# ROHTAS INDUSTRIES LTD v. BRIJNANDAN PANDEY

- **Citation:** [1956] 1 S.C.R. 800
- **Court:** Supreme Court of India
- **Decided:** 1953-09-25
- **Case number:** Civil Appeal No. 144 of 1955
- **Bench:** Bhagwati, Venkatarama Ayyar, s. K. DAS, Goyinda Menon
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/rohtas-industries-ltd-v-brijnandan-pandey-1271
- **Pages:** 12

## Headnote

Industrial Disp,,te-Temporary employees-Discharge of work·
men-Application before the Labour Appellate Tribunal-Scope of
enquiry-Discretion of the Tribunal-Ind•<Strial Disp,.tes (Appellate
Tribunal) Act, 1950 (XL VIII of 1950), s. 22.
The scope of an enquiry under s. 22 of the Industrial Disputes
(Appellate Tribunal) Act, 1950, is whether there is a prima facie
case made out for the proposed discharge of the workman and the
employer has not resorted to any unfair practice or victimisation.
Though an Industrial Tribunal can create new obligations or
modify contracts in the interests of industrial peace or to prevent
unfair practice or victimisation, its discretion bas to be exercised
in accordance with well recognised principles and it cannot ignore
altogether an existing agreement or existing obligations.
The AutomobileProditets of India Ltd. v. R"kmaji Bala ([1955]
1 S.C.R. 1241) and Atherton West it Co. Ltd. v. Suti Mill Mazdoor
Union, ([1953] S.C.R. 780), relied on.
Where, as in the present case, the Labour Appellate Tribunal
did not direct its mind to the real question to be decided on an ap·
plication under s. 22 of the Act for permission to discharge the
temporary employees and witbout deciding ·whether the workmen
were temporary employees or not, passed an order dismissing the
application on the basis of a finding which was not determinative
of the real point or question at issue, held that the decision must be
set aside and the proper order passed.

## Text

1956
Octobe1' 11.
800
SUPREME COURT REPORTS
ROHTAS INDUSTRIES LTD.
v.
BRIJNANDAN PANDEY.
[1956]
[BHAGWATI, VENKATARAMA AYYAR, s. K. DAS and
GOYINDA MENON JJ.]
Industrial Disp,,te-Temporary employees-Discharge of work·
men-Application before the Labour Appellate Tribunal-Scope of
enquiry-Discretion of the Tribunal-Ind•<Strial Disp,.tes (Appellate
Tribunal) Act, 1950 (XL VIII of 1950), s. 22.
The scope of an enquiry under s. 22 of the Industrial Disputes
(Appellate Tribunal) Act, 1950, is whether there is a prima facie
case made out for the proposed discharge of the workman and the
employer has not resorted to any unfair practice or victimisation.
Though an Industrial Tribunal can create new obligations or
modify contracts in the interests of industrial peace or to prevent
unfair practice or victimisation, its discretion bas to be exercised
in accordance with well recognised principles and it cannot ignore
altogether an existing agreement or existing obligations.
The AutomobileProditets of India Ltd. v. R"kmaji Bala ([1955]
1 S.C.R. 1241) and Atherton West it Co. Ltd. v. Suti Mill Mazdoor
Union, ([1953] S.C.R. 780), relied on.
Where, as in the present case, the Labour Appellate Tribunal
did not direct its mind to the real question to be decided on an ap·
plication under s. 22 of the Act for permission to discharge the
temporary employees and witbout deciding ·whether the workmen
were temporary employees or not, passed an order dismissing the
application on the basis of a finding which was not determinative
of the real point or question at issue, held that the decision must be
set aside and the proper order passed.
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
144 of 1955.
Appeal by special leave from the judgment and
order dated September 25, 1953, of the Labour Appellate Tribunal of India, Calcutta in Miscellaneous
Case No. C-112 of 1953.
G. K.
Daphtary,
Solicitor-General of India,
A. B. N. Sinha and B. P. Maheshwari, for the appellant.
S. P. Sinha, R. Patnaik and A. D. Mathur, for
tl:~e respondents.
..
-
-
S.C.R.
SUPREME COURT REPORTS
801
1956. October 11. The Judgment of the Court
was delivered by
S. K. DAS J.-This is an appeal by special leave
from a decision of the Labour Appellate Tribunal,
Calcutta, dated the 25th September, 1953.
The
relevant facts lie within a narrow compass.
On the
4th of May 1953 the appellant, the Rohtas Industries
Limited, Dalrnianagar, made an application to the
said Labour Appellate Tribunal under section 22 of
the Industrial Disputes (Appellate Tribunal) Act,
1950 (XLVIII of 1950), hereinafter referred to as the
Act, for permission to discharge ninety six temporary
employees in the following circumstances.
The appellant company have a number of factories at Dalmianagar including a cement factory, power house,
pulp mill, paper factory, chemical factory, factory
for the manufacture of certain acids and an asbestos
cement factory.
The company had a number of
temporary employees who were engaged temporarily
in connection with certain erection works for the extension and enlargement of those factories.
The
terms of employment of these employees were embodied in a temporary appointment form which was
signed by the employees as well as the management.
The said terms stated, inter alia, that "the company
could discharge the employee at any· time without
notice, compensation and giving any reason therefor,
whether on completion of the work on which the employee was engaged or earlier"; the terms also made
it clear that whether the employee was on the same
job or some other job, in the same department or
some other, either on temporary work or permanent
work, he would remain a temporary employee until
the Works Manager issued a written letter expressly
making him a permanent employee. As and when the
various erection works were completed, the temporary employees were first put on a list of spare men
and then discharged.
Some time prior to the 3rd of
July 1952, sixty nine of these temporary employees
were spared for being discharged. The names of these
sixty nine employees were given in two lists, Appendix
1956
Rohtas Industries
Ltd.
v.
Brijnanda11
Pandey
802
SUPREME COURT REPORTS
[1956]
1956
A and Appendix B. It was alleged that on the 3rd ot
July 1952,a number of these employees headed by one
Rohtas Industries Brij Nandan Pandey entered the office of Shri L. C.
Ltd.
v.
Jain, Manager of the Cement Factory, and Brij
Brifnandan
Nandan Pandey assaulted the Manager.
A serious
Pand•y
situation resulted from that incident and the company stopped the sixty nine temporary employees
s. K. DasJ.
from coming to their factories or to their Labour
' Office and issued a notice to them stating that the
company were applying to the Industrial Tribunal
for permission to terminate their services.
At that
time an industrial dispute relating to, among other
things, the payment of bonus to the employees was
pending adjudication in the Court of the Industrial
Tribunal, Bihar. On the 5th of July l!l52, the appellant company made an application to the said Tribunal for permission to discharge the sixty nine employees. The application was made under section 33 of
the Industrial Disputes Act, 1947.
On the 12th of
July 1952, forty nine out of the said sixty rtine employees made an application, under section 33-A of
the Indus~rial Disputes Aot, to the Chairman, Industrial Tribunal, Bihar, on the allegation that the appellant company had discharged sixty nine employees on the 5th July 1952 and had thereby contravened section 33 of the Industrial Disputes Act,
1947. On the 20th of August 1952, thirty six more
tempon,ry employees were put on the spare list and
an application was made to the Industrial Tribunal
Bihar, for including these thirty six persons also in
the application which had been made for permission
to discharge the temporary men; thus, all told, the
application related to one hundred and five temporary men.
The case of the appellant company was
that the completion of the erection works for which
these temporary men were originally employed was a
gradual process and so far as the Cement Factory
erection work was concerned, it was completed by
the end of March 1952 except for certain minor additions and alterations. Therefore, the appellant company no longer required the services of the temporary
employees and they were put on the spare list as and
1
S.C.R.
SUPREME COURT REPORTS
803
when their services were no longer required.
The two applications which had been made to the
Industrial Tribunal, Bihar, the one under section 33
of the Industrial Disputes Act and the other under
section 33-A of the said Act, remained pending with
the Industrial Tribunal till the 17th of December 1952
on which date the application under section 33-A
filed by forty nine of the sixty nine temporary employees, was dismissed. On the 3rd of January 1953,
the Chairman of the Industrial Tribunal, Bihar, intimated to the appellant company that the Tribunal
was no longer competent to pass any orders on the
application under section 33 of the Industrial Disputes Act, 1947, as the adjudication proceedings on
the main reference had already concluded. Two
appeals were taken to the Labour Appellate Tribunal,
one from the award made on the main adjudication
and the other from the order made on the application
under section 33-A of the Industrial Disputes Act,
1947. On the 20th May 1953, the appeal from the
order under section 33-A was dismissed. As we are
not concerned with that appeal in any way, nothing
fu.rther need be said about it in this judgment.
The appeal from the main award was pending on
the 4th of May 1953 on which date the appellant
company made their application under section 22 of
the Act to the Labour Appellate Tribunal for permission to discharge ninety six of the temporary employees. Though there were one hundred and five
temporary employees originally, with regard to whom
an application had been made to the Industrial Tribunal, Bihar, nine out of them voluntarily left the service of the company; therefore, the number of temporary employees regarding whom the application under
section 22 of the Act was made was ninety six only.
The application was contested by forty two of the
temporary employees, and in their affidavit they
denied that any of the sixty nine workmen were
originally recruited as temporary workmen and they
further denied that they were involved in the incident
relating to the assault on Shri L.C. Jain on the 3rd
of July 1952. They said that in effect they were
1956
Rohtas Industries
Ltd.
v.
Brijnandan
Pandey
S, K. Das}.
1956
Rohtas Industries
Ltd.
v.
Brijnandan
Pandey
S. K. DasJ,
804
SUPREME COURT REPORTS
[1956]
permanent employees and enjoyed all the benefits of
permanent employees. They further stated:
"The erection work of the cement plants of the
petitioners was completed towards the end of 1950
and it is therefore patently false to suggest that we
became redundant as a resultofthecompletion of the
erection of the cement plants. It is significant to note
that a large number of workmen who had worked on
the job of erecting the cement plants were discharged
shortly after the completion of the said work on the
ground that they were surplus. The cement plants
started to work in full swing from about the first
quarter of 1951 and we were working in the said
cement plant producing cement from the very beginning right up to 5th July 1952, when we were informed that we were surplus. In fact the real reason
for the proposed retrenchment is the petitioner's
desire to increase the rate of exploitation of its workmen by increasfog the workload".
With regard to the terms embodied in the appointment form, it was alleged that on or about the 3rd of
December 1948 the employees of the appellant company were forced to go on strike on account of an
industrial dispute; towards the end of the strike the
workmen became exhausted and drifted back to work.
The strike was ultimately called off and the appellant
company taking full advantage of their victory compelled a section of the workmen, who did not return
to work until the strike was called off, to sign the appointment form with the purpose of humiliating and
terrorising them.
The Labour Appellate Tribunal gave its decision
on the 25th September 1953 which is the decision
under appeal. It dismissed the application of the
appellant company on a finding which the Tribunal
expressed in the following words:
"It is thus clear that these 96 workmen had been
working in the production departments from as far
back as the beginning of the year 1951 and so the
completion of the erection work cannot be put forward
as the ground for their retrenchment".
S.C.R.
SUPREME COURT REPORTS
805
Referring to the Directors' Report dated the 10th of
July 1951, the Tribunal came to the conclusion that
the workmen's version that the erection works had
been completed by the end of 1950 was supported by
the said report. In other words, the decision of the
Labour.Appellate Tribunal was primarily based on
the finding that the erection works were completed
by the end of 1950 and therefore there was no ground
foi' discharging the ninety six temporary men.
I
Learned counsel for the appellant has contended before us that (1) the Appellate Tribunal did not cor-
:i;ectly appreciate the true scope and effect of section
22 of the Act; (2) the Appellate Tribunal gave attention to only one point, namely, the completion of erection works, and did not consider the other circumstances put forward on behalf of the appellant in
support of their application; (3) instead of considering the real point which arose for determination on
an application under section 22 of the Act, the Appellate Tribunal confined its attention to a point which
was not decisive of the question before it; and (4) by
reason of its. failure to coneider the real point for
determination, the order of the Appellate Tribunal
has resulted in manifest injustice. In our opinion,
these contentions are correct and should be upheld.
It was pointed out in The Automobile Products of
India Ltd. v. Rukmaji Bala(1) that section 22 of the Act
confers on the Appellate Tribunal a special jJJrisdiction which is in the nature of original jurisdiction
and the Tribunal being an authority of limited jurisdiction must be confined to the exercise of such functions and powers as are actually conferred on it. "With
regard to the scope of section 22 of the Act, it was
observed: •
"The object of section 22 of the 1950 Act like that
of section 33 of the 194 7 Act as amended is to protect
the workmen concerned in disputes which form the
subject-matter of pending proceedings against victimisation by the employer on account of their having
raised industrial disputes or their continuing the
(1) [1955] l S.C.R. 1241.
105
7956
Rohtas Industries
Ltd.
v.
Brijnandan
Pandey
S. K. Das],
1956
Rohtas Industries
Ltd.
v.
Brij'nandan
Pandey
S. K. Das].
806
SUPREME COURT REPORTS
[1956)
pending proceedings. It is further the object of the
two sections to ensure that proceedings in connection
with industrial disputes already pending should be
brought to a termination in a peaceful atmosphere and
that no employer should during the pendency of those
proceedings take any action of the kind mentioned in
the sections which may give rise to fresh disputes
likely to further exacerbate the already strained relation between the jlmployer and the workmen. To
achieve this object a ban bas been imposed upon the
ordinary right which the employer has under the
ordinary law governing a contract of employment.
Section 22 of the 1950 Act and section 33 of the 1947
Act which impose the ban also provide for the removal of that ban by the granting of express permission
in writing in 1tppropriate cases by the authority mentioned therein. The purpose of these two sections
being to determine whether the ban should be removed or not, all that is required of the authority
exercising jurisdiction·under these sections is to accord or withhold permission".
The earlier decision of this Court in Atherton We8t &
Co. Ltd. v. Suti Mill Mazdoor Union(') dealt with
clause 23 of the U. P. Government Notification dated
the 10th March 1948 made in exercise of the powers
conferred by sections 3 and 8 of the U. P. Industrial
Disputes Act, 1947, and it was there observed that
the scope of the enquiry was to Gome to a conclusion
whether there was a primafacie case made out for
the discharge or dismissal of the workman and the
employer, his agent or manager was not actuated by
any improper motives or did not resort to any unfair
practice or victimisation in the matter of the proposed discharge or dismissal of the workman. That
being the scope of the enquiry on an application
under section 22 of· the Act, what the Labour Appellate Tribunal had to decide in the present case was
whether the appellant company had made out a
prima facie case for the proposed discharge and whether tliey were resorting to any unfair practice or
victimisation in the matter of the proposed discharge.
(1) [1953] S.C.B. 780.
-
-
S.C.R.
SUPREME COURT REPORTS
807
Instead of doing that, the Labour Appellate Tribunal dismissed the application of the appellant company on the only ground that the version of the
workmen that the erection works had been completed
by the'end of 1950 was supported by the Report of
the Directors dated the 10th July 1951. Learned
counsel for the appellant has rightly pointed out that
even in respect of the completion of erection works
the conclusion of the Appellate Tribunal is a complete
non sequitur. First of all, the Directors' Report was
dated the 10th July 1951 though the balance-sheet of
the company with which the report was dealing related
to the period ending on the 31st October 1950.
The
report naturally referred to such works as were completed on or before the 10th of July 1951. It should
be obvious that the completion of erection works
must be a gradual process, and while some of the
erection works might have been completed by the end
of 1950 or July 1951, some were still in the process
of completion. Under their terms of employment,
temporary employees could be moved from one work
to the other and the mere circumstance that they
were employed in a production department for so.me
time, even if true, did not make them permanent employees; nor did the circumstance that they enjoyed
some of the benefits of permanent employees make
them permanent. These are circumstances which
have been completely ignored by the Labour Appellate Tribunal.
It is worthy of note that in their application dated
the 12th of July 1952, the forty nine workmen admitted:
"though most of us were originally recruited for
erection work in the Cement Factory, many of us were
later on transferred as permanent workers to sugar
and paper factories and some of us were absorbed as
permanent workers in the maintenance section of the
Cement Factory". (Vide paragraph 3 of the application).
In the joint affidavit filed on the 12th August, 1953,
in reply to the appellant's application under section
22 of the Act, the said workmen denied however that
1956
Rohtas Industries
Ud.
v.
Brijnandan
Pandey
S. K. Das].
808
SUPREME COURT REPORTS
(1956)
1956
they'were at any time engaged temporarily for temR ht ~
str.
porary work: vi de paragraphs 3 and 6 of the affidavit.
0
asu~." "' Obviously, they were shifting from the position which
v.
they had originally taken up. No evidence was given
Br;;nandan
that the men who were employed temporarily were
Pandey
afterwards made permanent. They filed a schedule,
marked 'A', to their affidavit wherein they showed
s. K. Das J.
their period of service and the name of the factory
or plant from where their duties stopped. On an examination of the schedule (Anne.xure A) it appears
that a number of them were put 9n the spare list
when the erection work was completed some time in
1952. Annexure 'A' therefore supports the case of
the appellant company that the completion of the
erection works was a gradual process, some were completed in 1950, some in 1951 and some in 1952.
The
first batch of sixty-nine employees with whom we
are concerned were put on the spare list between
March and July 1952 and the second batch were put
on the spare list in August 1952 when the relevant
erection works were completed. The finding of the
Labour Appellate Tribunal with regard to the completion of erection works was vitiated by reason of
the failure to take into consideration the circumstances stated above.
With regard to the terms of employment embodied
in the temporary appointment form, the respondents'
case was that the appointment forms were signed as
a ·result of the strike in 1948; it was never suggested
that these forms were never signed at all and the
comment of learned counsel for the respondents that
the appellant company have not produced the appointment forms has very little force.
The respondents gave no evidence in support of the allegation
that the appointment forms were taken from them
for the purpose of humiliating or terrorising them,
nor did the Appellate Tribunal come to any such finding.
None of the affidavits filed on behalf of the
respondents suggested, even in a remote way, that
the appellant company were resorting to any unfair
practice or victimisation in the matter of the proposed discharge.
-
S.C.R.
SUPREME COURT REPORTS
809
Learned counsel· for the respondents has contended
before us that the finding of the Labour Appellate
Tribunal is a finding on a question of fact, namely,
whether therespondents were temporary or permanent
employees. He has argued that this Court should
not interfere even though the finding is based on
reasons which may not appear convincing to us. We
have, however, pointed out that the Labour Appellate
Tribunal gave no finding on the question whether the
respondents were temporary employees or not. The
only finding which the Tribunal gave related to a
different matter, namely, the completion of erection
works. Secondly, learned counsel for the respondents
has contended that under section 22 of the Act the
Appellate Tribunal bad a discretion,either to lift the
ban or not to lift it and in a matter of disQretion this
Court should not interfere. It is true that this Court
does not sit upon the decisions of Industrial Tribunals
like an ordinary Court of appeal, and th~re must be
special circumstances to justify the exercise of pur
special power under article 136 of the Constitution.
In our opinion, such special circumstances exist in
the present case where the Labour Appellate Tribunal
has not directed its mind to the real question to be
decided on an application under section 22 of the
Act and has passed an order· on the basis of a somewhat irrelevant'finding which has resulted in manifest
injustice.
The discretion which an Industrial Tribunal has
must be exercised in accordance with well recognised
principles. There is undoubtedly a .distinction between commercial and industrial arbitration. As has
been pointed out by Ludwig Teller (Labour Disputes
and Collective Bargaining) Vol. I, page 536:
"Industrial arbitration may involve the extension of an existing agreement, or the making of a new
one, or in general the creation of new obligations or
modifications of old ones, while commercial arbitration generally concerns itself with interpretation of
existing obligations and disputes relating to existing
agreements".
1956
Rohtas Industries
Ltd.
v.
Brijnandan
Pandey
S. K. Das/.
1956
Rohtas Ind1,stries
Ud.
v.
Brijnandau
Pandey
S. /{,Das J.
810
SUPREME COURT REPORTS
[1956]
A Court of law proceeds on the footing that no power
exists in the courts to make contracts for people, and
the parties must make their own contracts. The
courts reach their limit of power when they enforce
contracts which the parties have made. An Industrial
Tribunal is not so fettered and may create new obligations or modify contracts in the interests of industrial
peace, to protect legitimate trade union activities
and to prevent unfair practice or victimisation. We
cannot, however, accept the extreme position canvassed before us that an Industrial Tribunal can
ignore altogether an existing agreement or existing
obligations for no rhyme or reason whatsoever.
It has been necessary for us to go into the facts and
circumstances of this case in greater detail than is
usual with this Court, because the Labour Appellate
Tribunal did not do so.
The Act under which the
Appellate Tribunal purported to pass its order has
now been repealed by the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956. A
question of some nicety as to the correct interpretation of section 33 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956 might
have arisen if we had thought fit to remand this case.
We do not, however, think it necessary to pass an
order of remand in this case and therefore abstain
from expressing any opinion as to the correct position
in law under sub-section (2) of section 33 of that Act.
No new facts need investigation in this case. Learned
counsel for the parties have taken us through all the
affidavits filed and the facts necessary for an enquiry
under section 22 of the Act clearly emerge from those
affidavits.
We are satisfied prima facie that the respondents were temporary employees and were put on
the spare list as and when the erection works were
gradually completed.
The appellant company have
made out a prima facie case for the permission which
they have asked for and there is no suggestion even
of any unfair practice or victimisation.
In these circumstances, we would allow the appeal,
set aside the decision of the Labour Appellate Tribunal dated the 25th September 1953 and pass the order
-
I
--
S.C.R.
SUPREME COURT REPORTS
Sll
which that Tribunal should have passed in this case,
namely, that permission be granted to the appellant
to discharge ninety six temporary workmen. In the
circumstances of this case, we think that the parties
must bear their own costs throughout.
Appeal allowed.
IN RE: SHRI 'M', AN ADVOCATE OF
THE SUPREME COURT OF INDIA.
[JAGANNADHADAS, VENKATARAMA AYYAR and
B. P. SINHA, JJ.]
Professional Misconduct-Appropriation by Advocate on record
of Surpfos Paper Book Cost towards fees-Legality-Standard of
professional conduct-Trustee-Lien-Procedure-Supreme Court
R1iles, 1950, (as amended), 0. IV, r .. 80.
Facts. Shri 'M', while an Agent of the Supreme Court, filed a.
criminal appeal and later on became an Advocate on record under
the. new rules of tl)e Court which came into force on January 26,
1954. He received a sum of Rs. 750 from his client for costs of
printing of the Paper Book and deposited the same in the Punjab
High Court from whose decision the appeal a.rose. There was 11 sur·
plus of Rs. ~J42-1-9 pies. He withdrew tbe amount without inform·
ing his client, made no demand of any fees a.s being due to him, did
not lodge any bill for taxation and appropriated the sum towards
his a.Ueged fses.
Tbe client came to know of the withdrawal from
_.
the Punjab High Court and when he confronted Shri 'M' with the
letter from that court Shri 'M', who had denied the receipt of the
surplus amount, could no longer do so and stated that he was en·
titled to a reasonable fee, had a lien therefor a.nd had appropriated
the a.mount.
Held, that on the facts found the Advocate wa.s guilty of professional misconduct and must be suspended from practice.
The high standard of professional conduct contemplated by rule
30 of Order IV of the Supreme Court Rules virtually made a.n Advoca.te a. trustee for his•client in respect of a.11 his moneys which
ca.me into his .hands except what was specifically ear-marked for
fees.
Any lien which he might have under the .rules would not
justify the appropriation of any such money towards his fees without the express or implied consent of the client or an order of Court.
Nor could a.n Advocate, in absence of a. prior settlement of fees,
constitute himself a judge in his own ca.use a.nd determine what
1956
Rohtas Industries
lid.
v.
Brijnat1dan
Pandey
S. K. Das}.
1956
October 17.