# ATHERTON WEST & CO. T,TD v. SUTI MILL MAZDOOR UNION AND OTHERS

- **Citation:** [1953] 1 S.C.R. 780
- **Court:** Supreme Court of India
- **Decided:** 1951-08-16
- **Case number:** CIVIL ArrELLA1'E JURISDICTION: Civil Appeal No. 8 of 1953
- **Bench:** MEHR CtHND MiUHJAN, Bhagwati
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/atherton-west-co-t-td-v-suti-mill-mazdoor-union-and-others-200
- **Pages:** 10

## Headnote

U. P. lndl!strial Disputes Act, 1947, ss. 3, 8-U. P. Government Notification No. 781 (L}!XVIII of March 10, 1948, els. 4, 7,
28-Dismissal of 1.uoi·krnen with permission of Regional Gonciliati011
0.(/icer-Jl!risdiction of Board to hear the dispute-TVhether dispute
ceases to be an industrial dispnte-Award of Board-Abse10ce of one
member dl!ring /waring- Validity of award.,
Under bhe provisions of clauses 4 and 7 (3) of Notification
No. 781 (L)/XVIII issued by the United Provinces Government on
~farch 10, 1948, the absence of ol)e of the members of the Regional Conciliation Board on the last date of hearing and his nonparticipation iri the making and signing of the award woulcl not
render the award void or inoperative.
The dismissal of workmen and their non-employment would
not cease to be an industrial dispute merely because the Regional
Conciliation Officer had given written permission to the employer
to dismiss them under clause 23 of the T:.P. Government Notification of ~farch 10, 1948. Such ·permission does not Yalidate the
<lismissal but only removes the ban on the right of the employer,
bis agent or manager to dismiss the \\'orkmen concerned during
the pendency of proceedings relating to an industrial dispute.
CIVIL ArrELLA1'E JURISDICTION:
Civil Appeal
No. 8 of 1953.
Appeal by special leave from the decision dated
16th August, 1951, of ~he Labour Appellate 'l'ribunal
of India, Calcutta, in Appeal No. 43 of 1951 (Cal.).
0. K. Daphtary, Solicitor-General for India, (Sri
Nrirain Andley, with him) for the appellant.
0. P. Vnr1na for the respondent.
1953.
March 16. The Judgment of the Court was
delivered by
BHAG\l'A1'I J.-This is an appeal by special leave
from a decision of the [Jabour Appellate Tribunal of
India, Calcutta, confirming an award made by the
Regional Conciliation· Board (Textiles & Hosiery),
Kanpur, in an industrial dispute between the appellants and the respondents,
·
s.c.R.
SUPREME OOLiRT REPOR'rs
781
The' respondents 2. 3 and 4 were employees of the
1953
appellants,
respondent 2 was
employed in the
-
1 ' l
d
h' l
d
3
d 4
Athsrton West <l)
c enca ca re w 1 e respon ents , an
were em0
Ltd
ployed as wrapping boy and piecer respectively and
".. ·
their service conditions were governed by the standSi.ti Mill
ing orders of the Employers' Association of Northern l1fozdoor Union
India, Kanpur, of which association the appellants
and Othm.
were members.
Bhay11)ati J.
· There was a theft in the canteen within the mill
premises between the night of January 6 and 7, 1950,
and some money belonging to the appellants invested
iu the canteen account was stolen from the safe.
A
report of the theft was made to the police authorities
and an investigation was made by the police as well
as the appellants in the matter with no result.
The
management of the appellants thereafter took action
against one J. P. Gurjar, who was in charge of the
canteen in connection with the losses of money from
the account of the canteen and after the completion
of the enquiries terminated his services.
An industrial dispute in respect of the non-employment of the
said .J. P. Gurjar arose between the parties which dispute was at the material time taken in appeal before
the Industrial Court (Textiles & Hosiery), Kanpur.
During the pendency of those proceedings, some time
in August, 1950, the respondent 4 made a confession
in regard to the said theft implicating the respondents 2 and 3 also therein.
On the 29th August,
1950, the management of the appellants presented to
the respondents 2, 3 and 4 c]large-sheets in respect of
the said theft and suspended them on the 30th
August, 1950, from their senice. They also made an
application on the 2nd September, 1950, to the Additional Regional Conciliation Officer, Kanpur, asking
for permission to dismiss the respondents 2, 3 and 4.
'rhe Additional Regional Conciliation Officer, Kanpur,
instituted an enquiry, heard the respondents 2, 3 and 4,
considered the evidence which was led before him by
the appellants a

## Text

1968
March 16,
780
SUPREME COURT REPOR'fS
(1953)
ATHERTON WEST & CO. T,TD.
v.
SUTI MILL MAZDOOR UNION AND OTHERS.
[MEHR CtHND MiUHJAN and BHAGWATI JJ.]
U. P. lndl!strial Disputes Act, 1947, ss. 3, 8-U. P. Government Notification No. 781 (L}!XVIII of March 10, 1948, els. 4, 7,
28-Dismissal of 1.uoi·krnen with permission of Regional Gonciliati011
0.(/icer-Jl!risdiction of Board to hear the dispute-TVhether dispute
ceases to be an industrial dispnte-Award of Board-Abse10ce of one
member dl!ring /waring- Validity of award.,
Under bhe provisions of clauses 4 and 7 (3) of Notification
No. 781 (L)/XVIII issued by the United Provinces Government on
~farch 10, 1948, the absence of ol)e of the members of the Regional Conciliation Board on the last date of hearing and his nonparticipation iri the making and signing of the award woulcl not
render the award void or inoperative.
The dismissal of workmen and their non-employment would
not cease to be an industrial dispute merely because the Regional
Conciliation Officer had given written permission to the employer
to dismiss them under clause 23 of the T:.P. Government Notification of ~farch 10, 1948. Such ·permission does not Yalidate the
<lismissal but only removes the ban on the right of the employer,
bis agent or manager to dismiss the \\'orkmen concerned during
the pendency of proceedings relating to an industrial dispute.
CIVIL ArrELLA1'E JURISDICTION:
Civil Appeal
No. 8 of 1953.
Appeal by special leave from the decision dated
16th August, 1951, of ~he Labour Appellate 'l'ribunal
of India, Calcutta, in Appeal No. 43 of 1951 (Cal.).
0. K. Daphtary, Solicitor-General for India, (Sri
Nrirain Andley, with him) for the appellant.
0. P. Vnr1na for the respondent.
1953.
March 16. The Judgment of the Court was
delivered by
BHAG\l'A1'I J.-This is an appeal by special leave
from a decision of the [Jabour Appellate Tribunal of
India, Calcutta, confirming an award made by the
Regional Conciliation· Board (Textiles & Hosiery),
Kanpur, in an industrial dispute between the appellants and the respondents,
·
s.c.R.
SUPREME OOLiRT REPOR'rs
781
The' respondents 2. 3 and 4 were employees of the
1953
appellants,
respondent 2 was
employed in the
-
1 ' l
d
h' l
d
3
d 4
Athsrton West <l)
c enca ca re w 1 e respon ents , an
were em0
Ltd
ployed as wrapping boy and piecer respectively and
".. ·
their service conditions were governed by the standSi.ti Mill
ing orders of the Employers' Association of Northern l1fozdoor Union
India, Kanpur, of which association the appellants
and Othm.
were members.
Bhay11)ati J.
· There was a theft in the canteen within the mill
premises between the night of January 6 and 7, 1950,
and some money belonging to the appellants invested
iu the canteen account was stolen from the safe.
A
report of the theft was made to the police authorities
and an investigation was made by the police as well
as the appellants in the matter with no result.
The
management of the appellants thereafter took action
against one J. P. Gurjar, who was in charge of the
canteen in connection with the losses of money from
the account of the canteen and after the completion
of the enquiries terminated his services.
An industrial dispute in respect of the non-employment of the
said .J. P. Gurjar arose between the parties which dispute was at the material time taken in appeal before
the Industrial Court (Textiles & Hosiery), Kanpur.
During the pendency of those proceedings, some time
in August, 1950, the respondent 4 made a confession
in regard to the said theft implicating the respondents 2 and 3 also therein.
On the 29th August,
1950, the management of the appellants presented to
the respondents 2, 3 and 4 c]large-sheets in respect of
the said theft and suspended them on the 30th
August, 1950, from their senice. They also made an
application on the 2nd September, 1950, to the Additional Regional Conciliation Officer, Kanpur, asking
for permission to dismiss the respondents 2, 3 and 4.
'rhe Additional Regional Conciliation Officer, Kanpur,
instituted an enquiry, heard the respondents 2, 3 and 4,
considered the evidence which was led before him by
the appellants as well as the respondents 2, 3 and 4 and
made an order on the 12th October, 1950, according
to the appellantA permission for the dismisrnl of the
·782
SUPREME COURT REPOR'fS
[i953J
1953
respondents 2, 3 and 4.
The respondel'lts 2, 3 and 4
Ath t-w t , were accordingly dismissed from _their employ bv the
er on
es
u.
•
..
co. Ltd.
appell:a.nts with effect from the 13th October, 1950.
v. .
An industrial dispute thereupon arose between the
8a"1' vfu,u
appellants and respondents 2, 3 and 4 in respect of the
Maz oor
nion
•
d
d 4
d
d
a dOth•,.,.
non-employmentot respon ents2,3au
an respon -
n
ent l, a registered trade union, of which the respondBhagwoti J. en ts 2, 3 and 4 were . members, ultimately-moved the_
Regional Conciliation Board ('1
1extiles and Hosiery),
Kanpur, ou the 1st November, 1950, challenging the
propriety and bona fides of the appellants in terminating the services of respondents 2, 3 and 4.
The appellants filed their written statement on the
25th November, 1950, contending inter alia that the
dismissal was fully justified, regular and proper, having
been made in accordance with the permission accorded by the Additional Regional Conciliation Officer.
'fhe only issue which was canvassed before the
Regional Conciliation Board was whether any or all
of the three workmen named in the application dated
the 1st November, 1950, hits/have been wrongfully
dismissed and if so, to what relief is he/they entitled.
The Board consisted of three members, Shri R. P.
Maheshwari, CJiairman, and Shri B. B. Singh and
Shri J. K. Bhagat, Members.
Shri J. K. Bhagat was
not present on the last date of the hearing and the
award was therefore signed on the 20th April, 1951,
by Shri R. P. Maheshwari and Shri B. B. Singh.
Under the terms of the award the Board held that
the dismissal was wron.~ful and that the respondents
2, 3 and 4 were entitled to reinstatement as also to the
full wages, including dearness allowance from the date
of their suspension to the date they were taken back
on duty.
The appellants preferred an appeal to the Labour
Appellate 'l'ribunal of India, Calcutta.
The appeal
was heard on the 16th August, 1951, and the Labour
Appellate Tribunal dismissed the appeal of the
appellants. The appellants obtained special leave
from this Court and filed the present appeal.
S.C.R.
SUPREME COURT REPORTS
783
Two conte:etions were urged by Shri C. K. DaphwoB
tary who appeared for the appellants before us-(1)
-
h . h
d
· d
d ·
·
·
Athe..ton West .t
t at t e a.war
was vo1
an
moperat1ve as it was
Co. Ltd.
made by only two members of the Board, the third,
v.
member, Shri J. K. Bhagat not having been present
Snti Mill
at the last hearing and not having signed the same Mazdoor Union
and (2) that the Additional Regional Conciliation
and Others.
Officer having given the written permission for disBhagwatiJ.
missal of repondents 2, 3 and 4 no industrial dispute
could arise by reason of the non-employment of respondents 2, 3 and 4 and the Regional Conciliation
Board had therefore no jurisdiction to entertain the
application made before it by respondent 1 on behalf
of the respondents 2, 3 and 4 and the award of the
Regional Conciliation Board ordering the reinstatement of respondents 2, 3 and 4 was therefore without
jurisdiction, void and inoperative and the Labour
Appellate Tribunal was in error in confirming the
same.
In support of his first contention Shri C. K. Daphtary relied upon clause 4 and ·clause 7, sub-clause (3)
of the G. N. No. 781 (L)/XVIII, dated 10th March,
1948, issued by the United Provinces Government
regarding the constitution of Regional Conciliation
Boards and Industrial Courts for the settlement of
industrial disputes within the State.
Clause 4-" No business may be transacted at any
meeting of any Board unless all the three members
are present 'I.
Clause 7 (3)-" Where no amicable settlement can
be reached on one or more issues the Board, if all the
members thereof agree or if they do not so agree, the
majority of the members agreeing or if no two members agree, the Chairman alone, shall record an award
and the reasons for such award, on the issues on
which the parties were unable to reach an amicable
settlement."
Shri C. K. Daphtuy therefore urged that Shri
J. K. Bhagat not having been present at the last
meeting of the Board and not having signed the
784
SUPREME COURT REPORTS
[1953]
19sa
award the award could not be lawfully made by the
--
Chairman and the other member who were present
Atherto•~~est & and who signed the award and the award was therefore
0\. .
void and inoperative.
Shri c._ P.
Varma who
suti Mill
represented the respondent 1 before us however drew
Mazdoo,. Unioii our attention to the Government Order No. 388(11)/
and Others.
XVIII/37 (LL) /50 dated 2nd March, 1051, which
amended the abol'e clauses 4 and 7(3).
Bhagwati J.
,
Clause 4 as amended provides:-
" (1) Notice of every meeting of the Board shall be
given to the members by the ChairmBn in advance.
(2) If apart from the Chairman either or both the
other members fail to attend any meeting of the
Board of which notice has been given to them, the
Chairman may transact the business of the Board
without the presence of the absent member or members; and no such business or proceedings of the
Board shall be held invalid merely by reason of the
fact that either one or both of the members were not
present at the meeting."
Clause 7 (3) as amended provides: -
"Where no amicable settlement can be reached on
one or more issues, if all the members present agree
the Board or if they do not so agree the majority of
the members agreeing or if no two rnembero present
agree or if only the Chairman is present, he alone,
shall record an ·award and the reasons for such award
on the issues on which the parties were unable to
reach an amicable settlement."
'
'fhese amendments in the 'clauses 4 and 7 (3) are
enough in onr opinion to repel the contention of
Shri C. K. Daphtary that the absence of Shri J. K.
Bhagat from the last meeting and also his non-participation in the making and signing of the award
rendered the award void and inoperatiYe. 'l'he Board
was empowered under the amended clauses 4 and 7(3)
to act in the absence of Shri J. R. Bhagat and the
award 11s it was made and signed by the two remaining members, viz., Sbri R. P. Maheshwari and Shri
B. B. Singh, was lawful and binding on the partie~.
S.C.R.
SUPREME COURT REPORTS
785
In support· of his second contention Shri C. K.
1968
Daphtary relied upon clauses 23 and 24 of the Govern-A'h -m
N 'fi
·
d
• ei·ton '"st <!
ment
ot1 cat10n ated the 10th March, 1948, above
00• Ltd.
referred to.
v.
Clause 23 :-" Sa,ve with the written permission of " Sduti Mum
th R
'
] C
']' ·
0""
h
A .
maz oor
nion
e
eg10na
onm iat1on
111cer or t e
ss1Stant
and Others.
Regional Conciliation Officer concerned irrespective
of the fact whether an enquiry is pending before a
Bhagwati J.
Regio-nal Conciliation Hoard or the Provincial Conciliation 13oara or an appeal has been filed before the
..
Industrial Court, no employer, his agent or manager,
shall discharge or dismiss any workmen during the
continuance of an enquiry or appeal and pending the·
issue of the orders of the State Government upon the
findings of the said Court ......... "
Clause 24 :-"(1) Except as hereinbefore provided
every order made or direction issued under the provisions of this Order shall be final and conclusive and
shall not be questioned by any party thereto in any
proceeding ......... "
Shri C. K. Daphtary contended that the order made
by the Additional Regional Conciliation Officer on
the 12th October, 1950, giving the appellants permission to dismiss respondents 2, 3 and 4 was final and
conclusive in regard to the appellants' right to dismiss them from their employ and their dismissal
accordingly by the appellants could not be the foundation of any industrial dispute which could be referred
to the Regional Conciliation Board at the instance of
respondent 1.
He further contended that if no industrial dispute could thus arise the Regional Conciliation Board had no jurisdiction to entertain the
same and the award made by the Board was therefore
without jurisdiction, void and inoperative and could
not also be con firmed by the T~abour Appellate Tribunal.
We are unable to accept this contention.
The
Government Notification dated 10th March, 1948,
was issued by the Governor of the United Provinces
in e)l:ercise of the powers conferred by cla,uses (b), (c),
786
SUPREME COURT REPORTS
(1953]
1953
(d) and (g) of section 3
and section 8 of the
-w
& United Provinces Industrial Disputes Act, 1947. It
Athorton
est
provided for the constitution by the Provincial
Co. Ltd.
b
v.
Government of such num er of Conciliation Boards
suti Mill
as might be deemed necessary for the settlement of
M•zdoor Union industrial disputes consisting of three members of
.,.a Others.
which one was to he the Conciliation Officer for the
B' -t. J
area; one was to be representative of the employers
,,agwa • •
b
h
.
f
k
·
and one was to
e t e representative o wor men,
the Conciliation Officer for the area being the
.Chairman of
the
Board.
'1
1he order provided
for the mode in which industrial disputes may
· be referred to the Board for enquiry and the
manner in which the enquiry was to be conduc,ed. It
also provided for the constitution by the Provincial
Government of such number of Industrial Courts as it
might be necessary consisting of a President assisted
by such equal number of assessors as the .President
might determine representing employers and employees.
Provision was made for appeals to such
Industrial Courts from the awards of the Board and
also for the hearing of the said appeals.
After making further provision for the procedure to be adopted
before the Boards as well a.s the Industrial Courts,
the Order by clause 23. above mentioned imposed a
ban ou the discli.arge or dismissal of any workman by
the employer, his agent or manager during the pe':l.-
dency of an enquir1' before the Regional Conciliation
Board or the Provincial Conciliation Board or of an .
appeal before the Industrial Court except with the
written permission of the Regional Conciliation Officer or the Assistant Regional Conciliation Officer
concerned and by clause 24 made every order or
direction issued under the provisions of the said
Government Order final and conclusive except as
thereinbefore provided.
It is clear that clause 23 imposed a ban on the discharge or dismissal of any workman pending the enquiry of an industrial dispute before the Board or an
appeal before the Industrial Court and the employer,
his agent or manager could only discharge or dismiss
'
S.C.R.
SUPREME COURT REPOR'fS
787
the workman with the written permission of the
1968
Regional Conciliation Officer or the Assistant Regio- 41
111_
~
1 C
· 1 · .
Offi
d
E
. f
h. /<Cr on
est ~
na
onc1 1at10n
cer concerne .
ven 1 sue
00• Ltd.
written permission was forthcoming the employer, his
v.
agent or manager might or might not discharge or
Suti Mill
dismiss the workman and the only effect of such Mazdoor Union
written permission would be to remove the ban
and Others.
against the discharge or dismissal of the workman
Bhagwati J.
during the pendency of those proceedings.
The Regional Conciliation Officer or the Assistant Hegional
Conciliation Officer concerned would institute an enquiry and come to the conclusion whether there was
a prima facie case made out for the discharge or dismiss:i.l of the workman and the employer, his agent or
manager was not actuated by any improper motives
or did not resort to any unfair practice or victimisation in the matter of the proposed discharge or dismiss9'1 of the workman.
But he was not entrusted, as
the Board or the Industrial Court would be, with the
duty of coming to the conclusion whether the discharge or dismissal of the workman during the
pendency of the proceedings was within the rights of
the employer, his agent or manager.
The enquiry to
be conducted by the Regional Conciliation Offi~er or
the Assistant Regional Conciliation Officer concerned
was not an enquiry into an industrial dispute as to
the non-employment of the workman who was sought
to be discharged or dismissed, which industrial dispute
would only arise after an employer, his agent or
manager discharged or dismissed the workman in accordance with the written permission obtained from
the officer concerned. l'his was the only scope of the
enquiry before the Regional Conciliation Officer or
the Assistant Regional Conciliation Officer concerned
and the effect of the written permission was not to
validate the discharge or dismissal but merely to remove the ban on the powers of the employer, his
agent or manager to discharge or dismiss the workman during the pendency of the proceedings.
Once
such written permission wa,s granted by him, tha,t
10•
788
SUPREME COURT REPORTS
[1953]
1953
order made or direction issued by him w.as to be final
-
, and conclusive and was not to be questioned by any
Atherton West ~
·
d'
'h
l
ff
f
00. Ltd.
party thereto Ill any procee mgs.
1 e on y e ect o
v.
clause 24(1) was to prevent any party to the pending
Suti Mill
proceedings from challenging the written permission
Mazdoor Union thus granted by the officer concerned.
Such written
and Others.
permission could not be made the subject-matter of
Bhaawati J. any appeal at the instance of either party and both
the parties would be bound by the order made or
direction issued by the officer concerned so far as it
gave or refused the permission to the employer, his
agent or man11ger in the matter of the proposed discharge or dismissal of the workman.
This was the only scope of the provisions of
clauses 23 and 24 (1) above mentioned.
Once the
written permission was granted by the officer concerned, the ban against the discharge or dismissal of the
workman would be removed and the employer, his
agent or manager could in the exercise of his discretion discharge or dismiss the workman but in that
event an industrial dispute within the meaning of its
definition contained in section 2(k) of the Industrial
Disputes Act, 1947, would arise and the workmen who
bad btlen discharged or dismissed would be entitled to
have that industrial dispute referred to the Region:1l
Conciliation Board for enquiry into the same.
That
right 9f the workman to raise an industrial dispute
could not be taken away in the manner suggested by
Shri C. K. Daphtary by having resort to the provisions of clauses 23 and 24(1) aforesaid. That right
\1:as given to the workman by the terms of the
Industrial Disputes Act, 1947, and the U.P. Industrial
Disputes Act, XXVIII of 1947, and woulii remain unaffected by any of the provisions hereinbefore referred
to.
We are therefore of the opinion that this contention of Sbri C. K. Daphtary also fails.
\Ve may before concluding advert to one circumstance and that is that even though the Labour
App111late Tribunal rightly confined its jurisdicti•m to
.,
S.C.R.
SUPREME COURT REPORTS
789
determining substantial questions of law involved in
1958
the appeal, it nevertheless observed that even on the Atl t-w t ,
f
.
ier on
es °'
:octs the conclus10ns of the Board were perfectly
00. Ltd.
justified and there was no substance in the appeal on
v.
merits as well.
The appellants were not heard at all
suti Mill
on merits and it was hardly legitimate for the Labour M•zdoor Union
Appellate Tribunal sito motu to consider the merits of
•nd Others.
the appeal and arrive at a finding in regard to the
Bhagwati J.
same. If at all the Labour Appellate Tribunal had
any jurisdiction in regard to the merits it was incum-
•.
beut upon it to have heard the appellants in regard
to the merits before arriving at a conclusion in regard
to the same.
The resuH is that this appeal fails and must be dismissed with costs.
Appeal dismissed .
•
Agent for the appellant : S. S. Shukla ..
'rROJAN & CO. LTD.
v.
RM. N. N. NAGAPPA CHETTIAR.
[MEHR CHAND MAHA.TAN and DAS JJ.]
Contract-Damages-Sale of shares-Sale induced by fra11dJleas11re of damages-Di(ference between price paid and market
price on date of sale-Fluctuations of market and sudden closure of
Stock Exchange, effect of-Interest on damaues-Practice-Gonflict
between pleadings and proof-Decree on alternative claim not set itp
in plaint-Legality.
Where a person is induced to l)Urchase shares at a certain
price by fraud the measure of damages which he is entitled to re·
cover from the seller is the difference between the price which he
paid for the shares and the real price of the shares on the date on
which the shares were purchased.
Ordinarily the m"rket rate of
the shares on the elate when the fraud was practised would represent their real price in tbe absence of any other circumstance.
If, however, the market was vitiated or was in a state of !lux or
1953