1. This order will dispose of two connected civil writs Nos. 1204 of 1965 and 224 of 1966 in which industrial disputes have arisen between the National Tobacco Co. of India Ltd. (hereinafter called the Company) and its workmen. The Company was registered under the Indian Companies Act in the State of West Bengal and had its head office at Calcutta. It carried on business throughout the territories of the Union of India. According to its workmen, the Company had different branches called Circles with head-quarters at various places and one of such branches which comprised the territories of Punjab, Himachal Pradesh and Jammu and Kashmir, had its headquarters at Jullundur Cantt. The Company had, however, denied that it had any branches called Circles. Its case was that for the purpose of distributing its products, it maintained depots in different parts of the country and the various areas had been grouped into territories and one such depot was maintained by the Company at Jullundur for distributing its products in the States of Himachal Pradesh, Jammu and Kashmir and Punjab.

2. Shri B.D Kapur was incharge of that depot at Jullundur and its function was to despatch stocks to the stockists. The Company maintained three offices in India, namely, at Delhi, Madras and Bombay besides, the head office at Calcutta. These offices carried out the directions issued by the head office in the territories which were linked to each one of these offices. The administrative control, however, was exercised solely by the head office and none the other offices or depots exercised any independent or effective control either over the Company's business or the Company's employees working in the territory.

3. The depot at Jullundur distributed the goods in accordance with the indents which were received from the stockists according to the trade practices. Shri H.B Dewan was the circle manager and his duties consisted of supervising sales in the market and keeping an eye on the activities of the other competitors in the trade. He had no control on the business of the Company in the territories of Punjab, Himachal Pradesh and Jammu and Kashmir or over the employees who had been working in those areas. According to the workmen, the employees under the Jullundur Branch of the Company consisted of section salesmen, propagandists, local travelling salesmen, local salesmen, depot incharge, clerks, peons, drivers, coolies and chaukidars. The total number of the employees working under the Jullundur Branch, according to the workmen, came to 55 out of whom 43 drawn from the categories of section salesmen, propagandists, local travelling salesmen, salesmen and drivers formed themselves into a trade union called the National Tobacco Company Employees Union, Jullundur (hereinafter referred to os the Union) in March, 1964.

4. The case of the Company, on the other hand, was that the employees who worked in the Jullundur depot were the coolies, chaukidars, peons, clerks and the depot incharge. The section salesmen, propagandists, local travelling salesmen, local salesmen and drivers did not belong to the depot establishment. They were neither associated with the Jullundur depot nor had they anything to do with the functional activities of the depot. The total number of employees in the Jullundur depot did not exceed 12. The strength of section salesmen, propagandists, local travelling salesmen, local salesmen and drivers in the Jullundur Region, who were operating in the States of Punjab, Himachal Pradesh, and Jammu and Kashmir, was 43 on 3rd of August, 1964 and these employees belonged to the establishment of the head office in Calcutta. They sent their daily sales reports to the head office with a copy to the Delhi Office but none to the circle manager at Jullundur Cantt. They did not draw their salaries, travelling allowance, or any other payment from the Jullundur depot. The orders of their appointment, transfers and dismissals, etc. were not made or regulated by Shri H.B Dewan, the circle manager or by Shri B.D Kapur incharge of the Jullundur depot.

5. In C.W 1204/1965, the Union on 31st of March, 1964, served a charter of demands on the circle manager, Jullundur, and their case was that with a view to disband and to victimise its active organisers, the Company transferred Shri G.C Kaura, President of the Union of Cuttack in the State of Orissa by an order dated 8th of April, 1964. The Union, therefore, served a supplementary notice of demand on the Company asking for the cancellation of the order of transfer of its President. According to the Company, Shri G.C Kaura was transferred in the interests of the business of the company and in accordance with the terms and conditions of his employment. Since according to the Union, the Company did not accede to any of the demands raised by it, an industrial dispute arose between the Union and the Jullundur Branch and conciliation proceedings were initiated by the Conciliation Officer, Jullundur. Those proceedings, however, failed and the Punjab Government, by notification dated 3rd of August, 1964, referred the industrial dispute between the workmen and the management of the Company to the Labour Court. Rohtak.

6. The position taken by the Company before the Labour Court was that the employees, whom the Union sought to represent, were salesmen and that salesmen were not workmen as defined in section 2(s) of the Industrial Disputes Act, 1947, (hereinafter called the Act) and that the persons who were employed in the depot were not interested in the dispute. It was also averred by the Company that since the administrative control over the employees of the Jullundur circle was exercised by the head office at Calcutta and because the Company did not maintain any branch office in Jullundur, to which the employees represented by the Union were alleged to have been attached, the Punjab Government was not the ‘Appropriate Government’ competent to refer the dispute to the Labour Court. On the pleadings of the parties, the following two preliminary issues were framed:

1. Which of the employees of the Respondent Company employed in their Jullundur Branch are workmen as defined in Clause (s) of Section 2 of the Industrial Disputes Act?

2. Whether the Punjab Government is not competent to refer this dispute as the Company's Head Office is at Calcutta and it has its Branches all over India.

7. On 12th of February 1965, the Labour Court decided issue No. 2 in favour of the Company and without recording any finding on issue No. 1, refrained from proceeding with the reference. Against that award, civil writ No. 1204/1965 was filed in this Court on 3rd of May 1965 by the workmen.

8. In civil writ No. 224/1966, the Union served a charter of demands on the circle manager with regard to the termination of services, retrenchment and transfer of workmen, but the management, according to the workmen, did not accede to any of them. Thereupon, industrial disputes arose between the Union and the Company which led to the conciliation proceedings by the Conciliation Officer, Jullundur. Those proceedings, however, failed and the Punjab Government referred those disputes, being industrial reference Nos. 12, 16 and 26 of 1965, by notifications dated 17th July, 25th August and 27th September, 1965 respectively, to the Labour Court, Jullundur. On the pleadings of the parties the Labour Court framed the following preliminary issues:

1. Whether the appropriate Government in relation to the dispute in question was West Bengal Government and, therefore, this reference by the Punjab Government is without jurisdiction?

2. Whether the matter covered by issue (1) is barred by the principle of res judicata?

3. What is the effect on this reference of the award dated 12th February, 1965 which was published in the Punjab Government Gazette, dated 12th March, 1965, and was given by the Labour Court. Rohtak in Reference No. 60 of 1964?

4. Whether the concerned workmen are “workmen” as defined in Section 2(s) of the Industrial Disputes Act, 1947?

5. Whether the dispute under reference is an “Industrial Dispute” within the meaning of the Industrial Disputes Act, 1947.

6. If issues (1) to (3) are proved, and issues (4) and (5) are not proved, whether this court has jurisdiction in the matter in dispute?

7. Whether the dispute with regard to Shri G.C Kaura was the subject matter of a previous reference No. 60 of 1964, which was decided by the Labour Court, Rohtak by an award, dated the 12th February, 1965 published in the Punjab Government Gazette, dated the 12th March, 1965 and that award is still in force and therefore the same dispute could not have been referred again for adjudication to this Court by the Punjab Government.

9. By the award dated 1st of December, 1965, the Labour Court held on issue No. 1 that the appropriate Government for making the references was the West Bengal and not the Punjab Government and, therefore, those references were without jurisdiction and invalid. On issues Nos. 4 and 5, it was held that none of the employees concerned in the reference, except Ved Parkash, was a workman as defined in Section 2(s) of the Act and that the disputes in those three references were not industrial disputes within the meaning of Section 2(k) of the Act. With regard to Ved Parkash, the finding was that he was a workman within the meaning of the Act, but as his case had not been sponsored by the Union representing the workmen of the Company, it being an individual dispute, the same could not be deemed to be an industrial dispute. On these findings, the Labour Court declined to proceed with the references and adjudicate on the merits of the dispute. That led to the filing of writ petition No. 224 of 1966 on 7-2-1966.

10. The common question that arises for decision in both these writ petitions is whether the Punjab Government was the ‘appropriate Government’ to refer these disputes to the Labour Court. The case of the Company was that it was the West Bengal Government, where the head office was situate, that was the appropriate Government for this purpose. The Company hid no branch office at Jullundur where they had only a depot which had no control over the various employees who had raised the disputes. According to Section 10 of the Act when an industrial dispute existed or was apprehended, the appropriate Government could refer it to a Labour Court for adjudication. ‘Appropriate Government has been defined in Section 2(a) as meaning the Central Government in relation to certain classes of disputes mentioned in Section 2(a)(i) and State Government in relation to other industrial disputes. It was conceded by the counsel for the parties that the disputes in these two writ petitions were not if the type mentioned in Section 2(a)(i) and, consequently, it was the State Government that could refer them for adjudication. Now the question for decision is as to which of the two State Governments, Punjab or West Bengal, had the jurisdiction to do so.

11. It is common ground that the Act does not give any guidance to solve this problem. This precise matter came up for decision before a Division Bench of the Bombay High Court, consisting of Chagla, C.J and Desai, J. in Lalbhai Tricumlal Mills Ltd. v. D.M Vin, 1956-1 Lah LJ 557 : (AIR 1955 Bom 403) where it was held.

“But what we are concerned with to decide is: where did the dispute substantially arise? Now the Act does not deal with the cause of action, nor does it indicate what factors will confer jurisdiction upon the labour court. But applying the well-known tests of jurisdiction a Court or tribunal would have jurisdiction if the parties reside within jurisdiction or if the subject-matter of the dispute substantially arises within jurisdiction.”

12. This dictum was approved by the Supreme Court in Management Of Indian Cable Co., Ltd., Calcutta v. Workmen, 1962-1 Lah LJ 409 (SC) and it was held that these principles were applicable for deciding which of the States had jurisdiction to make a reference under Section 10 of the Act. Now the question is: where did the disputes in the instant cases substantially arise? The Punjab Labour Court would have jurisdiction only if the parties resided within its jurisdiction or if the subject matter of the dispute substantially arose there. Did the Company reside within the jurisdiction of the State of Punjab on the date of reference? In other words, did it carry on business here at that time?

13. Explanation II to Section 20 of the CPC provided that a Corporation would be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it had also a subordinate office, at such place. Consequently, the Company would be deemed to carry on business either in Calcutta where it had its sole or principal office, or in the State of Punjab, if it could be proved that it had its suboidinate office there and the cause of action had also arisen there. In the latter case, both the conditions have to be established. Now the question is: has the cause of action in respect of these disputes arisen in the State of Punjab? In C.W 1204/1965, the workmen wanted the management to revise their grades and scales of pay, the rates of dearness allowance and travelling expenses and to grant rest to them in lieu of rest days spent on tour by them. They also wanted the management to cancel the transfer orders of Shri G.C Kaura to Cuttack.

14. In C.W 224/1966, the workmen were challenging the termination of services, retrenchment and transfers of certain workmen. Could these demands of the workmen be met by the so-called branch at Jullundur, because it was only then that it could be said that the cause of action regarding these disputes had arisen there? This would depend upon the determination of the question as to what type of the so-called Branch the Company had at Jullundur and what control it exercised over the said workmen. In C.W 1204/1965 it had been found by the Labour Court that there was no evidence worth the name on the record to show that the Jullundur office exercised any control over the Company's employees in the Jullundur Region. On the other hand, it had been admitted before the Labour Court by the workmen's representative that the final administrative control was exercised by the head office and the appointments and dismissals of the employees were also made by the head office which also paid the wages. In C.W 224/1966, on this point, the Labour Court found:

“…………No satisfactory or cogent evidence has been produced by the workmen to prove that the said company has a regular or recognised branch at Jullundur, and that the concerned workmen worked or received any important directions or instructions from the Circle Manager in the performance of their respective duties. He is not maintaining a separate office apart from the depot, with which he has no concern and as deposed by Shri B.L Khanna, he functions from his house. No doubt, if a salesman or a propagandist does not discharge his duties properly, then the Circle Manager, as admitted by Shri B.L Khanna, pulls him up and makes a report against him to the Regional Office at Delhi, recommending the proposed action to be taken in the matter, but he has no authority or power to punish them himself. Thus, his relationship or contact with them was casual and not of a type which can invest (in) him with real authority or effective control or command over them.

The organisational set-up of the National Tobacco Company of India, Ltd. Calcutta, is that at present India is divided into four regions. One of those regions is Northern Region with Regional Office at Delhi and the area under this office comprises of the States of Delhi, Punjab, Himachal Pradesh, Jammu and Kashmir, Uttar Pradesh and Madhya Pradesh.

The said company has a depot at Jullunder, which is manned by a Depot-incharge, five clerks, four coolies, a part-time sweeper and two watchmen.

The sales organisation staff, comprising of section salesmen, salesmen, propagandists and drivers, is not attached to the said depot nor do they work or function under the Circle Manager, Jullundur Cantonment. All of this sales organisation staff is appointed, dismissed, discharged or retrenched from service by the Head Office of the said company which is at Calcutta. The transfers of these employees is made from one region to another by the Head Office at Calcutta, and within a region by the respective Regional Office. The leave to the sales organisation staff, posted in the Punjab area, is granted by the Regional Office Delhi and the remittances of all kinds, including salary and travelling allowance, to them is made directly by the Head Office at Calcutta. The Regional Office at Delhi prepares the tour programme of the said staff and sends it directly to them, but occasionally it routes through the Circle Manager. Important Instructions bearing on the sale of the cigarettes manufactured by the said company are received by the sales organisation staff at Jullundur either directly from the Head Office, Calcutta or from the Regional Office, Delhi.

It is true that all the 12 concerned workmen, with whom we are concerned in these three references, were posted at Jullundur Cantonment and they also performed their respective duties within the territorial limits of the Punjab State right uptil the passing of the impugned orders by the management but, I think, this circumstance taken by itself is not sufficient to hold that the appropriate Government for making these references was the Punjab State. The disputed orders which are the subject of adjudication in these proceedings, were all passed by the Head Office of the company at Calcutta and the concerned employees, therefore, ceased to be the employees of that company by virtue of those orders, which brought about a severance of the relationship of master and servant between them. I am not satisfied that the cause of action giving rise to these references had arisen within the State of Punjab, holly or partly, as contended by the learner representative of the workmen, conferring jurisdiction on the Punjab Government to make these references, particularly when the industry or establishment in which the concerned employees were working was situated and also functioned at Calcutta, where its Head Office was. As I have already held, the respondent company has only a depot and not a branch office at Jullundur Cantonment and none of the concerned employees is attached to that depot, ever if it was considered as a separate unit of the establishment or industry in question. They, therefore, throughout the period of their employment, remained under the administrative and functional control of the Head Office functioning at Calcutta and not at Jullundur Cantonment. In these circumstances, their mere performance of duties within the State of Punjab before the disputed action was taken against them by the management, could not invest the Punjab Government with jurisdiction to make these references for adjudication to this court under Section 10(1)(c) of the Industrial Disputes Act”.

15. These findings of fact given by the Labour Courts in both the Civil Writs were challenged by the learned counsel for the workmen, who submitted that the decision of the Labour Courts being on a collateral fact essential to the very existence of its jurisdiction, was open to review by this Court under Article 226 of the Constitution. According to him, the entire evidence regarding this matter had to be appreciated afresh by this Court in order to find out whether it justified the conclusion reached by the Labour Court. Reliance for this submission was placed mainly on a Bench decision of the Kerala High Court in Malabar Industrial Co., Ltd. v. Industrial Tribunal Trivandrum, AIR 1959 Ker 326.

16. It is common ground that the above mentioned findings given by the Labour Courts were findings of fact recorded after appreciation of evidence. Under what circumstances, can findings of fact be interfered with in writ proceedings, has been answered by the Supreme Court in Syed Yakoob v. K.S Radhakrishnan, AIR 1964 SC 477 where it was observed:

“The jurisdiction of High Court to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior court or Tribunal as result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding the Tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari.

A finding of fact recorded by the Tribunal cannot, however, be challenged in proceedings for a writ of certiorari on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding being within the exclusive jurisdiction of the Tribunal, the points cannot be agitated before a writ Court.”

17. It is undisputed that the present case was not covered by Syed Yakoob's case, AIR 1964 SC 477 and that being so, these findings cannot be reversed in these proceedings. But, according to the learned counsel for the petitioners, a distinction has to be made between a finding of fact recorded by the inferior tribunal on jurisdictional fact and other facts. With regard to the former according to the learned counsel, the entire evidence on which such a finding was based was open to review in writ proceedings and the observations in Syed Yasoob's case were not attracted in such a case. In Syed Yakboo's case, however, no such distinction has been pointed out by the learned Judges of the Supreme Court.

18. In an earlier decision in Raman and Raman Ltd. v. State of Madras, AIR 1956 SC 463 while dealing with tills matter, the Supreme Court had observed:

“There may be cases where the jurisdiction of an inferior tribunal may depend upon the fulfilment of some condition precedent or upon the existence of some particular fact. Such a fact is collateral to the actual matter which the inferior tribunal has to try, and the determination of whether it exists or not is logically and in sequence prior to the determination of the actual question which the inferior tribunal has to try.

In such a case, in certiorari proceedings a Court can enquire into the correctness of the decision of the inferior tribunal as to the collateral fact and may reverse that decision if it appears to it, on the materials before it to be erroneous. There may be tribunals, however, which by virtue of legislation constituting them, have the power to determine finally the preliminary facts on which the further exercise of their jurisdiction depends.

With respect to them, in such cases, their decision even if wrong on facts or law cannot be corrected by a writ of certiorari. In cases where the fact in question is a part of the very issue which the inferior tribunal has to enquire into, a Court will not issue a writ of certiorari although the inferior tribunal may have arrived at an erroneous conclusion with regard to it.”

19. Following this decision, let us see whether the decision of Labour Courts on this question is correct or being erroneous liable to be reversed on the basis of the material before it. Learned counsel for the petitioners in this connection referred to the various annexures filed in C.W 224/1966 in order to show that the Jullundur office was issuing important instructions to its employees which proved that it was exercising effective control over them. I had been taken through all these annexures, but in my opinion, they do not, in any way, indicate that the findings recorded by the Labour Courts, as mentioned above, were erroneous. In majority of those annexures, instructions had been issued to section salesmen, propagandists, local salesmen and drivers to sign the debit notes of the stockists especially in octroi rebates, after minutely going through the relevant octroi receipts; to attend sales conference fixed for particular dates; not to charge bus fare, goods freight and cooliage for effecting sales in the out station markets when van maintenance allowance was allowed to the distributors; to address their correspondence, which related to A.T M's Office, Jullundur, in the name of Circle Manager, etc. Some of these annexures were the copies of the tour programmes of certain employees.

20. From all those annexures, it could not be inferred that the final administrative control was exercised and the payment of wages and appointments and dismissals were made by the Jullundur office. Under these circumstances, it cannot be held that the findings recorded above by the Labour Courts were in any way erroneous. I has thus, to be found that it was only the Head Office at Calcutta which exercised final administrative control over the workmen and it was that office which made appoint pents and dismissals. Again, it was that very head office which paid wages to them. All other important instructions also were issued from the Calcutta office. In C.W 224/1966, it had further been found by the Labour Court that none of the concerned employees was attached to the depot at Jullundur, even if it was considered as a separate unit of the company. All the demands of the workmen could, therefore, be met only by the head office at Calcutta and the Jullundur office could afford no relief to them. That being so, it could not be said that any part of the cause of action had arisen in Jullundur. It may incidentally be mentioned that this point about any part of the cause of action having arisen at Jullundur was not taken up by the workmen before the Labour Courts in the present case.

21. Besides, the industrial disputes arise not necessarily at the place where the workmen are residing and working, but at the place where their employer was exercising effective control over them. In Lipton Ltd. v. Their Employees, AIR 1959 SC 676 an argument was raised that the industrial tribunal had no jurisdiction to make an award in respect of the employees of the Delhi office who were employed outside thea State of Delhi. While answering this, the Supreme Court held;

“All the workmen of the Delhi Office, whether they worked in Delhi or not, received their salaries from the Delhi Office; they were controlled from the Delhi Office in the matter of leave, transfer, supervision, etc. and, therefore, the Delhi State Government was the appropriate Government within the meaning of Section 2 of the Industrial Disputes Act, 1947 relating to the dispute which arose between Lipton Ltd. and the Union…………”

22. In this connection, reference may also be made to a Bench decision of the Madhya Pradesh High Court in Association of Medical Representatives (M & V) v. Industrial Tribunal Madhya Pradesh, 1966-1 Lab LJ 614 : (AIR 1967 Madh Pra 114) where it was held:

“………… The concerned salesman was no doubt residing in Madhya Pradesh……… The dispute whether the company was justified in discharging the concerned workman arose in Bombay inasmuch as he was employed by the Bombay Office of the company; he was paid by that office and his work was controlled and supervised by that office; and the discharge order was also passed by the Bombay Office………………”

23. Therefore, according to Explanation II to Section 20 of the CPC, the Company cannot be deemed to carry on business at Jullundur. The disputes in the instant case, consequently, did not arise in the State of Punjab and the Labour Courts were right in holding that the Punjab State was not the appropriate Government to refer the disputes to them.

24. It may be mentioned that during the course of arguments, learned counsel for the petitioners submitted that the charter of demands was presented by the workmen at Jullundur and the conciliation proceedings between the management and the workmen were also held at Jullundur and that being so, the Punjab Government could validly refer the disputes to the Labour Court on the failure of the conciliation proceedings.

25. There is no substance in this argument, because the submission of the charter of demands by the workmen or the holding of the conciliation proceedings would not invest the Punjab Government with the Jurisdiction to refer the disputes to the Labour Court. The principles for deciding which of the States had jurisdiction to make a reference under Section 10 of the Act have already been discussed by me above. In view of what I have held above, it is unnecessary to go into the other points arising in the writ petitions.

26. The result is that these petitions fail and are dismissed. There will, however be no order as to costs.

TVN/D.V.C

27. Petitions dismissed.