TATANAGAR FOUNDRY COMPANY versus THEIR WORKMEN

Citation: [1962] SUPP. 3 S.C.R. 795 · Decided: 09-03-1962 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

a s.c.R. 
SUPREME COURT REPORTS 
795 
TATANAGAR FOUNDRY COMPANY 
v. 
THEIR WORKMEN 
P. B. GAJENDRAGADKAR, A. K. SARKAR and 
K. N. WANOHOO, JJ.) 
Industrial Dispute-Compensation-Statutory 
compen· 
sation-Lay off when ,iustijied and when malafide-Scope of 
enquiry by Tribunal-Industrial Disputes Act, 1947(14 of 
1947), 88, 2(kkk), 250. 
The appellant has its factory atJamshcdpur. It manu-
factures cast iron sleepers, pipes, etc., in the said factory. 
The raw materials mainly. required for the manufacture of 
sleepCrs are pig iron, coke, limestone and moulding- sand. 
The Railway Board is the only buyer of sleepers, and the 
sleepers are manufactured only on !'eceipt of orders from the 
said Board and not otherwise. 
Inspite of its best efforts to 
secure the raw materials in 1959, the appellant failed to 
secure the same. 
As the appellant found that the manufac-
ture of sleepers could not be carried on, it issued a notice 
and laid-off the workers of the sleeper factory. 
The lay-off 
continued from December 15, 1959 to September II, 1960. 
On September 12, 1960, the appellant closed the Sleeper 
Foundry Department and issued :µotice of retrenchment. 
Retrenchment compensation was also paid to the workmen 
retrenched. 
The appellant 
paid 
the respondents the 
statutory compensation for the Jay-off period as prescribed 
bys. 250 of the Industria1 Disputes Act 1947. 
However, 
the respondents contended that the lay-off ;.as not justified. 
The dispute between the parties was referred for adjudication 
by the Government of Bihar to the Industrial Tribunal. The 
Tribunal found that the appellant was in financial diffi-
culties at the relevant time, the appellant was not actuated 
by any 
malafide intentions and the lay-off was not the 
result of any ulterior motive. However, it held that if the 
affairs of the appellant had been better managed and more 
foresight had been shown by the appellant prior to the time 
when the crisis was reached, pig iron could have been secured 
and lay-off could have been avoided. Under the circum-
stances, the Ttibunal held that the lay-off could not be held 
to be altogether justified, and awarded compensation to the 
respondents in excess of the amount fixed by the statute. 
1962 
March 9. 
1962 
TataJiogar Foundry 
ComparrJ' 
v. 
Tluir W orkmtn 
Gajtndra.~odlcar J, 
796 SUPREME COURT REl'ORT:S [l!lti2] SCP F. 
Held, that the lay-off was justified as raw materials 
were not available to 1he appcllan1 at the relevant time. The 
only relief to which the \vorkmcn \Vere entitled was the stalut-
tory relief prescribed by s. 25C. 
If the lay off is malafide in the sense that the employer 
has deliberately and malaciously 
brought ahout a situation 
\vherc lay off becomes necessary, it is not a lay-off \\'hich 
in justified 11nder s. 2(kkk) and the relief provided under 
s. 25C is not the only relief to which the workmen are en-
titled. 
The malafides of the employer in declaring Jay-off 
really means that no lay-off has in law taken place and a 
finding a!i to the malafide of the employer in declaring a lay-
off takes the lay-off 011t of the definition of s. 2(kkk). If 
Jay-off is d<'clarc<l in order to victin1ise \\rorkmen or for son1e 
ulterior purpose, the position in the same. 
C1vrr, APPELLATE Ju1nso1CTJ0l\: Civil Appr11l 
Ko. 315 of l!l61. 
Appeal by special leave 
from t.lie award 
dated December 29, l!JflO, of tho Industrial Tri-
na!, Bihar at Patn:i in Reference No. 4 of Hl60. 
C. K. Daplitary, Solid lur-Gt11oa/ n_{ lr1dia. and 
Sardar Bal!lldur, for tho appellants. 
B. P. Malwshumri, for the.respondents. 
1962. Mardi 9. The Judgment of the Court was 
deli\'Ned by 
GA.IF.XDRAGAllKAH, J.-This appeal by special leave 
is directed against the order pnssed by the Industrial 
Tribunal, Patna, directing the appellant, the Tata· 
nagar Foundry Co., to pay to the respondent~, its 
workmen, 75% of the consolidated wages as com· 
pensation for having laid them off for a period of 
4i"i days commencing from December lfi, l95!l. 
It 
i~ common ground that the appellant laid off tho 
respondents for the said period. The appellant's 
case was that it had paid the respondents tho 
statutory compcru;ation for the said lay-off as 
prescribed by s.25C of tho Industrial Disputes Act 
(No. 14 of 1947) (hereinafter called 1,he Act). 
T~o 
:i 8.C.R. 
SUPREME COURT REPORTS 
797 
respondents, however, contended that the lay-off 
was not justified and so the statutory compensation 
paid by the appellant did

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