1959 (9) TMI 74 - SC - Indian Laws

Supreme Court: Quarry & Factory = One Establishment; Workmen Disqualified for Compensation

The Supreme Court determined that the limestone quarry and the cement factory constituted one establishment under Section 25E(iii) of the Industrial ... - Issues Involved:1. Interpretation of 'in another part of the establishment' under Section 25E(iii) of the Industrial Disputes Act, 1947.2. Whether the limestone quarry at Rajanka and the Chaibasa Cement Works at Jhinkpani constitute one establishment.Detailed Analysis:1. Interpretation of 'in another part of the establishment' under Section 25E(iii) of the Industrial Disputes Act, 1947:The primary issue revolves around the interpretation of the phrase 'in another part of the establishment' as mentioned in Section 25E(iii) of the Industrial Disputes Act, 1947. This section disqualifies workmen from lay-off compensation if the lay-off is due to a strike or slowing down of production by workmen in another part of the establishment. The Court needed to determine whether the limestone quarry at Rajanka and the Chaibasa Cement Works at Jhinkpani were parts of the same establishment.2. Whether the limestone quarry at Rajanka and the Chaibasa Cement Works at Jhinkpani constitute one establishment:The Court examined the relationship between the limestone quarry and the cement factory from several perspectives:- Ownership and Control: Both the quarry and the factory were owned by the same company, and there was unity of control and management. The Manager of the Chaibasa Cement Works had overall charge of both the quarry and the factory.- Finance and Employment: The financial accounts and employment conditions were integrated. Payments for the quarry's requirements were made through the cement works' office, and the staff and workers were transferable between the quarry and the factory.- Geographical Proximity: The quarry was located within a mile of the factory, indicating geographical proximity.- Functional Integrality: The quarry supplied limestone, the principal raw material, exclusively to the factory, demonstrating functional integrality.The Industrial Tribunal initially concluded that the quarry and the factory were separate establishments, citing reasons such as different sets of Standing Orders, separate attendance registers, and the distinct jurisdictional authorities under the Mines Act, 1952, and the Industrial Disputes Act, 1947. However, the Supreme Court disagreed with this conclusion.The Supreme Court emphasized that the Act did not prescribe specific tests for determining what constitutes one establishment. Instead, various factors such as unity of ownership, management, control, finance, employment conditions, functional integrality, and geographical proximity should be considered. The Court found that all these factors indicated that the quarry and the factory formed one integrated establishment.The Court also addressed the legal difficulties raised by the respondents, such as the different jurisdictions of the Central and State Governments under the Mines Act and the Industrial Disputes Act. The Court held that these jurisdictional differences did not imply that the quarry and the factory were separate establishments for all purposes of the Act. The Court concluded that the existence of two jurisdictions did not necessitate treating the quarry and the factory as separate establishments.Conclusion:The Supreme Court held that the limestone quarry at Rajanka and the Chaibasa Cement Works at Jhinkpani constituted one establishment within the meaning of Section 25E(iii) of the Industrial Disputes Act, 1947. Consequently, the workmen at the factory were disqualified from claiming lay-off compensation due to the strike in the limestone quarry. The appeal was allowed, and the award of the Industrial Tribunal was set aside.