M/S. Serajuddin and Co vs Their Workmen

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 355 of 1961

Decision Date: 19 March, 1962

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

M/S. Serajuddin and Co. filed a petition against its workmen and the matter was decided by the Supreme Court of India on 19 March 1962. The judgment was authored by Justice P. B. Gajendragadkar, who was joined on the bench by Justice K. N. Wanchoo. The parties were identified as petitioner M/S. Serajuddin and Co. and respondent their workmen. The decision was recorded on the date of 19 March 1962. The bench composition is reiterated as Justice P. B. Gajendragadkar and Justice K. N. Wanchoo. The case is reported in the 1966 All India Reporter at page 921 and also in the 1962 Supplement to the Supreme Court Reporter at page 934, with the citator reference E 1966 SC 925 (10). The legal provisions relevant to the dispute were taken from the Industrial Disputes Act, 1947 (the 14 of 1947), specifically sections 2(a), 2(a)(i), 2(j) and 2(k), and from the Mines Act, 1952 (the 35 of 1952), specifically sections 2(j), 2(k) and 2(h). The headnote of the case also mentions a reference by a State Government concerning the validity of an “appropriate Government” under section 2(a) of the Industrial Disputes Act in relation to a mine, and the definitions of “industry” and “mine” contained in the aforementioned statutes.

In the factual background, a dispute involving claims made by the employees of the company was referred for adjudication to a tribunal by the State Government of West Bengal. The appellant, M/S. Serajuddin and Co., raised a preliminary objection, contending that, under section 2(a) of the Industrial Disputes Act, only the Central Government possessed the authority to make a valid reference in relation to the present dispute because the dispute concerned a mine. Consequently, the appellant argued that the reference made by the State Government was unauthorised, incompetent, and that the tribunal therefore lacked jurisdiction to hear the matter. The tribunal rejected this objection and proceeded to set the case down for a hearing on the merits. Dissatisfied with the tribunal’s decision, the appellant sought special leave to appeal before this Court, raising a single point of law. The appellant asserted that its head office in Calcutta formed an integral part of the mining operation, and that any industrial dispute between that head office and its employees should be characterised as an industrial dispute concerning a mine under section 2(a)(i). Accordingly, the appellant maintained that the appropriate Government for making the reference should be the Central Government, not the State Government of West Bengal. The Court was therefore called upon to decide whether the dispute could be characterised as an industrial dispute in relation to a mine. The appellant’s argument relied on an expansive interpretation of the word “industry”, suggesting that it could include the head office of a mining company even though the office was physically separate from the actual mining site, and that the definition of “industry” in section 2(j) required a broad reading of the phrase “in relation to a mine”. The Court held that, in construing the expression “industrial dispute in relation to a mine”, the first step must be to determine the meaning of “mine” itself, and this determination must be made without reference to the broader definition of “industry” found in section 2(j). Because the Industrial Disputes Act does not provide a definition of “mine”, the Court looked to the ordinary dictionary meaning of the term and to the definition supplied in the Mines Act. On that basis, the Court found no difficulty in concluding that a dispute between employees working at the head office in Calcutta and the employer did not constitute an industrial dispute concerning a mine, since the head office is not a mine. Accordingly, the Court affirmed that the tribunal was correct in holding that the dispute was not one “in relation to a mine”.

It was held that the dispute between the appellant and the employees working at its Head Office in Calcutta did not constitute an industrial dispute concerning a mine. The rights that a lessee may enjoy under a mining lease were found to have no direct effect on the interpretation of section 2(a) of the Industrial Disputes Act, and consequently the tribunal correctly concluded that the present controversy was not a dispute in relation to a mine. The Court further observed that any industrial dispute that does not fall within the specific category listed in section 2(a)(i) is, by operation of section 2(a)(ii), within the jurisdiction of the State Government. In other words, the ordinary rule is that a disagreement between an employer and his work‑men is referred to the State Government for adjudication unless it falls under the exceptions enumerated in section 2(a)(i). Accordingly, the matter before the Court required an examination of whether the present case fell within one of those exceptions. In making that determination, the Court noted that the scope of the Mines Act itself must be taken into account, and that the fact that an office of a mine lies outside the statutory definition of “mine” assists in construing the term “mine” in clause 2(a)(1). On that basis, the tribunal’s finding that the reference made by the Government of West Bengal was valid was affirmed. The judgment was rendered in Civil Appeal No. 355 of 1961, filed by special leave against Order No. 28 dated 17 January 1961 of the Fourth Industrial Tribunal, West Bengal, in Case No. VIII‑71. Counsel for the appellant were P. K. Sanyal and D. N. Mukherjee, while the respondent was represented by Janardan Sharma. The appeal, decided on 19 March 1962, was delivered by Justice Gajendragadkar. The appeal presented a concise question concerning the construction of a portion of section 2(a) of the Industrial Disputes Act, 1947. The issue arose after, on 14 March 1960, the Government of West Bengal referred six items of dispute involving four employers and their respective employees to the Fourth Industrial Tribunal. Among the employers was the appellant, M/s Serajuddin & Co., situated at 16 Bentinck Street, Calcutta‑1, and the items of dispute related to claims for grade and scale, dearness allowance, house rent, leave and holidays, provident fund, gratuity, and conditions of service. The work‑men employed by the other three industrial concerns filed affidavits indicating that they no longer wished to pursue the cases because their disputes had been settled, leaving only the dispute between the appellant and its work‑men for adjudication. The appellant raised a preliminary objection to the validity of the reference, contending that, under section 2(a), the appropriate government able to make a valid reference in the present circumstances was the Central Government, not the State Government of West Bengal, rendering the reference unauthorised and the tribunal without jurisdiction. The tribunal rejected this objection and proceeded to hear the case on its merits. The appellant then sought special leave to the Supreme Court, raising solely the point that the appropriate government under section 2(a) should be the Central Government rather than the State Government of West Bengal.

In this case, the Tribunal rejected the preliminary objection raised by the appellant that the reference was invalid because, according to section 2(a), the appropriate Government for the dispute was the Central Government and not the State Government of West Bengal; consequently, the Tribunal held that it possessed jurisdiction and proceeded to set the matter down for hearing on its merits. The appellant challenged that finding by seeking special leave to approach this Court, and the sole issue raised by the appellant’s counsel, Mr Sanyal, is that the “appropriate Government” under section 2(a) must be the Central Government rather than the State Government of West Bengal. Before addressing that contention, it is necessary to recapitulate the material facts concerning the nature of the work performed by the workmen employed at the appellant’s office. The appellant’s head office in Calcutta is principally responsible for managing the mining operations of the company and for marketing the mineral products extracted from those mines. The actual mining activities, however, are carried out in the State of Orissa under a lease granted by that State to the appellant, and the operations involve the extraction of chromite and manganese. The Calcutta office does not directly conduct the mining; instead, it exercises overall supervisory control over the mining activities and handles the sale of the minerals produced. It is evident that personnel posted in the Calcutta head office can be transferred to the Orissa site where the mines are located, and, for the purpose of exercising direct supervisory control at the mine, the appellant employs staff at the mining locations themselves. Mr Sanyal argues that the Calcutta head office, being an integral component of the mining enterprise, renders any industrial dispute between that office and its employees an “industrial dispute concerning a mine” within the meaning of section 2(a)(i). Section 2(a)(i) provides, inter alia, that unless something in the subject or context renders it repugnant, the term “appropriate Government” in relation to an industrial dispute concerning a mine means the Central Government. The question that this Court must decide is whether the present dispute falls within that category. Counsel for the appellant maintains that the word “industry” is expansive enough to encompass the head office of a mining company even though the office is geographically remote from the actual mining operations, and that, in light of the definition of “industry” contained in section 2(j), the phrase “in relation to a mine” must be interpreted accordingly. Section 2(k) defines an “industrial dispute” as, inter alia, any dispute between an employer and workmen, and the expression “workman” refers to any person employed in any industry to perform either skilled or unskilled work of the kind described by section 2(a). Therefore, the words

In interpreting the phrase “industrial dispute” that appears in section 2(a)(i), the Court observed that the meaning of that phrase inevitably leads to the definition of “industry” contained in section 2(j). This is because an industrial dispute is defined with reference to a “workman”, and the definition of a workman itself incorporates the definition of “industry” in section 2(j). Consequently, when the provision speaks of “an industrial dispute concerning a mine”, the broad definition of “industry” in section 2(j) cannot be ignored. Under that wide definition, a “mine” is understood as the mining industry as a whole, which would encompass the head office that exercises overall supervision of mining operations even if that office is located far from the actual site of extraction. The argument advanced on behalf of the appellant relies on this interpretation, contending that the head office should be treated as part of the industry involved in the dispute.

Conversely, the Court noted that section 2(a)(i) also contains language that, when it intends to refer to an industry as such, expressly uses the term “industry”. For example, the provision mentions “industrial dispute concerning only such controlled industry as may be specified by the Central Government”. However, when the provision refers to a dispute “in regard to a mine”, it does not say “industrial dispute concerning a mining industry”; it simply says “industrial dispute concerning a mine”. In that context, the term “mine” is mentioned in the same way that a banking company, an insurance company, an oil‑field or a major port might be referenced. Therefore, the Court held that to construue the words “an industrial dispute concerning a mine”, the first step must be to determine the meaning of “mine” without resorting to the broad definition of “industry” in section 2(j). Because the Act itself does not define “mine”, the Court suggested looking to the ordinary dictionary meaning, namely an excavation in the earth for metals, coal, salt, or other minerals. The Mines Act of 1952, however, does define “mine” in section 2(j) as any excavation where operations for searching for or obtaining minerals have been or are being carried on. Importantly, that definition expressly excludes a “mine office”, which is separately defined in section 2(k) as an office at the surface of the mine, thereby confirming that an office – even if situated at the surface – does not fall within the definition of “mine”. The Court further clarified this point by referring to the definition of “person employed in a mine” in section 2(h), which describes a person as being employed in a mine if they work under appointment by, or with the knowledge of, the manager, whether for wages or not, in any mining operation or in cleaning, maintenance or other work directly connected with the mining activity.

In the judgment, the Court explained that the definition of a person employed in a mine, as provided in the Act, covered anyone who worked under the direction of the manager in any mining operation, or who performed cleaning, oiling, or any other work that was incidental to or connected with mining activities. The Court observed that employees who worked in the Head Office, regardless of where the office was located, could not be said to be carrying out mining operations within the first part of that definition, nor could they be regarded as performing work that was incidental to or connected with mining operations. For work to be considered incidental, the Court held, it must have a direct relationship with the mining activities themselves. The Court noted that the work carried out in the Head Office consisted principally of sales functions, which commenced only after the minerals had been extracted, processed, and all operations incidental to them had been completed. This point was not contested. Consequently, the Court concluded that, under the Mines Act, an office situated at the surface of a mine was not itself a mine, and the employees employed in such an office could not be classified as persons employed in a mine. Accordingly, the regulatory provisions of the Mines Act did not automatically apply to that office, nor did they govern the conditions of service of the office employees.

The Court further stated that, in determining the meaning of an “industrial dispute concerning a mine” under section 2(a)(i), the appropriate approach was to rely either on the ordinary dictionary meaning of the word “mine” or on the definition contained in the Mines Act. Applying that approach, the Court held that an industrial dispute between the Head Office employees in Calcutta and their employer could not be characterized as an industrial dispute concerning a mine, because the Head Office was not a mine. The Court rejected the argument advanced by counsel for the appellant, who contended that a mining lease under the Mines and Minerals (Regulation and Development) Act, 1948—defined as a lease for searching, winning, working, making merchantable, carrying away or disposing of minerals and including an exploring or prospecting licence—implied that the disposal of minerals, and therefore the sales activities carried out in the Head Office, were integrally connected with mining operations. The Court observed that, although the purpose of a mining lease was indeed to enable the lessee to search for and extract minerals and to make them marketable, the rights conferred by such a lease did not bear directly on the construction of section 2(a)(i). Therefore, the existence of a mining lease could not be used to interpret the term “mine” in that provision, and the argument that the Head Office formed part of the mine was without substance.

In this case the Court observed that the contention that the Head Office itself forms part of the mine lacks any substance. The purpose of granting a mining lease is plainly to enable the lessee to search for, extract, and make minerals marketable, and that purpose necessarily includes the lessee’s right to remove the minerals and to dispose of them in the market. However, the rights conferred on a lessee under a mining lease have no direct bearing on the interpretation of section 2(a) that is before the Court. As previously noted, because the Act does not contain a definition of the word “mine,” the Court must rely either on the ordinary dictionary meaning of the term or on the definition provided in the Mines Act. Consequently, the rights that a lessee enjoys under a mining lease cannot assist in construing the word “mine” in section 2(a)(i). The Court therefore holds that the Tribunal was correct in finding that the dispute between the appellant and its employees at the Head Office in Calcutta is not a dispute relating to a mine. On broader considerations the Tribunal’s conclusion also appears proper. The Central Government is vested with authority over industrial disputes that arise in connection with a mine, as provided in section 2(a). It is reasonable to assume that the Central Government’s interest extends to disputes concerning mines as defined by the Mines Act. The relevant provisions of the Mines Act are intended to regulate labour in mines; the scheme of the Act includes numerous provisions for the health and safety of persons working in mines and for the limitation of hours of work and employment conditions. If the scheme of the Act shows that the office of a mine lies outside its substantive ambit, then employees who work in such an office are not ordinarily governed by the principal provisions of the Act. Accordingly, it is not unreasonable to conclude that an industrial dispute between such office employees and the employer does not fall within the category of disputes in which the Central Government would be interested. It may be true that some work performed in a surface office—such as maintaining muster rolls or payment registers—are incidental to mining operations, and clerks engaged in those tasks could be described as persons employed in a mine. Nevertheless, the work carried out in the Head Office that is the subject of this appeal is entirely unrelated to mining operations. All industrial disputes which

The Court explained that disputes which are outside section 2(a)(i) fall within the jurisdiction of the State Government under section 2(a)(ii). In other words, the usual rule is that an industrial dispute that arises between an employer and his employees is sent to the State Government for a reference, except when the dispute is covered by section 2(a)(i). Accordingly, the point to be decided in this case was whether the present dispute fits within the exception listed in section 2(a)(i). While examining the breadth of that exception, the Court said it was necessary to keep in mind the scope of the Mines Act itself. It observed that the fact that the office of a mine is not defined as a mine under the Act assists in interpreting the word “mine” in section 2(a)(i). The Court therefore held that the Tribunal was correct in concluding that the reference made by the State Government of West Bengal was valid, and that there was no error in the Tribunal’s reasoning. Consequently, the appeal was found to have failed and was dismissed with costs. The appeal was therefore dismissed.