WP/1367/1998 of M/S NEPC INDIA LTD. REP. BY Vs THE STOCK EXCHANGE, MUMBAI on 21 November 2001

1. The Management of State FarmMelchengam West PostN.A.District.

2. The Presiding OfficerII Additional Labour CourtMadras 104. .. Respondents

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Appeal against the order of the learned single Judge dated 1.8.1996 made in W.P.No.10524 of 1987on the file of this Court.

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For Appellant : Mr.Vijay NarayanFor Mr.J.Saravana VelFor Respondent-1 : Mr.A.R.Gokulnath----- J U D G M E N T(Delivered by S.J.MUKHOPADHAYA,J.)

As all these appeals arise out of a common order, they were heard together and disposed of by thiscommon judgment.

2. It appears that the appellants were working on daily wage basis in the State Farm Corporation ofIndia Ltd. (hereinafter referred to as the "Corporation") as agricultural Mates or Pump Operators or Helpers. The Management of the Corporation were dealingwith agriculture. All the workers numbering more than 800 resorted to strike on 22.1.1981 raisingvarious demands like wage increase, holidays, festival advance, filling up of vacant post, providentfund, etc. While they were on strike, a Settlement was reached between the Management and theUnion of 27.4.1981 under Section 12(3) of the Industrial Disputes Act, 1947. By the said Settlement,provisions were made for provident fund, wages for weekly holiday, festival advance, re-employment of workers etc. It was agreed upon that the Mates, Pump Operators and Helpers are not be tocontinued further, as per the orders issued by the Management of the Corporation at Delhi.

3. Pursuant to the Settlement, while all the other employees were taken back in service, appellants,who were Pump Operators and Helpers, having not taken back and thereby they have beenretrenched from service, the Government of Tamil Nadu, by different Government Orders issued on12.1.1984, made individual references in regard to each workman on the question whether nonemployment of 33 workers is justified; if not, to what relief they are entitled to.

4. The II Additional Labour Court, Madras, on hearing the parties and on appreciation of evidence,by common award dated 26.3.1987, having answered the award in favour of the workmen(appellants herein), held that non-employment (retrenchment) of the workmen was in violation ofSection 25-F of the Industrial Disputes Act.

5. The Corporation challenged the common award before this Court by filing different writ petitions.The learned single Judge, by the impugned common order dated 1.8.1996, held that the award wasbad and set aside the award on two grounds, viz. agricultural operation do not fall within thepurview of Section 2(j) and thereby the Corporation cannot be termed as an 'industry' as definedunder Section 2(j) of the Industrial Disputes Act; and in view of the Settlement reached underSection 12(3) of the Industrial Disputes Act, the workmen cannot raise an industrial dispute.

6. The learned counsel appearing on behalf of the appellant(s) submitted that the definition of'industry' as noticed by the learned single Judge was never given effect to and thereby, the learnedsingle Judge erred in coming to a conclusion that the Corporation do not fall within the definition of'industry'. It was further submitted that a Settlement made under Section 12(3) do not cover thequestion of retrenchment.

7. The learned counsel appearing on behalf of the Corporation opposed the appeal on the followinggrounds:

(i) subsequent legislation can be looked at to ascertain proper interpretation to be put upon theearlier Act. Reliance is placed on the Supreme Court decision in State of Bihar v. S.K.Roy AIR 1966SC 1995] and T.Manickam & Co. v. State of Tamil Nadu [AIR 1971 SC 518];

(ii) a Settlement under Industrial Disputes Act is binding on all the parties and no industrial disputecan be raised under Section 10 of the Act against the essence of such Settlement. In this regard,reliance is placed on the Supreme Court decision in Jaihind Roadways v. MRMT & General KamgarUnion [2005 III LLJ 1020 (SC)]; and

(iii) the workmen have failed to prove that they have completed 240 days of continuous service toderive advantage of Section 25F of the Industrial Disputes Act. Burden of proving continuous workfor 240 days is on the workman and not on the Management. He relied upon the Supreme Courtdecisions in H.U.D.A. v. Jagmal Singh [2006 (5) Supreme 544 = (2006) 5 SCC 764] and Kanta (Smt.)

(Deceased) through LRs. v. MTNL [2006 I LLJ 573 - Delhi] etc.

8. We have heard the learned counsel for the parties and perused the records.

9. It will be evident from the impugned order that the learned singe Judge noticed the so-calledamended Section 2(j)(1) to come to a conclusion that the Corporation do not come within thedefinition of 'industry'. The following amendment was noticed as sub-Section 2(j)(1), which reads asunder:

"any agricultural operation, except where such agricultural operation is carried on in an integratedmanner with any other activity (being any such activity as is referred to in the foregoing provisionsof this Clause) and such other activity is the predominant one.

Explanation:- For the purposes of this sub-clause, "agricultural operation" does not include anyactivity carried on in a plantation as defined in clause (f) of section 2 of the Plantations Labour Act,1951 (69 of 1951)".

10. The question as to whether an agricultural industry falls within the definition of 'industry', fellfor consideration before different Courts from time to time.

11. In the Bombay Industrial Relations Act, 1946, 'agriculture' and 'agricultural operations' havebeen specifically included in Section 3(9) in the definition of 'industry'. But, in the IndustrialDisputes Act, 1947, 'agriculture' has neither been included nor excluded.

12. In D.N.Banerji v. P.R.Mukherjee [(1953) 1 LLJ 195 (SC) = AIR 1953 SC 58], the Supreme Courtobserved that non-technical and ordinary meaning of 'industry' is 'an undertaking where capital andlabour co-operate with each other for the purpose of producing wealth in the shape of goods,machines, tools etc', and for making profits, an industry in this sense, includes agriculture,horticulture, etc.

13. In Harinagar Cane Farm v. State of Bihar [(1963) 1 LLJ 692 (SC) = AIR 1964 SC 903], the Courtleft the question, whether all agriculture and operations connected with it are included within thedefinition of industry or not, undecided. But, on the facts of the case, the activities of the twocompanies registered under the Indian Companies Act, which were engaged in 'agriculturaloperations', i.e., one for production of sugarcane, wheat, paddy and other articles for sale in themarket, to the consumers, and the other producing sugarcane for use in its sugar factories, wereheld to be falling within the definition of industry, because the companies had invested capital forcarrying on their 'agricultural operations' for the purpose of making profit and the workmenemployed by them in the respective operations, contributed for the production of agriculturalcommodities, which brought in profit to the Companies.

14. In Bangalore Water Supply and Sewerage Board v. A. Rajappa [1978 Lab IC 467 (SC) = AIR 1978SC 548 = (1978) 1 LLJ 349], the Supreme Court held that any activity connected with 'agriculture' or'agricultural operations' affecting 'industrial and labour disputes' or 'welfare of labour', might fallwithin the ambit of industry, if it satisfies the following triple test laid down therein.

" 'Industry' as defined in S.2(j) and explained in Banerji (AIR 1953 SC 58) has a wide import.

(a) Where (i) systematic activity, (ii) organized by co-operation between employer and employee (thedirect and substantial element is chimerical) (iii) for the production and/or distribution of goods andservices calculated to satisfy human wants and wishes (not spiritual or religious but inclusive ofmaterial things or services geared to celestial bliss i.e. making, on a large scale prasad or food)prima facie, there is an industry in that enterprise.

(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint,private or other sector.

(c) The true focus is functional and the decisive test is the nature of the activity with specialemphasis on the employer-employee relations.

(d) If the organization is a trade or business it does not cease to be one because of philanthrophyanimating the undertaking."

15. The Labour Court, having noticed that the activities connected with the agriculture andagricultural operations will effect industrial and labour dispute, came to a definite conclusion thatthe activities of the Corporation at Melchengam amounts to an 'industry'. The learned single Judgealtered such finding only on the basis of so-called definition of industry said to have been madeunder Section 2(j)(1). In fact, after the decision of the Supreme Court in Bangalore Water Supplyand Sewerage Board v. A. Rajappa, a pragmatic definition was attempted in the Industrial Relations Bill 1978, besides the Bill lapsed on the dissolution of the Parliament in August 1979. Subsequently,by Act 46 of 1982, Clause 2(j) was ordered to be substituted in the manner as quoted above. But thesaid provision was never given effect to and the meaning of an 'industry', as originally defined underSection 2(j), thereby continued, which reads as under:

"(j) 'industry' means any business, trade, undertaking, manufacture or calling of employers, andincludes any calling, service, employment, handicraft, or industrial occupation or avocation ofworkmen."

Section 2(j)(1) having never been given effect, we hold that the learned single Judge should not haverelied upon the said provision to come to a different meaning of 'industry'.

16. In State of Bihar v. S.K.Roy AIR 1966 SC 1995], the Supreme Court held that when there isobscurity or ambiguity in the earlier Act, subsequent legislation can be looked at to ascertain properinterpretation to be put upon earlier Act.

17. In T.Manickam & Co. v. State of Tamil Nadu [AIR 1971 SC 518], similar view was taken by theSupreme Court that in case of ambiguous provision, for the purpose of proper construction, usefulaid of subsequent amendment can be taken.

18. In the present case, as the subsequent amendment has never been given effect to and there is noambiguity in the earlier definition of 'industry', we are of the view that there was no occasion for thelearned single Judge to notice the subsequent definition to come to a different conclusion.

19. So far as the Settlement is concerned, it will be evident from the Settlement dated 27.4.1981that the terms of Settlement relates to the following issues:(i) Provident Fund;(ii) Wages for weekly holiday;(iii) Festival advance;(iv) Filling up vacant post;(v) Maternity Benefit Act;(vi) Construction of houses for the workmen;

(vii) Wage increase;(viii) National and Festival Holidays; and(ix) Re-employment of workers.None of the aforesaid terms of Settlement relates to non- employment, amounting to retrenchment.Therefore, the Corporation cannot derive advantage of the Settlement to deny the benefit of Section25F to an employee.

From paragraph 10 the said Settlement, it will be evident that while the Settlement was made, thatwas the first time the Management decided to retrench the Mates, Pump Operators and Helpers, asevident from the relevant portion of paragraph 10 and quoted here under:"The Management are very strong in holding that the categories of Mates, Pump Operators andHelpers cannot be continued any further as per the orders issued by their higher Ups in Delhi."

20. It is a settled law that effect of Settlement dispute between the workmen and the employer isbinding on all the parties, including those who are not parties to the Settlement. Reliance wasplaced on the decision in Jaihind Roadways v. MRMT & General Kamgar Union [2005 III LLJ 1020(SC)]. But, if the Settlement is against any provision of the Statute or Act or Constitution, one cannotderive advantage of the Settlement to deny the benefit, to which, an employee is entitled to underthe Statute or Act or Constitution. A workman of an industry, if continuously work for more than 240days in one calendar year and if he is retrenched from service without notice or notice pay, asstipulated under Section 25F, the Management cannot deny the benefit of Section 25F on the ground of Settlement reached either under Section 12 or Section 18 of the Act.

21. The learned single Judge, having failed to notice the fact that the Settlement does not relate tonon- employment amounting to retrenchment and that the Settlement cannot be used to deny thebenefit under Section 25F, we have no other option, but to set aside the order passed by the learnedsingle Judge.

22. The learned counsel appearing on behalf of the Corporation vehemently submitted that many ofthe workmen may not have completed 240 days in a calendar year and this matter has not beenlooked into. But, we are not inclined to accept such submission at this appellate stage, as no suchargument was advanced either before the Labour Court or before the learned single Judge that oneor other workman has not completed 240 days of service in one or other calendar year. Further,having accepted in the Bar by the learned counsel for the Corporation that the workmen wereworking since 1971 and 1972 and they were not allowed to work after 22.1.1981, viz. the day theyproceeded on strike, it is very difficult to presume that one or other has not worked for 240 days in aparticular calendar year.

23. In view of the discussion and finding as made above, we have no other option but to set aside theorder dated 1.8.1996 passed by the learned single Judge and the same is accordingly, set aside. It isinformed that the Corporation is functioning at Delhi, but has closed its agricultural farm atMelchengam. If it is so, the workmen will be entitled to the benefits which other similarly situatedpersons were allowed, in view of the award dated 26.3.1987 passed by the Labour Court.

In the result, the writ appeals are allowed with the above said observation. But, there shall be noorder as to costs.

Index : Yes (S.J.M.J) (R.E.J.)Internet : Yes 24.7.2009.

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To

The Presiding OfficerII Additional Labour CourtMadras 104.

S.J.MUKHOPADHAYA, J,ANDRAJA ELANGO, J.[kpl]

W.A.Nos.1367 to 1399