Cawnpore Tannery Ltd., Kanpur vs S. Guha And Ors.

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 11 November, 1960

Coram: P.B. Gajendragadkar, A.K. Sarkar, K.N. Wanchoo

The case titled Cawnpore Tannery Ltd., Kanpur versus S. Guha and others was decided on 11 November 1960 by the Supreme Court of India. The judgment was authored by Justice P B Gajendragadkar, and the bench comprised Justices P B Gajendragadkar, A K Sarkar and K N Wanchoo. The matter arose on appeal by special leave from an industrial dispute between the appellant, Cawnpore Tannery Ltd., and its employees. The controversy centred on the termination of Mr S Guha, who had been engaged as Assistant Store Keeper in the Boot Factory Stores owned by the tannery. Mr Guha received a salary of Rs 140 per month. His employment was terminated on 1 May 1951. Following his discharge, the employees contended that the dismissal was wrongful, whereas the tannery argued that the termination was necessary because the Boot Factory Stores and the General Stores had been amalgamated, creating a need for economies. The Industrial Tribunal examined the dispute and upheld the tannery’s position, holding that Mr Guha’s discharge was not wrongful. The workmen appealed the Tribunal’s award, but their appeal was dismissed and the original award was affirmed.

Subsequently, the tannery employed two clerks: Mr Zaidi on 16 August 1951 and Mr Joseph in July 1952, and later a third clerk in April 1953. On 10 January 1953 a complaint was filed alleging that Mr Guha’s retrenchment was not bona fide and that persons junior to him had been retained while he was dismissed. This complaint gave rise to fresh industrial proceedings. The issue framed for adjudication asked whether the management of the tannery had wrongfully or unjustifiably kept Mr Guha out of employment from the time when a vacancy for his re‑employment existed, and, if so, what relief he was entitled to. The Tribunal again tried the matter as an industrial dispute. After evaluating the evidence, the Tribunal concluded that the tannery had kept Mr Guha wrongfully and unjustifiably unemployed at least from 16 August 1951, the date when Mr Zaidi was employed as a clerk. Accordingly, the Tribunal directed the tannery to re‑employ Mr Cuba with effect from the date the award became enforceable, and ordered the tannery to pay Mr Guha the highest consolidated salary then being paid to the three clerks. The tannery challenged the award before the Labour Appellate Tribunal, but the appellate body affirmed the Tribunal’s findings. The present appeal before the Supreme Court stems from that decision of the Labour Appellate Tribunal.

The Court observed that the judgment of the Labour Appellate Tribunal had been the source of the present petition, which had been filed after special leave was granted. Counsel for the appellant, identified as Mr Sen, presented three separate submissions. The first submission argued that no industrial dispute could exist between the appellant and the respondents concerning the termination of Mr Guha’s employment, because Mr Guha had been dismissed as early as May 1951 and therefore was no longer a workman of the appellant. The Court found this contention to be without merit. It held that even after Mr Guha’s dismissal, the trade union to which he belonged retained the right to raise a dispute regarding his continued non‑employment. The Court noted that the definition of “workman” that existed before its amendment in 1956 already encompassed a person whose services had been terminated, and that the current definition expressly includes persons who have been dismissed, discharged or retrenched. Moreover, the Court explained that the definition of “industrial dispute” is sufficiently broad to permit the union to challenge both the legality of Mr Guha’s retrenchment and the appellant’s refusal to offer him re‑employment when a vacancy for an additional clerk later arose. This interpretation was the same one adopted by the Labour Appellate Tribunal, and the Court concluded that the Tribunal’s finding was not legally erroneous and therefore did not warrant interference.

The second submission advanced by Mr Sen contended that Section 25‑H of the Industrial Disputes Act, which now statutorily recognises the principle that a retrenched workman must be offered re‑employment whenever the employer needs to employ an additional hand, was not in force at the relevant time, and that it was therefore unlawful to apply the provision retrospectively. The Court rejected this argument as misconceived. It explained that, even before the insertion of Section 25‑H, industrial adjudicators consistently recognised the principle that an employer who had retrenched an employee on the ground of surplus must give that employee an opportunity to re‑join the service whenever a new vacancy arose. The Court cited several authorities that reflected this general principle, namely Shri Vishuddananda Saraswathi Hospital v. Their Employees (1949‑1 Lab LJ 111, IT‑West Bengal), Kilburn and Co. and Mac‑Neill and Co. v. Their Employees (1950‑2 Lab LJ 125, IT‑West Bengal), and Sri Anna‑puma Mills v. Certain Workmen (1953 1 Lab LJ 43, L.A.T.I. All). The Court also mentioned the case of Annapurna Mills, where the discharge of workmen resulted from the closure of the business, and held that if the business later reopened, the employer was required to re‑engage those former employees. The Court therefore concluded that the principle now codified in Section 25‑H had long been part of industrial law, and that Mr Sen’s claim of retrospective misapplication was unfounded.

In this case, the Court noted that the principle applied to an employer who reopened a business that had been closed required the employer to take back his former employees. It observed that the same principle also obliges an employer, when he has occasion to employ another servant, to give the retrenched workman an opportunity to return to service. Consequently, the Labour Appellate Tribunal had observed that the rule now codified in Section 25‑H had previously been recognised by industrial adjudicators before the amendment of the Act. For that reason, the Court concluded that Mr. Sen was not justified in arguing that the order issued in the present proceedings against the appellant was contrary to industrial law. The Court then addressed the argument that the principle of industrial adjudication relied upon by the respondents could not require the appellant to offer Mr. Guha a job unless the job belonged to the same category in which Mr. Guha had previously worked. On principle, the Court accepted that an offer might be conditioned on the category of the retrenched employee. However, based on the findings of the Tribunal below, there was no basis to claim that Mr. Guha had been asked to be taken in a category different from his original one. Although his earlier designation was Assistant Store Keeper, the Tribunal found that he performed a substantial amount of clerical work and that subsequent appointments made by the employer were in the clerical cadre. Accordingly, the Tribunal required the appellant merely to re‑employ Mr. Guha in the clerical cadre. The Court therefore held that the order could not be challenged on the ground that it was inconsistent with the principle of industrial adjudication concerning retrenched workmen. The Court also considered Mr. Sen’s contention that the Tribunal might have erred in holding that the appointment of three clerks later introduced by the appellant was improper, and that the Tribunal should not have directed the appellant to re‑employ Mr. Guha. He pointed out that the record showed other persons had also been discharged and that a question could arise as to which of the discharged persons should receive the first opportunity for re‑employment. The Court found that this issue could not be raised for the first time before the Supreme Court, because it was based on facts that had not been specifically brought before the Tribunal below, and Mr. Sen had conceded that the matter had not been argued before that Tribunal. Having examined the submissions and the findings of the Labour Appellate Tribunal, the Court saw no reason to interfere with the Tribunal’s order.

In this proceeding, the Court found that the appellant’s challenge did not succeed. Accordingly, the Court concluded that the appeal must be rejected. The judgment therefore directed that the appeal be dismissed in its entirety. In addition, the Court ordered that the costs of the litigation be awarded against the party who brought the appeal. No further relief was granted, and the matter was closed on these terms.