# SAHU MINERALS & PROPERTIES LTD v. PRESIDING OFFICER, LABOUR COURT & ORS

- **Citation:** [1976] 1 S.C.R. 263
- **Court:** Supreme Court of India
- **Decided:** 1975-08-06
- **Case number:** Civil Appeals Nos. 1266 & 1267 of 1969
- **Bench:** A. Alagiriswami, P. K. Goswami, N. L. UNTWALf;\
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sahu-minerals-properties-ltd-v-presiding-officer-labour-court-ors-6495
- **Pages:** 5

## Headnote

lndustrja[ Disputes Act, 1947, Sections 25F, proviso to sec. 25FFF(l) and
section 33C(2)-Labour Court asked to decide retrrncl11nent compensation pay·
able to workmen-Question of retrenchment or the closure of factory beyond
control of employer, if could be decided by Labour Court-Item 10 to Third
Schedule. if attracted.
The Government of Bihar sent to the Labour Court, Chota Nagpur Division,
Ranchi, application in respect of 73 workers of the appellant for decision under
sec. J3C(2) of the Industrial Disputes Act for retrenchment compensation. The
contention of the appellant was that it was a case of closure for reasons beyond
its control and that, therefore, the workmen were entitled to compensation under
the proviso to sub-section ( 1) of sec. 25FFF of the Act and not to retrenchment
compensation. The workers contended that they were eot!tled to retrenchment
compensation under sec. 25F. The labour Court held that it was a case of w
trenchment.
The writ petitions filed by the emJ?loyer in .the High Court have
failed and these appeals have been preferred to this Court ort the ·basis .of the
certificate of fitness granted by the High Court.
,
Dismissing the uppeals,
HEID.: (i) It was competent to the Labour Court to declde whether the
case. before it was a case of retrenchment compensation or the proviso to sub·sec~
(1) of section 25FFF was attracted on closure of the establishment. Even the
employer does not dispute that the workmen are entitled to compensation. It
only says that the compensation should be calculated on a particular basis diffe·
rent from the basis on which the workmen claim. The claim also falls under
Chapter VA of the Act.
[266H; 267B-C]
Central Bank of India Ltd. v. P. S. Ra/agopalan, (1964] 3 S.C.R. 140 relied
on.
U.P. Electric Company v. R. K. Shukla [1970] I S.C.R. 507 and South Arcot
Elect. Co. v. N. K. Khan [1969] 2 S.C.R. 902, referred to.
(ii) Item No. 10 of the Third Schedule to the Act does not say that all questions arising out of retrenchment of workmen and closure of establishments have
to be decided by Industrial Tribunal. This entry refers to cases where the right
to retrench v.urkers or to close an establishment is disputed and that question is
referred for adjudication to the Industrial Tribunal. In that case the Tribunal
will be competent to decide whether the closure or retrenchment was justified and
whether the retrenched workmen should be reinstated or the workers in the estab·
lishment purported to have been closed should be continued to be paid on the
bas.l3 that the so·called closure was no closure at all. In the present case the
workmen do not ask for reinstatement.
They
accept the termination of the
services and ask for compensation. The only dispute is about the compensation
whether it is to be paid under s. 25F or 25FFF. Item 10 of Third Schedule will
not cover such a case.
[267D-G]

## Text

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263
SAHU MINERALS & PROPERTIES LTD.
v.
PRESIDING OFFICER, LABOUR COURT & ORS.
August 6, 1975
[A. ALAGIRISWAMI, P. K. GOSWAMI AND N. L. UNTWALf;\, JJ.j
lndustrja[ Disputes Act, 1947, Sections 25F, proviso to sec. 25FFF(l) and
section 33C(2)-Labour Court asked to decide retrrncl11nent compensation pay·
able to workmen-Question of retrenchment or the closure of factory beyond
control of employer, if could be decided by Labour Court-Item 10 to Third
Schedule. if attracted.
The Government of Bihar sent to the Labour Court, Chota Nagpur Division,
Ranchi, application in respect of 73 workers of the appellant for decision under
sec. J3C(2) of the Industrial Disputes Act for retrenchment compensation. The
contention of the appellant was that it was a case of closure for reasons beyond
its control and that, therefore, the workmen were entitled to compensation under
the proviso to sub-section ( 1) of sec. 25FFF of the Act and not to retrenchment
compensation. The workers contended that they were eot!tled to retrenchment
compensation under sec. 25F. The labour Court held that it was a case of w
trenchment.
The writ petitions filed by the emJ?loyer in .the High Court have
failed and these appeals have been preferred to this Court ort the ·basis .of the
certificate of fitness granted by the High Court.
,
Dismissing the uppeals,
HEID.: (i) It was competent to the Labour Court to declde whether the
case. before it was a case of retrenchment compensation or the proviso to sub·sec~
(1) of section 25FFF was attracted on closure of the establishment. Even the
employer does not dispute that the workmen are entitled to compensation. It
only says that the compensation should be calculated on a particular basis diffe·
rent from the basis on which the workmen claim. The claim also falls under
Chapter VA of the Act.
[266H; 267B-C]
Central Bank of India Ltd. v. P. S. Ra/agopalan, (1964] 3 S.C.R. 140 relied
on.
U.P. Electric Company v. R. K. Shukla [1970] I S.C.R. 507 and South Arcot
Elect. Co. v. N. K. Khan [1969] 2 S.C.R. 902, referred to.
(ii) Item No. 10 of the Third Schedule to the Act does not say that all questions arising out of retrenchment of workmen and closure of establishments have
to be decided by Industrial Tribunal. This entry refers to cases where the right
to retrench v.urkers or to close an establishment is disputed and that question is
referred for adjudication to the Industrial Tribunal. In that case the Tribunal
will be competent to decide whether the closure or retrenchment was justified and
whether the retrenched workmen should be reinstated or the workers in the estab·
lishment purported to have been closed should be continued to be paid on the
bas.l3 that the so·called closure was no closure at all. In the present case the
workmen do not ask for reinstatement.
They
accept the termination of the
services and ask for compensation. The only dispute is about the compensation
whether it is to be paid under s. 25F or 25FFF. Item 10 of Third Schedule will
not cover such a case.
[267D-G]
CIVIL APPELLATE JURISDICTION:
Civil Appeals Nos. 1266 &
1267 of 1969.
From the Judgment and Order dated the 29th July, 1968 of the
Patna High Court in Civil Writ Jurisdictioμ Case No. 61 of 1967.
H. K. Puri and K. K. Mohan, for ihe appellant.
264
SUPREME COURT REPORTS
[1976] 1 S.C.R.
D. Goburdhan, for respondent Nos. 1 and 2 (In both the appeals)
Respondent No. 21 (In C.A. No. 1266/69) and for respondent No. 60
(Jn C.A. No. I 267169).
A. K. Nag, for respondent Nos. 3-19 (In C.A. No. 1266/69) and
llor respondent Nos. 4, 5, 7-9, 11~32, 35-42, 44-52, 54-58 (In C.A. No.
1267169).
The Judgment of the Court was delivered by
· ALAGIRISWAMI, J. By two notifications dated 22-6-65
and
28-8-65 the Gove=ent of Bihar sent to the Labour Court, Chota
Nagpur Division, Ranchi, applications in respect of 73 workers of the
appellant for decision under s. 33C(2) of the Industrial Disputes Act
for retrenchment compensation. The employer contended that it was
a case oft closure for reasons beyond its control and that therefore the
workmen were entitled to compensation under the proviso to sub-section (1) of s.25FFF of the Act and not to retrenchment eompensation.
The workers contended, however, that they were entitled to retrenchment compensation under s.25F. The Labour Court held that it was
a case of retrenchment. Two writ petitions filed by the employer before
the High Court of Patna failed and these appeals have been filed .in
pursuance of a certificate of fit.neSs granted by the High Court.
The argument on behalf of the appellant is that where there is a
dispute before the Labour Court considering an application under s.
33C(2) as to whether the workmen had been retrenched or the factory
had been closed for reasons beyond the control of the employer, it was
not a matter which the Labour Court was competent to decide. and that
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it was a matter which only an Industrial Tribunal consider.ing a reference
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imder s. 10 is competent to decide. In particular Item 10 of the Third
Schedule to the Act is relied upon to show that the matter relating to
retrenchment and closure is one which only an Industrial Tribunal is
competent to decide. Reliance ;s placed upon a decision of this Conrt
in U.P. Elect. Co. v. R. K. Shukla(i') where it was held that the power
of the Labour Court is to compute the comvensati-On claimed to be payable to the workmen on the footing that there has been retrenchment
F
<Jf the workmen, that where retrenchment is conceded and the only
matter in dispute is that by virtue of s. 25FF no liability to pay compensation has arisen the Labour Court will be comvetent to decide the
question, that in such a case the question is one of computation and not
of determination, of the conditions vrecedent to the accrual of liability.
nnd that where the dispute is whether workmen have been retrenched
and computation of the amount is subsidiary or incidental, the Labour
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Court will have no authority to trespass upan the powers o~ the Tribuna•:
with which it is statutorily invested.
In the U.P. Electric Company's case (supra) the facts were somewhat different.
The Court in that case noticed at page 513 of; the
report that-
"The Company had expressly raised a contention that they
II
had not retrenched the workmen and that the workmen had
(1) [1970] 1 S. C.R. 507.
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SAHU MINERALS LTD. V. LABOUR COURT (Alagiriswami, !.)
265
voluntarily abandoned the Company's service by seeking employment with the Board even before the company closed its
undertaking".
This Court emphasised at page 517 of the report that-
"If the liabiLity arises from an award, settlement or under
the provisions of Ch. V-A or by virtue of a statute or a scheme
made thereunder, mere denial by the employer may not be
sufficient. to negative the claim under s. 33C(2) before the
Labour Court".
W c therefore, do not see how the decision in the U.P. Electric Cumpa~y's case (supra) can come to the aid of the appellant in this case.
The said case is clearly distinguishable on the peculiar facts as noticed
above.
In Central Bank of India Ltd. v. P. S. Rajagopalaiz(l) this Court
considered the scope of s. 33C(2) elaborately and it would be necessary
lo quote at some length from that decision. In that case it was urged
by the employer thats. 33C(Z) can be invoked by a workman who is
entitled to receive from the employer the benefit there specified, but
the right of the workman to receive the benefit has to be admitted anc!
could not be a matter of dispute between tho parties and that the only
point whiCh the labour Court can determine is one in relation to the"
computation of the benefit in terms of money.
This Court observed:
"We arc not impressed by this argument. In our opinion,
on a fair and reasonable construction of sul>-s. (2) it is clear
that if a workman's right to receive the benefit is disputed, that
may have to be determined by the Labour Court. Before
proceeding to compute the benefit in terms of money the
Labour Court inevitably has to deal with the question as to
whether the workman has a right to receive that benefit. If
the said right is not disputed, nothing more needs to be done
and the Labour Court can proceed to compute the value of the
benefit in te1111& of money; but if the said right is disputed, the
Labour Court must deal with that question and decide whe>- ·
ther the workman has the right to receive the benefit as alleg-
~d by him and it is only if the Labour Court answers this point
m favour of the workman that the next question of making
ncce~sary computation can arise.
It seems to us that the
openmg clause of sul>-s. (2) docs not admit of the c0nstruction for which the appellant contends unless we add some
words in that clause. The clause "Where any workman is
entitled to receive from the employer any benefit" does not
mean "where such workman is admittedly; or admitted to be.
enhtled to receive such benefit." The appellant's construc-
!,1on ~ould necessai;ily introduce the addition of the words
. admzttedly,. oi; adlll!tted.to be:' in that clause, and that clearly
is n?t perlll!ssi?le .. Besides, 1t seems to us that ii the appellants construchon ;s accepted, it would necessarily mean that
(I) [1964]3S.C.R.!40 ..
266
SUPREME COURT REPORTS
(1976] 1 S.C.R.
it would be at the option of the employer t:> allow the workiman to avail himself of the remedy provided by sub-s. (2),
because he has merely to raise an objection on the ground that
the right claimed by the workman is not admitted to oust the
jurisdiction of the Labour Court to entertain the workman's
application. The claim wider s. 33C(2) clearly J?OStulates that
the determination of the question about computmg the benefit
in terms of money may, in some cases, have to be preceded
by an enquiry into the existence of the right and such an enquiry must be held to be inciden 'al to the main determination
which has been assigned to the Labour Court by sub-s.(2). As
Maxwell in Interpretation of Statuies, p. 350, has observed
'where an Act confers a jurisdiction, it impliedly also grants
the power of doing all such aces, or employing such means,
as are essentially necessary to its execution; we must
accordingly
hold
that
s.
33C(2)
takes
within
its
purview cases of workmen who claimed that the benefit
to which they are entitled should be computed in terms of
mo!'ley, even though the right to the benefit on which their
claim is based is. disputed by their employers.. Incidentally,
it may be relevant to add that it would be somewhat odd that
under sub-s. (3), the Labour Court should have been autho1ised to delegate the work of computing the money value of
the benefit to the Commissioner if the determination of the
said question was the only task assigned to the Labour Court
under sub-s. (2). On the other hand, sub-s.(3) becomes inteliigible if it is held that what can be assigned to the Commissioner includes only a part of the assignment of the Labour
Court under sub-s. (2)". Further on this Court observed:
"It is thus clear that claim• made under s.33C(l), by iitself can be only claims referable to the settlement, award, or
the relevant provisions of Chapter VA. These words of limi-
<tations are not to be found in s.33C(2) and to that extent,
the scope of s. 33C(2) is undoubtedly wider than that of
s. 33C( 1). . • It is unnecessary in the present appeals either
to state exhaustively or even to indicate broadly what other
categories of claims can fall under s. 33C(2). There is no
doubt that the three categories of claims mentioned in s. 33C
(1) fall under s: 33C(2) and in that sense, s. 33C(2) can
itself be deemed to be a kind of execution proceeding, but it
is possible that claims not based on settlements, awards or
made under the provisions of Chapter VA, may also be competent under s .. 33C(2) and that may illustrate its wider
scope."
This Court then went on to discuss some of the claims which would
not fall under s.33C(2), which is not very relevant for the purpose of
this case. The present case stand on an even stronger footing. Even
the employer does not dispute that the workmen are entitled to como,!nsation. It only says that the compensation should be calculated on a
particular basis different from the basis on which the workmen claim.
The claim also falls under Chapter VA.
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SAHU MlNERALS LTD. v. LABOUR COURT (Alagiriswami, I.)
267
In the decision in South Arcot Elect. Co. v. N. K. Khan(\1) where
a right had been claimed by the various workmen in their applications
under s. 33C(2), it was held that it was a right which accured to them
under s.25FF of the Act and was an existing right at the time when
these applications were made, that the Labour Court clearly had jurisdiction to decide whether such a right did or did not ex.ist when dealmg
with the application under that provision, and that the mere denial of
that by the company could not take away its jurisdiction.
We hold that in this case Jt was competent to the Labour Court to
decide whether the case before it was a case of retrenchment compensation or the proviso to sub-s. (1) of s. 25FFF was attracted on closure
of the establishment. The question even according to the empluyer falls
under s. 25FFF and therefore in deciding that question the Labour
Court bas necessarily to decide whether the proviso has been satisfied .
We do not consider that the reference to item No. 10 of the Third
Schedule to the Act can decide the matter one way or the other. The
item reads as follows :
"10. Retrenchment of workmen and closure of establishment"
It dees not say that all questions arising out of retrenchment of workmen
and closure of establishments have to be. decided by Industrial Tribunal.
Logically if the contention .is to be accepted, even if the question of
retrenchment is not disputed the Labour Court will not be competent to
decide the question of compensation payable in a case of retrenchment
because it raises a question of jurisdiction. This entry should therefore
be held to refer to cases where the right to retrench workers or to close
a11 establishment is disputed and that question is referred for adjudication to the Industrial Tribunal. In that case the Tribunal will be competent to decide whether the closure or retrenchment was justified and whether the retrenched workmen should be reinstated or the workers in the
establishment purported to have been closed should be continued to be
paid on the basis that the so called closure was no closure at all. In
the present c~se ~he workm.en do ,not ask for reinstatement. They accept ~e te11I1;1nat1on of their service~ and ask fo~ compensation. The
only dispute is about the compensation whether 11 is to be paid under
s.25F or 25FFF. Item 10 of Thitd Schedule will not cover such a
case.
·
We therefore uphold the decision of the High Court and dismiss
thes~ appeals with costs .
V.M.K.
Appeals dismissed .
(!) [1969] 2 S. C. R. 902.