# LAKSHMI DEVI SUGAR MILLS LTD v. PT. R.AM SARUP

- **Citation:** [1956] 1 S.C.R. 916
- **Court:** Supreme Court of India
- **Decided:** 1956
- **Case number:** Civil Appeals Nos. 244 and 245 of 1954
- **Bench:** Bhagwati, Venkatarama Ayyar, s. K. DAS, ti GovINDA MENON
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/lakshmi-devi-sugar-mills-ltd-v-pt-r-am-sarup-1279
- **Pages:** 23

## Headnote

"
Industrial Dispute-Application for permission to dismiss workmen-Jurisdiction of Appellate
Tribunal-Scope of enquiry-
! nterim order of suspension by employer pending enquiry and receipt
of permission-If amounts to a lock-out-If amounts to punishment
-Prior permission of the Appellate Tribunal, if required-Enquiry
by General Manager-Non-co-operation by Workmen-Enquiry not
held within the prescribed time-If a breach of Standing OrdersIndustrial Disputes (Appellate Tribunal) Act (XL VIII of 1950),
.,. 22, 28-Indiistrial Disputes Act (XIV of 1947J, s. 83( a)(b)-
Standing Orders, cl. L 12.
Seventy-six workers of the appellant company resorted to a
tools-down strike in sympathy with a dismissed co-worker.
Re·
peated attempts to persuade them to resume work having failed the
General Manager suspended them until further orders.
After mid·
day recess the Management sought to prevent the workers from
entering the mills but they violently entered the mills and the Police
bad to be called in by the company to keep the peace.
Charges of
misconduct,a.nd insubordination were thereafter frame~ against the
workers and they were called upon to show cause in an open
enquiry to be held by the General Manager why disciplinary action
should not be taken against them and the order of suspension was
extended pending the enquiry.
The workers took up an attitude
of total non-eel-operation and the atmosphere was tense with the
result that the enquiry could not be held within 4 days.
The
Management decided to dismiss the workers as a result of the en ...
quiry but as an appeal was then pending before the Labour A11pel·
late Tribunal, the company applied to it under s. 22 of the Indus·
trial Disputes (Appellate Tribunal) Acit of 1950 for permission to do
so and extended the period of suspension pending receipt of such
permission.
The workmen in their turn filed an application under
s. !13 of the Act to the Appellate Tribunal for requisite action to
be taken against the company for having contravened s. 22(b) of
the Act by resorting to an illegal lock·out and thereby punishing
them without its prior permission.
The Appellate Tribunal held
that the company bad not held the enquiry within the time specified
by cl. L 12 of the Standing Orders and on that ground dismissed its
application. It allowed the application of the workers holding that
the wholesale suspension of the workers and preventing them from
continuing work after the mid-day recess amounted to a lock-out
S.C.R.
SUPREME COURT REPORTS
917
and punishment by the company and contravened ~· 22(b) of the
Act and directed their reinstatement.
The company appealed. It
was contended on behalf of the company that there had been neither
a breach of cl. L 12 of the Standing Orders nor a contravention of
s. 22(b) of the Act.
Held, that the contentions were correct and the appeals must
succeed.
The conduct of the company did not come within the definition
of a lock·out and even if there was any lock-out it was in con·
sequence of the illegal strike resorted to by the workmen and as such
could not be deemed to be illegal by virtue of s. 24(3) of the Indus·
trial Disputes Act, 194 7.
Moreover, even assuming that the company declared an illegal
lock-out it was not necessary for it to obtain the permission of the
Appellate Tribunal under s. 22 of the Act before it could do so.
A lock-out was neither an alteration of tb e conditions of service
within the meaning of cl. (a) nor a discharge or punishment by dismissal or otherwise within the meaning of cl. ,(b) of s. 33 of the
Industrial Disputes Act, 1947 or under s. 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 and no permission was, therefore, required for its declaration. If the lock·out was illegal the
workmen had their remedy under s. 26 of the Industrial Disputes
Act.and in any event they had the right to have the dispute referred
for adjudication.
Jute Workers Federation, Calcutta v. Clive Jute Mills ([1951]
II L.L.J. 344) and Colliery Mazdo

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1956
October 24.
916
SUPREME COURT REPORTS
[1956]
LAKSHMI DEVI SUGAR MILLS LTD.
v.
PT. R.AM SARUP.
(and connected appeal)
[BHAGWATI, VENKATARAMA AYYAR, s. K. DAS and
ti
GovINDA MENON JJ.]
"
Industrial Dispute-Application for permission to dismiss workmen-Jurisdiction of Appellate
Tribunal-Scope of enquiry-
! nterim order of suspension by employer pending enquiry and receipt
of permission-If amounts to a lock-out-If amounts to punishment
-Prior permission of the Appellate Tribunal, if required-Enquiry
by General Manager-Non-co-operation by Workmen-Enquiry not
held within the prescribed time-If a breach of Standing OrdersIndustrial Disputes (Appellate Tribunal) Act (XL VIII of 1950),
.,. 22, 28-Indiistrial Disputes Act (XIV of 1947J, s. 83( a)(b)-
Standing Orders, cl. L 12.
Seventy-six workers of the appellant company resorted to a
tools-down strike in sympathy with a dismissed co-worker.
Re·
peated attempts to persuade them to resume work having failed the
General Manager suspended them until further orders.
After mid·
day recess the Management sought to prevent the workers from
entering the mills but they violently entered the mills and the Police
bad to be called in by the company to keep the peace.
Charges of
misconduct,a.nd insubordination were thereafter frame~ against the
workers and they were called upon to show cause in an open
enquiry to be held by the General Manager why disciplinary action
should not be taken against them and the order of suspension was
extended pending the enquiry.
The workers took up an attitude
of total non-eel-operation and the atmosphere was tense with the
result that the enquiry could not be held within 4 days.
The
Management decided to dismiss the workers as a result of the en ...
quiry but as an appeal was then pending before the Labour A11pel·
late Tribunal, the company applied to it under s. 22 of the Indus·
trial Disputes (Appellate Tribunal) Acit of 1950 for permission to do
so and extended the period of suspension pending receipt of such
permission.
The workmen in their turn filed an application under
s. !13 of the Act to the Appellate Tribunal for requisite action to
be taken against the company for having contravened s. 22(b) of
the Act by resorting to an illegal lock·out and thereby punishing
them without its prior permission.
The Appellate Tribunal held
that the company bad not held the enquiry within the time specified
by cl. L 12 of the Standing Orders and on that ground dismissed its
application. It allowed the application of the workers holding that
the wholesale suspension of the workers and preventing them from
continuing work after the mid-day recess amounted to a lock-out
S.C.R.
SUPREME COURT REPORTS
917
and punishment by the company and contravened ~· 22(b) of the
Act and directed their reinstatement.
The company appealed. It
was contended on behalf of the company that there had been neither
a breach of cl. L 12 of the Standing Orders nor a contravention of
s. 22(b) of the Act.
Held, that the contentions were correct and the appeals must
succeed.
The conduct of the company did not come within the definition
of a lock·out and even if there was any lock-out it was in con·
sequence of the illegal strike resorted to by the workmen and as such
could not be deemed to be illegal by virtue of s. 24(3) of the Indus·
trial Disputes Act, 194 7.
Moreover, even assuming that the company declared an illegal
lock-out it was not necessary for it to obtain the permission of the
Appellate Tribunal under s. 22 of the Act before it could do so.
A lock-out was neither an alteration of tb e conditions of service
within the meaning of cl. (a) nor a discharge or punishment by dismissal or otherwise within the meaning of cl. ,(b) of s. 33 of the
Industrial Disputes Act, 1947 or under s. 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 and no permission was, therefore, required for its declaration. If the lock·out was illegal the
workmen had their remedy under s. 26 of the Industrial Disputes
Act.and in any event they had the right to have the dispute referred
for adjudication.
Jute Workers Federation, Calcutta v. Clive Jute Mills ([1951]
II L.L.J. 344) and Colliery Mazdoor Congress, Asansol v. New
Beerbhoom Coal Co. Ltd. ([1952] L.A.C. 219), approved.
The Company having been declared a public utility concern,
the workets had no right to go on strike without giving a notice in
terms of s. 22(1) of the Industrial Disputes Act, 194 7 and the tools·
down strike resorted to by them was illegal and the company was
within its rights in suspending them.
Buckingham and Carnatic Co. Ltd. v. Workers of the Buckingham
and Carnatic Co. Ltd., ([1953] S.C.R. 219), referred to.
Mere failure to hold an enquiry within the period of four days
prescribed by cl. L 12 of the Standing Orders could not determine
-'
~he matter before the Appellate Tribunal and where, as in the
mstant case, the delay was due to the conduct of the workers it was
sufficiently explained.
Where full and free opportunity was given to the workers to be
present and defend themselves in a duly notified enquiry and they
failed to do so, the Management was quite within its right to come
to its own conclusiQn as to their guilt and the punishment to be
meted out to them and it was not open to the workmen thereafter
to urge that such enquiry was not fair or impartia.l or violated the
principles of natural justice.
1956
Lakshmi Devi
Sugar Mills Ltd.
v.
Pt, Ram Saruj>
1956
Lakshmi Devi
Sugar Mills Ud.
v.
Pt. Ram Sarup
918
SUPREME COURT REPORTS
[1956]
There could be no punishment so long as there was no offence
and any action of the employer to the deteriment of the workers'
interest would not amount to punishment. The law did not contemplate anything like a contingent punishment of a worker and,
consequently, where there was an interim order of suspension pend·
ing an enquiry or the grant of permission by the Appellate Tribunal, the question of pay for the period ol such suspension depending on whether or not tbe permission would be granted, such sus·
pension would not amount to punishment even where it was of an
indefinite duration so as to attract the operation of s. 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950.
Champdany J11te Mifls and Certain Workmen, ([1952) 1 L.L.J.
554), Joint Steamer Companies and Their Workmen, ([1954] II
L.L.J. 221), Assam Oil Co. Ltd. v. Appalswami, ([1954] II L.L.J.
328), Standard Vac11um Oil Co. v. Gunaseelan, M. G. ([1954] II
L.L.J. 656), relied on.
Under that section the only thing that the Appellate Tribunal
he.d to consider was whether a prima facie case had been made out
by the employer for lifting the ban imposed by the section and if,
on thG materials before it, it was satisfied that there had been a
fair enquiry in the circumstances of the case and the Management
bad bona fide come to the conclusion that the worker was guilty of
misconduct with which be had been charged and it would be detrimental to discipline and dangerous in the interests of the company
ta continue him in its employ, a. prima jacie case was made out and
the Tribunal would be bound to permit the employer to punish the
workman. It would be no part of its duty to judge whether the
punishment was harsh or excessive, except so far it might bear on
the bona fides of the Management, and could only grant the permission as sought for or refuse it and the question of the propriety of
the punishment could be decided only by the appropriate Tribunal
appointed by the Government for adjudicating the industrial dis·
pute which would ensue upon the action of the management.
Atherton West cf) Co. Ltd. v. Suti Mills Mazdoor Union and
Otlwrs, ([1953] S.C.R. 780), The Automobile Products of India Ltd.
v. R11kmaji Bala it Others, ([1955] 1 S.C.R. 1241) Champdany Jute
Mills and Shri Alijan, ([1952] II L.L.J. 629), R.B.S. Lachmandas
Mohan Lal if; Sons Ltd. and Chini Mill Karmachari Union, ((1952]
II L.L.J. 787) and Assam Oil Companies' Case, ([1954] L:A.C. 78),
referred to.
CIVIL APPELLATE JuRISDICTION: Civil Appeals
Nos. 244 and 245 of 1954.
Appeals from the judgment and order dated
August 19, 1952, of the Labour Appellate Tribunal of
India (Calcutta) at Allahabad in Miscellaneous Cases
Nos. C-91 and 93 of 1952.
I
-
,_
..
... l
S.C.R.
SUPREME COURT REPORTS
91!)
N. 0. Ohatterji, H.J. Umrigar, J. B. Dadachanji,
1956
S. N. Andley and Rameshwar Nath, for the appellant
in both appeals.
Lakshmi Devi
Sugar Mills Ud,
v.
Purshottam Tricumdas, R. Ganapathy Iyer and
B. P. Maheshwari, for respondents in both appeals.
Pt. Ram Sarup
M. 0. Setalvad, Attorney-General for India, Porus
A. Mehta and R.H. Dhebar, fo.r the Intervener.
1956. October 24.
The Judgment of the Court
was delivered by
BHAGWATI J.-These two appeals by special leave
arise out of an order of the Labour Appellate Tribunal of India, Lucknow Bench, by which it dismissed
the application of the appellant under s. 22 of the •
Industrial Disputes (Appellate Tribunal) Act, 1950,
hereinafter referred to as the Act for permission to
dismiss the respondents from i~s employ and allowed
" the application of the respondents under s. 23 of the
Act for reinstatement.
The respondents are 76 employees of the appellant,
a limited company of Sugar Mills, situated in village
Chitauni in the district of Deoria and were working
in the engineering department of the.mills in the mill
house, boiling house and the workshop sections. There
were disputes between the appellant and its workmen and, on the date in question, i.e., Ma,y 27, 1952,
there was pending before the Labour Appellate Tribunal an appeal which was registered as Cal-101/51. It
appears that one Motilal Singh, an employee of the
appellant, had been dismissed by it sometime prior
thereto and he had been inciting the workmen to
make common cause with him, and, at a meeting
held th& previous night, some sort of action had been
decided upon.
When the workmen of the appellant
entered the mills on the morning of May 27, 1952,
these 76 workmen, though they entered their respective sections of the engineering department, did not
commence any work from 7 a.m. as they should have
done. The sectional engineers in-charge asked these
workmen as to why they did not commence their
work and became aware of their intention to resort
1956
Laksh1ni Devi
Sugar Mills Ud.
v.
Pt. Ram Sarup
Bhagwati J.
920
SUPREME COURT REPORTS
[1956]
to a tools-down strike. They reported the fact to the
Chief Engineer who sent a slip to the General Manager
informing him that the workers had gone on a toolsdown strike. The General Manager thereupon personally went to the workshop, mill house and the
boiling house and asked these workmen not to resort
to such strike but the latter did not pay any heed to
his ad vice. The General Manager then asked the Chief
Engineer to persuade these workmen to commence
the work, give them time for about 2 hours till 10-30
a.m. and report to him if, in spite of his -persuasions,
they did not commence work. The persuasions of the
Chief Engineer and also of the section engineers
proved of no avail and the 76 workmen persisted in
their attitude with the result that the section engineers made their reports to the General Manager
through the Chief Engineer giving the names of the
workmen belonging to their respective sections who
had resorted to the tools-down strike with effect from 7
a.m. that day. These reports were endorsed by the
Chief Engineer and passed on to the General Manager
who, in his turn, passed an order at about 10-30 a.m.
suspending these 76 workmen till further orders. The
order for suspen.sion was communicated to these workmen through their sectional heads and was also pasted
on the notice board of the mills.
There was a recess
between 11 a.m. and l p.m. and when the gates were
opened at I p.m. these 76 workmen, in spite of the
warnings of the gatekeepers and Jemadar to the contrary, rushed into the mills, entered their respective
sections and adopted a threatening attitude. The
sectional engineers made reports to the General
Manager in regard to this occurrence and these
reports also were endorsed by the Chief Engineer and
passed on by him to the General Manager. The situation which was created by these workmen by forcibly
entering their respective sections and continuing there
threatening violence was explosive and the management had to call in the police in order to avert
violence and damage to the property. The police
came in at 5 p.m. and order appears to have been
restored.
There was no untoward incident that day
'
.,
-~-
I
'
-
S.C.R.
SUPREME COURT REPORTS
921
but the management appears to have viewed the
situation with seriousness and approached the
Regional Conciliation Officer the next day in order to
ask for advice in regard to the dismissal of these
workmen. The Regional Conciliation Officer, however,
pointed out to the General Manager that, in,view of
the pendency of the appeal before the Labour Appellate Tribunal, he had no jurisdiction to entertain any
application fol" such permission and referred the
General Manager to the Labour Appellate Tribunal.
The workmen, on the other hand, got a letter dated
May 28, 1952, addressed to the General Manager by
the General Secretary of the Chini Mill Mazdoor Sangh
to the effect that they had gone to the gates of the
mills as usual at 7 a.m. that day to attend to their
work but they were not allowed to enter the mill premises. They charged the management with the intention to victimise them on the charge of a toolsdown strike and stated that they had neither struck
nor intended to strike but had been prevented froJ,11
attending to their work and had therefore been
advised to go back to their quarters with a view to
maintain peace. The last paragraph of that letter
was very significant. The General Manager was told
that if he did not mend his illegal mistakes and did
not take the w.orkmen back on duty he would be responsible for any breach of peace.
After receipt of that letter it was evident that the
workmen would resort to violent measures in order to
attend to their work and a breach of peace was apprehended. The management evidently continued the
police precautions and, after having waited for some
time, the General Manager furnished to these 76 workmen on June 2, 1952, a charge-sheet wherein he
charged them with having committed misconduct
within the meaning of cl. L. 1 (a) and (b) and wilful
insubordination within the meaning of cl. L. l(a), (b}
and (w) of the Standing Orders. He called upon them
to show cause within 24 hours of the receipt of the
charge-sheef why disciplinary action should not be
taken against them and gave them intimation that an
open enquiry in connection with the said charges
120
1956
Lakshmi Devi
Sugar Mills l.Jd.
v.
Pt. Ram Sarup
Bhagwati J.
195~
Lakshmi Devi
Sugar Mills Ltd.
v.
Pt. Ram Sarup
BhagwatiJ.
922
SUPREME COURT REPORTS
[19561
would be held by him at 8 a.m. on June 6, 1952. He
also intimated that if all the workmen arranged to
present themselves earlier than June 6, 1952, he
would take up the said enquiry earlier provided, however, an intimation was received to that effect from
them or from their Union. The workmen were to
remain suspended till the enquiry was finished.
The workmen addressed uniform letters to the
General Manager denying that there was any toolsdown strike on May 27, 1952, and alleging that the sectional heads and the Chief Engineer had conspired
together "under some mysterious preconceived plans"
and stated that no useful purpose would be served by
holding an enquiry on the 11th day of their suspension.
They pointed out that such indefinite period of suspension during the pendency of the appeal before the
Labour Appellate Tribunal and Reconciliation Board
was illegal and unjustified and was in utter disregard
of the Standing Orders. By their further letter dated
June 5, 1952, similarly addressed to the General Manager, they voiced their apprehension that
they would not get any justice from an enquiry held
by the management itself and asked for investigation
by an impartial tribunal. The management, however, held the enquiry as intimated at 8 a.m. on June
6, 1952. The workmen non-co-operated and did not
present themselves at the enquiry.
The General Manager immediately addressed a
letter to these workmen putting on record that in
spite of the orders conveyed by him earlier the workmen had disobeyed the same and had not appeared
at the appointed time and place for the enquiry into
the tools-down strike. He pointed out that by not
appearing in this manner they had made themselves
liable to dismissal for insubordination, and intimated
that the management was applying to the proper
authorities for permission to dismiss them pending
receipt of which the workmen would remain under
suspension. This letter was received by the workmen at 9 a.m. that day and they replied through the
General Secretary of the Chini Mill Mazdoor Sangh
repeating that a demand had been made for an
-·-
...
·-
...
.,..
S.C.R.
SUPREME COURT REPORTS ·
923
investigation by an impartial tribunal and in so far as
no impartial tribunal had been appointed they were
not agreeable to .present themselves and submit their
defence at the enquiry which was conducted by the
management itself.
The appellant thereafter made the necessary application under s. 22 of the Act before the Labour Appellate Tribunal of India, Lucknow Bench, for permission to dismiss these 76 workmen. In the affidavit
which was filed in support. of that application, all the
facts hereinbefore mentioned were set out in extenso
and it was pointed out that the management, after
giving full consideration to the explanations and
offering every possible opportunity to these workmen
to explain their conduct coupled with the unreasonable attitude adopted by them, had adjudged them
guilty of misconduct under cl. L. l(a), (b) and (w) of
the Standing Orders and considered that any further
employment of these workmen would be extremely
detrimental to discipline and dangerous in the interests of the industry.
The workmen, in their turn, filed on June 9, 1952,
an application under s. 23 of the Act for requisite
action to be taken against the appellant for having
contravened s. 22(b) of the Act by inflicting on them
the punishment in the shape of harassment by resorting to an illegal lockout for an indefinite period with
effect from May 27, 1952, without obtaining the prior
permission of the Labour Appellate Tribunal .and
"thereby acting contrary to law and resorting to mala
fide actions in direct violation of the provisions of the
Standing Orders in continuation of the management's
anti-trade (Union) activities".
Counter-affidavits were made by the workmen as
also the management in reply to both the above applications. The Labour Appellate Tribunal held that
the appellant did not act in strict compliance with cl.
L. 12 of the Standing Orders and was, therefore, not
entitled to ask for permission to dismiss the 76 worktnen. It accordingly dismissed the appellant's application under s. 22 of the Act. In regard to the application of the workmen under s. 23 of the Act, it held
1956
Lakshmi Devi
Sugar Mills Ltd.
v.
Pt. Ram Sarup
Bhagwati).
1956
Lakshmi Devi
Sugar Mills Ud;
v.
Pt. Ram Sarup
BhagwatiJ.
924
SUPREME COURT REPORTS
[1956)
that the wholesale suspension of the 76 workmen and
their prevention from resuming work at 1 p.m. after
the lunch hour amounted to a lockout and that this
conduct of the appellant amounted to punishment of
the workers whether by dismissal or otherwise and
was, therefore, in contravention of s. 22(b) of the
Act. It accordingly ordered the reinstatement of the
workmen if they presented themselves at the office of
the General Manager during office hours o.n any day
within 15 days of the order. and also ordered payment
of half the salary and allowances for the period of
non-payment, viz., from the date of their suspension
up to the date on which they were taken back in
service.
Shri N. C. Chatterjee for the appellant before us
has strenuously urged that the workmen had resorted
to the tools-down strike which was an illegal strike
and that the appellant was well within its rights in
suspending them pending enquiry and also pending
the application for permission to dismiss them made
before the Labour Appellate Tribunal. Even if it
be held that the appellant had declared a lockout,
such a lockout was in consequence of the illegal strike
resorted to by the workmen and could not be deemed
to be illegal. He further urged that the management
h~d held an enquiry into the illegal strike which had
been resorted to by the workmen and found that the
workmen were guilty of misconduct and insubordination within the meaning of cl. L. l(a), (b) and (w) of
the Standing.Orders and the appellant rightly came
to the conclusion that any further employment of
these workmen would be extremely detrimental to
discipline and dangerous in the interests of the industry. He also contended that the delay_in holding the
enquiry was not un.reasonable and the suspension of
the workmen pending enquiry for more than four
days was due to sufficient reason, the atmosphere
created by the non-co-operation of the workers being
so tense as not being appropriate for the holding of
an enquiry within those four days, that there was no
breach of cl. L. 12 of the Standing Orders and that
the Labour Appellate Tribunal was in error when it
-1
..
,.
S.C.R.
SUPREME COURT REPORTS
925
refused to grant the application under s. 22 of the
Act.
Civil Appeal No. 245 of 1954 which is directed
against the order of the Labour Appellate Tribunal
under s. 23 of the Act may be disposed of at once. The
Labour Appellate Tribunal was of opinion that the
conduct of the appellant in preventing the workmen
from continuing work after 1 p.m. on May 27, 1952,
came within the definition of a lockout and the workmen being employed in a public utility concern such
lockout would be illegal without a proper notice. It
was further of opinion that this conduct amounted to
punishment of a worker whether by dismissal or otherwise and was, therefore, in contravention of s. 22(b)
of the Act. This conclusion of the Labour Appellate
Tribunal was, in our opinion, based on a misapprehension of the whole position. The position had been
summed up by the Labour Appellate Tribunal in the
following words:-
" As a matter of fact, the management never
thought of a lockout. Their idea was to suspend the
suspected persons pending enquiry for which they
gave a notice".
If this was the correct position, the conclusion
reached by the Labour Appellate Tribunal that the
conduct of the management came within the definition of a. lockout was absolutely unjustifiable. · The
Labour Appellate Tribunal recorded its inability to
come to a definite finding as to what was the position which obtained on May 27, 1952. h observed:-
"W e have got a number of affidavits in support
of the parties' case and there is oath against oath.
We do not find ourselves in a position to hold definitely as to what was the exact situation. But it
does appear to us that a mountain has been made of
a mole hill and conclusions have been arrived at without going deep into the matter".
Even if the parties had made a mountain of a mole
hill and had reached conclusions without going deep
into the matter, it was certainly the business of the
Labour Appellate Tribunal itself to record a finding
of fact in regard to the situation as it obtained on
1956
Lakshmi Devi
S11gar Mills Ltd.
v.
Pt. Ram Satup
1956
Lakshmi Devi
Sugar Mills Ud.
v.
Pt. Ram Sarup
BhagwatiJ.
926
SUPREME COURT REPORTS
[1956]
that day. This unfortunately the Labour Appellate
Tribunal did not do and it came to record its conclusion that the conduct of the management came within the definition of a lookout without realizing that
such conclusion was inconsistent with what it had
stated a li.ttle earlier thatthemanagement as a matter
of fact never thought of a lookout.
We have been
taken through the whole evidence by the learned
counsel for the appellant and there is clear documentary evidence to show that the 76 workmen resorted to a tools-down strike from 7 a.m. on May 27,
1952. The reports which were made by the section
engineers and sent to the General Manager through
the Chief Engineer were clear and categoric in regard
to such tools-down strike having been resorted to by
the workmen in question and the list of the 76 workmen which was prepared by the General Manager
ordering their suspension was based on those reports.
'l'he further reports which were made by the section
engineers again sent by them to the General Manager
through the Chief Engineer in the afternoon of May
27, 1952, also were clear and categoric in regard to
the said workmen having been asked not to enter the
workshop, the boiling house and the mill house at
1 p.m. but their having entered the same threatening
violence. A faint attempt was made to charge the section engineers and the Chief Engineer with having
conspired "under some mysterious preconceived
plans" b,ut the same rested merely on a bare allegation and was•not substantiated by any tangible evidence.
Even though there was some conflict of evidence in regard to the time when the notice of suspension was given by the General Manager to these
workmen and when the notice in that behalf was
pasted on the notice-board of the appellant, it is
abundantly clear on the documentary evidence above
referred to that the 76 workmen resorted to a toolsdown strike from 7 a.m. on the morning of May 27,
1952, that they were suspended till further orders
immediately after the receipt by the General Manager
of the first series of reports from the section engineers,
that they were prevented from entering the premises
..,
'I
,_.
• -
S.C.R.
SUPREME COURT REPORTS
927
at I p.m. but entered the same threatening violence.
If this is the true position it follows that there was
no lockout declared by the appellant, much less an
illegal lockout. The workmen had resorted to an
illegal strike and the General Manager rightly ordered
that the workmen indulging in such strike should be
suspended pending further orders which obviously
meant pending enquiry into their conduct and the
obtaining of the permission to dismiss them as a result of such enquiry if the management thought fit.
If there was thus no illegal lockout at all, the conclusion reached by the Labour Appellate Tribunal in
,that behalf was absolutely unjustified. Even if there
had been a lockout as concluded by the Labour Appellate Tribunal the same was in consequence of the
illegal strike which had been resorted to by these
workmen and could not by virtue of s. 24(3) of the
Industrial Disputes Act, 1947, be deemed to be
illegal.
There is, however, a more fundamental objection
that, even if the appellant be held responsible for
having declared an illegal lockout, the lockout would
not come within the ban of s. 22 of the Act. The
Labour Appellate Tribunal had before it an earlier
decision of its own in Jute Workers Federation, Calcutta v. Clive Jute Mills(1), in which the same question had heed considered with reference to s. 33 of the
Industrial Disputes Act, 1947. In that case, a lockout had been declared which involved 4,000 workers
of the company and a preliminary contention was
urged that there was no contravention of the provisions of s. 33 of the Industrial Disputes Act, 1947.
The Labour Appellate Tribunal considered the question whether the lockout had (I) in fact altered the
conditions of service of the workmen to their prejudice, or (2) had the effect of discharge, or (3)
amounted to punishment of the workmen.
It came
to the conclusion that a lockout had not the effect of
a discharge, for a lockout does not automatically
terminate the services of the workmen.
It did not
also amount to punishment, for punishment presup-
(1) [1951] II L.L.J. 344.
1956
Lakshmi De~i
Sttgar Mills Ltd.
v.
Pt. Ram SarttP
BhagwatiJ,
1956
Laksh1ni Devi
Sugar Mills Ud.
v.
Pt. Ram Sarup
Bhagwati J.
928
SUPREME COURT REPORTS
(1956]
poses· an offence or misconduct.
A lockout is genera~ly adopted as a security measure and may in certam cases be used as a weapon corresponding to what
the employees have in the shape of a strike and that,
therefore, s. 33(b) would not be contravened by the
company by declaring a lockout.
The Labour Appellate Tribunal then considered whether a lockout
would attract the operation of s. 33(a).
It was of
opinion that no automatic termination of the services
of the employees was brought about by a lockout and
the question was whether any of the conditions of
service was altered thereby to their prejudice.
The
contention of the Union was that the conditions of
service were altered to the prejudice of the workmen
because those employees did not in fact get their pay
during the period of the lockout with the possibility
of losing it.
This contention was negatived and the
Labour Appellate Tribunal was of opinion that the
conditions of their service would be altered by the
lockout if the employees lost their right to receive
their pay during the period of lockout in all circum- ·
stances but the question whether they would be entitled to get their pay during that period could not
be postulated with certainty for that would depend
on a variety of considerations.
In the opinion of
the Labour Appellate Tribunal to bring a case within
s. 33(a), the questioned act of the employer must
directly and in fact alter the conditions of service to
the prejudice of the workmen concerned, that is to
say, the moment the lockout was declared.
The possibility that they may or may not get their pay meant
that the lockout may or may not alter the conditions
of their service to their prejudice.
Section 33(a)
would not, therefore, be attracted by the mere fact
of a lockout.
The Labour Appellate Tribunal thus
came to the conclusion that neither s. 33(a) nor s.
33(b) would be contravened by the company in declaring the lockout.
This decision of the Labour Appellate Tribunal
was followed in Colliery Mazrloor Congress, Asansol,
v. New Beerbhoom. Coal Co .. Ltd.(') and t.he Labour
(1) [1952] L A.O. 219.
..
....
.,
7
S.C.R.
SUPREME COURT REPORTS
929
Appellate Tribunal there held that a lockout did not
come within the ambit of s. 33 and, therefore, no permission under that section was required for declaring
a lockout.
We agree with the reasoning adopted in the above
cases and are of opinion that a lockout is neither an
alteration to the prejudice of the workmen of the conditions of service applicable to them within the meaning of cl. (a) nor a discharge or punishment whether
by dismissal or otherwise of the workmen within the
meaning of cl. (b) of s. 33 of the Industrial Disputes
Act, 1947, ors. 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950, and that, therefore, no permission of the Conciliation Officer, Board or Tribunal
as the case may be is necessary to be obtained before
a lockout can be declared. If the lockout is legal, no
question can at all arise. If, on the other hand, the
lockout is illegal, a remedy is provided in s. 26 of the
Industrial Disputes Act, 1947.
The employees
affected by a lock-out would in any event be entitled
to refer the industrial dispute arising between themselves and the employer for adjudication by adopting the proper procedure in regard thereto.
The Labour Appellate Tribunal was, therefore,
clearly in error when it came to the conclusion that
the conduct of the appellant came within the definition of a lockout and that it amounted to punishment
of the workmen whether by dismissal or otherwise
and was, therefore, in contravention of s. 22(b) of
the Act.
The application of the respondents under
s. 23 of the Act was accordingly liable to be dismissed
and should have been dismissed by the Labour Appellate Tribunal. Civil Appeal No. 245 of 1954 will,
therefore, be allowed and the order of the Labour
Appellate Tribunal reinstating the respondents in the
service of the appellant will be set aside.
Coming now to Civil Appeal No. 244 of 1954, the
first question to determine is whether the respondents had resorted to an illegal strike. We have
already pointed out the circumstances under which
the 76 workmen resorted to the tools-down strike
from 7 a.m. on May 27, 1952, and recorded the finding
121.
7956
Lakshmi De'Oi
Sugar Mills Ud.
v.
Pt, Ram Sarup
Bha gu·ati J.
1956
Lakshmi Devi
~:•igar Mills Ud.
v.
Pt. Ram Sarup
Bhagwati J,
930
SUPREME COURT REPORTS
[1956)
that they not. only resorted to such strike but persisted in their attitude in spite of the persuasions of
the Chief Engineer and the General Manager of the
appellant. The appellant having been declared a
public utility concern, the workmen were not entitled
to resort to such strike without giving to the appellant notice of the strike in terms of s. 22(1) of the
Industrial Disputes Act, 194 7, and the tools-down
strike which was resorted to by them was, therefore,
an illegal strike. The fact that the strike was of a
short duration viz., from 7 a.rn. till 10-30 a.rn. would
not exculpate the respondents from the consequences
of having resorted to such illegal strike, the avowed
intention of the strikers being not to resume work
until their pre-concerted plan conceived at the meeting held on the previous night was carried out. The
strike resorted to by the workmen was of an indefinite
duration and the management, having foiled in its
attempts to persuade the workmen to resume their
work, was well within its rights to suspend these
workmen pending further orders. (Vide Buckingham
and Garnatic Go. Ltd. v. Workers of the Buckingham
and Garnatic Go. Ltd.(')) . .
The Labour Appellate Tribunal did not decide this
issue at all but only considered the alleged non-compliance by the appellant of cl. L. 12 of the Standing
Orders as determinative of the whole enquiry before
it observing that "although the delay (in holding the
enquiry) was not unreasonable, there was no doubt
that the management did violate the letter of the
rule". It further observed that there was no sufficient reason indicated for extending the period of suspension beyond the period of four days provided in
cl. L. 12 of the Standing Orders, the tension created
by the non-co-operation of the workers not having
been considered sufficient to preclude the management
from collecting materials for conducting the enquiry
within the said period of 4 days.
This reasoning of
the Labour Appellate Tribunal was unsound. Having
once come to the conclusion that the delay was not
unreasonable, there was no justification for the further
\1) [1953] S.C.R. 219.
.... _
-
•
-
S.C.R.
SUPREME COURT REPORTS
931
conclusion reached by the Labour Appellate Tribunal
that the tension created by the non-co-operation of
the workers was not a sufficient reason for extending
the period of such suspension. The workmen had forcibly entered the premises of the mills in spite of the
warnings of the watchmen and the Jemadar and had
also entered the workshop, the boiling house and the
mill house and continued to stay there threatening
violence. In their letter dated June 3, 1952, theyhad
also threatened the General Manager that if he did
not mend his illegal mistakes and did not take the
workmen back on duty he would be responsible for
any breach of peace. This was enough evidence of
their mentality and the management naturally enough
apprehended breach of peace at the hands of these
workmen. If this was the tense atmosphere created
by the non-co-operation of the workmen, the management was perfectly justified in postponing the enquiry
by a few days and continuing the workmen under suspension. The delay which was thus caused in furnishing the charge-sheets and giving notice of the enquiry
to these workmen on June 2, 1952, was, therefore,
sufficiently explained and if there was any one responsible for this delay it was the workmen and not the
management. It did not then lie in the mouth of the
workmen to protest against thi~ delay in the enquiry
and trot out their suspension for a period exceeding
four days as an excuse for abstaining from the enquiry.
As a matter of fact, the management intimated to the
workmen that in spite of June 6, 1952, having been
fixed as the date for the open enquiry, the management would be prepared to take up the enquiry earlier
provided an intimation was received either from the
workmen or from their Union to that effect. Instead
of responding to this gesture of the appellant the
workmen persisted in asking for an independent enquiry and non-co-operated with the management in
the enquiry which was ultimately held by it as
notified at 8 a.m. on June 6, 1952.
We are of
opinion that under the circumstances the appellant
was not guilty of having contravened cl. L. 12 of
the Standing Orders and the Labour Appellate
1956
Lakshmi Devi
Sugar Mills Ltd.
v ••
Pt. Ram SamfrBhagwatiJ.
1956
Lakshmi Devi
Sugar Mills Ltd,
v.
Pt, Ram SaruP
BhagwatiJ.
-032
SUPREME COURT REPORTS
[1956)
Tribunal was in error when it came to the contrary
conclusion and dismissed the application of the appellant under s. 22 merely on that ground without making any further enquiry in to the circumstances of the
case. It appears that the Labour Appellate Tribunal
was driven to take this step because it found itself
unable to hold definitely as to what was the exact
situation on May 27, 1952.
We shall only observe
that if the Labour Appellate Tribunal had really applied its mind ts> the question it would have come to
the conclusion that the respondents in fact did resort
to the illegal strike from 7 a.m. on May 27, 1952, and
that there was no contravention of cl. L. 12 of the
Standing Orders by the appellant.
The next question that falls to be determined is
whether the enquiry which was held by the management on June 6, 1952, was a fair enquiry and whether the General Manager observed the principles of
natural justice in the conduct of that enquiry. Due
notice of the enquiry was given to the respondents
by the letter of the management addressed to them
on June 2, 1952, and if the respondents did not avail
themselves of the opportunity of presenting themselves and defending their action at the enquiry they
had only themselves to blame for it. It was within
the province of the management to hold such an
enquiry after giving aue notice thereof to the respondents and to come to its own conclusion as a result
of such enquiry whether the respondents were guilty
of the charges which had been levelled against them.
If full and free opportunity was given to the respondents to present themselves at the enquiry and defend
themselves it could not be said that the enquiry was
anything but fair.
No principles of natural justice
were violated and the management was at liberty to
come to its own conclusions in regard to the culpability of the respondents and also to determine what
punishment should be meted out to the respondents
for the misconduct and insubordination proved against
them. If the ban which is imposed by s. 22 of the
Act had not been in existence, the management would
have been entitled to impose the punishment on the
-
,_
...
...
S.C.R.
SUPREME COURT REPORTS
933
respondents and dismiss them without anything
more, if it honestly came to the conclusion that dismissal of these workmen was the only punishment
which should be meted out to them in all the circumstances of the case. The respondents would no doubt
then have been entitled to refer the industrial dispute which arose out of their dismissal for adjudication by adopting the proper procedure set out in the
Industrial Disputes Act, 194 7, and the Industrial
Tribunal appointed by the Government for the adjudication of such dispute would have been in a position to thrash out all the circumstances and award
to them the appropriate relief.