PIPRAICH SUGAR MILLS LTD. versus PIPRAICH SUGAR MILLS MAZDOOR UNION.

Citation: [1956] 1 S.C.R. 872 · Decided: 23-10-1956 · Supreme Court of India · Bench: NATWARLAL HARILAL BHAGWATI · Disposal: Appeal(s) allowed

Judgment (excerpt)

1956 
October 23. 
872 
SUPREME COURT REPORTS 
PIPRAICH SUGAR MILLS LTD. 
v. 
[1956] 
PIPRAICH SUGAR MILLS MAZDOOR UNION. 
[BHAGWATI, VENKATARAMA AYYAR, S. K. DAS and 
GovINDA MENON JJ.] 
Industrial Dispute-Definition-Claim in dispute arising prior 
to closure of indi1,stry-Government, if competent to issue notification 
for adjudication subsequent to such closure-Discharge of workmen 
on closure of industry and discharge on retrencliment-Distinction-
Aiorird of compensation for termination of service on cfo.~urc, if per-
missible-U.P. Industrial Disputes Act (U.P. XXVIII of 1947), 
SS. !J, a-Industrial Disputes Act (XIV of 1947), •. !J(k). 
The appellant company could ncit. work its Mills to full capa-
city owing to short supply of sugar-cane and got the permission of 
the Government to sell its machinery but continued crushing cane 
under a lease from the purchaser. 
The workmen's Union in order 
to frustrate the tran.Saction resolved to go on strike and communi." 
ca.ted its resolution to the company. There wa~ correspondence bet· 
ween the partie!i in course of which the company offered to pay to 
the workmen 25 per cent. of the profits of the sale on condition that 
the strike notice muc;t immediately be withdrawn. 
The workmen 
did not fulfil the condition and made certain counter·proposals. The 
company insisted that the condition must first be fulfilled before the 
counter·proposals could be considered and renewed its offer. 
Althougi1 the workmen did not actually go on strike, they did not 
Withdraw the strike notice, and did not co-operate with the manage· 
ment in the dismantling and delivery of the machinery to the pur· 
chaser, with tbe result that the company lost heavily. On the expiry 
of the lease and closure of the industry, the services of the workmen 
were duly terminated by the company on March 21, 1951. The 
workmen thereafter, claimed the share of profits on the basis of the 
offer made by the company in the correspondence and the dispute 
was referred to the Industrial Tribunal for adjudic•tion by the U.P. 
Government by a notification under s. 3 of the U.P. Industrial Dis· 
putes Act of 19t7. The Tribunal held that the company was bound 
by the offer it had made and awarded a sum of Rs. 45.000 to the 
workmen as representing their share of the profits. On appeal the 
award of the Indu•trial Tribunal was affirmed by the Labour Appel· 
late Tribunal. It was contended on behalf of the appellant company 
that the notification was ultra vires, and the reference and the 
e.wafd void in conseqtl'ence and that there having been no concluded 
agreen1ent between the parties, it was not bound to pay. 
Held, that the definition of an industrial dispute contained· iu 
s. 2(k) of the Industrial Disputes Act XIV of 1947 and adopted by 
the U.P. In<lu<trial Di'putes Act XXVIII of 1947 contemplated the 
S.C.R. 
SUPREME COURT REPORTS 
873 
existence of an industry and a subsisting relationship of employer 
and employee between the parties and, therefore, there could be no 
industrial dispute within the meaning of those Acts where the in· 
dustry had been closed, and the closure was real and bona fide, if the 
dispute arose on such closure, or thereafter, if that could be con· 
ceived. 
Section 3 of the U.P. Industrial Disputes Act of 19H only re-
quii·ed that there must be an industrial dispute before the Govern· 
ment could make a reference under that section and, consequently, 
in the instant case where the claim in dispute bad arisen, if at all, 
prior to tbe closing of tbe industry, the Government was fully com· 
patent to issue the notification. 
Indian Metal and 11fttalluroical Corporation v. Inditstrial 
Tribunal, Madras (A.LR. 1953 Mad. 98) and K. N. Padmanabha 
Ayyar v. The State of Madras ([1954] 1 L.L.J. 4G9), approved. 
Messrs Bnrn and Co. Ltd., Calcuttri v. Their TV orkmen, (Civil 
Appeal No. 325 of 1955, clecicled on October 11, 1956), referred to. 
In the instant ct1se, however, as the findings of tbe Tribunal 
we1·e inconsistent and conflicting, the court examined the correspon· 
dence and belcl that it did not establish that there was a concludecl 
agreement between the parties whereby the workmen could be en· 
titled to any share of the profits and, consequently, the award made 
by the Labour Appellate 'l'ribunal must be set aside. 
Nor was the award sustainable as one for compensation for 
termination of the services of workmen on closure of the industry as 
such discharge was different from

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