PRAKASH COTION MILLS PVT. LTD. versus RASHTRIYA MILLS MAZDOOR SANGH

Citation: [1986] 3 S.C.R. 419 · Decided: 01-08-1986 · Supreme Court of India · Bench: V. BALAKRISHNA ERADI · Disposal: Case Partly allowed

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Judgment (excerpt)

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PRAKASH COTION MILLS PVT. LTD. 
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v. 
RASHTRIY A MILLS MAZDOOR SANGH 
AUGUST 1, 1986 
[V. BALAKRISHNA ERADI AND MURARI MOHAN 
DUTI, JJ.] 
Bombay- Industrial Relations Act 1946, s. 42(4) and 78(J)(a) 
(iii)-Closure of textile mill on account of circumstances beyond control 
of the company-Regular employees-Whether entitled to "Closure 
compensation" -Badli employees-Not entitled. 
Certain goods which are essential for the manufacturing process 
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in the appeUant's mill were detained by the Excise Authorities for non· 
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payment of Central Excise Duty and consequently there was a disrup-
tion in the functioning of the appellant's mill compelling the appellant 
to stop the working of the mill for the period from March 24, 1964 to 
June 10, 1964. 
The respondent-Sangh demanded that the employees who were 
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affected by the said closure should be paid their wages for the aforesaid 
period. As the said demand was not accepted by the appellant, the 
respondent filed an application before the First Labour Court, praying 
for the payment of full closure compensation to the affected employees . 
The Labour Court held the appellant liable to pay closure com-
pensation to the employees affected by the closure of the mill for the 
aforesaid period at the rate of 50% of the basic wages and dearness 
allowance. 
The Industrial Court partly allowing the appeal of the appellant, 
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directed the appellant to pay closure compensation to the employees 
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affected by the closure for the period from March 24, 1964 to June JO, 
1%4 at the rate of SO per cent of their basic wages and dearness allo-
wance and further directed that where the employees had been sick and 
enjoyed sickness benefits for all the days or had been on privilege leave 
or enjoyed leave with wages for all the . days or secured alternative 
employment for any period during the closure, such employees would 
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SUPREME COURT REPORTS 
[1986) 3 S.C.R. 
not be entitled to any closure compensation for such days, but in respect 
of such days half of the wages payable to Badli W?rkmen in lieu of the 
said three categories of workmen would be paid to the Badli workmen 
equitably. 
In appeal to this Court, it was contended on behalf of the appel· 
lant that as the closure had been made in accordance with the provi-
sions of the Standing Orders 16 and 17 due to circumstances beyond the 
control of the appellant, the appellant is not liable to pay any compen-
sation to its employees for the period of closure including payment to 
the Badli workmen. 
Allowing the appeal in part, 
HELD: (I) The order of the Industrial Court in so far as it directs 
payment of compensation to the Badli workmen is set aside and, except 
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that, the rest of the onhlr of the Industrial Court is affirmed. [427F-G) 
2.(i) Sub-s. (4) of Sec. 42 read with the provision of s. 78(1)(a)(iii) of 
the Bombay Industrial Relations Act 1946, makes it manifestly clear that 
an employee is entitled to challenge the refusal by the company to pay 
compensation of the closure and claim such compensation before the 
Labour Coilrt whether or not such closure was due to circumstances 
beyond the control of the company, as enumerated in Standing Order 
16. The respondent-Sangh therefore, was entitled to make the applica-
tion before the Labour Court claiming compensation for the period of 
closure even though such closure was made in accordance with the 
provislo11$ofthe Standing Orders 16and 17. [425E-H) 
2.(ii) 1be Standing Order 16 provides that such closure can be 
made without notice and no compensation would be required to be paid 
in lieu of notice. It is clear from Standing Order 16 that it does not 
contemplate that when there has been a closure on account of some 
unavoidable circumstances, no compensation is required to he paid to 
the employees. Therefore, the order of the Industrial Court directing 
payment of compensation to the employees of the appellant for the 
above period of closure is upheld. [426A-C) 
3. Badli workmen get work only in the absence, temporary or 
otherwise, of regular employees, and that they do not have any 
guaranteed right of employment. Their names are not borne on the 
muster rolls of the establishment concerned. Indeed a Badli workman 
P. COTION MILLS v. R.M.M. SANGH [DUIT, J.] 
421 
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has no right to claim employment in place of any absentee employee. In 
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any particnlar case, if there be some jobs to be performed and the 
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