Buckingham and Carnatic Co. Ltd vs Workers of Buckingham Andcarnatic

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 89 of 1952

Decision Date: 2 December, 1952

Coram: Mehr Chand Mahajan, Natwarlal H. Bhagwati

In the matter titled Buckingham and Carnatic Co. Ltd. versus Workers of the Buckingham Andcarnatic, the Supreme Court of India delivered its judgment on 2 December 1952. The opinion was authored by Justice Mehr Chand Mahajan, who sat on the bench together with Justice Natwarlal H. Bhagwati. The parties to the proceedings were identified as Buckingham and Carnatic Co. Ltd., the petitioner, and the workers of the Buckingham Andcarnatic Co. Ltd., the respondents. The decision is reported in the year 1953 at AIR 47 and also appears in the Supreme Court Reports at page 219. Subsequent citations include F 1957 SC 82 (12), D 1961 SC 1567 (4), and RF 1981 SC 340 (14). The statutory provisions relevant to the dispute were Section 49-B of the Indian Factories Act of 1934 and Section 2 (q) of the Industrial Disputes Act of 1947, both of which dealt respectively with the continuity of service and the definition of a “strike” when employees stop work for a short period by concerted action.

The headnote of the judgment explained that night-shift operatives in a department of a textile mill had ceased working at about four p.m. and resumed at about eight p.m. on a particular day. The immediate cause of the stoppage was that the mill management had indicated it could not honor the workers’ request to declare the forenoon of that day a holiday in view of a solar eclipse. The Court found that the work stoppage resulted from a concerted action of the employees and therefore qualified as a “strike” under Section 2 (q) of the Industrial Disputes Act, 1947. Moreover, because the textile mills constituted a public utility industry, the Court held that the strike was illegal, noting that no notice had been given to the management even though the refusal to work lasted only a few hours. Consequently, the Court concluded that the workers’ continuity of service had been interrupted by this illegal strike and that they could not claim holidays with pay under Section 49-B (1) of the Indian Factories Act, 1934. The civil appeal, numbered 89 of 1952, was filed on a special leave basis against a judgment dated 27 June 1951 rendered by the Labour Appellate Tribunal of India at Calcutta in Appeals Nos. 94 and 142 of 1950, which themselves arose from the award of the Second Industrial Tribunal, Madras, published in the Fort St. George Gazette on 3 October 1950. Counsel for the appellant was N. C. Chatterjee, assisted by S. N. Mukherjee, while the respondents were represented by S. C. C. Anthoni Pillai, who was the President of the Madras Labour Union. The facts leading to the appeal were set out as follows: on 1 November 1948, a total of 859 night-shift operatives employed in the carding and spinning department of the Carnatic Mills stopped work, with some workers ceasing at four p.m., others at four-thirty p.m., and the remainder at five p.m.; the stoppage ended at eight p.m. in both departments, and by ten p.m. the strike had completely ceased.

The factual background was that on 1 November 1948 the night-shift operatives of the carding and spinning departments stopped work at different times: some at 4 p.m., some at 4 p.m. 30 and some at 5 p.m. The stoppage ceased at 8 p.m. in each department and was completely over by 10 p.m. The immediate cause of the stoppage was the management’s refusal to grant the workers’ request that the forenoon of 1 November be declared a holiday in view of a solar eclipse. On 3 November 1948 the management displayed a notice stating that the work stoppage on 1 November constituted an illegal strike and a break in service as defined by the Factories Act (XXV of 1934). The notice further declared that workers who had participated in the stoppage would lose their entitlement to paid holidays under the same Act. The Madras Labour Union rejected this position. By an order dated 11 July 1949, issued under section 10(1)(c) of the Industrial Disputes Act (XIV of 1947), the Madras Government referred the dispute, together with several others, to the Industrial Tribunal, Madras. The adjudicator issued an award that was published in the Gazette on 12 October 1950. In the award the adjudicator held that there was little doubt that the night-shift workers’ stoppage on the night of 1 November 1948 was a strike and that it was illegal because the textile industry was notified as a public-utility industry and, under the Industrial Disputes Act, a lawful strike required a prior notice in the prescribed form, which had not been given. Accordingly, the adjudicator accepted the management’s view that the workers’ continuity of service had been broken by the illegal strike and that, as a result, the participants were not entitled to annual paid holidays under section 49-B(1) of the Factories Act. However, the adjudicator considered the outright denial of any paid holiday to be a severe punishment; assuming he possessed the authority to review the management’s discretionary punishment, he reduced the forfeiture by fifty per cent and ordered that the workers would lose only half of their paid holidays. The adjudicator’s decision was therefore varied to that extent. Both the Mills and the Union appealed this decision to the Labour Appellate Tribunal. The Tribunal upheld the Mills’ contention that the adjudicator lacked power to interfere with or modify the management’s discretion under section 49-B(1). It also upheld the Union’s contention that the events of the night of 1 November did not amount to a strike and did not interrupt the workers’ service. The Tribunal expressed this view, stating: “It would be absurd to hold that non-permitted

The Court observed that an absence from work of even half an hour or less during a working day would normally be treated as an interruption of a workman’s service for the purposes of the relevant statutory provision. However, the Court was inclined to hold that the stoppage of work which lasted approximately two to four hours, given the particular facts of the case, should not be characterised as a strike that would cause a break in the continuity of the affected workman’s service. Accordingly, the Court allowed the Union’s appeal on this point and directed that the operatives concerned should have their holidays calculated at the full rate prescribed in section 49-A of the Factories Act, on the basis that there was no interruption in their continuous service arising from the stoppage of work on 1 November 1948. In the subsequent appeal, counsel for the Mills submitted that, when section 49-B(1) of the Factories Act (XXV of 1934) is properly construed, the management was correct in determining that the continuity of service had been broken by the interruption caused by an illegal strike. They argued that, because the workers had not completed twelve months of continuous service in the factory, they were not entitled to annual holidays with pay under the same section, and that a non-permitted absence resulting from a concerted refusal to work for even two to four hours in a single day amounted to an illegal strike and therefore to an interruption of service for the purposes of section 49-B. The Court found that this contention was well founded. Section 49-B provides that every worker who has completed a period of twelve months of continuous service in a factory shall, during the following twelve-month period, be allowed holidays for ten consecutive days, or fourteen days if the worker is a child, together with any days of holiday to which he is otherwise entitled under subsection (1) of section 35. The explanatory clause to that provision clarifies that a worker shall be deemed to have completed twelve months of continuous service notwithstanding any interruption caused by sickness, accident or authorised leave not exceeding ninety days in total, by a lookout, by a strike which is not an illegal strike, or by intermittent periods of involuntary unemployment not exceeding thirty days. It follows from this explanation that the benefit of the section does not apply where the interruption in service is caused by an illegal strike. Finally, the Court noted that section 2(q) of the Industrial Disputes Act (Act XIV of 1947) defines “strike” as a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been employed.

The adjudicator, after examining the evidence and the surrounding circumstances, concluded that the workers acted in concert and in combination to stop and refuse to resume work on the night of 1 November. He observed that the submission of a very large number of leave applications for various reasons demonstrated a coordinated effort by the employees. Furthermore, the applications presented by the workers and their representatives indicated that they were acting together in striking. They also refused to return to work on the ground that night-shift employees should receive leave whenever day-shift workers were granted a half-day’s leave. He further held that the workers’ refusal to resume duties despite the attempts of the officers showed their unwillingness to return. The intervention of their own Madras Labour Union representatives also indicated that the employees were not prepared to return as a body unless their demands were satisfied. In our view, the adjudicator’s conclusion was correct and it could not be avoided that the workers were acting in concert. Accordingly, the conduct of the workers on the night of 1 November clearly fell within the definition of “strike” contained in section 2(q) of the Industrial Disputes Act. We are unable to accept the Appellate Tribunal’s view that a stoppage of work lasting two to four hours and a non-permitted absence cannot be regarded as a strike. Before the adjudicator, the only argument advanced by the Union was that the incident constituted a spontaneous, lightning strike, and it did not assert that the stoppage fell outside the statutory definition of strike. It cannot be disputed that a cessation of work occurred by a body of persons employed in the mills, that they acted in combination, and that their refusal to return was concerted. All the essential elements of the definition are therefore present in the present case, and the stoppage of work on 1 November 1948 amounted to a strike. The incident was not an instance of an individual worker’s failure to report for duty, but a collective action undertaken by a large number of employees. Consequently, the Appellate Tribunal erred in refusing to classify the event as a strike, and it possessed no discretion to disregard a legally defined strike. Since the stoppage qualified as a strike and no notice was given to the management, it was an illegal strike because the mills operated as a public utility industry. The President of the Union, who represented the workers, contended that the Factories Act was inapplicable to the present dispute.

In this matter, the respondent argued that, pursuant to a notification issued by the Government of Madras on 23 August 1946, the Buckingham and Carnatic Mills were exempted from the provisions of Chapter IV-A of the Factories Act. Consequently, the respondent contended that sections 49-A and 49-B of the same Act did not apply to the mills, and that no substantial question of law concerning the construction of those sections required determination by the Court, so that the appeal should not be entertained under article 136 of the Constitution. The Court rejected that contention. The exemption from Chapter IV-A was granted only because the mills’ leave rules were already in conformity with the provisions of Chapter IV-A; therefore, the dispute turned on the construction of those leave rules, which raised a substantial question of law. The respondent also relied on section 49-A, which states that the new Act would not prejudice any rights that workers were entitled to under earlier rules, and claimed that, under the pre-Act leave rules, workers were entitled to privileged leave and that there was no provision analogous to that created by section 49-B. Accordingly, the respondent argued that the mills could not lawfully deprive workers of leave because of the strike. The Court held that this argument could not be sustained, because section 49-A(2) of the Factories Act did not apply to the Carnatic Mills in view of the 23 August 1946 notification. Finally, the respondent asserted that the stoppage of work on 1 November 1948 was not a concerted action but comprised individual workers seeking leave on that date. In view of the facts recorded in the adjudicator’s award, the Court found that contention untenable. It agreed with the adjudicator that the actions of the 859 workers on the night of 1 November 1948 fell within the definition of “strike” in section 2(q) of the Industrial Disputes Act, that the strike was illegal, and that the workers therefore lost the benefit of holidays they would otherwise have received under the rules. The appellant’s counsel, on behalf of management, offered an ex gratia undertaking to condone the workers’ default on that date and to treat the cessation of work as not depriving them of the holidays. The Court appreciated the spirit of that undertaking and expressed hope that the workers would likewise accept it in the same spirit. Accordingly, the appeal was allowed.

The Court declared that the earlier ruling issued by the Labour Appellate Tribunal on the specific point under consideration was overturned. After carefully reviewing the material that had been placed before it, the Court determined that the decision of the Tribunal could not stand and therefore set it aside. In light of the overall facts and the particular circumstances that existed in this matter, the Court decided that it would not make any order directing either side to pay the costs of the proceedings. Consequently, the Court allowed the appeal that had been filed, thereby granting the relief sought by the appellant. The record further indicates that the appellant was represented before the Court by an agent identified as S. P. Varma, who acted on behalf of the appellant in this proceeding.