Rashtriya Mill Mazdoor Sangh vs The Apollo Mills Limited and Others

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

Court: supreme-court

Case Number: Civil Appeal No. 419 of 1956

Decision Date: 10 March 1960

Coram: M. Hidayatullah, S. K. Das, A. K. Sarkar

In this case the Supreme Court of India heard a petition filed by the Rashtriya Mill Mazdoor Sangh, Parel, Bombay and another petitioner against The Apollo Mills Limited and other respondents, and delivered its judgment on 10 March 1960. The bench that heard the matter comprised Justice M Hidayatullah, Justice S K Das and Justice A K Sarkar, and the decision is reported as 1960 AIR 819 and 1960 SCR (3) 231. The factual background was that in 1951 the monsoon failed, which reduced the generation of electricity from the hydro‑electric system. Because of this shortage the Government of Bombay issued an order under section 6A(1) of the Bombay Electricity (Special Powers) Act, 1946, to regulate the use of electrical energy. The order required the respondent mills to cut down their working hours, and the workers continued to work on a reduced schedule for a considerable period. The workers claimed that they were entitled to their full wages and dearness allowances or, in lieu of those, compensation for the loss of work. The dispute was referred to the Industrial Court of Bombay for arbitration under section 73 of the Bombay Industrial Relations Act, 1946, and the Industrial Court made an award directing all the respondent mills to pay compensation to the employees. The mills contested the award on three grounds. First, they argued that because the closure of the mills was carried out in accordance with the government directions issued under the Bombay Electricity (Special Powers) Act, 1946, the protection afforded by section 11(1) of that Act barred the reference before the Industrial Court. Second, they submitted that the Industrial Court lacked jurisdiction to entertain the claim for compensation because the matter was covered by Standing Orders 16 and 17, which were determinative of the relationship between the workmen and their employers under section 40(1) of the Bombay Industrial Relations Act, 1946. Third, they relied on the decision in Muir Mills Co Ltd v Suti Mills Mazdoor Union, Kanpur, [1955] 1 S.C.R. 991, contending that no compensation was payable. The Court held that section 11(1) of the Bombay Electricity (Special Powers) Act, 1946, barred only proceedings that arose from interference with the supply of electricity and protected persons who acted in accordance with orders made under that Act; it did not prevent the filing of an industrial dispute. The Court further held that Standing Orders 16 and 17 dealt only with compensation in lieu of notice and wages for the period of closure, and did not encompass compensation for the closure itself, and that the provisions of section 73 of the Bombay Industrial Relations Act, 1946, were sufficiently wide to cover the reference in the present case. Consequently, the claim for compensation was not barred by the standing orders. Finally, the Court observed that the decision in Muir Mills Co Ltd v Suti Mills Mazdoor Union concerned only the award of bonus and was not applicable to the present claim for compensation.

In this matter the Court observed that Standing Orders sixteen and seventeen, read together with section forty‑one of the Bombay Industrial Relations Act, were the statutory provisions under consideration. The Court expressly disapproved the earlier authority in Digambar Ramachandra v. Khandesh Mills (1949) 52 Bom. L.R. 46. It further held that the decision in Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, Kanpur, concerned only the award of a bonus and was therefore not applicable to the present controversy. The judgment concerned a civil appeal numbered four‑one‑nine of 1956, which had been granted special leave to be heard by this Court. The appeal challenged a decision dated seventeen January 1955 of the Labour Appellate Tribunal, Bombay, which had reversed an earlier order of the Industrial Court, Bombay dated twenty January 1954, an order that had arisen from a reference made by the Government of Bombay under section seventy‑three of the Bombay Industrial Relations Act, 1946. Counsel for the appellant were N.C. Chatterjee, D.H. Buch and I.N. Shroff, while counsel for the respondents were R.J. Kolah, B. Narayanaswami, S.N. Andley, J.B. Dadachanji, Rameshwar Nath and P.L. Vohra. The judgment was delivered on ten March 1960 by Justice Hidayatullah. The appellant, Rashtriya Mill Mazdoor Sangh, represented the workers of the cotton textile mills located in Greater Bombay. The respondents comprised Apollo Mills Ltd. and other cotton‑textile mill owners identified in the annexure to the Special Leave Petition, together with the Mill Owners’ Association, Bombay, which represented the broader cotton‑textile mill industry. The dispute centered on the compensation claimed by the workers for loss of wages and dearness allowances that arose because the mills were required to operate on a reduced schedule or were closed on certain days during the period from first November 1951 to thirteenth July 1952. The factual background was that the monsoon failure in 1951 created a shortage of water in the catchment area of the Tata Hydro‑Electric system, the source of the mills’ power supply. Consequently the Government, after consulting the various mills and the appellant Sangh, directed that the mills should limit their weekly working hours from forty‑eight to forty hours for a period of thirty weeks starting on first November 1951. It was further agreed that if the mills could reduce their electricity consumption to five‑sixths of the normal level, they would be allowed to resume the forty‑eight‑hour week. Some mills installed their own generators, but many were compelled to work only forty hours a week, i.e., eight hours per day. As a result, certain mills lost up to thirty‑eight working days, while others lost fewer days; one mill, Ragbuvanshi Mills, was closed for only a single day. The Government’s order was made under the Bombay Electricity (Special Powers) Act, 1946.

The Bombay Government invoked section 6A(1) of the Bombay Electricity (Special Powers) Act, 1946, to reduce the working hours of the mills. While the reduced schedule was in effect, the workers demanded their regular wages and dearness allowances or compensation in lieu thereof. After unsuccessful negotiations, the Government referred the dispute to arbitration before the Industrial Court on 30 October 1952, invoking section 73 of the Bombay Industrial Relations Act, 1946. The mill owners objected, contending that the dispute fell within the scope of Standing Orders 16 and 17 and that the partial closure of the mills was caused by force majeure, rendering them not liable for compensation. They argued that, because the Standing Orders governed the relationship between workmen and employers under section 40(1) of the Bombay Industrial Relations Act, 1946, the Industrial Court lacked jurisdiction. The mills further submitted that the Government’s orders issued under the Electricity (Special Powers) Act must be obeyed and therefore no compensation was payable. They emphasized that the employees were already receiving fair wages and that the mills could not shoulder an additional burden since they had lost profits due to the shortened working period. The mills relied on the Bombay High Court’s decision in Digambar Ramachandra v. Khandesh Mills (1), which held that an arbitrator referred a dispute under section B. 49A of the Bombay Industrial Disputes Act, 1938, could decide matters within the terms of the Standing Orders framed under section 26 of that Act but could not determine employer liability on grounds outside those orders. After hearing the parties, the Industrial Court delivered an award on 20 January 1954, directing all respondent mills to pay compensation to the employees and holding that Standing Orders 16 and 17 were inapplicable and therefore did not bar the award. The Court based its jurisdiction on sections 3, 40(2), 42(4), 73 and 78 of the Bombay Industrial Relations Act, read with Schedule 111, item 7, and on the Federal Court’s decision in Western India Automobile Association v. Industrial Tribunal, Bombay (1). Relying on principles of social justice, the Court concluded that the workers were entitled to compensation, which it quantified at fifty percent of the wages and dearness allowances the workers would have earned had the mills operated on the days they were closed. The Mill Owners’ Association and two of the mills appealed the award to the Appellate Tribunal, Bombay. All arguments raised before the Industrial Court were reiterated before the Appellate Tribunal, and two additional contentions were introduced: that the claim for compensation was barred by section 11 of the Bombay Electricity (Special Powers) Act, 1946, and that it was also barred by the Supreme Court’s decision in Muir Mills Co., Ltd. v. Suti Mills Mazdoor Union, Kanpur (2).

In the present appeal, the respondents placed reliance on the Electricity (Special Powers) Act, 1946, and also invoked the Supreme Court decision in Muir Mills Co., Ltd. v. Suti Mills Mazdoor Union, Kanpur (2). The Appellate Tribunal, whose order is now before this Court, allowed the appeal filed by the mill owners, set aside the award rendered by the Industrial Court, and dismissed the claim made by the employees. The Tribunal held that even if the dispute were covered by Standing Orders 16 and 17, the rule established in Digambar Ramachandra’s case (1) could not be applied because of the provisions of section 40(2) and the addition of Schedule 111, item 7, to the Bombay Industrial Relations Act; those provisions were not part of the Bombay Industrial Disputes Act, 1938, under which the Bombay High Court had decided the earlier matter (1) [1949] F.C.R. 321; (2) [1955] 1 S.C.R. 991; (3) [1949] 52 Bom. L.R. 46. The Tribunal referred to the Federal Court decision cited earlier and expressed the view that awarding compensation equal to fifty per cent of the wages and dearness allowances that the workers would have earned had the mills remained open was both fair and just. Nevertheless, the Tribunal felt bound by the Supreme Court’s ruling in the Muir Mills case (1) and therefore rejected the workers’ claim, allowing the appeal. In reaching that conclusion, the Tribunal did not address the question of whether section II of the Bombay Electricity (Special Powers) Act, 1946 barred the grant of compensation. The appellant initially contended that the Muir Mills decision (1) was inapplicable, and that even if it were set aside, the other findings of the Tribunal together with section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950 meant that the appeal should fail because no question of law remained and the Tribunal was not competent to reverse the Industrial Court’s award. Conversely, the Mill Owners’ Association argued that the Tribunal’s view that the Muir Mills case (1) applied was correct, that section II of the Electricity (Special Powers) Act barred the proceedings, and that, since the closure resulted from force majeure for which the mills were not responsible, Standing Orders 16 and 17 determined the relationship between the parties, rendering the compensation claim untenable. Other objections raised before the Tribunal were not pursued before this Court. The first issue addressed here is whether section 11 of the Bombay Electricity (Special Powers) Act, 1946 precludes the reference. Section 11 reads: “(1) No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of any order, direction or requirement made or deemed to have been made under section 3, 4, 5, 6, 6A, 6B or 6C.” (1) [1955] 1 S.C.R. 991. The order that gave rise to the present dispute was made under sub‑section (1) of section 6A.

In this case, the order issued by the Government of Bombay was made under sub‑section (1) of section 6A. That provision states: “6A(1). Notwithstanding anything contained in any law for the time being in force, or any permission granted under sub‑section (3) of section 5 or any instrument having effect by virtue of any law, the Provincial Government may with a view to controlling distribution, supply, consumption or use of electrical energy make an order—(a) for prohibiting or regulating, subject to such conditions as it may specify in the order, the distribution or supply of electrical energy by a licensee or use of such energy by a consumer for any purpose specified in such order; (b) for determining the order of priority in which, or the period or periods during which, work shall be done by an undertaking to which the supply of electrical energy is made by a licensee.” The respondents argued that sub‑section (1) of section 11, quoted earlier, barred the remedy of arbitration because the shutdown of the mills was carried out in good faith and pursuant to an order made under section 6A(1). Counsel for the respondents referred to the overall scheme of the Bombay Electricity (Special Powers) Act, focusing especially on the sections that prescribe penalties and offences. The counsel maintained that the mills were compelled to close part of their establishments and that the protection afforded by section 11(1) was available to them, contending that it granted complete immunity from any legal action.

The present proceedings, however, seek compensation for the period during which the mills remained closed, and the claim is brought by the workers against the mills. Section 11 confers immunity only for proceedings arising from interference with the supply of electrical energy and its consumption. That immunity is intended to protect the supplier of electricity against the consumer, and also to safeguard those who enforce the order. No grievance has been raised in this case concerning a reduction in electricity supply or the partial closure of the mills, and neither the mills nor the workers have made that contention. Moreover, the sub‑section operates as a protection clause that is typically inserted into legislation when new or unusual powers are granted, designed to give immunity to persons acting under or enforcing the order. Its ambit is limited to the supply and consumption of electricity, which alone are curtailed by the order issued under section 6A(1). Consequently, the protection afforded by the first sub‑section of section 11 does not preclude the raising of an industrial dispute that may result in an award for the equitable sharing of loss incurred by both employers and employees due to compliance with the order. The respondents did not press the argument that the Industrial Court lacked jurisdiction to hear the reference because the State Government could not make it, and therefore no discussion of that point was necessary.

Both parties expressed displeasure with the order issued by the Appellate Tribunal, and the respondents specifically contested the findings that were adverse to them. The Court therefore found it necessary to examine these objections. The appellant maintained that the Appellate Tribunal lacked the authority to interfere with the Industrial Court’s order because the appeal did not raise a substantial question of law and did not fall within any of the eight categories enumerated in section 7(1)(b) of the Industrial Disputes (Appellate Tribunal) Act, 1950, which are the only matters that grant appellate jurisdiction to the Tribunal. The appellant also referred to earlier decisions that held the Tribunal could not intervene on questions of fact; the Court considered that a detailed analysis of those cases was unnecessary. Under the 1950 Act, the Tribunal may entertain an appeal only when a substantial legal issue arises from an award or when the dispute concerns one of the eight specified subjects. The respondents attempted to fit the present dispute within clause (1) of section 7(1)(b) by characterising it as a question of “wages,” one of the eight subjects. However, the real issue concerned compensation rather than wages per se. Counsel for the respondents further argued that a decision rendered without reference to the evidence constituted a question of law and a legal inference drawn from proven facts, thereby making the appeal permissible. In support of this argument, the respondents relied on the decisions in Anglo‑Iranian Oil Co. (India) Ltd. v. Petroleum Workers’ Union and Crompton Parkinson (Works) v. Its Workmen.

The Court noted that even if the dispute did not fall within any of the eight enumerated topics, a substantial question of law nevertheless existed. The legal question was whether a claim for compensation could be entertained in view of the provisions of the Bombay Industrial Relations Act and the applicable Standing Orders. It had already been established that the inability to continue employing labour stemmed from a shortage of electrical energy. The pivotal issue, therefore, was whether Standing Orders 16 and 17, read together with section 40(1) of the Bombay Industrial Relations Act and item 9 of Schedule 1 of that Act, conferred immunity on the employers against claims for loss of wages and dearness allowances. The respondents asserted that such immunity existed, whereas the appellant contended the opposite, citing sections 40(2), 42(4), 73 and 78(1)(A) as well as item 7 of Schedule III of the same Act. The Court held that this dispute indeed raised a substantial question of law, rendering the appeal competent. The essential matter, therefore, turned on the interpretation of Standing Orders 16 and 17 in conjunction with section 40(1) of the Bombay Industrial Relations Act. Standing Order 16 provides that the company may, at any time or times, in the event of a fire, catastrophe, breakdown of machinery, stoppage of the power supply, epidemic, civil commotion or any other cause beyond its control, stop any machine or machines or department or departments, wholly or partially, for any period or periods, without notice and without compensation in lieu of notice.

Standing Order 16 stated that the Company could, at any time and for any cause beyond its control—including fire, catastrophe, breakdown of machinery, stoppage of power supply, epidemic, civil commotion, or any other such cause—stop any machine or department, wholly or partially, for any period, without giving notice and without providing compensation in lieu of notice. The Order required that, if a stoppage occurred during working hours, the operatives affected be informed by notices posted on the notice boards in the relevant department and at the time‑keeper’s office as soon as practicable, indicating when work would resume and whether they were required to remain in the mill or could leave. The period of detention in the mill was not to exceed one hour after the commencement of the stoppage. If the detention lasted one hour or less, the operatives detained were not to be paid for that period. If detention exceeded one hour, the operatives were entitled to receive wages for the entire time they were detained as a result of the stoppage. For piece‑workers, the average daily earnings for the preceding month were to be taken as the daily wages. Standing Order 17 provided that any operative who was “played‑off” under Order 16 would not be considered dismissed but would be deemed temporarily unemployed, and would not be entitled to wages during such unemployment except to the extent mentioned in Order 16. The Order further required that, whenever practicable, a reasonable notice of the resumption of normal work be given, and that all operatives who had been played‑off and who presented themselves for work when normal operations resumed would have a prior right of reinstatement.

The respondents advanced a two‑fold argument. First, they contended that the two Standing Orders fully covered a closure that resulted from a stoppage of power. Second, they argued that, under section 40(1) of the Bombay Industrial Relations Act, 1946, the Standing Orders were determinative of the relationship between the employer and the employees with respect to every industrial matter specified in Schedule I, which includes “closure or reopening of a department or a section of a department or the whole of the undertaking” and “temporary closures of work including playing off and rights and liabilities of employers and employees.” To support this position, they cited the decision in Digambar Ramachandra’s case and asserted that the position had not been altered even by the addition of the second sub‑section to section 40 in the Act. For reference, they quoted section 40 as follows: “40. (1) Standing orders in respect of an employer and his employees settled under this Chapter and in operation, or where there are no such standing orders, model standing orders, if any, applicable under the provisions of sub‑section (5) of section 35 shall be determinative of the relations between the employer and his employees in regard to all industrial matters specified in Schedule I.”

Section 40 of the Bombay Industrial Relations Act provides that the standing orders of an employer and his employees shall determine their relations with respect to all industrial matters listed in Schedule I. However, subsection (2) adds that notwithstanding the provisions of subsection (1), the State Government may refer, or an employee or a representative union may apply, any dispute of the type mentioned in clause (a) of paragraph A of section 78 to a Labour Court.

The respondents argued that only the first subsection of section 40 applied and that, according to Standing Orders 16 and 17, no compensation could be claimed. The appellant countered that the second subsection effectively excluded the first, because of the non‑obstructive language introducing it, and that the Industrial Court, being the appellate authority for Labour Court awards, was not bound by the first subsection or by the standing orders. While the appellant’s contention carries some merit, the Court observed that Standing Orders 16 and 17 do not relate to a claim for compensation of the kind presented. Standing Order 16 addresses stoppage “without notice and without compensation in lieu of notice,” meaning compensation for the period during which notice would have been required, which is prior to the closure date. The present claim seeks compensation for the period of closure itself, not for notice, and therefore falls outside the scope of Order 16. Standing Order 17 deals with “wages,” whereas the workers’ claim concerns compensation, a distinct concept from wages. Consequently, the Court concluded that these standing orders cannot be said to govern the present facts and are not determinative of the parties’ relationship.

The dispute was referred to the Industrial Court under section 73(2) of the Bombay Industrial Relations Act, 1946. That subsection states that, notwithstanding any other provision of the Act, the State Government may at any time refer an industrial dispute to the Industrial Court if, on a report by the Labour Officer or otherwise, it is satisfied that the dispute is unlikely to be settled by other means. The non‑obstante clause clearly indicates that, despite other provisions, an industrial dispute may be referred to the Industrial Court. Under the Act, an industrial dispute includes any disagreement between an employer and employee, or between employers and employees, connected with an industrial matter, encompassing all matters relating to the non‑employment of any person. Since the workmen were not employed on certain days, an industrial dispute arose concerning their claim for compensation for the period of non‑employment.

In the case before the Court, it was observed that the workmen had not been employed on certain days and therefore there existed an industrial dispute concerning their claim for compensation for the period of non‑employment. Item 9 of Schedule 1 conferred the authority to frame Standing Orders relating to temporary closures. The Standing Orders that were made addressed only compensation in lieu of notice and wages for the period of closure, but they did not provide for compensation for the closure itself. The Court held that, given its interpretation of the Standing Orders, it was unnecessary to decide whether item 7 of Schedule III dealt solely with compensation for permanent closure or whether item 9 of Schedule 1 empowered the making of a Standing Order for temporary closure compensation. It was sufficient to state that Standing Orders 16 and 17, in their present form, did not encompass a case for compensation for closure.

The Court further noted that the powers of the Industrial Court under section 73 of the Bombay Industrial Relations Act were very broad, because the State Government could refer an industrial dispute to the Court notwithstanding any other provision of the Act. On that basis, the objection to the jurisdiction of the Industrial Court was not pressed. Nevertheless, the opposite argument was advanced in a different guise, asserting that Standing Orders 16 and 17 were determinative and that the Industrial Court could not decide anything outside the parameters of those Standing Orders. Reliance was placed upon the decision in Digambar Ramachandra’s case (1), where Chief Justice Chagla and Justice Bhagwati held that an arbitrator was bound by the Standing Orders and could not act beyond them.

The Court expressed the view that Standing Orders 16 and 17 did not apply to the present facts for the reasons already articulated, and it dissented from the earlier decision that held the Standing Orders covered compensation for closure. The Court also observed that the Bombay Industrial Disputes Act 1938 contained no item similar to the one in Schedule III of the Bombay Industrial Relations Act. It cited the decision in Textile Labour Association, Ahmedabad v. Ahmedabad Millowners’ Association (2), where Justice Divatia, Justice Rajadhyaksha, and Justice Vyas correctly held that the Standing Orders did not extend to compensation for loss of earnings. The headnote of that decision was quoted, stating that although workers could not demand wages during a stoppage because the matter was covered by the Standing Orders, there was nothing preventing them from giving notice of change and demanding compensation for loss of earnings, and that the Court’s jurisdiction was not barred by Standing Orders 16 and 17.

The Court acknowledged that the reference in the cited case was made under section 43 of the Bombay Industrial Disputes Act 1938, but it emphasized that the provisions of section 73 of the Bombay Industrial Relations Act were sufficiently wide to cover a reference on the same subject. Accordingly, the Court concluded that the claim for compensation was not barred by Standing Orders 16 and 17 read with section 40(1) of the Bombay Industrial Relations Act.

The Court held that the claim for compensation, referenced in (1) [1949] 52 Bom. L.R. 46 and (2) 1946‑47 Industrial Court Reporter 87, was not barred by Standing Orders 16 and 17 read together with section 40(1) of the Bombay Industrial Relations Act. The respondents argued that the principle of social justice, which the Industrial Court had applied and the Appellate Tribunal had accepted, could not be invoked because of the precedent set by this Court in the Muir Mills case (1). They further asserted that the matter of bonus had been decided together with the present case and that the Appellate Tribunal had increased both bonus and dearness allowance for thirty‑eight mills, while the remaining fifteen mills, which had suffered loss, had nevertheless paid the minimum bonus to their workers. The respondents maintained that wages were reasonable, that bonus had been awarded, that dearness allowance had been increased, and that the Appellate Tribunal had taken all of these factors into account when it refused to grant compensation. They submitted that the mills had incurred heavy losses because of reduced working hours and that it would be manifest injustice to require them to pay wages or compensation for days on which the mills remained closed and lost profits due to the stoppage of normal work. The Court noted that the Muir Mills case (1) concerned the award of bonus, which is linked to profits, and that the decision in that case held that because labour in an industrial undertaking changes constantly, bonus may be paid only out of the profits to which the labour in a particular year contributed; labour could not demand that profits or reserves of other years be used for bonus. The Court clarified that the present dispute did not involve the award of bonus as such and therefore it was unnecessary to rely on the reasons advanced by this Court in the Muir Mills decision. The Court explained that the narrow field in which social justice demands compensation for workmen who are forced into unemployment is distinct from issues of bonus. It emphasized that social justice is not based on contractual relations and is not enforced on the principles of a contract of service; rather, it operates outside those principles to achieve fairness where no contract exists. The Court recalled the observation of Mahajan, J., in Western India Automobile Association v. Industrial Tribunal, Bombay (2), quoting that adjudication does not mean adjudication strictly according to master‑and‑servant law, and that the Tribunal’s award may contain provisions for settlement of a dispute which no court could order if bound by ordinary law, because the Tribunal is not limited by such constraints. The Court also referred to Ludwig Teller’s commentary in Volume 1 of Labour Disputes and Collective Bargaining, page 536, which states that industrial arbitration may involve extending an existing agreement, creating a new one, or generally establishing a new obligation or modifying an old one, distinguishing it from commercial arbitration.

Unlike commercial arbitration, which usually deals with interpreting existing obligations and resolving disputes that arise out of already‑existing agreements, an Industrial Tribunal in labour matters performs a broader function that may include creating new obligations or modifying old ones, as the Court has observed. In the present case, the Court considered whether the Industrial Court, whose orders had been approved by the Appellate Tribunal, could have adopted a more appropriate measure by apportioning the loss between the industrial concerns and the workmen. No alternative basis for apportionment had been suggested by either side. The respondents argued that the loss suffered by labour was already taken into account when the bonus was granted, and that the two matters—bonus and compensation—had been heard together, a position accepted by the Appellate Tribunal. However, the Court noted that a bonus is paid out of profits and represents the workers’ share of the profits they helped to generate, intended to narrow the gap between actual wages and a living wage. By contrast, compensation in the present dispute relates to loss of wages and dearness allowance, and the two cannot be merged on any legal principle. There was no evidence that the Appellate Tribunal, despite formulating its own formula, had considered factors outside that formula. It seemed that the Tribunal’s real intention was to say that because the workers received a bonus they should not claim compensation for days on which wages were lost, since paying compensation would have required reducing the bonus. If that is the correct reading, the question of compensation was never actually decided, rendering the reasoning irrelevant. The Court held that it was immaterial whether the employers made a profit or incurred a loss in the relevant year, as long as they retained the labour force for the days the mills operated. The Appellate Tribunal had found that a claim for compensation equal to one‑half of the wages and dearness allowances was just and proper, yet it wrongly excluded the claim on the ground of the decision in Muir Mills case (1), a decision that did not apply to the facts here. The Tribunal also erred in refusing compensation on the basis that the grant of bonus barred the claim. The issue of badli workers had not been separately raised, but the Court saw no reason to deny them compensation; any such payment would be subject to the same condition imposed by the Industrial Court. Consequently, the appeal was allowed, the order of the Appellate Tribunal was set aside, the order of the Industrial Court was restored, and the respondents were ordered to bear the costs of both the present appeal and the proceedings in the lower tribunals.