Industrial dispute reference, conditional acceptance, and bona fide closure were examined under the unamended labour law framework.

A dispute remains referable under the U.P. Industrial Disputes Act if the asserted right accrued while the industry was still operating, even if the undertaking was later closed; the relevant test is when the claim arose, not the date of reference. Correspondence proposing payment of 25% of sale profits did not create a binding contract because the offer was conditional on immediate withdrawal of the strike notice and there was no unconditional acceptance. Compensation could not be sustained on a retrenchment theory, since retrenchment presupposes continuation of business and does not cover termination on a bona fide closure under the unamended law.

---

---

Issues: (i) whether a reference under section 3 of the U.P. Industrial Disputes Act XXVIII of 1947 was incompetent because the undertaking had been closed before the notification; (ii) whether the correspondence of 3 January 1951 and 10 January 1951 created a concluded and binding agreement to pay the workmen 25 per cent of the sale profits; (iii) whether compensation could be supported on the footing of retrenchment or closure of business.

Issue (i): whether a reference under section 3 of the U.P. Industrial Disputes Act XXVIII of 1947 was incompetent because the undertaking had been closed before the notification.

Analysis: The statutory scheme contemplates an existing industry and an industrial dispute arising in relation to that industry. A real and bona fide closure takes the matter outside the Act where the dispute itself arises only after closure. But where the right claimed arose while the industry was still in operation, the State's power to refer the dispute is not defeated merely because the business was later closed. The relevant point is when the right in dispute accrued, not the date of the reference.

Conclusion: The reference was competent in principle because the claim arose while the industry was still working.

Issue (ii): whether the correspondence of 3 January 1951 and 10 January 1951 created a concluded and binding agreement to pay the workmen 25 per cent of the sale profits.

Analysis: The offer was expressly conditional on immediate withdrawal of the strike notice. That condition was never accepted. The workmen's replies showed that they were awaiting further instructions and did not amount to an unconditional acceptance. The alleged acceptance by conduct also failed, because no definite withdrawal of the strike notice was communicated and the workmen continued to resist the sale and dismantling. The correspondence therefore did not ripen into a concluded contract.

Conclusion: No binding agreement came into existence, and the claim to 25 per cent of the sale profits failed.

Issue (iii): whether compensation could be supported on the footing of retrenchment or closure of business.

Analysis: Retrenchment, in its ordinary meaning, presupposes the continuance of the business and the discharge of surplus labour. It does not extend to the termination of all workmen on a bona fide closure of the undertaking. The later statutory definition inserted by amendment could not govern the present dispute, because the rights had to be determined under the law as it stood when the workmen were discharged. The award could not therefore be sustained on a retrenchment theory.

Conclusion: Compensation was not payable on the footing of retrenchment or closure.

Final Conclusion: The award of compensation was set aside and the appeal succeeded, with the parties directed to bear their own costs.

Ratio Decidendi: A dispute arising from a right that accrued while an industry was still in existence remains an industrial dispute for reference purposes even if the undertaking is later closed, but a conditional promise does not become binding without unconditional acceptance, and termination on bona fide closure is not retrenchment under the unamended law.

---