KALINGA TUBES LTD. versus THEIR WORKMEN

Citation: [1969] 1 S.C.R. 287 · Decided: 03-05-1968 · Supreme Court of India · Bench: J.M. SHELAT · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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KALINGA TUBES LTD. 
V • 
THEIR WORKMEN 
May 3, 1968 
[J. M. SHELAT, K. S. HEGDE AND A. N. GROVER, JJ.J 
iildustri'al Dispute-Closing down of undertaklng-Whether 
closure 
or lockout-Tests for . 
Industrial Disputes Act (14 of 1947), s. 25FFF(l) 
and 
proviso-
'Unavoidable circun1stances beyond the control of the e1nployer'-Scope 
of. 
The appellant was a prosperous public company whose principal un-
dertaking was the manufacture and sale of iron pipes and 
poles. 
In 
August, 1965 its workmen demanded honus at a rate higher than what 
they were receiving and the Assistant "Labour Commissioner started cor-
respondence with the. management and the secretary of the workers' union. 
On 1st October, 1967, about 150 workmen assembled, after 2 p.m., at 
the gates of th·e administr;;i.tive buildjng in which about 40 members of 
the staff \Vere present. 
The members of the staff were not allowed to 
leave th~ building an<l no ingress or egress was allo\ved even of refresh-
ments. 
At 5 a.m. nex,t day, the police arrived and wa'rned the workmen 
lh>t force will be 
used unless they left, and rescued the 
staff. 
The 
secretary of the workers' union was present during all that time hut never 
made any ·~!fort to persuade the assembled workmen to leave the premises. 
The factory remained closed on 2nd Octobe'r on account of public holiday 
and on the 3rd October, 1967. the management issued a notice declaring 
a closure of the factory, and sent a copy of it to t.he Chief lnspectc:tr of 
Factories. 
A notice v.,ras given tn the \Yorkers that they should hand 
over vacant possession of the quarters which had been allotted to them. 
A k~tter was written to the Chief l'vfinister of the State that the mana~ 
ment had no other alternative but to close down the factory. Information 
\\'as similarly given to the Superintendent of Police in which a request \Vas 
n1adc for posting a platoon of police force in the factorv premises at the 
appellant's cost. Employees in the branch offices in other States were dis-
charged and members of the staff at the principal offi.oe were notified th~t 
their services would be te'rminatcd within a period of three months from 
the date of closur-<. 3rd Octohcr, 1967. 
The management offered to pay 
the \YOrkmen wages for one month in 1ieu of notice. and compensation 
under the proviso to s. 25FFF(l) of the Industrial Disputes Act, 1947, 
on the ground that the closure was on account of unavoidabl-c circum-
stances beyond the control of the employer. 
On the question whether the appellant bad declared a lockout 
or 
\Vhethcr it was a bona fide closure, the Industrial Tribunal. to which ~he 
question \Vas referred by the State Government. held that the ·suspending 
of the work in the factory amounted to a lockout, that it was illegal and 
gave consequential directions. 
In appeal to this Court. 
H 
HELD : ( !) The notice of 3rd October. I 967 amounted to a closure 
of the busine·ss itself and not a lockout. 
Ordinarily, this Cou'rt does not 
interfere with the findings of fact of the Industrial Tribunal, but the ques-
tion \\'hcthcr the undertaking was closed down or not by means of the-
288 
SUPREME COURT REPORTS 
(1969] l S.CR 
notice \\'<is not C\1nsidered in a proper manner hr the l'ribunal and its 
approach \\'as erroneous an<l suffered fron1 infirmilic,'i. [300 D-E] 
(a) The Tribunal erred in holding that there can be a closure of an 
undertaking only when there are financial difficultiC< and the undenakiog 
hccomes a losing concern. 
There is no such principle of industrial laW. 
C)n the other hand, the entire set of circumstances and fact~ have to be 
taken into ;iccount \\ hile endeavouring to find out if. in fact, there h~r· 
been a closure. 
Jn O;lC Ca!>'t:, the management may decide to close d()\.\.'tl 
;1n undcrlaking because df financial or purely huc;incss rca-;ons; in another. 
1l m~tv decide 1n f;1\·our of closure v•hen faced v:ith :1 situ:ition in which it 
ic; considered either dangerous or hazardous from . the point of view of 
the safety of the administra~ive staff or of ~he members of the management 
or even of the employees them.selves in canying on the husiness. 
The 
csc;cnce of the n1atter is the faclum of closure by y.·hatcver reasons moti-
1·atcd, and not a mere pretence of closure. [295 D-E; 297 G-H) 
In the prcsi.:nt case, if the \\.'Orkcrs' demand was purely in respect of 
honu<; there \VJS no justific.:i.tion for kccpin~ about 40 members of 

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