TaxTMI 
TaxTMI 
TaxTMI 
1964 (12) TMI 73
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....as a result of import restrictions and other factors. In 1960 and 1961 the Company had to close down three brandies in North India and twelve branches in South India and its establishments in many places became considerably reduced; and in order to reorganise its business, the Company relinquished several agencies in Bombay, Calcutta, Delhi and Madras, So far as Calcutta is concerned the Company relinquished eleven general sales and pharmaceutical and other engineering agencies between 1st August 1.960 and 1st August 1961. It is stated by the Company that in pursuance of its policy to develop manufacturing activities as opposed to General Agency business, it reorganised its business operations us a result whereof the agencies in Calcutta and elsewhere had to be relinquished and this policy was adopted for the sake of convenience and for economic utilisation of the Company's finance in the light of the changing pattern of the Company's business. "The eleven agencies which were given up in respect of the Calcutta business were as follows: Date of ralinguishment Name of Agency. 1-8-1960 (H.A.L.) Hindusthan Antibiotics Private Ltd. Bombay. 1-8-1960 Government Oil Facto....
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.... happens to be the major business of the Calcutta Branch of the Company. It has been a declared policy of the Board of the Directors of the Company to give up the old agencies and to liquidate agency business in its entirety. In this event there is an apprehension of heavy retrenchment of all categories of employees due to the fact that the Company has also declared in the report of the Board of Directors that they would be no longer interested in having any agency heretofore. Under the circumstances the Union Secretary along with some of his co-workers had waited on an interview with the Manager at about the middle of March 1961. The Manager also confirmed the policy of agency business. In the premises there is an apprehension of retrenchment of about 60 heads in the very near future and with the Company it is not a question of profit and loss or a question of business recession because the Company has also been found to hand over their own business to another Company under certain terms of agreement. As a result of all these happenings the future of the employees is very dark. The employees have been kept under suspense and fear and loss of employment Just at the beginning ....
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....ff concerned are being referred to our Principals or their incoming representative with the request that as many as possible are absorbed, but you will appreciate that this is a matter where the ultimate decision does not rest with us. 4. You may rest assured, however, that in the event of retrenchment having to take place, we will comply in every respect with the rules and regulation provided to cover the circumstances. Yours faithfully, for Parry and Co., Ltd. Sc/- H.H.J. Taylor Manager." 8. On the 20th June 1961 a conciliation proceeding was held. On the 23rd June, 1961 the appellant Union sent a letter to the Chairman of the Board of Directors of the respondent Company's office at Madras forwarding a copy of the resolutions comprising the demands of the Union which had been adopted at a general meeting of the members of the Union held on the said date. The resolutions were twelve in number and the resolutions Nos. 8 and 12 are set out hereunder: "8. That the transfer of service to other places in the company's organisation should be offered to those who are willing to accept such transfer before retrenchment; 12. That a list of persons proposed to be re....
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....ereafter filed before Sri P.C. Pal, Judge, Second Industrial Tribunal, by the appellant Union and the respondent Company. 12. The case of the Union before the Tribunal in substance was that as a result of agitation by the workmen the Company became vindictive and planned to create a sense of frustration amongst the workmen by releasing a hell of terror by taking recourse to large scale retrenchment and break the Union, if possible; and that the Company with that mala fide end in view in the name of alleged management policy, decided to release some of the profitable agencies and create artificially a condition to snow fall in volume of work and surplusage of staff; that the mala fide of the whole move is also apparent from the fact that the company's said policy of giving up agencies is not for all other places also but for Calcutta only where the market is the widest and best in India; that the present head office of the company being in Madras and the Chairman and powerful Board of Directors of the Company being Madrasees, there is a hidden mind to divert the Company's resources to Madras State not from the bona fide trade point of view but essentially from narrow paroc....
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....lleged reorganisation of business and relinquishment of agencies. The Union contended that there was no good reason for relinquishment of the agencies and the alleged policy of reorganisation had not been proved. The Union also characterised the Company's act as an artificial creation of surplus just to weaken the Union toy taking recourse to extremely narrow parochial consideration and anti-trade Union perspective with improper motives behind. 16. In dealing with the case of reorganisation as put forward by the Company the Tribunal observed; "As regards relinquishment of agencies Ext. E shows that 3 agencies in Madras were given up between 1-6-60 and 1-6-61, 13 agencies in Bombay were given up between 1-7-60 and 1-7-61 ana 11 agencies, in Delhi were given up between 1-2-60 and 140-61. But it does not appeal anywhere--either from papers filed or from oral evidence that any retrenchment, as in Calcutta, had taken place in any other branches..........In the absence of any adequate proof as to retrenchment in the places other than Calcutta, it may well be taken that no retrenchment was effected in those places. There is nothing on record to show that the surplus hands in thos....
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....ore factory in or about December 1900. ........... That there was such a proposal for sale of that factory, and some money was received from the intending purchaser, has not been denied............ So this conduct cannot certainly be said to be an indication as to the purpose for doing manufacturing works for which relinquishment of Calcutta agencies became necessary on ground of reorganisation of business." 18. In a later paragraph the Tribunal after dealing with certain additional reasons which had been given by the Manager for the relinquishments of the agencies in course of his evidence observed: "It appears, therefore, that these agencies were given up by the Company for the sake of the Principals concerned. But the actual reasons given by the Manager in his deposition do not appear to find support from the correspondence produced ................ According to the Manager there are several other letters bearing on the subject in the Calcutta Office of the Company, out he only chose important correspondence out of many. It is not the Company's case that the agencies were not profitable. So it is but natural that one should like to know as to what actually actuated the ....
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....chment there has been increase in the work-load of the Company in the Calcutta Branch, the Tribunal has dealt with the evidence of the Manager and commenting on the fact of non-production of the relevant books came to the following conclusion: "in view of all these facts and circumstances, I cannot but accept the Union's case that the work-load of the Company in Calcutta branch increased, as stated by P. W. 1 on account of the retrenchment effected there." 22. The Tribunal after discussing the evidence on the point that the case of the Union that retrenchment in question could be avoided if the Company had given effect to the condition of service of the employees concerned, of transferring them to other branches, came to the conclusion, that there was considerable force in this case made by the Union. 23. Then again in dealing with the question of bona fides on the part of the Company in effecting the retrenchment in question and the suggestion of the Union that the Company wanted to crush the Union and victimise its members by taking unlawful and improper recourse to retrenchment, the Tribunal observed: "As for me, T am unable to say that in view of the facts and cir....
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....gs the Tribunal has also found that the provision of the Industrial Disputes Act as contained in Section 25(G) of the Act has not been followed in this case in respect of some of the employees and the provision as contained in Section 25(F)(c) of the Act has not been followed in this case. The final conclusion which the Tribunal has recorded upon a consideration of the entire case is in the following words: "In view of the above findings arid considerations, I hold in conclusion that the retrenchment in question along with its extent is unjustified, and also that the retrenchment itself is illegal on account of violation of the provision of Section 25(F)(c) of the Industrial Disputes Agt. The retrenched workmen are, therefore, entitled to the reliefs claimed. The Company shall reinstate them by giving them their former jobs in the Calcutta Branch as far as feasible and by making suitable transfer to the other branches of the Company as may be necessary, with continuity of their respective service. The company shall also pay them all back wages since the time of the retrenchment in question after adjusting the retrenchment compensations already laid to them. These directions must....
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....on this point in the following manner: "In the instant case, the Tribunal expressly found that respondent Union did not succeed in establishing a case of victimization but at the same breath came to the inconsistent finding that the probability that the Union activities would be weakened by large scale retrenchment cannot be ignored or overlooked, I am not happy with this last finding because in coming to the said finding the Tribunal proceeded not upon evidence but upon conjectural probability. If this last finding be ignored, as based on no evidence whatsoever, then the criticism of Mr. Sen that in condemning the reorganisation the Tribunal trespassed upon purely management function deserves serious consideration. 30. The learned Judge then proceeds to discuss some of the oral and documentary evidence on this question of reorganisation and has observed as follows: "The Tribunal appears to have ignored the above considerations and confined its criticisms to Mr. Taylor's evidence and to the speech delivered by C.R. Srinivasan, the Chairman of the petitioner Company and also of East Indian Distilleries and Factories Ltd., an allied concern of the petitioner Company. In s....
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....d on the 1st July 1961. The learned Judge also found that the explanation which had been offered on behalf of the Company that these temporary hands were taken in order to fill up certain vacancies caused by death, retirement or resignation at a time when the company had not decided upon large scale retrenchment was a good explanation and it should have been accepted by the Tribunal, but the Tribunal had failed to appreciate this aspect of the matter. 34. Then in dealing with the tliird, fourth and fifth reasonings the learned Judge observes; "I am not sure, on the materials before me, that the agencies which were relinquished were not all profitable agencies. The petitioner Company had suffered losses earlier on its existing pattern of business and there is nothing to show that economic considerations also did not weigh with the petitioner Company, when it decided to reorganise its business on manufacturing basis. The immediate cause of giving up the Calcutta agencies has been as stated in the Award but these may as well have been additional grounds. On the face of the finding that the retrenchment had not been made to victimise workers, it will not be proper to infer without....
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....e retrenchment was effected neither mala fide nor done on parochial consideration." 37. In a subsequent paragraph after dealing with a decision of the Kerala High Court Sundareswaran v. Industrial Tribunal, (1959) 1 Lab LJ 510 (Ker) and certain observations of Ayyanger, J. who decided that case, the learned Judge observed; "Relying on the observations, Mr. Mukherjee contended that even if the findings of the Tribunal were wrong even then this court should not interfere with the findings. In my opinion, this contention is much too wide for acceptance. If the findings are patently wrong, this Court has jurisdiction to interfere with the findings." 38. The learned Judge then dealt with the finding of the Tribunal as to whether the extent of retrenchment was justified or not and held that the Company was within its rights in deciding the number of workmen to be retrenched. 39. Then in dealing with the three other grounds on which the Tribunal had condemned the retrenchment, the learned Judge sets out the grounds as follows: (a) The service of retrenched workmen was transferable service and the petitioner company could avoid retrenchment by transferring the surplus workers i....
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....ent was not made bona fide and that the case of the Company that it is as a result of the scheme and policy of reorganisation that retrenchment was effected has not been established, it was not open to the learned trial Judge to reappreciate or reappraise the evidence and to come to a different conclusion. It is argued that it is a well-settled principle that in exercise of its jurisdiction under Article 226 of the Constitution the High Court cannot function as a Court of Appeal and interfere with or revise findings of fact arrived at by a properly constituted Tribunal upon evidence adduced before it. 44. In the case of Hari Vishnu Kamath v. Syed Ahmad Ishaque the Supreme Court upon a review of the relevant Indian and English decisions has laid down that a Writ of Certiorari can be issued for correcting errors of jurisdiction, as when an inferior Court or Tribunal acts without jurisdiction or in excess of it or fails to exercise it. It will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice. It has been furt....
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.... be drawn from the said finding is within the exclusive jurisdiction of the Tribunal and such point cannot be agitated before a Writ Court. The Supreme Court has pointed out that if findings of fact were allowed to be disturbed by High Court in such. Writ proceedings, that may lead to an interminable search for correct findings and would virtually convert the High Courts into Appellate Courts competent to deal with questions of fact and that is why in entertaining petitions for Writs of Certiorari it is necessary to remember that findings of tact recorded by a, Special Tribunal which has been clothed with jurisdiction to deal with them should be treated as final between the parties unless of course it is shown that the impugned finding is based on no evidence. 48. In the case before us we feel that what the learned trial Judge has done is to correct what are mainly errors in appreciation of oral and documentary evidence and errors in drawing inferences. It may be that some of the conclusions to which the learned trial Judge has arrived at are more in consonance with the entire record of the proceedings before the Tribunal but it appears to us that under the law as it stands, the ....
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....ors in Calcutta to give them the first option of employment on terms and conditions to be settled between them inter se. The distributor was agreeable to take up the 14 outdoor salesmen but only two of the salesmen approached the distributor and obtained appointments; but the others did not approach the distributor, with the result that the distributor waited for some time and ultimately appointed other persons in course of the next three months. Under these circumstances, an industrial dispute was raised between the Company and the Union of the employees in respect of the termination of services of the 14 outdoor salesmen. The two salesmen who had been employed by the distributor appeared before the Labour Court and informed that they were not interested in Hie dispute. 50. The case of the Company before the Labour Court was that the impugned discharge of the 14 employees was not at all an unfair labour practice; but it was in fact a bona fide act on the part of the Company inasmuch as the said discharge was a part of the scheme of reorganisation of its business adopted by the Company since 1954. The case of the Union on the other hand was that the Company's plea of reorgani....
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....h a patently erroneous assumption should have been made by the Labour Court in view of the evidence adduced before it and it was thus quite clear that the principal reason which weighed with the Labour Court in characterising the scheme as a colourable device was entirely unsustainable and that introduced a serious infirmity in the conclusion itself. The Supreme Court also found that if the reorganised scheme had been adopted by the appellant Company for reasons of economy and convenience and it had been introduced in all the areas of its business, the fact that its implementation would lead to the discharge of some of the employees would have no material bearing on the question as to whether the reorganisation had been adopted by the appellant bona fide or not. The discharge of the employees would have to be considered as an inevitable though very unfortunate consequence of the reorganised scheme which the employer acting bona fide was entitled to adopt. The Supreme Court ultimately came to the conclusion that the finding of the Tribunal that the plea of reorganisation was nothing but a colourable device to throw off the workmen was not only not supported by any evidence but was c....
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.... named in the Order of reference under Section 10 dated the 11th July 1957. With regard to this issue one Mr. Zachariah a member of the Club had given evidence. It also appeared from the evidence that the Club which was a week-end Club was not doing very well as in the first and it had to raise additional funds by issue of debentures and that from the year 1957-58 the Club had been suffering a loss. The Tribunal found that the work which was being done by the female labourers was now being done by the male labourers and so the termination of the employment of the female labourers was not permissible and it ordered reinstatement of these labourers. Being dissatisfied with the findings of the Tribunal with regard to this issue and two other issues which had been referred for adjudication by the same order dated 11th July 1957, the Club moved this Court under Article 226 of the Constitution and the question which was raised with regard to this issue of reinstatement of the female labourers was whether it was open to an employer to terminate the services of an employee as a result of the reorganisation of his business. In dealing with this question Sinha, J. before whom the Rule came u....
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....he strict law of master and servant. The award of the Tribunal may contain provisions for settlement of a dispute which no court could order if it was bound by ordinary law, but the Tribunal is not fettered in any way by these limitations. In Vol. I of 'Labour Disputes and Collective Bargaining' by Ludwing Teller it is said at page 586 that industrial arbitration may involve extension of an existing agreement or making of a new one, while commercial arbitration .generally concerns itself with interpretation of existing obligations and disputes relating to existing agreement. In our opinion it is a true statement about the functions of an Industrial Tribunal in Labour disputes." 56. The principle enunciated in this case has been followed by the Supreme Court in the case of State of Madras v. C. P. Sarathy, AIR 1938 SC 58 and in the case of Rohtas' Industries Ltd. v. Brijnandan Pandey . 57. In the case of Tatanagar Foundry Co. Ltd, v. Their Workmen, AIR 1962 SC 1538 the Supreme Court has also pointed out that in dealing with a laying off which satisfies the tests prescribed by the definition contained in Section 2(KKK) it is not open to the Tribunal to enquire whether....