# JAIDRUDDIN v. K. D. RATID, FACTORY MANAGER, TIIE MODEL MILLS NAGPUR LTD

- **Citation:** [1966] 2 S.C.R. 660
- **Court:** Supreme Court of India
- **Decided:** 1965-11-22
- **Case number:** Special Civil Application No. 315 of 1962
- **Bench:** P. :8. Gajendragadkar, K. N. Wanchoo, V. Ramaswami, P. Satyanarayana Raju
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jaidruddin-v-k-d-ratid-factory-manager-tiie-model-mills-nagpur-ltd-3735
- **Pages:** 9

## Headnote

A
B
Central Provinces and Berar Industrial Disputes Settlement Act, 1947
(Act 23
of 1947), s. 16--Dismissal within exemption
in forceWithdrawal of exemption-Application to Labour
Commissioner
for
C
reinstatement-If lies.
The State of Bombay by a notification under the Bombay Relief
Undertakings (Special Provisions) Act 1958 declared a Mill a 'relief undertaking' and exempted it from the applicability of s. 16 of the C.P.
and Berar Industrial Disputes Settlement Act, 1947. During the period
the exemption was in force, the appellants-employees of the Mill abstained from work and were dismissed for joining an illegal strike.
D
After the exemption was withdrawan and was no longer in operation,
the employees filed applications before the Labour Commissioner claim·
ing reinstatement with back wages. The Labour Commissioner allowed
·, •
the applications. The Mill preferred revisions to the Industrial Court
which were allowed. In writ fetitions filed by the employees, the High
Court confirmed the finding o the Industrial Court, that the employees
had no right to file applications under s. 16 and the applications filed
•
by them before the Labour Commissioner were not maintainable.
In
E
appeal to this Court.
HELP : The High Court was in error in holding that the applications
were not maintainable.
The right of an employee to claim re-instatement on a wrongful dismissal existed de hors s. 16 of the Central Provinces and Berar Industrial
Disputes Settlement Act. Section 16 provides a forum for a dismissed
F
employee to claim reinstatement but does not create a right. The effect
of an exemption granted by the notification issued under the Bombay
Relief Undertakings (Special Provisions) Act, is not to destroy the right
but to suspend the remedy prescribed by s. 16 for enforcing that right
during the period when the exemption remains in force.
The right can
be enforced by a dismissed employee by restoring to the provisions of
s. 16 of the Act provided he makes the application within six months
from the date of his dismissal. [668 EJ
G

## Text

JAIDRUDDIN
v.
K. D. RATID, FACTORY MANAGER, TIIE MODEL MILLS
NAGPUR LTD.
November 22, 1965
(P. :8. GAJENDRAGADKAR, C.J., K. N. WANCHOO, V. RAMASWAMI
AND P. SATYANARAYANA RAJU, JJ.]
A
B
Central Provinces and Berar Industrial Disputes Settlement Act, 1947
(Act 23
of 1947), s. 16--Dismissal within exemption
in forceWithdrawal of exemption-Application to Labour
Commissioner
for
C
reinstatement-If lies.
The State of Bombay by a notification under the Bombay Relief
Undertakings (Special Provisions) Act 1958 declared a Mill a 'relief undertaking' and exempted it from the applicability of s. 16 of the C.P.
and Berar Industrial Disputes Settlement Act, 1947. During the period
the exemption was in force, the appellants-employees of the Mill abstained from work and were dismissed for joining an illegal strike.
D
After the exemption was withdrawan and was no longer in operation,
the employees filed applications before the Labour Commissioner claim·
ing reinstatement with back wages. The Labour Commissioner allowed
·, •
the applications. The Mill preferred revisions to the Industrial Court
which were allowed. In writ fetitions filed by the employees, the High
Court confirmed the finding o the Industrial Court, that the employees
had no right to file applications under s. 16 and the applications filed
•
by them before the Labour Commissioner were not maintainable.
In
E
appeal to this Court.
HELP : The High Court was in error in holding that the applications
were not maintainable.
The right of an employee to claim re-instatement on a wrongful dismissal existed de hors s. 16 of the Central Provinces and Berar Industrial
Disputes Settlement Act. Section 16 provides a forum for a dismissed
F
employee to claim reinstatement but does not create a right. The effect
of an exemption granted by the notification issued under the Bombay
Relief Undertakings (Special Provisions) Act, is not to destroy the right
but to suspend the remedy prescribed by s. 16 for enforcing that right
during the period when the exemption remains in force.
The right can
be enforced by a dismissed employee by restoring to the provisions of
s. 16 of the Act provided he makes the application within six months
from the date of his dismissal. [668 EJ
G
CIVIL APPELLATE JURISDICTION: Civil Appeal Nq. 156 of
1965.
Appeal by special leave from the judgment and order dated
August 12, 1963 of the Bombay High Court (Nagpur Bench) in
Special Civil Application No. 315 of 1962.
H
V. P. Sathe and A. G. Ratnaparkhi, for the appellants.
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JAHIRUDDIN v. K. D. RATH! (Raju, J.)
661
•
A.
M. N. Phadke, J.B. Dadachanji, O. C. Mathur and Ravinder
c
Narain, for "respondents Nos. 1 and 3 .
N. S. Bindra and B. R. G. K. Achar, for respondent No. 4.
The Judgment of the Court was delivered by
Satyanarayana Raju, J. This is an appeal, by Special Leave~
against the judgment of a Division Bench of the Bombay High
Court dismissing an application for the issue of a Writ of certiorari
under Art. 226 of the Constitution to quash the order of the State
Industrial Court at Nagpur.
For a proper appreciation of the questions that have been
raised in the appeal, it would be necessary to state the material
facts.
The Model Mills, Nagpur (hereinafter referred to as the
Mills) is a public limited company incorporated under the Indian
Companies Act. On July 18, 1959, in exercise of the powers
D conferred by s. 18-A of the Industries (Development and Regulation) Act, 1951, the Central Government took over the management of the Mills and appointed the 3rd respondent as the
authorised Controller of the Mills.
On March 25, 1960 the State
of Bombay (now the State of Maharashtra), in exercise of the
powers conferred by ss. 3 and 4 of the Bombay Relief UnderJt takings (Special Provisions) Act, 1958 (hereinafter referred to
as the Bombay Act) made a notification declaring the Mills to
be a "relief undertaking" for a period of one year commencing
from March 26, 1960 and ending with March 25, 1961. The
appellants, eight in number, w'~re, at the relevant time, the permanent employees of the Mills. It would be convenient to refer
F
to them as "employees''. On December 15, 1960, when the
notification made by the State Government under the Bombay
Act was in force, the employees abstained from work. Thereupon,
the 1st respondent who is the Factory Manager of the Mills issued
notices to the employees to show cause why they should not be
dismissed from service for joining an "illegal strike". On JanuG ary 6, 1961 the Factory Manager passed orders dismissing the
employees from service.
On January 12, 1961 the employees
filed an application in the High Court of Bombay for the issue
of a writ of mandamus directing the employees to be reinstated
in service.
On April 4, 1961, the exemption of the Mills from
the application of s. 16 of the Central Provinces
and Berar
H Industrial Disputes Settlement Act
(XXIII of 194 7) (hereinafter called the State Act) was made.
On April 25, 1961 the
employees filed applications before the Assistant Commissioner
L3Sup.CI./76-l2
662
SUPREME COURT
REPORTS
[1966] 2 s.c.~.
of Labour claiming reinstatement with back wages.
The High
A.
Court dismissed the Writ Petition filed by the employees with
liberty to file a fresh petition, if necessary, since they were prosecuting their applications for relief of. reinstatement before the
Assistant Commissioner of Labour.
In and by his order dated
September 29, 1961, the Assistant Commissioner allowed the
applications filed by the employees.
He held that as there was
B
no illegal strike the orders of dismissal were unsustainable and
should be set aside.
He directed that the employees should be
reinstated with back wages.
Against the orders passed by the
Assistant Commissioner, the Mills preferred applications in revision to the State Industrial Court. By its order dated February
16, 1962, the Industrial Court allowed the revision applications
C
filed by the Mills on the ground that the applications before the
Assistant Commissioner were not maintainable.
On the merits,
the Industrial Court agreed with the Assistant Commissioner that
there was no illegal strike.
Aggrieved _ by the orders of the
Industrial Court, the employees filed an applicatoin under Arts.
D
226 and 227 of the Constitution for the issue of a writ of certiorari to quash the orders of dismissal passed by the Factory
Manager and to direct their reinstatement with back wages. By
its judgment dated August 12, 1963 the High Court dismissed
the Writ Petition filed by the employees.
The High Court has held that the right to claim reinstateE
ment is not a right which is available to an employee under the
Common Law and that the relief of reinstatement is a special
right which has been conferred on an employee under s. 16 of
the State Act. In the opinion of the High Court, the essential
pre-condition for an employee to claim relief under s. 16 is that
he is an employee in an industry to which that section is appliIi'
cable and in respect of which a notification under s. 16 (1 ) also
has been issued.
The High Court has reached this conclusion
by reason of the fact that the State Government issued a notification exempting the Mills from the operation of s. 16 of the State
Act and that the exemption was withdrawn only on April 4,
1961 while the employees were dismissed on January 6, 1961. G
In the opinion of the High Court, by reason of the fact that s. 16
of the Act was not applicable, the dismissal of the employees
even if it was wrongful did not give them a right to claim reinstatement and that to hold otherwise would be to give retrospective operation to s. 16 of the State Act which became applicable
H
to the Mills on and from April 4, 1961 by reason of the withdrawal of the exemption. In the result, the High Court confirmed
the finding of the State Industrial Court that the employees had
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JAHIRUDDIN v. K. D. RATH! (Raju, J.)
66:r
A no right to file applications under s. 16 of the State Act and the
applications filed by them before the Assistant Commissioner were
not maintainable.
Now it is contended by Mr. V. Sathe on behalf of the employees that though the industry was exempt from the operation of
B certain sections including s. 16 of the Act, on the date when the
appellants were dismissed, there was an existing industrial dispute
relating to an industrial matter between the employees and the
Mills on April 4, 1961, when the notification withdrawing the
exemption in favour of the Mills from the operation of s. 16 of
the State Act was issued by the Government, that on the date
C when the employees filed an application under s. 16 before the
Commissioner of Labour, the period of six months provided by
that section had not elapsed and that therefore the employees
could invoke the provisions of s. 16 and claim reinstatement.
The learned counsel for the Mills, Mr. Phadke, has endeavoured
to support the judgment of the High Court and the reasons on
D which its conclusions were rested.
F
The questions which arise for determination
in this appeal
are:
1. Whether the right of a dismissed employee to claim reinstatement, in appropriate cases, exists de hors s. 16 of
the State Act ?
2. Whether by reason of the State Government's exemption
of the industry from the operation of s. 16 on the date
when the employees were dismissed from service, their
right to apply for reinstatement ceased to exist ?
For a proper determination of the above questions, it is necessary
to refer to the material statutory provisions.
The State Act
became law on June 2, 1947.
S. 15 of the State Act empowers
the State Government to appoint any person as Labour CommisG sioner for the State and he shall exercise all or any of the powers
of the Labour Commissioner.
Now s. 16 of the State Act as it
stood at the relevant date provides as follows:
H
"(1) Where the State Government by notification
so directs, the Labour Commissioner shall have power
to decide an industrial dispute touching the dismissal,
discharge, removal or suspension of an employee working in any industry in general or in any local area as
may be specified in the notification.
664
SUPREME COURT REPORTS
[1966] 2 S.C.R.
( 2) Any employee, working in an industry to which
the notification under sub-section ( 1) applies,
may,
within six months from the date of such dismissal, discharge, removal or suspension, apply to the Labour
Commissioner for reinstatement and paymeno of compensation for loss of wages.
"
The different powers that could be exercised by the Labour
Commissioner are then set out in sub-s. ( 3) : "On receipt of such
application, if the Labour Commissioner, after such enquiry as may
be presci:ibed, finds that the dismissal .... was in contravention
-Of any of the provisions of this Act or in contravention of a
standing order. . . . he may direct that the employee shall be
reinstated forthwith or by a specified dat~. and paid for the whole
period from the date of dismissal .... to the date of the order
-Of the Labour Commissioner".
A
B
c
It is common ground that s. 16 is made applicable to the texD
tile industry with effect from March 1, 1951
by a notification
dated February 22, 1951. The provisions of s. 16 were thus
applicable to the Mills till March 25, 1960, on which date,
however, the State Government issued a notification in exercise of
the powers conferred under ss. 3 and 4 of the Bombay Act deeE
laring the Mills to be a 'relief undertaking'.
The notification
directed that the provisions of s. 16 of the State Act and Chapter
V-A of the Industrial Disputes Act (XIV of 1947) (Lay-off and
Retrenchment) shall not apply to the Mills and that it shall be
exempt therefrom.
This notification was extended by the State
Government on March 8, 1961 for a further period of one year.
F
A subsequent notification dated April 4, 1961 issued by the State
-0f Bombay amended the earlier notification by withdrawing the
exemption in so far as it related to s. 16 of the State Act.
The alleged participation by the employees in an illegal strike
occurred on December 15, 1960 and the 1st respondent dismissed
G
the employees in and by his order dated January 6, 1961. It was
during the period between March 25, 1960 and April 4, 1961
when the exemption was in force that the incident which resulted
in the Mills framing a charge against the employees happened and
the subsequent orders of dismissal were passed.
It is submitted by the learned counsel on behalf of the Mills
that th~ right of an employee to claim reinstatement has been
granted by s. 16 of the State Act and since the Mills were exempt
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JAHIRUDDIN v. K. D. RATH! (Raju, J.)
665
A from the provisions of that section on the material dates the employees had no right to claim reinstatement.
The Industrial
Disputes Act (XIV of 194 7) came into force on April 1, 194 7.
For our present purposes, it is not necessary to consider whether
the right to claim reinstatement by a dismissed employee existed
before the Central Act became law.
The question about the
B jurisdiction of an Industrial Tribunal to direct reinstatement of a
dismissed employee was raised as early as 1949, before the Federal Court in Western India Automobile Association v. Industrial
Tribunal, Bombay('). In that case, the Federal Court considered the larger question about the powers of industrial tribunals in
all its aspects and rejected the argument of the employer that to
C invest the tribunal with jurisdiction to order reinstatement amounts
to giving it authority to make a contract between two persons
when one of them is unwilling to enter into a contract of employment at all. This argument, it was observed, "overlooks the fact
that when a dispute arises about the employment of a per,son at
D
E
the instance of a trade union or a trade union objects to the employment of a certain person, the definition of industrial dispute
would cover both those cases. In each of those cases, although
the employer may be unwilling to do, there will be jurisdiction
in the tribunal to direct the employment or non-employment of
the person by the employer".
The Federal Court also added :
"The disputes of this character being covered by the
definition of the expression 'industrial disputes', there
appears no logical ground to exclude an award of reinstatement from the jurisdiction of the Industrial Tribunal.''
F
For nearly two decades the decision of the Federal Court has been
accepted without question. Therefore, after the Industrial Disputes
Act, 1947, at any rate, the right of a dismissed employee to claim
reinstatement in proper cases has been recognised.
It is no doubt
true that under the Central Act the right to claim reinstatement
has to be enforced in the manner laid down by that statute, whereas
G under the State Act it is open to an employee to claim reinstatement without the intervention of the appropriate Government.
This would not however make any difference.
It is argued that by reason of the exemption granted by the
Bombay State when it declared the Mills to be a relief underH taking, rights and obligations which accrued to the employees or
were incurred by the Mills during the period of exemption, stood
(I) [1949] F.C.R. 321.
~66
SUPREME
COURT REPORTS
[1966] 2 S.C.R.
abrogated.
This takes us to the question as to the legal effect of
A
the exemption granted by the State of Bombay.
The notification
issued by the State of Bombay is in the following terms :
"The Government of Bombay hereby directs that in
relation to the said relief undertaking and in respect of
the said period of one year for which that relief undertaking continues as such, the provisions of (i) Sections
16, 31 and 37, section 40 (in so far as it relates to
lock-out) and section 51 and section 61 [in so far as it
relates to clauses (b) and ( c) of Rule 36 of the Central
Provinces and Berar Industrial Disputes Settlement
Rules, 1949] Central Provinces and Berar Act No.
XXIII of 1947 and (ii) Chapter V-A of the Industrial
Disputes Act, 1947 (XIV of 1947) shall not apply and
the said relief undertaking shall be exempt from the
aforesaid provisions of the Central Provinces and Berar
Industrial Disputes Settlement Act, 1947 (Central Provinces and Berar Act No. XXIII of 1947)
and the
Industrial Disputes Act, 1947 (XIV of 1947)."
The contention urged on behalf of the Mills proceeds on the
assumption that the right to claim reinstatement has been granted
B
c
D
by s. 16 of the State Act.
As we have already stated, s. 16
only recognises the right of a dismissed employee, in appropriate
It
cases, to claim reinstatement but does not confer the right. The
section provides the procedure for enforcing the right.
In this
view, the right of the dismissed employee to claim reinstatement
was in existence even during the period of exemption, but only it
could not be enforced under s. 16.
Once the exemption is withdrawn the status quo ante is restored and it is open to the emF
ployee to file an application for reinstatement provided, however,
his application is within the period of six months from the date of
his dismissal.
Under s. 4(1)(a), on a notification being made, the industry
becomes a relief undertaking and the laws enumerated in the
G
Schedule to the Bombay Act shall not apply.
The Schedule specifies Chapter V-A of the Industrial Disputes Act ands. 16 of the
State Act.
Section 4 (1 )(a)( i) also provides that the relief
undertaking shall be exempt from the operation of the Acts mentioned in the Schedule.
Learned counsel drew a distinction between the expressions
H
'exemption' and 'suspension' by relying upon the meanings given
to these words in the Oxford Dictionary. 'Exempton' means
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JAHIRUDDIN v. K. D. RATH! (Raju, J.)
667
A 'immunity from a liability' whereas the word 'suspension' means
'put it off'.
Basing himself on the dictionary meanings, learned
counsel for the Mills has contended that the word 'exemption' is
of a wider connotation than 'suspension' and means
that the
industry shall be immune from the liabilities arising under the statutes specified in the Schedule and that the order of dismissal havB ing been passed while the exemption was in force, the Mills were
immune from liability to reinstate the employees on their dismissal
being held to be wrongful.
The order dismissing the employees was passed on January 6,
1961 when the notification was in force.
The employees filed
c applications before the Commissioner of Labour on April 25,
1961. On the date of their applications, the exemption granted
to the Mills by the State Government was no longer in operation.
The decision in Birla Brothers, Ltd. v. Modak(') has firmly established the principle that for a dispute which originated before the
Industrial Disputes Act came into force but was in existence on
D the date when that Act became law, the Act applied to the dispute
since it was in existence and continuing on that date and no question of giving retrospective effect to the Act arose. At p. 221, the
learned Chief Justice, Harries, who spoke for the Court stated
thus:
E
F
H
"In my judgment, the Act of 194 7 clearly applies to
the present dispute without any question arising of giving the Act any retrospective effect. It is true the dispute arose before the Act was passed, but on April 1,
194 7, when the Act came into force, the dispute was in
existence and continuing.
The employees were on
strike and the strike actually continued until May 19,
that is, five days after the Government made the order
referring the dispute to arbitration. In my judgment,
the Act must apply to any dispute existing after it came
into force, no matter when that dispute commenced.
There is nothing in the Act to suggest that it should
apply only to disputes which originated after the passing
of the Act.
On the contrary, the opening words of
s. 10 of the Act make it clear that the Act would apply
to all disputes existing when it came into force. The
opening words of s. 10 ( 1) are---
If any industrial dispute exists or is apprehended,
the appropriate Government may, by order in writing
etc.
(I) LL.R. [1948] 2 Cal. 2'19.
668
SUPREME COUJ.T RBPORTS
[1966) 2 S.C.lt.
It seems to me that these words make it abundantly
A
clear that the Act applies to any industrial dispute existing when it came into force and, therefore, the Act
applies to this dispute."
It is argued by Mr. Phadke that the notification dated April 4,
1961 withdrawing the exemption is only prospective and no retrospective effect can be given to it. This argument proceeds on
a fallacy.
There is no question of the notification withdrawing
an exemption being prospective or retrospective.
It is finally submitted by learned counsel for the Mills that the
validity of the order passed by the Factory Manager dismissing
the employees from service has not been determined by the High
Court and that the matter must be remitted to that Court for a
consideration of that question.
We may point out that the Assistant Commissioner of Labour has held that the dismissal is wrongn
c
ful.
This conclusion is affirmed by the Industrial Court.
The
validity of the dismissal was therefore finally concluded in favour
D
of the employees. There is therefore no question of the validity
of the dismissal order now being considered by the High Court.
We may now summarise the conclusions reached by us as a
result of the above discussion.
The right of an employee to claim
reinstatement on a wrongful dismissal exists de hors s. 16 of the
State Act.
Section 16 provides a forum for a dismissed employee
to claim reinstatement but does not create a right. The effect
of an exemption granted by the notification issued under the Bom·
bay Act is not to destroy the right but to suspend the remedy
prescribed by s. 16 for enforcing that right during the period when
the exemption remains in force.
The right can be enforced by a
dismissed employee by resorting to the provisions of s. 16 of the F
Act provided he makes the application within six months from
the date of his dismissal.
In the present case, the appellants filed
their applications within the period specified in s. 16 of the State
Act. The High Court was in error in holding that the applications
were not maintainable.
In the result the judgment of the High Court and the order
of the Industrial Court are set aside and the award made by the
Assistant Commissioner of Labour is restored.
The appeal is
allowed and the appellants will have their costs in this Court paid
by respondent No. 1.
Appeal allowed.
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