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PETITIONER: WORKMEN OF THE STRAW BOARD MANUFACTURING COMPANY LIMITED

       Vs.

RESPONDENT: M/S.  STRAW BOARD MANUFACTURING COMPANY LIMITED

DATE OF JUDGMENT21/03/1974

BENCH: GOSWAMI, P.K. BENCH: GOSWAMI, P.K. REDDY, P. JAGANMOHAN DWIVEDI, S.N.

CITATION:  1974 AIR 1132            1974 SCR  (3) 703  1974 SCC  (4) 681  CITATOR INFO :  R          1984 SC 516  (23)  R          1987 SC1415  (11,13)  R          1987 SC1478  (6)

ACT: UP.  Industrial  Disputes Act, Ss.  2N  and  6N’--Industrial Disputes  Act  (14  of  1947)  S.  25FFF--Two  units  of   a business--Tests     for    determining    if    they     are independent--Principles  of res  judicata--Applicability  to industrial  adjudication--Scope of s. 25 FFF of the  Central Act.

HEADNOTE: The  respondent-company owned two units-S-mill  and  R-mill. They  were.  in separate premises, but in  close  proximity. The  raw-materials used in the two mills were different  and were   obtained   from  different  sources.  ,   They   also manufactured  different products.  Electricity was  obtained by  the  two  mills from different  sources.   The  sale  of products  manufactured in the respective units was  effected from their respective offices ’and the members of the  staff of  the  two  units  were  separate,  and  wages  were  paid separately.   The accounts of the two mills were  maintained separately  although finally they were amalgamated into  one account.    The  Fire  Insurance  of  the  mills  was   done separately;  the  local  manager  of  the  Employees   State Insurance  Corporation  had allotted  different  numbers  of provident  fund  to  the two mills; the  assessment  of  the sales-tax for the sales of the product of the two units  was done  separately;  and  as  the  products  were   different, different  rates of sales-tax were applied.  The  respondent closed  the  S-mill  on the ground  of  non-availability  of certain  raw-material  for its product  and  terminated  the services of the workmen of that mill by stages between May 7 and July 28, 1967.  The first batch consisted of 98  workmen and   they   raised  a  dispute  which  was   referred   for adjudication  by  the  tribunal under s.  4-K  of  the  U.P. Industrial Disputes Act. On  the  questions  (1)  whether stoppage  of  work  by  the employers  and the consequent non-employment of the  workmen amounted to a lay-off, retrenchment, lock-out, or whether it

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was  a legitimate closure; and (2) to what relief,  if  any, the  workmen concerned were entitled to, the  tribunal  held that  the closure was legitimate; that it was not a case  of lay-off, retrenchment or lock out; that since itlegitimate closure,   the  question.  of  compensation  could  not   be determined by a sit; and that the workmen were not  entitled to any relief. In appeal to his Court, HELD :-(1)In the circumstances of the case the S  mill-which was an independent unit and a separate line of business, had been  closed  in fact; and therefore, it was not a  case  of lay-off or lock-out or retrenchment. [713G-H; 714A-D]. (a)  Several factors are relevant in deciding  the  question whether   industrial  establishments  owned  by   the   same management  constitute separate units or one  establishment, and  the  significance  or  importance  of  these   relevant factors,  would not be the same in each case but depends  on the  facts  of each case.  There is bound to be a  shift  of emphasis  in the application of the various tests  from  one case to another. But   among   these   tests   functional integrality, meaning thereby such functional interdependence that  one  unit  cannot  exist  conveniently  or  reasonably without the other, will assume an added significance in  the case  of  a closure of a branch or a unit.  In  the  present case, R-mill is a different line of business and the closure of the S-mill has nothing to do with the functioning of  the R-mill.  This is a most important aspect in this  Particular case  thought there are certain common features  as  between the  two  units.   The  fact  of  the  unity  of  ownership, supervision and control and the existence of certain  common features do not justify a contrary conclusion.  That most if the   conditions   of  service  of  the   two   mills   were substantially identical can be easily explained by the  fact that  being  owned by the same employer and  the  two  units being 704 situate in close proximity it will not be in the interest of the  management and peace and well-being of the  company  to treat the employees differently, creating heart burning  and discrimination.  Similarly, no particular significance could be  attached  to "he fact that the standing  orders  of  the company were applied to the employees of R-mill.  It is true that  there were some case of transfer from one mill to  the other  but  they  were  all done with  the  consent  of  the employees.  In fact, the standing orders did not provide for transfer  from one unit to the other.  The tribunal has  not committed  any  manifest  error of law  by  any  significant omission  to  consider  relevant  materials  in  this  case. Therefore, it was a clear case of closure of an  independent unit  of  the  company and not a closure of  a  part  of  an establishment.  Such closure cannot be treated as lay-off or lock-out  under  the  Act.  The S-mill was  intended  to  be closed and was in fact closed and therefore, the question of lay-off under s. 2-N of the Act does not arise.   Similarly, it  is also not a case of lock-out within the meaning of  s. 2-0.   In both lay off and lock-out the unit is  not  closed completely and there is also no intention of the employer to close the concern.  It is also not a case of retrenchment as it  is ordinarily understood nor even within the meaning  of s. 2(s) of the Act which is substantially identical with  s. 2(00) of the Industrial Disputes Act 1947, as interpreted by this Court. [713A-714H; 718C-D] Associated Cement Companies Limited, Chaibassa Cement  Works Jhinkuni  v. Their Workmen, [1960] 1 S.C.R. 709/716,  Indian Cable  Co.,  Ltd. v. Its Workmen, [1962] 1  L.L.J.  409/419,

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Pakshiraja Studios v. Its workmen, [1961] 11 L.L.J. 330/382, Pratap  Press,  etc. v. Their Workmen, [1960] 1  L.L.J.  497 quoted in 1961 (11) L.L.J. 308/382; South India  Millowners’ Association  and  others  v.  Coimbatore  District   Textile Workers’  Union  and  others, [1962] 1  L.L.J.  223/230  and Management of Wenger & Co. v. Their Workmen, [1963] Suppl. 2 S.C.R. 862/ 871, referred to. (b)  The employer was justified in deciding to close  It  is not  always  possible to immediately shut down  a  though  a decision to close it may have been irrevocably wrong in  the respondent  company  arranging closure of way  as  to  guard against  unnecessary  inconvenience to and  the  labour  and against  possible avoidable wastage or loss to the  concern. It would be necessary to go on with the unused stock of  raw material for come time for which a lesser number of  workers would  be necessary, some of whom would constitute the  next batch  to go.  Hence the termination of the services of  the 98  workmen as the first batch selected to go on account  of closure, in the circumstances of the case, cannot be held to be unjustified. [715C-F] (c)The timing of the termination of the 98 workmen which was about  three months earlier to the actual closure is not  at all relevant in the context of the present case which is one of a closure of an independent unit with different processes of  work  for it-, end product.  It could not  be  contended that  there was no closure on 7th May since the  S-Mill  had been functioning till 28th July and that therefore the first batch of 98 workmen must be held to have been retrenched  on 7th  May  with a right to compensation  as  on  retrenchment Under s. 6N of the U.P. Act. [715F-H] (d)  (i) The principles of res judicata under s.  11  C.P.C. are   applicable   to  industrial  adjudication.    In   the application of the principle in industrial adjudication  the extremely technical considerations usually invoked in  civil proceedings  may  not  be allowed  to  outweigh  substantial justice  to the parties.  This is so since  multiplicity  of litigation  and  agitation  and  re-agitation  of  the  same dispute at issue between the same employer and his employees will  not  be  conducive to industrial peace  which  is  the principal  object  of  all  labour  legislation  bearing  on industrial  adjudication.  But, whether a matter in  dispute in   a  subsequent  case  had  already  been  directly   and substantially in issue between the same parties and the same had  been heard and finally decided by the tribunal will  be of  pertinent consideration and will have to  be  determined before  holding in a particular case that the principles  of res indicate are attracted. [717C-F] (ii)  Rule  18  of the U.P Industrial  Tribunal  and  Labour Courts Rules Procedure, 1967, enables the tribunal to  frame any  issue that may arise from the down the unit  by  stages mill  or a concern even taken.  There is nothing the  S-mill in such a both the management 705 pleadings   but  the  decision  on  such  issue  would   not automatically  attract the principle of res  judicate.   The heart of the matter always will be what was the  substantial question   that  came  up  for  decision  in   the   earlier proceedings.  Some additional issues may be framed in  order to assist the tribunal to better appreciate the case of  the parties with reference to the principal issue which has been referred to for adjudication.  The reasons for the  decision in  connection with the adjudication of the principal  issue cannot  be considered as the decision itself to attract  the plea of res Judicate.  The earlier question at issue must be relevant  and  germane in determining the  question  of  res

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judicata in the subsequent proceedings.  The real  character of  the controversy between the parties is the  determining, factor  and  in  the complex and  manifold  human  relations between  labour  and capital no cast-iron rule can  be  laid down. [717F-718A] (iii) In the present case, there were earlier. awards but in none of them was the question whether R-Mill and S-Mill were one establishment substantially in issue. [717A-C] 2(a)  Since  the U.P. Act does not make  any  provision  for compensation in the case of closure and the Central Act  has supplied the lacuna there is no repugnancy between the  U.P. Act and the Central Act and the beneficent provisions of the latter Act can be availed of by labour even in their absence in  the U.P. Act.  Any doubt in the matter is cleared by  s. 25J of the Central Act.  Therefore, on the finding that  the S-Mill  was closed as an independent unit it will  fall  for consideration  whether  the employees of the said  mill  are entitled  to  compensation under s. 25F which is  a  counter part of s. 6N of U.P. Act by virtue of the provisions of  s. 25FFF (i) of the Central Act.  The Tribunal was,  therefore, not  correct in holding that’s. 25FFF did not apply  to  the employees concerned. [718D-719D] (b) It is no longer open to plead at that there could be  no industrial dispute with regard to eligibility of workmen  to compensation,   or  to  its  quantum,  on  closure   of   an establishment.    Further,  the  reference  has   not   been challenged  as incompetent either before the tribunal or  in this  Court.   On the other hand the explicit terms  of  the reference  show  that the subject matter referred to  is  an industrial  dispute.   Once  it is found  that  there  is  a closure the question of applicability of s. 25FFF(i) or  the proviso  thereto will automatically arise for  consideration in  determining the quantum of compensation.  The scheme  of chapter  V-A  or  even the language of  s.  25FFF  does  not indicate  that the claim under the section can be made  only under s. 33C of the Central Act. it was therefore  incumbent upon  the  tribunal to adjudicate upon the second  issue  of reference  for  granting appropriate relief as  a  necessary corollary  to the result of the first issue, and the  matter must  be  remitted  to the tribunal.   The  tribunal  should determine  the  amount  of  compensation  after  giving   an adequate  opportunity  to  the parties  to  establish  their respective pleas. [719H-720H] (c) The word undertaking as used in s. 25FFF is not intended to cover the entire industry or business of the employer and therefore,  even  closure  or  stoppage of  a  part  of  the business  or activities of the employer would be covered  by the sub-section. [719E-G] Management  of  Hindustan  Steel Ltd.  v.  The  workmen  and others, A.I.R. 1973 S.C. 878/882, followed.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 52 of 1969. Appeal  by  special.  leave from the Award  dated  the  30th April,  1968 of the Industrial Tribunal (11) Lucknow in  Adj Case No. 110 of 1967. S.  C. Agrawal, Shanti Swarup Bhatnagar and Y. J..  Francis, for the appellants. F.  S.  Chitalev,  I- N. Shroff and R.  P.  Kapur,  for  the respondent. 706 The Judgment of the Court was delivered by. GOSWAMI, J.-This appeal by special leave at the instance  of

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the  workmen  of  the  Straw  Board  Manufacturing   Company Limited, is directed against theaward  of the  industrial tribunal (11) at Lucknow (briefly theTribunal) dated 30th April, 1968.  The facts briefly are as follows:- The Straw Board Manufacturing Company, the respondent  here- inafter  to  be  referred to as the  Company)  is  a  Public Limited company and owns two units shown as the Straw  Board Mill  and the Regmal Mill (hereinafter described as S.  Mill and R. Mill respectively).  Straw Board was manufactured  in S.  Mill and abrassive paper/cloth described as  regmal  was prepared in R. Mill.  These two Mills are situated close  to each  other with only a railway line intervening Each has  a factory  registered separately under the Factories Act,  but one  balanced  sheet  and one profit and  loss  account  are prepared  for  the  Company as  a  whole  consolidating  the accounts  of  both units.  S. Mill was stated some  time  in 1932  and R. Mill was established some time in 1940-41.   S. Mill  had more than 200 workmen whereas R Mill had about  50 workmen.   The Company closed the S. Mill on the  ground  of non-availability of Bagase which is the raw material for the manufacture of strawboaxd and terminated the services of the workmen  of this Mill by stages between May 7 and  July  28, 1967  The first batch consisted of 98 workmen whose  dispute was the subject matter of the reference before the Tribunal. On  a  dispute  being,  raised by  the  workmen  over  their termination of services and on failure of conciliation,  the State  Government under section 4 K of the  U.P.  Industrial Disputes Act (briefly the U. P. Act) referred the  following two issues-for adjudication by the Tribunal :-               (1)  Whether  the  stoppage  of  work  by  the               employers and the consequent non-employment by               them of the Workmen, detailed in the Annevure,               in  stages as from May 7, 1967, amounts  to  a               lay-off/retrenchment/lock-out  or  whether  it               should be treated as a legitimate closure?               (2)  To what relief, if any, are  the  workmen               concerned   entitled  on  the  basis  of   the               findings on issue No. 1 above ? Both  the  Parties submitted their  written  statements  and rejoinders.  In accordance with the usual procedure followed by the Tribunal , the following fresh issues were framed  on the pleadings               (i)  Whether the Present reference is  bad  in               law  by reason of withdrawal of  the  Previous               reference?               (ii) Whether this Tribunal is not competent to               go  into the Question whether the closure  was               for unavoidable reasons beyond the control  Of               the employers?               (iii)  Whether this Tribunal is not  competent               to  determine the question of compensation  in               this reference?               (iv) Whether the employers could validly close               only the Straw Board Mill without closing  the               Regmal Mill?  707               (v) Whether the awards in Adj.  Cases Nos.  53               of  1965  and  93 of 1965  of  Labour  Courts,               Allahabad and Meerut, respectively and in Adj.               Case  No.  10 of 1967 of  Industrial  Tribunal               (1),  Allahabad or any of them operate as  res               judicata between the parties ?               (vi)  Whether this Strawboaid Mill and  Regmal               Mill   form   part  of  one   and   the   same               establishment,  and  whether this  matter  has

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             been  finally  determined  by  the  award   of               Industrial Tribunal (1) in Case No. 65 of 1963               and does the award operate as res judicata? Issue No.(i) was not pressed before the Tribunal.   Numerous documents  were  exhibited by both the  parties  before  the Tribunal, most of these oil admission.  The workmen examined only one witness while the Company examined three witnesses, including its director.  After hearing arguments in the case on April 24, 1968, the Tribunal recorded the following order "24.4.68                Arguments have been heard on all the  issues.               If it appears to me that the reference can  be               answered  on findings on the issues framed  by               me.   I will proceed to give my award  and  it               will not be necessary to call upon the parties               to adduce evidence on the question of  quantum               of  compensation.   In case I am of  the  view               that the question of compensation is  required               to  be  determined  in  this  case  and   this               Tribunal is competent to determine it, parties               shall be called upon to adduce evidence on the               question  of  compensation  and  the   related               question of availability or unavoidability  of               reasons of closure of the factory and in  that               case  the reference will be disposed  of  only               after  evidence  on this point also  has  been               recorded  and  the  parties  have  been  heard               further." On April 30. 1968, the Tribunal made the award by  recording the following order "30.4.68               While writing the award I found it possible to               determine  the matters of dispute  finally  on               the  findings  on the issues at which  I  have               arrived.   It is not, therefore, necessary  to               call  upon the parties to aduuce  evidence  on               the  question  of compensation and  any  other                             related  question.   I  do  not  consi der   it               necessary   to   go  into  the   question   of               compensation in this case. Award made.  Let it be sent to the State Government." The Tribunal came to the following conclusions (1)  S.  Mill and R. Mill do not form parts of one  and  the same establishment. 708               (2)  It  is a case of complete closure  of  an               independent industrial unit.               (3) There is no res judicata on account of the               previous awards as claimed by the workmen.               (4)  The employers could validly close the  S.               Mill without closing R. Mill. The  Tribunal.  therefore, answered the first issue  in  the reference  in  favour  of the Company  ’and  held  that  the closure  was  legitimate and it was not a case  of  lay-off, retrenchment  or lock-out.  The Tribunal further  held  that since   it  was  a  legitimate  closure,  the  question   of compensation  could not be determined by it and the  workmen were  not entitled to any relief.  Hence this appeal by  the workmen. Mr.  Aggarwal,  learned counsel appearing on behalf  of  the appellants. submits as follows :--               (1)  The  action  of  the  Company  is  not  a               closure,  far  less, legitimate or  bona  fide               closure, It was a lock-out.

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             (2) Even if it is accepted that suspension  of               production  in S. Mill was due to shortage  of               raw   materials,  the  Company   should   have               )resorted  only to lay-off in accordance  with               the provisions of section 6-K of the U.P. Act.               (3) In any event, termination of the  services               of 98 workmen constituted retrenchment and was               made  in violation of sections 6-N and 6-P  of               the  U.P.  Act and is, therefore,  invalid  in               law.               (4)  Alternatively,  if  the  action  of   the               Company  even amounts to closure, the  workmen               are entitled to compensation under  subjection               ,  (1)  of  section 25FFF  of  the  Industrial               Disputes Act (briefly the Central Act) and the               proviso of that sub-section is not attracted. On behalf of the respondent the principal submissions of Mr Chitaley are as follows :-               (1) If a distinct business activity is  closed               then   the  provision  of  section  25FFF   is               satisfied.    The   section  uses   the   word               undertaking’ in a’ general and popular  sense;                             the  accent  not being on financial  o r  other               unity  but on separate line of business.   The               test  of  functional integrality  is  not  re-               levant.               (2) Since the test for functional  integrality               would  depend upon the nature of  the  dispute               raised  and  the test would be  different  for               section 25FFF, there cannot be any question of               res   judicata;  the  matters   directly   and               substantially  in issue in the  present  award               and the earlier awards being different. 709               (3)  Closure need not be instant.  It can  be,               and  very often, in the nature of things,  has               to  be  in  stages.  All  that  section  25FFF               requires  is that there should be a bona  fide               closure  in the sense that it should not be  a               mere pretence of closure. The  Tribunal has held that section 25FFF is not  applicable on account, of a similar provision being absent in the U. P. Act.  Although Mr. Chitaley also, had at first submitted  in the  same  vein  but finally did not  choose  to  take  that position  before us.  We will, therefore,, briefly give  our own reasons at the appropriate place. It  may  be  noted here that the workmen were  paid  by  the Company  three  month’s  wages  as  compensation  under  the proviso  to  section  25FFF,  although  there  is  no  like, provision in the U. P. Act and the workmen also accepted the payment without prejudice to their rights to agitate against the same.  Even ’so, the Company, however, had  successfully raised  the  non-applicability of section 25FFF  before  the Tribunal as an answer to the workmen’s claim on the score of noncompliance  with  section 25F under  sub-section  (1)  of section 25FFF of the Act. With regard to the first submission. the appellants’ counsel took  considerable pains, in the forefront of his  argument, to  demonstrate  that there was no closure as  such  of  the Company  at tll since only a part of a single  establishment was  sought  to be shut down.  It is also pointed  out  that there  was in fact no closure of even the S. Mill on May  7, 1967  and that the same continued functioning until  it  was finally  declared  closed on July 28, 1967.   Hence,  it  is

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submitted that 98 workmen concerned in this appeal should be held  to  be retrenched on May 7. 1967 and  since  the  pre- conditions laid down under section 6-N and the provisions of section 6-P of the U. P. Act have not been complied with  by the Company, the so described retrenchment should be held as invalid. in order to assess the correctness of the above  submissions of the parties. it is necessary first to find if the S. Mill and Eli-, R. Mill were The  U.  P.  Act follows the pattern  of  the  Central  Act, namely,  the industrial Disputes Act and the definitions  of lay-off,  lock-out  and  retrenchment  and  the   provisions relating thereto are almost identical.  The decision of this Court   dealing  with  the  problems  arising  out  of   the application of the provisions of Chapter V-A of the  Central Act  relating  to Jay-off and retrenchment  are,  therefore, relied upon by both the parties. The learned counsel for the appellants drew our attention to a number of decisions of this Court with regard to the tests of   determining  what  is  ’one  establishment’.   In   the Associated Cement Companies Limited, Chaibassa Cement Works, Jhinkuni  v.  Their  Workmen, (1)  the  Court  observed,  as follows               "Several tests were referred to in the  course               of arguments before us, such as,  geographical               proximity, unity (1) [1960] 1 S. C. R. 703/716. 710               of ownership, management and control, unity of               employment   and   conditions   of    service,               functional   integrality,  general  unity   of               purpose  etc.... II is, perhaps impossible  to               lay  down  any  one test as  an  absolute  and               invariable  lest  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,  that               the establishments 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               ind 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  lest;               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-   consideration   at  the   same   time".               (emphasis added). In  India  cO..Ltd.  v. Its Workmen, (1)  this  Court  while approving  of the principles laid down in Associated  Cement Companies  case  (supra) at page 419 entered  a  significant observation as follows               "In  Associated Cement Companies case  (supra)               it was held that all the tests referred to  in               the judgmente were satisfied and therefore the               question  of  the  comparative  weight  to  be               attached  to the several tests did  not  arise               for consideration".

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In   Pakshiraja  Studios  v.  Its  Workmen,(2)  this   Court referring  to its earlier decision in Pratap Press, etc.  v. Their Workmen,(1) reiterated the following principle :               "........ the Court has to consider with  care               how   far  there  is  functional   integrality               meaning      thereby      such      functional               interdependence  that  one unit  cannot  exist               conveniently and reasonably without the  other               and the further question whether in matters of               finance   and  employment  the  employer   has               actually  kept  the  two  units  distinct   or               integrated". In South India Millowners’ Association and others v. Coimba- tore  District  Textile Workers’ Union and  others,(1)  this Court on the same topic observed as follows.:-               "In dealing with the problem, several  factors               are  relevant and it must be  remembered  that               the  significance  of  the  several   relevant               factors would not be the same in each case, (3) [1960] I L.L.J.497quoted in [1961] II L. L. J. 380/382. (4)  [1962] I L.L.J. 223/230. (1) [1962] I L. L. J. 4091419. (2)  [1961] II L.L.J. 380/382.  711               nor their importance.. Unity Of ownership  and               management  and  control  would  be   relevant               factors.  So would be general unity of the two               concerns;  the  unity of finance  may  not  be               irrelevant and geographical location may  also               be  of some relevance; functional  integrality               can also be a relevant and important factor in               some cases.  It is also possible that in  some               cases,  the test would be whether one  concern               forms an integral part of another so that  the               two  together constitute one concern,  and  in               dealing  with  this  question  the  nexus  ’of               integration  in  the form  of  some  essential               dependence of the one  on the other may assume               relevance.   Unity  of purpose or  design,  or               even parallel or co-ordinate activity intended               to achieve a common object for the purpose  of               carrying  out the business of the one  or  the               other   can   also   assume   relevance    and               importance .... In the complex and complicated               forms   which  modern  industrial   enterprise               assumes,  it would be unreasonable to  suggest               that   any  one  of  the  relevant  tests   is               decisive;  the importance and significance  of               the tests would vary according to the facts in               each case and so, the question must always  be               determined  bearing in mind all  the  relevant               tests and corelating them to the nature of the               enterprise with which the Court is concerned".               (emphasis added). In  Management  of Wenger & Co. v. Their  Workmen,(1),  this Court while referring to almost all the earlier decisions on the subject emphasised the following aspect in these terms:-               "Several factors are relevant in deciding this               question  (whether  industrial  establishments               owned   by  the  same  management   constitute               separate units or one establishment).  But  it               is   important  to  bear  in  mind  that   the               significance  or importance of these  relevant               factors  would not be the same in  each  case;               whether  or not the two units  constitute  one

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             establishment  or are really two separate  and               independent  units,  must be  decided  on  the               facts of each case". Bearing  in mind the not too rigid principles laid  down  by this Court, as noticed above, we have to consider if the two units,  the  S.  Mill and the R. Mill can be  held,  on  the materials  established in this case, to be functionally  one single  establishment.  Broadly the common features  of  the two  units emphasised before us by the appellants are  unity of  ownership; ultimate control and supervision;  unity  oil finance;  similarity  of  service  conditions  in   general, similarity  Of  general. wage structure;  proximity  of  the units; some work (viz., preparation. of water proof  Masala) for  the  R.  Mill being performed in the  S.  Mill;  common boiler  located in the S. Mill supplying steam to  R.  Mill; location  of the processing furnace of the R. Mill ill  tile S.  Mill; identical bonus scheme for both the  units  except for  one  year; intertransferability of employees  from  one unit to the other; identical working conditions; maintenance of  one  balance sheet and profit and loss account  and  one consolidated  account  for the company  including  both  the units;   depreciation  fund;  same  occupier,  namely,   the Director (1) [1963] Supp. 2 S. C. R. 862/871. 712 (E.W. 1), for both the Mills and above all treatment by  the Company of both the units as one in certain matters, such as opening  of Bank accounts except in the State Bank where  it was  in  the name of the Company, Regmal  section,  and  the products of both the units bearing the name of the Company’- The  submission is sought to be reinforced by  reference  to some  earlier awards of Tribunals in  certain  adjudications where it is pointed out that the Tribunal had held that  the standing  orders  of the Company were applicable to  the  R. Mill  and the workmen’s terms of conditions of service  were the same in both the units. On the other hand the circumstances pointed out in favour of the  respondent are "that the two units are separate.   Both factories are registered separately under the Factories  Act and they are in separate ,-premises.  The raw materials used in  the two factories are different and it is obtained  from different  sources.   Electricity  is obtained  by  the  two factories  from  different  sources, the  sale  of  products manufactured in the respective units is effected from  their respective  office, the staff of the two mills  is  separate and  wages  are paid separately.  The accounts  of  the  two mills  are maintained separately, although finally they  are amalgamated into one account of the Company.  Fire insurance of  the two factories is done separately, the local  manager of  the Employees State Insurance Corporation  has  allotted different  numbers of provident fund to the  two  factories, the assessment of sales-tax for the sales of products of the two  mills is done separately which is obviously due to  the fact that the products are different and different rates  of sales  tax  apply to them".  There is no  provision  in  the standing orders of the Company regarding transfer of workmen from one unit to the other. We  have got to consider the appellants’ submission  in  the backdrop  of the present dispute before the  Tribunal.   The dispute  centres  round closure of S. Mill.  By  raising  an industrial dispute the closure is sought to be characterised by   the  workmen  as  either  a  lay-off  or  lock-out   or retrenchment.   The  controversy between  the  parties  with regard to the oneness of the establishment has to be  viewed mainly  from  the point of view of compensation  for  deemed

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retrenchment  of  the  employees  on  closure  since  it  is absolutely  clear that the S. Mill was ultimately closed  on July  28, 1967 and remained so till the date of  the  award. It  is,  however,  pointed out by  the  appellants  and  not countered by the respondent that the Strawboard section  has again been restarted with about 58 workmen from October 1972 during the pendency of this appeal.  It is, therefore, clear that  the  S. Mill was not functioning at all  between  July 1967 and October 1972.  We will, therefore, have to consider the   matter  in  controversy  in  the  above  context   and circumstances  of this particular case.  Adverting  to  tile common features emphasised by the appellants, although  most of  these  are  present, it is not correct  that  there  was mutual transfer of labour from one unit to the other without the   consent   of   the   employees.    Again   too    much significance.cannot be given in this case for application of the provisions of the standing orders.  The fact that in the earlier  award, on a dispute being raised by the workmen  of the  R. Mill the standing orders were held to be  applicable to them, would not assist the appellants for the purpose  of this  case to enable an unerring conclusion on  that  ground alone that the two units are one.  Similarly 713 that some masala for the R. Mill is prepared in the S.  Mill or that the steam in the R. Mill is supplied from the boiler located  in the S. Mill are not decisive tests in this  case when  even for the purpose of economy a common employer  may arrange  his  matters in such a, way that there  is  certain operational  cooperation  between  units,  not  necessarily, wholly   interdependent  one  upon  the  other.   The   most important  aspect  in  this  particular  case  relating   to closure,  in  our  opinion, is whether  one  unit  has  such componental  relation that closing of one must lead  to  the closing  of  the other or the one  cannot  reasonably  exist without  the other.  Functional integrality will  assume  an added significance in a case of closure of a branch or unit. That  the R. Mill is capable of functioning in isolation  is of  very material import’ in the case of closure.  There  is bound  to be a shift of emphasis in application  of  various tests  from  one case to another.  In other  words,  whether independent functioning of the R. Mill can at all be said to be  affected by the closing of the S. Mill.  At the time  we are  hearing  this appeal we should have, thought  that  the answer  is  easy  since  the R.  Mill  admittedly  has  been functioning in the absence of the S. Mill for a little  over five years.  But we have to consider the correctness of  the conclusion  of the Tribunal on the date it passed the  award when  the  closure  was only for about  ten  months.   That, however, will, in our view, make no difference in principle. The reason for closure of the S. Mill is non-availability of Bagasse,  which  is the raw material needed for  keeping  it going.   It is clear from the finding of the  Tribunal  that there  is no other oblique reason at all established in  the evidence  in  respect of the closure.   The  workmen  cannot question  the motive of the closure once closure  has  taken place  in  fact.  The matter may be different if  under  the guise  of closure the establishment is being carried  on  in some  shape or form or at a different place and the  closure is  only  a ruse or pretence.  Once the Court comes  to  the conclusion  that  there is closure of  an  undertaking,  the motive of the employer ordinarily ceases to be relevant.  No employer  can  be compelled to carry on his business  if  he chooses to close it in truth and reality for reasons of  his own.   It  is because of this that section  25FFF  has  been inserted  by an amendment of the Industrial Disputes Act  by

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Act  IS of 1957 and it is not necessary for us to trace  the history  of the insertion of Chapter V-A in the Central  Act by  Amendment Act 47 of 1953 and later on of  section  25FFF with other provisions.  We may only note in passing that the legislature had to introduce these beneficial provisions  in the  interest of labour on account of the interpretation  by this Court of the earlier relevant provisions of the Central Act on the subject. After  giving due consideration to all the  aspects  pointed out by the learned counsel for the appellants, we are unable to  hold  that R. Mill is not an  independently  functioning unit  and that there is any functional integrality  as  such between the R, Mill and the S. Mill.  The fact of the  unity of ownership, supervision and control and some other  common features,  which  we have noticed above, do  not  justify  a contrary  conclusion  on this aspect in  the  present  case. There  is  considerable  force  in  the  submission  of  Mr. Chitaley  that the R. Mill is a different line  of  business and  the closure of the S. Mill has nothing to do  with  the functioning  of the R. Mill.  The matter may  be  absolutely different when 714 in  an  otherwise going concern or a  functioning  unit-some workmen’s  ,services  are terminated as being  redundant  or surplus  to  requirements.  That most of the  conditions  of service  of the two Mills were- substantially identical  can be  easily  explained by the fact that, being owned  by  the same  employer  and the two- units being situated  in  close proximity, it will not be in the interest of the  management and  peace  and  wellbeing  of  the  Company  to  treat  the employees    differently   creating   heart   burning    and discrimination.  For the same reason, there is no particular significance  in this, case even in the application  of  the standing  ,orders of the Company to the employees of the  R. Mill which, because of the non-requisite number of employees employed  in the latter, is not even required under the  law to have separate standing orders.  It is, in our opinion,  a clear  case of closure of an independent unit of  a  Company and  not a closure of a part of an establishment.  Even  so, this  kind of closure cannot be treated as lay-off or  lock- out  under  the U.P. Act.  The S. Mill was  intended  to  be closed  and was in fact closed and, therefore, the  question of lay-off under section 2-N of the U.P. Act does not arise. Similarly  it is also not a case of lock-out within out  the unit  is-  not  closed  completely  and  there  is  also  no intention of the    employer to close the concern. The learned counsel drew our attention to the fact that  the Tribunal did   not consider the effect of certain awards and of  some  material  evidence.   We  have  examined  all  the materials  which  according to the counsel. were  not  taken note of by the Tribunal.  We are, however, not impressed  by the argument that the Tribunal committed any Manifest  error of  law  by any significant omission  to  consider  relevant materials  in this case.  To cite one or two instances,  the appellants  drew  our attention to Exhibit E-69 which  is  a letter  to the Chief Controller of Imports and Exports  with an application dated 4th June 1962. addressed by the Manager of  the  Company.  We have gone through this  document.   We find  that against item A, while giving particulars  of  the applicant  under column 1, the name of ,he applicant.   "the Straw   Board   Manufacturing   Company   Ltd,    (Abrasives Department) Saharanpur" is mentioned.  Again against item  B therein,  regarding particulars of the industrial unit,  the name  of  the industry has been given as  "Coated  Abrasives Industry".  Against item D, under column 1 in the said  form

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viz.,  Date of establishment of business in India.  what  is mentioned is "Abrasives Department started production in the year 1940".  It is true that the application has been put in for  and on behalf of the Company but that, by itself,  does not at all assist the appellants and this document would not help in coming to a contrary conclusion that the R. Mill  is not an independent unit.  Similarly, the learned counsel was referring  to  mis-reading  ’ of the evidence  of  the  only witness, Raja Ram, on behalf of the workmen, with regard  to the  inter-transferability of the employees between the  two units. dear evidence has been given by the Director (B.W. 1) that the four cases of transfer within the last eleven years were "done with their consent".  Besides, as noted  earlier, even  the standing orders relied upon by the  appellants  do not provide for transfer from one unit to the other.   There is,   therefore,  no  merit  in  the  submission-   of   the appellants. 715 We  may  now  consider whether the  employer  after  he  had decided to close down a particular unit is entitled to close the  same  by  stages.  We have seen in  this  case  that  a decision to close the S. Mill was taken by the Company  some time in March, 1967 and the Secretary to Government of  U.P. Industries  Department was informed about it on  7th  March, 1967.  Even the Union had been informed about it earlier  on 21st February, 1967.  Communication of the decision was also made  to  various authorities of the  Government  and  other concerned.  Finally on 5th April, 1967, notice of closure of the factory was published stating that the first batch of 98 workmen  will  be discharged on 7th May, 1967.   Notices  of termination  of  service were also served on  these  workmen individually on the same day.  In pursuance of this  notice, services of these workmen were terminated, with effect  from 7th May, 1967. It  may  not always be possible to immediately shut  down  a mill or a,. concern even though a decision to close the same may  at  any rate at the time have irrevocably  been  taken. There is, therefore, nothing wrong in the employer arranging closure  of  the S. Mill in such a way as to  guard  against unnecessary inconvenience to both the management as well  as to the labour and against possible avoidable wastage or loss to  the  concern, say, for not being able to  complete  some processes  which  have ultimately to  be  finished.   Having decided to close down a unit on account of  non-availability of  raw  materials the supply of which had stopped,  it  was necessary  to go on with the unused stock of  raw  materials for some, time for which a lesser number of workers would be necessary who would then naturally constitute the next batch or  batches to go.  We do not see anything wrong in  law  in electing  a  step  or mode in finally closing a  unit  or  a concern.   It  may be in the nature of a  business  to  take recourse  to such a mode which cannot ordinarily and per  se be   considered   as  unfair  or  illegitimate.    In   the, circumstances  of this case we are unable to hold  that  the termination of the services of the 98 workmen, on account of closure, as held by us, is unjustified having been the first batch  selected to go while others were retained  until  the final  closure  of  the S. Mill on  28th  July,  1967.   The counsel  for  the appellants very strenuously  submits  that there  was no closure on. 7th May, 1967, since the Mill  had been  functioning  till  28th  July,  1967  and,  therefore, contends  that the first batch of work,men must be  held  to have been retrenched on 7th May, 1967 and paid  compensation as  on retrenchment under section 6-N of the U.P.  Act.   We are unable to accede to this submission.  The timing of  the

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termination  of the 98 workmen which was about three  months earlier is not at all relevant in the context of the present case  which  is one of closure of an independent  unit  with different  processes  of  work for  its  end-product.   What compensation  they  will get under the circumstances  is  of course a different matter to which we will refer hereafter. We  will now take up the submission of the  learned  counsel for  the  appellants  with regard to res  judicata.   It  is contended  by him that in previous awards between  the  same parties the Tribunals have held both R. Mill and S. Mill  to be  one establishment and, therefore, the principles of  res judicata  will  apply and the employer is  not  entitled  to reagitate the same question here in this case.  Counsel  has referred to 716 award  (Ext.   E-105)  which is an  award  of  the  Regional Conciliation  Officer,  Meerut, in case No. 8 Adj.  of  1957 dated  July 12, 1957.  The reference in this case  was  with regard  to  whether  a worker named Sri Santoo  "be  made  a permanent  sweeper?" In considering this question the  Union claimed  that although Santoo was employed in the  R.  Mill, he.  was entitled to be made a permanent sweeper  under  the standing  orders  of  the  Company.  It  is  true  that  the Adjudicator  held  in favour of the  workman  repelling  the contention of the management that he was only employed in  a temporary  capacity  in  part-time work and  he  was  not  a suitable worker to be absorbed as a permanent workman.   The Adjudicator,   of  course,  observed  that  the   management "further  added that the Regmal Mill is entirely a  separate factory  than (sic) the Straw Board factory and as such  the standing  orders of the Straw Board factory would not  apply in  this  concern".   This  decision on  the  facts  of  the particular  case where incidentally the  Company’s  standing orders were also taken note of-by the Adjudicator, cannot be considered  to  be  res  judicata  in  this  case,  for  the particular purpose for which that doctrine is invoked here. The  next  award  to which reference has been  made  by  the appellants is the award in Adjudication Case No. 65 of  1963 dated  2nd November, 1964 (Ex.W-11). The issue in that  case was in the following terms               "Should the employers be required to introduce               the  Provident  Fund Scheme  for  the  workmen               employed in their Regmal Mills.... ?" The  dispute  in that case was between the Company  and  the workmen of the R. Mill as such and not that of the S.  Mill. The  Tribunal, guardedly enough, framed an additional  issue (Issue No. 4) in these terms               "Has the Regmal Mills to be considered for the               purposes  of  the  present  claim  to  be   an               independent  and separate unit. .?"  (emphasis               added). The Tribunal finally allowed the provident fund facility  to the  workers of the Regmal Mill.  The decision again  cannot be  invoked as res judicata for the purpose of dealing  with the case of closure of one of the units of the Company.  The nature  of the subject matter of the Industrial dispute  and the purpose of an enquiry in such an adjudication are always material  in considering the question of res judicata  in  a later proceeding between the same parties. The  next  award to which reference, has been  made  by  the appellants  is  in Adjudication Case No. 53  of  1965  dated October  23,  1965 (Ex.  W-2).  The subject mattter  of  the dispute in that case was "whether the employers have retired the workmen, Shri Punnu Ram, son of Ganga Ram, peon,  Regmal Mills,  with effect from the March 1, 1964,  legally  and/or

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justifiably.....  ?" Here again on the pleadings one of  the issues framed by the Labour Court was "whether the certified standing  orders are or are not applicable to the  employees of the  717 Regmal  Mills?"  The  Labour Court in  its  award  gave  the benefit of the superannuation age of 61 years provided under the  standing orders to this workman.  This again cannot  be considered  as  helping the submission on the score  of  res judicata  made  in this case in respect  of  the  particular dispute which is involved between the parties here. Another   award  relied  upon  by  the  appellants   is   in Adjudication  Case  No. 10 of 1967 dated 22nd  August,  1967 (Ex.   W-4).   The  issue  in  this  case  was  "should  the employers  be required to grant 12 days’ casual  leave  with wages   in  a  year  to  the  workmen  employed  in   Regmal section  ... ?" The Tribunal in that case allowed  12  days’ casual leave to the employees of the Regmal unit.  This case also cannot be considered as res judicata for the purpose of the present controversy between the parties in this  appeal. It is the matter directly and substantially in issue in each case  which  is  of material relevance  in  determining  the question of res judicata in an industrial matter. It  is now well established that, although the entire  Civil Procedure Code is not applicable to industrial adjudication, the principles of res judicata laid down under section 11 of the  Code  of  Civil  Procedure,  however,  are  applicable, wherever possible, for very good reasons.  This is so  since multiplicity of litigation and agitation and re-agitation of the same dispute at issue between the same employer and  his employees will not be conducive to industrial peace which is the  principal object of all labour legislation  bearing  on industrial adjudication.  But whether a matter in dispute in a   subsequent   case   had  earlier   been   directly   and substantially in issue between the same parties and the same had  been heard and finally decided by the Tribunal will  be of  pertinent consideration and will have to  be  determined before  holding in a particular case that the principles  of res judicata are attracted. The  learned  counsel  faced  with  the  problem  drew   our attention  to  rule 18 of the U.P. Industrial  Tribunal  and Labour Courts Rules of Procedure, 1967, which provides  that after the written statements and rejoinders, if any, of both the  parties are filed and after examination of parties,  if any, the Industrial Tribunal or Labour Court may frame  such other  issues, if any, as may arise from the pleadings.   It is  clear  that these issues are framed by the  Tribunal  to assist in adjudication.  While it cannot be absolutely ruled out that in a given cases judicata, the heartof     the matter  will always be : What was the  substantial  question thatcame up for decision in the earlier proceedings ?  Some additional  issues  may  be framed in order  to  assist  the Tribunal  to better appreciate the case of the parties  with reference to the principal issue which has been referred  to far adjudication and on the basis of which, for example,  as to  whether  it  is  an  industrial  dispute  or  not,   the jurisdiction  of’-the_ Tribunal will have to be  determined. The  reasons  for  the  decision  in  connection  with   the adjudication of the principal issue which has been  referred to  for adjudication and on the basis of res judicata.   The earlier  question at issue must be, relevant and germane  in determining  the question of res judicata in the  subsequent proceedings.  The real character of the controversy  between the parties 718

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is the determining factor and in complex and manifold  human relations between labour and capital giving rise to  diverse kinds of ruptures of varying nuances no castiron rule can be laid down. Some  distinction, of whatever shade or magnitude, may  have to be borne in mind in application of the principles of  res judicata in industrial adjudication in contradistinction  to Civil   proceeding.   Extremely  technical   considerations, usually invoked in civil proceedings, may not be allowed  to outweigh substantial justice to the parties in an industrial adjudication. We  have already held on the facts established in this  case that  the  S.  Mill, which was an  independent  unit  and  a separate  line  of business, had been closed  in  fact  and, therefore, it was not a case of lay-off or lock-out.  It  is also  not  a  case  of retrenchment,  as  it  is  ordinarily understood,  and even within the meaning of section 2(s)  of the U.P. Act which is substantially identical with.  section 200  of the Central Act as interpreted by this  Court.   The Tribunal  is, therefore, right in answering the first  issue in the reference in favour of the respondent. The   next  crucial  question  that  will  then  arise   for consideration   is  whether  the  concerned  employees   are entitled  to relief under section 25FFF of the  Central  Act since  there is no similar provision in the U.P.  Act.   Mr. Chitalfy,  as  stated earlier, at first  disputed  that  the employees  can  invoke  the  provisions  of  section  25FFF, although,  finally abandoned that position.  Since the  U.P. Act does not make any provision for compensation in the case of  closure  and the Central Act has  supplied  the  lacuna, there is no repugnancy between the U.P. Act and the  Central Act  and the beneficent provisions of the latter Act can  be availed of by labour even in their absence in the U.P.  Act. the  Central  Act applies to the whole of  India,  including U.P. Even if there may be the slightest doubt in the matter, section 25J of the Central Act advisedly leaves no scope for controversy in the matter.  We will, therefore, read section 25FFF  of  the  Central Act which  clearly  applies  in  the present case :               25FFF  (1):  "Where an undertaking  is  closed               down for any reason whatsoever, every  workman               who  has  been in continuous service  for  not               less   than  one  year  in  that   undertaking               immediately before such closure shall, subject               to  the  provisions  of  sub-section  (2),  be               entitled   to  notice  and   compensation   in               accordance with the provisions of section 25F,               as if the workman had been retrenched               Provided that where the undertaking is  closed               down  on account of unavoidable  circumstances               beyond  the  control  of  the  employer,   the               compensation  to be paid to the workman  under               clause  (b) of section 2.5F shall  not  exceed               his average pay for three months.               Explanation.-An  undertaking which  is  closed               down by reason merely of-               (i)    financial    difficulties    (including               financial losses); or               (ii) accumulation of undisposed of stocks; or 719               (iii)  the, expiry of the period of the  lease               or licence granted t* it; or               (iv)  in  a  case Where  the  undertaking.  is               engaged  in mining, operations, exhaustion  of               the  minerals  in  the  area  in  which   such

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             operations are carried on;               shall  not  be deemed to be  closed  down  oft               account  of unavoidable  circumstances  beyond               the  control  of  the,  employer  within   the               meaning of the proviso of this sub-section. Section  6-N of. the U.P. Act is identical with section  25F of  the Central Act except for some consequential  additions in  section 25F(c) in view of the scheme of the latter  Act, which  are not material for our purpose.  It is,  therefore, clear  that on the finding that the S. Mal was closed as  an independent unit it will fall for consideration whether  the employees  of  the said Mill are  entitled  to  compensation under section 25F which is the counterpart of section 6-N of the U.P. Act by virtue of the provisions of section 25FFF(l) of  the  Central  Act.  The  Tribunal  was,  therefore,  not correct  in holding that section 25FFF did not apply to  the employees  concerned.   Indeed the management has  paid,  as already noted, compensation to their employees under section 25FFF(l) of the Act. some  controversy was raised at the bar with regard  to  the meaning of the word ’undertaking’ in section 25FFF.  Without going  into  the question in detail we may only refer  to  a decision  of  this Court ’in Management of  Hindustan  Steel Lid.  v.  The  Workmen and Others(1),  where  the  following observation appears :               "The  word  undertaking as used  in  s.  25FFF               seems to us to have been used in its  ordinary               sense connoting thereby any work,  enterprise,               project  or business undertaking.  It  is  not               intended  to  cover  the  entire  industry  or               business  of the employer as was suggested  on               behalf  of the respondents.  Even  closure  or               stoppage   of  a  part  of  the  business   or               activities  of the employer would seem in  law               to be covered by this sub-section We  may  now deal with another submission of  Mr.  Chitaley. According   to   the  learned  counsel,  the   question   of compensation cannot be gone into by the Tribunal on  account of closure of the Mill as found by the Tribunal.  We are not impressed by this argument. In  the course of gradual development of the industrial  law the legislature, by engrafting a provision like section 25FF in  the Central Act, has sought to wipe out the  deleterious distinction  in  the  consequential effect  on  labour  upon retrenchment and upon closure except that in the latter case a restricted compensation under very specified circumstances is  provided  for  under the  proviso  to  section  25FFF(l) itself.  It is no longer open to the employer to plead  that there  can  be  no industrial dispute  with  regard  to  the eligibility of workmen to compensation ox, to its quantum on closure of an establishment although the factum of a (1) AIR 1973 S.C. 878/882. 720 real and, genuine or legitimate closure, admitted or proved, is outside the pale of industrial adjudication not partaking of or fulfilling the content of an industrial dispute within the  meaning  of  section  2(k) of  the  Central  Act.   If, however, the closure is a masquerade, the matter will  stand on  a  different footing.  That is not the  case  before  us here. Besides,   the   reference  has  not  been   challenged   as incompetent  either before the Tribunal or in  this  appeal. Indeed  on  the explicit terms of the reference, it  is  not possible  to contend that the subject matter referred to  is not  an  industrial dispute.  Apart from that  there  is  no

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legal  bar  to  refer  to  the  Tribunal  to  determine  the compensation  on closure of an undertaking.  The  scheme  of Chapter V-A or even the language of section 25 FFF, does not necessarily  indicate that claim under the said section  can be made only under section 33-C of the Central Act and  that the Industrial Tribunal, in a reference, has no jurisdiction to grant appropriate relief in that behalf, as urged by  the learned  counsel.  The submission of the learned counsel  is devoid of substance. The  claim, however, of the respondent-company before us  is that  the proviso to section 25FFF(l) is attracted  in  this case and the employees are not entitled to any  compensation exceeding  their  average pay for three months  as  provided therein.   The Tribunal, however, did not address itself  to this aspect of the matter as according to it "since it was a legitimate closure the question of compensation could not be determined  by it".  The matter, therefore, was not  at  all considered  by  the Tribunal and the parties were  also  not allowed   to  adduce  any  evidence  with  regard   to   the applicability  or otherwise of the said proviso  before  the Tribunal.   Even  after decision of the first issue  in  the reference  holding  that  the closure of  the  S.  Miff  was legitimate, it was incumbent upon the Tribunal to adjudicate upon  the  second  issue  of  ,the  reference  for  granting appropriate relief as a necessary corollary to the result of the  first issue.  The Tribunal committed a clear  error  of jurisdiction  in not undertaking that enquiry.  Once  it  is found,  as  in  this  case, that there  is  a  closure,  the question  of  applicability of sub.section  (1)  of  section 25FFF  or the proviso thereto will automatically  arise  for consideration  in determining the quantum  of  compensation. The proviso to section 25FFF(l) which limits the quantum  of compensation  under the conditions specified  therein,  will have  to  be carefully considered in order to  arrive  at  a conclusion  whether  the onus in that behalf  to  justify  a lesser  amount  of compensation has been discharged  by  the employer  or  not.  A decision against  the  employer  after considering  all  aspects of the matter in relation  to  the said proviso read with the Explanation will lead to granting of  a higher compensation under sub-section (1)  of  section 25FFF  by reason of the legal fiction contained therein  for payment  in accordance with section 25F of the Central  Act. It  will  now,  therefore, be the duty of  the  Tribunal  to afford  adequate  opportunity to the  parties  to  establish their respective pleas on the point which appertains to  the domain of the second issue in the reference. In the result the appeal is partly allowed and that part  of the   Award  of  the  Tribunal  with  regard  to  the   non- applicability of section 721 25FFF  is set aside.  The reference stands restored to  the, file  of the Tribunal for adjudicating only the question  of applicability or nonapplicability of the proviso to  section 25FFF(l) of the Central Act.  It will be open to the parties to adduce oral and documentary evidence before the  Tribunal with respect to this limited enquiry.  In the  circumstances of the case the parties will bear their own costs. V.P.S.                          Appeal allowed in part. 722