# WORKMEN OF DEWAN TEA ESTATE AND ORS v. THE MANAGEMENT

- **Citation:** [1964] 5 S.C.R. 548
- **Court:** Supreme Court of India
- **Decided:** 1963-11-25
- **Bench:** P.B. Gajendragadkar, K.N. Wanchoo, · K.C. Das Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/workmen-of-dewan-tea-estate-and-ors-v-the-management-2992
- **Pages:** 13

## Headnote

Industrial Disputes-Lay-off due to financial position or trade
reasons-Whether justified-If common law right could be spelt
out of s. 25 of the Industrial Disputes Act to declare lay-~ff-Standing
Order No. 8-"Stoppage of supply" al(d "other causes beyond his
control", meaning of-Industrial Disputes Act, 1947 (Act 14of1947),
ss. 2(kkk) and 25C-Industrial Employment (Standing Orders)
Act, 1946 (Act 20 of 1946).-Rule 8 of the Standing Orders.
As a result of the lay-off declared by the respondent in the
11 tea estates, managed by them an industrial dispute arose between
the respondent and their workmen, the appellant. The respondent
justified the lay-off on the ground thJt its financial position was
very difficult and that the lay-off was appropriate in the interests
of the employees and their own in order to avoid closure of business.
The appellants urged, inter alia, that the depression in trade or
financial difficulties which may be characterised as trade reasons
did not justify the lay-off under the relevant Standing Order, and
so, they justified their claim for full wages during the period of the
lay-off. The Tribunal held that the relevant Standing Order No.
8 justified the lay-off, and the trade reasons resulting from the
depression in trade and financial liabilities arising therefrom fell
within the scope of the Standing Order. Alternatively, the Tribunal
thought that even if the lay-off was not justified by the relevant
clause of the Standing Order, the respondent had a common law
right to declare a lay-off and this right was recognised by s. 25C
of the Industrial Disputes Act, 1947 and since it is a statutory provision, it overrides the relevant clause in the Standing Order.
In appeal by special leave:
Held:
(i) The Tribunal was not right in holding thats. 25C of
the Industrial Disputes Act recognises the inherent right of the
employer to declare lay-off for reasons which he may regard as
sufficient or satisfactory in that behalf. No such common law
right can be spelt out from the provisions of s. 25C. When the
laying off of the workmen is referred to in s. 25C, it is laying
off as defined by s. 2 (kkk), and so, workmen who can claim the
benefit of s. 25C must be workmen who are laid off for the reasons
contemplated by s. 2(kkk); that is all that s. 25C means. If in
any case the lay-off is not covered by the Standing Orders, it will
necessarily be governed by the provisions of the Act, and lay-off
would be permissible only where one or the other of the factors
mentioned by s. 2(kkk) is present, and for such lay-off compensation
would be awarded under s. 25C.
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•
..
t
•
-
. 5 S.C.R.
SUPREME COURT REPORTS
549
(ii) "Stoppage of supply" must, in the context, mean stoppage
1963
of raw material or other such thing. In regard to the factory,
"stoppage of supply" may mean the stoppage of tea leaves, or
Workmen of
in the case of field work, it may mean the stoppage of supply of
Dewon Tea
other articles necessary for field operations. "Supply" in the context E 1
d 0
cannot mean money or funds.
sta e an
rs.
(iii) The last clause of r. S(a) (i) of the Standing Order which
v.
refers to "other causes beyond his control" would not take in the The Management
financial difficulties of the companies.
Oth~r causes beyond his
control for one thing should be similar to the causes that have
preceded; even otherwise there is no justification for the argument
that the financial difficulty which is alleged to have confronted
the respondent was beyond its control.
Rule S(a) (iii) which refers to temporary curtailment of production must obviously be read in the light of r. S(a) (i) and if the case
of the present lay-off does not fall under r. S(a) (i), r. S(a)(iii)
would not improve the position.
(iv) The present dispute must be governed by r. 8(a)(i) of the
respondent's Standing Orders. It cannot be accepted that the
Standing Orders having been certified before the definition of the
lay-off was introduced in the Act, the respondent is entitled t

## Text

1963
November, 25
548
SUPREME COURT REPORTS
[1964]
WORKMEN OF DEWAN TEA ESTATE AND ORS.
v.
THE MANAGEMENT
(P.B. GAJENDRAGADKAR, K.N. WANCHOO AND
· K.C. DAS GUPTA JJ.)
Industrial Disputes-Lay-off due to financial position or trade
reasons-Whether justified-If common law right could be spelt
out of s. 25 of the Industrial Disputes Act to declare lay-~ff-Standing
Order No. 8-"Stoppage of supply" al(d "other causes beyond his
control", meaning of-Industrial Disputes Act, 1947 (Act 14of1947),
ss. 2(kkk) and 25C-Industrial Employment (Standing Orders)
Act, 1946 (Act 20 of 1946).-Rule 8 of the Standing Orders.
As a result of the lay-off declared by the respondent in the
11 tea estates, managed by them an industrial dispute arose between
the respondent and their workmen, the appellant. The respondent
justified the lay-off on the ground thJt its financial position was
very difficult and that the lay-off was appropriate in the interests
of the employees and their own in order to avoid closure of business.
The appellants urged, inter alia, that the depression in trade or
financial difficulties which may be characterised as trade reasons
did not justify the lay-off under the relevant Standing Order, and
so, they justified their claim for full wages during the period of the
lay-off. The Tribunal held that the relevant Standing Order No.
8 justified the lay-off, and the trade reasons resulting from the
depression in trade and financial liabilities arising therefrom fell
within the scope of the Standing Order. Alternatively, the Tribunal
thought that even if the lay-off was not justified by the relevant
clause of the Standing Order, the respondent had a common law
right to declare a lay-off and this right was recognised by s. 25C
of the Industrial Disputes Act, 1947 and since it is a statutory provision, it overrides the relevant clause in the Standing Order.
In appeal by special leave:
Held:
(i) The Tribunal was not right in holding thats. 25C of
the Industrial Disputes Act recognises the inherent right of the
employer to declare lay-off for reasons which he may regard as
sufficient or satisfactory in that behalf. No such common law
right can be spelt out from the provisions of s. 25C. When the
laying off of the workmen is referred to in s. 25C, it is laying
off as defined by s. 2 (kkk), and so, workmen who can claim the
benefit of s. 25C must be workmen who are laid off for the reasons
contemplated by s. 2(kkk); that is all that s. 25C means. If in
any case the lay-off is not covered by the Standing Orders, it will
necessarily be governed by the provisions of the Act, and lay-off
would be permissible only where one or the other of the factors
mentioned by s. 2(kkk) is present, and for such lay-off compensation
would be awarded under s. 25C.
-
•
..
t
•
-
. 5 S.C.R.
SUPREME COURT REPORTS
549
(ii) "Stoppage of supply" must, in the context, mean stoppage
1963
of raw material or other such thing. In regard to the factory,
"stoppage of supply" may mean the stoppage of tea leaves, or
Workmen of
in the case of field work, it may mean the stoppage of supply of
Dewon Tea
other articles necessary for field operations. "Supply" in the context E 1
d 0
cannot mean money or funds.
sta e an
rs.
(iii) The last clause of r. S(a) (i) of the Standing Order which
v.
refers to "other causes beyond his control" would not take in the The Management
financial difficulties of the companies.
Oth~r causes beyond his
control for one thing should be similar to the causes that have
preceded; even otherwise there is no justification for the argument
that the financial difficulty which is alleged to have confronted
the respondent was beyond its control.
Rule S(a) (iii) which refers to temporary curtailment of production must obviously be read in the light of r. S(a) (i) and if the case
of the present lay-off does not fall under r. S(a) (i), r. S(a)(iii)
would not improve the position.
(iv) The present dispute must be governed by r. 8(a)(i) of the
respondent's Standing Orders. It cannot be accepted that the
Standing Orders having been certified before the definition of the
lay-off was introduced in the Act, the respondent is entitled to
rely upon the said definition in support of the plea that the impugned
lay-off was justified.
Management of Kairbetta /''state, Kotagiri v. Raja-manickam
& Ors., [1969) 3 S.C.R. 371, referred to.
C1v1L APPELLATE JURISDICTION:
Civil Appeal No.
390 of 1963.
Appeal by special leave from the award dated
December 11, 1959, of the Industrial Tribunal, Assam
at Gauhati in Reference No. 7 of 1959.
C.B. Agarwal, J.N. Hazarika and K.P. Gupta,
for the appellants.
Sankar Bannerjee, P.K. Chatterjee, D.N. Gupta
and B.N. Ghosh, for the respondents.
November 25, 1963. The judgment of the Court
was delivered by
GAJENDRAGADKAR, J.-This appeal by special Gajendragadkar
leave arises from an industrial dispute between the
J.
respondent, the Management of 11 Tea Estates
and the appellants, their workmen. It appears that
!
'
the appellants raised a dispute against the respondent
in regard to the lay-off declared by them in the 11
550
SUPREME COURT REPORTS
[1964]
1963
estates m question m February, 1959. The said
lay-off lasted for 45 days and the appellants' contention
Workmen of was that the lay-off was not justified, and so, they
Dewan Tea
were entitled to their full wages for the period of the
Estate and Ors. lay-off. The respondent's Managing Agents for the
v.
nine Companies that run the 11 tea estates in question,
The Management resisted this claim on the ground that the lay-off
. --
was justified and they alleged that the appellants
Ga1endragadkar were not entitled to anything more than the compensa-
.,
J.
tion prescribed by section 25C
of the Industrial
Disputes Act, 1947 (hereinafter called 'the Act'). This
.. ,
dispute was referred to the adjudication of the Industrial
Tribunal by the Governor of Assam under s. IO(l)(d)
of the Act. The 11 tea estates which are concerned
with this dispute were described in Appendix A to
the order of reference. It is common ground that
,.
these 11 tea estates are run by nine Companies and
M/s. Macneill and Barry Ltd. are the Managing Agents
of all these companies.
The case for the respondent was that the tea
estates in question which are all situated in Cachar
District had to face a long period of depression in
trade by reason of the poor prices generally commanded
by the tea produced by them. In 1959, the management faced a very difficult financial position and it
took the view that in the interests of the employees
and its own business, it would be appropriate to lay
off the workmen for a certain period in order to avoid
closure of business. The circumstances which caused
financial depression were beyond the control of the
management and lay-off was, therefore, inevitable
and fully justified.
(
f
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On the other hand, the appellants urged that
there were other tea estates in the district of Cachar
which had to face similar problems; the labour costs
incurred by the respondent were not higher than
the corresponding costs incurred by the other tea
estates, the burden of taxes was the same for all the
tea estates in the district and the quality of the tea
produced was relatively similar. They contended
t ~
that the difficulty which the respondent had to face
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5 S.C.R.
SUPREME COURT REPORTS
551
was partly the result of its mismanagement and neglect.
1963
They pleaded that the workmen . employed by the
respondent had been promised continuous work throuWorkmen of
ghout the ye11-r and the declaration of lay off for such
Dewan Tea
a long period as 45 days exposed them to the risk of Estate and Ors.
semi-starvation. The appellants also urged that deprev.
ssion in trade or financial difficulties which may be The Management
characterised as trade reasons did not justify the G . d- dk
lay o!f ll;nder th~ releyant Standing Order, ~nd so,
aJen 7ga ar
they Justified their claim for full wages dunng the
·
period of the lay off.
The Tribunal has held that the relevant Standing
Order No. 8 justified the lay off. The trade reasons
resulting from the depression in trade and financial
liabilities arising therefrom fell within the scope
of the Standing Order; it has also held that the last
clause in the Standing Order which was general in
terms could be relied upon by the respondent in support
of its plea that. the lay off was justified. In the alternative, the Tribunal thought that even if the lay off
was not justified by the relevant clause in the Standing
Order, the respondent had a common law right to
declare a lay off and this right was recognised by s. 25C
of the Act. According to the Tribunal, s. 25C recognises
this common law right and since it is a statutory provision, it over-rides the relevant clause in the Standing
Order. Having thus found that the lay off was justified,
the Tribunal proceeded to examine the question as
to whether the trade reasons on which the respondent
relied had been proved. It then considered the relevant documentary evidence bearing on tlle point
and noticed some general features applicable to all
the tea companies before it. "They have suffered
losses which are by no means inconsiderable", said
the Tribunal, "and some of the companies have not
been able to declare dividends in time during the
last ten years, though others have declared them from
year to year." The Tribunal rejected the respondent's
contention that the losses were due to high labour
charges, but it found that the tea companies were
not making adequate profits. It was satisfied tllat
552
SUPREM.E COURT REPORTS
[1964)
1963
the companies had reserves and large capital assets
and would not have found it difficult to raise necessary
Workmen of finances.
On the whole, the Tribunal thought it
Dewan Tea
necessary to distinguish between the .different tea
Estate and Ors. estates with which it was dealing, and having conv.
sidered their respective individual cases, it came to
The Management the conclusion that out· of the nine companies, five
.
-Tcompanies need not have declared lay off for 45 days.
Ga1endragadkar In its opinion, there was justification for lay off in
J.
their cases, but its duration should have been 21 days.
Acting on this finding, the Tribunal has ordered
"\.
that for the 24 days in excess of three weeks for which
the lay off was justified the said companies should
pay their workmen full wages and not merely the
compensation prescribed by s. 25C of the Act. In
regard to the remaining four companies, the Tribunal
held that the lay off was fully justified, and so, the
workmen were not entitled to full wages for the period
of the lay off. In other words, the award made by
the Tribunal partially granted relief to the appellants
inasmuch as it gave them full wages against five
companies for 24 days only. These five companies
are: Bhubandhar, Doyapore, Western Cachar, Borak
and Koyah. The . other four companies in respect of
which the Tribunal has given no relief to the workmen
are: Doodputlee, Majagram, Scottpore and Tarrapore.
It is this award which has given rise to the present
appeal by the appellants.
The first question which arises for our decision
is whether the Tribunal was justified in holding that
s. 25C recognises the common law right of the respondent to declare a lay off for reasons other than those
specified in the relevant clause of the Standing Order.
While dealing with this argument, we must proceed
on the assumption that the financial difficulties experienced by the respondent at the relevant time
which have been compendiously described by it as ·
constituting trading reasons for the lay off do not
fall within the purview of the said relevant clause.
'(
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The respondent's argument is that though the trading
t
reasons may not justify the declaration of the lay off
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5 S.C.R.
SUPREME COURT REPORTS
553
under the said clause, as prudent employers who
1963
must be given liberty to run their industry in the
best manner they choose, they have a common law
Workmen of
right to declare a lay off if they feel that the alternative
Dewan Tea
to the lay off would be closure and acting bonafide Estate and Ors.
they want to avoid closure and adopt the lesser evil
v.
of declaring the lay off. Does section 25C of the The Management
Act justify this argument? Section 25C(l) which
--
recognises the right of the workmen who are laid Gajendragadkar
off, for compensation, provides that whenever a
J.
workman therein specified has been laid off, he shall
be paid by the employer for whole of the period of the
lay off, except for such weekly holidays as may intervene, compensation at the rate prescribed by the
section. The proviso to this section lays down that
the compensation payable to a workman during any
period of twelve months shall not be for more than
45 days; and this proviso seems to indicate that the
legislature thought that normally the period of lay
off within 12 months may not exceed 45 days. Section
25C(2), however, contemplates the possibility that
the period of lay off may exceed 45 days, and it lays
down that if during any period of 12 months, a workman is laid off for more than 45 days, whether continuously or intermittently, he shall be paid compensation in the manner indicated by it.
Thus,
the position is that workmen who are laid off are
entitled to compensation and the method in which
the said compensation has to be calculated has been
prescribed by the two clauses of s. 25C.
It is, however, significant that when s. 25C deals
with workmen who are laid off and proceeds to prescribe the manner in which compensation should be
paid to them, it is inevitably referring to the lay off
as defined by s. 2(kkk) of the Act. The said section
defines a "lay-off" (with its grammatical variations
and cognate expressions) as meaning:
"the failure, refusal, or inability of an employer
on account of shortage of coal, power or raw
materials or the accumulation of stocks or the
breakdown of machinery or for any other reason
1963
Workmen of
Dewan Tea
Estate and Ors.
554
SUPREME COURT REPORTS
[1964]
to give employment to a workman whose name
is borne on the muster rolls of his industrial establishment and who has not been retrenched."
v.
It would be legitimate to hold that lay off which priThe Management marily gives rise to a claim for compensation under
G . ;;-- dk . s. 25C must be a lay off as defined by s. 2(kkk). If
a1en 'j'ga
m the relevant clauses in the Standing Orders of industrial
·
employers make provisions for lay off and also prescribe the manner in which compensation should
be paid to them for such lay off, perhaps the matter
may be covered by the said relevant clauses; but if
the relevant clause merely provides for circumstances
under which lay off may be declared by the employer
and a question arises as to how compensation has
to be paid to the workmen thus laid off, s. 25C can
be invoked by workmen provided, of course, the lay
off permitted by the Standing Order also satisfies
the requirements of s. 2(kkk). Whether or not s. 25C
can be invoked by workmen who are laid off for reasons
authorised by the relevant clause of the Standing Order
applicable to them . when such reasons do not fall
under s. 2(kkk), is a matter with which we are not
directly concerned in the present appeal. The question
which we are concerned with at this stage is whether
it can be said that s. 25C recognises a common law
right of the industrial employer to lay off his workmen.
This question must, in our opinion, be answered in
the negative. When the laying off of the workmen
is referred to in s. 25C, it is the laying off as defined
by s. 2(kkk), and so, workmen who can claim the
benefit of s. 25C must be workmen who are laid off
and laid off for reasons contemplated by s. 2(kkk);
that is all that s. 25C means. If any case is not covered
by the Standing Orders, it will necessarily be governed
by the provisions of the Act, and lay off would be
permissible only where one or the other of the factors
mentioned by s. 2(kkk) is present, and for such lay
off compensation would be awarded under s. 25C.
Therefore, we do not think that the Tribunal was
right in holding that s. 25C recognises the inherent right
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5 S.C.R.
SUPREME COURT REPORTS
555
of the employer to declare Jay off for reasons which
1963
he may regard as sufficient or satisfactory in that
behalf. No such common Jaw right can be spelt out
Workmenof
from the provisions of s. 25C.
Dewan Tea
.
Estate and Ors.
That takes us to the question whether the lay
v
off in the present case is justified under Rule 8 of the Th M
· g
1
Standing Orders which have been duly certified under
e
~nc:._ emen
the Industrial Employment (Standing Orders) Act Gajendragadkar
(No. 20 of 1946). The relevant portion of Rule 8
J.
reads thus:-
"Closing and re-opening of sections of the industrial establishments, and temporary stoppages
of work, and the rights and liabilities of the
employer and workmen arising therefrom .
(a) (1) The Manager may at any time in the
event of fire,catastrophe, break down of machinery,
stoppage of power or supply, epidemic, civil
commotion, strike, extreme climate conditions
or other causes beyond his control, close down
either the factory or field work or both without
notice.
(iii) In cases where workmen are laid off for
short periods on account of failure of plant
or a temporary curtailment of production, the
period of unemployment shall be treated as
compulsory leave either with or without pay,
as the case may be, when,
however, workmen
have to be laid off for an indefinitely fong period,
their services may be terminated after giving
them due notice or pay in lieu thereof."
It will be seen that the circumstances under which
a lay off can be declared have been specifically described by Rule 8(a)(J). Two grounds have been
ur~ed b~fore us by Mr. Banerj~e in support of the
Tnbunal s conclusion that the impugned lay off is
justified. He contends that the clause "stoppage
of .supply" may cover cases of stoppage of financial
assistance. The argument is that in 1959 when the
lay off was declared, the companies found that they
556
SUPREME COURT REPORTS
(1964]
1963
could not raise enough money to carry on the operations
in the tea gardens, and so, it was a case of stoppage
Workmen °1 of supply. If that be so, the lay off would be justified.
Dewan Tea
In our opinion, this argument is wholly misconceived.
Estate and Ors. Stoppage of supply must, in the context, mean stoppage
v.
of raw material or other such thing. In regard to
The Managementthe factory, the stoppage of supply may mean the
. --
stoppage of tea leaves, or in the case of field work,
Ga1endragadkar it may mean the stoppage of supply of other articles
1·
necessary for field operations. It is impossible to
accept the argument that "supply" in the context
can mean money or funds.
The other argument urged before us is that the
last clause of R. 8(a)(i) which refers to "other causes
beyond his control" would take in the financial difficulties of the Cos.
We are not inclined to accept
this argument also. Other causes beyond his control
for one thing should be similar to the causes that
have preceded; even otherwise we see no justification
for the arguinent that the financial difficulty which is
alleged to have confronted the respondent was beyond
its control. In fact, on this point the Tribunal has
made a definite finding that though the respondent
had produced a letter from the Chartered Bank of the
9th April, 1959 in which the Bank expressed its reluctance to afford financial facilities, it was by no
means clear that the Companies acting through their
Managing Agents completely failed to raise the necessary finances at the relevant time. As the Tribunal
has observed, the letter written by the Bank shows
that it had promised to consider the matter and write
to the Companies again; no evidence was produced
to show what the Bank subsequently stated and whether
finances became available or not. On the other hand,
it is clear that at the end of the period of the lay off,
all the Cos. started operating their tea gardens and
we have been told that the operations have continued
uninterrupted ever since. Besides, the letter on which
reliance is placed was written in April, 1959, whereas
the lay off was declared in February, 1959. Therefore,
there is no evidence on the record which can justify
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5 S.C.R.
SUPREME COURT REPORTS
557
the assumption made by Mr. Banerjee when he raised
1963
the contention that the financial difficulties faced
by the respondent at the relevant time were beyond
Workmen of
its control. The fact that some of the Cos. have
Dewan Tea
been incurring losses and have not made profits would Estate and Ors.
not necessarily show that the financial position which
v.
they had to face at the relevant time was beyond their The Management
control. It is true, as Mr. Banerjee has pointed out,
--
that the three Cos.
Scottpore, Tarrapore and Dood- Gajendragadkar
putalee have not been able to pay dividends between
J.
1951 to 1958 and it may be that with the exception
of the year 1954, the position of all of them is not
very satisfactory; but, on the other hand, there are
other tea gardens in the same area and it is not suggested
or shown that their position was any better than that
of the companies before us. It is also true that
at the relevant time, all the tea companies in Cachar
in general, and the Managing Agents of the nine
companies before us in particular M/s. Macneill and
Barry Ltd. were trying their best to persuade the Assam
Government to give them some relief in the matter of
taxation. But the question which we have to decide
is whether the financial position disclosed by the
evidence on the record can be described as constituting a cause beyond the control of the respondent.
We are not inclined to answer this question in favour
of the respondent. Besides, as we have already
indicated, having regard to the factors specified by
Rule 8(a)(i) before the clause in regard to other causes
beyond his control was introduced, it would not be
easy to entertain the argument that a trading reason
of the kind suggested by Mr. Banerjee can be included
in that clause.
Therefore, we are satisfied that the
Tribunal was in error in holding that the impugned
lay off could be justified by Rule 8(a)(i).
Rule 8(a) (iii) which refers to temporary curtailment of production must obviously be read in the
light of R. 8(a)(iJ and if the case of the present lay
off does not fall under R. 8 (a)(i), R. 8(a) (iii) would
not improve the position.
Mr. Banerjee has then urged that the present
Standing Orders which were duly certified under the
558
SUPREME COURT REPORTS
[1964]
1963
Standing Orders Act came into force in 1950, whereas
s. 2(kkk) which defines a lay off was added to the
Workmenof Act by the Amending Act 43 of 1953 on the 24th
Dewan Tea
October, 1953. His argument is that the Standing
Estate and Ors. Orders having been certified before the definition of the
v.
lay off was introduced in the Act, the respondent
The Management is entitled to rely upon the said definition in support
G . -;-
of the plea that the impugned lay off was justified.
a1en ';gadkar Basing himself on the definition of the lay off as
·
prescribed by s. 2(kkk), Mr. Banerjee urged that this
definition was wider than R. 8(a)(i) of the respondent's
Standing Orders and would take in the trading reasons
on which he relies. We are not prepared to accept
the argument that in the present case, the respondent
can rely on the definition of lay off as prescribed by
s. 2(kkk). It will be recalled that the Standing Orders
which have been certified under the Standing Orders
Act became part of the statutory terms and conditions
of service between the industrial employer and his
employees. Section 10(1) of the Standing Orders
Act provides that the
Standing
Orders
finally
certified under this Act shall not, except on agreement
between the employer and the workmen, be liable to
modification until the expiry of six months from the
date on which the Standing Orders or the last modification thereof came into operation. If the Standing
Orders thus become the part of the statutory terms and
conditions of service, they will govern the relations
between the parties unless, of course, it can be shown
that any provision of the Act is inconsistent with the
said Standing Orders. In that case, it may be permissible to urge that the statutory provision contained
in the Act should over-ride the Standing Order which
had been certified before the said statutory provision
was enacted. Assuming without deciding thats. 2(kkk)
may include the trading reasons as suggested by
Mr. Banerjee, the definition prescribed by s. 2(kkk)
is not a part of the operative provisions of the Act,
and so, the argument that there is inconsistency between
the definition and the relevant Rule of the Standing
Orders does not assist Mr. Banerjee's case. If there
had been a provision in the Act specifically providing
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5 S.C.R.
SUPREME COURT REPORTS
559
that an employer would be entitled to lay off his
1963
workmen for the reasons prescribed by s. 2(kkk),
it might have been another matter. The only proWorkmenof
vision on which reliance has been placed is contained
Dewan Tea
in s. 25C and that, as we have already seen, merely Estate and Ors.
takes in the definition of lay off inasmuch as it
v.
refers to the workmen as laid off and provides the The Management
manner in which compensation would be paid to
. -
them. An alleged conflict between the definition Ga1end7gadkar
of lay off and the substantive rule of the Standing
·
Orders would not, therefore, help the respondent
to contend that the definition over-rides the statutory
conditions as to lay off included in the certified Standing
Order. Therefore, we do not think Mr. Banerjee
would be entitled to contend that s. 2(kkk) of the Act
is wider than the relevant Rule in the Standing Orders
and should apply to the facts of this case. We ought
to make it clear that in dealing with this argument,
we have not thought it necessary to consider whether
the broad and general construction of s. 2(kkk) for
which Mr. Banerjee contends is justified. In fact,
Mr. Agarwala for the appellants has very strongly
urged that the words "for any reason" found ins. 2(kkk)
will not take in the trading considerations. He
contends and prima facie with some force that the
said words must be construed ejusdem generis with
the words that precede them. (vide Management of
Kairbetta Estate, Kotagiri v. Rajamanickam & Ors.)<1>
According to him, the circumstances specified in
s. 2(kkk) which justify a lay off must be integrally
connected with production, and so, trading reasons
cannot be included in that definition. According to
this argument, the distinguishing features of the
genus of which the several circumstances mentioned
in the definition are different species, are: they are
beyond the control of the employer, are expected to
be of a short duration, and are of compulsive effect.
As we have already indicated, we do not think it
necessary to decide this interesting point in the present
appeal because we are satisfied that the present dis-
(!) [1960] 3 S.C.R. 371.
560
SUPREME COURT REPORTS
(1964]
1963
pute must be governed by Rule S(a)(i) of the respondent's Standing Orders.
Workmen of
Dewan Tea
In the result, we reverse the finding of the Tribunal
Estate and Ors. !hat the lay <!ff 4eclared by the .respon~e!lt for 45 days
v
m 1959 was Justified. That bemg so, 1t 1s unnecessary
"''he M
· g
t to consider the individual cases of the nine respective
,,
ana emen
·
b
h
h
b
h ·
compames,
ecause w atever may
ave
een t elf
Gajendragadkar respective financial position, under the relevant Rule
J.
they could not validly declare a lay off at all, nor
could they have declared the lay off in exercise of
their alleged common law right. The questions referred
to the Tribunal must, therefore, be answered in favour
of the appellants. The appeal is accordingly allowed
and the appellants' claim for full wages for the 45
days of lay off in respect of the
11 tea gardens is
awarded to them. The appellants will be entitled to
their costs throughout.
1963
November. 25
Appeal allowed.
N.A. MALBARI AND BROS.
v.
COMMISSIONER OF INCOME-TAX, BOMBAY
(A.K. SARKAR, M. HIDAYATULLAH AND J.C. SHAH,
JJ.)
Income Tax-Penalties-One earlier, the second on disclosure
of full facts-Whether justifiahle-Tncome-tax Act, 1922 (II of
1922), s. 28.
The appellant, a firm of Surat, had a branch at Bangkok,
to which it exported cloth, and the branch also made purchases
locally and sold them. During the war the business of the branch
had been in abeyance, but was re-started after the termination of
the hostilities. In its return for the assessment year 1949-50 the
appellant did not include any profit of the branch, but stated that
the books of account of branch were not available, and therefore
its profits might now be assessed on an estimate basis subject to
•
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