PETITIONER:
JAHIRUDDIN
Vs.
RESPONDENT:
K.D. RATMI, FACTORY MANAGER, THE MODEL MILLS NAGPUR LTD.
DATE OF JUDGMENT:
22/11/1965
BENCH:
SATYANARAYANARAJU, P.
BENCH:
SATYANARAYANARAJU, P.
GAJENDRAGADKAR, P.B. (CJ)
WANCHOO, K.N.
RAMASWAMI, V.
CITATION:
1966 AIR 907 1966 SCR (2) 660
CITATOR INFO :
D 1973 SC1227 (55)
F 1975 SC2025 (6)
ACT:
Central Province and Berar Industrial Disputes
Settlement Act, 1947 (Act 23 of 1947), s. 16--Dismissal
within exemption in force--Withdrawal of exemption-
Application to Labour Commissioner for reinstatement--If
lies.
HEADNOTE:
The State of Bombay by a notification under the Bombay
Relief Undertakings (Special Provisions) Act 1958 declared a
Mill a 'relief undertaking' and exempted it from the
applicability of s. 16 of the C.P. and Berar Industrial
Dispute& Settlement-Act, 1947. During the period the
exemption was in force, the appellants-employees of the Mill
abstained from work and were dismissed for joining an
illegal strike. After the exemption was withdrawn and was
no longer in operation, the employees filed applications
before the Labour Commissioner claiming reinstatement with
back wages. The Labour Commissioner allowed the
applications. The Mill preferred revisions to the
Industrial Court which were allowed. In writ petitions
filed by the employees, the High Court confirmed the finding
of the Industrial Court, that the employees had no right to
file applications under s. 16 and the applications filed by
them before the Labour Commissioner were not maintainable.
In appeal to this Court.
HELD : The High Court was in error in holding that the
applications were not maintainable.
The right of an employee to claim reinstatement on a
wrongful dismissal existed de hors s. 16 of the Central
Provinces and Berar Industrial Disputes Settlement Act.
Section 16 provides a forum for a dismissed employee to
claim reinstatement but does not create a right. The effect
of an exemption granted by the notification issued under the
Bombay Relief Undertakings (Special Provisions) Act, is not
to destroy the right but to suspend the remedy prescribed by
s. 16 for enforcing that right during the period when the
exemption remains in force. The right can be enforced by a
dismissed employee by restoring to the provisions of s. 16
of the Act provided he makes the application within six
months from the date of his dismissal. [668 E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 156 of
1965.
Appeal by special leave from the judgment and order
dated August 12, 1963 of the Bombay High Court (Nagpur
Bench) in Special Civil Application No. 315 of 1962.
V. P. Sathe and A. G. Ratnaparkhi, for the
appellants.
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M. N. Phadke, J. B. Dadachanji, O.C. Mathur and
Ravinder Narain, for respondents Nos. 1 and 3.
N. S. Bindra and B. R. G. K. Achar, for respondent
No.4.
The Judgment of the Court was delivered by
Satyanarayana Raju, J. This is an appeal, by Special
Leave,, against the judgment of a Division Bench of the
Bombay High Court dismissing an application for the issue of
a Writ of certiorari under Art. 226 of the Constitution to
quash the order of the State Industrial Court at Nagpur.
For a proper appreciation of the questions that have
been raised in the appeal, it would be necessary to state
the material facts. The Model Mills, Nagpur (hereinafter
referred to as the Mills) is a public limited company
incorporated under the Indian Companies Act. On July 18,
1959, in exercise of the powers conferred by s. 18-A of the
Industries (Development and Regulation) Act, 1951, the
Central Government took over the management of the Mills and
appointed the 3rd respondent as the authorised Controller of
the Mills. On March 25, 1960 the State of Bombay (now the
State of Maharashtra), in exercise of the powers conferred
by ss. 3 and 4 of the Bombay Relief Undertakings (Special
Provisions) Act, 1958 (hereinafter referred to as the Bombay
Act) made a notification declaring the Mills to be a ‘
“relief undertaking” for a period of one year commencing
from March 26, 1960 and ending with March 25, 1961. The
appellants, eight in number, were, at the relevant time, the
permanent employees of the Mills. It would be convenient to
refer to them as “employees”. On December 15, 1960, when
the notification made by the State Government under the
Bombay Act was in force, the employees abstained from work.
Thereupon, the 1st respondent who is the Factory Manager of
the Mills issued notices to the employees to show cause why
they should not be dismissed from service for joining an
“illegal strike”. On January 6, 1961 the Factory Manager
passed orders dismissing the employees from service. On
January 12, 1961 the employees filed an application in the
High Court of Bombay for the issue of a writ of mandamus
directing the employees to be reinstated in service. On
April 4, 1961, the exemption of the Mills from the
application of s. 16 of the Central Provinces and Berar
Industrial Disputes Settlement Act (XXIII of 1947) (herein-
after called the State Act) was made. On April 25, 1961 the
employees filed applications before the Assistant
Commissioner Sup.CI./76-12
662
of Labour claiming reinstatement with back wages. The High
Court dismissed the Writ Petition filed by the employees
with liberty to file a fresh petition, if necessary, since
they were prosecuting their applications for relief of
reinstatement before the Assistant Commissioner of Labour.
In and by his order dated September 29, 1961, the Assistant
Commissioner allowed the applications filed by the
employees. He held that as there was no illegal strike the
orders of dismissal were unsustainable and should be set
aside. He directed that the employees should be reinstated
with back wages. Against the orders passed by the Assistant
Commissioner, the Mills preferred applications in revision
to the State Industrial Court. By its order dated February
16, 1962, the Industrial Court allowed the revision
applications filed by the Mills on the ground that the
applications before the Assistant Commissioner were not
maintainable. On the merits, the Industrial Court agreed
with the Assistant Commissioner that there was no illegal
strike. Aggrieved by the orders of the Industrial Court,
the employees filed an applicaton under Arts. 226 and 227 of
the Constitution for the issue of a writ of certiorari to
quash the orders of dismissal passed by the Factory Manager
and to direct their reinstatement with back wages. By its
judgment dated August 12, 1963 the High Court dismissed the
Writ Petition filed by the employees.
The High Court has held that the right to claim
reinstatement is not a right which is available to an
employee under the Common Law and that the relief of
reinstatement is a special right which has been conferred on
an employee under S. 16 of the State Act. In the opinion of
the High Court, the essential pre-condition for an employee
to claim relief under S. 16 is that he is an employee in an
industry to which that section is applicable and in respect
of which a notification under S. 16(1) also has been issued.
The High Court has reached this conclusion by reason of the
fact that the State Government issued a notification
exempting the Mills from the operation of S. 16 of the State
Act and that the exemption was withdrawn only on April 4,
1961 while the employees were dismissed on January 6, 1961.
In the opinion of the High Court, by reason of the fact that
s. 16 of the Act was not applicable, the dismissal of the
employees even if it was wrongful did not give them a right
to claim TV instatement and that to hold otherwise would be
to give retrospective operation to S. 16 of the State Act
which became applicable to the Mills on and from April 4,
1961 by reason of the withdrawal of the exemption. in the
result, the High Court confirmed the finding of the State
Industrial Court that the employees had
663
no right to file applications under s. 16 of the State Act
and the applications filed by them before the Assistant
Commissioner were not maintainable.
Now it is contended by Mr. V. Sathe on behalf of the
employees that though the industry was exempt from the
operation of certain sections including s. 16 of the Act, on
the date when the appellants were dismissed, there was an
existing industrial dispute relating to an industrial matter
between the employees and the Mills on April 4, 1961, when
the notification withdrawing the exemption in favour of the
Mills from the operation of s. 16 of the State Act was
issued by the Government, that on the date when the
employees filed an application under s. 16 before the
Commissioner of Labour, the period of six months provided by
that section had not elapsed and that therefore the
employees could invoke the provisions of s. 16 and claim
reinstatement. The learned counsel for the Mills, Mr.
Phadke, has endeavoured to support the judgment of the High
Court and the reasons on which its conclusions were rested.
The questions which arise for determination in this
appeal are :
1. Whether the right of a dismissed
employee to claim reinstatement, in
appropriate cases, exists. de hors s. 16 of’
the State Act ?
2. Whether by reason of the State
Government’s exemption of the industry from
the operation of s. 16 on the date when the
employees were dismissed from service, their
right to apply for reinstatement ceased to
exist ?
For a proper determination of the above questions, it is
necessary to refer to the material statutory provisions.
The State Act became law on June 2, 1947. S. 15 of the
State Act empowers the State Government to appoint any
person as Labour Commissioner for the State and he shall
exercise all or any of the powers of the Labour
Commissioner. Now s. 16 of the State Act as it stood at the
relevant date provides as follows:
"(1) Where the State Government by notification so directs, the Labour
Commissioner shall have power to decide an
industrial dispute touching the dismissal,
discharge, removal or suspension of an
employee working in any industry in general or
in any local area as may be specified in the
notification.
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.lm15
(2) Any employee, working in an industry to which the
notification under sub-section (1) applies, may, within six
months from the date of such dismissal, discharge, removal
or suspension, apply to the Labour Commissioner for
reinstatement and payment of compensation for loss of wages.
The different powers that could be exercised by the
Labour Commissioner are then set out in sub-s. (3) : “On
receipt of such application, if the Labour Commissioner,
after such enquiry as may be prescribed, finds that the
dismissal …. was in contravention of any of the provisions
of this Act or in contravention of a standing order…. he
may direct that the employee shall be reinstated forthwith
or by a specified date and paid for the whole period from
the date of dismissal …. to the date of the order of the
Labour Commissioner”.
It is common ground that s. 16 is made applicable to the
textile industry with effect from. March 1, 1951 by a
notification dated February 22, 1951. The provisions of s.
16 were thus applicable to the Mills till March 25, 1960, on
which date, however, the State Government issued a
notification in exercise of the powers conferred under ss. 3
and 4 of the Bombay Act declaring the Mills to be a ‘relief
undertaking’. The notification directed that the provisions
of S. 16 of the State Act and Chapter V-A of the Industrial
Disputes Act (XIV of 1947) (Lay-off and Retrenchment) shall
not apply to the Mills and that it shall be exempt
therefrom. This notification was extended by the State
Government on March 8, 1961 for a further period of one
year. A subsequent notification dated April 4, 1961 issued
by the State of Bombay amended the earlier notification by
withdrawing the exemption in so far as it related to s. 16
of the State Act.
The alleged participation by the employees in an illegal
strike occurred on December 15, 1960 and the 1st respondent
dismissed the employees in and by his order dated January 6,
1961. It was during the period between March 25, 1960 and
April 4, 1961 when the exemption was in force that the
incident which resulted in the Mills framing a charge
against the employees happened and the subsequent orders of
dismissal were passed.
It is submitted by the learned counsel on behalf of the
Mills that the right of an employee to claim reinstatement
has been granted by s. 16 of the State Act and since the
Mills were exempt
665
from the provisions of that section on the material dates
the employee had no right to claim reinstatement. The
Industrial Disputes Act (XIV of 1947) came into force on
April 1, 1947. For our present purposes, it is not
necessary to consider whether the right to claim
reinstatement by a dismissed employee existed before the
Central Act became law. The question about the jurisdiction
of an Industrial Tribunal to direct reinstatement of a
dismissed employee was raised as early as 1949, before the
Federal Court in Western India Automobile Association v.
Industrial Tribunal, Bombay(1). In that case, the Federal
Court considered the larger question about the powers of
industrial tribunals in all its aspects and rejected the
argument of the employer that to invest the tribunal with
jurisdiction to order reinstatement amounts to giving it
authority to make a contract between two persons when one of
them is unwilling to enter into a contract of employment at
all. This argument, it was observed, “overlooks the fact
that when a dispute arises about the employment of a person
at the instance of a trade union or a trade union objects to
the employment of a certain person, the definition of
industrial dispute would cover both those cases. In each of
those cases, although the employer may be unwilling to, do,
there will be jurisdiction in the tribunal to direct the
employment or non-employment of the person by the employer”.
The Federal Court also added
“The disputes of this character being
covered by the definition of the expression
‘industrial disputes’, there appears no
logical ground to exclude an award of rein-
statement from the jurisdiction of the
Industrial Tribunal.
For nearly two decades the decision of the Federal Court has
been accepted without question. Therefore, after the
Industrial Disputes Act, 1947, at any rate, the right of a
dismissed employee to claim reinstatement in proper cases
has been recognised. It is no doubt true that under the
Central Act the right to claim reinstatement has to be
enforced in the manner laid down by that statute, whereas
under the State Act it is open to an employee to claim
reinstatement without the intervention of the appropriate
Government. This would not however make any difference.
It is argued that by reason of the exemption granted by
the Bombay State when it declared the Mills to be a relief
undertaking, rights and obligations which accrued to the
employees or were incurred by the Mills during the period of
exemption, stood
(1) [1949] F.C.R. 321.
666
abrogated. This takes us to the question as to the legal
effect of ‘the exemption granted by the State of Bombay.
The notification issued by the State of Bombay is in the
following terms :
“The Government of Bombay hereby directs
that in relation to the said relief
undertaking and in respect of the said period
of one year for which that relief undertaking
continues as such, the provisions of (i)
Sections 16, 31 and 37, section 40 (in so far
as it relates to lock-out) and section 51 and
section 61 [in so far as it relates to clauses
(b) and (c) of Rule 36 of the Central
Provinces and Berar Industrial Disputes
Settlement Rules, 1949] Central Provinces and
Berar Act No. XXIII of 1947 and (ii) Chapter
V-A of the Industrial Disputes Act, 1947 (XIV
of 1947) shall not apply and the said relief
undertaking shall be exempt from the aforesaid
provisions of the Central Provinces and Berar
Industrial Disputes Settlement Act, 1947
(Central Provinces and Berar Act No. XXIII of
1947) and the Industrial Disputes Act, 1947
(XIV of 1947).”
The contention urged on behalf of the Mills proceeds on
the assumption that the right to claim reinstatement has
been granted by S. 16 of the State Act. As we have already
stated, S. 16 only recognises the right of a dismissed
employee, in appropriate cases, to claim reinstatement but
does not confer the right. The section provides the
procedure for enforcing the right. In this view, the right
of the dismissed employee to claim reinstatement was in
existence even during the period of exemption, but only it
could not be enforced under S. 16. Once the exemption is
withdrawn the status quo ante is restored and it is open to
the employee to file an application for reinstatement
provided, however, his application is within the period of
six months from the date of his dismissal.
Under S. 4 ( 1 )(a), on a notification being made, the
industry becomes a relief undertaking and the laws
enumerated in the Schedule to the Bombay Act shall not
apply. The Schedule specifies Chapter V-A of the Industrial
Disputes Act and S. 16 of the State Act. Section 4 ( 1 )(a)
(i) also provides that the relief undertaking shall be
exempt from the operation of the Acts mentioned in the
Schedule.
Learned counsel drew a distinction between the
expressions exemption’ and ‘suspension’ by relying upon the
meanings given to these words in the Oxford Dictionary.
‘Exempton’ means
667
‘immunity from a liability’ whereas the word ‘suspension’
means ‘put it off’. Basing himself on the dictionary
meanings, learned counsel for the Mills has contended that
the word ‘exemption’ is of a wider connotation than
‘suspension’ and means that the industry shall be immune
from the liabilities arising under the statutes specified in
the Schedule and that the order of dismissal having been
passed while the exemption was in force, the Mills were
immune from liability to reinstate the employees on their
dismissal being held to be wrongful.
The order dismissing the employees was passed on January
6, 1961 when the notification was in force. The employees
filed applications before the Commissioner of Labour on
April 25, 1961. On the date of their applications, the
exemption granted to the Mills by the State Government was
no longer in operation. The decision in Birla Brothers,
Ltd. v. Modak(1) has firmly established the principle that
for a dispute which originated before the Industrial
Disputes Act came into force but was in existence on the
date when that Act became law, the Act applied to the
dispute since it was in existence and continuing on that
date and no question of giving retrospective effect to the
Act arose. At p. 22 1, the learned Chief Justice, Harries,
who spoke for the Court stated thus :
“In my judgment, the Act of 1947 clearly
applies to the present dispute without any
question arising of giving the Act any
retrospective effect. It is true the dispute
arose before the Act was passed, but on April
1, 1947, when the Act came into force, the
dispute was in existence and continuing. The
employees were on strike and the strike
actually continued until May 19, that is, five
days after the Government made the order
referring the dispute to arbitration. In my
judgment, the Act must apply to any dispute
existing after it came into force, no matter
when that dispute commenced. There is nothing
in the Act to suggest that it should apply
only to disputes which originated after the
passing of the Act. On the contrary, the
opening words of s.10 of the Act make it clear
that the Act would apply to all disputes
existing when it came into force. The opening
words of s. 10(1) are—
If any industrial dispute exists or is apprehended, the
appropriate Goverment may, by order in writing etc.
(1) L.L.R. [1948] 2 Cal. 209.
668
It seems to me that these words make it
abundantly clear that the Act applies to any
industrial dispute existing when it came into
force and, therefore, the Act applies to this
dispute.”
It is argued by Mr. Phadke that the, notification dated
April 4, 1961 withdrawing the exemption is only prospective
and no retrospective effect can be given to it. This
argument proceeds on a fallacy. There is no question of the
notification withdrawing an exemption being prospective or
retrospective.
It is finally submitted by learned counsel for the Mills
that the validity of the order passed by the Factory Manager
dismissing the employees from service has not been
determined by the High Court and that the matter must be
remitted to that Court for a consideration of that question.
We may point out that the Assistant Commissioner of Labour
has held that the dismissal is wrongful. This conclusion is
affirmed by the Industrial Court. The validity of the
dismissal was therefore finally concluded in favour of the
employees. There is therefore no question of the validity
of the dismissal order now being considered by the High
Court.
We may now summarise the conclusions reached by us as a
result of the above discussion. The right of an employee to
claim reinstatement on a wrongful dismissal exists de hors
s. 16 of the State Act. Section 16 provides a forum for a
dismissed employee to claim reinstatement but does not
create a right. The effect of an exemption granted by the
notification issued under the Bombay Act is not to destroy
the right but to suspend the remedy prescribed by s. 16 for
enforcing that right during the period when the exemption
remains in force. The right can be enforced by a dismissed
employee by resorting to the provisions of s. 16 of the Act
provided he makes the application within six months from the
date of his dismissal. In the present case, the appellants
filed their applications within the period specified in S.
16 of the State Act. The High Court was in error in holding
that the applications were not maintainable.
In the result the judgment of the High Court and the
order of the Industrial Court are set aside and the award
made by the Assistant Commissioner of Labour is restored.
The appeal is allowed and the appellants will have their
costs in this Court paid by respondent No. 1.
Appeal allowed.
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