IN THE HON’BLE

SUPREME COURT OF INDIA

In the matter of

Papraich Sugar Mills

(Appellant)

v.

Papraich Sugar Mills Mazdoor Union

(Respondent)

On Submission to the Hon’ble Supreme Court

MEMORANDUM FOR THE DEFENDANT

COUNSEL FOR THE DEFENDANT

ANIRUDDHA MISHRA

ROLL NO.- 22 SEM: 4

 Papraich Sugar Mills v. Papraich Sugar Mills Mazdoor Union

TABLE OF CONTENTS

1) LIST OF ABBREVIATIONS 3

2) INDEX OF AUTHORITIES 4

3) STATEMENT OF FACTS 5-6

4) ISSUES RAISED 7

5) SUMMARY OF ARGUMENTS 8

6) WRITTEN SUBMISSION ............................................................................... 9-13

7) PRAYER FOR RELIEF 14

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 Papraich Sugar Mills v. Papraich Sugar Mills Mazdoor Union

LIST OF ABBREVIATIONS

& And

AIR All India Reporter

Edn. Edition

Etc. Et Citra.

Govt. Government

SC Supreme Court

P. Page Number

v. Versus

No. Number

Dt. date

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 Papraich Sugar Mills v. Papraich Sugar Mills Mazdoor Union

INDEX OF AUTHORITIES

STATUTE:

• INDUSTRIAL DISPUTE ACT, 1947

BOOKS:

• V.G. Goswami, Labour and Industrial Laws, Central Law Agency, Allahabad 2011.
• S.N. Mishra, Labour and Industrial Law Central Law publication, Allahabad.
• Srivastava K. , Industrial piece and labour in India, Kitab Mahal, Allahabad, 2003.
• K.M. Pillai, Labour and Industrial laws, Allahabad Law Agency, Faridabad, Harayana.

DICTIONARIES:

• Concise Oxford Dictionary, 10th. Edn, Oxford University Press, 2002

WEBSITES:

• www.manupatra.com
• www.lexisnexis.com

INDIAN JUDICIAL DECISIONS ;

• Indian Metal and Metallurgical Corporation v. Industrial Tribunal

• K. N. Padmanabha Ayyar v. The State of Madras
• Messrs Burn and Co., Ltd., Calcutta v. Their Workmen
• National Union Fire Insurance Co. v. Ehrlich
• Patiala Cement Co. Ltd. V. Certain Workmen

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 Papraich Sugar Mills v. Papraich Sugar Mills Mazdoor Union

STATEMENT OF FACTS

1. The appellant is a limited company, which had been carrying on business in crushing
sugarcane at a place called Pipraich in Gorakhpur District from the year 1932. In 1946 it
decided to expand its business, and with that object, sold its old machinery which had a
crushing capacity of 160 tons per day, and purchased a new one with 650 tons capacity. The
new plant was installed in 1947, and it actually started working in 1948- 49
2. But the quota which was allotted to the appellate's Mill by Govt. proved too small to its
being worked profitably, with the result that in 1948-49 and 1949-50 the Company sustained
losses which according to the appellant came to Rs. 2,67,042-7-4.
3. After several unsuccessful attempts at getting a larger supply, the management wrote to the
Government on May 11, 1950, either to increase their quota or to permit them to sell the
Mills. In October 1950, the Government granted permission for the sale of the plant and
machinery, and pursuant thereto, the management sold them to a Madras party.
4. As the crushing season was then on, the appellant obtained from the purchaser a lease of the
Mills for the current season agreeing to deliver possession thereof on the termination of the
lease
5. When the workmen became aware of the agreement of sale, they had expected reaction. They
moved the Government to cancel the permission granted to the appellant for the sale of the
Mills, and they also passed a resolution on December 26, 1950, to go on strike from January
12, 1951, and communicated the same to the appellant. This led to correspondence between
the parties On January 3, 1951, the Managing Director offered through the Manager of the
Mills, to allot 25 percent of the profit on the sale transaction with the Madras party on certain
terms and subject to the condition "that the notice of strike should be withdrawn at once.
6. On January 9, 1951, Kashinath Pandey came to Pipraich, and discussed the
matter with the management and following upon it, the General Manager wrote to the
respondent on January 10, 1951 to negotiate with the Union. The letter concluded by stating
that the amount of compensation "will not be less than a lac".

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 Papraich Sugar Mills v. Papraich Sugar Mills Mazdoor Union

7. After this, the strike also did not take place, and the crushing went on till the end of January,
1951, when the season came to an end. To continue the narration, the lease having expired
with the crushing season, the purchaser came over to Pipraich to take delivery of the Mills
8. On February 28, 1951, the GM generated a notice of job of workers dismantling the
machinery and erecting it at Madras notified that workers who are not ready to
co-operate they should consider themselves to be discharged from 1st
March 1951. The workmen were thus in no mood to accept the terms contained in the notice
dated February 28, 1951, and so, the management had to issue further notice on March 14,
1951. The termination of workers extended from March 15 to March 21 due to the decision
pending of the Govt.
9. The Government declined by its letter dated March 21, 1951, to interfere with the sale of the
machinery, and in accordance with the understanding reached above, the workers should
have co-operated with the appellant in dismantling the machinery from March 21.
10. In view of the inability of the appellant to take up the contract, the purchaser entered into
direct negotiations with the workmen, and on 1-4-1951 concluded an agreement with them
for dismantling the machinery.The workers, next turned their attention to the appellant, and
on the basis of the letters dated January 3, 1951, and January 10, 1951, sent a notice to it on
April 19, 1951, asking for distribution among the workers of the "25 per cent labour-share of
the profits on sale of machinery
11. Thereafter, the respondent moved the Government to take action in the matter, and the result
was that on November 16, 1951, the U. P. Government issued a notification, referring the
following dispute to the adjudication of the Industrial Tribunal. By its award dated February
28, 1952, the Industrial Tribunal held firstly that the closure of the business and the sale of
the machinery by the appellant was bona fide, as it had been continuously incurring losses
and the supply position of sugarcane held out no immediate prospects of improvement, that
the conduct of the workmen had been throughout unfair and such as to disentitle them to
compensation but that the promise contained in the letters dated January 3 and 10, 1951, to
pay 25 per cent ofthe profits realised by the sale of the Mills, was binding on the
management. The management appealed against this decision, but the same was confirmed
by the Labour Appellate Tribunal by its order dated July 21, 1953.Now, matter rests before
this Court under Article 136.

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ISSUES RAISED

• Whether referring the dispute to Industrial Tribunal was ultra vires ?

• Whether there was any concluded or binding agreement by the appellant to pay the

workmen any share of profits in the sale transaction as promised via the notice on 03-

01-1951?

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 Papraich Sugar Mills v. Papraich Sugar Mills Mazdoor Union

SUMMARY OF ARGUMENTS

1. The notification dated November 16, 1951, referring the dispute to the adjudication of
the Industrial Tribunal is not ultra vires, and the reference and the award therein is
valid.
We do not find anything in the language of section 3 of the Act to warrant the imposition of
this additional limitation on the power of the State to make a reference. That section only
requires, apart from other conditions, with which we are not concerned, that there should be
an industrial dispute before there can be a reference, and we have held that it would be an
industrial dispute if it arises out of an existing industry. If that condition is satisfied, the
competence of the State for taking action under that section is complete, and the fact that the
industry has since been closed can have no effect on it.

2. There was binding agreement by the appellant to pay the workmen share of profits in
the sale transaction.
The question whether there was consideration for the promise made by the management in
its letters dated January 3, and January 10, 1951, arises only if the offer contained in the
letters had been accepted by the respondent, so as to ripen into an agreement. The mere fact
that there was no strike held at all and therefore the condition of “withdrawing the strike” is
fulfilled in an implied but conclusive sense. Such was also the view of the Tribunal which
decided that the non-performance of strike is enough acceptance regardless the
dissatisfaction of the workers.

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WRITTEN SUBMISSION

CONTENTION I: The notification dated November 16, 1951, referring the dispute
to the adjudication of the Industrial Tribunal is not ultra vires, and the reference and the
award therein are in consequence valid.

An "industrial dispute", as defined in s. 2(k) of the Industrial Disputes Act XIV of

1947 - and by force of section 2, that definition applies to the Act – "means any dispute or
difference between employees and employees, or between employers and workmen, or between
workmen and workmen, which is connected with the employment or nonemployment or the terms
of employment or with the conditions of the labour, of any person. "

Now, the it is contended that it is a condition precedent to the exercise by the State of its power
under Section 3 of the Act that there should be an industrial dispute, there has to be relation
between employer and workmen in order to construe an industrial dispute.

Reliance is placed in support of this position on the observation in Indian Metal and
Metallurgical Corporation v. Industrial Tribunal, Madras1 that the definition of an
"industrial dispute" presupposes the continued existence of the industry and on the decision in K.
N. Padmanabha Ayyar v. The State of Madras 2 that there could be no industrial dispute with
regard to a business, which was not in existence.

It cannot be doubted that the entire scheme of the Act assumes that there is in existence an
industry, and then proceeds on the provide for various steps being taken, when a dispute arises in
that industry. Thus, the provisions of the Act relating to lockout, strike, lay off, retrenchment,
conciliation and adjudication proceedings, the period during which the awards are to be in force
have meaning only if they refer to an industry which is running and not one which is closed.

1
Indian Metal and Metallurgical Corporation v. Industrial Tribunal, Madras ILLJ364Mad
2
K. N. Padmanabha Ayyar v. The State of Madras [1954] 1 L. L. J. 469

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 Papraich Sugar Mills v. Papraich Sugar Mills Mazdoor Union

3
In Messrs Burn and Co., Ltd., Calcutta v. Their Workmen this Court observed that the
object of all labour legislation was firstly to ensure fair terms to the workmen, and secondly to
prevent disputes between the employers and employees, so that production might not be
adversely affected and the larger interests of the public might not suffer. Both these objects again
can have their fulfilment only in an existing and not a dead industry.

The view therefore expressed in Indian Metal and Metallurgical Corporation v. Industrial
Tribunal, Madras and K. N. Padmanabha Ayyar v. The State of Madras that the industrial
dispute to which the provisions of the Act apply is only one which arises out of an existing
industry is clearly correct. Therefore, where the business has been closed and it is either admitted
or found that the closure is real and bona fide, any dispute arising with reference thereto would,
as held in K. N. Padmanabha Ayyar v. The State of Madras (supra), fall outside the purview of
the Industrial Disputes Act. And that will a fortiori be so, if a dispute arises - if one such can be
conceived – after the closure of the business between the quondam employer and employees.

In the light of the principles stated above, we must examine the nature of the dispute which is the
subject-matter of the reference under the impugned notification.

While the industry was in existence and between persons who stood in the relationship of
employer and employees, and that would clearly be an industrial dispute as defined in the Act.
There is nothing in the language of section 3 of the Act to warrant the imposition of this
additional limitation on the power of the State to make a reference.

Section 3 of The Industrial Disputes Act, 1947 reads:

“Works Committee.-

(1) In the case of any industrial establishment in which one hundred or more workmen are
employed or have been employed on any day in the preceding twelve months, the appropriate
Government may by general or special order require the employer to constitute in the prescribed
manner a Works Committee consisting of representatives of employers and workmen engaged in
the establishment so however that the number of representatives of workmen on the Committee
shall not be less than the number of representatives of the employer. The representatives of the
3
Messrs Burn and Co., Ltd., Calcutta v. Their Workmen [Civil Appeal No. 325 of 1955, decided on October 11,
1956.]

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workmen shall be chosen in the prescribed manner from among the workmen engaged in the
establishment and in consultation with their trade union, if any, registered under the Indian Trade
Unions Act, 1926 (16 of 1926 ).

(2) It shall be the duty of the Works Committee to promote measures for securing and preserving
amity and good relations between the employer and workmen and, to that end, to comment upon
matters of their common interest or concern and endeavour to compose any material difference
of opinion in respect of such matters.”4

That section only requires, apart from other conditions, with which the counsel is not concerned,
that there should be an industrial dispute before there can be a reference, and it should be held
that it would be an industrial dispute if it arises out of an existing industry. If that condition is
satisfied, the competence of the State for taking action under that section is complete, and the
fact that the industry has since been closed can have no effect on it. Any other construction
would result in serious anomalies and grave injustice. If a workman improperly dismissed raises
an industrial dispute, and before action is taken by the Government the industry is closed, what
happens to the right which the Act gives him for appropriate relief, if the Act vanishes into thin
air as soon as the industry is closed? If the contention of the appellant is correct, what is there to
prevent an employer who intends, for good and commercial reason, to close his business from
indulging on a large scale in unfair labour practices, in victimisation and in wrongful dismissals,
and escaping the consequences thereof by closing down the industry? On a true construction
of s. 3, the power of the State to make a reference under that section must be determined with
reference not to the date, on which it is made but to the date on which the right which is the
subject-matter of the dispute arises, and that the machinery provided under the Act would be
available for working out the rights which bad accrued prior to the dissolution of the business.

The cases when analyzed will result in a conclusion that there should be an existence of an
industry and in the given case there was existence of an industry when the industrial dispute
arose. Also even if we consider that there should be continuance of the industry then also it is to
be considered that the industrial dispute arose on December 26, 1950 and the industry was not
only in existence at that point of time but also continued till March 21, 1951. Therefore it can be
finally concluded that the The notification dated November 16, 1951, referring the dispute to the
4 Section 3, The Industrial Disputes Act, 1957.

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 Papraich Sugar Mills v. Papraich Sugar Mills Mazdoor Union

adjudication of the Industrial Tribunal is not ultra vires, and the reference and the award therein
are in consequence valid.

CONTENTION II : There was concluded and binding agreement by the appellant to

pay the workmen any share of profits in the sale transaction as promised via letter dated
January 3, 1951.

Starting with the letter dated January 3, 1951, wherein the management made an offer to pay 25
per cent of the profits of the sale transaction to the workmen. It was expressly subject to the
condition that the strike should be called off "at once and today". The fact which is to be
considered here that there was only a notification for strike but the strike never happened. The
letter by the mill authority specifically stated that the “Strike” should be called off. Strike is
defined under Section 2(q) of The Industrial Disputes Act, 1947 as:

"Strike" means a cessation of work by a body of persons employed in any industry acting in
combination or a concerted refusal, or a refusal under a common understanding, of any number
of persons who are or have been so employed to continue to work or to accept employment.5

Going by the interpretation of the definition, there was no cessation of work by any body of
workers what so ever. There was mere dissatisfaction among workers while working in the
industry but there was no refusal under a common understanding between the workers in any
manners. Few of the workers displayed dissatisfaction in their personal capacity and manner but
no action was taken by the workers body as a whole and the employment continued like a normal
scenario. Therefore, it can be concluded that there was no strike which took place.
.
Then on January 10, 1951, the management renewed its offer subject again to the condition that
the strike notice was withdrawn at once. Union at the time was not in place to make any
communication to the management but in its emission to conduct a strike clearly reflects its
acceptance to the management’s offer such implication and direct and substantial. In the case of
National Union Fire Insurance Co. v. Ehrlich6, an established principle of English law was

5 Section 2(q) of The Industrial Disputes Act, 1947.

6 122 Misc. 682 (N.Y. App. Div. 1924)

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reestablished that silence can be treated as acceptance if the actions suggests so. In the case as
there is no strike which took place, silence can be considered as acceptance.
The actions of Kashinath Pandey is not a signification of collective will but his personal
expression and union has no relation with the hunger strike threat given by him. The workers as
body did not take any actions through a common will but few of the workers showed their
contempt and dissatisfaction in their own personal capacity to which union owes no liability.

In Patiala Cement Co. Ltd. V. Certain Workmen7, it was held that mere cessation of work
does not come within the purview of strike. It was also held in that case that mere non-
cooperation by certain workers cannot be treated as strike if such is not done through common
will of the workers union. The significance was put on the common will and intention of the
body of workmen and not just non-cooperation of certain workers in personal capacity.

The question whether there was consideration for the promise made by the management in its
letters dated January 3, and January 10, 1951, arises only if the offer contained in the letters had
been accepted by the respondent, so as to ripen into an agreement. And as we have already
proved that there was acceptance by the union through their omission of doing strike and
therefore the agreement has to be concluded to be binding on the management. Therefore, the
management is obligated to given the portion of profit to the workmen.

7 (1955)II LLJ 57 (LAT)

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PRAYER FOR RELIEF

Wherefore in the lights of the facts stated, authorities cited, arguments advanced, the Defendant
humbly requests the Hon’ble Court to adjudge and declare that:-

1. Appeal should not be allowed.

2. The judgement of the tribunal be upheld.
3. There being concluded and binding agreement by the appellant so, appellants
are liable to pay share of profits to the workmen.

And, pass any order or decree in the favor of the defendant as the Court may deem fit in the
lights of Justice, Equity & Good Conscience.

All of which is most humbly prayed.

COUNSEL ON BEHALF OF DEFENDANT 2019, 8th April

ANIRUDDHA MISHRA

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