WORKMEN OF THE INDIAN LEAF TOBACCO DEVELOPMENT COMPANY LIMITED, GUNTUR versus MANAGEMENT OF THE INDIAN LEAF TOBACCO DEVELOPMENT CO. LTD., GUNTUR

Citation: [1969] 2 S.C.R. 282 · Decided: 27-09-1968 · Supreme Court of India · Bench: J.M. SHELAT · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

WORKMEN OF THE INDIAN LEAF TOBACCO DEVELOP· 
A 
MENT COMPANY LIMITED, GUNTUR 
v. 
MANAGEMENT OF THE INDIAN LEAF TOBACCO DEVE· 
LOPMENT CO. LTD., GUNTUR . 
September 27, 1968 
[J. M .. SHELAT, V. BHARGAVA AND C. A. VAIDIALINGAM, JJ.] 
Industrial Dispute-Closure of 
branches or depots-No closure of 
business itself-Whether managerial 
activity, oot referable to industrial 
B 
tribuna/,,__Rights of workmen in closed depots. 
C 
The respondent was carrying on the business of purchasing, handling 
and selling tobacco. In 1962, it was 
maintaining 21 depots where the 
principal work was handling tobacco and the work of purchasing was 
done on a small scale. In 1963, it gave notice that 8 out of the 21 depots 
would be closed down. 
An industrial dispute was raised by the workmen 
and the demands df the workmen, namely : ( 1) that no depot workod 
during 1962 should be closed; and (2) no workman who worked in 1962 
D 
should be retrenched, 
were referred 
to the Industrial Tribunal. 
The 
Tribunal held that the stoppage of work at the 8 depots and the closure 
was genuine and real, that there was no transfer of the work that 
w~ 
being carried on at those depots to other buying points established by the 
respondent, and repelled the suggestion of the appellants that it was a 
ma/a fide device adopted for carrying on the same business in a different 
manner, and decided both the issues against the workmen. 
In appeal to this Court, 
HELD : (1) A genuine closure of depots or branches, even though 
it did not amount to closure of the business could not be interfered witlt 
by an Industrial Tribunal, and therefore, the issue was incorrectly refer-
red by the Government for adjudication by the Tribunal. The closure is 
stoppage of part of the activity or business of the respondent. Such stop-
page is an act of management which is entirely in the discretion of the 
respondent and no Industrial Tribunal can interfere with the 
discretion 
exercised in such a matter, or can have the power to direct the respon~ 
dent to continue a part of the business which it had decided to shut down. 
or direct it to reopen a closed depot or branch. [284 G.JI; 285 A.CJ 
(2) On that finding, no question could arise of the retrenchment 
being set aside by the Tribunal, because, there was no business for which 
the workmen would be required. All that the workmen could claim was 
compensation for loss of the service, and, in a case where a dispute may 
arise as to whether workmen discharged 
are entitled 
to compensation 
under s. 25F or s. 25FFF, of the Industrial Disputes Act, 1947, it may 
become necessary to decide whether the closure 
amounts to closure in 
E 
F 
G 
law or not. 
But, in the present case, the workmen have all been paid re-
trenchment compensation at the higher ·rate laid down in s. 25F and 
therefore, received adequate compensation. [287 F-H; 288 A] 
H 
CIVIL APPELLATE JURISDICTION : 
Civil Appeal No. 556 of 
1966. 
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H 
WORKMEN v. TOBACCO co. (Bharg!)Va, J.) 
283 
Appeal by special leave from the order dated August 13, 1964 
of the Industrial Tribunal, Andhra Pradesh in Industrial Dispute 
No. 41 of 1963 . 
M. K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for 
the appellants. 
K. Srinivasamurthy and Naunit Lal, for the respondent. · 
The Judgment of the Court was delivered by 
Bhargava, J. This appeal, by special leave, has arisen out of 
an award made by the Industrial Tribunal, Andhra Pradesh, at 
Hyderabad in an industrial dispute between the respondent, the 
Imperial Tobacco Co., as well as exporting the tobacco to various 
(hereinafter referred to as "the Company"), and its workmen. 
Admittedly, the Company is an associate of the Imperial Tobacco 
Company Ltd., and the main business carried on by the Company 
is that of purchasing tobacco of all varieties and qualities, stem· 
ming, grading and packing of tobacco and supplying it to the 
Imperial Tobacco Co., as well as expo1ting the tobacco to various 
foreign countries in the world. The Company has been carrying 
on this business for about 40 years and handles almost 35 per cent 
of the tobacco grown in the State of Andhra Pradesh. 
For the 
work of stemming, grading and packing tobacco, the Company 
has two factories, one at Anaparty in East Godavari District, and 
the other at Chirala in Guntur District. 
In connection with this 
business, the Company, in the year 1962, was maintaining 21

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