JUDGMENT Per Vaidialingam, J.-This appeal, by special leave, is directed against the award dated September 30, 1964, of the Central Government Industrial Tribunal, Calcutta, holding that the appellant-management is liable to pay compensation to its workmen, under the principal part of S. 25 FFF(1) of the Industrial Disputes Act, 1947 (Act XIV of 1947) (hereinafter called the Act). 2. Section 25 FFF (1) of the Act, as it then stood and which is material, for the present purpose, was as follows : "25 FFF (1). Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-s. (2) be entitled to notice and compensation in accordance with the provisions of S. 25-F, as if the workman had been retrenched. Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under cl. (b) of S. 25F, shall not exceed his average pay for three months. Explanation: An undertaking which is closed down by reason merely of financial difficulties (including financial losses) or accumulation of undisposed of stocks shall not be deemed to have been closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub-section." 3. The West Jamuria Colliery which belongs to the appellant was closed down, from September 15, 1963. Formerly, Messrs Macneill & Barry Limited were the managing agents of this company. The managing agency ceased from December 31, 1959 and from January 1, 1960 the affairs of the company were being managed by a Board of Directors. The colliery had four seams, Taltore, Ponthati, Koithee and Jamuria. At the time of the closure of the colliery, the Jamuria seam was being worked. Consequent on dispute, arising between the management and its workmen, regarding the quantum of compensation, payable on the closure of the colliery, the same was referred, by the Central Government, to the Central Government Industrial Tribunal, Calcutta, for adjudication. 4. At the time of the closure of the colliery, the Jamuria seam was being worked. Consequent on dispute, arising between the management and its workmen, regarding the quantum of compensation, payable on the closure of the colliery, the same was referred, by the Central Government, to the Central Government Industrial Tribunal, Calcutta, for adjudication. 4. The case of the management was that the colliery had to be closed, on account of unavoidable circumstances, beyond its control an.d hence it was liable to pay compensation to its workmen under clause (b) of S. 25F, in view of the proviso to sub-s. (1) of S. 25 FFF. On the other hand, the contention of workmen was that the closure itself was unjustified and, in any event, the closure of the colliery was by reason merely of financial difficulties experienced by the management, and hence, in view of the Explanation to the proviso to sub-s. (1) of S. 25 FFF they were entitled to compensation under the principal part of sub-s. (1) of s. 25 FFF. The Industrial Tribunal has accepted the case of the workmen and has held that the closure of the colliery was almost entirely due to financial difficulties, and that the claim of the management, that the closure is due to unavoidable circumstances beyond its control, cannot be accepted. 5. Mr. A.N. Sinha, learned counsel for the appellant, has raised two contentions:-(1) that the Industrial Tribunal has committed a gross error in brushing aside the evidence, adduced by the management, without even considering that evidence, on merits and (2) even on the basis of the evidence accepted by the Industrial Tribunal, the finding, that the closure of the undertaking was not due to unavoidable circumstances, is erroneous. 6. It is seen that both the management, as well as the workmen, adduced oral evidence, in support of their respective claims; but the Tribunal has characterised that evidence as interested, and has not chosen to place any reliance on such evidence. In view of this opinion, expressed by the Tribunal, we do not think that any error has been committed by the Tribunal, when it disregarded that evidence. The first contention of the learned counsel for the appellant, therefore, fails. In view of this opinion, expressed by the Tribunal, we do not think that any error has been committed by the Tribunal, when it disregarded that evidence. The first contention of the learned counsel for the appellant, therefore, fails. Then the question is, whether, on the evidence accepted by the Tribunal, the finding that it cannot be stated that the closure of the colliery was due to unavoidable circumstances beyond the control of the appellant, is justified. 7. The Tribunal has examined, as a Court witness, Sri H.B. Ghose, Deputy Chief Inspector of Mines, and it has stated that it places full reliance on his evidence, and it also holds that the facts mentioned by him are true. In fact, it is seen that both the management, as well as the Union, appear to have placed great reliance on the evidence given by Sri Ghose. The management relied upon the evidence of this witness to establish that there were several serious defects, noted in the colliery, which made the colliery thoroughly unworkable and hazardous, and hence the closure was due to circumstances beyond the control of the employer. On the other hand, the workmen placed considerable reliance on this evidence to establish that notwithstanding certain defects, found in the colliery, it could certainly be worked by adopting certain safety measures and that the conditions, relied by the management, were not new to this colliery alone, but existed in other collieries which were working. 8. It is the view of the Tribunal that the management has been taking an inconsistent stand, regarding the reasons for the closure of the colliery. 9. On March 23, 1963, the appellant wrote a letter to the Regional Inspector of Mines stating that they are not able to accept the suggestion of the Coal Board that panels Nos. 3 and 4 have to be developed. The management expresses its view that the development has become extremely difficult, due to the excessively bad nature of the roof. In view of these circumstances the management states that it intends to withdraw from the area for good. 10. On May 28, 1963, the appellant gave notice, under r. 40 of the Coal Mines (Conservation & Safety) (Amendment) Rules, 1963 to the Secretary, Coal Board, intimating its intention to close the West Jamuria Colliery. In view of these circumstances the management states that it intends to withdraw from the area for good. 10. On May 28, 1963, the appellant gave notice, under r. 40 of the Coal Mines (Conservation & Safety) (Amendment) Rules, 1963 to the Secretary, Coal Board, intimating its intention to close the West Jamuria Colliery. The reason given is that the roof is very treacherous and comes down all of a sudden. There is a reference to an order of the Deputy Chief Inspector of Mines, dated March 18, 1963, declaring the mines to contain inflammable gases. Another circumstance is also adverted to in this letter, viz, that the Jamuria seam, which is being worked, is very near exhaustion, and, as such, it will not permit adequate quantities of coal to be raised, as a business proposition. The letter winds up by saying that, for these reasons the management is compelled to take a decision to close the mine. 11. On August 7, 1963, the appellant wrote a letter to the Chief Inspector of Mines, Dhanbad, informing him of their intention to close the colliery. The main reason for the closure of the colliery is stated in this letter as the exhausting condition of the mine. 12. From these letters it will be seen that the reasons given by the management for taking a decision to close the colliery are mainly bad roofing, presence of gas and the mine having become exhausted. 13. On March 26, 1962, the Deputy Secretary of the Coal Board sent a letter to the appellant, intimating the sequence of depillaring that should be done in the colliery. 14. In view of all these circumstances, the management pleaded that the closure of the colliery was due to unavoidable circumstances beyond its control. 15. The workmen resisted the claim of the management, and pleaded that the closure was not justified and, in any event, the closure was not on account of unavoidable circumstances beyond the control of the management. 16. In considering the plea of the management, based upon the proviso to sub-s. (1) of S. 25 FFF, it is necessary to bear in mind the observations of this Court in Hatisingh Mfg. 16. In considering the plea of the management, based upon the proviso to sub-s. (1) of S. 25 FFF, it is necessary to bear in mind the observations of this Court in Hatisingh Mfg. Co., Ltd. v. Union of India (1960) 3 S.C.R. 528 , 540: "When the closure of an undertaking is due to circumstances beyond the control of the employer, the maximum limit of compensation is average pay for three months, irrespective of the length of service of the workmen ; in the residuary class, the liability is unrestricted. The explanation is in substance a definition clause which sets out what shall not be deemed to be closures on account of circumstances beyond the control of the employer. By this explanation employers who had to close down their industrial undertakings merely because of financial difficulties including financial losses or accumulation of undisposed of stocks are excluded from the benefit of the proviso to S. 25 FFF(1). The proviso restricts the liability of employers who are compelled to close down their undertakings on account of unavoidable circumstances beyond their control, but, in the view of the Parliament, in that category are not to be included employers compelled to close down their undertakings merely because of financial difficulties or accumulation of undisposed of stocks. Closure of an undertaking attributable merely to financial difficulties or accumulation of undisposed of stocks is, by the explanation, excluded from the benefit of restricted liability; but coupled with other circumstances, financial difficulties or accumulation of undisposed of stocks may justify the view that the closure is due to unavoidable circumstances beyond the control of the employer, and attract the application of the proviso notwithstanding the explanation." and the further observations, at p. 542 : "By the explanation, certain persons, because of persistant losses or accumulation of stocks, find themselves unable to carry on the business, and may still not be entitled to the benefit of the proviso, but that will not be a ground for holding that the explanation is unreasonable. The Tribunal called upon to decide whether the case of any employer is covered by the proviso will certainly be entitled to look into causes which led to the financial losses or the accumulation of stocks and ascertain whether the closure was merely on account of financial losses or accumulation of stocks or was on account of circumstances beyond the control of the employer, and in assessing whether the circumstances were beyond the control of the employer, the fact that the employer has suffered financial losses or there is accumulation of stocks is not required by the legislature to be excluded from consideration." 17. More recently, similar views have been expressed by this Court in Kalinga Tubes Ltd. v. Their Workmen, Civil Appeal No. 26 of 1968, dated 3-5-1968, to the effect that the explanation appearing in the proviso gives some indication of the anxiety of the legislature to expressly rule out certain contingencies which, ordinarily, could have been pleaded by the employer as unavoidable circumstances, beyond his control, and that the legislature was apparently very stringent and strict about the nature of the circumstances, which would bring a closure, within the meaning of the proviso, though, in the normal working of business of a commercial undertaking, financial losses will go a long way in establishing that it has virtually become impossible to carry on the business. Therefore, the question is whether the management, in this case, have closed down the colliery, on account of unavoidable circumstances, beyond their control coming within the purview of the proviso to sub-s. (1) of S. 25 FFF, without being hit by the explanation. In other words, is the undertaking closed down by reason merely of financial difficulties (including financial losses), as held by the Tribunal, or is the closure due to financial difficulties coupled with other circumstances ? 18. The Tribunal has considered every one of the circumstances and rejected the plea of the management; and in coming to this conclusion, it has placed considerable reliance upon the evidence, given by Sri Ghose, who was examined as a Court witness. Sri Ghose, in his evidence, has stated that the working conditions in the colliery in 1963 were not very different from what they were between 1955 and 1960, excepting for the detection of gas. Sri Ghose, in his evidence, has stated that the working conditions in the colliery in 1963 were not very different from what they were between 1955 and 1960, excepting for the detection of gas. This witness has stated that though the roof conditions were bad, the seam could have been worked with requisite support, and he has also stated that there were several other collieries, with similar bad roof conditions, which are still being worked. Regarding the presence of gas, this witness has stated that it is only necessary to take certain precautions to work the mines, when presence of gas is detected. In this connection, he has spoken to the fact that safety lamps, which are being manufactured in India, and are easily available, will have to be provided for the workmen. No doubt this witness has also stated that certain other defects, like gas, black damp, etc., were found in the colliery in respect of which suitable instructions to prevent accidents had been given by the Coal Board. Witness has further stated that to provide requisite support, to avoid the roofs falling down, and for providing safety lamps to the workmen, the management will have to incur expenses. If sufficient expenditure is made in that behalf the evidence of this witness is that the colliery could be worked. Sri Ghose has further referred to the fact that there was a jore running in the mine, and it does create a dangerous condition which requires certain safety measures to be taken. In view of this, the Coal Board has laid down certain restrictions in the working of the mine during mosoon. It is his further view, that if those restrictions were properly adopted, the mines could be worked during monsoon. 19. Regarding the claim of the management, that the seam is nearing exhaustion, Sri Ghose has categorically stated that in the Jamuria seam, which was being worked at the time of closure, about two lakh tons of coal were still available. This witness has further stated that the sequence of depillaring laid down in the letter of the Coal Board, dated March 26, 1962, does not, in any way, hinder the proper working of the colliery. This witness has further stated that the sequence of depillaring laid down in the letter of the Coal Board, dated March 26, 1962, does not, in any way, hinder the proper working of the colliery. In fact, at this stage, it may be stated that even Shri A. A. Lobo, who is M. W. 3, has admitted that the sequence, laid down by the Coal Board in respect of this colliery, is capable of being worked properly. 20. The Tribunal has, after perusing the balance sheets of the company produced by it for the years 1960, 1961 and 1962, found that the company was making a profit of nearly five lakh rupees in 1960, but it had mads losses of nearly six and a half lakh rupees and ten and a half lakh rupees in 1961 and 1962 respectively. The Tribunal has commented on the fact that the management has not produced their accounts for the earlier years, and that the inference is that it must have been making good profits. The Tribunal has further held that it was because of the losses that the colliery was closed. It has rejected the plea of the management that the closure was due to unavoidable circumstances. 21. In this Court, the appellant has filed C.M.P. No. 676 of 1967, praying for receiving as additional evidence certain cost statements for the years 1958, 1959 and 1960 and the balance sheets for the years 1958 and 1959. We are not inclined to grant this request and, accordingly, dismiss C.M.P. No. 676 of 1967. 22. From what is stated above, it is clear that the plea of the management, that the closure of the colliery was due to unavoidable circumstances beyond the control of the employer, has been rightly rejected by the Tribunal. We have already referred to the evidence of Shri Ghose, to the effect that the circumstances relied on by the management, regarding bad roofing, presence of gas, etc., are not new to this colliery and that they are present in other collieries, which are being worked. We have also pointed out that the claim of the management, that in view of the sequence of depillaring, laid down by the Coal Board, in its letter of March 26, 1962, the working of the colliery has been made impossible, is falsified by the evidence of the management s own witness, Shri Lobo, M.W. 3. We have also pointed out that the claim of the management, that in view of the sequence of depillaring, laid down by the Coal Board, in its letter of March 26, 1962, the working of the colliery has been made impossible, is falsified by the evidence of the management s own witness, Shri Lobo, M.W. 3. No doubt, it is borne out by the evidence of Shri Ghose, that the management will have to incur expenditure in the matter of providing support for the roofing and for furnishing safety lamps to the workmen. The plea of the management, that the seam is nearing exhaustion, has been falsified by the evidence of Shri Ghose. The various circumstances relied on by the management, either individually or collectively, in our opinion, will not make the closure as being due to unavoidable circumstances beyond the control of the management. 23. Having due regard to the balance sheets, referred to by the Tribunal, it is clear that the undertaking has been closed down by reason merely of financial losses. The explanation to sub-s. (1) of S. 25 FFF makes it clear that an undertaking which is closed down, by reason merely of financial difficulties (including financial losses), shall not be deemed to have been closed down on account of unavoidable circumstances, beyond the control of the employer. 24. The appellant will not therefore be entitled to claim the benefit of the proviso to sub-s. (1) of S. 25 FFF. If so, it follows that the award of the Industrial Tribunal holding that the appellant is liable to pay compensation, under the principal part of sub-s. (1) of S. 25 FFF, is correct. 25. The appeal fails, and is dismissed with costs. For Citation : (1971) 1 Lab LJ 549 Vikas Info Solutions Pvt. Ltd.