PETITIONER:
J.K. IRON AND STEEL CO. LTD., KANPUR
Vs.
RESPONDENT:
THE IRON AND STEEL MAZDOOR UNION, KANPUR(with connected appe
DATE OF JUDGMENT:
23/12/1955
BENCH:
BOSE, VIVIAN
BENCH:
BOSE, VIVIAN
AIYYAR, T.L. VENKATARAMA
AIYAR, N. CHANDRASEKHARA
CITATION:
1956 AIR 231 1955 SCR (2)1315
ACT:
Industrial Disputes Act, 1947, (Act XIV of 1947), ss. 7
and 11– Adjudicator–Scope and authority of–Democratic
Constitution–Essentials thereof–Rule of Law-Benevolent
despotism–Foreign thereto.
HEADNOTE:
Held, that adjudication by an adjudicator under the
Industrial Disputes Act does not mean adjudication according
to the strict law of master and servant and that an
adjudicator’s award may contain provisions for the
settlement of a dispute which no court could order if it was
bound by ordinary law. Thus the scope of an adjudication
under the Industrial Disputes Act is much wider than that of
an arbitrator making an award. Industrial Tribunals are not
fettered by such limitations and an adjudicator has
jurisdiction to investigate disputes about discharge and
dismissal and where necessary, to direct reinstatement.
Nevertheless, wide as their powers are, these Tribunals are
not absolute and there are limitations to the ambit of their
authority. Though they are not courts in the strict sense
of the term, they have to discharge quasi judicial functions
and as such are subject to the overriding jurisdiction of
the Supreme Court under Art. 136 of the Constitution. Their
powers are derived from the statute that creates them and
they have to function within the limits imposed there and to
act according to its provisions. Those provisions invest
them with many of the trappings” of a court and deprive them
of arbitrary or absolute discretion and power.
Benevolent despotism is foreign to a democratic
Constitution. When the Constitution of India converted this
country into a sovereign, democratic, republic, it did not
invest it with the mere trappings of democracy but invested
it, with the real thing, the true kernel of which is the
ultimate authority of the courts to restrain all exercise of
absolute and arbitrary power not only by the executive and
by officials and lesser tribunals but also by the
legislatures and even by Parliament itself. The
Constitution established a “Rule of Law” in this land and
that carries with it restraints and restrictions that are
foreign to despotic power.
The courts, however, must always exercise caution and should
not substitute their own judgment and discretion for that of
such tribunals.
166
1316
In view of ss. 7 and 11 of the Industrial Disputes Act,
1947 and U.P. State Industrial Tribunal Standing Orders 1951
these Tribunals, though not bound by all the technicalities
of Civil Courts must nevertheless follow the general pattern
of the Civil Courts in the matter of taking the pleadings of
the parties in writing and the drawing up of issues. It is
not open to the Tribunals to disregard the pleadings and to
reach any conclusion that they think are just and proper.
The Supreme Court remitted the case to the Labour
Appellate Tribunal for a rehearing of the appeals as the
Adjudicator and the Labour Appellate Tribunal had adopted
the attitude of benevolent despots and had based their
conclusion on irrelevant considerations and ignored the real
questions that arose for decision and the issues that arose
out of the pleadings of the parties.
Western India Automobile Association v. Industrial
Tribunal, Bombay ([1949] F.C.R. 321, 345), State of Madras
v. C. P. Sarathy, ([1953] S.C.R. 334, 348), Bharat Bank Ltd.
v. Employees of Bharat Bank Ltd., ([1950] S.C.R. 459, 497),
Muir Mills Co. v. Suti Mills Mazdoor Union, Kanpur ([1955]
1 S.C.R. 991, 1001), referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 22 and
22-A and 301 of 1955.
Appeals by special leave from the judgment and order dated
the 4th July 1952 of the Labour Appellate Tribunal of India,
Lucknow in Appeals Nos. 391 and 392 of 1951 arising out of
the Award dated the 1st November 1951 of the Adjudicator and
Additional Regional Conciliation Officer, Kanpur in Case No.
53 of 1951.
G.S. Pathak, (Rameshwar Nath and Rajinder Narain), for the
appellants in all the appeals.
G. C. Mathur, for the respondent in C. A. Nos. 22 and 22-A
and respondent No. 4 in C. A. No. 301 of 1955.
K. B. Asthana and C. P. Lal, for the respondent No. 3
in C. A. No. 301 of 1955.
1955. December 23. The Judgment of the Court was
delivered by
BOSE J.-We are concerned here with three appeals. They
arise out of a dispute between the J.K. Iron and Steel
Company Limited and the Iron and Steel Mazdoor Union. We
will call them the
1317
Company and the Mazdoor Union respectively. The facts are
as follows.
The Company had its factory and other works at Kanpur in
Uttar Pradesh. On 10-4-1948 the Ministry of Commerce in the
Government of India ordered the Company to shift its Jute
Baling Hoops factory from Kanpur to Calcutta.
As no land was available in Calcutta no effect could be
given to this order till the year 1950-51. On 19-3-1951 the
Iron and Steel Controller ordered the Company to stop the
rolling of jute baling hoops at once. Accordingly, the
production of these hoops was stopped from that date.
At the same time there was scarcity of scrap iron and the
Company’s case is that forced it to reduce the working of
its furnace from three shifts a day to one.
The Company states that because of these two causes it was
obliged to retrench its staff. Therefore, it issued the
following- notice dated 15-5-1951 to 128 of its workers:
“Consequent to transfer of the Rolling Mill to Calcutta
and want of scrap to Furnace Department in full, the
services of the persons as per list attached are dispensed
with from today.
Their wages and other dues in full settlement will be paid
after 2 P.m.”
Twenty five of the 128 accepted their wages and other dues
in full settlement but the remaining 103 refused. Their
cause was accordingly espoused by the Mazdoor Union which
made an application to the Regional Conciliation Officer at
Kanpur on 16-5-1951 complaining that the retrenchment was
illegal and asking that the workmen be reinstated with full
payment of their wages for the period they were out of work.
This was forwarded to the Government of Uttar Pradesh and
on 28-6-1951 the Governor of that State referred the
following issue to the Regional Conciliation Officer at
Kanpur under sections 3, 4 and 8 of the U.P. Industrial
Disputes Act, 1947 for adjudication:
“Whether the retrenchment of the workmen
1318
given in the Annexure by Messrs J. K. Iron and Steel Co.
Ltd’ Kanpur, is unjustified? If so, to what relief are the
workmen entitled?”
The parties filed their written statements on 14-7-1951
and the Company filed a rejoinder on 20-7-1951. The
Adjudicator thereupon took evidence, oral and documentary,
and gave his award on 1-11- 1951. But before that was done
the case of one of the workmen (Kapil Deo Singh) was
withdrawn and that left 102 for him to deal with.
The Adjudicator reached the following conclusions. The
Mazdoor Union had contended that the retrenchment was not in
good faith. The Adjudicator held that it was and that there
was neither harassment nor victimisation. So also on the
question about the shortage of scrap he held that there was
a shortage but that it was only temporary and that it was
not likely to last for more than 8 or 9 months. He then
referred to the Standing Orders and said that the Company
was not entitled to resort to retrenchment except as a last
resort and that in the circumstances of the present case
these workmen should (1) have been offered the option of
employment in the new set up at Calcutta; and (2) those that
did not want it should have been laid off in rotation
instead of being retrenched. He accordingly ordered that
should be done and drew up a graduated scale ,of
compensation.
We observe in passing that the expression used throughout
has been “played off”. The reason for that is that is the
phrase used in the Standing Orders and in the copy of the
Act and Model Standing Orders reproduced by the U. P. De-
partment of Labour in its Annual Review of Activities. But
it seems to us that was due to printer’s error at some stage
which has been repeated in various places. The correct
expression is “lay off”. That is the expression used and
defined in the Act. The Standing Orders should have used
the same phrase. Apart from the definition in the Act, “lay
off ” is a well-known industrial term meaning, according to
the Oxford Dictionary, “a period during which
1319
a workman is temporarily discharged”. We will use the
correct expression in this judgment.
Both sides appealed to the Labour Appellate Tribunal. The
decision, there was as follows. The Tribunal upheld the
finding that there was in fact a shortage of scrap iron and
also agreed with the Adjudicator that was only likely to be
temporary. Then it held, apparently as a matter of law,
that under the Standing Orders it is not permissible to
retrench workmen and deprive them of their maintenance when
there is only a temporary shortage of material, whatever the
duration of the shortage; all that the employer can do in a
case like that is to lay them off.
The Tribunal also upheld the finding that the Hoop Mill
was in the course of transfer to Calcutta consequent on the
orders of Government, but they held that there was nothing
on the record to show which of the 105 persons (it should be
102) whose cases they were considering were “specifically
engaged in the Hoop Mills and had become surplus by reason
of the transfer to Calcutta”.
This is one of the findings attacked before us by the
Company on the ground that the Tribunal has failed to
realize that the Company’s operations must be considered as
a whole and that because of the interdependence of its
various departments a closure of one section, coupled with a
shortage of materials in another, is bound to affect its all
round working and therefore the question of retrenchment
cannot be looked at from the narrow point of view of only
one department but must be viewed in its all round setting.
We will deal with this later.
Another of the Tribunal’s findings on the “transfer” aspect
of the case was that a cut in profits is not in itself a
good ground for retrenchment. It held that retrenchment can
only be made when there is a total closure of the mill “or
when for any such other reason the workmen become surplus”.
The final conclusion of the Tribunal was that the
retrenchment was “wholly unjustified”. Accordingly, it set
aside the retrenchments and held that the
1320
affected workmen will be deemed to be “still in service”.
and directed that they be reinstated. The appeal of the
Mazdoor Union was partly allowed and that of the Company
dismissed.
This impelled the Company. to do the following things:
(1)to file a writ petition in the Allahabad High Court on 4-
8-1952. This was dismissed by that Court on 9-4-1953 and
Civil Appeal No. 301 of 1955 is the appeal to us against
that order;
(2)to file two appeals to this Court against the order of
the Labour Appellate Tribunal. These appeals are Civil
Appeal No. 22 of 1955 and Civil Appeal No. 22-A of 1955.
This judgment covers all three appeals.
Mr. G. C. Mathur, who appeared for the Mazdoor Union, raised
a preliminary objection against the Company’s appeals based
on the following facts. The Company had appealed to this
Court against the Labour Appellate Tribunal’s decision on
26-8-1952. The petition was summarily dismissed on 10-9-
1952. Counsel contended that barred the present appeals:
Civil Appeal 22-A of 1955 because it is an appeal against
the very order that is now under appeal, and Civil Appeal
301 of 1955 on the basis of res judicata because it raises
the same points as were raised in the petition for special
leave which was dismissed.
We rejected this objection because the previous petition
for appeal does not appear to have been dismissed on the
merits but on two technical grounds. It is true the order
of dismissal is general but the office note states (1) that
no certified copy of the decision appealed against was filed
though Order 13, rule 4, of the Rules of the Supreme Court,
requires that and (2) that the reliefs sought in the
petition for special leave and in the writ petition before
the High Court are the same. It is evident that formed the
basis of the order of dismissal especially as it is the
usual practice not to entertain an appeal here when a
similar matter is pending in the High Court,
1321
Before we come to the merits it will be necessary to set out
the grounds on which the High Court proceeded. The learned
Judges were concerned with a writ for certiorari and so
naturally focussed their attention on questions of
jurisdiction rather than on the merits. They considered
that the Adjudicator’ was free to take into consideration
all matters bearing on the question of retrenchment and to
consider whether it was “absolutely necessary” to retrench
the workmen. They looked at Standing Order 16(a) and
decided that the Adjudicator had jurisdiction to determine
the scope and meaning of this Order and that he and the
Labour Appellate Tribunal were competent to hold that these
orders meant that the Company was not entitled to take what
the learned Judges called the “extreme step of retrenchment”
so long as it was possible for it to “lay off ” the workmen.
That at once raises questions about the scope and authority
of an adjudicator under the Industrial Disputes Act. But
that, we feel is now settled by authority. The Federal
Court held in Western India Automobile Association v.
Industrial Tribunal, Bombay(1) that adjudication does not
mean adjudication according to the strict law of master and
servant and held that an adjudicator’s award may contain
provisions for settlement of a dispute which no Court could
order if it was bound by ordinary law. They held that
Industrial Tribunals are not fettered by these limitations
and held further that an adjudicator has jurisdiction to
investigate disputes about discharge and dismissal and,
where necessary, to direct reinstatement.
That decision was followed with approval by this Court in
State of Madras v. C. P. Sarathy(2) and it was again pointed
out that the scope of an adjudication under the Industrial
Disputes Act is much wider than that of an arbitrator making
an award. It would be pointless to cover the same ground;
so we must take that now as settled law.
All the same, wide as their powers are, these Tri-
(1) [1949] F.C.R 321, 345. (2) [1953] S.C.R. 334, 348,
1322
bunals are not absolute and there are limitations to the
ambit of their authority. In Bharat Bank Ltd. v. Employees
of Bharat Bank Ltd.(1) this Court held by a majority that
though these Tribunals are not Courts in the strict sense of
the term they have to discharge quasi judicial functions and
as such are subject to the overriding Jurisdiction of this
Court under article 136 of the Constitution. Their powers
are derived from the statute that creates them and they have
to function within the limits imposed there and to act
according to its provisions. Those provisions invest them
with many of the “trappings” of a court and deprive them of
arbitrary or absolute discretion and power. There is, in
our opinion, an even deeper reason which is hinted at in the
judgment of Mahajan J. (as he then was) at page 500 where he
says that “benevolent despotism is foreign to a democratic
Constitution”. That, in our opinion, is the heart of the
matter. When the Constitution of India converted this
country into a great sovereign, democratic, republic, it did
not invest it with the mere trappings of democracy and leave
it with merely its outward forms of behaviour but invested
it with the real thing, the true kernel of which is the
ultimate authority of the Courts to restrain all exercise of
absolute and arbitrary power, not only by the executive and
by officials and lesser tribunals but also by the
legislatures and even by Parliament itself. The
Constitution established a “Rule of Law” in this land and
that carries with it restraints and restrictions
that are foreign to despotic power.
Despite this, however, the Courts must always exercise
caution and see that they do not substitute their own
judgment and discretion for that of these Tribunals, for, as
Mahajan, J. said in Bharat Bank Ltd. v. Employees of Bharat
Bank Ltd.(1) the overriding powers of this Court under
article 136 are exceptional; and he went on to point out
that-
“extraordinary Powers of this character can only be
justifiably used here there has been a grave miscarriage of
justice or where the procedure adopted by
(1) [1950] S.C.R. 459, 497.
1323
the Tribunal is such that it offends against all notions of
legal procedure”.
Now the position in the present case is this. The Tribunals
are directed by section 7 of the Industrial Disputes Act to
adjudicate industrial disputes “in accordance with the
provisions of the Act” and section 11 directs them to follow
“such procedure as may be prescribed”. The procedure for
the Uttar Pradesh Tribunals is laid down by the U.P. State
Industrial Tribunal Standing Orders, 1951. Very broadly it
follows the pattern of the civil Courts. Once the reference
is made by Government, the Tribunal has to take the
pleadings of the parties in writing and to draw up issues.
Then it takes evidence, hears arguments and finally
pronounces its “judgment” “in open Court”. It is evident
from this that though these tribunals are not bound by all
the technicalities of civil Courts, they must nevertheless
follow the same general pattern. Now the only point of
requiring pleadings and issues is to ascertain the real dis-
pute between the parties, to narrow the area of conflict and
to see just where the two sides differ. It is not open to
the Tribunals to fly off at a tangent and, disregarding the
pleadings, to reach any conclusions that they think are just
and proper.
What exactly was the dispute in the present case? The
broad conflict was of course about the retrenchment and the
Tribunal was asked to decide whether the retrenchment of
these 103 persons was unjustified; but that by itself left
the issue much too broad, so it was necessary to
“particularise” and that was done in the pleadings.
The Company justified its action on two grounds: (1)
because of the shortage of scrap and (2) because of the
stoppage of work in the Hoop Department consequent on the
orders of Government. But none of the persons retrenched
came from the Hoop Department and the Company explained that
was because of the interdependence of its various
departments and, taking the retrenchments in groups,
department by department, it explained just why reduction
was effected in those particular places. In
167
1324
this way, it dealt serially with the retrenchments in(1) the
Scrap Department, (2) the Cast Iron Foundry,(3) the Punching
and Pressing Department, (4) the Watch and Ward Department
and (5) the Clerical Department.
The Company also made the following assertions, (1) that
retrenchment is a necessary incidence of an industry and
that the discretion of the management should not be
interfered with; (2) that it is the exclusive function of
the management to determine the size of its working force
and (3) that the employer must be the sole judge as to how
economically or efficiently its business is to be run.
The Mazdoor Union retorted that the retrenchments were not
done in good faith. It denied that there was any shortage
of scrap but admitted the interdependence of the various
departments and used that fact as an argument to indicate
the Company’s bad faith. The Union said the very fact that
there had been no retrenchment in the department that was
directly affected, namely the Hooping Department, and that
there was no retrenchment in certain allied departments that
would have been the first to be bit, had there been any real
shortage of scrap, showed that the reasons given by the
Company for the retrenchment were untrue. In particular,
the Union pointed out that there had been no retrenchment in
the following departments which, according to it, would have
been the hardest hit had there been any truth in the
Company’s case namely, (1) the Furnace Department, (2)
Rolling Mill Department, (3) Workshop, (4) Painting and
Bundling, (5) Works and Maintenance. Then, as regards the
Foundry Department and the Scrap Department where there bad
been retrenchments, the Union said that these departments
bad sub-sections and yet there were no retrenchments in the
sub-sections that would have been hit if the Company’s
allegations were true.
The Union gave no reply to the Company’s assertions about
its right to retrench in the absence of bad faith-, its
right to determine the size of its work-
1325
ing force and its right to judge of the economy and
efficiency of its business.
The Company filed a written rejoinder and explained in
detail why there had been no retrenchments in the places
where, according to the Union, there should have been on the
facts alleged by the Company and it again explained why it
had retrenched workers in the departments which, according
to the Union, ought to have been the hardest hit. This
explanation again brought out the interdependence of the
various departments.
Instead of drawing up issues, as it is required to do by
Standing Order 22 of 1951, and determining just where the
parties disagreed, the Adjudicator at once proceeded to
record evidence and entered upon a rambling enquiry which
embraced questions which had not been raised at all. On the
only point on which the parties were really at issue, namely
the good faith of the management, the findings were in
favour of the Company. So also the Adjudicator accepted the
Company’s assertion about its right to determine the size of
its labour force and to effect retrenchment where necessary
subject only to the proviso which the Adjudicator added,
namely that this must be done in good faith; and indeed the
Mazdoor Union had not challenged these assertions in its
written statement.
The Adjudicator said-
“It is however an accepted principle that such changes as
are being done by the management now form a part of
managerial discretion and cannot be interfered with unless
it is coloured with the element of victimisation or unfair
labour practice”.
But despite this, and despite his findings about good
faith, the Adjudicator considered that, in spite of it all
“the right of the workmen has to be safeguarded to certain
extent”.
What is left of the right if the “accepted principle” be
what he says it is-and if there is no victimisation or bad
faith, he did not proceed to explain. If the principle he
enunciated and accepted is sound, then the only rights they
have are to complain of
1326
bad faith, victimisation and so forth. However, feeling
under a compulsion to safeguard these unexplained rights he
had recourse to Standing Order 16(a) and ignored Standing
Orders 19 and 20.
The “accepted principle” to which the Adjudicator refers
in the passage quoted above is implicit in Standing Orders
19(a) and 20(a). They deal with the termination of service
by an industrial establishment and prescribe a certain
quantum of notice in writing, and then comes this important
proviso in Standing Order 19 (a) -
“Provided that if a permanent workman feels that he has been
discharged for reasons not connected with his employment or
that the reason of discharge communicated to him is not
genuine, he may make an appeal to the Labour Commissioner.
The decision of the Labour Commissioner…………….
shall be binding on both the parties”.
Reading the body of Standing Order 19 (a) along with the
proviso in the light of the “accepted principle”, it is
evident that the only right the workman has, when his
services are lawfully terminated after service of due notice
and so forth, is to question the order on only two grounds-
(1)that he has been discharged for reasons not connected
with his employment, and
(2)that the reason of discharge communicated to him is not
genuine.
There is nothing in these Standing Orders to indicate
that retrenchment is a measure of last resort and that an
employer must continue to lay off his workmen however
uneconomical that may be to the business; still less that he
must lay them off in rotation and thus affect other workmen
who would not be affected by a legitimate order of
retrenchment. That cuts at the root of the “accepted
principle”.
In any event, the ground on which the adjudicator
proceeded was not a matter in dispute between the parties
because it was not raised in their pleadings and could not
have been put in issue bad the Adjudicator troubled to draw
up issues as he should have done. As Mahajan, J. said,
adjudicators and tribu-
1327
nals cannot act as benevolent despots and that is exactly
what it comes to when an adjudicator, after setting out,
correctly in our opinion the Company’s rights, holds against
the Union on the only grounds that it did raise and then
proceeds to give an award, not only on grounds that are not
raised but on grounds that fly in the face of the very
principles that he enunciated; and that only because he felt
that he was under a compulsion to “safeguard” the workmen to
“a certain extent”.
Both sides appealed to the Labour Appellate Tribunal and
the second ground of the appeal lodged, by the Mazdoor Union
was “that the award of the learned Adjudicator is quite
arbitrary” which, of course, is exactly what it was
And so also ground No. 9:
“That the learned Adjudicator has gone beyond his
jurisdiction in awarding relief on a question not, referred
to it by Government”.
That again we feel is justified. What was referred was
the question of the justification for retrenchment of
certain specified workmen. What was awarded was the laying
off of persons whose cases were not even considered, that is
to say, when the Adjudicator directed laying off in
rotation, his order necessarily affected persons who had
neither been laid off nor retrenched and whose cases not
even the Union had in mind. It is to be observed that the
Mazdoor Union complains about this part of the order in
ground No. 11 though on a different ground.
The Company also appealed against the Adjudicator’s order
and grounds Nos. 6, 9 and 24 of their appeal are directed
against that part of the order that deals with the lay off
of the workmen. Among other reasons advanced is that this
will adversely affect others who are not retrenched. The
other grounds repeat what was said in the company’s written
statement though in different language.
The Labour Appellate Tribunal contrasted Standing Order
15(a) with Standing Order 16(a) but also ignored Standing
Orders 19(a) and 20 which are the
1328
only ones that really apply to this case. It upheld the
finding of the Adjudicator that there was a shortage of
scrap but held that as the shortage was for only 6 months
retrenchment was not justified.
In point of fact, the Labour Appellate Tribunal is wrong
about the six months. It was under the impression that the
Adjudicator had come to that conclusion. But what the
Adjudicator said was that the shortage at best was for a
period of 8 or 9 months. The passage which the Appellate
Tribunal quotes is not the finding of the Adjudicator but
the argument advanced on behalf of the Company. The full
passage runs thus:
“Shri Mahalingam stated that Standing order 16(a) which
provides for a lay off of a maximum period of 12 days in a
month contemplates a temporary shortage of very short
duration. It could not apply to shortage of raw materials
lasting for more than 6 months and hence the Company’s right
to retrench is not affected by the aforesaid Standing
Order”.
The Appellate Tribunal quoted the portion we have
underlined but ignored the rest of the sentence and the part
that went before and concluded that the portion underlined
was a part of the Adjudicator’s findings.
However, even if we assume that the Tribunal would have
reached the same conclusion if it had realised that the
shortage was for as long as 8 or 9 months, the error into
which it has fallen is that the question of retrenchment
cannot be made to depend on the duration of the shortage or
even on the fact that those retrenched will be thrown out of
employment but on the effect that an omission to retrench
will have on the business. In some cases, laying off even
for 6 or 8 or 9 months might make the Company bankrupt,
therefore, if the Appellate Tribunal considered that it had
power to stop retrenchment for reasons other than those
given in the proviso to Standing Order 19(a) it was bound to
look into the Company’s finances and determine the question
of justification on that basis. The only question referred
was the retrenchment justified? and we find it
1329
impossible to see how that can be determined without
considering the question of good faith which in turn would
largely depend on the finances of the Company, on the
adverse effect that retention would have on the business and
on whether retention would mean the deadweight of an
uneconomic surplus and so forth.
Next, when the Appellate Tribunal turned its attention to
the transfer of the Hoop Mill to Calcutta, it agreed that
would have been a good ground for retrenching those who were
specifically engaged in the Hoop Mill but not the others.
But this takes an impossibly narrow view and ignores the
over-all working of a business concern and the repercussions
that a transfer of this kind would have on other parts of
the business. It totally ignores the pleadings of the
parties and, like the adjudicator, bases its conclusion on
some airy view of what it considers would be a good thing
for the workmen. That is not a decision “given in
accordance with the Act” and is as much open to objection on
that score as the award of the Adjudicator.
It is pertinent at this stage to refer to a decision of this
Court reported in Muir Mills Co. v. Suti Mills Mazdoor
Union, Kanpur(1) where Bhagwati, J. delivering the judgment
of the Court said-
“The considerations of social justice imported by the
Labour Appellate Tribunal in arriving at the decision in
favour of the respondent were not only irrelevant but
untenable”.
In the present case also we are of opinion that the
Adjudicator and the Labour Appellate Tribunal had adopted
the attitude of benevolent despots and have based their
conclusions on irrelevant considerations and have ignored
the real questions that arose for decision and the issues
that arose out of the pleadings of the parties.
It would not be right for us to substitute our judgment
and discretion for that of the Adjudicator and the Tribunal:
accordingly, as we are of opinion that the. real questions
that were in dispute between the
(1) [1955] 1 S.C.R. 991, 1001.
1330
parties were neither appreciated nor considered we have no
alternative but to remit the matter to the Labour Appellate
Tribunal for a proper decision after drawing up issues that
arise out of the pleadingS, considering them and deciding
the dispute accordingly, with liberty of course to remit the
case to the Adjudicator for a retrial or for the taking of
further evidence if it is of the opinion that the omission
to draw up issues and focus attention on the points that
seem to be in dispute has had the result of shutting out
evidence that might otherwise have been led.
An agreement said to have been reached between the parties
on 7-9-1953 was placed before us towards the end of the
arguments but we have not looked at it because counsel for
the Mazdoor Union said it did not cover the case of these
retrenched workers. The Company insisted that it did. We
were not prepared to investigate that dispute at that late
stage but we make it plain that the Labour Appellate
Tribunal will be at liberty to consider it or not as it
deems right after hearing what both sides have to say
about it.
The award and the decision of the Labour Appellate
Tribunal are set aside and the case is remitted to the
Labour Appellate Tribunal for a re-bearing of the appeals
filed before it and for a fresh decision in the light of the
foregoing observations.
We will, however, have to make some interim arrangement
for payment of what may be termed a sort of subsistence
allowance to the affected workmen during the pendency of
those further proceedings. As there is no agreement between
the parties on the subject, we leave it to the Labour
Appellate Tribunal or the Adjudicator, as the case may be,
to make suitable orders in this respect.
There will be no order, about costs as neither party is to
blame for what has happened.
1331