Citation Codes

Equivalent Citations

citation codes

Case Number

C.R Nos. 1320(W) and 177(W) of 1964-65 respectively

Judges

D. Basu, J.

Acts

INDUSTRIAL DISPUTES ACT
provisions of Section 46(1) of the Factories Act, 1948,

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Smart Summary

Structured Summary of the Opinion (D. Basu, J.)

Factual and Procedural Background

This opinion concerns two Rules related to the Bengal Water Proof Works and their workmen. The principal matter appears as C.R. No. 1320(W) of 1964, in which the Company (Bengal Water Proof Works) is the Petitioner and the Bengal Water Proof Workers' Union is Respondent No. 3. Other respondents include the State of West Bengal, the First Industrial Tribunal and the Assistant Labour Commissioner. By an order dated 9 October 1964, four issues were referred to the First Industrial Tribunal for adjudication and an award was made (reproduced at Annexure G of the Petition). The Company seeks to quash that award. The issues referred concern: (1) whether dismissals of two employees (Khagendra Lal and Santosh Kumar) were justified and what relief they should receive; (2) termination of services of Jogindar and Ram Swarup; (3) merger of a tiffin allowance with dearness allowance; and (4) entitlement of four canteen employees to retrenchment compensation.

A second Rule, C.R. 177(W)/65, is brought by the Union (the Company's workmen) challenging portions of the Tribunal's Award that were not favourable to the workmen. The court addresses the Tribunal's findings and legal consequences issue by issue for both Rules.

Legal Issues Presented

Whether the dismissal of Khagendra Lal and Santosh Kumar was justified, and what relief, if any, they were entitled to (Issue No. 1).
Whether the termination of services of Jogindar and Ram Swarup was justified (Issue No. 2).
Whether the merger of the tiffin allowance (Rs. 4 per month) with dearness allowance was justified (Issue No. 3).
Whether four employees of the Company's canteen were entitled to retrenchment compensation (Issue No. 4).

Arguments of the Parties

Petitioner (Company) — Principal Contentions

The Company seeks to quash the First Industrial Tribunal's award (Annexure G) in respect of several issues referred for adjudication.
With respect to Khagendra Lal, the Company maintained that Khagendra had no legal right to occupy the Institute Hall and that termination of his services on the ground of refusal to vacate was not contrary to law.
Regarding Santosh Kumar, the Company asserted that the permission to attend late was a temporary concession that did not ripen into a legal right or a condition of service; withdrawal of that permission did not amount to victimisation.
For Ram Swarup, the Company's case was that the employee had absented himself without submitting any application for leave (foundation of the charge against him).
Concerning the tiffin allowance, the Company relied on an agreement (dated 16 July 1949) by which the Rs. 4/- tiffin allowance would be added to dearness allowance after setting up a properly equipped canteen; the Company also served notice under Section 9-A of the Industrial Disputes Act prior to effecting the change.
As to the canteen employees, the Company maintained that the canteen was run by a Managing Committee constituted under the Factories Act rules, that the Committee employed the canteen workers and fixed their emoluments, and therefore the canteen workers (other than the clerk provided by the Company) were not employees of the Company.

Respondents / Union — Principal Contentions

The Union sought reinstatement of Khagendra and Santosh (the Tribunal had ordered reinstatement) and urged that they should receive back wages for the period of unemployment.
With respect to Jogindar, the workman's case (before the Tribunal) was that he was ill at the material time and had sent an application for leave during the notice period; the workman argued for relief on those grounds.
As to the canteen employees, the Union contended that the Canteen Managing Committee was effectively an agent of the Company and that the canteen employees ought to be regarded as employees of the Company for purposes of retrenchment compensation under Section 25(F) of the Act.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Ritz Theatre v. Workmen	Act of employer actuated by mala fides as a ground for Tribunal interference.	Listed by the Court among the established grounds on which a Tribunal may interfere with an employer's termination; used to show the Tribunal had no such basis here.
Indian Iron and Steel Co. v. Workmen	Victimisation or unfair labour practice as a ground for Tribunal interference.	Included by the Court in the catalogue of permissible grounds for interference; Court found no such circumstances in the present case.
Tata Oil Mills v. Workmen	Failure to conduct inquiry in accordance with principles of natural justice as a ground for interference.	Cited as authority for the proposition that a Tribunal may interfere if the employer's inquiry offended principles of natural justice; the Court found no such defect in the instant case.
Phulbari Tea Estate v. Workmen	That a Tribunal may interfere where an Inquiry Officer's finding is perverse or unsupported by evidence.	Cited as an example of the perverse-finding head; the Court noted no such perverse or unsupported finding here to justify Tribunal interference.
Andhra Scientific Co. v. Seshagiri (Standing Orders)	Act of employer or Inquiry Officer being ultra vires (e.g., contrary to standing orders) as a ground for interference.	Placed among the heads under which a Tribunal may properly interfere; the Court concluded none applied in the present proceedings.
Labour Appellate Tribunal decision, 1954 (I) L.L.J. 774	Management must bear a substantial part of canteen running expenses to fulfil statutory obligation.	The Petitioners relied on this decision; the Court observed that it does not require the management to directly appoint or be liable for all canteen employees' services, and therefore it did not assist the Petitioners' case that the canteen employees were Company employees.

Court's Reasoning and Analysis

The Court proceeded issue by issue, grounding its analysis in the statutory scheme of the Industrial Disputes Act and established jurisprudence delineating the limited circumstances in which a Tribunal may interfere with an employer's power to terminate services.

General jurisdictional premise: The Court emphasized that an Industrial Tribunal's jurisdiction to interfere with an employer's common-law power of termination is limited and confined to specific statutory or recognized grounds (mala fides/victimisation; breach of natural justice; perverse or unsupported inquiry findings; acts ultra vires/contrary to standing orders). The Tribunal must not assume the role of a conciliation officer or impose terms not supported by law.

Issue No. 1 — Khagendra Lal: The Tribunal found Khagendra's legal claim to occupy the Institute Hall had no basis and that the employer's termination was not tainted by victimisation. Despite these findings, the Tribunal ordered reinstatement conditional on Khagendra vacating the hall. The Court considered this to be an assumption of conciliation-like powers and beyond the Tribunal's jurisdiction because none of the recognized grounds for interference were present. Therefore, the Court held the award relating to Khagendra was without jurisdiction and quashed it.

Issue No. 1 — Santosh Kumar: The Tribunal held Santosh had no legal right to late attendance and that withdrawal of the concession did not constitute victimisation. Nevertheless, the Tribunal ordered reinstatement and directed employment in the general shift, specifying terms (no back wages, leave without pay counted as continuity). The Court viewed this as the Tribunal conferring legal rights which it had found did not exist, thereby acting beyond its adjudicatory jurisdiction and as a "benevolent despot." The Court quashed the Tribunal's award as to Santosh for want of jurisdiction.

Issue No. 2 — Jogindar and Ram Swarup: The Tribunal's award favored the Company regarding Jogindar; factual findings (rejected pleas of illness and late leave application) were not interfered with by this Court. As to Ram Swarup, the Tribunal found the termination was grossly improper and actuated by mala fides and ordered reinstatement with back wages. The Court noted that this finding was based on the Tribunal's factual determinations which the Petitioner could not re-open before the Court, and therefore the Petition must fail with respect to Issue No. 2 (i.e., the Tribunal award in favor of Ram Swarup stands).

Issue No. 3 — Tiffin Allowance merger: The Tribunal held that merging the Rs. 4 tiffin allowance into dearness allowance was unjustified. The Court examined documentary materials (Annexure B) showing a 16 July 1949 agreement under which the Rs. 4 would be added to dearness allowance after setting up a properly equipped canteen. The Court also noted the Company had served notice under Section 9-A of the Act before effecting the change. The Court concluded the Tribunal ignored relevant materials and that the Company's action could not be held ultra vires. The Tribunal's award on this issue was arbitrary and vitiated by error apparent on the face of the record and therefore quashed on this ground.

Issue No. 4 — Canteen employees' retrenchment compensation: The Tribunal found the canteen employees were not employees of the Company because (a) the canteen was set up pursuant to a joint works committee resolution agreed by company and workers; (b) the Managing Committee (constituted under Factory Act rules) employed the canteen workers; and (c) emoluments were fixed by the Managing Committee not the Company. The Company agreed to maintain the canteen, provide a clerk (with expenses) and contribute to running costs, but the day-to-day employment relationships were with the Managing Committee. The Court accepted the Tribunal's analysis, observed that the joint resolution was not contrary to the statute, and held the award on this issue was not vitiated by error.

In C.R. 177(W)/65 (the Union's challenge), the Court applied the same reasoning: because the Court had quashed the Tribunal's reinstatement orders (in C.R. 1320) as illegal and without jurisdiction, the Union's claim for back wages failed; the Tribunal's factual findings about Jogindar were not subject to interference; and the Tribunal's conclusion that canteen employees (other than the clerk) were not Company employees was upheld.

Holding and Implications

Core Rulings:

In C.R. No. 1320(W) of 1964: The Rule is made absolute in part. The impugned Award is quashed in so far as it relates to Issue No. 1 (dismissals of Khagendra Lal and Santosh Kumar) and Issue No. 3 (tiffin allowance merger). There will be no order as to costs.
As to Issue No. 2: The Petitioner's challenge to the Tribunal's award in favour of Ram Swarup fails (the Tribunal's factual findings supporting reinstatement and back wages for Ram Swarup stand and cannot be reopened by the Company in this Court).
As to Issue No. 4: The Tribunal's finding in favour of the Company (that the four canteen employees were not Company employees) was not challenged successfully and stands; C.R. 1320 succeeds in part but fails on this issue.
In C.R. 177(W)/65 (Union's Rule): The Union's challenges fail in respect of points where the Court either declined to disturb Tribunal's factual findings (Jogindar) or where the Tribunal's orders were quashed for want of jurisdiction (back wages claim premised on reinstatements that the Court found illegal). The Rule brought by the Union accordingly fails on the contested points addressed by the Court.

Implications for the parties:

The Tribunal's reinstatement orders for Khagendra Lal and Santosh Kumar are quashed; those employees are not entitled to the Tribunal-ordered reliefs (including the conditional reinstatements) as upheld by the Court.
Ram Swarup's reinstatement and award of back wages, being founded on the Tribunal's factual findings, remain in force because the Company could not reopen those findings before this Court.
The Company's merger of the Rs. 4 tiffin allowance into dearness allowance (pursuant to the earlier agreement and after notice under Section 9-A) was held lawful; the Tribunal's contrary award was quashed as arbitrary.
With respect to the canteen staff, except for the clerk provided by the Company, the workers employed by the Canteen Managing Committee are not Company employees for purposes of retrenchment compensation; the joint resolution and constitution of the Managing Committee under the Factories Act rules were held lawful.
No broader precedent or novel legal principle was announced beyond application of established limits on a Tribunal's jurisdiction; the decision operates principally to alter the parties' rights and obligations under the Tribunal's award in the specific matters adjudicated.

Note: This summary is confined to the contents of the provided opinion and does not add or infer facts beyond those stated by the Court.

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Bengal Water Proof Works (1940) Ltd. (In C.R No. 1320(W) Of 1964) Workmen Of Bengal Water Proof Works (1940) Ltd. (In C.R No. 177(W) Of 1965) v. State Of West Bengal And Others

The Judgment of the Court was delivered by

D. Basu, J.:— Both these Rules relate to the Bengal Water Proof Works and their Workmen.

2. C.R No. 1320(W) of 1964.

3. In this earlier Rule, the Company is the Petitioner and the Bengal Water Proof Workers' Union is Respondent No. 3. The other Respondents are—the State of West Bengal (No. 1) the First Industrial Tribunal (No. 2); the Asstt. Labour Commissioner (No. 4). 4 Issues were referred to the First Industrial Tribuanl for adjudication by the State of West Bengal by its order of October 9, 1964 and the award of the Tribunal thereon is at Annexure G (p. 55) of the Petition. The Petitioner company seeks to have that award quashed. Since the issue relate to separate matters, it would be convenient to deal with the findings of the Tribunal and the case of the Company with reference to the several issues separately.

Issue No. 1 was—

“whether the dismissal of Khagendra La and Santosh Kumar is justified? What relief, if any, are they entitled to”

(a) As regards Khagendra, the decision of the Tribunal was as follows:

“……the termination of service of Khagendra is not altogether justified. There are certain facts which may be urged in Khagendra's favour. Before the termination of his service he served for 16 years in the company without any blemish. The company al lowed him to remain in a portion of the Institute Hall for long 16 years…… From the tolerance shown by the company Khagendra came to entertain an exaggerated opinion about his own right in the matter of occupation of quarters. In these circumstances I am inclined to reinstate Khagendra and to set aside his order of dismissal if he vacates the hall room within the time which I shall allow………”

4. In the ordering portion of the Award, relating to Khagendra, the Tribunal directed—

“If Khagendra Lal …….vacates the Hall room…….within 15 days of the date of publication of this award………….and shifts to some other quarters offered by the company or to a place of his own he shall be reinstated in his former post on the same terms and conditions of his service as before. He will not get wages for the period of his unemployment but there will be no break in his service and his absence during the period of unemployment shall be counted as leave without pay.”

5. A prima facie reading of the above order leads one to conclude that the Tribunal had assumed to himself the role of a conciliation officer, which he could not, under the law. The principles relating to the scope of the jurisdiction of the Tribunal upon a reference for adjudication of an industrial tribunal under the Industrial Disputes Act (hereinafter referred to as ‘the Act’) are well-settled and that Act makes distinctions between the different modes in which an industrial dispute may be settled, namely, adjudication, conciliation and the like.

6. It is also settled by a number of Supreme Court decisions that the powers of the employer to terminate the services of his workmen under the general law is the same as that applicable to a master and servant at common law, subject only to statutory restrictions, if any. The jurisdiction of an industrial Tribunal to interfere with the exercise of the foregoing power is also limited to certain conditions following from statutory provisions and the general principles of natural justice, so that if a Tribunal interferes with the action of an employer in a case not warranted by any of these conditions settled by law, its award becomes invalid for want of jurisdiction. The broad heads under which a Tribunal may thus interfere are—

(i) That the act of the employer is actuated by mala fides Ritz Theatre v. Workmen (1), or victimisation or unfair labour practice Indian Iron and Steel Co. v. Workmen (2).

(ii) That the inquiry held by the employer was not conducted in accordance with the principles of natural justice Tata Oil Mills v. Workmen (3).

(iii) That the finding of the Inquiry Officer at the inquiry was perverse or not supported by any evidence at all Phulbari Tea Estate v. Workmen (4) and Tata Oil Mills case, ibid.

(iv) That the act of the employer or the finding of the Inquiry Officer is ultra vires, e.g, being contrary to the Standing Orders Andhra Scientific Co. v. Seshagiri (5).

7. In the instant case, none of the preceding conditions for interference by the Tribunal were present. The Tribunal held that the claim of the employee Khagendra to occupy the Institute Hall or to be provided with alternative accommodation with equal amenities had no foundation in law, and also that the employer's action in terminating the services of Khagendra on the ground of his refusal to vacate the Hall was not contrary to law nor vitiated by any motive of victimisation. After this finding, any assumption of jurisdiction by the Tribunal to reinstate Khagendra was patently unwarranted and may be likened, without meaning any offence, only to the intervention of a village salis, uncharted by any law.

8. I have not the least hesitation in holding that impugned Award must be quashed in so far as it relates to Khagendra.

(b) Coming now to the case of Santosh, it is evident that the order of the Tribunal was not warranted by his findings, in law. The employee was given a permission, temporarily, to attend late at the ‘A’ shift, on personal grounds, which was subsequently revoked by the Company, and, on the charge of late attendance, after such revocation, the employee was dismissed, mentioning at the same time that ‘the letter would not be operative if Santosh was agreeable to attend his duty punctually’. The contentions of the employee that the permission of late attendance had ripened into a condition of service as well as that its withdrawal amounted to victimisation were both rejected by the Tribunal. It was definitely held that Santosh had not acquired any legal right to attend late and that the withdrawal of the concession or favour granted to him did not amount to a punishment, which is involved in the concept of victimisation. On the other hand, the Tribunal held that—

“……Santosh was not justified in taking an exaggerated view of his own right and in refusing to obey the lawful order of the Company although that order operated harshly on him.”

9. Notwithstanding the above finding, the Tribunal ordered for reinstatement and for employing him in the general shift on the view that ‘Santosh would be able to attend his work punctually if he is given work in the general shift’, even though he held that he had no legal right to be employed in the general shift, at his choice, thereby causing inconvenience to the employer and discontent to other workmen.

10. It is obvious that the Tribunal was moved on humanitarian grounds owing to the difficult domestic conditions brought about by the insanity of Khagendra's wife. If so, it was open to the Tribunal to make some sort of a personal recommendation to the Company, by way of appealing to their good sense.

11. But that is not what the Tribunal did. He made the following legal command, after holding that the dismissal was not unjustified in law:

“As regards Santosh Kumar……I give a direction that if with in 15 days of the publication of the award ……he expresses his willingness………to work in the General shift, he shall be given such work by the Company in future. In case of reinstatement he will not get any wages for the period of his unemployment but that period shall be counted as leave without pay. There will be no break in the continuity of service”.

12. It is obvious that after holding that Santosh had no legal right to be reinstated or to work at a Shift of his choice, the Tribunal gave him those very rights, also dictating what would be the terms of such reinstatement as to break in service, leave of absence or the like, by laying down the law where the existing law did not assist the Tribunal in making such order. The Tribunal has, thus, acted as a ‘benevolent despot’ which, the Supreme Court has said, it should not do.

13. I have no hesitation in holding that the impugned award as to issue No. 1 regarding Santosh must be quashed on the ground of want of jurisdiction.

Issue No. 2.

14. This issue related to the termination of services of Jogindar and Ram Swarup. The award of the Tribunal was in favour of the Company so far as Jogindar was concerned.

15. It is the award in favour of Ram Swarup which has been challenged before me. The Tribunal has directed that this employee should be reinstated with back wages, since the termination of his service has been ‘grossly improper and actuated may mala fides’. This finding, however, is based on some findings of fact by the Tribunal which the Petitioner cannot reopen before this Court. The case of the Company was that the employee absented himself without submitting any application for leave. The Tribunal has held that the employee got himself treated at the Company, medical establishment and deposited his application for leave in the box kept at the Petitioner's office for the purpose. If so, the very foundation of the charge against Ram Swarup is gone. The Rule must therefore fail with respect to issue 2.

Issue No. 3.

16. This issue was whether the merger of tiffin allowance with dearness allowance was justified.

17. The finding of the Tribunal on this question was very short. It found that a cash amount of Rs. 4/- per month was payable by the Company to each workman as tiffin allowance, in terms of an award. But that the Company has now merged that sum with dearness allowan???e, without any justification.

18. It appears from Annexure B at page 5 of the Petition however that the workmen urged for increase of their dearness allowance and there was an agreement between them and the Company on this matter on July 16, 1949, by which it was settled that after the Company set up a properly equipped canteen, the cash allowance of Rs. 4/- on account of tiffin would be added to dearness allowance. Not that the workmen agreed to this merger without any interest of their own; such merger would give the workmen incidental benefits arising out of a higher dearness allowance. The change has also been effected after serving upon the workmen notice under Section 9-A of the Act (Annexure B, p. 9) in this behalf. The action of the company cannot, accordingly, be held to be ultra vires or without jurisdiction. On the other hand, the award of the Tribunal on this point is liable to be quashed, being arbitrary and vitiated by error apparent on the face of the record, in that the relevant materials bearing on the question have been ignored by the Tribunal.

Issue No. 4.

19. This issue was whether 4 employees of the Company's canteen were entitled to ‘retrenchment compensation’.

20. The finding has been in favour of the Company and has not been challenged by it.

21. In the result, the Rule is made absolute in part, so as to quash the impugned award with respect to issue No. 1 and Issue No. 3. There will be no order as to costs.

C.R 177 (W)/65.

22. In this Case, it is the Union of the Company's workmen who are the Petitioners and they challenge those portions of the Award of the Tribunal which are not favourable to the workmen.

Issue No. 1.

23. The Union urges that since the Tribunal has ordered reinstatement of Khagendra and Santosh, it should not have refused them back wages for the period of their employment. But I have held that the Tribunal's award of reinstatement is illegal and without jurisdiction. Hence, no claim for back wages is tenable.

Issue No. 2.

24. Jogindar was discharged on the ground that he failed to report to duty after termination of a strike, in terms of a tripartite agreement, after due service of notice. The workman's case is that he was ill at the material time and that he had sent an application for leave during the notice period of ten days. Both the pleas have been rejected by the Tribunal. Since these are findings of fact, this Court cannot interfere with the Award relating to Jogindar.

25. The finding of the Tribunal regarding his application for leave has however been challenged on the ground that the Tribunal should have given relief to the workman on the ground that he had sent is application within the ten-day period even though it might have been received by the Company beyond that period. But the T???partite agreement made no provision for illness or application for leave on that ground. Presumably, the ten-day period was allowed by the agreement taking into consideration legitimate grounds like illness or the like. When the Agreement did not make any separate provision for illness, neither the Tribunal nor this Court can substitute or override the Agreement. The question is also otherwise precluded by the Tribunal's finding that the Petitioner's case of illness was not acceptable.

26. I find no reason to quash the Tribunal decision on this issue.

Issue No. 4.

27. As regards the retrenched employees of the Canteen, the Tribunal rejected their claim for ‘retrenchment compensation’ under Section 25(F) of the Act on the ground that there was no relationship of employer and employee between those employees and the Company since they held their employment not under the Company but under the Canteen Managing Committee, which was a separate legal entity.

28. The case of the Union is that the Canteen Managing Committee is nothing but an agent of the Company, discharging the liability of the Company itself.

29. The Tribunal finds that the canteen was established in pursuance of the provisions of Section 46(1) of the Factories Act, 1948, which says—

“The State Government may make rules requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers.”

30. But the Tribunal finds that the persons employed by the canteen in question were not employees of the Company, for the following reasons—

(i) The canteen was set up in pursuance of a resolution passed at a works Committee, consisting of representative of the Company and the Workers (Annexure to the counter-affidavit), which lay down the liability of the Company as regards the Canteen and its employees.

(ii) The workers in question were employed by the Managing Committee of the Canteen, which was constituted by the preceding resolution.

(iii) The emoluments of the workers of the Canteen were fixed by the Managing Committee and not the Company.

31. It is evident that though the workers' representatives urged that the employees of the canteen should be the employees of the Company, that was not eventually accepted by the joint resolution and that the scheme which was adopted by the Resolution was agreed to by both parties ‘for the sake of good will’ between the parties, irrespective of the position under the Act.

32. By the Resolution, it was provided, inter???alia,—

(a) While the Company would maintain the existence of the canteen according to the provisions of the Act, it is the Canteen Managing Committee which would ‘look after the actual running of the Company’;

(b) It is to be noted that the ‘Managing Committee’ for the canteen is a statutory body, referred to in Section 46(2)(d) of the Act. Though the Rules made under the Act have been produced by either party before me, it is evident from the decision of the Award as well as the affidavits on record that Rules have been made under the Act and that the Committee has, in the instant case, been constituted in accordance with those Rules.

33. The provisions of the joint resolution as aforesaid cannot be said to be contrary to the provisions of the statute. The liability of the Company under the Act is only to set up and maintain a canteen, so that the workers may have the benefit of its existence. The terms and conditions of service of the staff of the canteen do not come under that liability, as has been rightly contended on behalf of the Company. The Company has ensured the continuance of the canteen by agreeing to provide a Clerk to the canteen with his expenses, and to contribute Rs. 100/- per month towards the running expenses of the canteen.

34. According to the joint resolution, therefore, the only employee of the Company amongst the staff of the canteen is the Clerk of the Canteen. The other workers have been appointed by the Managing Committee of the Canteen, which is a separate body set up under statutory provisions. On behalf of the Petitioners, reliance was placed on the decision of the Labour Appellate Tribunal, reported in 1954 (I) L.L.J 774. That decision, however, merely says that in order to fulfil its statutory obligation, the management must bear a substantial part of the running expenses of the canteen. There is no grievance on that score in the case before me. The cited decision nowhere says that the statutory provision requires that the Company must directly appoint and be liable for the services of all the employees of the canteen. In the result, the joint resolution cannot be held to be contrary to law nor can the award on this issue be held to be vitiated with any error apparent on the face of the record or the like.

35. This Rule fails accordingly. I do not make any order as to costs.

Bengal Water Proof W... v. State Of West Bengal...