Indian Iron and Steel Co., Ltd. and Another vs Their Workmen (And Connected Appeals)

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

Court: Supreme Court of India

Case Number: Civil Appeal Nos. 44, 45, 336, 337 of 1957

Decision Date: 15 October, 1957

Coram: S.K. Das, Natwarlal H. Bhagwati, J.L. Kapur

In this case, the Supreme Court of India recorded that the dispute involved Indian Iron & Steel Co., Ltd. and another company as petitioners and their workmen as respondents. The judgment was delivered on 15 October 1957 by a bench consisting of S. K. Das, Natwarlal H. Bhagwati and J. L. Kapur. The citation of the report is 1958 AIR 130 and 1958 SCR 667. The matter concerned an industrial dispute characterised as an illegal strike, a lock‑out, notices issued by the employer, the right of workmen to be taken back without condition, the refusal of leave to workmen taken into police custody, the discretion of the employer, the dismissal of workmen, and the powers of an Industrial Tribunal to intervene. The Court noted that because the workmen continued an illegal stoppage of work, employed tactics described as “glow down”, and carried out strikes despite advice from their Union, the employer issued a notice dated 23 August 1953. That notice stated that, as a result of the illegal strike, management had no alternative but to declare a lock‑out of the whole plant except for special shifts, effective 24 August 953. The notice further declared that the services of all other workers would be deemed to be discharged with effect from 24 August 953. Subsequently the employer lifted the lock‑out and issued a second notice on 17 September 1953, informing that all employees who were on the company’s work rolls on 23 August 1953 and who wished to report for duty must do so on 18 September 1953. A third notice later extended the time allowed for the workmen to resume work. The principal issue before the Court was whether the notice of 23 August 1953 actually terminated the employment of the respondents by discharging them from 24 August 1953, and whether the notice of 17 September 1953 merely offered them the possibility of re‑employment at the employer’s discretion upon satisfaction of certain conditions. The Court held that, when the notices were interpreted, the phrase “shall be deemed to be discharged” must be read in the context of the lock‑out declaration. The intention of the employer was that those employees whose service had been refused during the lock‑out should be allowed to resume work without any condition if they reported for duty by the specified date, and that a condition would apply only for those who reported after that date. The Court also considered the situation where some of the workmen, having been taken into police custody, applied for leave while in custody but were denied leave by the employer pursuant to Standing Order No. 0. The Labour Appellate Tribunal had held that, because the workmen were in custody, the employer could not refuse leave. The Supreme Court held that the decision on whether leave should be granted in such circumstances rested with the employer’s discretion, unless it could be shown that the employer was exercising power in a colourable or mala‑fide manner under the standing order. The judgment therefore clarified the interpretation of the employer’s notices, the conditions for reinstatement after a lock‑out, and affirmed the employer’s discretion to grant or refuse leave to workmen in custody, subject only to proof of an improper exercise of authority.

The Court recalled the authority of the case of the Indian Iron and Steel Company, Calcutta v. Their Employees ([1956] S.C.R. 781) and held that the jurisdiction of an Industrial Tribunal to intervene in dismissals of workmen is limited. The Tribunal does not function as an appellate court that replaces the judgment of the employer with its own. Intervention is warranted only in specific circumstances: when the employer acts without good faith; when there is victimisation of the employee or an unfair labour practice; when the employer commits a fundamental error or disregards the principles of natural justice; or when, based on the evidence, the Tribunal’s finding is wholly untenable or perverse.

The matter before the Court arose on special leave against four civil appeals—numbers 44, 45, 336 and 337—filed in 1957. These appeals challenged decisions rendered on 29 June 1956 by the Labour Appellate Tribunal of India at Calcutta in Appeals Cal. 223, 226, 247 and 250 of 1955. The Attorney‑General for India, M. C. Setalvad, appeared for the appellant in Appeal 44 and for the respondent in Appeal 45, assisted by counsel Dipak Datta Chaudhury and B. N. Ghosh. The same Attorney‑General, with counsel S. N. Mukerji and B. N. Ghosh, represented the appellant in Appeals 336 and the respondent in Appeal 337. Additional counsel—including S. K. Acharya, Arun Kumar Dutt, D. L. Sen Gupta and Sukumar Ghosh—appeared for the parties in the remaining combinations of appeals. The judgment was delivered by Justice S. K. Das on 15 October 1957.

The Court explained that the four appeals originated from labour disputes between the employer, identified as Messrs. Indian Iron and Steel Company Limited and the Indian Standard Wagon Company Limited of Burnpur, Asansol (collectively referred to as “the Company”), and various groups of its employees. The Company’s managing agents were Messrs. Martin Burn Limited, situated at 12 Mission Row, Calcutta. The original controversy that gave rise to Appeals 44 and 45 involved a purported case concerning 144 workmen, while the controversy underlying Appeals 336 and 337 related to 74 workmen. By the time of the present proceedings, the actual numbers of workmen affected had diminished considerably.

Appeals 44 and 45 were linked because they stemmed from the same tribunal decision; Appeal 44 was filed by the Company concerning 104 respondent workmen, whereas Appeal 45 was filed on behalf of 103 of those 104 workmen. Similarly, Appeals 336 and 337 were jointly based on a common decision, with Appeal 336 representing the Company in relation to 10 workmen organized in three groups, and Appeal 337 representing 31 workmen. Recognising that the factual matrices of the two sets of appeals differed, the Court found it advisable for reasons of convenience and clarity to consider the two groups separately, and therefore began its analysis with Appeals 44 and 45.

In regard to Civil Appeals 44 and 45, the Court recorded the factual background that, in 1947, the Asansol Indian Iron and Steel Workers Union had been recognised by the Company, with Professor Abdul Bari serving as its President. After Professor Bari’s death, the Union elected Mr Michael John as President, and the Union continued to enjoy the Company’s recognition. Subsequently, in 1951, the Company was declared a Public Utility Service under the Industrial Disputes Act, 1947. The Company alleged that on 12 September 1951 it had established a procedure intended to secure an amicable settlement of any disputes that might arise between the Company and its employees. The alleged procedure required that a dispute concerning an individual employee first be referred to the shop‑in‑charge and then to a Works Committee; the Union was required to discourage any individual worker from approaching the Company’s management directly. If the Works Committee succeeded in effecting a settlement, that settlement was to be deemed final; if the Committee failed, the Union could take up the matter on its merits with the Company’s management. According to the record, this procedure was accepted at a joint meeting of the Works Committee held on 13 November 1951.

The factual narrative then moved to events occurring in 1953. The Company maintained that on 18 January 1953 certain workers employed in the Hot Mills section engaged in an illegal stoppage of work. On the following day, all three shifts of the Hot Mills section commenced a “slow‑down” strike, an action that adversely affected the Company’s production. In response, the Company addressed a letter to the Union’s Secretary on 27 January 1953, drawing the Union’s attention to the illegal stoppage and the “slow‑down” tactics. The letter warned that, should the workers’ attitude not improve, the Company would be compelled to take such action as it deemed necessary to secure a return to normal work. Two days later, the workers of the Hot Mills section submitted a set of demands, but they did so without involving the Union. The Company informed the workers that joint petitions submitted without reference to either the Union or the Works Committee would not be accepted, and that no consideration could be given to any demands unless normal work was resumed. The Union, in turn, communicated to the Company that the workers concerned had not made any representation to the Union and that the Union did not support their activities, indicating a clear split between a segment of the Hot Mills workers and the Union.

Following these developments, the Company issued notices to the workmen outlining the consequences of their continued action. In reaction, the workers elected a committee consisting of six men with the purpose of pressing their demands. The Company, however, refused to negotiate with this committee, and the impasse persisted. The record noted that the stalemate continued into March 1953, at which point the narrative of the case proceeds to subsequent events.

In March 1953 a conference was held that involved three parties: the Labour Commissioner of the Government of West Bengal, the General Manager of the Company, and the President of the Union. Prior to this meeting the Company had issued a notice that closed the ‘B’ and ‘C’ shifts of the Hot Mills section. Although the tripartite conference reached certain conclusions, it did not succeed in restoring industrial harmony. A principal reason for its failure, as recorded, was that the representatives of the workers from the Hot Mills section were not included in the discussions. The committee formed by the workers protested the closure of the two shifts, and the dispute continued until 8 April 1953, when the Company issued a further notice to the workmen stating that unless they voluntarily expressed a willingness to resume normal work, they would be deemed to have ceased employment as of 2 p.m. on 10 April 1953. On the following day, 11 April 1953, approximately seven hundred workers engaged in an illegal stoppage of work. In response, the Labour Minister of West Bengal visited Asansol, met with the representatives of the workers, the Union, and the management, and offered several suggestions, none of which succeeded in ending the unrest. Subsequently, the workmen organised an Action Committee, and a strike occurred on 27 April 1953. The Sub‑Divisional Magistrate of Asansol then promulgated an order under section 144 of the Code of Criminal Procedure, which further deteriorated the situation. The authorities declared that iron and steel were essential to the community’s life pursuant to the West Bengal Security Act, 1950, and consequently the Company halted all leave for employees. In the interim, thirty‑eight workers from various departments were dismissed on the grounds of alleged disobedience of orders. On 18 August 1953 the Action Committee issued a strike notice to the Company, declaring that the workmen would commence a strike and abstain from duty starting 11 September 1953.

The pivotal development occurred on 23 August 1953 when the Company announced a lock‑out and issued a detailed notice, the full text of which was central to the arguments presented by counsel on both sides. The notice read as follows: “NOTICE. Having regard to the continued existence of the go‑slow strike and the unsatisfactory working of the Plant and in consequence of the illegal strike which took place on (1) 18‑1‑53; (2) 9‑3‑53; (3) 11‑4‑53 to 20‑4‑53; (4) 27‑4‑53 and 28‑4‑53; (5) 15‑7‑53, the Management has no option but to declare a lock‑out of the entire works except the special shifts in the Hot Mills Section of the Sheet Mills with effect from Monday, the 24th August, 1953. The following Departments will continue to operate: No. 3 Boiler Plant; No. 2 Power House; Nos. 1 and 2 Reservoir Pump Houses; Riverside Pump Station; Town Water Works; Town Sub‑Station; Coke Ovens. Workers required in the above Departments will be notified. The services of all other workers shall be deemed to be discharged with effect from Monday, August 24th, 1953.” The notice was signed by Bunpur (Sd.) J. McCraken, General Manager.

On 23 August 1953 the General Manager of the Company signed a lock‑out notice, and on 17 September 1953 the Company issued a second notice declaring that the lock‑out would be lifted with effect from six o’clock in the morning on Friday, 18 September 1953. The second notice required every employee whose name appeared on the Company’s rolls as of 23 August 1953 and who wished to return to work to report for duty between six o’clock on the morning of 18 September 1953 and ten o’clock in the evening on Saturday, 19 September 1953, on the regular shift to which he had previously been assigned. The notice further directed that any worker who was in the vicinity of the works but was unable to resume duty because of illness should report his condition to the Company’s medical authorities, and if he could not attend personally he should send a written intimation of his sickness to the Company by 19 September 1953. In such a case the Company would arrange for the worker’s medical examination, and the worker would be required to resume duty from the date on which the Company’s medical authorities declared him fit. The notice additionally provided that any worker who had left the vicinity of the works could report for duty on or before Thursday, 24 September 1953, provided that he produced to the Company satisfactory evidence of his absence.

Subsequently, on 23 September 1953 the Company issued a third notice which reproduced a request received from the President of the Asansol Iron and Steel Workers’ Union for an extension of the time given to the workmen to resume work, and the notice concluded that the Company was pleased to accede to the request to the extent of one week; consequently the Company’s notice No. GM/CS‑3B/571 dated 17‑9‑53 was deemed to be amended so that the deadline for returning to work would be extended until Friday, 2 October 1953. Of the workmen who were the subject of the present dispute, ninety‑eight reported for duty on 1 October 1953, four reported on 2 October 1953, and one reported on 9 October 1953; nevertheless the Company refused to allow any of these men to resume their duties. This refusal gave rise to an industrial dispute which the Government of West Bengal referred to the Fifth Industrial Tribunal. The Tribunal was asked to determine two matters: first, whether the Company was justified in keeping the workmen listed in three separate lists (A, B and C) out of employment; and second, whether the workmen were entitled to reinstatement and to any additional relief or compensation. The Tribunal held that every workman who had turned up on or before 2 October 1953 in compliance with the Company’s notices was entitled to be taken back into employment without any condition. Of the two men who reported later, the Tribunal found that one suffered from typhoid fever and therefore had a sufficient reason to report for duty only on 9 October 1953. Regarding the second issue, the Tribunal ordered that, apart from Shri Satyanarayan, who appeared as number 5 in list C attached to the order of reference, the other workmen would receive half of their basic salary for the entire period beginning on 2 October 1953 up to the date on which each actually returned to work, and that no dearness allowance or any other allowance would be payable.

The Fifth Industrial Tribunal had awarded the workmen only half basic pay and expressly excluded any dearness allowance or any other allowance. From that award two separate appeals were filed in the Labour Appellate Tribunal at Calcutta. The appeal made by the Company challenged the direction that all employees who had reported for work on or before 2 October 1953 should be reinstated without any condition. The appeal filed by the workmen sought full compensation for those workers who were ordered to be taken back into employment. The Labour Appellate Tribunal dismissed both appeals; it rejected the Company’s petition on its merits and refused the workmen’s petition on the ground that it did not raise any substantial question of law. After the dismissals both sides applied for and were granted special leave to appeal to this Court. In Civil Appeal No 44 the Attorney‑General, appearing for the Company, contended that both lower tribunals erred in principle when they interpreted the notices dated 23 August 1953 and 17 September 1953. He argued that because the workmen continued illegal stoppages, slow‑down tactics and strikes despite their Union’s advice, the Company had no alternative but to discharge the workmen, except in a few essential departments, effective from 24 August 1953. He maintained that the notice of 23 August, although it described a lock‑out of the entire works except for special shifts, actually terminated the respondents’ services by discharging them from 24 August 1953. Further, he submitted that the notice dated 17 September 1953 did not rescind the earlier discharge order but merely offered the respondents a chance of re‑employment at the Company’s pleasure, subject to the fulfilment of certain conditions. The Attorney‑General therefore asserted that, if the notices were to be understood in this manner, the tribunals were wrong to hold that the respondents were entitled to be reinstated as a matter of right, and he also maintained that the Fifth Industrial Tribunal erred in holding that a lock‑out and a discharge could not occur simultaneously.

The Court observed that the two notices could not be given the construction advocated by the Attorney‑General, irrespective of the separate question whether the Industrial Disputes Act, 1947 permits a simultaneous order of discharge and lock‑out for the same employees. It emphasized that the proper construction of a notice depends primarily on the intention expressed by the language used in the document, and when the words are ambiguous, the surrounding circumstances must be examined to ascertain that intention. The Court noted that the first notice expressly stated, inter alia, that because of illegal strikes on several previous occasions, management had no alternative but to declare a lock‑out of the entire works. This statement indicates that the phrasing “the services of all other workers shall be deemed to be discharged” must be read in the context of a lock‑out, rather than as an unequivocal termination of employment. Consequently, the Court found that the notices did not support the Attorney‑General’s suggested interpretation and that the conclusions reached by the lower tribunals were not manifestly erroneous.

In the first notice the employer declared that the whole plant, except for a few special shifts, would be closed effective Monday, August 24, 1953, and then added that “the services of all other workers shall be deemed to be discharged with effect from Monday, August 24, 1953.” The Court explained that the phrase “shall be deemed to be discharged” must be read in the context of the lock‑out declaration; such wording is not normally used to terminate employment entirely and does not indicate an intention to end the workers’ services forever. Under the Industrial Disputes Act, 1947, a lock‑out is defined as the closing of a place of employment, the suspension of work, or the refusal by an employer to continue employing any number of persons employed by him. Accordingly, when the notice said that the services of all other workers would be deemed discharged from the date of the lock‑out, it really meant that the company would not employ the workmen during the period when the plant was closed. The second notice, dated September 17, 1953, removed any doubt on this point. It began by stating that “management have reasons to believe that many workers are desirous of resuming work,” and then directed that all employees who were on the company’s rolls on August 23, 1953, and who wished to report for duty, must do so between 6 a.m. on Friday, September 18, 1953, and 10 p.m. on Saturday, September 19, 1953. The language of this notice shows clearly that the purpose was not the re‑employment of discharged workmen but the resumption of work by those whose employment had been halted because of the lock‑out. The third notice, issued on September 23, 1953, extended the date for joining to October 2, 1953, and explained that “a large number of workers might have been prevented from resuming their work for reasons beyond their control,” which served as the basis for the extension. When the three notices are read together, in light of the events that occurred before August 23, 1953, the only reasonable construction, which the Tribunals adopted, is that the employees whose employment had been refused during the lock‑out were allowed to resume work without conditions if they reported by the specified date, and with certain conditions if they reported after that date. The Attorney‑General cited oral and documentary evidence, including a letter dated September 2, 1953, from the Action Committee to the General Manager, describing the August 23, 1953, notice as “an illegal and unconstitutional notice of discharge,” to show that the workmen themselves understood it as a discharge notice.

The counsel for the respondent workmen relied on testimony from several of the Company’s servants, indicating that the service books of the employees did not contain any formal order of discharge, as the rules required, nor was a one‑month notice of discharge given. Instead, the workmen were treated as having continuous service throughout the period of their absence. The Court held that when the language of the notices plainly expresses the Company’s intention, it is unnecessary to introduce additional evidence. Moreover, the Court noted that it does not function as an ordinary appellate court for Industrial Tribunals and therefore does not normally re‑examine the evidence presented to those tribunals unless there are exceptional circumstances, a grave injustice, or issues of sufficient seriousness that justify a fresh review.

The Attorney‑General advanced an alternative argument. Assuming the Court’s interpretation of the notices, the respondent workmen failed to report for duty on or before Saturday 19 September 1953, the last day by which they could resume work without any condition. The workmen instead reported on 1 October 1953 or 2 October 1953 but did not supply the Company with satisfactory evidence of the reasons for their absence, as required by the notice dated 17 September 1953. Consequently, they were not entitled to be reinstated automatically and without conditions.

The record then required an examination of the events that occurred between November 1953 and April 1954. A considerable number of workmen who reported on 1 October 1953 and 2 October 1953 were later interviewed. As a result of those interviews, 144 workmen were not taken back into employment. Shri S. K. Kanwar, a witness for the Company, explained that those men were interviewed but could not provide a satisfactory explanation for failing to report within the time specified in the 17 September 1953 notice, and therefore did not meet the condition. The written report of those interviews, however, was not produced. The same witness added that some workmen who were also interviewed were reinstated without any explanation of their absence.

The evidence on this point was highly conflicting. One witness testified that around 2,000 men assembled at the Company’s main gate on 1 October 1953 and 2 October 1953, after which the Company’s instruction, from 2 October onward, was to “take back only those who were not harmful to the running of the factory.” Another witness could not recall whether any of the respondent workmen appeared before him on those dates or whether any reasons for their absence were given. Because of these contradictions, it could not be established that the workmen’s failure to produce satisfactory evidence of their absence was the sole reason for the Company’s decision not to reinstate them.

Another witness testified that he could not recall whether any of the respondent workmen appeared before him on 1 October 1953 or on 2 October 1953, nor could he say whether any of them offered reasons for their absence. Because the evidence on this point was contradictory, the Court could not accept the proposition that the workmen had failed to produce satisfactory proof of why they were absent and that this lack of proof was the sole reason why the Company did not reinstatement them. The learned Attorney General then directed the Court’s attention to the testimony of Shri Promotho Nath Mukherji, who was identified as witness No 9 for the workmen. He stated: “When the lock‑out was lifted I did not think it proper to join immediately because most people were then outside, secondly, my colleagues and others had not then joined, and lastly, my social status in the place combined with the above circumstances restrained me from joining.” The Court observed that it was possible that some of the workmen might have reported for work earlier than they actually did, but such a possibility did not establish that the Company had refused to take back only those workers who could not show satisfactory evidence of their absence. If the Company's position were indeed that each workman had failed to produce such evidence, the Company should have produced the written record of the interviews or otherwise offered sufficient proof that, in every individual case, the workmen could not satisfy the evidentiary requirement. Instead, the Tribunal found that the Company examined the conduct of the workmen to determine the extent of their association with the Action Committee, their participation in meetings, and related matters, and on that basis the Company chose to reinstate some workers while refusing to reinstate others.

The Court noted that it was now too late to try to prove that every respondent workman in the two appeals had failed to produce satisfactory evidence of his absence. Accordingly, the Court concluded that the appellant Company, in Civil Appeal 44, had not established any ground for interference with the decision under appeal. Although there had been some argument before the Court concerning whether the strike declared by the workmen was illegal and whether the lock‑out declared by the Company was lawful, the Court chose not to decide those issues because they were unnecessary for the present appeals. The Court further clarified that its reluctance to pronounce on the conduct of the workmen before 23 August 1953 did not amount to an endorsement of that conduct, which the Industrial Tribunal had rightly criticized. The Court also addressed a suggestion that, if the notice dated 23 August 1953 terminated the workmen’s services and the second notice dated 17 September 1953 operated as a conditional revocation of the earlier notice, then there was no consideration for the condition imposed and the Company could change its mind‑ and

The Court observed that the condition could simply be ignored. In the view taken of the three notices, it became unnecessary to examine the submission concerning the conditional revocation. Regarding Civil Appeal 45, filed on behalf of the workmen seeking full compensation, the Court noted that the matter did not raise any question of principle. The Fifth Industrial Tribunal had refused to award compensation for the period prior to 2 October 1953 because the workmen themselves had attempted to coerce the Company by employing “slow‑down” tactics and similar methods. For the period after 2 October 1953, the Tribunal allowed compensation amounting to one‑half of the wage. This award was based on the finding that some of the workmen were situated near Burnpur and might have rejoined earlier, while others claimed a right to resume their services without providing any explanation, and that none of the workmen had performed any actual work during that interval. The Court reiterated that no principle was involved and that it saw no error in the Tribunal’s determination of the compensation. Turning then to Civil Appeals 336 and 337, the Court explained that these appeals arose from a case initially involving seventy‑four workmen who had been discharged or suspended by the Company for various reasons. The central question referred to the Fifth Industrial Tribunal was whether each discharge or suspension was justified and, if not, what relief the affected men were entitled to. The Tribunal classified the seventy‑four men into four distinct categories: (1) those whose services were terminated in accordance with the Company’s Standing Orders for fourteen consecutive days of unauthorised absence; (2) those dismissed for a major misdemeanor; (3) those suspended whose cases could not be finally disposed of; and (4) those dismissed for disobedience of orders and for participation in a concerted “go‑slow” strike. After considering each individual case within these categories, the Tribunal ordered reinstatement of twenty‑five of the seventy‑four workmen and directed that twenty‑four of the reinstated men receive compensation equal to one‑half of their basic pay for the period of forced unemployment. From the Tribunal’s decision, two appeals were taken to the Labour Appellate Tribunal, Calcutta—one by the Company and one by the workmen. The Labour Appellate Tribunal dismissed both appeals, and consequently the two appeals now before this Court were filed by special leave.

In Civil Appeal 336, the Court indicated that only ten workmen were the subject of consideration. Seven of these ten fall within the category of employees whose services were terminated under the Company’s Standing Orders for fourteen consecutive days of unauthorised absence. The seven individuals are named as follows: Bamapado Mukherji, Chandrasekhar Mukherji, Niaz Hossain, Dhani Ram, Chandrabhan Sing, Raja Sing, and Jai Kishore Sing. Two additional workmen, namely Samar Sen and Abharani Debi, belong to a different classification described as those who were said to have been…

In the present proceedings, the tenth workman, Himansu Chattoraj, was placed in a separate category from the other appellants. In Civil Appeal 336, which concerned only ten workmen, seven of them were terminated under the Company’s Standing Orders for being absent without permission for fourteen consecutive days; these seven were Bamapado Mukherji, Chandrasekhar Mukherji, Niaz Hossain, Dhani Ram, Chandrabhan Sing, Raja Sing and Jai Kishore Sing. The remaining two, Samar Sen and Abharani Debi, were dismissed for a major misconduct. In Civil Appeal 337, filed on behalf of the workmen, there were thirty‑one appellants, of whom nine (excluding Samar Sen) were the same individuals who appeared in the Company’s appeal, while the rest were workmen who had not been ordered reinstated. The matters of two of those additional workmen, Akka Hossain and D. P. Das, were specially referred to this Court by counsel Mr S. K. Acharya on the basis that Akka Hossain should be treated in the same manner as Himansu Chattoraj and that D. P. Das should be treated like those workmen whose leave had not been granted and who were absent for fourteen consecutive days without permission.

The Court first examined the ten workmen in Civil Appeal 336, beginning with the seven who had been absent without leave for the prescribed fourteen‑day period. The relevant provision was Standing Order No. 9 of the Company, which provides that any worker who is absent for fourteen consecutive days without permission shall be automatically discharged, and that a worker who is absent for fourteen individual days within any twelve‑month period is also liable to discharge. The factual circumstances were that, on various dates between 5 July 1953 and 10 July 1953, these seven workmen were taken into police custody and remained detained for a period of time; while in custody they applied for leave, but the Company refused their applications. The Fifth Industrial Tribunal held that Standing Order No. 9 was not an inflexible rule and that a mere application for leave was sufficient to prevent the operation of the automatic discharge provision. When the matter came before the Labour Appellate Tribunal, counsel for the workmen, Mr S. K. Acharya, acknowledged that he could not fully support the Fifth Industrial Tribunal’s position, yet he argued that the Tribunal had examined the justification for each workman’s absence and that, given their detention, the Company was not justified in refusing leave. The Appellate Tribunal accepted this argument.

The Court noted that the same issue had been considered in Burn and Co., Calcutta v. Their Employees, where one employee, Ashimananda Bannerji, had been arrested under the West Bengal Security Act and detained from 25 January 1949 to 5 April 1949. The Company terminated his services on 22 April 1949 on the ground of continued absence. The Labour Appellate Tribunal ordered his reinstatement, holding that he had been discharged without a charge and without an enquiry. The Supreme Court, however, disagreed with that decision, observing that the ground for discharge was the employee’s continued absence and his inability to perform work, and that it was difficult to see what purpose a formal charge would serve or what answer the employee could give. The Court therefore held that the Appellate Tribunal’s order was manifestly erroneous and must be set aside, and it indicated that the same principle should be applied to the present facts.

The Court noted that it was difficult to see any purpose that would be served by delivering a formal charge to the employee and that it was hard to imagine any answer the employee could give in response to such a charge. Accordingly, the Court held that the order of the Appellate Tribunal was manifestly erroneous and therefore had to be set aside. The Court then applied the same principle to the facts before it. It observed that the arrested workmen were unable to attend their places of work because the police had taken them into custody. Although this circumstance was unfortunate for the workmen, the Court found it would be unjust to require the Company to grant leave automatically whenever an application for leave was made under such circumstances. The Court explained that if a large number of workmen were arrested by the authorities responsible for law and order because of their involvement in a labour dispute, the Company’s operations would be paralysed if the Company were forced to grant leave to all of them for an indeterminate period. Such a rule, the Court said, would not be just, would not restore harmony between labour and capital, and would not ensure the normal flow of production. The Court further held that it was irrelevant whether the charges for which the workmen were arrested were later proved in a court of law. The Company was required to continue its business, and it might find it impossible to do so if a large number of workmen were absent. Accordingly, the decision on whether leave should be granted in those circumstances rested with the discretion of the employer. The Court added that if the workmen had been arrested at the instance of the Company for the purpose of victimisation, the situation would be different and would amount to a colourable or mala fide exercise of power under the relevant Standing Order; however, the Court found that this was not the case here. The Court concluded that the two lower Tribunals had misdirected themselves as to the true scope and effect of the Standing Order in question, and that their decision concerning the seven workmen could not be supported.

The Court then turned to consider the two persons placed in the second category, namely Samar Sen and Abharani Debi, recalling that the Court was exercising its jurisdiction on an appeal by special leave. The Court explained that Samar Sen had served as the Manager of the Burnpur hotel and that one of the issues raised was whether he qualified as a “workman” within the meaning of the relevant provisions of the Industrial Disputes Act, 1947. At the material time, the Act defined “workman” in Section 2(s) as follows: “workman” means any person employed (including an apprentice) in any industry to do any skilled or unskilled manual or clerical work for hire or reward and includes, for the purposes of any proceedings under this Act in relation to an industrial dispute, a workman discharged during that dispute, but does not include any person employed in the naval, military or air service of the Government.” The Court examined whether Samar Sen performed any clerical work for hire or whether his duties were purely supervisory. The Tribunals had examined the evidence on this point and had jointly found that Samar Sen was a workman within the meaning of the term as used in the Act. They relied on Samar Sen’s own testimony, which showed that he wrote ledgers, filed correspondence, entered the cash book and performed similar tasks. The Court saw no reason to hold that the Tribunals’ finding on this issue was erroneous.

The definition of “workman” in the Industrial Disputes Act, 1947 expressly excludes any person employed in the naval, military or air service of the Government. The issue before the Court was whether the manager of the Burnpur hotel, Samar Sen, performed any clerical work for hire or whether his duties were purely supervisory. Both the Industrial Tribunal and the Fifth Industrial Tribunal examined the material on this point and concluded that Samar Sen qualified as a workman under the statutory definition. Each Tribunal relied upon Samar Sen’s own testimony, which demonstrated that he was required to write ledgers, file correspondence, enter entries in the cash book and carry out similar clerical functions. The Court finds no basis to declare those Tribunal findings erroneous.

On the merits, the case against Samar Sen arose from a regular and proper enquiry conducted by the Company, which concluded that he was guilty of unauthorised absence and insubordination, leading to his dismissal. The argument before this Court is that, having given Samar Sen a full opportunity to meet the charges during the enquiry, the decision as to whether the charges were proved lay within the exclusive competence of the Company. The Industrial Tribunal should not have interfered with that decision unless it was shown that the dismissal was made mala fide or amounted to victimisation. The Fifth Industrial Tribunal recorded the following findings: “Next, I consider the merit of the case. On the 6th July 1953, he went on leave. On the 16th July, he applied for extension of leave for one month (vide Ex. 6). He got a reply from the Company on the 25th or 26th July 1953. But as the Company refused his leave, he joined on the 1st August 1953, with a medical certificate of fitness. So practically he was within fourteen days’ admissible grace period for joining one’s duty. When he was on leave, he was suffering from blood pressure and fever. The doctor advised him to take rest. Of course, he should have consulted the Company’s doctor. But even if he had not done so, it did not matter as he was then on leave allowed by the Company. So where was his fault? Yes, his fault was that he was the Secretary of the Action Committee at that time. The Action Committee to the Company was like a red rag to the bull. I find absolutely no reason why this man should be dismissed. So I set aside the order of dismissal passed against him, and order his reinstatement. I grant him compensation at half basic pay for the period of his forced unemployment.” The Tribunal’s conclusion was that Samar Sen had been victimised because of his role as Secretary of the Action Committee, that he was genuinely ill, and that his only lapse was not consulting the Company’s doctor. The Attorney‑General challenged this finding, arguing that evidence showed Samar Sen, despite his illness, engaged in public work and did not take complete rest as advised. While such arguments might be appropriate before a court of first instance, this Court is not a tribunal of first instance and, absent exceptional circumstances or grave injustice, is not justified in overturning a factual finding of the lower tribunals. The same principles will now be applied to the case of Abharani Debi.

The Court considered the material evidence, including the statements made by Samar Sen before the Enquiry Committee. It noted that, although Samar Sen was reported to be suffering from fever and high blood pressure, his own testimony before the Committee indicated that he had not observed the complete rest that his doctor had advised. Instead, he admitted that he had been engaged in some “public work.” The learned Attorney‑General argued that such evidence might have been pressed before a Court or Tribunal of first instance. However, the Court explained that it is not a Court or Tribunal of first instance and, absent any exceptional circumstances or grave injustice, it is not justified in disturbing a factual finding that has already been established by the lower adjudicating body.

Turning to the earlier decision in the case of Abharani Debi, the Court applied the same principles. Abharani Debi was employed as a nurse at Burnpur Hospital, and the charge against her alleged that she had incited a sweeper named Karu not to attend his duties on the morning of 5 September 1953. An enquiry was conducted and initially found her guilty of the alleged offence. The Tribunal, however, later determined that the charge was completely baseless and that the enquiry report had exaggerated a minor incident into a serious accusation. The Tribunal recorded that the only remarks made by Abharani Debi to Karu concerned a pass issued to him; those comments were innocent but were magnified into an allegation of intimidation. It was also noted that the Company had not even presented arguments before the Labour Appellate Tribunal on this matter. While the Court acknowledged that an employer possesses the authority to direct internal administration and impose discipline, that authority is not unlimited. When a dispute arises, Industrial Tribunals are empowered to examine whether a dismissal is justified and to grant appropriate relief. In cases of dismissal for misconduct, a Tribunal does not substitute its own judgment for that of management, but it may intervene only when (i) there is an absence of good faith, (ii) victimisation or an unfair labour practice is evident, (iii) a basic error or breach of natural‑justice principles occurs, or (iv) the finding is wholly untenable or perverse on the record. The Court held that the facts in Abharani Debi’s case fell squarely within clause (iv), as the Tribunal’s finding was manifestly baseless.

Finally, the Court examined the case of Himansu Chattoraj. The Company alleged that, since January 1953, Chattoraj had encouraged fellow workmen to adopt “slow‑down” tactics. On 28 March 1953, he was formally charged with taking an active part in a slow‑down strike in the Hot Mills section, having allegedly initiated the action and persuaded others to join. On the following day, 29 March 1953, Chattoraj submitted an explanation to the Company. Subsequently, on 31 March 1953, the Company suspended him pending further enquiries. The Court noted that on 3 April 1953 and again on 4 April 1953, evidence was taken against several workmen, including Chattoraj, as part of the ongoing enquiry. The Court recorded these procedural steps to provide the factual context for the matters before it.

After the enquiry, the management found that the evidence against Himansu Chattoraj was not overwhelming, and consequently postponed any final decision pending a further enquiry. In May 1953, the Sub‑divisional Magistrate issued an order under section 144 of the Criminal Procedure Code, in which the name of Chattoraj was specifically mentioned. Later, in September 1953, the dispute concerning Chattoraj was referred to the Fifth Industrial Tribunal, where a suspension order against him was already in force. The parties filed an application under section 33 of the Industrial Disputes Act, 1947, seeking the Tribunal’s permission to dismiss Chattoraj on the basis of activities that had occurred after the charge‑sheet dated 28 March 1953. Rather than address that application directly, the Tribunal made several observations in its award regarding Himansu Chattoraj. It noted that Chattoraj, along with other workmen, had been charged on 28 March 1953 and that an enquiry had taken place. Since the evidence against him was not overwhelming, the management had deferred any decisive action. Nevertheless, Chattoraj continued his activities, leading the Sub‑divisional Officer of Asansol to promulgate an order under section 144 of the Criminal Procedure Code on 15 May 1953, wherein his name again appeared. The Tribunal observed that, after the lock‑out was lifted, the workman persisted in obstructing loyal workers. As a result, the Companies resolved to terminate his services, but were unable to take direct action because his case was pending before the Tribunal. The Tribunal further stated that, even according to the Companies’ own version, the charge‑sheet on which Chattoraj was to be punished had not been proved, and that there was no charge‑sheet for his other alleged activities. In those circumstances, the Tribunal concluded that the Companies were not entitled to dismiss him and ordered his reinstatement. However, because the Tribunal was satisfied that Chattoraj had engaged in activities prejudicial to the Companies’ interests, it declined to award him any compensation for the period of forced unemployment resulting from his suspension, treating that period as leave without pay. The Tribunal directed that Chattoraj be reinstated as soon as the award became operative.

The Appellate Tribunal subsequently dealt with Chattoraj’s case in a very concise manner, holding that his reinstatement was not open to any objection. Before the present Court, it was argued that the decision to reinstate Himansu Chattoraj was flawed by a basic error. The only formal order that had been made against him was the suspension order, which was unquestionably a valid order. The Industrial Tribunal had found that Chattoraj had engaged in activities prejudicial to the Company, and it is now recognised that deliberate “slow‑down” tactics and incitement of other workmen to adopt such tactics constitute misconduct. The lower Tribunal appeared to be satisfied that Chattoraj was guilty of that misconduct; nevertheless, it held that the charge‑sheet on which the suspension was based had not been proved. If the suspension order were the sole issue for consideration with respect to Chattoraj, the Tribunal could not have ordered…

The Court observed that reinstating the employee until the inquiry was completed would have been improper, and noted that if the Tribunal had instead acted on the premise that the company had resolved to terminate the employee’s services because of his prejudicial and subversive conduct, then, upon being satisfied that the employee was guilty of such conduct, the appropriate order would have been to grant the company permission to dismiss him. In either circumstance, the order directing his reinstatement was deemed unwarranted. The Court further stated that only a brief exposition was required to dispose of Civil Appeal 337. It explained that the Tribunal had examined each workman’s case according to the four categories previously identified and had refused reinstatement to those individuals for whom the Tribunal found that the company possessed valid reasons for dismissal. Counsel for the petitioner, Mr Acharya, was unable to persuade the Court that the lower Tribunals had erred in any respect concerning the appellants in this appeal. He pressed the matters of two individuals, namely Akka Hossain and D P Das. Akka Hossain faced an initial charge of employing slow‑down tactics and was subsequently charged with assaulting the company’s driver; although he was acquitted in the criminal proceeding, the Tribunal concluded that the company’s decision to terminate his services was justified. D P Das had been absent from duty beginning on 5 July 1953 and had been absent without leave for a period exceeding fourteen days; the Tribunal fully considered his case and held that his termination was proper under the company’s Standing Orders. Consequently, the Court held that Civil Appeals 44, 45 and 337 were without merit and were dismissed. Civil Appeal 336 was allowed in part, and the decisions of the lower Tribunals were set aside with respect to eight men only, namely Bamapada Mukherji, Chandrasekhar Mukherji, Niaz Hossain, Dhani Ram, Chandrabhan Sing, Raja Sing, Jai Kishore Sing and Himansu Chattoraj. In all other respects the appealed decision was to remain in force. The Court ordered that, given the special circumstances of the case, each party should bear its own costs, and it stated that Appeal No 336 was partly allowed while the remaining appeals were dismissed.