Raja Bahadur Motilal Poona Mills vs Tukaram Piraji Masale

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 323 of 1955

Decision Date: 31 October 1956

Coram: P. Govinda Menon, Natwarlal H. Bhagwati, S.K. Das

In the case titled Raja Bahadur Motilal Poona Mills versus Tukaram Piraji Masale, the Supreme Court of India delivered its judgment on 31 October 1956. The opinion was authored by Justice P. Govinda Menon and was heard by a bench comprising Justices P. Govinda Menon, Natwarlal H. Bhagwati and S. K. Das. The citation for this decision appears in 1957 AIR 73 and 1956 SCR 939. The dispute arose under the Bombay Industrial Relations Act, 1946, specifically section 97(1)(c), which declares a strike illegal when it is commenced or continued solely because the employer has failed to implement a standing order or has introduced an illegal change in the conditions of work.

The facts of the case centered on a change proposed by the management of the appellant, a limited cotton textile spinning and weaving mill located in Poona, which the Court refers to as “the Mill.” The Mill intended to experiment with a new working arrangement whereby a weaver would be assigned four looms for a period of two months, instead of the existing practice of assigning two looms to a weaver. To conduct this experiment, the management selected a small number of workmen who voluntarily agreed to work under the new arrangement. However, the remaining workers objected, arguing that such a change was illegal because the employer had not complied with the procedural requirements prescribed by the Act for altering working conditions. The objecting workers consequently went on strike, asserting that the change introduced by the Mill was unlawful.

The legal issue before the Court was whether the strike conducted by the workmen was illegal under section 97(1)(c) of the Bombay Industrial Relations Act. The Court examined the language of the statutory provision, which explicitly covers a strike that is initiated or maintained solely on the ground that the employer has introduced an illegal change. Considering that the workmen’s strike was triggered exclusively by their belief that the management’s experiment constituted an illegal alteration of the existing system of work, the Court concluded that the strike fell within the express terms of section 97(1)(c) and was therefore illegal.

The procedural history of the appeal involved Civil Appeal No. 323 of 1955, which was filed against the judgment and order dated 2 July 1953 rendered by the Bombay High Court in Special Civil Application No. 159 of 1953. Counsel for the appellant were R. J. Kolah and A. C. Dave, while the respondent was represented by H. R. Gokhale, K. R. Chaudhury and M. R. Rangaswamy. On 20 July 1954, the Bombay High Court granted a certificate of fitness under Article 133(1)(c) of the Constitution, recognizing that the case raised a substantial question of law warranting appellate review by the Supreme Court. The Supreme Court, therefore, entertained the appeal to determine the legality of the strike.

In delivering the judgment, Justice Govinda Menon explained that a concise recapitulation of the facts leading to the certiorari application in the High Court was essential for a proper understanding of the legal question. He noted that the appellant, for convenience referred to as “the Mill,” was a limited company that owned and operated a cotton textile spinning and weaving mill in Poona, employing a large workforce organized under a trade union. The Court’s analysis proceeded from this factual backdrop to the statutory interpretation and the ultimate holding that the strike was unlawful under the specified provision of the Bombay Industrial Relations Act.

The appellant was a limited company that owned and operated a cotton textile spinning and weaving mill located in Poona, employing a large number of workmen who were organized in their own union. The first respondent was a workman employed by the mill, and the second respondent was the Poona Girni Kamagar Union of which that workman was a member. Respondents three to five had initially been joined as parties in the first instance, but their names were later struck out as unnecessary at the time of the hearing. At the time of the dispute the mill was operating five hundred and eighty looms, and each weaver had been assigned two looms for his work. On August twenty‑nine, nineteen fifty‑one the management issued a notice stating that, beginning on September first, it intended to conduct an experiment in which a weaver would be allotted four looms for a period of two months, covering a total of sixteen looms. The notice further explained that if the experiment proved successful, the management would adopt the new arrangement permanently after giving the notice of change required by the Bombay Industrial Relations Act.

In response to the notice, on September fourth the secretary of the union wrote to the manager of the mill. The union’s letter said that under the Bombay Industrial Relations Act the management could not legally alter the existing system of work without first giving notice of the change in the prescribed form to the union representatives and to the workers, and without complying with the other procedural requirements laid down by the Act. The union warned that if the management persisted in implementing the change without following the legal procedure, the workmen would be free to approach the appropriate courts. The union further asserted that the proposed new system would affect the workers’ wages, would cause substantial hardship, and that any adverse consequences would be attributable solely to the management because the union could not control the workers in that matter.

Despite the union’s objections, four workers volunteered to take part in the experiment and began working on the sixteen looms on September sixth. Their participation immediately provoked objections from the remaining workmen, who stopped the four volunteers from continuing the experimental work. The management did not withdraw its notice, and no other workers were required to join the experiment. The second shift of workers also refused to cooperate, resulting in a complete strike at the mill that lasted from September sixth until September twenty‑six, nineteen fifty‑one. On September tenth the appellant filed an application under sections seventy‑eight and ninety‑seven of the Bombay Industrial Relations Act, nineteen forty‑six, seeking a declaration that the strike which had begun on September sixth and continued thereafter was illegal because it contravened the provisions of the Act.

In the proceedings, the appellant sought a declaration that the workers’ strike, which began on 6 September 1951 and continued until the filing of the application, was illegal because it violated the Bombay Industrial Relations Act, 1946. On 16 September 1951, the Vice‑President of the Mill Mazdoor Sabha submitted a written statement responding to that complaint, asserting that the workers had not engaged in an illegal strike; rather, they had refused to perform the unlawful work imposed by the employer, specifically the demand that each weaver operate two looms, and they were willing to work only under the original conditions. Within three days of that statement, two of the workers presented another application before the same Labour Court, this time invoking sections 78 and 98 of the Act, and asked the Court to declare that the employer’s actions had resulted in an illegal lockout, thereby violating the Act, and to order the withdrawal of the contested change. The appellant answered that the employer’s conduct did not breach the Act because it did not constitute an illegal change. The Labour Court heard both applications together and, in a combined order dated 26 September 1951, concluded that the employer had not forced any employee to accept the new work, so the employer’s conduct could not be characterized as an illegal lockout, and likewise, the workers had not created a situation amounting to an illegal strike. Consequently, the Court denied the relief sought in both applications but nevertheless held that the employer’s action did constitute an illegal change and directed that the notice proposing the experimental arrangement be withdrawn. Satisfied with the outcome, the workers accepted the decision, whereas the employer, displeased by the finding of an illegal change, appealed to the Labour Appellate Tribunal, case number 293 of 1951. The Tribunal judges ruled that the strike was illegal, found no lockout on the part of the employer, and set aside the Labour Court’s declaration of an illegal change, substituting a declaration that the strike itself was unlawful with the attendant consequences. In response, the two workers filed a petition for a writ of certiorari under Articles 226 and 227 of the Constitution before the Bombay High Court, where Chief Justice Chagla and Justice Dixit held that the Tribunal’s decision was erroneous and should be set aside, thereby upholding the Labour Court’s original order.

In the earlier proceedings the High Court of Bombay set aside the order of the Labour Appellate Tribunal and reinstated the decision of the Labour Court, thereby upholding the finding that the strike was illegal. The present appeal before the Supreme Court arises from the certificate that was granted by that High Court. Consequently, the Court finds it necessary to examine the statutory provisions that govern the question of whether the order that is being challenged is lawful. The Bombay Industrial Relations Act of 1946 was enacted with the purpose of regulating the relationship between employers and employees, providing mechanisms for the settlement of industrial disputes, and serving several ancillary objectives. The Act replaced the earlier Bombay Trade Disputes Conciliation Act of 1934 and the Bombay Industrial Disputes Act of 1938. Under section 3(8) the term “change” is defined as an alteration in an industrial matter. Section 3(15) then defines “illegal change” by referring to sub‑sections 4 and 5 of section 46, which state that any alteration made in violation of the procedures laid down in sub‑sections 1, 2 and 3 of that section is illegal, and that failure to implement the terms of any settlement, award, registered agreement, or decision of a Wage Board, Labour Court or Industrial Court that pertains to industrial matters is also deemed an illegal change. Section 42, which deals with the procedure for effecting a change, requires that any employer who intends to make a change in respect of an industrial matter listed in Schedule II must give notice of that intention in the form prescribed to the employees’ representatives. The employer must also transmit a copy of the notice to the Chief Conciliator, the Conciliator for the relevant industry in the local area, the Registrar, the Labour Officer, and any other persons who may be prescribed, and must display a copy of the notice conspicuously at the place where the affected employees work, as well as at any other location directed by the Chief Conciliator. The Act further defines “industrial matter” in section 3(18) as any issue relating to employment, work, wages, hours of work, privileges, rights or duties of employers or employees, or the mode, terms and conditions of employment. This definition expressly includes: (a) all matters relating to the relationship between employers and employees or to the dismissal or non‑employment of any person; (b) all matters concerning the demarcation of duties of any employees or classes of employees; (c) all matters involving any right or claim under, or concerning, a registered agreement, settlement or award made under the Act; and (d) all questions of fairness and justice in relation to any industrial matter, taking into account the interests of the individual concerned and those of the community at large. Schedule II, paragraph 4, specifically mentions “rationalisation or other efficiency system of work,” thereby obliging an employer to give the prescribed notice when introducing such rationalisation.

In this matter, the Court explained that when an employer introduced any rationalisation of work, the law required the employer to give notice of that intention in the prescribed form to the employees’ representatives. The Court then referred to the statutory definition of “stoppage” contained in section 3(35‑A), which described stoppage as a total or partial cessation of work by employees in an industry acting together, or a concerted refusal, whether or not the cessation was a result of an industrial dispute. The Court also cited section 3(36), which defined “strike” as a total or partial cessation of work by employees in an industry acting together, or a concerted refusal, where the cessation was a consequence of an industrial dispute. Chapter XIV of the Act dealt with illegal strikes and lockouts, with section 97 addressing illegal strikes and section 98 addressing illegal lockouts. According to section 97(1)(c), a strike was illegal if it was commenced or continued solely because the employer had not complied with any standing order or had made “an illegal change.” The Court noted that the learned judges of the High Court had held that employees possessed a common‑law right to stop work and that only statutory prohibitions could render certain strikes illegal for the purpose of labour relations. In the present case, because the employer had not made any “illegal change,” the High Court, relying on the finding of the Appellate Tribunal that the change was legal, concluded that the strike did not fall within the scope of section 97. The appellant’s counsel presented two arguments concerning the construction of section 97(1)(c) of the Bombay Industrial Relations Act, 1946. The first argument contended that the High Court erred in suggesting a common‑law right to strike existed and that section 97 infringed that right. The counsel further argued that if a strike was illegal when it was commenced or continued solely because the employer made an illegal change, then, by necessary implication, it must also be illegal when it was commenced or continued for a legal change. The second argument advanced by counsel focused on the interpretation of the word “only” in the clause, asserting that the clause meant a strike was illegal only when the sole reason for the strike was an illegal change by the employer, and that the test should be the reason for striking rather than the legality of the change itself. The Court indicated that it was unnecessary to resolve the first argument, as it was of the view that the second argument regarding the construction of section 97(1)(c) was correct and should prevail.

The second argument presented by counsel concerned the proper construction of clause (c) of section 97(1). Counsel argued that the word “only” occurring in the clause must be read together with the word “reason”. Accordingly, if a strike is commenced or continued for the sole reason that the employer has made an illegal change, the strike must be held illegal. The test, according to this construction, is not whether the change itself was legal or illegal in fact, but rather the reason why the employees went on strike. If the employees commenced or continued a strike only because the employer had made an illegal change, the strike falls squarely within the express terms of clause (c) and is therefore illegal. The Court expressed that it was unnecessary to decide whether the first argument advanced by counsel for the appellant was correct, because the Court was clearly of the opinion that the second argument regarding the interpretation of section 97(1)(c) was the correct approach and should prevail.

In the present case the workmen themselves approached the court with a prayer that the employer’s action amounted to an illegal change. In their application to the Labour Court they stated: “That for the above‑mentioned reasons it is prayed that this Honourable Court be pleased to declare the said lockout by the opponent Mills as illegal being in contravention of the Bombay Industrial Relations Act, and the opponent be ordered to withdraw the said illegal change.” From this submission it was evident that the workmen had struck solely because the change or experiment introduced by the appellant employer was alleged to be illegal. Consequently, the conduct of the workmen fell within the express terms of section 97(1)(c) of the Act.

The learned Chief Justice, the judgment notes, had not considered this aspect of the case and had reached a conclusion on the legality of the strike based on reasoning that did not give full effect to the wording of section 97(1)(c). The Court held that the proper test was to determine the reason for which the strike was commenced or continued, and that it was unnecessary to decide whether a common‑law right to strike existed or whether the workmen possessed a collective‑bargaining right to strike against a change they disliked. Counsel for the workmen, identified as Mr Gokhale, had referred to various provisions of the Bombay Industrial Relations Act, 1946, and argued that the workmen possessed a right to strike as a collective‑bargaining measure against any employer action they considered detrimental, so long as the strike did not fall within the prohibited scope of section 97. Even assuming the correctness of Mr Gokhale’s contention, the Court observed that if the workmen commenced or continued the strike solely because the employer had made an illegal change, the strike was covered by the express terms of section 97(1)(c).

The Court observed that when workmen begin or continue a strike solely because the employer has effected an illegal change, the strike falls squarely within the explicit language of section 97(1)(c) of the Act. The Court noted that it does not matter if a later decision of the Labour Court declares the change to be legal; the decisive factor is the reason for which the strike was initiated or maintained. The Court further pointed out that the legislation provides a separate mechanism for penalising an employer who makes an illegal change, but that mechanism is unrelated to the test imposed by section 97(1)(c). In the present case, the Court found that the reason for the strike was clearly established: the workmen themselves stated that they started and kept the strike because they believed the employer had made an illegal alteration. Consequently, the Court held that, under a correct construction of section 97(1)(c), the strike that lasted from 6 September to 26 September 1951 was unmistakably illegal. On that basis, the Court allowed the appeal, set aside the High Court order dated 2 July 1953, and affirmed the Labour Appellate Court judgment dated 4 September 1952, which declared the strike illegal and subject to its normal consequences. The Court also addressed the costs issue, noting that the appellant had, in seeking a certificate of fitness from the Bombay High Court for appeal to this Court, consented to pay the respondents’ taxed costs in a single lump sum. Because this agreement was highlighted by counsel for the appellant, the Court found it unnecessary to decide whether the High Court could order costs while granting a certificate under Article 133(1)(c) of the Constitution. Accordingly, the Court directed the appellant to pay the respondents’ costs of the appeal in one set and to bear its own costs. The appeal was therefore allowed.