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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.20  OF 2018 (Arising out of S.L.P.(C) No.18413 of 2015)  

National Kamgar Union ….Appellant(s)

VERSUS

Kran Rader Pvt. Ltd. & Ors.        …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1. Leave granted.

2. This  appeal  is  filed  by  the  appellant-Trade

Union against the final judgment and order dated

12.09.2014 passed by the High Court of  Judicature

at  Bombay  in  Writ  Petition  No.5241  of  2003

whereby  the  High Court  allowed the  writ  petition

filed by respondent No.1-Kran Rader Pvt. Ltd. and

set aside the award dated 08.04.2003 passed by the

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Industrial Court, Pune in a Complaint (ULP) No.544

of  1990  and,  in  consequence,  dismissed  the

complaint filed by the appellant herein.

3. In order to appreciate the short issue involved

in the appeal, it is necessary to set out few relevant

facts infra.

4. The  appellant  is  the  Trade  Union  registered

under  the  Trade  Union  Act,  1926  having  several

members  working  in  Factories.   Respondent  No.1

owned a factory (manufacturing unit) at Pune.  This

Unit was originally owned by respondent Nos. 2 and

3 who, in turn, sold it to respondent No.4 in 1991

and  then  it  was  owned  by  respondent  No.1.  The

Unit  was  engaged  in  the  manufacture  of  several

components  like  Traction  Gears  for  supply  to

Railways,  forging  for  oil  industries  and  other

manufacturing  units  etc.   The  members  of  the

appellant-Union were working in respondent No.1’s

factory at all relevant time.  

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5. In  1990,  respondent  No.1  suffered  business

loss in running the said manufacturing unit  and,

therefore,  decided  to  close  down  the  said  unit

permanently.   With  that  end  in  view,  respondent

No.1  served  a  notice  of  closure  to  the  State

Government (Maharashtra) under Section 25 FFA of

the Industrial Disputes Act, 1947 (in short, “ID Act”)

on 29.08.1990 with a copy to the appellant-Union

expressing  therein  their  intention  to  close  the

operation of the Unit on expiry of 60 days with effect

from 29.10.1990.  

6. The  appellant-Union,  felt  aggrieved  of  the

closure  notice  issued  by  respondent  No.1,  filed

complaint  against  respondent  No.1  under  Section

28 read with Items 9 and 10 of the Schedule IV of

the Maharashtra Recognition of Trade Unions and

Prevention  of  Unfair  Labour  Practices  Act,  1971

(hereinafter referred to as “the Act”) in the Industrial

Court  at  Pune  in  October  1990  being

Complaint(ULP) No.544/1990.

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7. In substance, the grievance of the appellant in

their complaint was that since respondent No.1 had

employed more than 100 workers on an average per

working  day  for  preceding  12  months  in  their

manufacturing unit,  the provisions of  Chapter VB

(Section 25-K)  of  the  ID Act  and,  in turn,  all  the

relevant  provisions  contained  therein  were

applicable to respondent No.1.  It was alleged that

due  to  this  reason,  it  was  obligatory  upon

respondent No.1 to have ensured compliance of all

the relevant provisions applicable for closure of the

Unit.  It  was  alleged  that  since  admittedly  the

relevant  provisions applicable  to  closure  were  not

complied with by respondent No.1, a case was made

out under the ID Act read with the Act to seek a

declaration  that  the  intended closure  declared  by

respondent  No.1,  vide  their  notice  dated

29.08.1990, is illegal under the ID Act read with the

Act with a further grant of all consequential reliefs

to  each  worker  arising  out  of  grant  of  such

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declaration  sought  by  the  appellant  in  the

Complaint in their favour.

8. Respondent No.1 (employer)  filed a reply and

denied  therein  the  allegations  made  by  the

appellant-Union  in  their  complaint.   According  to

Respondent  No.1  they  never  employed  more  than

100 workers in their Unit so as to attract the rigor

of Chapter VB and other related provisions of the ID

Act  to give  effect  to the closure.   In other words,

according  to  respondent  No.1,  the  strength  of

workers working in their Unit was always less than

100 in number, therefore, the provisions of Chapter

VB and the related provisions of the I.D. Act had no

application to respondent No.1.  It was, therefore,

contended  that  the  decision  taken  by  respondent

No.1 to close the Unit with effect from 29.10.1990

was legal, proper and in accordance with law and

hence could not be faulted with.

9. The  parties  adduced  evidence

(documentary/oral)  in  support  of  their  respective

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contentions.  The  Industrial  Court,  by  its  award

dated  08.04.2003,  allowed  the  appellant's

complaint.  It  was  held  that  respondent  No.1  had

employed 115 workers at all relevant time in their

Unit, therefore, the provisions of Chapter VB of the

ID Act were required to be followed while effecting

the closure of the Unit.  It was held that since the

relevant  provisions  were  not  complied  with  by

respondent No.1, the closure in question was bad in

law entitling the members of the appellant-Union to

claim all consequential benefits arising therefrom as

if there was no closure of the Unit.

10. Respondent No.1 felt aggrieved and filed a writ

petition  before  the  Bombay  High  Court.  By

impugned judgment, the Single Judge allowed the

writ petition and while setting aside of the award of

the  Industrial  Court  dismissed  the  appellant's

complaint.  The  High  Court  held  that  the  total

strength of the workers working at all relevant time

in respondent No.1’s Unit was 99 and not 115 as

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held by the Industrial Court.  It was held that due

to this reason, it was not necessary for respondent

No.1  to  ensure  compliance  of  the  provisions  of

Chapter VB of the ID Act while declaring the closure

of their Unit.  

11. The  appellant-Union  felt  aggrieved  and  filed

the present appeal by way of special leave in this

Court.  

12.  Heard  Mr.  B.H.  Marlapalle,  learned  senior

counsel for appellant and Mr. D.J. Bhanage and Mr.

Sanjay  R.  Hegde,  learned  senior  counsel  for

respondents.

13. Having  heard  the  learned  counsel  for  the

parties at length and on perusal of the record of the

case,  we  find  no  good  ground  to  interfere  in  the

impugned judgment  of  the  High  Court.   In  other

words,  the  reasoning  assigned by  the  High Court

appears  to  be  just  and  reasonable  calling  no

interference for the reasons mentioned hereinbelow.

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14.  The  main  question,  which  arises  for

consideration in this appeal, is only one, viz., how

many  workers  were  working  in  the  Unit  of

respondent No.1 at all relevant time,  whether the

strength  of  the  workers  was  above  100  or  below

100.  In other words, the question, which arises for

consideration, is whether the provisions of Section

25-K of Chapter VB of the ID Act were applicable to

respondent No. 1-Unit at the relevant time.

15. If the strength of the workers was above 100 at

the relevant time,  in that  event,  the provisions of

Section  25-K  were  applicable  to  respondent  No.1

whereas  if  the  strength  was  below  100,  in  such

event,  the  provisions  of  Section  25K  had  no

application.   In  the  case  of  former,  the

appellant-Union succeeds and in the case of later,

respondent No.1 succeeds.  

16. As mentioned above, the Industrial Court held

that  115  workers  were  found  working  at  the

relevant time whereas the High Court held that 99

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workers  were  found  working  in  the  Unit  of

respondent No.1 at the relevant time.

17. There can be no dispute to the proposition that

the question as to what is the total strength of the

workers employed in the  Unit  or,  in  other  words,

how many workers were working in a particular unit

is essentially a question of fact.  Such question is

required  to  be  decided  by  the  Courts  on

appreciation of evidence adduced by the parties.  

18. Once  the  Courts  record  a  finding  on  such

question,  be  that  of  concurrence  or  reversal,  the

finding is usually held binding on this Court while

hearing  the  appeal  under  Article  136  of  the

Constitution.  

19. It  is  only  when such  finding  is  found  to  be

against any provision of law or evidence or is found

to be wholly perverse to the extent that no average

judicial  person  could  ever  record  such  finding,  it

would not be held binding on the superior Court.

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20. When  the  question  arises  as  to  what  is  the

status of a “workman”, this Court has held that it

has  to  be  inferred  as  a  matter  of  law  from facts

found and if the question involved is one of drawing

a legal  inference as to the status of  a  party from

facts found, it is not a pure question of fact.  It is

held that if the inference drawn by the Tribunal in

regard to the status of  the workman involved the

application  of  certain  legal  tests,  it  necessarily

becomes a mixed question of fact and law.

21. This  Court  has,  however,  cautioned  that  it

must  be  remembered  that  even  if  the  question

raised is one of the mixed question of fact and law,

this  Court  would  not  readily  interfere  with  the

conclusion of the Tribunal unless it is satisfied that

said  conclusion  is  manifestly  or  obviously

erroneous. (See AIR 1967 SC 428)

22. With a view to examine the question from both

angels which is taken note of above, we perused the

evidence  and  also  called  upon  the  parties  to  file

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additional  evidence  before  this  Court  and  it  was

filed.  

23. Having perused the record, we are not inclined

to  interfere  in  the  finding  recorded  by  the  High

Court though of reversal.  In other words, we are

inclined  to  agree  with  the  reasoning  of  the  High

Court and accordingly hold that the total strength of

workers  employed  at  the  relevant  time  in

respondent No.1’s Unit was 99 and that the status

of 16 disputed employees could not be conclusively

proved to be that of  a “workman” for the reasons

stated infra.

24.  First, the High Court assigned the reasons as

to why the finding of  the Industrial Court holding

the strength of workers as 115 is not factually and

legally sustainable.   Second, the reasons assigned

are neither arbitrary nor against the record and nor

perverse  to  that  event  so  as  to  call  for  any

interference  by  this  Court.  Third,  in  these

circumstances,  this  Court  would  be  slow  to

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appreciate  the  entire  evidence  afresh  on this

question  in  this  appeal  and  lastly,  such  being  a

question of fact or a mixed question of law and fact,

it is binding on this Court.

25. Inspite  of  this,  we  have  gone  through  the

evidence with a view to find out as to whether the

High Court has committed any jurisdictional error

in reaching to its conclusion.  In our view it is not.

We notice that the Industrial Court held that there

was no dispute regarding the status of 79 workers.

The dispute of status of an employee was confined

only to 36 employees, namely, whether their status

was  that  of  the  “worker”  or  “supervisor”.  The

Industrial Court, however, held that the status of all

the  36  employees  was  that  of  “worker”  and

accordingly  recorded  a  finding  that  79+36  =  115

employees were working as “worker” in the Unit at

the relevant time.  

26. The High Court, however, while reversing the

aforementioned finding of the Industrial Court came

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to a conclusion that out of 36 employees, only 20

employees  could  be  regarded  as  “worker”  and,

therefore,  the  total  strength  of  workers  at  all

relevant time was 79+20 = 99.  In our opinion, the

High Court  rightly  held that  there  was no cogent

evidence  adduced  by  the  appellant  to  prove  the

status  of  remaining  16  employees  as  to  whether

they also could be regarded as “worker” employed in

the Unit and, therefore, it was not possible to hold

that the total strength of the workers at the relevant

time was more than 100, i.e., 115.

27.  We, while concurring with the reasoning of the

High Court, also find that since the Industrial Court

did not elaborately discuss the issue regarding the

status of 16 employees while holding the strength of

workers at 115 except clubbing 36(20+16) with 79,

the High Court was right in going into the evidence

to the extent permissible and reversed the finding of

Industrial Court. In our view, the Industrial Court

should  have  examined  the  status  of  each  such

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disputed  employee  independently  for  holding

whether they could also be regarded as “worker”.  It

was, however, not done so.

28. Mr. B.H. Marlapalle, learned senior counsel for

the  appellant-Union,  strenuously  argued  with  the

help  of  the  entire  evidence  and  the  relevant

provisions  of  the  Factories  Act,  1948  and  the

Payment of Wages Act including the statutory forms

prescribed in the two Acts for  filing the details of

workers working in the Unit that the finding of the

Industrial Court appears to be more plausible and

reasonable as compared to the finding recorded by

the  High  Court  on  this  question  and  hence  the

finding  of  the  Industrial  Court  deserves  to  be

restored.   

29. We cannot accept this submission of learned

counsel  for  the  appellant  in  the  light  of  what  we

have held above. In our view, the appellant, in order

to prove the status of 16 employees, did not adduce

any cogent evidence as against the evidence of the

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respondent No.1.  It is,  therefore, not possible for

this Court to hold that the finding of the High Court

is wholly arbitrary or illegal or against the evidence.

We do not wish to go into this factual question any

more.

30. Learned counsel for the appellant then urged

that the High Court has committed a jurisdictional

error when it went on to re-appreciate the evidence

and  then  reversed  the  finding  of  the  Industrial

Court under Article 227 of the Constitution.  In our

view, it does not appear to be so.  

31. It  is  the  duty  of  the  High  Court  while

exercising  the  supervisory  jurisdiction  to  see  that

the subordinate Court has exercised its powers in

accordance  with  law  and  did  not  commit  any

illegality or perversity in reaching to its conclusion.  

32. While recording a finding, if it is noticed by the

High Court that the subordinate Court has failed to

take  into  consideration  the  material  evidence  or

recorded a finding without there being any evidence,

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then the High Court would be entitled to interfere in

such  finding  in  exercise  of  its  supervisory

jurisdiction under Article  227 of  the Constitution.

Such is the case here.

33. In the light of foregoing discussion, we do not

consider proper to disturb the findings recorded by

the  High  Court  which  are  more  plausible  and

reasonable rather than that of the Industrial Court.

34. In  view  of  the  foregoing  discussion,  we  also

hold that respondent No.1 had employed 99 workers

in their manufacturing Unit at the time of declaring

the closure of the Unit in 1990.  Since the strength

of workers was below 100, it was not necessary for

respondent No.1 to ensure  compliance of  Chapter

VB.   In  other  words,  in  such  circumstances,  the

provisions  of  Section  25-K  had  no  application  to

respondent No.1.   

35. This takes us to examine the next question as

to how much compensation and under which heads

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the workers are entitled to receive from respondent

No.1 (Company).  

36. Learned counsel for respondent No.1, however,

stated that out of total workers, most of the workers

have  settled  their  claims  by  accepting  the

compensation  offered  by  respondent  No.1

voluntarily.   Learned  counsel  stated  that  the

compensation paid to each worker consisted of  (i)

amount of Gratuity payable under the Payment of

Gratuity  Act,  (ii)  closure  compensation  payable

under the I.D. Act, and over and above these two

statutory  payments  of  compensation,  the

respondent No.1 also paid 30 days’ wages for each

completed year of  service  as  ex gratia  payment to

each worker.  It was also stated that now hardly 16

workers or so remain unpaid because they did not

accept the compensation when offered to them and

preferred to prosecute the present litigation.

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37. Learned  counsel  for  respondent  No.1  stated

that the total compensation paid to every worker in

1990-1991 varies between Rs.1 lakh to Rs.2 lakhs.

38. Taking into consideration the aforementioned

background facts and circumstances of the case, we

consider it just and proper to award in lump sum a

compensation of Rs.2,50,000/- (Rs.Two Lakhs and

Fifty Thousand) to each worker who did not accept

the compensation.

39. Let  Rs.2,50,000/-  (Rs.Two  Lakhs  and  Fifty

Thousand)  be  paid  to  each  such  worker  after

making  proper  verification.   If  any  worker  is  not

available  for  any  reason,  the  amount  payable  to

such worker be paid to his legal representatives or

nearest relatives, as the case may be, after making

proper verification.  

40. Respondent No.1 will, accordingly, deposit the

entire  compensation  payable  to  all  such  workers

with details in the Industrial Court, Pune.  A notice

will  then  be  served  to  each  worker  or  his  legal

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representatives,  as  the  case  may  be,  by  the

Industrial Court to enable the workers to withdraw

the amount from the Industrial Court.  

41. The amount will be paid to every worker or his

nominee as the case may be by the demand draft

issued  in  his/her  name  or  in  the  name  of  legal

representatives, as the case may be.  It will be duly

deposited  in  his/her  Bank  account  to  enable

him/her to withdraw the same.

42.  The appellant would submit necessary details

of  each  such  worker  before  the  Industrial  Court.

The  Industrial  Court  would  ensure  compliance  of

the  directions  of  this  Court  and  complete  all

formalities within three months from the date of this

order.

43. We make it clear that this order is applicable

only  to  those  workers  who  did  not  accept  the

compensation from respondent No.1.

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44. In  other  words,  those  workers  who  already

accepted the compensation will not be entitled to get

any benefit of this order.

45. With  these  directions,  the  appeal  stands

disposed of finally.  

               ………...................................J.

[R.K. AGRAWAL]             

                         …...……..................................J.

        [ABHAY MANOHAR SAPRE] New Delhi; January 5, 2018