Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10
PETITIONER:
THE RASHTRIYA MILL MAZDOOR SANGH,PAREL, BOMBAY AND ANOTHER
Vs.
RESPONDENT:
THE APOLLO MILLS LIMITED AND OTHERS
DATE OF JUDGMENT:
10/03/1960
BENCH:
HIDAYATULLAH, M.
BENCH:
HIDAYATULLAH, M.
DAS, S.K.
SARKAR, A.K.
CITATION:
1960 AIR 819 1960 SCR (3) 231
CITATOR INFO :
D 1986 SC1514 (17)
ACT:
Industrial Dispute-Compensation for closure of Mills-Partial
closure due to shortage of Power-Government Order curtailing
supply of power-Standing Ordeys-Scope of-Bombay Electricity
(Special Powers) Act, 1946 (Bom. XX of 1946), ss. 6A(1),
11(1)--Bombay Industrial Relations Act, 1946 (Bom. XI Of
1947), ss. 40 (1), 73.
HEADNOTE:
In 1951 on account of the failure of the monsoon, generation
of electricity from the Hydro-Electric System was affected
and it was found necessary to reduce the consumption of
electricity. The Government of Bombay passed an order under
s. 6A(1) of the Bombay Electricity (Special Powers) Act,
1946, regulating the use of electrical energy and the
respondent Mills were compelled to reduce the working time.
For the period during which the short working continued the
workers claimed their wages and dearness allowances or
compensation in lieu thereof.’ The Industrial Court to which
the matter was referred for arbitration under S. 73 Of the
Bombay Industrial Relations Act, 1946, made an award
directing all the respondent Mills to pay compensation to
the employees. The Mills pleaded that no compensation was
payable because (1) the closure of the Mills was in
pursuance of the directions made by the Government under the
Bombay Electricity (Special Powers) Act, 1946, and,
therefore, s. 11(1) of that Act barred the reference, (2)
the Industrial Court had no jurisdiction to entertain the
claim for compensation as the matter was covered by Standing
Orders 16 and 17 which were determinative of the relations
between the workmen and their employers under S. 40(1) of
the Bombay Industrial Relations Act, 1946, and (3) in any
case, no compensation was payable in view of the decision in
Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, Kanpur,
[1955] 1 S.C.R. 991:
Held, (1) that s. 11 (1) of the Bombay Electricity (Special
Powers) Act, 1946, barred only proceedings arising from the
interference with the supply of electric energy and
protected those who acted in pursuance of orders passed
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10
under that Act; the section did not prevent the raising of
an industrial dispute.
(2)that Standing Orders 16 and 17 contemplated only cases
of compensation in lieu of notice and wages for the period
of closure, and did not cover cases of compensation for
closure ; that the provisions of S. 73 of the Bombay
Industrial Relations Act, 1946, were wide enough to cover
the reference in the present case and that the claim for
compensation was not barred by Standing Orders 16 and 17,
read with s. 40(1) of the Act.
Digambar Ramachandra v. Khandesh Mills, (1949) 52 Bom. L.R.
46, disapproved.
232
(3)that the decision in Muir Mills Co. Ltd. v. Suti Mills
Mazdoor Union, Kanpur, was concerned only with the award of
bonus and was not applicable to the present case.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 419 of 1956.
Appeal by special leave from the decision dated January 17,
1955, of the Labour Appellate Tribunal, of India, Bombay, in
Appeal (Bom.) No. 61 of 1954.
N.C. Chatterjee, D. H. Buch and I. N Shroff, for the
appellants.
R. J. Kolah, B. Narayanaswami, S. N. Andley, J. B.
Dadachanji, Rameshwar Nath and P. L. Vohra, for the
respondents.
1960. March 10. The Judgment of the Court was delivered by
HIDAYATULLAH, J.-This is an appeal with the special leave of
this Court against- a decision dated January 17,1955, of the
Labour Appellate Tribunal (hereinafter called the Appellate
Tribunal) by which it reversed a decision of the Industrial
Court, Bombay, dated January 20, 1954, in a matter referred
to the Industrial Court under s. 73 of the Bombay Industrial
Relations Act, 1946, by the Government of Bombay. The
appellant is the Rashtriya Mill Mazdoor Sangh, representing
the employees of the cotton textile mills in the city of
Greater Bombay. The respondents are the Apollo Mills, Ltd.,
and other companies owning cotton textile mills specified in
the annexure to the Special Leave Petition and the Mill
Owners’ Association, Bombay, representing the cotton textile
mill industry. The dispute relates to the compensation
which the workers claimed for loss of wages and dearness
allowances due to the short working or closure of the
Textile Mills on certain days during the period between
November 1, 195 1, and July 13, 1952.
The facts of the case are as follows: In the year 1951
monsoon failed, and caused scarcity of water in the
catchment area of the Tata Hydro-Electric system, from which
the Mills obtained their supply of power. It was,
therefore, found necessary to reduce the consumption of
electricity, and- Government, after consulting the various
Mills and also the appellant Sangh, decided that the Mills
should work, instead of
233
48 hours, for 40 hours per week during a period of 30 weeks
from November 1, 1951. It was also agreed that if the Mills
could reduce their consumption of electricity to 5/6th of
their normal consumption, then they could work for 48 hours
per week as before. Some of the Mills installed their own
generators, but many others were compelled to reduce the
working time to 40 hours in a week, working at 8 hours per
day. As a result, the working of some of the Mills was
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10
reduced by one day in the week, and the Mills lost a maximum
number of 38 days, some more and some less. One of the
Mills (the Ragbuvanshi Mills) remained closed only on one
day. The order of the Bombay Government was made under s.
6A(1) of the Bombay Electricity (Special Powers) Act, 1946.
While this short working continued, the workers claimed
their wages and dearness allowances or compensation in lieu
thereof. Negotiations followed, but when they did not result
in anything to the advantage of the workers, the matter was
referred for arbitration to the Industrial Court by the
Bombay Government on October 30, 1952, under s. 73 of the
Bombay Industrial Relations Act, 1946.
The Mills raised the objection that the matter was covered
by Standing Orders 16 and 17, and inasmuch as the partial
closure of the Mills was due to force majeure, they were not
liable. They contended that the Industrial Court had thus
no jurisdiction, as these Standing Orders were determinative
of the relations between the workmen and their employers
under s. 40(1) of the Bombay Industrial Relations Act, 1946.
They also submitted that the orders of the Government issued
under the Bombay Electricity (Special Powers) Act, 1946, had
to be obeyed and therefore no compensation was payable.
They pointed out that the employees were receiving fair
wages, and that the Mills were not in a position to bear an
additional burden, in view of the fact that they had lost
their profits due to short working. They relied upon the
decision of the Bombay High Court in Digambar Ramachandra v.
Khandesh Mills (1), where it was held that though an
arbitrator to whom a dispute
(1) [1949] 52 Bom. L.R. 46.
30
234
falling under B. 49A of the Bombay Industrial Disputes Act,
1938, was referred had jurisdiction to decide the disputes
within the terms of the Standing Orders framed under s. 26
of that Act, he had no jurisdiction to determine the
liability of the employers on grounds outside the Standing
Orders.
The Industrial Court, after hearing the parties, made an
award on January 20, 1954, and directed all the respondent
Mills to pay to the employees compensation, holding that
Standing Orders 16 and 17 were not applicable, and were,
therefore, no bar. The Industrial Court held that in view
of the provisions of ss. 3, 40(2), 42(4), 73 and 78 of the
Bombay Industrial Relations Act read with Sch. 111, item 7,
and having regard to the decision of the Federal Court in
Western India Automobile Association v Industrial Tribunal,
Bombay (1), it had jurisdiction to grant compensation. The
Industrial Court, therefore, held that on principles of
social justice the workers were entitled to compensation,
which it assessed at the rate of 50 per cent. of the wages
and dearness allowances which the workers would have drawn,
if the Mills had worked on the days they remained closed.
Against that award, the Mill Owners’ Association and two of
the Mills appealed to the Appellate Tribunal, Bombay. All
the contentions which were raised before the industrial
Court were once again raised before the Appellate Tribunal.
Two new contentions were raised, viz., that the claim for
compensation was barred under s. 1 1 of the Bombay
Electricity (Special Powers) Act, 1946, and was also barred
by the decision of the Supreme Court in the Muir Mills Co.,
Ltd. v. Suti
Mills Mazdoor Union, Kanpur (2).
The Appellate Tribunal by its decision now impugned before
us, allowed the appeal, and set aside the award of the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10
Industrial Court, and dismissed the claim of the employees.
It held that even if Standing Orders 16 and 17 covered the
case, the decision in Digambar Ramachandra’s case (1) could
not now be applied because of the provisions of s. 40(2) and
the addition of Sch. 111, item 7 in the Bombay Industrial
Relations Act, which provisions did not find place in the
Bombay
(1) [1949] F.C.R. 321. (2) [1955] 1 S.C.R 991.
(3) [1949] 52 Bom. L.R. 46
235
Industrial Disputes Act, 1938, under which the decision of
the Bombay High Court was given. The Appellate Tribunal
referred to the Federal Court decision cited earlier, and
observed that there was no doubt that the award of
compensation to workmen equal to half of their wages and
dearness allowances was fair and just. The Tribunal,
however, felt compelled by the decision of this Court in the
Muir Mills case (1) to reject the claim of the workers, and
allowed the appeal. In this view of the matter, the
Appellate Tribunal did not decide whether s. II of the
Bombay Electricity (Special Powers) Act, 1946, barred the
grant of compensation.
The appellant in this case first contended that the Muir
Mills case (1) did not apply, and further that if that case
was out of the way, then in view of the other findings of
the Appellate Tribunal and s. 7 of the Industrial Disputes
(Appellate Tribunal) Act, 1950, the appeal ought to have
failed, since no question of law survived and the Appellate
Tribunal was incompetent to reverse the decision. The Mill
Owners’ Association, on the other hand" contended that the
opinion of the Appellate Tribunal that the Muir Mills case
(1) applied, was correct, that s. II of the Bombay
Electricity (Special Powers) Act barred these proceedings,
and that, in view of the fact that the closure was due to
force majeure for which the Milks were not responsible,
Standing Orders 16 and 17 were determinative of the
relations between the parties and the claim for compensation
was not entertainable. Other objections raised before the
Appellate Tribunal were not pressed before us.
We begin first with the question whether s. 11 of the Bombay
Electricity (Special Powers) Act, 1946 barred the reference.
That section reads as follows:
" 11 (1). No suit, prosecution or other legal proceeding
shall lie against any person for anything which is in good
faith done or intended to be done in pursuance of any order,
direction or requirement made or deemed to have been made
under section 3, 4, 5, 6, 6A, 6B or 6C."
(1) [1955] 1 S.C.R. 991.
236
The order which was made in this case by the Government of
Bombay was under sub-s. (1) of s. 6A, which reads:
" 6A(1). Notwithstanding anything contained in any law for
the time being in force, or any permission granted under
sub-section (3) of section 5 or any instrument having effect
by virtue of any law, the Provincial Government may with a
view to controlling distribution, supply, consumption or use
of electrical energy make an order-
(a)for prohibiting or regulating subject to such
conditions as it may specify in the, order,-the distribution
or supply of electrical energy by a licensee or use of such
energy by a consumer for-any purpose specified in such
order;
(b) for determining the order of priority in which,or the
period or periods during which, work shall be done by an
undertaking to which the supply of electrical energy is made
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10
by a licensee."
It was contended by the respondents that sub-s. (1) of s. 11
quoted above barred the remedy of arbitration, because the
closure of the Mills was in good faith, and was in pursuance
of a direction or order made under s. 6A(1). Mr. Kolah
referred to the scheme of the Bombay Electricity (Special
Powers) Act, and specially to the sections dealing with
penalties and offenses and contended that the Mills were
helpless and were compelled to close down their esta-
blishments for part of the time. He claimed that the
protection of s. 11(1) was available’ to them., and argued
that it gave immunity from action of any kind.
The present proceedings are for compensation for, the period
during which the Mills remained closed. This claim is made
by the workers against the Mills. The section which confers
immunity bars proceedings &rising from the interference with
the supply of electrical energy and its consumption. It is
a protection to the supplier of electrical energy against
the consumer and vice versa, and protects also those who act
to enforce the order. There is no complaint here about the
reduction of electricity or even about the closure of the
Mills for part of the time. Neither the
237
Mills nor the workers have raised any such contention.
Further, the sub-section is a protection clause which is
usually introduced in an Act, where it gives new or unusual
powers, and is designed to give immunity to persons acting
under or enforcing it. The ambit of the protection is in
relation to the supply and consumption of electricity which
alone are curtailed by the order issued- under s. 6A(1) of
the Act. The protection conferred by the first subsection
of s. 11 does not, therefore, prevent the raising of an
industrial dispute resulting in an award for the equitable
sharing of loss which had been occasioned to., both the
employers and the employees by the observance of the order.
The contention that the Industrial Court had no jurisdiction
to hear the reference because the State Government could not
make it, was not pressed by the respondents, and nothing
need, therefore, be said about it. It was raised in another
form, as will appear in the sequel. Both the parties,
however, criticised the order of the Appellate Tribunal, the
respondents challenging the findings adverse to them. It is
now necessary to deal with these contentions.
The case of the appellant was that the Appellate Tribunal
had no jurisdiction to interfere with the order of the
Industrial Court, because the appeal before it did not
involve a ’,.Substantial question of law and did not fall
within any of the eight matters mentioned in s. 7(1)(b) of
the Industrial Disputes (Appellate Tribunal) Act, 1950,
which gave appellate jurisdiction to the Appellate Tribunal.
The appellant referred to cases in which it has been held
that the Appellate Tribunal could not interfere on facts.
It is not necessary to analyse those cases for reasons which
we proceed to state.
The Industrial Disputes (Appellate Tribunal) Act conferred
appellate powers on the Appellate Tribunal, if there was a
substantial question of law arising from the award, or the
matter fell within eight enumerated subjects. The
respondents attempted to bring the matter within cl. (1) of
s. 7(1)(b) that is to say’ " wages ", which is one of the
eight subjects. But there is no question here of wages as
such but of
238
compensation. Learned counsel for the respondents also
argued that a conclusion drawn without adverting to the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10
evidence involved a question of law and a legal inference
from proved facts and an appeal thus lay. He relied upon
Anglo-Iranian Oil Co. (India) Ltd. v. Petroleum Workers’
Union (1) and Crompton Parkinson (Works) v. Its Workmen (2).
It may not be necessary to discuss the matter at length,
because even if the subject-matter did not fall within any
of the eight enumerated topics, there was a substantial
question of law involved, inasmuch as it was necessary to
decide whether a claim for compensation was not admissible
in view of the provisions of the Bombay Industrial Relations
Act and the Standing Orders. It has been pointed out
already that the failure to continue to employ labour was
due to the short supply of electrical energy, and the
question is whether in these admitted circumstances,
Standing Orders 16 and 17 read with s. 40(1) and item 9 of
Sch. 1 of the Bombay Industrial Relations Act rendered the
employers immune from a claim for compensation for loss of
wages and dearness allowances. The respondents claimed that
they did, while the appellant maintained that they did not,
and referred to ss. 40(2), 42(4), 73 and 78(1)(A) and item 7
of Sch. III of the same Act. This is a substantial
question of law, and the appeal was thus competent.
The crux of the matter is the provisions of Standing Orders
16 and 17, which are to be read with s. 40(1) of the Bombay
Industrial Relations Act. Standing Orders 16 and 17 read as
follows
16.The Company may, at any time or times, in the event of
a fire, catastrophe, breakdown of machinery or stoppage of
the power supply, epidemic, civil commotion or other cause,
beyond the control of the Company, stop any machine or
machines or department or departments, wholly or partially
for any period or periods, without notice and without
compensation in lieu of notice.
In the event of a stoppage of any machine or department
under this Order during working hours, the operatives
affected shall be notified by notices
(1) [1951] 2 L.L.J. 770.
(2) [1959] SUPP. 2 S.C.R. 936.
239
put upon notice boards in the department concerned and at
the time-keeper’s office, as soon as practicable, when work
will be resumed and whether they are to remain or leave the
mill. The period of detention in the mill shall not
ordinarily exceed one hour after the commencement of the
stoppage. If the period of detention does not exceed one
hour, operatives so detained shall not be paid for the
period of detention. If the period of detention in the mill
exceeds one hour, operatives so detained shall be entitled
to receive wages for the whole of the time during which they
are detained in the mill as a result of the stoppage. In
the case of pieceworkers, the average daily earnings for the
previous month shall be taken to be the daily wages.
17.Any operative played-off Linder Order 16 shall not be
considered as dismissed from service, but as temporarily
unemployed, and shall not be entitled to wages during such
unemployment except to the extent mentioned in Order 16.
Whenever practicable a reasonable notice shall be given of
resumption of normal work and all operatives playedoff under
Order 16, who present themselves for work, when the normal
working is resumed, shall have prior right of
reinstatement."
The argument of the respondents was- two-fold: (1) that
these two Standing Orders fully covered a closure due to
stoppage of power, and (2) that under s. 40(1) of the Bombay
Industrial Relations Act, 1946, the Standing Orders were
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10
determinative of the relations between the employer and the
employees in regard to all industrial matters specified in
Sch. 1, which contains the following items :-
" 4. Closure or reopening of a department or a section of a
department or the whole of the undertaking" and
" 9. Temporary closures of work including playing off and
rights and liabilities of employers and employees........"
They also invoked the decision in Digambar Ramachndra’s case
(1), and added that the position had not been altered even
by the addition of the second sub-
(1) [1949] 52 Bom. L.R. 46.
240
section to s. 40 in the Bombay Industrial Relations Act.
We may at this stage read s. 40:
" 40. (1) Standing orders in respect of an employer and his
employees settled under this Chapter and in operation, or
where there are no such standing orders, model standing
orders, if any, applicable under the provisions of sub-
section (5) of section 35 shall be determinative of the
relations between the employer and his employees in regard
to all industrial matters specified in Schedule I.
(2)Notwithstanding anything contained in subsection (1)
the State Government may refer, or an employee or a
representative union may apply in respect of any dispute of
the nature referred to in clause (a) of paragraph A of
section 78, to a Labour Court."
The respondents contended that only the first subsection
applied, and that under Standing Orders 16 and 17 quoted
above, no compensation was claimable. The appellant pointed
out that the second sub-section excluded the first sub-
section, because of the nonobstructive clause with which it
is prefaced and in view of the position of the Industrial
Court as the appellate authority from awards of the Labour
Court, the former was not also bound by the first sub-
section or the Standing Orders. There is some force in the
contention of the appellant, but, in our opinion, Standing
Orders 16 and 17 do not, in terms, apply to a claim for
compensation such as is made here. Standing Order 16 speaks
of stoppage "without notice and without compensation in lieu
of notice." The compensation which is claimed by the workers
in this case is not in lieu of notice, that is to say, for a
period equal to that in respect of which notice would have
had to be given. That period would be before the date of
closure. The Standing Order contemplates those cases in
which a notice has to be dispensed with and then no
compensation in lieu of notice is payable. There is,
however, here a question of quite a different sort, and it
is not covered by Standing Order 16, even though the closure
was by reason of stoppage of power. Standing Order 17
speaks of "wages", and
41
241
we are not concerned with wages here but with compensation
which is not the same thing as wages. In this view of the
matter, Standing Orders 16 and 17 cannot be said to cover
the present facts, and they are not, therefore,
determinative of the relations between the parties.-
The present dispute was referred to the Industrial Court
under s. 73(2) of the Bombay Industrial Relations Act, 1946.
That section reads as follows:"Notwithstanding anything
contained in this Act, the State Government may, at any
time, refer an industrial dispute to the arbitration of the
Industrial Court, if on a report made by the Labour Officer
or otherwise it is satisfied that-
(2)the dispute is not likely to be settled by other
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10
means;".
The non-obstante clause clearly shows that in spite of the
other provisions of the Bombay Industrial Relations Act, an
industrial dispute may be referred to the Industrial Court.
An industrial dispute as defined in that Act means inter
alia any dispute or difference between an employer and
employee or between employers and employees, which is
connected with an industrial matter, which includes all
matters pertaining to non-employment of any person. That
these workmen were not employed on certain days goes without
saying, and thus, there was an industrial dispute concerning
their claim for compensation for the period of non-
employment. Item 9 of Sch. 1 gave the power to frame
Standing Orders in relation to temporary closures. The
Standing Orders made covered only compensation in lieu of
notice and wages for the period of closure, but not
compensation for closure. In the view which we have taken
of the Standing Orders, it is not necessary to decide
whether item 7 of Sch. III relates only to compensation for
permanent closure, or whether item 9 of Sch. 1 gave the
power to make a Standing Order relating to compensation for
temporary closure. It is enough to say that Standing Orders
16 and 17, as they stand, do not cover a case of
compensation for closure.
242
The powers of the Industrial Court under s. 73 of the Bombay
Industrial Relations Act are very wide, inasmuch as the
State Government can refer an industrial dispute to it,
notwithstanding anything contained in the Act. It was in
view of this that the objection to the jurisdiction of the
Industrial Court was not pressed. But the argument was
advanced in another form to show that Standing Orders 16 and
17 were determinative and did not enable the Industrial
Court to decide in any manner except in accordance with
those Standing Orders. Reliance was also placed upon
Digambar Ramachandra’s case (1), where Chagla, C.J., and
Bhagwati, J., decided that the arbitrator was bound by the
Standing Orders and could not go outside them. We are of
opinion that Standing Orders 16 and 17 do not apply to the
present facts for reasons already stated, and we express our
dissent from that decision in so far as it held that the
Standing Orders covered a case of compensation for closure
also. We note further that in the Bombay Industrial
Disputes Act, 1938, there was no item similar to the one in
Sch. III of the Bombay Industrial Relations Act. In
Textile Labour Association, Ahmedabad v. Ahmedabad
Millowners’ Association, Ahmedabad (2), Sir H. V. Divatia,
Rajadhyaksha, J., and Mr. D. V. Vyas (later, Vyas, J.)
correctly held that the Standing Orders did not cover a case
of compensation for loss of earnings. The head note
adequately summarises the decision, and may be quoted. It
reads:
" Although the workers are not entitled to demand their
wages during the period of stoppage of work as that matter
has been (sic) covered by the Standing Orders there is
nothing to prevent them from giving any notice of change
demanding compensation for the loss of their earnings. It
cannot be said that the jurisdiction of the Court is barred
by the provisions of Standing Orders Nos. 16 & 17.".
No doubt, the reference there was under s. 43 of the Bombay
Industrial Disputes Act, 1938; but the provisions of s. 73
of the Bombay Industrial Relations Act are wide enough to
cover a reference on the same topic. We are, therefore, of
opinion that the claim
(1) [1949] 52 Bom. L.R. 46.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10
(2) 1946-47 Industial Court Reporter 87.
243
for compensation was not barred by Standing Orders 16 and 17
read with a. 40(1) of the Bombay Industrial Relations Act.
The respondents further contended that the principle of
social justice applied by the Industrial Court and accepted
by the Appellate Tribunal could not apply because of the
decision of this Court in the Muir Mills case (1). They
also contended that the case for bonus was decided along
with the present case and both bonus and dearness allowances
were increased by the Appellate Tribunal in respect of 38
Mills and even the remaining 15 Mills which had ,suffered
loss had given minimum bonus to their workers. They argued
that wages were fair and bonus was awarded and dearness
allowance was increased, and that the Appellate Tribunal
took all this into account in refusing compensation. They
submitted that the Mills suffered heavy losses due to short
working, and that it was sheer injustice to make them pay
wages or compensation for days on which the Mills remined
closed and lost their profits through stoppage of normal
working.
The Muir Mills case (1) was concerned with the award of
bonus, which is linked with profits. It was there laid down
that inasmuch as the labour employed in an industrial
undertaking is ever changing, the award of bonus can only be
from the profits to which labour in any particular year
contributed and labour cannot claim that profits and
reserves of some other years should be used for the purpose
of giving them bonus. We are not concerned in this case
with the award of bonus as such, and we need not, therefore,
make use of the reasons which appealed to this Court in that
case. The narrow sphere in which social justice demands
that workmen going into forced unemployment should receive
compensation is quite different. Social justice is not
based on contractual relations and is not to be enforced on
the principles of contract of service. It is something
outside these principles, and is invoked to do justice
without a contract to back it. Mahajan, J. (as he then
was), observed in Western India Automobile Association v.
Industrial Tribunal, Bombay (2) as follows:
(1) [1955] 1 S.C.R. 991.
(2) [1949] F.C.R. 321.
244
" Adjudication does not, in our opinion, mean adjudication
according to the strict law of master and servant. The
award of the Tribunal may contain provisions for settlement
of a dispute which no Court could order if it was bound by
ordinary law, but the Tribunal is not fettered in any way by
these limitations. In Volume 1 of I Labour Disputes and
Collective Bargaining’ by Ludwig Teller, it is said at page
536 that industrial arbitration may involve the extension of
an existing agreement or the making of a new one, or in
general the creation of a, new obligation or modification of
old ones, while commercial arbitration generally concerns
itself with the interpretation of existing obligations and
disputes relating to existing agreements. In our opinion,
it is a true statement about the functions of an Industrial
Tribunal in labour disputes. "
Here, what better measure could have been adopted by the
Industrial Court (which is approved by the Appellate
Tribunal) than to divide the loss into two parts, one to be
borne by the industrial concerns and the other by the
workmen ? There is no other basis suggested by the one side
or the other. It was contended that the loss to labour went
into the consideration of the grant of bonus, and that the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10
two cases were heard together. The Appellate Tribunal says
so. But bonus is to come out of profits and is the share of
labour in the profits it has helped to earn, to bridge the
gap between wages as they are and the living wage.
Compensation in the present context is for loss of wages and
dearness allowance, and the two cannot be considered
together on any principle. There is nothing to show that in
spite of the formula which the Appellate Tribunal had
evolved for itself, it took into account some other factors
quite alien to the said formula. It appears to us that what
the Appellate Tribunal really meant to say was that inasmuch
as the workers were paid bonus they should not make a
grievance if they lost wages on some of the days, because if
compensation were paid bonus would have had to be reduced.
If that is the meaning, as it obviously is, then the
question of compensation was not decided at all. In our
opinion, this reasoning was
245
beside the point. It was wholly immaterial whether profits
were made or losses were incurred in the year, if the
employers continued to retain the labour force so as to be
available for the days on which the Mills worked.
In our opinion, the Appellate Tribunal after giving a
finding that a claim for compensation equal to half the
wages and dearness allowances was just and proper, erred in
holding that it was not admissible because of the decision
of this Court in the Muir Mills case (1). That case had no
application to the facts here. The Appellate Tribunal also
erred in declining to grant compensation on the ground that
since bonus was granted the claim for compensation could not
be entertained. The case of badli workers does not appear
to have been separately raised, and we see no reason not to
award them compensation ; but payment of such compensation
will be subject to the same condition, as was imposed by the
Industrial Court.
In the result, the appeal will be, allowed, the order of the
Appellate Tribunal set aside and the order of the Industrial
Court restored. The respondents shall bear the costs here
and in the Tribunals below.
Appeal allowed.