Messrs. Shalimar Works Limited. Vs.
Their Workmen  INSC 74 (8 May 1959)
SINHA, BHUVNESHWAR P.
CITATION: 1959 AIR 1217 1960 SCR (1) 150
Industrial Dispute-Reinstatement-Pending adjudication--Illegal
strike by workmen-Management discharging workmen without Permission of Tribunal
Reference, delayed and vague-Whether workmen entitled to reinstatement on such
On March 23, 1948, while certain disputes
were under adjudication the workmen pressed the same demands upon the company
for immediate solution without awaiting the award of the tribunal. The company
refused to meet the demands and thereupon the workmen went on an illegal
The company closed the works indefinitely and
notified that all those workmen who had resorted to the illegal strike were
discharged from that date. On July 5 the company notified that the works would
open on July 6 and all old employees could apply for reengagement upto July 21.
A majority of them applied for being retaken and all those who applied upto
July 21 were taken but those who applied after that date were refused. On
November 18, 1953, the Government made a reference in respect of the
reinstatement Of 250 old -workmen who had not been retaken. No list of the 250
workmen was sent to the tribunal nor was such a list filed even during the
adjudication proceedings but after the arguments on behalf of the company were
over a carelessly prepared list Of 220 persons was filed before the tribunal by
the workmen on December 14, 1953. The Tribunal ordered reinstatement without
specifying who were to be reinstated.
It directed the company to give a general
notice notifying the strikers to come and join their duties on a fixed date and
to reinstate those who applied within the time allowed.
On appeal, the Labour Appellate Tribunal
upheld the order of reinstatement in respect Of 15 workmen only.
Held, that there was no reason for ordering
reinstatement of any of the workmen-on such a vague reference made after such
an unreasonable delay. It was reasonable that disputes should be referred as
soon as possible after they had arisen and after conciliation proceedings had
failed, particularly in cases of wholesale discharge of workmen followed by
fresh recruitment of labour. Though the workmen were discharged during the
pendency of a dispute in violation of s. 33 of the Industrial Disputes Act,
1947, the remedy of the workmen was to apply under s. 33-A of the Act; but that
was not done. This defect in the discharge of the workmen could be ignored in
the circumstances of this case on account of the illegal strike, the failure to
151 avail of the remedy under S. 33-A and the delay and vagueness of the
reference which all show that the workmen were not interested in reinstatement.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 317 & 318 of 1950.
Appeals by special leave from the judgment
and order dated the 29th June 1955 of the Labour Appellate Tribunal of India at
Calcutta in Appeals Nos. Cal. 61 and 81 of 1954.
N. C. Chatterjee, S. N. Mukherjee and B. N.
Ghose, for the appellants in C. A. No. 317 of 56 and respondent No. 1 in C. A.
No. 318 of 56.
A. V. Viswanatha Sastri, A. K. Dutt and B. P.
Maheshwari, for the appellants in C. A. No. 318 of 56 and respondents in C. A.
No. 317 of 56.
1959. May 8. The Judgment of the Court was
delivered by WANCHOO J.-These are two appeals by special leave against the same
decision of the Labour Appellate Tribunal of India in a dispute between Messrs.
Shalimar Works Ltd., Howrah (hereinafter called the company) and its workmen
represented by two unions (hereinafter called the workmen). Appeal No.
317 is by the company while appeal No. 318 is
by the workmen. We shall dispose them of by one judgment.
There was a dispute between the company and
its workmen on a number of matters and it was referred to the Sixth Industrial
Tribunal for adjudication by the Government of West Bengal. Only two matters
now survive out of the many referred to the Tribunal, namely, (1) profit
sharing bonus and (2) reinstatement of 250 old workmen.
We shall first deal with the question of
profit sharing bonus. It appears that the company had a profit sharing bonus
scheme in force on the following lines. It provided that after making certain
deductions, if the remaining profit was between Rs. 1,50,000 and Rs. 1,99,999,
the workmen would be entitled to quarter of a month's average basic pay as
bonus, When the 152 remaining profit was between Rs. 2-00 lakhs and Rs. 2,49,999,
the bonus went up to half of a month's average basic pay. When the remaining
profit was between Rs. 2,50,000 and Rs. 2,99,999, the bonus was to be three
quarters of a month's average basic pay and when the remaining profit was Rs. 3
lacs or more the bonus was to equal one month's basic pay. No bonus was to be
paid if the profit was less than Rs. 1,50,000. There were provisions that the
full bonus would be paid to a workmen who had attended 275 days in a year
(inclusive of holidays and leave with pay) while those with less attendance
were to be paid proportionately with the condition that if the attendance of
any workman was less than 100 days he would be entitled to no bonus. The
workmen wanted this scheme to be revised and the main revision they desired was
that the bonus should begin with a profit of Rs. 25,000 after the usual
deductions when it would be one week's wages and should go on increasing till
it came to three months' wages for profit above Rs. 1 lakh and upto Rs. 3
lakhs; thereafter it should increase further at the rate of 21 days' wages for
each lakh over 3 lakhs. This was opposed by the company, though the company
agreed to a change in the quantum of bonus when profit after deductions was Rs.
3 lakhs or above. In the scheme in force, the bonus was equal to one month's
basic pay when the profit was Rs. 3 lakhs or above, with no further increase
whatsoever be the profits. The company agreed to revise this term and suggested
that when profit was(i)between Rs. 3 lakhs to Rs. 4 lakhs, bonus should be four
(ii) above Rs. 4 lakhs upto Rs. 5 lakhs,
bonus should be five weeks' wages.
(iii)above Rs. 5 lakhs, it should be six
weeks'wages The Industrial Tribunal did not accept fully the contentions of
either party in this connection, though it varied the scheme in force in
certain particulars. After the variation the scheme was as below 153 For
remaining profit after the usual deductions (i)from Rs.80,000 to bonus at the
rate of one Rs.1,99,999, week's average basic pay;
(ii) from Rs.2-00 lakhs to bonus at the rate
of half Rs. 2,49,999, of a month's average basic pay;
(iii) from Rs.2-50 lakhs to bonus at the rate
of threeRs. 2-99,999, quarters of a month's average basic.pay;
(iv) from Rs. 3-00 lakhs to bonus at the rate
of four Rs. 4-00 lakhs, weeks' average basic pay;
(v) from above bonus at the rate of six
Rs.4-00 lakhs up weeks' average basic toRs. 5-00 lakhs pay ; and (vi) from
above bonus at the rate of two Rs. 5-00 lakhs, months' average basic pay.
The Industrial Tribunal also accepted 275
days' attendance for earning full bonus and proportionate bonus when the
attendance fell below 275 days and the minimum of 100 days' attendance for
earning any bonus at all. It also held that bonus for the years 1951 and 1952
should be paid at the existing rates while revised rates should be applied from
the year 1953 onwards.
Both parties appealed to the Labour Appellate
Tribunal against this revision. The company contended that no greater revision
than what it had agreed to should have been ordered. In the workmen's appeal it
was contended that the scheme put forward on their behalf should have been
accepted. They further contended that the condition of minimum attendance for 100
days should not have been laid down and that the bonus for the years 1951 and
1952 should have been awarded at the revised rates.
The Appellate Tribunal saw no reason to
interfere with the award of the Industrial Tribunal in this respect and
dismissed the appeals with one modification,, namely, it added that if in any
year it was found 154 that the bonus worked out according to the award of the
Industrial Tribunal was less than profit bonus, calculated according to the
Full Bench formula evolved in the MillOwners' Association, Bombay v. The
Rashtriya Mill Mazdoor Sangh, Bombay (1), the workmen would be entitled to
bonus under the formula; otherwise they would get bonus under the scheme as
modified by the Industrial Tribunal., In the appeals before us, the company has
attacked the revision ordered by the Industrial Tribunal, which was upheld by
the Appellate Tribunal, as also the condition added by the latter; while the
workmen have attacked the scale fixed by the Industrial Tribunal as also the
order of payment of bonus for the years 1951 and 1952, according to the scheme
in force before the revision by the Industrial Tribunal, and the conditions as
to attendance. Learned counsel for the parties, however, agreed before us that
the revision made by the Industrial Tribunal was acceptable to both the parties
and that the condition laid down by the Appellate Tribunal that where the bonus
according to the scheme is less than the bonus worked out according to the Full
Bench formula that formula should be applied, should be deleted. In view of
this agreed statement, we delete the condition laid down by the Appellate
Tribunal and order that bonus should be paid in accordance with the scheme as
revised by the Industrial Tribunal. Learned counsel for the workmen, however,
urged that the condition as to minimum attendance of 100 days for entitlement
to any bonus at all and of minimum attendance of 275 days for entitlement to
full bonus was arbitrary and should be set aside. This condition has been
accepted by both the Tribunals and appears reasonable and we see no reason to
interfere. It was further contended that bonus for the years 1951 and 1952
should have been ordered to be paid according to the revised scheme. This
contention was also negatived by the two Tribunals and we see no reason to
differ from them. The two appeals therefore with respect to bonus are dismissed
subject to the modification given above.
(1) 1950 L.L.J. 1247.
155 We now come to the question relating to
the term in the reference as to the reinstatement of 250 old workmen. it is
necessary to state certain facts in this connection. It appears that a Major
Engineering Tribunal was set up by the Government of West Bengal in October
1947 to decide disputes between major engineering firms and their workmen. The
company as well as the workmen were parties to the disputes which was pending
before that tribunal. The issues before that tribunal were of a very
comprehensive nature and included all kinds of disputes that could arise
between employers and employees. While that adjudication was pending the
workmen suddenly pressed certain demands upon the company for immediate
solution without awaiting the award of the tribunal, even though the demands so
put forward were under adjudication. The company naturally refused to meet the
demands when they were under investigation by the tribunal. Consequently, the
workmen who had come to work on March 23,1948, started a sit-down strike after
they had entered the company's premises. This strike continued from March 23 to
27, and it was on March 27 that the workmen were ejected from the premises by
the police according to the case of the company or were induced to leave the
premises by the police according to the case of the workmen. Anyhow, after the
workmen left the premises on 27th, the company gave notice on that day that the
Works would be 'closed indefinitely. Another notice was given by the company on
April 6, 1948, in which it was notified that all those who had resorted to
illegal strike from March 23, 1948, would be deemed to have been discharged
from that date. Thereafter no work was done till May 15, 1948. On that date the
company gave a notice that if sufficient suitable men applied for employment on
or before May 19, the works would be opened on a limited scale from May 20. It
seems, however, that nothing came out of this notice.
Eventually on July 5, the company gave
another notice to the effect that the works would reopen on July 6, 1948, and
all old employees could apply, and if reengaged their past services would 156
be counted and their conditions of service would be as awarded by the Major
Engineering Tribunal, which, it seems, had given its award in the meantime. It
was also said in the notice that upto July 21, the company would only consider
engagement of former employees and no fresh labour would be recruited till that
date. Thereafter the majority of the old workmen applied for being retaken in
service and everyone who applied upto July 21 was reengaged. Thereafter the
company refused to reengage the old employees, a few of whom are said to have
applied in November and December, 1948, August, 1951, February, 1952 and
It appears that in November, 1949, the
Assistant Labour Commissioner was moved by one of the trade unions about nonemployment
of 249 workmen. He wrote to the company in that connection and it replied that
the workmen had been discharged for having taken part in an illegal strike and
it could not see its way to reemploy them. For a long time nothing seems to
have happened thereafter till we come to October 7, 1952, when the first
reference was made with respect to the reinstatement of 250 old workmen. The
original reference was to the tribunal consisting of Shri S.K. Niyogi. That
gentleman went on retirement before he could dispose of the reference and
consequently another reference was made on November 18, 1953 to the present
tribunal consisting of Shri M.L. Chakraborty. No list of 250 workmen was sent
to the Tribunal about whom it was to consider the question of reinstatement. No
list of these workmen was filed even before the Industrial Tribunal during the
adjudication proceedings: It was only after the arguments on behalf of the
company were over on December 14,1953, that a list of names was filed before
the Industrial Tribunal. This list consisted of 220 persons only though the
reference was with respect to 250. As has been pointed out by the Appellate
Tribunal, it was a carelessly prepared list in which some names were repeated.
Against some serial numbers there were neither
names nor ticket numbers. In spite of this, the Industrial Tribunal ordered
reinstatement without specifying who were to be reinstated; it really 157 did
not know who were the persons to be reinstated. What it did was to order the
company in order that identity of the workmen to be reinstated might be
established to give a general notice on its notice-board notifying the strikers
to come and join their duties on a fixed date and to reinstate whichever
striker applied within the time allowed.
This award of the Industrial Tribunal has
been rightly criticised by the Appellate Tribunal, which has charactrized this
reinstatement as " vague and highly objectionable ".
The Appellate Tribunal was of the view that
" no award could be so loosely or vaguely made ". It further went on
to consider whether identity could in any manner be fixed. In this connection
it relied on the remarks made by the company (which had, however, objected to
the production of the list at that late stage) on this list under orders of the
Industrial Tribunal. From these remarks the Appellate Tribunal came to the
conclusion that the identity of 115 workmen had been established. It found that
100 out of them had withdrawn their provident fund. It, therefore, held that so
far as these 100 were concerned, they accepted the order of discharge because
of the with. drawal of the provident fund and no further relief could be
granted to them. As for the remaining fifteen workmen, it pointed out that they
had not withdrawn their provident fund. It, therefore, ordered these fifteen
workmen to be reinstated. Finally, it ordered that no compensation could be
allowed to the workmen for the period between their discharge and their
reinstatement because of the delay on their part in asking for redress.
The reason which impelled the Appellate
Tribunal to order reinstatement was that the notice of discharge dated April 6,
1948, was not served on the workmen individually and though the notice of July
5, 1948, inviting the former workmen to come and join the company was given
wide publicity, it was also not served on the workmen individually. According
to the Appellate Tribunal, " the net result was that there was defective
communication of notice of discharge to the workmen and the notice offering reinstatement
was not also sufficiently published to enable it to hold 158 that the defect
was cured ". As to the sit-down strike itself, both the Tribunals were of
the view that the strike was the result of pre-concerted action and there was
no justification for it when the matter was pending before a tribunal for
adjudication. The plea of the workmen that the strike resulted spontaneously
because of the insult offered by the manager to a deputation of the workmen on
March 23 was disbelieved by both the Tribunals.
The main contention on behalf of the company
in this connection is that when both the Tribunals had found the sit-down
strike unjustified, they should have held that the company was entitled to
discharge the workmen, in the particular circumstances of this case. It is also
urged that the discharge took -place in April, 1948 and the company reopened in
July, 1948; the reference of the matter more than four years after without the
list of the workmen said to have been discharged, was not proper. On the other
hand it has been urged on behalf of the workmen that as a, dispute was pending
between the company and its workmen, the company could not discharge the
workmen without obtaining permission of the tribunal under s. 33 of the Industrial
Disputes Act, and inasmuch as the notice of discharge of April 6, 1948, was
given without obtaining the sanction of the tribunal before whom the dispute
was then pending, it was a breach of s. 33 and therefore the order of discharge
being in breach of law the -workmen were entitled to reinstatement.
There is no doubt that strictly speaking the
order of the company discharging its workmen on April 6, 1948, when a dispute
was admittedly pending was a breach of s. 33; (see Punjab National Bank Ltd. v.
Employees of the Bank,(1)).
The remedy for such a, breach is provided in
s. 33-A and it can be availed of by an individual workman. If therefore it was
felt by the workmen who were discharged on April 6, 1948, that there was breach
of s. 33 by the company, they should have applied individually or collectively
to the tribunal under s. 33-A. None of them did this. It is true that some kind
of letter was written to the Assistant (1)  S.C.R. 680.
159 Labour Commissioner in November, 1949,
but that was also very late and nothing seems to have happened thereafter for
almost another three years, till the first reference was made on October 7, 1952.
It is true that there is no limitation prescribed for reference of disputes to
an industrial tribunal; even so it is only reasonable that disputes should be
referred as soon as possible after they have arisen and after conciliation
proceedings have failed, particularly so when disputes relate to discharge of
workmen wholesale, as in this case. The industry has to carry on and if for
any, reason there has been a wholesale discharge of workmen and closure of the
industry followed by its reopening and fresh recruitment of labour, it is
necessary that a dispute regarding reinstatement of a large number of workmen
should be referred for adjudication within a reasonable time. We are of opinion
that in this particular case the dispute was not referred for adjudication
within a reasonable time as it was sent to the Industrial Tribunal more than
four years after even reemployment of most of the old workmen. We have also
pointed out that it was open to the workmen themselves even individually to
apply under s.
33-A in this case; but neither that was done
by the workmen nor was the matter referred for adjudication within a reasonable
time. In these circumstances, we are of opinion that the tribunal would be
justified in refusing the relief of reinstatement to avoid dislocation of the
industry and that is the correct order to make. In addition, the reference in
this case was vague inasmuch as the names of 250 workmen to be reinstated were
not sent to the Industrial Tribunal and no list of these men was given to it till
practically after the whole proceeding was over. Even the list then supplied
was so bad that the Industrial Tribunal did not think it worthwhile to act upon
it, and directed the company to give a notice to the strikers to ask for reemployment
within a certain time. This the company had already done on July 5, 1948. That
notice had gained considerable publicity, for the majority of the workmen did
appear thereafter for re-employment by July 21. In the circumstances there was
no reason for ordering 160 reinstatement of any one on such a vague reference
after such an unreasonable length of time. The defect, in the order-of
discharge of April 6, due to permission not having been obtained under s. 33
can in the circumstances of this case be ignored on the ground that the workmen
who did not rejoin in July 1948, were not interested in reinstatement:
firstly, on account of the circumstances in
which that order came to be made after an illegal and unjustified sit-down
strike, secondly, because the workmen in their turn did not avail themselves of
the remedy under s. 33-A which. was open to them, and thirdly, because the
reference was made after an unreasonable length of time and in a vague manner.
We are therefore of opinion that the Appellate Tribunal should not have ordered
the reinstatement of even the fifteen workmen in the circumstances as their
case was exactly the same as the case of the hundred workmen, except in the
matter of the withdrawal of the provident fund.
After the application for special leave was
allowed this Court made an order on September 26, 1955, that seven days' wages
every month should be paid by the company to the fifteen workmen who had been
ordered to be reinstated.
Learned counsel for the company informs us
that of these fifteen, only seven have been turning up to receive this payment
while eight men never turned up. This shows that these eight are not interested
in the reinstatement. Of the remaining seven, two, according to the learned
counsel for the company, have obtained other jobs while one is said to be a
member of Parliament. The company was prepared to reinstate, out of human
considerations, the other four, though, it contends that legally and rightly
so-it is not bound to reinstate any one of these fifteen workmen. These four
workmen whom the company is prepared to take back are Nitai Manji, Satya Charan
Das, Mustafa Khan and Akil-ud-Din.
The appeal of the company must therefore be
allowed with respect to the remaining eleven workmen who have been ordered to
be reinstated by the Appellate Tribunal. The order of the Appellate Tribunal
will stand with respect to the four workmen named above in 161 view of the
company's willingness to take them back. The appeal of the workmen on the
question of re in statement fails and is hereby dismissed. We may, however,
make it clear that payment made pursuant to the order of this Court will not in
any event be refundable or adjustable towards the future wages of those workmen
who will be reinstated by the company.
Both the company and the workmen have raised
other points in their respective grounds of appeal; but as they have not been
pressed before us we need not say anything with respect to them. In these
circumstances we are of opinion that both the parties will bear their own costs
of this Court.
Appeal No. 317 allowed.
Appeal No. 318 dismissed.