{"id":271145,"date":"1967-01-17T00:00:00","date_gmt":"1967-01-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/national-iron-and-steel-co-ltd-vs-the-state-of-west-bengal-anr-on-17-january-1967"},"modified":"2016-08-07T00:13:04","modified_gmt":"2016-08-06T18:43:04","slug":"national-iron-and-steel-co-ltd-vs-the-state-of-west-bengal-anr-on-17-january-1967","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/national-iron-and-steel-co-ltd-vs-the-state-of-west-bengal-anr-on-17-january-1967","title":{"rendered":"National Iron And Steel Co. Ltd. & … vs The State Of West Bengal & Anr on 17 January, 1967"},"content":{"rendered":"
Supreme Court of India<\/div>\n
National Iron And Steel Co. Ltd. & … vs The State Of West Bengal & Anr on 17 January, 1967<\/div>\n
Equivalent citations: 1967 AIR 1206, 1967 SCR (2) 391<\/div>\n
Author: G Mitter<\/div>\n
Bench: Mitter, G.K.<\/div>\n
           PETITIONER:\nNATIONAL IRON AND STEEL CO. LTD. & ORS.\n\n\tVs.\n\nRESPONDENT:\nTHE STATE OF WEST BENGAL & ANR.\n\nDATE OF JUDGMENT:\n17\/01\/1967\n\nBENCH:\nMITTER, G.K.\nBENCH:\nMITTER, G.K.\nHIDAYATULLAH, M.\nBHARGAVA, VISHISHTHA\n\nCITATION:\n 1967 AIR 1206\t\t  1967 SCR  (2) 391\n CITATOR INFO :\n R\t    1968 SC1076\t (8)\n F\t    1972 SC1942\t (25)\n\n\nACT:\n     Industrial disputes--One reference--when can be made in\nrespect to, several concerns--Gratuity, comprehensive order,\nif can be made--Contract labour, abolition, if Tribunal\t can\norder--Industrial    Disputes\t Act<\/a>,(14   of\t 1947)\t  S.\n25F<\/a>--Notice--Requirements.\n\n\n\nHEADNOTE:\n     The  appellants are four public limited companies,\t all\nseparately  registered under the Indian Companies  Act<\/a>,\t and\nall producing iron and steel goods though of different type.\nThey  had  a common General Manager who later  became  their\nWorks  Manager;\t they  had a common time  office,  a  common\ncanteen and  a\tcommon Labour officer.\tBy  one\t order\tof\nreference,   certain   industrial   disputes   between\t the\nappellants  (described in the reference as  first  appellant\nand \"their allied conerns) and their workmen, were  referred\nfor adjudication.  All the companies were not interested  in\nall  the  disputes.  The Industrial Tribunal gave  an  award\nagainst\t the  appellants.   In appeal  to  this\t Court,\t the\nappellants  contended  that (i) as  all,companies  were\t not\nconcerned  in all items of dispute, one order  of  reference\nembracing  all of them, should not have been made; (ii)\t the\ncomprehensive order of gratuity binding on all the companies\nwas bad as the Tribunal considered only balance sheets,\t and\nprofit\tand loss accounts and other documents of  the  first\nappellant  and\tdid not have before it those  of  the  other\ncompanies;  (iii)  Tribunal was wrong in  holding  that\t the\nretrenchment  of a workman was illegal as s. 25F<\/a> of the\t Act\nhad  not been complied with; and (iv) the  award  abolishing\ncontract  labour employed by one of the companies was  wrong\nas it would place the said concern in a very disadvantageous\nposition compared to other which did similar-kind of work.\nHELD:\t  (i)  In  order  to  find  out\t whether  there\t was\nsufficient functional integrality between the employers\t and\nwhether\t it was proper to have one reference in\t respect  of\nthe four concerns which were separate entities in the eye of\nlaw,  it was necessary to take an overall picture  of  their\nactivities  and\t the  interest, if any, which  they  had  in\ncommon. [395 G]\nThe  things the appellants had in common were sufficient  to\nshow  a community of interest so far as industrial  disputes\nwere  concerned.  If then wages, the dearness  allowance  or\nbenefit\t of  gratuity  or leave rules were  altered  in\t one\nwithout\t affecting  the\t others, the  industrial  peace\t and\nharmony\t in  the  other\t establishments\t were  bound  to  be\ndisturbed.   All the four concerns filed written  statements\nwhich appear to have been drafted by the same draftsman, and\nsame  set of lawyers represented them.\tAt no point of\ttime\nwas it ever shown to the Tribunal that there was any  possi-\nbility\tof  conflict  of  interest  between  them.    Making\nseparate  orders  of  reference in the\tcases  of  the\tfour\nestablishments\twould only have multiplied costs  enormously\nwithout\t any corresponding benefit to anybody.\tIt was\talso\npatent\tfrom the course of the proceedings that it was\tonly\nthe  first  appellant  which  played a\tmajor  part  in\t the\nadjudication before the Tribunal.  The other three  concerns\nwere  content  to  abide  by what  was\tdone  by  the  first\nappellant.. [395 H; 396 A-B, H; 397 B]\nWenger\t&  Co. v. Their Workman, [1963] II L.J. 403  at\t 308\nfollowed.\n392\nWorkman\t of Dimakuchi Tea Estate V. The Management of  Dima<\/a>-\nkuchi Tea Estate [1958] S.C.R. 1156, referred to.\n(ii) The scheme of gratuity as framed was quite a reasonable\none  on\t the  facts  and  figures  presented  by  the  first\nappellant.   The  three concerns were content  to  make\t the\nfirst  appellant  their mouthpiece in this respect  or\tthey\nmust  have  felt that the facts and figures,  if  disclosed,\nwould  have  been  such as would go against  them  and\tthey\ndeliberately refrained from producing them. [3.99 A]\nBurhanpur  Tapti  Mills Ltd. v. B. T. Mills  Mazdoor  Sangh<\/a>,\n(1965) L.LJ. 453, followed.\n(iii)\t  When a workman is asked to leave forthwith he bar.\nto be paid at the time when he is asked to go and cannot  be\nasked to collect his dues afterwards.\nThe  notice, in this case, bore the date November 15,  1958,\nterminating  services of the workman from November  17,\t and\nasking him to collect one month's wages in lieu of notice on\nNovember 20, 1958 or thereafter.  So S. 25F<\/a>  had  not\tbeen\ncomplied  with [399 E]\nBombay Union of Journalists v. The State of Bombay<\/a> [1964]  6\nS.C.R. 22.     followed.\n(iv) There  was\t no material before this Court\tto  conclude\nthat  the direction for partial abolition of the  employment\nof  contract labour in one of the companies was wrong.\t The\nabolition of contract system of labour can be ordered by  an\nIndustrial 'Tribunal if the facts justify it. [400 D-E]\n Standard  Vacuum  Refining  Co. of India  v.  Its  Workmen<\/a>,\n[1960], 3 S.C.R 466, followed.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 497 of 1965.
\nAppeal\tby special leave from the award dated  September  14
\n1963  of the Third Industrial Tribunal, West Bengal in\tCase
\nNo VIII-151 of 1959.\n<\/p>\n
Niren  De,  Additional Solicitor-General, Arun\tBahadur\t and
\nSardar Bahadur, for the appellants
\nJanardan Sharma and P. K. Ghosh, for” respondent No. 2(1).
\nThe Judgment of the Court was delivered by
\nMitter, J. This is an appeal by special leave from an  award
\nof   the  Third\t Industrial  Tribunal,\tWest  Bengal   dated
\nSeptember  14,\tG  1963.  The  appellants  are\tfour  public
\nlimited companies all separately registered under the Indian
\nCompanies  Act<\/a>\tand  all carrying on business  in  the\tsame
\npremises at Belur in the district of Howrah, the respondents
\nbeing  two unions, viz., NISCO Karmachari Sangha, Belur\t and
\nHowrah\tand  Belur  Iron and  Steel  Workers’  Union,Howrah.
\nNational  Iron\tand  Steel Co. Ltd was\tengaged\t in  the  H
\nbusiness  of  steel rolling and\t steel\tcasting.   Britannia
\nBuilding  & Iron Co. Ltd. was, engaged in steel\t fabrication
\nwork  while National Screw and Wire Products was engaged  in
\nthe manufacture of wires
\n 393<\/span>
\nand  nails.   Tatanagar\t Foundry Co.  Ltd.  carried  on\t the
\nbusiness  of manufacturing cast-iron sleepers for  railways.
\nBy  an order dated August 25, 1959, the Government  of\tWest
\nBengal\tmade  a\t reference under s.  10<\/a>\t of  the  Industrial
\nDisputes  Act, 1947-of what was described as  an  industrial
\ndispute between “Messrs National Iron & Steel Co. Ltd.,\t and
\ntheir  allied  concerns, viz., Tatanagar Foundry  Co.  Ltd.,
\nBritannia  Building & Iron Co. Ltd., and National Screw\t and
\nWire Products Ltd., all of P.O. Belur, District Howrah”,  on
\nthe one part and their workmen represented by the two unions
\non the other regarding the matters specified in the schedule
\nfor  adjudication.   Nine  issues  were\t set  forth  in\t the
\nschedule.   Issue No. 9 was abandoned at the hearing  before
\nthe Tribunal and need
\nnot be\t  considered  at  all.\t The other  issues  were  as
\nfollows\n<\/p>\n
\t       1.   Gratuity.\n<\/p>\n
\t       2 .  Sickness benefit.\n<\/p>\n
\t       3.   Leave Rules.\n<\/p>\n
\t       4.   Abolition of contract labour.\n<\/p>\n
\t       5.   Whether  termination of service of\tShri
\n\t      Bhadreswar Ghose is justified ?\n<\/p>\n
\t      6.    Whether the durwans and other members of
\n\t      the Watch & Ward staff are entitled to  weekly
\n\t      rest ?\n<\/p>\n
\t       7.   Whether retirement of Shri Gopal Das and
\n\t      Shri  Ramjatin Pandit at the age 55  years  is
\n\t      justified\t ? To what relief, if any, are\tthey
\n\t      entitled ?\n<\/p>\n
\t       8.   Whether  the  action of the\t Company  in
\n\t      retrenching the following masons is  justified
\n\t      ? To what relief, if any, are they entitled  ?\n<\/p>\n
\t      (i) Shri Sushil, (ii) Shri Sarojit, (iii) Shri
\n\t      Sukdeo, (iv) Shri Khalil.\n<\/p>\n
Issue  No. 8 referred to the retrenchment of  four  workmen.
\nOf  the four, the case of the first workman,  viz.,  Sushil,
\nalone was pressed at the hearing before the Tribunal.  There
\nis no dispute that all the four companies were not concerned
\nwith  all the issues.  Messrs National Iron and\t Steel\tCo.,
\nLtd.  was  primarily  concerned with  almost  all  of  them.
\nBritannia  Building & Iron Co., Ltd. was not concerned\twith
\nissues\t7 and 8 while National Screw & Wire  Products  Ltd.,
\nwas not interested in issues 4, 5, 7 and 8. Tatangar Foundry
\nCo.  Ltd. was not interested in issues 5, 7 and 8.  All\t the
\nthe companies were interested in the first three issues.
\nThe  award went against the companies and they have come  up
\nin  appeal.   Appearing\t on behalf of  the  appellants,\t the
\nlearned\t Additional  Solicitor-General raised  four  points.
\nFirst, he challenged the validity of the order of  reference
\nand  contended that as all the companies were not  concerned
\nin  all\t the  items  of\t dispute,  one\torder  of  reference
\nembracing all of them in some of which some
\n394<\/span>
\nof the appellants were interested while in others they\twere
\nnot,  should  not have been made.  His next  contention\t was
\nthat the award a,; regards gratuity was bad inasmuch as\t the
\nTribunal  considered only the balance sheets and profit\t and
\nloss accounts and other documents of National Iron and Steel
\nCo.  Ltd.   The\t Tribunal did not  have\t before\t it  similar
\naccounts   of\tthe   other  companies\t and   therefore   a
\ncomprehensive order of gratuity purporting to be binding  on
\nall  the companies was bad.  The third point raised  by\t the
\nlearned\t counsel  was  that the award  on  the\tquestion  of
\nretrenchment  of  the workman Sushil was not  justified\t for
\ngrounds\t which\twill  be  discussed  hereafter.\t  His\tlast
\ncontention  was\t that  the  abolition  of  contract   labour
\nemployed  by  Tatanagar\t Foundry Co.  Ltd.  ordered  by\t the
\nTribunal  was  wrong  inasmuch as it would  place  the\tsaid
\nconcern in a very disadvantageous position compared to other
\nconcerns  which did similar kind of work, namely,  producing
\niron sleepers for use in railways.\n<\/p>\n
Before\tconsidering  the  points  separately,  it  will\t  be
\nnecessary  to  refer  to certain  general  aspects  and\t the
\nposition  of  the four appellants vis-a-vis  their  workmen.
\nThe finding of the Tribunal is to the effect that there\t was
\nsufficient functional integrality between the four  concerns
\nwhich  would justify one order of reference.   According  to
\nthe Tribunal, there was sufficient evidence to show that the
\nlast three named concerns were allied concerns of the  first
\n(National   Iron   &   Steel   Co.   Ltd.)   having   common
\nadministrative heads and being located in the same  premises
\nat  Belur.  They had one General Manager, one common  Labour
\nOfficer and common Time Office.\t They also had a common cash
\noffice,\t a common shipping department and a  common  canteen
\nfor  all the workmen.  The workmen of all the concerns\twere
\nguided\tby common Standing Orders.  The Tribunal  relied  on
\nEx.  14\t being an office order dated  March  19,1957  issued
\nunder  the  signature of the Works Manager of  the  National
\nIron and Steel Co. Ltd. which shows that the workmen of\t all
\nthe  four concerns had consecutive check numbers.   By\tthis
\noffice\torder, check numbers of different  departments\twere
\nrevised in the table contained therein.\t Reference was\talso
\nmade  to Ex.  F. which contains a list of masons on roll  on
\nNovember  16,  1958.   According  to  the  evidence  of\t the
\nCompanies’ witness, Milan Kumar Dey, Ex. F. contained a list
\nof masons on the rolls of the four concerns.
\nWe  may\t here  refer,  in brief,  to  the  evidence  of\t two
\nwitnesses who were examined by the employers.  The  evidence
\nof  Tarini  Prosad Jha, the Labour Officer of  the  National
\nIron  and Steel Co. Ltd. at the time of adjudication  before
\nthe Tribunal went to show that there was one common  General
\nManager\t for  all  the four concerns which  had\t one  common
\ncanteen,  that one Mr. E. C. Watson was the General  Manager
\nof all the concerns and that the witness
\n 395<\/span>
\nhimself\t was  the common Labour Welfare Officer of  all\t the
\nfourconcerns.\tAccording  to Bireshwar Banerjee,  the\thead
\ntime  keeper  in the National Iron and Steel  Co.  Ltd.,  in
\n1962,  E. C, Watson was at first the General Mahager of\t all
\nthe  four concerns and he later became the Works Manager  of
\nall  of them.  The witness had been in charge of the  common
\ntime   office  of  all\tthe  four  concerns.   The   learned
\nAdditional  Solicitor General did not seek to show that\t the
\nTribunal had gone wrong in appreciating the evidence  placed
\nbefore\tit.   But  according to him, the  evidence  did\t not
\njustify\t coming to the conclusion that there was  sufficient
\nfunctional  integrality\t between the different\tconcerns  to
\nmake their disputes with their workmen the subject matter of
\none reference but that there should have been four  separate
\nreferences.   According to him, although the  four  concerns
\nwere  located  in the same premises nevertheless  they\twere
\nseparate and independent entities and could not be described
\nas one establishment.  All the four concerns could not\tgive
\nrelief\tin respect of all the issues.  If, for\tinstance,  a
\ndispute arose in one of the concerns as to retrenchment of a
\nparticular  worker  in\twhich the other\t concerns  were\t not
\ninterested, the dispute could not be made the subject matter
\nof a reference to which all the four concerns were  parties.
\nHe  referred  us  to several  sections.\t of  the  Industrial
\nDisputes Act<\/a> including ss.  IS (1), 18(3) and 33.  According
\nto  him, s. 18(1)<\/a> went to show that it was possible for\t the
\nworkmen\t of  one concern to arrive at a\t settlement  between
\nthemselves  and their employer and if such a settlement\t was
\narrived\t  it,\twould  not  necessarily\t  bind\t the   other
\nestablishments.\t  Further, s. 33<\/a> went to show that if  there
\nwas  a\tdispute\t in  one concern,  it  would  not  have\t any
\napplication to the case of workmen in another establishment.
\nHe  also  relied  on the case of Workmen  of  Dimakuchi\t Tea
\nEstate\tv. The Management of Dimakuchi Tea Estate<\/a>(1) and  to
\ncertain\t observations therein in support of  his  contention
\nthat  the  dispute  must  be one in  respect  of  which\t the
\nemployer was in a position to give relief.
\nIn order to find out whether there was sufficient functional
\nintegrality  between the employers and whether it  would  be
\nproper to have one reference in respect of the four concerns
\nwhich  are  separate  entities\tin the eye  of\tlaw,  it  is
\nnecessary to take an overall picture of their activities and
\nthe  interest,\tif any, which they had in common.   In\tthis
\ncase,  we  find\t that  all  the\t four  establishments\twere
\nengineering  concerns producing iron and steel goods  though
\nof  different types.  They had a common General Manager\t who
\nlater on became their Works Manager; they had a common\ttime
\noffice,\t a common canteen and a common Labour Officer’\tThat
\ntheir  Standing Orders were the same may be due to the\tfact
\nthat  they were all members of the Engineering\tAssociation.
\nBut  the things they had in common are sufficient to show  a
\ncommunity
\n(1)  [1958] S.C.R. 1156.\n<\/p>\n
396<\/span><\/p>\n
of interest so far as industrial disputes are concerned.  If
\nthe wages, the dearness allowance or benefit of gratuity  or
\nleave  rules  were  altered in\tone  without  affecting\t the
\nothers,\t the  industrial  peace and  harmony  in  the  other
\nestablishments were bound to be disturbed.The workmen of all
\nthe  four concerns were so closely associated that it  would
\nbe asking for trouble if the conditions of employment in one
\nconcern\t were varied to the benefit of the workmen  of\tthat
\nparticular establishment, leaving the conditions of  service
\nin  the other three concerns undisturbed.  In  our  opinion,
\nthe  observations of this Court in Wenger and Co.  v.  Their
\nWorkmen<\/a>\t apply\twith equal force to the facts  of  the\tcase
\nbefore us.  In that case, there were two orders of reference
\nof industrial dispute in regard to service conditions of the
\nemployees in a number of hotels and restaurants in the\tcity
\nof  New\t Delhi.\t  The Tribunal\theard  both  the  references
\ntogether  and  did  not\t make  any  classification   between
\nrestaurants and hotels for the purpose of fixing the service
\nconditions.  Negativing the contention of the employers,  it
\nwas observed by this Court
\n\t       “Thus,  the situation of the restaurants\t and
\n\t      the  hotels  which have been included  in\t the
\n\t      present reference shows that they are carrying
\n\t      on  the  same  business  in  about  the\tsame
\n\t      locality\tand it is desirable that  the  terms
\n\t      and  conditions  of service of  the  employees
\n\t      working in them should, as far as possible, be
\n\t      uniform.\t  Such\t uniformity  is\t  not\tonly
\n\t      conducive\t to  peace and harmony\tamongst\t the
\n\t      employees\t and their employers, but  would  be
\n\t      helpful to the managements themselves  because
\n\t      it  would\t tend to avoid migration  of  labour
\n\t      from one establishment to another.”\n<\/p>\n
In  that  case,\t some of the  hotels  and  restaurants\twere
\nsituated  in  Connaught\t Place\twhile  one  restaurant\t was
\nsituated  in  Karolbagh and another hotel  was\tsituated  in
\nAurangzeb  Road at some distance from Connaught\t Place.\t  In
\nthe case before us, all the concerns are housed in the\tsame
\npremises  and  the workmen of the  different  establishments
\nhave  ample opportunity of getting together during  the\t day
\nand discussing things which are to their common interest.
\nThe contention that all the employers were not interested in
\nall the reliefs claimed is not a matter of any moment in the
\ncircumstances  of  the case.  All the  four  concerns  filed
\nwritten statements which appear to have been drafted by\t the
\nsame  draftsman’  They were represented by the same  set  of
\nlawyers.   At  no  point of time was it ever  shown  to\t the
\nTribunal that there was any possibility
\n(1)  [1963] II L. L.J. 403 at 498.\n<\/p>\n
397<\/span><\/p>\n
of  conflict of interest between them.\tIt is admitted\tthat
\nsome  of the issues were common to all\tthe  establishments.
\nThe fact that some of the establishments were not interested
\nin  some of the other issues did not cause any prejudice  to
\nany body.  After all, when all the facts were placed  before
\nthe Tribunal by the same set of lawyers, the Tribunal had no
\ndifficulty in appreciating the different points of view\t and
\ngranting  appropriate  reliefs.\t  In  our  opinion,   making
\nseparate  orders  of  reference in the\tcases  of  the\tfour
\nestablishments\twould only have multiplied costs  enormously
\nwithout\t any corresponding benefit to anybody.\tIt  is\talso
\npatent\tfrom the course of the proceedings that it was\tonly
\nNational  Iron and Steel Co. Ltd. which played a major\tpart
\nin  the adjudication before the Tribunal.  The\tother  three
\nconcerns were content to abide by what was done by the first
\nnamed concern.\n<\/p>\n
In our opinion, there is no substance in the first point..
\nWith  regard  to the second point, it was  urged  before  us
\nthat’  the Tribunal went wrong in laying down a\t scheme\t for
\ngratuity  which\t would bind all the  four  concerns  without
\nconsidering the. financial position and other factors  which
\nhave to be considered before a scheme for gratuity could  be
\nformulated.    Reference.  was\tmade  by  counsel  for\t the
\nappellants to the case of BurhanpurTapti Mills Ltd. v. B. T.
\nMills  Mazdoor Sangh<\/a>(1) and to the principles  therein\tlaid
\ndown for fixing the terms of gratuity scheme.  It was  there
\nsaid (at p. 456) :\n<\/p>\n
\t       ..  …..  there are two general\t methods  of
\n\t      fixing the terms of a gratuity scheme.  It may
\n\t      be  fixed on the basis of\t industry-cum-region
\n\t      or  on the basis of units.. Both\tsystems\t are
\n\t      admissible  but  regard  must be\thad  to\t the
\n\t      surrounding circumstances to select the  right
\n\t      basis.. Emphasis must always be laid upon\t the
\n\t      financial\t position, of the employer  and\t his
\n\t      profit-making  capacity  whichever  method  is
\n\t      selected.”\n<\/p><\/blockquote>\n
\t       The Court went on to add
\n\t       ……..\t We  have next to  see\twhether\t the
\n\t      industrial  court was right in appraising\t the
\n\t      financial\t condition  and\t the   profit-making
\n\t      capacity\tof  the\t company.   A  scheme,\t for
\n\t      gratuity\tno  doubt imposes a  burden  on\t the
\n\t      finances of the concern but the pressure is ex
\n\t      facie  distributed  over the years for  it  is
\n\t      limited  to  the number  of  retirements\teach
\n\t      year.  The employer is not required to provide
\n\t      the  whole  amount at once.  He maycre  ate  a
\n\t      fund,  if he likes and pay from  the  interest
\n\t      which accrues on a capitalised sum  determined
\n\t      actuarially.  This is one way of providing the
\n\t      money.  Ordinarily the payment is. made.\n<\/p><\/blockquote>\n
(1)  [1965]1 L. L. J. 453.\n<\/p>\n
398<\/span><\/p>\n
\t       each  year  to those who\t retire.   To  judge
\n\t      whether the financial position would bear\t the
\n\t      strain  the average number of retirements\t per
\n\t      year must be found out.  This is one  part  of
\n\t      the inquiry.  The next part of the inquiry  is
\n\t      to see whether the employer can be expected to
\n\t      bear  the\t burden\t from  year  to\t year.\t The
\n\t      present  condition of his finances,  the\tpast
\n\t      history  and  the future prospects  all  enter
\n\t      into the appraisal of his ability.”\n<\/p>\n
In the light of the above observations and on the  materials
\nplaced before the Tribunal, it is not possible to hold\tthat
\na  wrong  conclusion  had  been arrived\t at.   The  Tribunal
\n\t      scrutinised the balance sheets of the National
\n\t      Iron and Steel Co. Ltd., for the years 1953 to
\n\t      1960 and found that excepting in the  solitary
\n\t      case  of the year 1960, the company had  been
\n\t      making  substantial  amounts of  profit  every
\n\t      year.   The company’s balance  sheets  further
\n\t      show that it had substantial reserves.   The
\n\t      Tribunal found that the number of workmen\t who
\n\t      retired\t during\t  the\t11    years    under
\n\t      consideration  was only 77, that is to say,  7
\n\t      workmen  per  year.  According to\t the  scheme
\n\t      framed, the company’s liability would be\tonly
\n\t      Rs.  7,500  per  year and\t this  amount  could
\n\t      easily  be provided out .of the funds  of\t the
\n\t      company.\t The  learned  Additional   Solictor
\n\t\t\t    ,General referred to a statement of th
\ne number
\n\t      of  wrokmen who would be due to retire  during
\n\t      the  years  to  come  and\t according  to\tthis
\n\t      statement, the financial burden would be\tmuch
\n\t      heavier  than  that  found  by  the  Tribunal.
\n\t      Unfortunately,  we cannot take this  statement
\n\t      into   account  which  was  not\tbefore\t the
\n\t      Tribunal.\t Again, we are not impressed by\t the
\n\t      argument\tof  the learned counsel\t that  if  a
\n\t      scheme  for gratuity could, on  the  materials
\n\t      before the Tribunal, be introduced in National
\n\t      Iron  and Steel Co. Ltd., the Tribunal had  no
\n\t      material\twhereby it could introduce the\tsame
\n\t      scheme   with  regard  to\t the   other   three
\n\t      companies.   It  was further argued  that\t the
\n\t      Tribunal should have compelled the other three
\n\t      companies to produce the relevant documents in
\n\t      this connection.\tWe are not impressed by this
\n\t      argument.\t  No  doubt  it\t was  open  to\t the
\n\t      Tribunal to call upon a particular employer to
\n\t      produce  any  document which  was\t within\t its
\n\t      possession  or  power.   Balance\tsheets\t and
\n\t      profit and loss accounts have to be maintained
\n\t      by  all  the  companies and  it  goes  without
\n\t      saying that the other three concerns could, if
\n\t      they  were  so  minded,  have  produced  these
\n\t      documents\t before\t the Tribunal.\t They  could
\n\t      also  have  prepared statements  to  show\t the
\n\t      number  .of  workmen who\thad  retired  during
\n\t      several years past and who were due to  retire
\n\t      in the years to come.  It seems to us that the
\n\t      the  three concerns were content to  make\t the
\n\t      National Iron and ‘Steel Co. Ltd. their mouth-
\n\t      piece in this respect, or they must have\tfelt
\n\t      that  the\t facts and  figures,  if  disclosed,
\n\t      would have been such ,as would go against them
\n\t      and they deliberately refrained from producing
\n\t      them.   On the materials placed before us,  we
\n\t      hold
\n 399<\/span>
\nthat the scheme of gratuity as framed is quite a  reasonable
\none on the facts and figures presented by the National\tIron
\nand  Steel Co., Ltd.  We have no material to hold  that\t the
\nscheme\twould work hardship on the other companies  and\t the
\nfindings of the Tribunal cannot therefore be disturbed.
\nThe  third point raised by the Additional Solicitor  General
\nis   also   not\t one  of  substance.   According   to\thim,
\nretrenchment  could only be struck down if it was mala\tfide
\nor  if\tit  was shown that there was  victimisation  of\t the
\nworkman\t etc.\tLearned\t counsel  further  argued  that\t the
\nTribunal had gone wrong in holding that the retrenchment was
\nillegal\t as s. 25 F of the Industrial Disputes Act  had\t not
\nbeen complied with.  Under that section, a workman  employed
\nin  any industry should not be retrenched until he had\tbeen
\ngiven  one month’s notice in writing indicating the  reasons
\nfor  retrenchment and the period of notice had\texpired,  or
\nthe workman had been paid in lieu of such notice, wages\t for
\nthe period of the notice.  The notice in this case bears the
\ndate  November\t15,  1958.  It is to  the  effect  that\t the
\naddressee’s  services were terminated with effect  from\t the
\n17th  November\tand that he would get one month’s  wages  in
\nlieu  of notice of termination of his service.\tThe  workman
\nwas  further asked to collect his dues from the cash  office
\non November 20, 1958 or thereafter during the working hours.
\nManifestly, s. 25F<\/a> had not been complied with under which it
\nwas incumbent on the employer to pay the workman, the  wages
\nfor  the period of the notice in lieu of the notice.   That,
\nis to say, if he was asked to go forthwith he had to be paid
\nat  the time when he was asked to go and could not be  asked
\nto collect his dues afterwards.\t As there was no  compliance
\nwith s. 25F<\/a> we need not consider the other points raised  by
\nthe learned counsel.  This conclusion receives support\tfrom
\nthe   observations   of\t this  Court  in  Bombay  Union\t  of
\n\t      Journalists   v.\tThe  State   of\t  Bombay<\/a>(1).\n<\/p>\n
\t      Incidentally it may. also be pointed out\tthat
\n\t      the retrenchment of Sushil does not seem to be
\n\t      otherwise\t justified  in\tthat  following\t the
\n\t      principle\t of ‘last come first to go’,  Sushil
\n\t      could   not  be  called  upon  to\t leave\t the
\n\t      company’s\t service.  Another employee by\tname
\n\t      Joy Kishen, junior to Sushil, was retained  in
\n\t      service.\t No doubt, the Labour Officer,\tJha,
\n\t      tried to make out a case in his oral  evidence
\n\t      that  Joy\t Kishen\t was  retained\tin   service
\n\t      because he was doing a special job at the time
\n\t      while  Sushil  was not The  Tribunal  rejected
\n\t      this  contention on the ground that this\tplea
\n\t      had  not\tbeen  put  forward  in\tthe  written
\n\t      statements  of the company and we do  not\t see
\n\t      any  reason  why we should  take\ta  different
\n\t      view.\n<\/p>\n
The last point urged was that the Tribunal had gone wrong in
\nordering  the  abolition  of  contract\tlabour\temployed  by
\nTatanagar Foundry Co. Ltd.  There is no doubt that the other
\nthree con-\n<\/p>\n
(1)  [1964] 6 S.C.R. 22 at 31-32.\n<\/p>\n
400<\/span><\/p>\n
cerns  did  not\t employ such labour.   It  was\targued\tthat
\nrailways  gave contracts for supply of sleepers to a  number
\nof  concerns  including\t Tatanagar  Foundry  Co.  Ltd.\t The
\nemployment of contract labour served to keep down’ the costs
\nas  there would not. be sufficient work for all the  workmen
\nif  permanent labour were employed.  It was on\tthis  ground
\nthat  Tatanagar Foundry Co. Ltd. had made an application  at
\nthe early stages of the enquiry and pressed for a number  of
\nengineering  concerns to be made parties to the dispute\t but
\nthe Tribunal had not acceded to this prayer.  After  dealing
\nwith  the  point  in  some  detail,  the  Tribunal  directed
\nTatanagar Foundry Co. Ltd. to abolish the system of contract
\nlabour\texcepting for the purpose of loading, unloading\t and
\nfor  removing  slags,  ashes  burnt  sand  etc.\t and   waste
\nproducts.   It was not argued before us that the  Tribunal’s
\nappraisal  of  the evidence. and the  direction\t to  abolish
\ncontract  labour were fundamentally wrong.  What  was  urged
\nbefore us was that such a direction would be  discriminatory
\nas  between concerns engaged in the manufacture\t of  railway
\nsleepers  and the abolition of contract labour in  Tatanagar
\nFoundry\t Co.  Ltd.  would mean an increase  in\tits  working
\nexpenses while the other concerns similarly engaged would be
\nfree  to  employ  contract labour and  thus  oust  Tatanagar
\nFoundry\t Co.  Ltd.  from competition.  As we  have  not\t the
\nmaterial  before us to come to such a conclusion, we do\t not
\nfeel competent to express any opinion on this point and\t can
\nonly add that abolition of contract system of labour can  be
\nordered\t by an Industrial Tribunal if the facts justify\t it.
\nIndustrial adjudication should not encourage the  employment
\nof  contract  labour is a principle which was laid  down  by
\nthis  Court as far back as 1960 in Standard Vacuum  Refining
\nCo. of India Ltd.  v.Its Workmen<\/a>(1).\n<\/p>\n
In  the result, the points urged by the\t learned  Additional
\nSolicitor General all fail and the appeal is dismissed\twith
\ncosts.\n<\/p>\n
Y.P.\t\t\t     Appeal dismissed.\n(1) [1960] 3 S.C.R. 466 at 473.\n401<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India National Iron And Steel Co. Ltd. & … vs The State Of West Bengal & Anr on 17 January, 1967 Equivalent citations: 1967 AIR 1206, 1967 SCR (2) 391 Author: G Mitter Bench: Mitter, G.K. PETITIONER: NATIONAL IRON AND STEEL CO. LTD. & ORS. Vs. RESPONDENT: THE STATE OF WEST BENGAL […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-271145","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nNational Iron And Steel Co. 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