  and  when  there  are   disqualifying provisions,  the  latter should be construed  strictly  with reference  to the words used therein.  Now, s. 25 gives  the right, and there are three disqualifying clauses in s.  25E. They  show  that  the basis of  the  right  to  unemployment compensation  is  that the unemployment is  involuntary;  in other  words, due to no fault of the  employees  themselves; that  is  why no unemployment compensation is  payable  when suitable  alternative employment is offered and the  workman refuses to accept it as in cl. (1) of s. 25E ; or the  work- man  does not present himself for work at the  establishment as in cl. (ii); or when the laying-off is due to the  strike or  slowing  down of production on the part  of  workmen  in another   part  of  the  establishment  as  in  cl.   (iii). Obviously,  the  last  clause treats the  work  men  in  one establishment as one class and a strike of slow-down by some resulting  in the laying-off of other  workmen  disqualifies the    workmen   laid-off   from    claiming    unemployment compensation, the reason being that the unemployment is  not really involuntary. It  is against this background of the scheme and  object  of the  relevant  provisions  of the Act  that  were  must  now consider the -legal difficulties alleged by the  respondent. The  first difficulty is said to arise out of s. 17  of  the Mines  Act,  1952.  That section says in effect  that  every mine   shall   be   under  a   Manager   having   prescribed qualifications  who  shall be responsible for  the  control, management and direction of the mine; it is then pointed out that  the word ’agent’ in relation to a mine means a  person who  acts as the representative of the owner in  respect  of the management of the mine and who is superior to a Manager.

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The argument is that the limestone quarry at Rajanka had a ’ Manager’ under the Mines Act, 1952, and Mr. Dongray acted as the  agent, that is, representative of the owner, viz.,  the Company;  and this arrangement which was in consonance  with the  provisions of the Mines Act, 1952, it is  argued,  made the factory and the quarry two separate establishments.   We are  unable to accept this argument as correct.  We  do  not think that s. 17 of the Mines Act, 1952, has any relevance 720 to  the question whether the limestone quarry was part of  a bigger  establishment.  It prescribes the appointment  of  a Manager  for purposes of the Mines Act, 1952, and  does  not deal  with  the question of ’one establishment’  within  the meaning  of cl. (iii) of s. 25E of the Act.  The  fact  that the  quarry  Manager worked under the  overall  control  and supervision  of Mr. Dongray showed, on the facts  proved  in this case, just the contrary of what learned counsel for the respondent  has contended ; it showed that the  factory  and the quarry were treated as one establishment. The  second  difficulty  is said to  arise  out  of  certain provisions  of the Act which relate to the  constitution  of Boards of Conciliation, Courts of Inquiry, Labour Courts and Tribunals and the reference of industrial disputes to  these bodies for settlement, inquiry or adjudication.  The  scheme of the Act is that except in the case of National  Tribunals which   are  appointed  by  the  Central   Government,   the appropriate  Government makes the appointment of  Boards  of Conciliation, Courts of Inquiry, Labour Courts and Tribunals and it is the appropriate Government which makes the  refer- ence   under  s.  10  of  the  Act.   Now,  the   expression appropriate Government is defined in s. 2(a) of the Act.  So far as it is relevant for our purpose, it means the  Central Government  in relation to the limestone quarry  at  Rajanka and the State Government of Bihar in relation to the factory at  Jhinkpani.  We had stated earlier in this judgment  that in   this  very  case  the  original  dispute  between   the management  and  the  workmen in the  limestone  quarry  was referred  to  the  Central Tribunal at  Dhanbad,  while  the latter dispute about lay-off compensation to workmen of  the factory  was  referred  by the Government of  Bihar  to  the Industrial  Tribunal  at Patna.  The argument before  us  is that  when the statute itself brings the two units,  factory and  mine,  under  different  authorities,  they  cannot  be treated  as one establishment for the purposes of  the  same statute.   Our attention has also been drawn to s. 18(3)  of the  Act under which in certain circumstances, a  settlement arrived  at in the course of conciliation proceedings  under the Act or an award of 721 a Labour Court or Tribunal is made binding " on all  persons who  were  employed  in the establishment  or  part  of  the establishment,  as  the case may be, to  which  the  dispute relates  on  the  date of the dispute and  all  persons  who subsequently become employed in that establishment or part." It is contended that it will be difficult to apply s.  18(3) if  the factory and the limestone quarry are treated as  one establishment.   Lastly, learned counsel for the  respondent has  referred  us to s. 33 of the Act.  Sub-section  (1)  of that  section,  in  substance, lays  down  that  during  the pendency   of  any  conciliation  proceedings  or   of   any proceeding  before a Labour Court or Tribunal in respect  of any   industrial  dispute,  no  employer  shall  alter   the conditions of service to the prejudice of workmen or  punish any  workmen,  save with the permission in  writing  of  the authority  before  which the proceeding  is  pending.   Sub-

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sections (2) and (3) we need not reproduce, because for  the purposes  of this _ appeal, the argument is the same,  which is  that  if  a  proceeding  is  pending  before  a  Central Tribunal, say in respect of the limestone quarry, there will be difficulty in applying the provisions of s. 33 in respect of  workmen in the factory over which the  Central  Tribunal will have no jurisdiction.  The Industrial Tribunal did  not specifically  refer  to these provisions, but  perhaps,  had them  in mind when it said that an anomalous position  would arise  if  the factory and the quarry were  treated  as  one establishment. We  have  given  our most  earnest  consideration  to  these arguments, but are unable to hold that they should  prevail. It  is  indeed true that in the matter  of  constitution  of Boards of Conciliation, Courts of Inquiry, Labour Courts and Tribunals and also in the matter of reference of  industrial disputes  to  them, and perhaps for  certain  other  limited purposes,  the  Act  gives  jurisdiction  to  two   distinct authorities,  the  Central  Government  in  respect  of  the limestone quarry and the State Government in respect of  the factory.   The  short  question  is-does  this  duality’  of jurisdiction,  dichotomy one may call it, necessarily  imply that for all purposes of the Act, and particularly for 722 payment  of unemployment compensation as per the  provisions in  Ch.  VA, the factory and the quarry must be  treated  as separate  establishments.   We are unable to find  any  such necessary  implication.   There is no provision in  the  Act which  says that the existence of two jurisdictions has  the consequence  contended  for  by  learned  counsel  for   the respondent;  nor  do  we find  anything  in  the  provisions creating two jurisdictions which by reason of the  principle underlying  them  or by their very nature give  rise  to  an implication  in law that the existence of two  jurisdictions means the existence of two separate establishments.  On  the contrary,  such  an  implication or  inference  will  be  at variance   with  the  scheme  and  object  of   unemployment compensation as provided for by the provisions in Ch.  VA of the  Act.   We have pointed out earlier that the  object  of unemployment  compensation is to relieve hardship caused  by involuntary  unemployment, that is, unemployment not due  to any  fault  of the employees.  If in the  ordinary  business sense the industrial establishment is one, a lay-off of some of the workmen in that establishment as a result of a strike by  some other workmen in the same establishment  cannot  be characterised  as  involuntary unemployment.  To  hold  that such  an  establishment must be divided  into  two  separate parts by reason of the existence of two jurisdictions is  to import  an  artificiality  for which we think  there  is  no justification in the provisions of the Act. Nor  do  we  think that ss. 18(3) and 33  present  any  real difficulty.  Section 18(3) clearly contemplates a settlement or an award which is binding on a part of the establishment. It  says  so in express terms.  If, therefore, in  the  case before  us there is a settlement or award in respect of  the limestone  quarry, it will be binding in  the  circumstances mentioned in the subsection, on the workmen in that part  of the establishment which is the limestone quarry.  Similarly, a  settlement  or award in respect of the  factory  will  be binding  on the workmen of the factory.  Section 33, as  far as it is relevant for the argument now under  consideration, is in two parts.  Sub-section (1) relates 723 to a matter connected with the dispute in respect of which a proceeding is pending.  Sub-section (2) relates to a  matter

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not  connected  with  the dispute in respect  of  which  the proceeding  is  pending.   In one  case  permission  of  the authority  before which the proceeding is pending has to  be obtained  for  punishing  etc.  ;  in  the  other  case,  an application for approval of the action taken by the employer has to be made.  We see no difficulty in applying s. 33 in a case  like the one before us.  For workmen in the mine,  the authority   will  be  the  one  appointed  by  the   Central Government;  for  the factory, the authority  will  be  that appointed  by  the  State  Government.   This  is  the  same argument  as  the argument of two jurisdictions  in  another form.  The assumption is that there cannot be two  jurisdic- tions for two parts of one establishment.  This argument  is valid, if the assumption is correct.  If, however, there  is no  warrant  for the assumption, as we have  held  there  is none, then the argument has no legs to stand upon. So far we have dealt with the case irrespective of and apart from reported decisions, because there is no decision  which really  covers the point in controversy before us.   Learned counsel  for the appellant has referred to the decisions  in Hoyle v. Cram (1) and Coles v. Dickinson (2 ). The  question in the first case was if the appellants there were liable to be convicted of an offence against the Bleaching Works  Act, 23  and  24  Vict. c. 78 in employing the  child  without  a school  master’s  certificate.   It was held  that  a  child employed  on  the premises where the bleaching,  dyeing  and finishing  were  performed  was employed  in  an  incidental printing process within the second section of 8 and 9  Vict. c.  29; and that the place where he was so  employed  formed part  of  "  the establishment where the  chief  process  of printing  was carried on " within the meaning of  that  Act. The  decision proceeded mainly on the words of the  statute; but Earle, C.J., said: "  It appears that the works at Mayfield having  some  years ago become inadequate, by reason of the (1)  (1862) 12 C.B. (N.S.) 125; 142 E.R. 1090. (2)  (1864) 16 C.B.(N.S.) 604; 143 E.R. 1264. 724 increase  of  the  business and  by  the  detorioration  and deficiency of the water of the river Medlock, the appellants transferred part of their works to Sandy Vale: but that  the principal  part  of the work continued to be carried  on  at Mayfield,  which was the principal seat of the firm.   In  a commercial sense, therefore, Sandy Vale clearly was part  of one   entire  establishment.   It  was  contended  for   the respondent  that the statute did not mean forming part in  a commercial  sense, but in a popular and local sense.  But  I see no reason for confining the meaning to local  proximity. The whole substantially forms one establishment." In  the  second  case the question was this :  by  the  73rd section  of  7 and 8 Vict. c. 15, premises  which  are  used solely  for the manufacture of paper were excluded from  the operation of the Factory Acts; there were two mills, one  at Manchester  and the other in Hertfordshire.  The  Manchester mill  prepared what was called half-stuff which was sent  to the mill in Hertfordshire to be manufactured into paper, and the  question was if the Manchester mill was  exempted  from the operation of the Factory Acts.  The answer given was  in the  affirmative.   It  was stated that  each  step  in  the process  was  a step in the manufacture of  paper,  and  the distance between the two places where the several parts were carried on was wholly immaterial in view of the words of the statute. The  last decision to which our attention has been drawn  is the  American decision in Donald L. Nordling v.  Ford  Motor

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Company  (1).  This decision is perhaps more in point as  it related  to unemployment compensatiOn.  The statute in  that case  provided  that  an individual  losing  his  employment because  of  a  strike or other  labour  dispute  should  be disqualified  during its process " at the  establishment  in which he is or was employed ". The claimants there had  been employed at a Minnesota automobile assembly plant which  was partially  shut  down because of a lack of parts  due  to  a strike  at a manufacturing plant owned and operated  by  the same  corporation in Michigan.  The Minnesota Supreme  Court to which an application was made for (1)  (1950) 28 A.L.R. 2d. 272. 725 a  certiorari  to review a decision of the director  of  the division of employment and security reviewed the tests which have generally been applied for determining what is meant by the term ’ establishment’ within the meaning of the  statute concerned;  it pointed out that there was no  uniformity  of decision on the question and it was not possible to lay down an  absolute or invariable test.  The decision was based  on the broader ground that the tests of functional integrality, general  unity  and physical proximity should all  be  taken into  consideration in determining the ultimate question  of whether  a factory, plant or unit of a larger industry is  a separate establishment within the meaning of the  employment and  security  law.  The test which was emphasized  in  that case  was  the test of the unity of employment and  on  that footing it was found that the evidence was ample to  support the  director’s  finding  that the  Minnesota  plant  was  a separate establishment. We  do not think that these decisions carry the  matter  any further than what we have explained in earlier paragraphs of this judgment.  We must have regard to the provisions of the statute under which the question falls to be considered;  if the  statute  itself says what is  one  establishment,  then there  is no difficulty.  If the statute does not,  however, say what constitutes one establishment, then the usual tests have  to be applied to determine the true  relation  between the  parts, branches etc., namely, whether  they  constitute one  integrated  whole or not.  No particular  test  can  be adopted  as an absolute test in all cases of this  type  and the  word  ’establishment’ is not to be given  the  sweeping definition  of one organisation of which it is capable,  but rather  is  to  be construed in  the  ordinary  business  or commercial sense. For  the reasons which we have already given, we are of  the view  that the learned Chairman of the  Industrial  Tribunal wrongly  held that the limestone quarry at Rajanka  and  the factory  at Jhinkpani were separate establishments.  In  our view, they constituted one establishment within the  meaning of cl. (iii) of 92 726 s.25E of the Act.  It was conceded on behalf the  respondent workmen that the lay-off in the factory was due to the  non- supply of limestone by reason of the strike in the limestone quarry and the strike was decided on by the same Union which consisted  of  the workmen at the factory  and  the  quarry. That  being the position, the disqualification in cl.  (iii) aforesaid  clearly  applied and the workmen at  the  factory were not entitled to claim lay-off compensation. The  result, therefore, is that the appeal succeeds  and  is allowed  and  the award of the Industrial  Tribunal  is  set aside.   In  the  circumstances  of  the  case  in  which  a difficult question of interpretation arose for decision  for

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the first time, we pass no order as to costs. Appeal allowed.