Delhi Cloth & General Mills Co.
Ltd. Vs. The Workmen & Ors [1966] INSC 225 (14 October 1966)
14/10/1966 MITTER, G.K.
MITTER, G.K.
WANCHOO, K.N.
CITATION: 1967 AIR 469 1967 SCR (1) 882
ACT:
Industrial Disputes Act (14 of 1947), s.
10(1)--Industrial Tribunal Limits of jurisdiction with respect to order of
reference of industrial dispute-"Incidental", meaning of.
HEADNOTE:
Four issues, arising out of industrial
disputes between the Management of Delhi Cloth Mills and Swatantra Bharat Mills
(two units of the same company) and their workmen, were referred to the
Industrial Tribunal. Issue 3 in the order of reference raised the question
whether the strike at the Delhi Cloth Mills and the lockout declared by the
Management were justified and legal; and issue 4, whether the, sit-down strike
at the Swatantra Bharat Mills was justified and legal. As regards these issues
the contention of the Management was that the issues were framed on the basis
that there were strikes at the two units, and the only questions referred to
the Tribunal for decision related to the legality of and justification for, the
said strikes. As regards issue 1, relating to the calculation of the bonus
table, the case of the Management was that there were settlements on various
dates between the Management and the Unions of workmen, and in view of those
settlements it was not open to the workmen to reopen the matter., The Tribunal
overruled the pleas of the Management. It held that as the existence of the
strikes was disputed by the workmen, it would be its duty and within its
jurisdiction to decide whether there were strikes at the Mills at all; that in
doing so, it would not be going beyond the scope and ambit of the reference;
and that the parties would be at liberty to adduce evidence in confirmation or
denial of the existence of the strikes. As regards issue 1, relating to bonus,
the Tribunal held that if after taking evidence it was found that as a result
of the settlements referred to by the Management, the claim was barred,, it
would not be allowed.
In appeal to this Court,
HELD : (1) The basis of issues 3 and 4 was
that there were strikes at the two units and a lock-out declared by the
Management at one. On the issues as framed, it would not be open to the workmen
to question the existence of the strikes or to the Management to deny the
declaration of a lock-out.
The parties could place before the Tribunal
such facts as would show that the dispute referred was not an industrial
dispute at all, or explain their conduct or their respective stands on the
propriety and legality of the strikes and lock-out. But they could not be
allowed to argue that the order of reference was wrongly worded and that the
very basis of the order of reference was open to challenge.
Therefore, the Tribunal had to examine issues
3 and 4 on the basis that there was a strike at the Delhi Cloth Mills and a
sit-down strike at the Swatantra Bharat Mills, and that there was a lock-out
declared with regard to the former as stated in the order of reference, and
decide on the evidence adduced, whether the strikes and lock-out were justified
and legal. [887 G-H; 892 F-H; 893 E-G] The Industrial Tribunal must confine its
adjudication to the points of dispute referred and matters incidental thereto.
It is not free to 883 enlarge the scope of
the dispute referred to it but must confined its attention to the points
specifically mentioned and anything which is "incidental' thereto.
Something "incidental to a dispute" means something happening as a
result of or in connection with the dispute or associated with the dispute. The
dispute is the fundamental thing while something incidental thereto is an
adjunct to it. It cannot Cut at the root of the main thin.to which it is an
adjunct. [887 C-D, E-F] Express Newspapers v. Their Workmen,[1962] 2 L.L.227
(S.C) and Syndicate Bank v. Its Workmen, [1966] 2 L.L.J. 194 (S.C.), explained.
(2) The parties were not bound by any
agreement with regard to the first issue and the Tribunal would have to take
evidence to come to a finding on it. [897 D]
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos. 2100 to 2102 of 1964.
Appeals by special leave from the judgments
and orders (1) dated the 16th June, 1966 of the Special Industrial Tribunal,
Delhi in Reference No. 53 of 1966 (Delhi Administration) and (ii) and (iii)
dated the 13th July, 1966 and 12th August 1966 of the Punjab High Court
(Circuit Bench) at Delhi in Civil Writ Petitions Nos. 488-D and 122 of 1966
respectively.
M. C. Setalvad, G. B. Pai, Rameshwar Dial and
Rameshwar Nath, for the appellant (in all the appeals).
A. S. R. Chari and M. K. Ramamurthi, for
respondent No. 1 (a) (in all the three appeals).
S. Venkatakrishnan and N. K. Bhatt, for
respondent No. 1 (in all the three appeals).
A. C. Shubh, Ram Kishan and S. S. Khanduja, for
respondent No. 1(c) (in all the three appeals).
A. S. R. Chari, D. K. Aggarwal and M. V.
Goswami, for respondents Nos. 1(d) and 1(e) (in all the three appeals).
D. R. Gupta and H. K. Puri, for respondent
No. 2 (in all the three appeals).
S. S. Khanduja, for respondent No. 2 (in all
the three appeals) M. V. Goswami, for respondent No. 3(a) (in all the three
appeals).
The Judgment of the Court was delivered by
Mitter, J. On March 4, 1966 an order under s. 10(1) and s.
12(5) of the Industrial Disputes Act
(hereinafter referred to as the Act) was passed over the signature of Secretary
(Industries and Labour), Delhi Administration, Delhi referring to the Special
Industrial Tribunal certain matters set forth in the Schedule 884 annexed
thereto for adjudication. According to the recitals in the order, it appeared
to the Delhi Administration from a report submitted by the Conciliation Officer
under s. 12(4) of the Act that an industrial dispute existed between the
managements of Delhi Cloth Mills and Swatantra Bharat Mills and their workmen
represented by four different Unions and the Chief Commissioner, Delhi, was
satisfied on a consideration of the said report that the said dispute should be
referred to an Industrial Tribunal. The terms of reference specified in the
Schedule are reproduced below:
"1. Whether in calculating the bonus
table for the accounting year ending 30-6-1965 the allocations separately made
by the Delhi Cloth & General Mills Co., Ltd. towards the Capital and
Reserves of the Delhi Cloth Mills and Swatantra Bharat Mills, the two units of
the Company is fair and reasonable? If not, what directions are necessary in
this regard ?
2. Whether the workmen of these Mills are
entitled to bonus at a rate higher than 6 per cent of the wages for the accounting
year ending 30-6-1965? If so, what directions are necessary in this regard?
3. Whether the strike at the Delhi Cloth
Mills and the lock-out declared by the management on the 24-2-1966 are
justified and legal and whether the workmen are entitled to wages for the
period of the lock-out?
4. Whether the 'sit-down' strike at the
Swatantra Bharat Mills from 23-2-1966 is justified and legal and whether the
workmen are entitled to wages during the period of the strike?" The report
of the Conciliation Officer shows that trouble had arisen over the claim of
bonus in the Delhi Cloth and General Mills and Swatantra Bharat Mills, two
units of the same company. The report also shows that at a meeting convened at
2-30 p.m. on February 23, 1966, the Works Committee recommended that the
payment of bonus should be suspended pending examination of the entire issue in
conciliation or otherwise. But before this could be announced, workers started
demonstration outside the mill premises of the first named unit and became
violent. To quote from the report "As the situation became tense inside
the mill premises and the workers left work, the management closed down the
turbine at about 4 p.m. on 23-2-1966. Later on, at about 11-00 p.m. the
management put up a notice that in view of the prevailing circumstances in the
Mills, it was not possible to work the mills until conditions become
normal....... As 885 there was no improvement in the situation and as workers
who were inside the mills were reported to have caused further damage to the
mill property, the management declared a lockout at about 6 p.m. on 24th
February, 1966. ...... The workers, however, are very much restive over the
management's declaration of lock-out." With regard to Swatantra Bharat
Mills, the report runs:
"........ the situation is peaceful
although the workers resorted to the stay-in-strike from 7.30 p.m. on the 23rd
February 1966 and the strike still continues. It appears that their attitude is
that whatever is decided at the D.C.M. level will automatically be applicable
to them as well. The workers do not seem to be in a mood to start the work
unless the workers of the Delhi Cloth Mills also start work." The
recommendation in the report was that the dispute should be immediately
referred to a Tribunal for adjudication along with the issue of prohibitory
orders under s. 10(3) of the Act. The report notes that the Unions' leaders had
pressed that the question of workers' claim for wages for the strike period in
the Swatantra Bharat Mills and lock-out period in the Delhi Cloth Mills should
also be included and the Tribunal to be constituted should proceed immediately
in the matter.
The Management filed a statement of case
before the Special Tribunal on April 9, 1966 and the Unions filed separate
statements of case between April 10, 1966 and April 13, 1966. There were
Replications and Rejoinders up to May 21, 1966.
On June 3, 1966, the Company prayed before
the Industrial Tribunal that issues 1, 3 and 4 (set out in the terms of
reference) may be decided before the parties were called upon to lead their
evidence. As regards issues 3 and 4, the contention of the management was that
the fundamental basis of these two matters was that there was a strike at the
Delhi Cloth Mills and a sit-down strike at the Swatantra Bharat Mills and the
only question referred to the Tribunal for decision related to the legality and
justification of the said strikes. All the four Unions contended before the
Tribunal that there was no strike at the Delhi Cloth Mills.
Two of the Unions' case was that the strike
at Swatantra Bharat Mills was in sympathy with the workmen of the Delhi Cloth
Mills; while the other two Unions' case was that there was a lock-out in the
Swatantra Bharat Mills. As regards the first issue, the case of the Management
was that there was a settlement on December 13, 1965 relating to the
computation of bonus for the year 1963-64 between the Company and the two major
Unions. It was stated further that the settlement referred to the computation
of bonus in accordance with the provisions of the Payment of Bonus Act, 1965
and in arriving at the settlement, all the available and relevant financial
statements had been shown to the Unions which accepted the accounts based on
allocation of share capital and reserves during the years previous to and
including 1963-64. Further, according to the Management, one of the Unions had entered
into another settlement with the Management of the D.C.M. Silk Mills with
regard to that Union for the year 1964-65, and in view of these settlements, it
was not open to the workmen of the Delhi Cloth Mills and Swatantra Bharat Mills
to question the correctness and reasonableness of the allocations made by the
Management towards share capital and reserves of these two units.
The Tribunal considered the pleas put forward
before it and several decisions cited in support and came to the conclusion that
as the strike covered by issue No. 3 and sit-down strike covered by issue No. 4
were disputed by the Unions, or at any rate not admitted by all of them
"it would be the duty of the Tribunal to decide whether there was a strike
at D.C.M. as covered by issue No. 3 and whether there was a sit-down strike by
S.B.M. as covered by issue No. 4." According to the Tribunal, it would not
be exceeding its jurisdiction at all and would not be going beyond the scope
and ambit of the reference to examine issues 3 and 4 in the above light and
accordingly, the Tribunal held that the parties would be at liberty to adduce
such evidence as they liked in confirmation or denial of the fact of a strike
and sit-down strike regarding issues 3 and 4.
As regards issue No. 1 also, the Tribunal
over-ruled the plea of the Management and held that it would be open to the
parties to adduce evidence regarding this issue and if in course thereof it was
found that as a result of the settlements referred to by the Management, the
claim was barred, the same would not be allowed This decision of the Tribunal
was announced on June 16, 1966.
The Management moved a Writ Petition before
the Punjab High Court on June 30, 1966 for quashing the order of 16th June by a
writ of certiorari. By an order dated July 13, 1966, the petition was summarily
dismissed. By an application under Art. 133(1) of the Constitution, the
Management moved the Punjab High Court for leave to appeal to the Supreme
Court. This was also dismissed in limine on August 12, 1966. The Management
then moved three Special Leave Petitions Nos. 1068 to 1070 of 1966 before this
Court, one from the order of the Tribunal, the second from the order of the
High Court dated July 13, 1966 and the third also from the order of the High
Court dated August 12, 1966. By an order made on September 12, 1966 special
leave was granted in all these three petitions. All these have now come up for
hearing before us.
Proceeding in the order in which the
arguments were addressed, we propose to deal with issues 3 and 4 first.
Under s. 10(1) (d) 887 of the Act, it is open
to the appropriate Government when it is of opinion that any industrial dispute
exists to make an order in writing referring "the dispute or any matter
appearing to be connected with, or relevant to, the dispute....... to a
Tribunal for adjudication." Under s.
10(4) "where in an order referring an
industrial dispute to a Labour Court, Tribunal or National Tribunal under this
section or in a subsequent order, the appropriate Government has specified the
points of dispute for adjudication, the Labour Court or the Tribunal or the
National Tribunal, as the case may be, shall confine its adjudication to those
points and matters incidental thereto." From the above it therefore
appears that while it is open to the appropriate Government to refer the
dispute or any matter appearing to be connected therewith for adjudication, the
Tribunal must confine its adjudication to the points of dispute referred and
matters incidental thereto. In other words, the Tribunal is not free to enlarge
the scope of the dispute referred to it but must confine its attention to the
points specifically mentioned and anything which is incidental thereto. The
word 'incidental' means according to Webster's New World Dictionary:
"happening or likely to happen as a
result of or in connection with something more important; being an incident;
casual; hence, secondary or minor, but usually associated:"
"Something incidental to a dispute" must therefore mean something
happening as a result of or; in connection with the dispute or associated with
the dispute. The dispute is the fundamental thing while something incidental
thereto is an adjunct to it. Something incidental, therefore, cannot cut at the
root of the main thing to which it is an adjunct.
In the light of the above, it would appear
that the third issue was framed on the basis that there was a strike and there
was a lock-out 'and it was for the Industrial Tribunal to examine the facts and
circumstances leading to the strike and the lockout and to come to a decision
as to whether one or the other or both were justified. On the issue as framed
it would not be open to the workmen to question the existence of the strike,
or, to the Management to deny the declaration of a lock-out. The parties were
to be allowed to lead evidence to show that the strike was not justified or
that the lock-out was improper. The third issue has also a sub-issue, namely,
if the lock-out was not legal, whether the workmen were entitled to wages for
the period of the lock-out. Similarly, the fourth issue proceeds on the basis
that there was a sit-down-strike in the Swatantra Bharat Mills on 23-2-1966 and
the question referred was as to the propriety or legality of the same. It was
not for any of the Unions to contend on the issues as framed that there was no
sit-down strike. On their success on the plea 888 of justification of the
sit-down strike depended their claim to wages for the period of the strike.
Apart from the consideration of the various
decisions cited at the Bar, the above is the view which we would take, with
regard to issues 3 and 4. We have now to examine the decisions cited and the
arguments raised and see whether it was competent to the Tribunal to go into
the question as to whether there was a strike at all at the Delhi Cloth Mills
or a sit-down strike at the Swatantra Bharat Mills or a lock-out declared by
the Management on 24-2-1966.
The decisions on the point to which our
attention was drawn are as follows. In Burma-Shell Oil Storage & Distributing
Co., of India Ltd. & Ors. v. Their Workmen & Others(1) one of the
disputes referred to the fifth industrial tribunal by the Government of West
Bengal under s. 10 of the Industrial Disputes Act was a claim for bonus for
1955 payable in 1956 for the Calcutta Industrial area. The Industrial Tribunal
heard both the parties and awarded 41 months basic salary as bonus for the year
1955 to the clerical staff and the operatives of the companies. This Court
referred to the recital in the order of the Government of West Bengal and
observed that the reference was between the four appellants and their workmen
represented by the named Workers' union on the other. According to this Court,
it appeared from the record that the said union represented only the workmen in
the categories of labour, service and security employees in the Calcutta
industrial area and so prima facie the two demands made by the union would
cover the claims of the operatives alone. This Court also relied on the fact
that the appellants had dealt with the two categories of employees distinctly
and separately. According to Gajendragadkar, J. (as he then was) who delivered
the judgment of the Court:
"If the reference does not include the
clerical staff and their grievances, it would not be open to the members of the
clerical staff to bring their grievances before the tribunal by their
individual applications or for the tribunal to widen the scope of the enquiry
beyond the terms of reference by entertaining such individual applications."
Accordingly, it was held that the appellants were right in contending that the
tribunal had no authority to include within its award members of the clerical
staff employed by the appellants.
In Express Newspapers v. Their Workmen &
Staff (2) the two items of dispute specified in the order of reference were :
(1) Whether the transfer of the publication
of Andhra Prabha and Andhra Prabha Illustrated Weekly to (1) [1961] 2 L.L.J.
124.
(2) [1962] 2 L.L.J. 227.
889 Andhra Prabha (Private) Ltd., in
Vijayawada is justified and to what relief the workers and the working
journalists are entitled ? (2) Whether the strike of the workers and working
journalists from 27th April 1959, and the consequent lockout by the management
of the Express Newspapers (Private) Ltd., are justified and to what relief the
workers and the working journalists are entitled? On the same day as the
Government of Madras made the order of reference, it issued another order under
s. 10(3) of the Act prohibiting the continuance of the strike and the lockout
in the appellant concern. Against this latter order, the appellant filed a writ
petition in the Madras High Court and the workers also filed another writ
petition against the order by which the dispute was referred to the industrial
tribunal for adjudication. In regard to the second petition, the learned single
Judge of the Madras High Court held on the merits that what the appellant had
done did not amount to a lock-out but a closure and so the substantial part of
the dispute between the parties did not amount to an industrial dispute at all.
In the result, he allowed the application of the company in part and directed
the tribunal to deal only with the second part of the two questions framed by
the impugned reference. There was some modification in the order by a Division
Bench of the Madras High Court. The matter then came up to this Court. It was
held by this Court that the High Court could entertain the appellant's petition
even at the initial stage of, the proceedings before the industrial, tribunal
and observed "If the action taken by the appellant is not a lockout but is
a closure, bona fide and genuine, the dispute which the respondents may raise
in respect of such a closure is not an industrial dispute at all. On the other
hand, if, in fact and in substance, it is a lock-out, but the said action has
adopted the disguise of a closure and a dispute is raised in respect of such an
action, it would be an industrial dispute which industrial adjudication is
competent to deal with. .
There is no doubt that in law the appellant
is entitled to move the High Court even at the initial stage and seek to
satisfy it that the dispute is not an industrial dispute and so the industrial
tribunal has no jurisdiction to embark upon the proposed enquiry." It was
further observed:
"If the industrial tribunal proceeds to
assume jurisdiction over a non-industrial dispute, that can be successfully
challenged before the High Court by a petition for an appropriate writ, and the
power of the High Court to issue an appropriate writ in that behalf cannot be
questioned.
M17Sup.CI/66-12 890 It is also true that even
if the dispute is tried by the industrial tribunal, at the very commencement,
the industrial tribunal will have to examine as a preliminary issue the question
as to whether the dispute referred to it is an industrial dispute or not, and
the decision of this question would inevitably depend upon the view which the
industrial tribunal may take as to whether the action taken by the appellant is
a closure or a lock-out. The finding which the industrial tribunal may record
on this preliminary issue will decide whether it has jurisdiction to deal with
the merits of the dispute or not." The Court then proceeded to consider
the facts of the case and the contentions raised before the tribunal. It
referred to a settlement which had been reached between the parties and
embodied in a memorandum drawn up on 6th November 1958 under s. 12(3) of the
Act. This settlement was to operate for two and half years. The case of the respondents
was that during the negotiations between the appellant and the union in the
presence of the acting Labour Minister and the Labour Commissioner, the
appellant had tried to insert a clause in the agreement in respect of the
decision that the paper Andhra Prabha would not be shifted for publication to
Vijayawada during the period of the settlement and that the workmen would be
continued to be employed as before at Madras and this was objected to by the
respondent whereupon a verbal assurance was given that the business of the
appellant would be carried on at Madras for two and half years. The respondents
contended that the said assurance was one of the terms of the conditions of the
respondents' service and the transfer effected by the appellant contravened and
materially modified the said condition of service. In regard to issue 2, the
argument was that in effect the Government had determined this issue and
nothing was left for the tribunal to consider. The Court observed that the
wording of this issue was in-artistic and unfortunate and held:
"Even so, when the question of this kind
is raised before the Courts, the Courts must attempt to construe the reference
not too technically or in a pedantic manner, but fairly and reasonably. Thus
construed, even the inelegant phraseology in framing the issue cannot conceal
the fact, that in dealing with the issue, the main point which the tribunal
will have to consider is whether the strike of the respondents on 27th April
1959 was justified and whether the action of the appellant which followed the
said strike is a lockout or amounts to a closure...... Thus, having regard to
the content of the dispute covered by issue 2, it would not be right to suggest
that the reference precludes the tribunal from entertaining the appellant's
plea that what it did on 29th April is in fact not a lock-out but a closure.
891 The fact that the relevant action of the
appellant is called a lock-out does not mean that the tribunal must hold it to
be a lockout." This decision has been referred to by the Tribunal as
giving it jurisdiction to examine the question as to whether there was a strike
at all. Both sides have referred to this decision in support of their
respective contentions.
According to the respondents, the fact that
the Tribunal could go into the question as to whether there was a lockout or a
closure went to show that the Tribunal's jurisdiction was not limited because
of the use of the word 'lock-out' in the second; issue so that the Tribunal was
precluded from examining the question as to whether there was a lock-out at all
while according to the appellants it was because the Tribunal had always to
consider whether the issue referred was an industrial dispute that the Tribunal
had to scrutinise whether the cessation of business of the company was due to a
lock-out which it was competent to adjudicate upon or whether it was due to a
closure which was not an industrial dispute at all.
In our opinion, there was enough material on
the record in that case to show that the company had been trying for some time
past to transfer its business elsewhere and the action of the appellant which
followed the strike on April 27, 1959 was in fact a closure and not a lock-out.
The facts of that case were very special and the decision must be limited to
those special facts.
In Syndicate Bank v. Its Workmen(1) there was
a dispute between the appellant bank and its employees with respect to C. rank
officers which was referred by the Central Government to an Industrial Tribunal
in the following terms:(1) Whether the Canara Industrial and Banking Syndicate,
Ltd., Udipi, is justified in imposing the condition that only such of those
workmen would be considered for appointment as officer-trainee and promotion to
probationary C rank officers who agree to be governed by the rules of the bank
applicable to such officers in respect of the scale of pay and other conditions
of service? If not, to what reliefs are such workmen entitled? (2) Whether the
bank is justified in imposing the condition of twelve months training as
officer-trainee before appointment as C rank officer in addition to the
probation prescribed after the appointment as C rank officer ? If not, to what
relief are the workmen entitled? Before the tribunal it was contended on behalf
of the appellant that the first term of reference proceeded on the assumption
that (1) [1966] 2L.L.J. 194.
892 C rank officers were officers of the bank
while the workmen urged that the question whether C rank officers were workmen
was implicit in the first term of reference. The Tribunal accepted the plea of
the respondents and proceeded to consider that question. It came to the
conclusion that C rank officers were workmen. On the question whether the
imposition of the condition that workmen would only be promoted as C rank
officers if they accepted the condition that they would be governed by the
rules of the bank, it found against the appellant. Before this Court it was
argued on behalf of the appellant that there was no reference on the question
of the status of C rank officers and the tribunal went beyond the terms of
reference when it decided that C rank officers were workmen. It was held by
this Court':
"that the first term of reference had
implicit in it the question whether C rank officers were workmen or not. If
that were not so, there would be no sense in the reference, for if C rank
officers were assumed to be non workmen, the bank would be justified in
prescribing conditions of service with respect to its officers and there would
be no reference under the Act with respect to conditions imposed by the bank on
its officers who were not workmen." In the last mentioned case, the
question whether C rank officers were workmen had to be examined by the
tribunal, for, if they were not, there could be no reference under the
Industrial Disputes Act. In the case before us, there is no such difficulty.
The third and the fourth terms of reference in the instant case are founded on
the basis that there was a strike at the Delhi Cloth Mills and a sit down strike
at the Swatantra Bharat Mills and that there was a lock-out declared by the
management of the Delhi Cloth Mills on 24-2-1966. On the order of reference, it
was not competent to the workmen to contend before the Tribunal that there was
no strike at all; equally, it was not open to the management to argue that
there was no lock-out declared by it. The parties would be allowed by their
respective statement of cases to place before the Tribunal such facts and
contentions as would explain their conduct or their stand, but they could not
be allowed to argue that the order of reference was wrongly worded and that the
very basis of the order of reference was open to challenge. The cases discussed
go to show that it is open to the parties to show that the dispute referred was
not an industrial dispute at all and it is certainly open to them to bring out
before the Tribunal the ramifications of the dispute. But they cannot be
allowed to challenge the very basis of the issue set forth in the order of
reference.
On behalf of the respondents, Mr. Chari put
before us four propositions which according to him the Tribunal had to consider
before coming to a decision on these two issues.
They were:
893 (i)The fact that there was a recital of
dispute in the order of reference did not show that the Government had come to
a decision on the dispute; (ii) The order of reference only limited the,
Tribunal's jurisdiction in that it was not competent to go beyond the heads or
points of dispute; (iii) Not every recital of fact mentioned in the order of
Government was irrebuttable; and (iv) In order to fix the ambit of the dispute
it was necessary to refer to the pleadings of the parties. No exception can be
taken to the first two points. The correctness of the third proposition would
depend on the language of the recital.
So far as the fourth proposition is
concerned, Mr. Chari argued that the Tribunal had to examine the pleadings of
the parties to see whether there was a strike at all. In our opinion, the
Tribunal must, in any event, look to the pleadings of the parties to find out
the exact nature of the dispute, because in most cases the order of reference
is so cryptic that it is impossible to cull out therefrom the various points
about which the parties were at variance leading to the trouble. In this case,
the order of reference was based on the report of the Conciliation Officer and
it was certainly open to the Management to show that the dispute which had been
referred was not an industrial dispute at all so as to attract jurisdiction
under the Industrial Disputes Act. But the parties cannot be allowed to go a
stage further and contend that the foundation of the dispute mentioned in the
order of reference was non-existent and that the true dispute was something
else. Under s. 10(4) of the Act it is not competent to the Tribunal to
entertain such a question.
In our opinion, therefore, the Tribunal had
to examine issues 3 and 4 on the basis that there was a strike at the D.C.M.
unit and a sit-down strike at Swatantra Bharat Mills and that there was a
lock-out declared with regard to the former as stated in the third term of
reference. It was for the Tribunal to examine the evidence only on the question
as to whether the strikes were justified and legal. It then had to come to its
decision as to whether the workmen were entitled to the wages for the period of
the lock-out in the Delhi Cloth Mills and for the period of the sit-down strike
at the Swatantra Bharat Miffs.
With regard to the first issue, Mr. Setalvad
contended that there was a binding agreement between the parties which had not
been terminated or which had not come to an end and consequently, the Tribunal
had to go into the question and if it came to the conclusion that there was
such a binding agreement, it was precluded from examining the matter any
further. Mr. Chari for the respondents did not dispute this proposition, but,
according to him, there was no agreement between the parties as contended for
by the Management. We have therefore to refer to the documents to which our
attention was drawn to see whether 894 there was such an agreement. The first
issue relates to the allocation of capital and reserves of the company to the
two units, viz., Delhi Cloth Mills and Swatantra Bharat Mills, for calculating
the bonus table for the accounting year ending 30-6-1965. According to Mr.
Setalvad, such allocation had been accepted by the workers in respect of the
previous year and the settlement between the parties was not limited to that
year. This was not accepted by Mr. Chari.
Mr. Chari referred us to the statement of the
case of the Management before the Tribunal dated April 9, 1966. In subparagraph
(d) of paragraph 1, it was stated by the Management:
"The method and basis of allocation had
been consistently adopted every year for the last many years and has been
accepted, expressly or impliedly, by the workers every year. It has been
expressly accepted in a settlement made in respect of the payment of bonus for
the year 1963-64 during Conciliation. A copy of the settlement dated 13-12-1965
along with its enclosure is annexed; (Annexure'B')." In sub-para (e) it
was stated:
"The allocation has been uniformly made
on the same method and on the same basis for the purpose of determination of
available surplus for payment of bonus to the workers of other textile units of
the company (viz., Hissar Textile Mills, Hissar, & D.C.M. Silk Mills,
Delhi). The workers of these units have accepted this allocation in respect of
the payment of bonus for the year 1964-65 under agreements entered into with
respective unions representing workmen of these units." The company has
several units and the two units mentioned in subparagraph (e) above are
different from the units with which we have to deal in this case. Consequently,
any agreement between the Management and the workers with respect to those two
units cannot be binding so far as the dispute in this case is concerned. We
then have to consider the nature of the settlement mentioned in sub-para (d).
The first document in this connection is dated October 27, 1964 executed on
behalf of the Delhi Cloth Mills and Swatantra Bharat Mills on the one hand and
Kapra Mazdoor Ekta Union and Textile Mazdoor Sangh, Delhi, two of the
respondents before us, on the other. The relevant portion of the first clause
of the terms of settlement reads:
"According to the Bonus Commission's
Formula as accepted and modified by the Government vide Resolution No.......
dated 2-9-1964 the rate of bonus payable to the workmen of the two textile
units of the Company viz., 895 Delhi Cloth Mills and Swatantra Bharat Mills
works out to 7.33% of the total earnings viz., basic wage plus Dearness
Allowance, including High Cost Allowance." According to the second clause:
"The company has however agreed to pay
bonus for the year ending 30-6-1964 at the rate of 8-1/3% of the total average
wage earnings as defined above, as a gesture of goodwill and to promote cordial
relations in consideration of the unions having agreed to withdraw all pending
bonus disputes unconditionally." Clause 3 runs as follows:
"The company agrees that in case any
further alteration or modification in Bonus Commission's Formula is made by the
Government hereafter, the application of which results in any addition to the
total amount to be distributed as bonus for the year ending 30-664 only, the
workers will be entitled to receive benefit of the same. It is agreed that the
audited figures of the balance-sheet, profit and loss account and the basis of
any allocation including capital and reserves etc.
for the year 1963-64 will not be challenged
by the unions." According to cl. 4:
"The Unions agree to withdraw their
disputes regarding payment of additional bonus for the years 1960-61, 1961-62
and 1962-63 unconditionally. Any further modification or change in the Bonus
Commission Formula will not affect these years." Clauses 5, 6 and 7 are
not relevant.
It is clear from the above that the agreement
related entirely to the years 1960-61, 1961-62 and 1962-63 and 1963
64. There is no statement anywhere about the
workers being bound to accept any figure of allocation with regard to the year
1964-65.
The only other document to which our
attention was drawn bears the date 13-12-1965 and this also was executed by and
between the same parties. The document is divided into two portions, the first
being a short recital of the case and the second being the terms of settlement
divided into eight paragraphs. The recitals of the case show that the bonus for
the year ending 30-6-1964 was paid to the workmen of the two Textile Mills in
accordance with the agreement dated 2710-1964 between the Management and the
Kapra Mazdoor Ekta Union representing the workmen and that the payment was made
according to the Bonus Commission Formula as accepted and modified by the Government.
Under the 896 aforesaid agreement, it was agreed that in case any further
alteration or modification in the Bonus Formula were made by the Government,
the workers would be entitled to receive benefit of the same. The workers had
accordingly raised a demand for additional bonus in terms of para 3 of the
Agreement dated 27-10-1964. The Kapra Mazdoor Ekta Union and the Textile
Mazdoor Sangh representing an overwhelming majority of the workmen of Delhi
Cloth Mills and Swatantra Bharat Mills had moved the Conciliation Officer for
settlement of this demand for additional bonus. After mutual negotiations with
the help and assistance of the Conciliation Officer, the parties had agreed to
settle the matter on the following terms and conditions. Then follow the terms
of settlement. The first is to the effect that the workers reiterate and
re-affirm the agreement dated 2710-1964. The second clause is to the effect
that the parties agree to calculate the quantum of bonus payable for the year
ending 30-6-1964 on the basis of the Formula laid down under sections 6 and 7
of the Payment of Bonus Act, 1965, taking together the pooled profits of Delhi
Cloth Mills and Swatantra Bharat Mills calculated on that basis.
According to this, the total amount of bonus
payable worked out to Rs. 30-25 lacs and the rate of bonus payable worked out
to 10.43 % of the total earnings which was not based on any base year.
According to cl. 3, the company agreed to pay the additional balance amount of
bonus due to the workmen at the rate of 3.10% of the total earnings for the
year ending 30-6-1964 within a period of three days. Cl. 4 is not material.
According to cl. 5, as regards the amount of Rs. 2 90 lacs paid by the company
in consideration of withdrawal of disputes for the years 1960-61, 1961-62 and
1962-63, it was agreed that the company would be entitled to adjust that amount
of Rs. 2.90 lacs against the total amount of bonus payable to the workers for
the year, in which the actual disbursement of such arrears, if any, might have
to be made, subsequent to the year 1964-65, as a result of any award of the
Court. Clause 6 runs as follows:"It is, further, agreed between the
parties that the calculation of rate of bonus -payable for the year 1964-65
will be made on the basis of formula laid down under sections 6 and 7 of the Payment
of Bonus Act. This will however be done soon after the General Meeting of the
shareholders of the Company in which the accounts for the aforesaid year will
be passed by the shareholders. The actual disbursement of the bonus for this
year will commence after 15 days of the holding of the Annual General Meeting.
In case a settlement in regard to rate of bonus is arrived at, the negotiations
for it will start immediately." It will be noticed from the above that the
entire settlement was with regard to the additional bonus for the year ending
June 897 30, 1964 and only cl. 6 had some relation to the bonus payable for the
year 1964-65. With regard to that there really was no agreement excepting that
the rate of bonus would be on the basis of the Formula laid down in ss. 6 and 7
of the Payment of Bonus Act. S. 6 of the Payment of Bonus Act shows what sums
are to be deducted from the gross profits as prior charges for the computation
of the available surplus under s. 5 of the Act. S. 7 lays down that for the
purpose of cl. (c) of S. 6 any direct tax payable by the employer for any
accounting year shall, subject to the provisions mentioned, be calculated at
the rates applicable to the income of the employer for that year. Cl. 6
therefore only prescribes that the parties could proceed on the basis of the formula
laid down in ss. 6 and 7 of the Payment of Bonus Act. The last portion of cl. 6
shows that the parties contemplated that they would be able to arrive at a
settlement with regard to the rate of bonus for which negotiations were to
start immediately.
From this, it is impossible to spell out any
agreement between the parties with respect to the bonus for the year 1964-65 or
the allocation of capital and reserves of the company to the two units in
calculating the bonus statement.
In our view, therefore, the parties were not
bound by any agreement with regard to issue No. 1 and the Tribunal will have to
take evidence to come to a finding on that issue.
In the result, the preliminary objection of
the Management with regard to issues 3 and 4 succeeds while it fails on issue
No. 1.
Appeals Nos. 2101 and 2102 of 1966 which are
from the orders of the High Court are dismissed without any order as to costs.
So far as Appeal No. 2100/1966 is concerned, the matter will go back to the
Tribunal for decision in the light of the observations made above. In view of
the divided success in this Court, there will be no order as to costs of this
appeal.
V.P.S.
Appeal No. 2100/66 remanded Other Appeals
dismissed.
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