Hooghly Jute Mills vs Their Employees

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 29 January, 1957

Coram: Bhagwati, J.

In this matter, the Supreme Court considered an appeal filed under special leave granted pursuant to Article 136 of the Constitution. The appeal arose from a judgment of the Labour Appellate Tribunal in Calcutta, which had set aside the award of the Industrial Tribunal of Calcutta and had directed that the respondent, Nanilal Mukherjee, be reinstated by the appellant, Hooghly Jute Mills, with full pay, all emoluments, and uninterrupted continuity of service. The factual background revealed that Nanilal Mukherjee had been engaged by the appellant on 26 July 1944 as a Turbine Fitter and had continued in that capacity until July 1951, the point at which the mills were electrified. Following the electrification, a number of employees were dismissed on grounds of redundancy. Although Mukherjee was likewise eligible for dismissal, the appellant retained him because of his seniority as a Mistry and expressed an intention to incorporate him, if feasible, into the new arrangement of mistries that the electrified operations required. Consequently, Mukherjee was allotted a trial period within the restructured setup for a considerable duration. However, on 4 September 1952, an overseer of the mills, identified as James Collins, submitted a report to the mill manager stating that Mukherjee had been assigned duties as a general Vice‑Mistry after the turbine closure, but that, upon observation, he displayed no aptitude for that work and therefore should be treated as redundant. Acting on this report, the manager issued a notice on 15 September 1952 terminating Mukherjee’s services effective 30 September 1952. Mukherjee received a gratuity calculated for four and a half years at half a month’s average basic wages, full contributions to his Provident Fund from both himself and the employer, and earned leave with wages, all of which he accepted. The dispute over his dismissal was taken up by the National Union of Jute Workers, Calcutta, of which Mukherjee was a member, and was referred by the Government of West Bengal to the First Industrial Tribunal, Calcutta for adjudication. Both the appellant and the respondent presented evidence before the Tribunal, including examinations of Mukherjee and Collins. After evaluating the parties’ submissions and the evidence, the Tribunal concluded that Mukherjee had been retrenched because he could not be productively employed after the turbine’s dismantling, and determined that the dismissal was not a result of victimisation or an unfair labour practice. Accordingly, the Tribunal held that Mukherjee was not entitled to reinstatement. Dissatisfied with this award, the respondent appealed to the Labour Appellate Tribunal, Calcutta. The appellate Tribunal overruled the appellant’s objection that the appeal did not raise any substantial question of law and could not be maintained. It also rejected the appellant’s contention that Mukherjee could have continued in service month after month. The Tribunal observed that a dismissal lacking reasonable evidence required the lower Tribunal’s finding to be set aside for insufficient material, noting that such a conclusion could not be sustained given the contrary indications in the case. Consequently, the Labour Appellate Tribunal allowed the appeal, ordering Mukherjee’s reinstatement with full pay, all emoluments, and continuity of service without any break. The appellant subsequently obtained special leave from this Court to challenge the Labour Appellate Tribunal’s decision, and the present appeal is now before the Court for final disposal. It is necessary to note that the award...

In the appeal before the Labour Appellate Tribunal, the tribunal rejected the appellant’s contention that the appeal did not raise any substantial question of law and therefore could not be maintained. The tribunal found that it could not accept the narrative that Mr. Nanilal Mukherjee had remained continuously in service month after month under the circumstances of the case. It expressly observed that when a dismissal occurs without any reasonable evidence, the finding of the lower tribunal must be set aside not only because it is not based on sufficient material but also because such a conclusion could not be logically drawn from the facts and circumstances of the case when the indications point in the opposite direction. Accordingly, the tribunal allowed the appeal in the limited extent of ordering the reinstatement of Mr. Nanilal Mukherjee with full pay and emoluments and with continuity of service uninterrupted by any break.

The appellant subsequently applied for and obtained special leave from this Court to appeal against the decision of the Labour Appellate Tribunal, Calcutta, and the appeal was brought before this Court for final hearing and disposal. The Court noted that the award of the First Industrial Tribunal, Calcutta, had been founded on the evidence presented by the parties, which consisted of the testimonies of Mr. Nanilal Mukherjee and Mr. James Collins. Mr. Mukherjee admitted that his discharge took effect on 1‑10‑52 and that he had been served with a notice stating that his services were no longer required from that date. He also admitted that the reason for his discharge was that he was no longer needed as a Turbine Fitter. The evidence did not establish any dismissal by way of punishment, victimisation, or unfair labour practice on the grounds of his membership in the respondent union or his active participation in union activities. Rather, the evidence showed that his termination resulted from redundancy caused by the closure of the turbine following the electrification of the mills. Consequently, on the basis of the record, if the evidence were believed, it was sufficient for the Industrial Tribunal to reach the conclusion that it had reached. Under these circumstances, the Court held that no question of law, let alone a substantial question of law, was involved in the respondent’s appeal to the Labour Appellate Tribunal. The Labour Appellate Tribunal could entertain an appeal only if a substantial question of law arose; matters concerning the sufficiency of evidence for fact‑finding fell within the exclusive jurisdiction of the fact‑finding tribunal. A factual finding of the Industrial Tribunal could be set aside only if there were no evidential foundations for it, or if the finding was perverse or one that no reasonable tribunal could have reached.

In this case the Court examined the material placed before the Industrial Tribunal and concluded that, if the evidence was accepted as true, it was sufficient to support the Tribunal’s conclusion in favour of the appellant. The Court further observed that the appeal filed by the respondent did not raise any question of law, and certainly not a substantial question of law, against that factual finding. Since the Appellate Tribunal’s jurisdiction is confined to legal questions and not to re‑examining the factual basis of a decision, the Court held that the Labour Appellate Tribunal in Calcutta had no jurisdiction to entertain the appeal and could not set aside the finding recorded by the Industrial Tribunal with respect to Nanilal Mukherjee. Accordingly, the Court expressed the opinion that the Labour Appellate Tribunal was without authority to consider the challenge to the award of the Industrial Tribunal concerning Nanilal Mukherjee. The appeal was therefore allowed, the decision of the Labour Appellate Tribunal relating to Nanilal Mukherjee was set aside, and the award originally made by the First Industrial Tribunal, Calcutta, on issue number two was restored. The respondent had filed a statement of case but failed to appear at the hearing. After taking into account all the circumstances, the Court ordered that each party shall bear its own costs of the appeal.