The Manager, Bengal Nagpur Cotton Mills... vs J. Bastian

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

Court: supreme-court

Case Number: Not extracted

Decision Date: 26 February, 1960

Coram: P.B. Gajendragadkar, K.C. Das Gupta

The case titled “The Manager, Bengal Nagpur Cotton Mills … versus J. Bastian” was decided on 26 February 1960 by the Supreme Court of India. The bench consisted of Justice P.B. Gajendragadkar and Justice K.C. Das Gupta, and the judgment was authored by Justice P.B. Gajendragadkar. This appeal, granted special leave, arose from an industrial dispute between the Manager of Bengal Nagpur Cotton Mills Ltd., referred to as the appellant, and Mr J. Bastian, who had been employed by the appellant as a Head Clerk, referred to as the respondent. On 28 December 1955 the respondent handed over charge of his office to Mr Satyabralal under protest, following an order issued by the appellant that effectively terminated his service. The respondent challenged this termination by filing an application under Section 16, Sub‑section (2) of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947 (the Act) before the Assistant Labour Commissioner, Madhya Pradesh. In his application he contended that the termination was illegal and improper and he prayed for an order directing his reinstatement. The appellant opposed the claim on two grounds: first, that the dispute did not qualify as an industrial dispute because the respondent had voluntarily retired; second, that the respondent’s claim for a pension at the time of his alleged voluntary retirement was not valid or justified. Both of these contentions were rejected by the Assistant Labour Commissioner, who ordered the appellant to reinstate the respondent and to pay back wages for the period of his absence. The appellant then filed a revisional application before the Industrial Court, Madhya Bharat, Indore, invoking Section 19 of the Act. The appellant raised the same arguments before the Revisional Court, but the court affirmed the Assistant Labour Commissioner’s view that the respondent was entitled to reinstatement with back wages. Consequently, the revisional application failed, was dismissed with costs, and the appellant brought the matter before this Court by way of special leave.

The factual background is that the respondent had served as a Head Clerk with the appellant for nearly thirty‑five years. On 28 May 1955 he wrote to the appellant requesting retirement on full pension in accordance with the company’s rules and also asked that a reasonable gratuity be paid to him (Exhibit A‑2). He renewed this request on 29 October 1955, asking that he be allowed to take all leave due to him from 2 January 1956 and that he be retired on full pension after the leave period had elapsed. In that subsequent letter he added a claim for pension on the basis that he had rendered meritorious service for a long period to the appellant (Exhibit A‑1). On 5 December 1955 the respondent replied to a letter he had received from the appellant on 3 December 1955, expressing gratitude for the appellant’s willingness to grant gratuity but insisting on his right to pension. He pointed out that his request for pension had been forwarded to the Head Office at Calcutta for sanction, and therefore he was surprised that gratuity was being granted while he believed the pension scheme was already in force and that he was entitled to full pension. He therefore asked the appellant to reconsider his case and to grant him the pension (Exhibit A‑3). On 27 December 1955 the respondent received a copy of an office order informing him that he had been granted a gratuity of Rs 5,000 and that his employment would cease with effect from 28 December 1955 (Exhibit AA‑2). The respondent protested this order, stating that it was unacceptable to him.

The respondent, who had been a Head Clerk employed by the appellant for many years, wrote to the appellant on 5‑December‑1955 in response to a letter the appellant had sent on 3‑December‑1955. In that reply the respondent expressed gratitude for the appellant’s willingness to provide him with a gratuity, but he emphasized that his principal concern was the pension to which he believed he was entitled. He reminded the appellant that his request for a full pension had previously been forwarded to the Head Office at Calcutta for approval, and he asserted that he did not understand why a gratuity was being offered when, in his view, the pension scheme was already operative and he should receive a full pension. Consequently, he asked the appellant to reconsider the matter and to grant him the pension he sought, as reflected in the accompanying document marked Ex. A‑3. Later, on 27‑December‑1955, the respondent received an official order (Ex. AA‑2) informing him that a gratuity of Rs. 5,000 had been awarded and that his employment would terminate on 28‑December‑1955. The respondent found this order unacceptable, lodged a protest, and declared that he was prepared to continue working until the pension provided for by the appellant’s rules and customary practice was granted. The appellant did not accept the protest and instructed the respondent to surrender his charge to a colleague named Mr. Satyabralal. Accordingly, on 28‑December‑1955 the respondent handed over his responsibilities, doing so under protest. On the basis of these events, the respondent contended that his termination had been unlawful and that he should be reinstated with back wages.

During the hearing of the appeal before the Supreme Court, the learned Attorney‑General attempted to introduce two fresh points that had not been raised before either the Assistant Labour Commissioner or the Industrial Court. One of those points had been included in the petition for special leave filed with this Court, while the other had been sought through a later application to add an additional point. The appellant argued that the present controversy was not an industrial dispute but merely an individual dispute, relying on the Court’s earlier decision in Newspapers Ltd. v. State Industrial Tribunal, Uttar Pradesh. The second new point advanced by the appellant concerned whether a dispute involving a single employee, which is not taken up by the employees collectively or by a union, qualifies as an industrial dispute. The Court was not prepared to entertain either of these submissions. The first point had not even been presented in the petition for special leave, and although it was of some significance, the Court considered it inappropriate to permit its introduction at such a late stage. In matters of this nature, it is ordinarily required that points of considerable importance be raised before the original industrial tribunal so that they may be examined at the earliest opportunity.

The Court observed that the present case required an interpretation of several relevant sections of the Industrial Disputes Act. In construing those provisions, the Court considered prior decisions of the industrial courts on similar questions and the prevailing practice in such matters, deeming them highly relevant to the issue at hand. The Court then turned to the second matter raised by the petition for special leave, describing it as a mixed question of fact and law. If that issue were permitted to be raised, it would be necessary to determine whether the dispute had been taken up by the union. The Court noted that it would be very reluctant to entertain a new point whose resolution would demand further factual inquiry. Consequently, under the circumstances of this case, the Court declined to allow the learned Attorney‑General to argue either of those two points.

The remaining issue for consideration concerned whether the dispute qualified as an industrial dispute. The lower authorities had been urged to hold that the dispute was not industrial because the respondent had not been dismissed but had voluntarily retired. The Court acknowledged that if the retirement were truly voluntary, the respondent’s application under Section 16 of the Act would be incompetent. The pivotal question, therefore, was whether the termination of the respondent’s services could be properly characterized as voluntary retirement. In the Court’s view, only the answer given by the lower authorities was appropriate. While the respondent did offer to retire, he expressly conditioned his retirement on receiving his due pension under the applicable rules and customs, and he also claimed gratuity. When his pension claim was rejected, he offered to continue working, stating that he would retire only if the pension were granted. It was undisputed that the appellant possessed no superannuation rules and had not justified termination under Standing Order 23 or 25; thus, the discharge could not be said to arise from any standing order justification. Instead, the respondent’s service was discontinued by a peremptory order directing him to hand over charge to Mr Satyabralal, to which the respondent complied under protest. The Court concluded that the appellant had illegally and improperly terminated the respondent’s service, making the dispute an industrial dispute properly raised before the Assistant Labour Commissioner. The learned Attorney‑General had faintly argued that the respondent’s pension claim was unjustified and suggested that the offer to retire together with a pension claim should be interpreted as an unconditional offer to retire.

The Court observed that the contention that the offer to retire was an unconditional one was without merit. In its view, the argument advanced by the appellant lacked any substantive foundation. Both the lower tribunals had examined the respondent’s claim for a pension and concluded that the claim was fully justified. The agreement invoked by the appellant as a basis for its position was held not to be applicable to the respondent’s particular circumstances. This conclusion was reached jointly by the authorities below and was grounded in a careful appreciation of the evidentiary material presented. The Court noted that such a finding could not have been successfully challenged even before a revisional court, and it could not be questioned before this Court under the provisions of Article 138 of the Constitution. The Court further recorded that the appellant, through its counsel, attempted to introduce a fresh issue concerning the competence of the State Legislature to define, by inclusion or otherwise, an individual grievance as falling within the meaning of “industrial dispute” for the purposes of the Act. Since this question had never been raised in the earlier proceedings and had not been incorporated into the petition for special leave, the Court declined to permit the appellant to raise it at this stage. Consequently, the Court refrained from expressing any opinion on that particular point. Having found that the appeal was devoid of any substantive ground, the Court dismissed the appeal and ordered that the costs of the proceedings be borne by the appellant.