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1977 DIGILAW 128 (PAT)

Mangal Prasad v. Parshva Properties Ltd.

1977-07-28

G.M.MISRA, S.SARWAR ALI

body1977
JUDGMENT S. Sarwar AIi, J. In this writ application the petitioners pray for quashing of the award (Annex. 4) dt. 31.10.1973. made by the Central Government Industrial Tribunal-Cum-labour Court no. 3' at Dhanbad. 2. Petitioner no.1 is a workman employed in the services of M/s Parshva Properties Ltd. (hereinafter referred to as 'the Company) and petitioner no. 2 is a registered trade union of the workmen in the employment of the aforesaid Company. The two questions which were referred to for adjudication under Section 10 (1) (d) of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act') are as follows ;- "I. Whether rendering the workmen of Pipradih and Murli quarries of Parshva Properties Limited jobless from the 28th July, 1969, to 3rd August, 1969, amounts to illegal lay-off or lockout ?" II. Whether the workmen are entitled to compensation in the above period? If so, to what extent? The circumstances in which the reference in question was made may now be briefly stated. 3. The Company bas' the business of quarrying and supplying lime stone for manufacture of cement. It entered into certain contracts with the Rohtas Industries Limited and Ashoka Cement Limited at Dalmianagar (hereinafter referred to as 'the Cement Companies'). There was a strike in the cement factories at Dalmianagar of the two Cement Companies mentioned above from 28. 6. 1969. On 21.7.69 the management of the Cement Companies declared lockout. As a result of the strike and lockout the Cement Companies at Dalmianagar did not Operate, but in spite of the aforesaid strike and lockout, lime stones were being supplied by the company till 27. 7. 1969. As per notice dt. 26. 7. 1969, the Company gave notice of layoff to their workmen with effect from 28. 7. 69. A dispute was raised whether the workmen of the quarries of the Company were entitled to compensation from 28. 7. 69 to 3.8.69, which had led to the reference under Section 10 (1) (d) of the Act, 4. The Tribunal in its award (Annexure 4) came to the conclusion that the action of the management of the Company in laying off their workmen did not amount to lockout. It also came to the conclusion that in view of provisions of Sec. 25-E (iii) of the Act the workmen would not be entitled to compensation. 5. Learned counsel for the petitioners has raised two main contentions. It also came to the conclusion that in view of provisions of Sec. 25-E (iii) of the Act the workmen would not be entitled to compensation. 5. Learned counsel for the petitioners has raised two main contentions. They are; (a) the Tribunal has erred in Jaw in holding that Section 25- E of the Act had application to the facts and circumstances of the present case and (b) Sec. 25-E (iii) is only attracted where the layoff is due to strike or slowing down of production. In the instant case, the Jay off was not as a result of the strike in the Company, but because of the lockout that was declared by the' Cement Companies on 21.7.69. It may be stated that while developing the first contention learned counsel had contended that the finding of the Tribunal that the Cement Companies and the Company (Parshva Properties Ltd.) were part of the same establishment is perverse. 6. Section 25-E of the Act so far as is relevant is quoted :- "No compensation shall be paid to workmen who has laid off. (iii) if such laying off is due to a strike at slowing down of production on the part of workmen in another part of the establishment." Learned counsel for -the petitioner contended that it was not in dispute in the present case that the ownership of the three undertakings are not the Same, their directors were different. They had separate standing orders. Being separate legal entities, the annual reports are balance sheets were also separate and distinct. In view of all these, it could not be said that the Cement Companies and the respondent Company were part of the same establishment. Learned counsel for the petitioners referred to several cases and contended that all those cases are cases where the ownership is the same and it is in the context of the same ownership that the question has been considered as to whether they are part of the same establishment or not on account of the various factories noticed in the judgment. In order to attract section 25-E (iii), it is necessary, it was contended that the ownership of the two units which are said to form part of the same establishment should be the same. 7. Learned counsel for both the parties relied on the decision of the Supreme Court in The Associated cement Companies Ltd. Vrs. In order to attract section 25-E (iii), it is necessary, it was contended that the ownership of the two units which are said to form part of the same establishment should be the same. 7. Learned counsel for both the parties relied on the decision of the Supreme Court in The Associated cement Companies Ltd. Vrs. Their Workmen. It was pointed out by the learned Counsel for the petitioners that what was being considered in that case was whether the different units of the appellant Company could be said to constitute one establishment, and the observations made in the judgment must be read in that context. The emphasis on functional integrality which is the basis of the award even in this case, was being considered in the above, mentioned case. A perusal of the judgment, however, indicates that unity of ownership was not found to be necessary to attract the application of section 25-E (iii) of the Act. In paragraph 11 of the judgment, after laying down the various tests• that may be relevant, it was observed :-- "Indeed, in a large number of cases several tests may fall for consideration at the same time. The difficulty of applying these tests arises because of the complexities of modern industrial organisation : many enterprises may have functional integrality between factories which are separately owned; some may be integrated in part with units or factories having the same ownership and in part with factories or plants which are independently owned. In the midst of all these complexities, it may be difficult to discover the real thread of unity." In my opinion, therefore, this case recognizes that even though the ownership may not be the same, still two units under consideration may be said to be part of the same establishment. In my opinion, therefore, if functional integrality is established between the two units, which here would be the Cement Companies and the Respondent Company, it is possible to hold that section 25-E (iii) of the Act is attracted. 8. In order to find out whether there is functional integrality or not, I find guidance from the observations made in M/s National Iron and Steel Co. Ltd. Vrs. The State of West Bengal paragraph S--where, Mitter. 8. In order to find out whether there is functional integrality or not, I find guidance from the observations made in M/s National Iron and Steel Co. Ltd. Vrs. The State of West Bengal paragraph S--where, Mitter. J. speaking for the Court observed :- In order to find out whether there was sufficient functional integrality between the employers and whether it' would be proper to have on reference in respect of the four concerns which are separate entities in the eye of law, it is necessary to take an overall picture of their activities and the interest, if any, which the had in common." It may be pointed out that this was not a case under section 25-E of the Act. The question under consideration was whether reference of disputes between the Company and its allied concerns and their workmen by one order was a valid reference in the eye of law. The observations just extracted were made with reference to the question there under, consideration, nevertheless; in my view they, afford sufficient guidance for ascertaining whether there is functional integrality between different companies or units. As already noticed, It is the overall picture of the activities and interest of the concerns, which had to be I taken into consideration. 9. It is to be examined whether the Tribunal has proceeded to decide the question applying the correct test. if what I have stated be the correct test. The Tribunal has found, on the material on the record, that if the work in the cement companies is stopped it automatically affects the lime stone quarries of the Company, and as such the working of lime stone quarries of the Company were dependent on the functioning of the cement companies. In the context reference was made to the agreement dated 17. 5. 1957(Ext. W. 10) between the cement Factories and the Respondent-Company. It was pointed out that this document shows that the Company was found to supply the total quantity of lime stones quarried by the Company to the two cement companies, and that the quarrying of lime stone was solely dependent on the requirement of the two cement companies aforesaid. The aforesaid agreement has been annexed to the counter-affidavit filed in this case and is annexure 'B'. A perusal of the agreement indicates that Rohtas Industries Limited has installed machineries, c8nstructed quarters in the quarries, and had laid railway sidings. The aforesaid agreement has been annexed to the counter-affidavit filed in this case and is annexure 'B'. A perusal of the agreement indicates that Rohtas Industries Limited has installed machineries, c8nstructed quarters in the quarries, and had laid railway sidings. it would thus appear that the position of Robtas Industries Limited and the Respondent-Company was not that of all ordinary supplier and consumer. The tribunal has also referred to the report of the 1st and 2nd Central Wage Board and has pointed out that the wage structure prescribed for the Cement Companies had been supplied to the workers of the respondent Company. Taking all these into consideration the Tribunal came to the conclusion that there was functional integrality between the Robtas Industries Ltd. and Ashoka Cement Ltd. on the one hand and Parshva Properties Ltd. on the other. it cannot be said that this finding is In any way perverse. On the other hand, it appears to me that the finding arrived at is a reasonable finding, in view of position in law as explained earlier. The Tribunal, in my view, has taken into consideration the factors, for and against which were put forth in the course of argument and it has in paragraph 19 discussed the argument which were pressed against the contention that the Cement companies and the respondent-company formed part of the same establishment. It may be pointed out that the Tribunal has rightly taken into consideration the fact that even after the declaration of strike in the Cement Companies the supplier company was supplying lime stone till such time as it was possible for the lime stone to be stored in the premises of the cement companies. I am, therefore, of the view that it is not possible to accede to the contention that section 25-E (iii) of the Act was not applicable, on the first ground raised in the course of argument. 10. The second contention also cannot be accepted. From what has been stated earlier, it is clear that the strike had started on 28. 6. 1969. The strike was not called off and during the continuance of strike, lock out was declared on 21.7.1969. Taking the over all picture of the situation, it cannot be said that it was not on account of strike that lay-off had taken place in the respondent-company. 6. 1969. The strike was not called off and during the continuance of strike, lock out was declared on 21.7.1969. Taking the over all picture of the situation, it cannot be said that it was not on account of strike that lay-off had taken place in the respondent-company. Had the strike been withdrawn or the lockout was not as a direct result of the strike there would have been force in the argument of the learned counsel for' the petitioners. But in the instant case, it is quite clear that the real factor which caused the lay-off of the workmen of M/s Parshwa Properties Ltd. was the strike in the two Cement Companies. The second contention also, therefore, cannot be accepted. 11. In the result, I am of the view that the Tribunal has not committed any error apparent on the fact of the record to justify the quashing of the same in the exercise of writ jurisdiction of this court. This application is accordingly dismissed but with our costs. Gobind Mohan Mishra, J. I agree. Application dismissed.