# Calcutta v. Its Worknien

- **Citation:** [1962] 1 S.C.R. 717
- **Court:** Supreme Court of India
- **Decided:** 1959-10-12
- **Case number:** Civil Appeal No. 264 of 1960
- **Bench:** P. B. Gajendragadkar, K. N. Wanchoo
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/calcutta-v-its-worknien-2071
- **Pages:** 7

## Headnote

Industrial Dispute-Gratuity-'Continuous service'-[ nterpretation of-Industrial Disputes Act, 1947 (14 of 1947).
One Bhanu Bala had joined the appellant's service as a
workman in 1929 and resigned in 1957· During this period of
bis service he had ren1ained absent from duty without permission or leave for nearly 8 months between February, 1945, to
April 3.
M/s. ]eewanlal
(z929) Ltd.,
Calcutta
v.
Its Worknien
718
SUPREME COURT REPORTS
[1962]
October, r945. Under an Award made between the company
and its workmen a scheme \vas framed wherein the concerned
clause was that "on voluntary retirement or resignation of an
employee after r5 years continuons service gratuity at the same
rate as above."
Dispute arose with regard to the question of granting
gratuity to Bhanu Bala who claimed the benefit of the said
clause and the company denied ihe claim on the ground that
the said employee had not been in continuous SErvice for the
requisite period because there was a break in his service and
that affected the continuity of his employment which made
his claim incompetent.
The question was as to the interpretation of the term
"continuous service" contained in the Award of r95r.
Held, that in different context the 'flme word can often
have different meanings and the expression "continuous service"
would always be a question of fact to be decided on the circumstances of each case whether or not a particular employee can
claim continuity of service for the requisite period.
\Vhere the expression "continuous service" was statutorily
defined then the definition would prevail; and where an award
itself gave a definition of the expression that would bind the
parties in dealing with claims arising from the award but where
the award did not explain the expression "continuous service"
and statutory definitions contained in other Acts were of no
material assistance it would ~e necessary to examine the question on principle and decide what the expression should mean
in any given award.
"Continuous service", in the context of the scheme of
gratuity, postulates the continuation of relationship of master
and servant between the employer and employees which
could come to an end either by act of parties, i.e., by resignation
or termination of service, or by the operation of law; but
the continuity of service would not come to an end merely
because an employee was absent without obtaining leave; though
there would be cases where long unauthorised absence may
reasonably give rise to an inference that such service was intended to be abandoned by the employee.
For the purpose of gratuity mere participation in an illegal
strike could not be said to cause breach in the continuity of
service though it may be a good cause for its termination, provided the relevant provisions in the Standing Orders in that behalf were complied with.
Bttckingham and Carnatic Co. Ltd. v. Workers of the Buckingham and Carnatic Co. Ltd., [r953] S.C.R. 2r9, distinguished.
Rudge Budge Municipality v. P.R. Mukherj<e, [r953] I L.L.J.
r95, referred to.
'
•
•
1 S.C.R. SUPREME COURT REPORTS
719

## Text

•
I S.C.R. SUPREME COURT REPORTS
717
tribunal did not take into account the fact that the
1961
appellant has no reserves and that it had borrowed
Garment
large loans. We do not see how that would enable the Cleaning Works
appellant now to agitate a question which is purely a
v.
question of fact. Mr. Sen realised the difficulties in
Its Workmen
his way because, since his client had claimed the pri-
. -
vilege of s. 21 the Tribunal was fully justified in not Ga1endragadkar J.
discussing the figures in its a ward.
He, therefore,
faintly suggested that we niay remand the case subject
to any order as to costs that we may deem fit to make
and ask the Tribunal to reconsider the matter in the
light of the relevant documents, and he assured us
that he would not claim privilege under s. 21 after
remand. This r~quest is plainly untenable. If the
appellant wanted the tribunal to consider the figures
and state its conclusions in the light of the said figures
in its award it need not have claimed privilege under
s. 21 at the trial. It is now too late to suggest that
the privilege be waived and that the matter be considered afresh by the tribunal or by us in the appeal.
Therefore we see no reason to interfere with the direction given by the Tribunal in regard to the framing of
the provident fund scheme.
The result is the appeal fails and is dismissed with
costs.
Appeal dismissed.
M/S. JEEWANLAL (1929) LTD., CALCUTTA
v.
ITS WORKMEN
(P. B. GAJENDRAGADKAR and K. N. WANCHOO, JJ.)
Industrial Dispute-Gratuity-'Continuous service'-[ nterpretation of-Industrial Disputes Act, 1947 (14 of 1947).
One Bhanu Bala had joined the appellant's service as a
workman in 1929 and resigned in 1957· During this period of
bis service he had ren1ained absent from duty without permission or leave for nearly 8 months between February, 1945, to
April 3.
M/s. ]eewanlal
(z929) Ltd.,
Calcutta
v.
Its Worknien
718
SUPREME COURT REPORTS
[1962]
October, r945. Under an Award made between the company
and its workmen a scheme \vas framed wherein the concerned
clause was that "on voluntary retirement or resignation of an
employee after r5 years continuons service gratuity at the same
rate as above."
Dispute arose with regard to the question of granting
gratuity to Bhanu Bala who claimed the benefit of the said
clause and the company denied ihe claim on the ground that
the said employee had not been in continuous SErvice for the
requisite period because there was a break in his service and
that affected the continuity of his employment which made
his claim incompetent.
The question was as to the interpretation of the term
"continuous service" contained in the Award of r95r.
Held, that in different context the 'flme word can often
have different meanings and the expression "continuous service"
would always be a question of fact to be decided on the circumstances of each case whether or not a particular employee can
claim continuity of service for the requisite period.
\Vhere the expression "continuous service" was statutorily
defined then the definition would prevail; and where an award
itself gave a definition of the expression that would bind the
parties in dealing with claims arising from the award but where
the award did not explain the expression "continuous service"
and statutory definitions contained in other Acts were of no
material assistance it would ~e necessary to examine the question on principle and decide what the expression should mean
in any given award.
"Continuous service", in the context of the scheme of
gratuity, postulates the continuation of relationship of master
and servant between the employer and employees which
could come to an end either by act of parties, i.e., by resignation
or termination of service, or by the operation of law; but
the continuity of service would not come to an end merely
because an employee was absent without obtaining leave; though
there would be cases where long unauthorised absence may
reasonably give rise to an inference that such service was intended to be abandoned by the employee.
For the purpose of gratuity mere participation in an illegal
strike could not be said to cause breach in the continuity of
service though it may be a good cause for its termination, provided the relevant provisions in the Standing Orders in that behalf were complied with.
Bttckingham and Carnatic Co. Ltd. v. Workers of the Buckingham and Carnatic Co. Ltd., [r953] S.C.R. 2r9, distinguished.
Rudge Budge Municipality v. P.R. Mukherj<e, [r953] I L.L.J.
r95, referred to.
'
•
•
1 S.C.R. SUPREME COURT REPORTS
719
CIVIL APPELLATE JURISDICTION:
Civil Appeal No.
264 of 1960.
Appeal by special leave from the Award dated
October 12, 1959, of the Industrial Tribunal, Bombay
in Reference (IT) No. 81 of 1959.
S. T. Desai, Sukumar Ghose and B. N. Ghose, for
the appellant.
C. L. Dhudia and K. L. Hathi, for the respondents.
1961. April 3.
The Judgment of the Court was
delivered by
r961
M/s. JeCwanlal
(r929) Ltd.,
Calcutta
v.
Its Workmen
GAJENDRAGADKAR, J.-This appeal by special leaveGajendragadkar J.
is directed against the award passed by the industrial
tribunal in a matter which was referred to it under
s. 36A(2) of the Industrial Disputes Act, 1947, for
interpretation of certain terms of the award made by
the said tribunal on April 28, 1951, in Reference
No. 168 of 1950. It appears that a dispute had arisen
between the appellant M/s. Jeewanlal (1929) Ltd. and
its workmen in regard to certain demands made by
the respondents against the appellant in 1950. The
said dispute was referred for adjudication as a result
of which an award was passed which, inter alia, provided for a gratuity scheme. Some provisions of this
award have been referred for interpretation in the
present reference.
On August 31, 1957, resignation submitted by the
appellant's employee Bhanu Bala was accepted by the
appellant. The said employee had joined the appellant's service in 1929 but there was a break in the
continuity of his service for nearly St months because
he had remained absent from duty without permission or leave from February 14, 1945 to the end of
October, 1945.
According to the appellant the said
employee was not entitled to any gratuity under the
scheme framed by the award. Even so the appellant
offered him Rs. 1,165 and odd on compassionate
grounds. The employee was not willing to accept
that amount because he claimed that he was entitled
to Rs. 2,282.50 nP. by way of gratuity. The demand
thus made by the employee led to an industrial dispute which was taken by the employee before the
720
SUPREME COURT REPORTS
[1962]
'96'
First Labour Court at Bombay under s. 33C of the
M/s. f"wanlal Act.
The Labour Court entertained the application,
(x92 9) Ltd.,
decided the point in dispute in favour of the employee
Calcutta
and directed the appellant to pay hirb. Rs. 1,781 ·80 nP.
v.
as gratuity. The appellant then moved the BomIts Workmen
bay High Court for a writ under Arts. 226 and 227
Gajendr~-;,dkar ;. on the ground that the Labour Court had no juris-
.
diction to entertain the application made before it by
the employee. This writ petition was allowed and
the order passed by the Labour Court was quashed. It
was at this stage that the Government of Bombay
referred the question of interpretation of the term
"continuous service" contained in the award of 1951
to the Industrial Court under s. 36A(l) of the Act.
That is how the Industrial Court was possessed of
the matter. It has held that the words "continuous
service" as used by the tribunal when it framed the
a ward in question mean service not broken or interrupted by the termination of the contract of employment by either the employer or the employee or by
operation of law. It is this interpretation the correctness of which is challenged by the appellant in
its present appeal.
The relevant part of the gratuity scheme which
was framed by the tribunal in the earlier reference
reads thus:
(i) On the death of an employee while in the service of the company or on an employee becoming
physically or mentally disabled to continue further
in service half a month's wages for each year of
service subject to a maximum of ten months' wages
to be paid to him or to his heirs, executors, assigns
or nominees as the case may be.
(ii) On the termination of his service by the company after five years' continuous service-Gratuity
at the same rate as above.
(iii) On voluntary retirement or resignation of an
employee after 15 years' continuous service-Gratuity at the same rate as above.
As we have already seen the employee Bhanu Bala
resigned and his resignation was accepted in August,
1957. He claimed the benefit of cl. (iii) whereas the
,_ \
I...
I ..
"
,,,..,
_)
I'
..
•
l S.C.R. SUPREME COURT REPORTS
721
appellant contended that the said employee had not
'96'
been employed in continuous service for the requiM/s. Jeewanlal
site period because there was a break in his service
(rgag) Ltd.,
between February 14, 1945, to the end of October,
Calcutta
1945, and that affected the continuity of his employ-
•.
ment which made his claim incompetent under
Its Workmen
cl. (iii). This contention has been rejected by the Gajend;;;;;;dkar J.
tribunal.
Mr. S. T. Desai contends that in interpreting the
words "continuous service" in cl. (iii) we should
compare the provisions of s. 49B(l) along with the
explanation in the Indian Factories Act, 1934 (XXV
of 1934) as well as s. 79(1) along with explanation (1)
in the Indian Factories Act, 1948 (63 of 1948) prior
to its amendment in 1954; and he argues that unauthorised absence from work should normally cause
a break in service so that if an employee, after unauthorised absence from work, is allowed to resume
after such unauthorised absence he should not be entitled to claim continuous service in view of the break
in his service. In ·support of this argument reliance
has been placed on the decision of this Court in
Buckingham and Carnatic Co. Ltd. v. Workers of the
Buckingham and Carnatic Co. Ltd. (1).
In that case
this Court has held that the continuity of the service
of the workers was interrupted by the illegal strike
and so they were not entitled to claim .J;iolidays with
pay under s. 49B(l) of the Indian Factories Act. It
would, however, be noticed that the said decision
turned upon the definition of the word "strike" in
s. 2(q) of the Industrial Disputes Act, 1947, read with
the relevant provision of s. 49-B of the Indian Factories Act, 1934; and there can be no doubt that in a
different context the same words can and often have
different meanings. As this Court has observed in
Budge Budge Municipality v. P.R. Mukherjee('), "the
same words may mean one thing in one context and
another in different context. This is the reason why
decisions on the meaning of particular words or collection of words found in other statutes are scarcely of
(1) [1953] S.C.R. 219.
(2) [1953] 1 L.L.J. 195, 198.
91
722
StJPREM:ll: COtJRT REPORTS
[1962]
1961
much value when we have to deal with a specific
M/s. feewanlat statute of our own; they may be helpful but cannot be
(Igzg) Ltd.,
taken as guides or precedents". Therefore, the meanCatrntta
ing attributed to the words "continuous service" in the
v.
context of the Factories Act may not have a material
Its W°'kmen
bearing in deciding tho point in the present appeal.
G .
d
dk
1
The same comment falls to be made in regard to
a;en raga
ar .
b
d
h
. .
the argument ase on t e defimt10n of the expression "continuous service" contained ins. 2(eee) of the
Industrial Disputes Act, 194 7.
The said section provides that "continuous service" means uninterrupted
service and includes service which may be interrupted
merely on account of sickness or authorised leave or
an accident or a strike which is not illegal, or a lockout or a cessation of work which is not due to any
fault on the part of the workmen. This definition is
undoubtedly relevant in dealing with the question of
continuous service by reference to the provisions of
Industrial Disputes Act but its operation cannot be
automatically extended in dealing with an interpretation of the words "continuous service" in an award
made in an industrial dispute unless the context in
which the expression is used in the award justifies it.
In other words, the expression "continuous service"
may be statutorily defined in which case the definition will prevail. An a ward using the said expression
may itself give a definition of that expression and
that will bind parties in dealing with claims arising
from the award. Where, however, the award does not
explain the said expression and statutory definitions
contained in other Acts are of no material assistance
it would be necessary to examine the question on
principle and decide what the expression should mean
in any given award; and that is precisely what the
tribunal had to do in the present case.
"Continuous service" in the context of the scheme
of gratuity framed by the tribunal in the earlier
reference postulates the continuance of the relationship of master and servant between the employer and
his employees. If the servant resigns his employment
service automatically comes to an end. If the employer terminates the service of his employee that
' '
'
..
•
•
•
'
I S.C.R. SUPREME COURT REPORTS
723
again brings the continuity of service to an end. If
1961
the service of an employee is brought to an end by M /s. Jeewanlal
the operation of any law that again is another in-
(r929) Lid.,
stance where the continuance is disrupted; but it is
Calcutta
difficult to hold that merely because an employee is
v.
absent without obtaining leave that itself would
Its Workmen
bring to an end the continuity of his service. Simi- G . d-dk 1
larly, participation in an illegal strike which may "1"' raga
ar •
incur the punishment of dismissal may not by itself
bring to an end the relationship of master and servant. It may be a good cause for the termination of
service provided of course the relevant provisions in
the standing orders in that behalf are complied with;
but mere participation in an illegal strike cannot be
said to cause breach in continuity for the purposes of
gratuity. On the other hand, if an employee continues to be absent from duty without obtaining leave
and in an unauthorised manner for such a long period
of time that an inference may reasonably be drawn
from such absence that by his absence he has abandoned service, then such long unauthorised absence
may legitimately be held to cause a break in the continuity of service. It would thus always be a question
of fact to be decided on the circumstances of each
case whether or not a particular employee can claim
continuity of service for the requisite period or not.
In our opinion, therefore, the view taken by the tribunal is substantially right though we would like to
make it clear that in addition to the cases where
according to the tribunal continuity of service would
come to an end there would be the class of cases
where long unauthorised absence may reasonably give
rise to an inference that such service is intended to
be abandoned by the employee. With this modification wo confirm the award and dismiss the appeal.
There would be no order as to costs.
Appeal dismissed.