# Bomvari v. Stott of Ultar p,adt•h

- **Citation:** [1962] Supp. 3 S.C.R. 196
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Bench:** P. B. Ga.H::S-Dragadkar, A. K. SARKAR :ind K. N. WA:S-CHOO
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bomvari-v-stott-of-ultar-p-adt-h-2369
- **Pages:** 14

## Headnote

lncfu.<;lrial
dispu.tt -lndu,,trial conrern·-8plit-Linq up of
a. going concern-Hosiery Gonzpany-lnsfa!lalion n.f spinnin!f
1nflchinf',ry -Rrc<;1j11ition of Com[>finy as
ho-~ier11
und.~rf1tkinr1
and t.ipinning undlcrtak:1.q
1v~
sr.para.1p -Vrzlidity -Rrnnba.1J
[ntb1stri!tl R•Jation-• Act, 1.94r, (Rom. 1 I of /!147), s. 11.
The. appellant Comparv was incorporated in 1908 and
its principal activity then ""as to manufac.turc hosiery.
In
1924 \\'hen
tilt' appellant shifted its factor to Ahmcdtbarl
it
installr:d
spinnin~ n1achinr:ry \\·ich
a view to ensure
suitable and e\·r.n s111)ply of yarn for its hosiery manufacture.
()riginally, a notifiratior. had hccn iss~t"d on ~fay 30, l~l39,
under the Bo1nl>ay Industrial l)i.-p11tc Act, l 93n, ,.,·hereby
hosierv concerns , .. ·rrc includccl in t.hc dcfination of 11Cotton
Tr.xtil~ Tndusrry•·, h11t suhsrqucntly on July 17, t 9:t.1, another
notification vvas issued as a result of which the llo~irry manu·
facture \\'as excluded from thP.
(~otton 'fcxtile lnd 11stry and
it \'•:ls covt"red by a separate notificatinn.
For the purposrs
of th~ Ro1n\Jav Industrial R~lations Act, 1916,
th~ appellant
concc-rn ,.,•as rccognisr<l as an undertaking of th~ hosiery
industry by the Rcgiitrar nncler s. 11 of that Act.
Subsequently as a re-;11lt of certain proceedings taken liy the Textile Lobour Association of Ahmedabad, the Registni.r decided
•
J
38.C.R.
SUPREME COURT REPORTS
197
to recognise the appellant concern as consisting of two under-·
takings, the hosiery section and the rest excluding the hosiery
section and this decision was confirmed by the Industrial
Court.
The appellant challenged the order of the Industrial
Court on the grounds ( l) that the spinning and the hosiery
sections in
its establishrr1ent were one concern because (a)
there was unity of ownership, management, supervision, con ..
trol and employment,
(b) there was compleie functional
integration, and (c) the two sections were functioning under
the same roof, and (2) that, in any case, s. l l of the Act
did not authorise the spJitting up of a concern
into two
undertakings. The evidence showed that though in 1924 the
spinning section had begun as a subsidiary to the hosiery
section in order to serve as its feeder, later on the spinning
section developed to such an extent that it became a spinning mill by itself and could no longer be regarded a• a
minor section attached to the hosiery works,
that only 20%
of the yarn manufactured by the· spinning section was consumed for hosiery purposes while the rest was sold in the
markrt, that the spinning department produced yarn of all
counts, some of which could not be used for hosiery work.,
that when the knitting department was closed in 1948, the
spinning d~partment was not. It was also found that the
amount paid to the employees in each of the two departments
by
way of minimum wages and dearness allowance was
different.
Held, that the decision of t'ie Registrar recognising
the hosiery and spinning departments of the appellant concern as separate undertakings under s. I I of the Bombay
Industrial Relations Act, 1946, was correct.
Held, further,
that the question whether the several
undertakings carried on by the same company are separate
or not depends on whether they are distinct and independent
of each-other or are functionally integral or inter-department
and that the kegistrar was within his powers under s. 11 of
the Act to come to a decision on this question on the basis
of the circumstances disclosed on evidence.
Associated Cement Companies Ltd. v. Their Workmen, ( 1960)
I S.C.R.703,PratapPressv. Their Workmen, (1960) I L.L.J.
497 Pakshiraja Studios v. Its Workmen. (1962) 2 L.L. J. 380
and Honorary Secretary, The Soath India Millowrers' Association
v·
The Secretary
Coimbatore · District
Textile
Worker8' Union, Coimbotore (1962) Supp. 2, S.C.R. 926 relied
on.
CIVIL APPE'ILATE JURISDICTION: Civil Appeal
No. 306 of 1961.
1962
Thi Fine Knitting
Co. Ltd.,
••
The lndustriaf Court,
·Bombay
19'S

## Text

1962
Bomvari
v.
Stott of
Ultar p,adt•h
ll1tlrubar Dayal J.
Ft1-1Ili.
196 SUPREJ\IE COURT REPORTS [1962] SUPP.
other viotims.
He had it with him E·ithrr as a matter of cour~c or for doing the work hP mil!ht have
bren doing that day. We are therrfore of the opinion
that ltam Charnn had no common intention with
Banwari in his acts towards the \'arious victims of
tho incident anrl t.hat he has been wrongly convicted.
"\Ve therefore dismiss the appciil of Ranwari
and allow the appeal of Ram Cha.ran and acquit
the latter of the offonccs he has been convict.id of.
AppP.al pa.rtly allowed.
THE FINE KNITTING CO., LTD.
v.
THE IN"DCSTIUAL COURT, BOJ\IBAY
AND OTHEHS
(P. B. GA.H::S-DRAGADKAR, A. K. SARKAR :ind
K. N. WA:S-CHOO, JJ.)
lncfu.<;lrial
dispu.tt -lndu,,trial conrern·-8plit-Linq up of
a. going concern-Hosiery Gonzpany-lnsfa!lalion n.f spinnin!f
1nflchinf',ry -Rrc<;1j11ition of Com[>finy as
ho-~ier11
und.~rf1tkinr1
and t.ipinning undlcrtak:1.q
1v~
sr.para.1p -Vrzlidity -Rrnnba.1J
[ntb1stri!tl R•Jation-• Act, 1.94r, (Rom. 1 I of /!147), s. 11.
The. appellant Comparv was incorporated in 1908 and
its principal activity then ""as to manufac.turc hosiery.
In
1924 \\'hen
tilt' appellant shifted its factor to Ahmcdtbarl
it
installr:d
spinnin~ n1achinr:ry \\·ich
a view to ensure
suitable and e\·r.n s111)ply of yarn for its hosiery manufacture.
()riginally, a notifiratior. had hccn iss~t"d on ~fay 30, l~l39,
under the Bo1nl>ay Industrial l)i.-p11tc Act, l 93n, ,.,·hereby
hosierv concerns , .. ·rrc includccl in t.hc dcfination of 11Cotton
Tr.xtil~ Tndusrry•·, h11t suhsrqucntly on July 17, t 9:t.1, another
notification vvas issued as a result of which the llo~irry manu·
facture \\'as excluded from thP.
(~otton 'fcxtile lnd 11stry and
it \'•:ls covt"red by a separate notificatinn.
For the purposrs
of th~ Ro1n\Jav Industrial R~lations Act, 1916,
th~ appellant
concc-rn ,.,•as rccognisr<l as an undertaking of th~ hosiery
industry by the Rcgiitrar nncler s. 11 of that Act.
Subsequently as a re-;11lt of certain proceedings taken liy the Textile Lobour Association of Ahmedabad, the Registni.r decided
•
J
38.C.R.
SUPREME COURT REPORTS
197
to recognise the appellant concern as consisting of two under-·
takings, the hosiery section and the rest excluding the hosiery
section and this decision was confirmed by the Industrial
Court.
The appellant challenged the order of the Industrial
Court on the grounds ( l) that the spinning and the hosiery
sections in
its establishrr1ent were one concern because (a)
there was unity of ownership, management, supervision, con ..
trol and employment,
(b) there was compleie functional
integration, and (c) the two sections were functioning under
the same roof, and (2) that, in any case, s. l l of the Act
did not authorise the spJitting up of a concern
into two
undertakings. The evidence showed that though in 1924 the
spinning section had begun as a subsidiary to the hosiery
section in order to serve as its feeder, later on the spinning
section developed to such an extent that it became a spinning mill by itself and could no longer be regarded a• a
minor section attached to the hosiery works,
that only 20%
of the yarn manufactured by the· spinning section was consumed for hosiery purposes while the rest was sold in the
markrt, that the spinning department produced yarn of all
counts, some of which could not be used for hosiery work.,
that when the knitting department was closed in 1948, the
spinning d~partment was not. It was also found that the
amount paid to the employees in each of the two departments
by
way of minimum wages and dearness allowance was
different.
Held, that the decision of t'ie Registrar recognising
the hosiery and spinning departments of the appellant concern as separate undertakings under s. I I of the Bombay
Industrial Relations Act, 1946, was correct.
Held, further,
that the question whether the several
undertakings carried on by the same company are separate
or not depends on whether they are distinct and independent
of each-other or are functionally integral or inter-department
and that the kegistrar was within his powers under s. 11 of
the Act to come to a decision on this question on the basis
of the circumstances disclosed on evidence.
Associated Cement Companies Ltd. v. Their Workmen, ( 1960)
I S.C.R.703,PratapPressv. Their Workmen, (1960) I L.L.J.
497 Pakshiraja Studios v. Its Workmen. (1962) 2 L.L. J. 380
and Honorary Secretary, The Soath India Millowrers' Association
v·
The Secretary
Coimbatore · District
Textile
Worker8' Union, Coimbotore (1962) Supp. 2, S.C.R. 926 relied
on.
CIVIL APPE'ILATE JURISDICTION: Civil Appeal
No. 306 of 1961.
1962
Thi Fine Knitting
Co. Ltd.,
••
The lndustriaf Court,
·Bombay
19'S
Tht /•1nt Kniltint
Co., 1.14.
••
f"ft lndtHtrilll C1urt,
lJ1mb•y ·
198 SUPRE:.\IE COURT REPORTS [1962] SUPP.
Appeal Ly Bpecial leave from tho Judgment
and order dntt·d !\lay 16, !Oii9, of thn Industrial
Court, Bombay, in Appeal (J.C.) Ku. HO of 1959 .
.J.P. lHtlttii and l.N. Shroff, for the appellant.
N. !IL Harot, Secretary, Labour Association,
for the respoudeut Nu. 3.
I!lfi2. Februar·y l 5.
The Judgment of the
Court was delivered by
GAJE~IJHAGADK.All, J .. The appellant, tho
:Fine Knittiug Co. Ltd., was iuoorpomted in 1908
and its priucipal acti~·itv then was to man11facture
hosiery.
Ju HJ24, wht'.n the app<'llant shifted its
factory
from
Barejadi tu Ahmedabad, it installed spinning machinery with nooo spindles
with a vil'w to ensure suitable and .,,·en rnpply of
yarn for its hosiery manufacture. On :\lay 30, 1939,
the Government of Romhav i"sued a notification
under t.he Bombay Industr
0ial Disputes Ac:t, l!):J8
(No. XXV of Hiili;), whereb.v hosiery concerns were
included in tht' definition of ·Cot ton Textile Industry'. Subsequently on .July 17,
Hl45,
another
notification was issued as a re8ult of which the
hosiery manufacture was excluded from the Cotton
Textile Industry and it was covered by a separate
notifi~-ation issued under the said Act.
This latter
notification
which
was
made
applicable to
the Hosiery Industry specified that the said
notification i'.?lkr aliu, lo all concerns using power
and employiug twe11ty or moro persons which are
engaged in . the manufacture of hosiery or other
knitted ar.tio:lcs made of cotton and all processes
incidental or supplementary thereto. Aft.or this
notification was issued, the appellant ceased to be
covered by the extended and inclusive definition of
the 'Cotton Textile Industry' and was recognised
as a HusiH,Y concern being engaged in the manufacture of hosiery.
Later, in J!l46, the Bombay
Industrial Relations Act, 1946 (No. XI of 194i)
(hereinafter called the Act.), wa.s applied to the
1
3 S.0.R.
SUPREME COURT REPORTS
199
industries to which the Bombay Industrial Disputes
Act had been applied, as a result of s.2(3) of the
former Act. In consequence, for the purposes of
the Act, the appellant concern was recognis<"d as an
undertaking of the Hosiery Industry under s. ll. This
was the result of notification No. 10 of 1948, issued
by the Registrar under the Act. This position was
recognised by the Industrial Tribunal in industrial adjudications concerning disputes between the
appellant and its workmen.
Even so, respondent No. 3, the Textile Labour
Association, Ahmedabad, sought to reopen the issue
by applying by to the Registrar on October 16,
1953, that the appellant's factory
should be
recognised as an undertaking both in the Cotton Textile Industry and the Hosiery Industry. The Registrar
who is the second respondent in the present appeal
held an enquiry and ultimately came to tJ:i.e conclusion that there was no justification for splitting up
the concern into two units-and recognising them
as suggested by the third respondent. The third
respondent did not prefer an appeal against the
said decision of the second respondent; but respondent No. 4 who are the five elected representatives
of the employees of the appellant sought to challenge the said decision of the second respondent by
preferring an appeal to the Industrial Court, respondent No. 1. The appellant · contended that
respondent No. 4 were not entitled to prefer an
appeal because they were not parties to the proceedings in the original application before the
second respondent. This preliminary objection was
upheld and the appeal preferred by respondent
No. 4 was dismissed.
The result was that the
orde·r passed by the Registrar rejecting the application made by respondent No. 3 concluded the
dispute.
Even while the said appeal was pending before the first respondent, respondents Nos. 3 and 4
1962
Thi Fim Knitting
Co., Ltd.
v.
Thi lndustri•l Court
Bombay
Uoj1ndragadk•r J.
Tht Fir1~ Knit1ifll
Co., Ltd.
Y,
The lndu 1lrid/ Court,
Bombay
200 SUPREME COCRT REPORTS [1962) SL'PP.
initiated the present proceedings by means of two
applications made before the second respondent in
which the same relief was claimed that the appellant concern should be recognised as an undertaking
both in the Cotton Textile Industry and in thr
Hosiery Industry. The second respond~nt, howenor.
rejected these applications on the ground that since
he gave his earlier decision, there had been rio
chango of circumstances and so there was no justification for roconsidering the matter over again.
The third and the fourth respondents then went in
appeal before the first respondent and their appeals
were allowed by the first respondent and a direction
was issued that the appellant company should be
recognised as two undert&kings- one in the Cotton
Textile Industry and the othPr in the Hosiery
Industry. Thu appellant then moved the High
Court of Bombay undH Articles 2~!i and 227 of tho
Constitution and challenged the validity of the
order passed by the first respondent. In the High
Court the parties took an order by consent on
August 20, l!J58.
As a result of this consent order,
the direction issued by the first respondent was set
aside and the matter was remanded to the second
respondent to enable him to hold a fresh enquiry
and to dispose of the dispute betwcC'n the parties in
accordance with law.
On February 14, 1959, the second respondent
pronounced his decision.
Ho came to the conclusion that in the cir< umstances disclosed on evidencu,
tho best courts wo~ Id be to recognise the spinning
and hosiery sectior • of the appellant company as
two separate unrl artaking and treat them as two
separate enterpriseR.
That is why under s.11(1) he
decided to recognise the Fine Knitting Co: Ltd.
(Hosiery Section) and the Fine Knitting Co. Ltd.
(excluding Hosiery Section) as undertakings in the
Hosiery Industry and the Cotton Text.He Jndustr,v
respectively. The appellant was aggneved by th!B
order and so is preferred a.ppe&ls before the first
3 S.C:i:t.
SUPREME COURT REPORTS
201
respondent. The respondents Nos. 3 and' 4 also
challenged the decision of the second respondent
and contended that the entire concern of the appellant should be treated as Cotton Textile Undertaking.
All the . three appeals failed and the first
respondent confirmed the order passed by the
second respondent. The result is that the appellant
concern is recognised as consisting of two undertakings, the Hosiery Section and the rest excluding the
Hosiery Section. It is against this order of the first
. respondent. that the appellant has come to this Comt
by special leave.
The first point which Mr. Mehta has strenuously
urged before us on behalf of the appellant i8 that
on a proper application of the tests laid down by
this Court, it should be held that the spinning and
the Hosiery Sections in the appellant's establishment are one concern and in support of this argument he h<ts referred us to the decisions in the
Associated Cement Companies Ltd. v. Their Worlcmen ( '), Pratap Press v. Their W (ll'lcmen (2)
and
Palcshiraja Studios v. Its Workmen ('). This question
has been recently considered by this Court in the
case of the Honorary Secretary,
The South India
MiUowners'
Association
v.
The
Secretary,
Coimbatore District :Textile Workers' Union, Coimbatore (') in which judgment has been pronounced
on February 1, 1962. In the last mentioned
case, this Court has examined the relevant earlier
decisions and ha.s come to the conclusion that
though the question about the unity of two
industrial establishments has to be
considered
in the light of the refevant tests laid down from
time to time, it would be unreasonable to treat any
one of the said tests as decisive. As has been
observed in that case, in dealing with the problem,
several factors are relevant, but it must be remembered that the significance of the several factors
(1) (1960] 1 S.C.R. 703.
(3) (1961] 2 L L.J. 380.
(2) (1960] I L.L.J. 497.
(4) (1962] Supp. 2 s.c R. 92s
1962
The _Fine Kni.rting
Co., Lld .
••
The lnd1Jdrial Court,
Born.hay
Gajendragadkar J.
1 ht Fi1ic 1\·11iUint;
Co Ltd.
v.
11u Tndusl1ial Co11rt,
Bomb~J
Gajmdn']adkar J
202 SUPRE:IIE COtJRT REPOR'i'S (1962] SUPP.
would not be tho same in each case nor their importance. It is in the light (Jf tht>se decisions that
tho point raised by Mr. llkhla has to be consi·
dered.
:llr. i\lchta contends that in the present caso
there is unity of ownership aml as a necessary
corollary, tlwre is unity of mauagement, supervision and control; there is unity of purpose and
design and he 11rgucs that there is complete functional integration. According to him, as no hosiery could be manufactured without ya.ru, thereis such a functiu1ml in tcr-dcpendcnco between the
spinning and the hosiery sections that the latter
cannot exist without the former.
There is also
unity of fornnce and in consequence, there is one
capital aud depreciation fund account, one common
account of expenditure and incomo, one balanct!·
sheet and one profit and loss account. There is
also unity of employment and the two concerns
function UJ:der the same roof; so there is unity of
habitation. It is on these grounds that lllr. Mehta
contends that the first and the second respondents
were in error in spl,itting up the appellent's establishment into two Hections and recognising them
separately as such.
In dealing with the significance and the effect
of the factors on which ;\Ir. i\lchta has rightly relied
it is necessary to bear in mind certain other relevant foctorn on which the decision wider appeal
is substantially baaed. It is true that in 1924, the
spinning scct10n of the establishment may have
begun as a subsidi111·y tu the hosiery section and in
order to servo as its feeder.
But tho evidence on
tho record clearly shows that the position is now
roversed and that the spinning section has now
assumed major importance and hosiery takes a
minor place in tho industrial activities of the appellant. The inspectiou notes made by the second
respondent show that it was admitted by the
3 S.C.R.
SUPREME COURT REPORTS
203
management tha.t the spinning section has now
developed to such an extent that it is like a spinn·
ing mill by itself; it can no longer be regarded as a
minor section attached to the hosiery _works.
It
was conceded before the secowi respondent that
only about 20'/'0 of the yarn manufactured in the
spinning section is consumed for hosiery purposes
while the rest is available to be sold in the market.
The production figures in the spinning section and
'the consumption of the yarn produced in that sec·
tion unmistakably point to the fact that the spinn·
ing section is no longer a minor department run
by the appellant solely for the purpose of its hosiery section. In 1955 in the months of November
and December, the production in the epinning
department was worth Rs. 1,17,742 whereas whatever was consumed in the knitting department was
only Rs. 23,817 leaving a balance which was sold
for Rs. 93,!l25.
The corresponding figures for the
year 1956
Mc Es. 6,70,854, Rs. 1,40,105 and
Rs.5,30, 749. Similar figures for 1957 are Rs.8,17,153,
Rs. 1,31, 725 and Rs. 7,04,018 and for 1958 are
Rs. 6,68,095, !'ts. 1,26,252 and Rs. 5,40,873.
The
balance-sheet for the year 1954 shows that the total
hosiery sale was worth Rs. 2,37,232-6-0 whereas
the total yarn sale was worth Rs. 14,82,705-5-0.
Similarly, for the year 1955, the hosiery sale was
Rs. 2,56,986 and the yarn sale was Rs. 14,44,929.
The strength of the employees engaged in the two
respective sectors tells the same'story. The table
prepared by the second respondent from the information supplied by the · management shows
that .for the year 1955, spinning employees were
174, hosiery employees 5ti and the common work,
men 35. For the year 1956, the figures were 217,
54 and 38; for Hi57, the figures were 194, 65 and
38; and for 1958, the figures were 178, 60 and 32.
Mr. Mehta quarrels with some of these figures but
does not dispute the broad conclusion which is
drawn from the figures ,that the number of employees engaged in the spinning section is far more
1962
The Fine Knittjng
Co., Ltd.
v.
The Industrial Court,
Bombay
Gajendragadkar J.
1!16Z
Tht Jr'ine },'n1tt{1,;
Co., Ltd.
••
1·1i, lnduJll'ial Court,
Bombay
Gajtndr 'l.cadkar .J.
204 SUPREME COVRT REPORTS [1962] SCPP.
than that employed in the hosiery section. Thus,
there can be no doubt that the spinning activity
of the appellant which may have begun as subsidiary to the hosiery activity has now grown in
importance and has taken a place of pride in the
industritd activity of the appellant coIJ.Sidered as a.
whole; it can no longer be regarded as subsidiary
to hosiery.
It is common ground that by the notification
issued under the Cotton Textile (Control) Order,
l!J48, the appellant is called upon to supply to the
Governm1·nt the prescribed quantity of yarn produced by the spinning depa.rtment. It is unnecessary to refer to th!' details of the order or to tho
extent of the yarn required to be sup.plied by the
appellant under it. 'Vhat is significant is the fact
that by the application of the ord!lr issued in that
behalf, the Govcmmcnt has treated the appellant
as a producer who has a spinning plant and in that
sense, the existence of the spinning activity of the
appellant bas bocn treated as an independent
activity liable to be controlled by the notification
issued under the Cotton Textile (Control) Order,
1948.
Then as t-0 the argument that the spinning
and the hosiery am functionally integrated, it is
clear that hosiery can exist without spinning, provided the industry engaged in hosiery purchases
yarn required f'or the purpose of hosiery. That is
one aspect of the ma.ttor.
But the more important
aspect on which reliance bas been placed against
the appellant is tha.t the appellant's spinning dep·
artmcnt produces yarn of all counts some of which
would admittedly not be useful for boHiery work.
When the appellant was asked whether t,he allegation mado by respondents Nos. 3 and 4 in that behalf wa.s true or not, the ma.na.gement of the app·
ellant hositatingly donicd the said 111lcgation. But
an advertisement published in the local daily
"Sandesh" wa.s produced by respondent.a Nos. 3
3 S.C.R.
SUPREME COURT REPO.ttTS
205
and 4 and it clearly showed that yarn of all counts
was offered by the appellant for sale in the general
, market. Therefore, it would be idle to contend
that the spinning work carried on in the spinning
department is meant exclusively or solely for tbe
hosiery department. If the spinning department
produces yarn which is not useful or necessary for,
and which cannot be used by, the hosiery section.
the only inferei:ice is that the spinning department
is working on its own and is producing yarn to be
sold in the market. ·That being so, the argument
of functional inter-dependence or integrality cannot
be treated as valid.
Besides, it is not disputed that when the
knitting department was closed in 1948, the spinning department was not. If the two departments
are
functionally inter-dependent,
the
closure
of the one
without the closure of the other may
need an explanation. The explanation which
has appealed to the first and the second respondents Hpparently is that though the spinning
work carried on by the appellant may, to some
extent, be useful for the hosiery work, the major
part of its work is carried on independently with
an eye on the market and so the closure of the
hosiery cannot and did not affect the continuance
of the spinning department.
There is yet another circumstance on which
considerable reliance bas been placed by the first
and second respondents in rejecting the appellant's
contention that the two departments constitute one
unit. This circumstance refers to the conduct of
the appellant itself in dealing with the employees
engaged in spinning and in knitting departments.
It is admitted that the minimum wages paid to the
employees in knitting differed from the minimum
wages paid to the employees in spinning and so
does the amount of dearness allowance paid to the
respective employees differ. It is difficult to understand how an employer can make a distinction ui
1962
The Fine Knitting
Co., Ltd.
v.
The Industrfol
Court, Rombay
G ajendragadkar J,
1962
Tht Fint Knittin.~
Co., LJr/.
v.
Tht Industrial Ccurt,
Bombay
OojtndrogadJ:or J.
206 SUPREME COURT REPORTS [1962] SUPP.
the payment of minimum wa.ges between one class
of employees a.ad another if bfJth the classes of
employees are engaged in diffllrent departments •
of the samo esta bli~bmcnt or concern. If there is
unity of rmployment ancl unity of purpose and
design as suggested by ;\fr. Mehta., it is inconceivn.ble that th" employees engaged in two departments intt>grally connect<id with Pach other and constitut.ing onA unit would be paid different minimum
wag<'s. Wha.t is true about the minimum wages and
the cl Parness a.llowanco is also tru<' a bout tho bonus.
It a.ppca.ra that even in years in which the appPllant
made profits and actually paid bonus· to the worktrwn employed in the spinning dPpart.ment, no bonus
was paid to the employ~es enga11Pd in the knitting rlepartmcnt. That again can be explained and
ju~tifiecl only 0n the basis that the appellant treated
the two departments as distinct and separate and so
the employees in the one got bonus and not the cmploype• in the other. It was suggested by Mr. :\Jet ha
that the genesis of the present di8pute lies in the
anxi<'t:V of the third respond('nt to take within its
jurisdirt.inn the emplnyees Pngaged by the appellant
in itR spinnin!! departm.-nt. On t.lw other hand,
~fr. Barnt for rt'Spond1·11ts x OS. a and 4 contends
that the prt'Hcnt trouble aros<' b<'causc the appellant beiran to deny to its employers in the spinning
d<'partmr>nt t.h<, berwfitR of 1'11 relevant conditions
of sPrviee which were npplicnhle to the employees
in the Textile fndnstrv in Ahm('dabad.
WhatPv~r ma~' ho the baekgronncl of the dispute and
its gPm»•is, it is clear beyond dc,ubt that. the way
in whi0h ihe appellant has t.rrat<'<I irn employees
in spinning ns
clistiugui~hPd frnm itH cmp](l}"<'es in
knit.ting leads very st.rci11gly
to the
infon'rW~
that t.he nppell•rnt treat•'•! the two departnwnts not
aR one 11nit hut aR separate unitH each one functioning on its own and inde.pc11dm1tly of the other.
It is in tht' light of these
cir~nmstances that.
3 S.C.R.
SUPREME COURT REPORTS
207
the first and the second respondents were not impressed by the relevant factors on which the appel ·
!ant relied in support of its plea of the unity of the
two activities and came to the conclusion that the
two activities were separate and as such, as must be
separately recognised under s. 11. . We do not see
how the appellant can successfully challenge the
correctness of this conclusion.
There is one more point which yet remains to
be considered. Mr. Metha argues that the impugned order recognising two different undertakings
under s. 11(1) is not justified by the provisions of
the statute. Section 11 provides that the Registrar
may, after making su~h inquiry as he deems fit,
recognise for the purposes of the Act-
( 1) any concern in a.n industry to be an
undertaking ;
(2) any section of an undertaking to be an
occupation.
1
The argument is that s. 11 ( 1) does not authorise
the splitting up of a concern into two undertakings.
A concern, says ]\fr. Metha, is the whole of the
concern or establiEhment run by the appellant and
as ·such it has to be recognised as one undertaking in
so far as the order under appeal treats the appellant's concern as two undertakings, it is contrary
to s. 11 (l). We are not impressec! by this argument. The appellant is undoubtedly engaged in the
hosiery industry and that part of its business cannot.
be recognised as Cotton 'l'extile Industry because
it is a concern engaged in spinning only which can
be recognised under that category. If that is so,
industrial activity of the appell~.nt in relation to
hosiery industry must be recognised separately
from the textile undertaking. If one concern or
company carries on several businesses or undertakes different types of industrial works, these
businesses or works would amount to separate
enterprises or undertakings and would have to be
]962
The Fin6 Knitting
Co., Ltd.
Vo
The /ndustrinl Court,
·Bombay ,.
--,
Gajendragadkar J.
1961
Tht Fint Knitting
Co., I.td.
.
•.
The Indtutri12/ Court,
Flombay
Gajt11drn:a'1k1r J,
208 SUPREME OOURT REPORTS [1962] SUPP.
recof!lliRerl as such. In fa.ct, if the a.ppel!a.nt it.qelf
has heen treating the two kinds of work sepa.ra.tdy
and ha.s thus split up its whole husiness into two
indcIJ"mfont sections, it is not easy to understand
why the Registrar cn,nnot recognise the existence
of two undcrtakingR carried on by th.e appell:rnt
and trPat the sairl undcrtakings as such. We see
no jnstific•ition for the as.q•.1mption made by Mr.
:'vfctha. that s. 11 (I) doPA not permit the recognition
of several undertakings carried on bv the same company Rf'parat<>ly.
Jt all depends On
whether the
undertakings arc sepa.rato, distinct and independent. of oaf'h other or n,re functionally integral or
intcr-dl'pcndent..
Tn the former case, th<i Registrar
woul<l h<> justified in trPating the several undertakings separa.telv while in tho latter case, hA may
recognise all of them as one undortaking.
There is one minor point to which reference
may incidPntally be made. It. appears that before
the firnt respondent, it was 'urgcd by the appellant
that tlw present applications made by respondents
!'\os. :J and 4 were barred by reA judicata. The
ari.rnment wast.hat. sine" the Aeconrl respondent had
on an Ni.rlier 'oncassinn c·>nsidcmd the merits of
tho cas" :tnd ' refuRr<l to grant the request made
by the third r<'Apondent for reeogni.qing
the two
und<•rtakings
separately,
t.he
same
question
<'ot1ld not he !'('-agitated again before the same
authority. In our opinion, there is no substance
_in this argument.
As we have alread.v pointed
out, when the second re"'Pondent passed hiR earlier
order, an appeal wag preferred againAt the said
ordPr hv the fourth resprmd<mt hefore t.he first
rPHponc10nt.
That. appeal was, however, dismiHsed
on the groun<l that. the fourth responclent w;Ls not
partv to the proceedings hcforn th<> sccon<I res·
pondt'nt and, thcrc•fore, he could not prefer an
appeal. If t.he fourth reApondent had no right to
m:i.ke an appeal because he wits not a party to the
said proceedings, it is difficult to see how he can
3 S.C.R.
SUPREME COURT REPORTS
209
be
precluded from
making
the present application
on the ground of res judicata. At the
highest, a plea ofres judicata may perhaps be raised
against the third respondent but that would not
be effective in view of the fact that in the present
case, an application
has been made by the
fourth respondent as well.
That is why Mr.
Mehta did not seriously press the point of res
judicata before us.
In the result, fails the appeal and is dismissed
with costs.
Appeal dismissw.
KRISHAN LAL DHAWAN AND ·ANOTHER
v.
DELHI ADMINISTRATION
(J. L. KAPUR, K. C. DAS GUPTA and RAGHUBAR
DAYAL, JJ.)
Criminal Trial-Trial by Special Judge-Another •pecial
Judge
conducts further proceedings-Conviction-Valid-ityCode of Criminal Procedure, 1898 (Act 5 of 18.98), s. 350Criminal Law Amendment Act, 1952 (46 of 1952). s. 8,
sub's. 3.
The appellants were charged under ss. 120B and 420
Indian Penal Code ands. 5 (I) (d) read withs. 5 (2) of the
prevention of Corruption Act. The trial of the appellants was
commenced before a 15pecial Judge who heard the prosecution
evidence. 'fhereafter the trial was taken up by another special
Judge who examined the defence witnesses. and
finally
convicted
the appellants. The appellants appealed to the
High Court and the High Court upheld the conviction and
sentence. The appellants thereupon appealed to the Supreme
Court by special leave.
The sole question which was raised by the appellants
was that in view of the fact the trial commenced before
one Special Judge and another Special Judge took up the
proceedings
are
incompetent. . . The
respondent ·
relying on s. 8, sub-s. (3), of the Cnmmal Law Amendment
The Fine IL nit tint
Co., Ltd.
v.
The fndustrial Court,
Bombay
Gojentlr•zadk•r J.
196S