judgement:
minal Appeal No. 177 of 1963.
Appeal from the judgment and order dated May 14, 1963 of the Calcutta High Court in Criminal Appeal No. 380 of 1962.
section C. Das Gupta and Sukumar Ghose, for appellants.
C. K. Daphtary, Attorney General, A. N. Sinha and P. K. Mukherjee, for the respondent.
The Judgment of MUDHOLKAR and SATYANARAYANA RAJU JJ. was delivered by MUDHOLKAR J. BACHAWAT J. delivered a separate Judgment.
Mudholkar, J. This is an appeal by certificate from a judg ment of the High Court of Calcutta setting aside the acquittal of M/s. Baburally Sardar of Steward Hogg Market, Calcutta, appellant No. 1 and of Abdul Razzak, a partner of that firm, appellant No. 2, in respect of an offence under section 16 (1) (a) (i) of the read with section 7(1) of that act.
The facts which are not in dispute are briefly these : On June 1, 1960 a Food Inspector of the Corporation of Calcutta visited the shop of the appellants.
At that time Abdul Razzak was in charge.
He took samples of Comela Brand condensed milk from the shop, one of which was sent to the Public Analyst.
Upon an analysis made by the Public Analyst the milk fat content of the condensed milk was found to be 3.4% which did not conform to the prescribed standard in respect of condensed milk.
A complaint was thereupon lodged against the firm before the Municipal Magistrate and Additional Chief Presidency Magistrate, 817 Calcutta.
Apart from the firm five other persons, including Abdul ' Razzak were also named as accused persons.
One of the accused persons, Mohd. Yasin did not appear but it was represented to the learned Magistrate that the person was not mentally fit.
Thereupon the counsel for the Corporation gave him up.
The other accused persons pleaded not guilty and were eventually acquitted by the Magistrate.
Against that order an appeal was preferred before the High Court under section 417 of the Code of Criminal Procedure.
The High Court, however, allowed the appeal only against the appellants but dismissed it against the remaining accused persons.
The defence of the appellants was based upon section 19(2) of the Act and was briefly this : The tins of condensed milk were purchased by the firm on May 3, 1960 from Messrs section Choudhury Brothers under a document of sale exhibit A.
At that time the firm had demanded a warranty from the traders, that is, Messrs. Choudhury Brothers, but they did not furnish a written guarantee on the ground that a certificate and a warranty had been given on each tin of condensed milk.
The appellants further pleaded that the tins were in the same condition in which they were when they were purchased from Messrs Choudhury Brothers and that they had no reason to believe that there was any alteration in their nature, substance or quality subsequent to the purchase of the tins.
It may be mentioned that an attempt was made to secure the appearance of section Choudhury of Messrs. Choudhury Brothers, but it failed because he could not be traced at the address given in the cash memo.
Section 16(1) (a) (i) of the Act, amongst other things, pro vides that if any person, whether by himself or by any person on his behalf stores or sells any article of food in contravention of any provisions of the Act or of the rules made thereunder he shall 'be punishable for the first offence with imprisonment for a term which may extend to one year and/or with fine which may extend to Rs. 2000 or both.
Section 2(i) defines the word "adulterated".
According to the definition an article of food shall be deemed to be adulterated in various circumstances, one of which is where the quality or purity of the article falls below the pres cribed standard.
In the Act "prescribed" means prescribed by the rules.
Rule 5 of the Rules framed by the Central Government under section 23(1) of the Act read with section 4(2) thereof runs thus "Standards of quality of the various articles of food specified in Appendix B to these rules as defined in that appendix.
" 818 The definition of standard of quality for condensed milk is give in A. 1 1.07 of Appendix B and runs thus : "Condensed milk means milk which has been con centrated from full cream milk by removal of part of its water with or without the addition of sugar, and includes the article commonly known as 'evaporated milk ' but does not include the article commonly known as 'dried milk ' or 'milk powder '.
It shall be free from preservatives other than sugar and contain at least 31 per cent of milk solids of which at least 9 per cent shall be fat.
" As already stated, the Public Analyst found that the fat content of the condensed milk was only 3.4% whereas the minimum prescribed in the Appendix is 9%.
It is, therefore, clear that the condensed milk stored by the appellants for sale was adulterated and, therefore, there was a breach of the provisions of section 16(1)(a) (i) of the Act.
In view of the provisions of section 19(1) it was not open to the appellants to contend that they were ignorant of the nature, substance and quality of the condensed milk sold by them.
Subsection (2) of section 19, however, furnishes a defence to a vendor ignorant of the nature, substance and quality of food sold by him provided he satisfies the requirements of that provision.
Omitting the second proviso thereto, which is not relevant in the present case, sub section
(2) of section 19 reads thus : " (2) A vendor shall not be deemed to have committed an offence if he proves (i) that the article of food was purchased by him as the same in nature, substance and quality as that demanded by the purchaser and with a written warranty in the prescribed form, if any, to the effect that it was of such nature, substance and quality; (ii) that he had no reason to believe at the time when he sold it that the food was not of such nature, substance and quality; and (iii)that he sold it in the same state as he purchased it : Provided that such a defence shall be open to the vendor only if he has submitted to the food inspector or the local authority a copy of the warranty with a written notice stating that he intends to rely on it and 819 specifying the name and address of the person from whom he received it, and has also sent a like notice of his intention to that person.
" The aforesaid defence was available to the appellants provided that they showed, in the first place, that what was stored by them for sale to purchasers demanding condensed milk was in fact milk which had been concentrated from full cream milk so as to conform to the standard of quality given in A. 1 1.07 of Appendix B. For, it would be milk which satisfies the standard prescribed therein which can be regarded as 'condensed milk ' under the Act.
Upon analysis, however, it was found that the so called condensed milk contained in the samples taken by the Food Inspector from the appellants was far inferior to that prescribed for "condensed milk".
It could, therefore, not be regarded as "the same in nature, substance and quality as that demanded by the purchaser".
Nor again, had the appellant obtained a warranty in the prescribed form.
Rule 12 A provides that every trader selling an article of food to a vendor shall deliver to the vendor a warranty in form 6 A, if required to do so by the vendor.
No such warranty was demanded by the appellants, nor given by Messrs. section Chaudhury Brothers.
No doubt, under the proviso to the aforesaid sub rule no warranty in the prescribed form is necessary if the label on the article of food or cash memo delivered by the trader to the vendor in respect of that article contains a warranty certifying that the food contained in the container or mentioned in the cash memo is the same in nature, substance and quality as demanded by the vendor.
Mr. Das Gupta for the appellants, says that the labels on the tins satisfy the requirements of the proviso and faintly suggested that the cash memo also satisfies the conditions.
The contents of the label upon which reliance is placed by him are as follows : " 'Comela ' Full Cream sweetened condensed milk made on formula of Holland Product. 'Comela Brand ' 'The contents of the tin are scientifically preserved, pure and produced from healthy Cow 's milk.
Comela full cream condensed milk easily digestable and are ideal food for babies.
Special care is taken to maintain freshness Prepared by Kwality Diary.
" This label contains no warranty of the kind referred to in the proviso.
Moreover, it is not even in the form given for a label 820 prescribed for "Sweetened condensed milk".
Under r. 42 B(b) the label prescribed is as follows CONDENSED FULL CREAM MILK (Sweetened) This tin contains the equivalent of . litres of milk with sugar added.
It may be that the inscription on the prescribed label "This tin contains an equivalent of. . litres of milk with sugar added" was meant to serve the purpose of a warranty though it is couched in different language.
For, it may be possible to ascertain by reference to standard tables the quantity of milk solids and fat from the quantity of milk condensed and from the quantity of condensed milk contained in the tin.
It would not be possible even to do this on the basis of the particulars given on the labels borne on the tins which were taken as samples by the Food Inspector from the appellants.
Mr. Das Gupta strongly relied upon the words "Full Cream" and said that where condensed milk is said to have been obtained from full cream the requirements of law must be deemed to have been satisfied.
For one thing "Full cream" has nowhere been defined in the Act or the rules.
Moreover, without knowing the quantity of "Full cream" which was condensed in the milk contained in each tin it is impossible even to calculate the quantity of milk solids and fat in each tin.
The label, therefore, is of little assistance to the appellants.
Moreover, when a vendor accepts from the trader tins purported to be of condensed milk bearing a label of this kind he cannot be said to have "had no reason to believe" that it was not condensed milk of the prescribed nature, substance and quality.
It may be that the appellants sold them in the same state as they purchased them.
But this fact is by itself not sufficient to absolve them.
As for the so called cash memo it is sufficient to point out that all that it specifies is : Quantity Description Rate Per Amount 1 C/C Comela Milk C 70/ Case Rs. 70 00 There is not a whisper of any warranty on it.
In the circumstances, therefore, the High Court was right in setting aside the acquittal of the appellants and convicting them of the offence under section 1 6 (1) (a) of the Act and sentencing them to pay fine of Rs. 2,000 each.
The appeal is without merit and is dismissed.
821 Bachawat, J.
The defence under section 19(2) of the cannot succeed, as the appellants failed to prove that they purchased the articles of food with a written warranty in the prescribed form.
The label on the tin container gave a description of the article of food, but it did not give a warranty certifying that the food is the same in nature, substance and quality as demanded by the vendor.
In the absence of such a warranty, the appellants have failed to establish the defence under section 19 (2) read with R. 12 (a) and Form VI A.
Had there been such a written warranty on the label, the appellants would have established the defence.
I agree that the appeal be dismissed.
Appeal dismissed.

summary:
Samples of a certain brand of tinned condensed milk were taken from the appellants ' shop by the Food Inspector.
The Public Analyst found the fat content of the condensed milk below standard.
When prosecuted under section 16(1) (a) (i) of the the appellants took a plea based on section 19(2) of the Act and claimed that the label on the tins was a warranty within the meaning of that section as well as of the proviso to Rule 12 A.
The label on the tins described the milk as "Full cream sweetened condensed milk made on formula of Holland product ' and inter alia said : "The contents of the tin are scientifically preserved, pure and produced from healthy cow 's milk." The trial Magistrate accepted the appellants ' plea and acquitted them but on appeal by the State the High Court convicted them.
They appealed to this Court with certificate.
HELD : (i) Defence under section 19(2) of the Act was available to the appellants provided they showed in the first place, that what was stored by them for sale to the purchasers demanding condensed milk was in fact milk which had been concentrated from full cream milk so as to conform to the standard of quality given in A 11.07 of Appendix B. For, it would be milk which satisfies the standard prescribed therein which can be regarded as 'condensed milk ' under the Act.
Since however the milk stored by the appellants was found to be below standard it could not be regarded as 'the same in nature, substance and quality as that demanded by the purchaser '.
Nor again had the appellants obtained a warranty in the prescribed form.
Thus the requirements of s.19 (2) (i) were not satisfied.
[819 B C] (ii) No doubt, under the proviso to Rule 12 A no warranty in the prescribed farm is necessary if the label on the article of food or cash memo delivered by the trader to the vendor in respect of that article contains a warranty certifying that the food contained in the container or mentioned in the cash memo is the same in nature, substance and quality as demanded by the vendor.
But the labels on the tins stared by the appellants contained no warranty of the kind referred to in the proviso.
The labels were not in the form prescribed under r. 42B(b) and it was not possible from the matter printed thereon to ascertain by reference to standard tables the quantity of milk solids and fat from the quantity of milk condensed and from the quantity of condensed milk contained in the tin.
[819 D 820 D] (iii)The words "Full cream" on the tin did not satisfy the requirements of the law either. 'Full cream ' has nowhere been defined in the Act or the rules.
Without knowing the quantity of 'full cream ' which 816 was condensed in the milk contained in each tin it was impossible even to calculate the quantity of milk solids and fat in each tin.
The label therefore was of little assistance to the appellants.
[820 D E] Similarly the cash memos carried no warranty whatsoever.
(iv) When a vendor accepts from the trader tins purported to be of condensed milk hearing a label of the above kind he cannot be said to have "had no reason to believe" that it was not condensed milk of the prescribed nature, substance and quality.
It may be that the appellants sold the tins in the same state as they purchased them.
But this fact was by itself not sufficient to absolve them.
[820 F] Per Bachawat, J The defence under section 19(2) of the Act could not succeed as the appellants failed to prove that they purchased the articles of food with a written warranty in the prescribed form.
The label on the tin container gave a description of the article of food but it did not give a warranty certifying that the food was the same in nature, substance and quality as demanded by the vendor.
In the absence of such a warranty.
the appellants had failed to establish the defence under section 19(2) read with r. 12 A and Form VI A. [821 A B.]


judgement:
Civil Appeal No. 156 of 1965.
Appeal by special leave from the judgment and order dated August 12, 1963 of the Bombay High Court (Nagpur Bench) in Special Civil Application No. 315 of 1962.
V. P. Sathe and A. G. Ratnaparkhi, for the appellants.
661 M. N. Phadke, J. B. Dadachanji, O.C. Mathur and Ravinder Narain, for respondents Nos. 1 and 3.
N. section Bindra and B. R. G. K. Achar, for respondent No.4.
The Judgment of the Court was delivered by Satyanarayana Raju, J.
This is an appeal, by Special Leave,, against the judgment of a Division Bench of the Bombay High Court dismissing an application for the issue of a Writ of certiorari under article 226 of the Constitution to quash the order of the State Industrial Court at Nagpur.
For a proper appreciation of the questions that have been raised in the appeal, it would be necessary to state the material facts.
The Model Mills, Nagpur (hereinafter referred to as the Mills) is a public limited company incorporated under the Indian Companies Act.
On July 18, 1959, in exercise of the powers conferred by section 18 A of the Industries (Development and Regulation) Act, 1951, the Central Government took over the management of the Mills and appointed the 3rd respondent as the authorised Controller of the Mills.
On March 25, 1960 the State of Bombay (now the State of Maharashtra), in exercise of the powers conferred by sections 3 and 4 of the Bombay Relief Undertakings (Special Provisions) Act, 1958 (hereinafter referred to as the Bombay Act) made a notification declaring the Mills to be a ' "relief undertaking" for a period of one year commencing from March 26, 1960 and ending with March 25, 1961.
The appellants, eight in number, were, at the relevant time, the permanent employees of the Mills.
It would be convenient to refer to them as "employees".
On December 15, 1960, when the notification made by the State Government under the Bombay Act was in force, the employees abstained from work.
Thereupon, the 1st respondent who is the Factory Manager of the Mills issued notices to the employees to show cause why they should not be dismissed from service for joining an "illegal strike".
On January 6, 1961 the Factory Manager passed orders dismissing the employees from service.
On January 12, 1961 the employees filed an application in the High Court of Bombay for the issue of a writ of mandamus directing the employees to be reinstated in service.
On April 4, 1961, the exemption of the Mills from the application of section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act (XXIII of 1947) (herein after called the State Act) was made.
On April 25, 1961 the employees filed applications before the Assistant Commissioner Sup.
CI./76 12 662 of Labour claiming reinstatement with back wages.
The High Court dismissed the Writ Petition filed by the employees with liberty to file a fresh petition, if necessary, since they were prosecuting their applications for relief of reinstatement before the Assistant Commissioner of Labour.
In and by his order dated September 29, 1961, the Assistant Commissioner allowed the applications filed by the employees.
He held that as there was no illegal strike the orders of dismissal were unsustainable and should be set aside.
He directed that the employees should be reinstated with back wages.
Against the orders passed by the Assistant Commissioner, the Mills preferred applications in revision to the State Industrial Court.
By its order dated February 16, 1962, the Industrial Court allowed the revision applications filed by the Mills on the ground that the applications before the Assistant Commissioner were not maintainable.
On the merits, the Industrial Court agreed with the Assistant Commissioner that there was no illegal strike.
Aggrieved by the orders of the Industrial Court, the employees filed an applicaton under articles 226 and 227 of the Constitution for the issue of a writ of certiorari to quash the orders of dismissal passed by the Factory Manager and to direct their reinstatement with back wages.
By its judgment dated August 12, 1963 the High Court dismissed the Writ Petition filed by the employees.
The High Court has held that the right to claim reinstatement is not a right which is available to an employee under the Common Law and that the relief of reinstatement is a special right which has been conferred on an employee under section 16 of the State Act.
In the opinion of the High Court, the essential pre condition for an employee to claim relief under section 16 is that he is an employee in an industry to which that section is applicable and in respect of which a notification under section 16(1) also has been issued.
The High Court has reached this conclusion by reason of the fact that the State Government issued a notification exempting the Mills from the operation of section 16 of the State Act and that the exemption was withdrawn only on April 4, 1961 while the employees were dismissed on January 6, 1961.
In the opinion of the High Court, by reason of the fact that section 16 of the Act was not applicable, the dismissal of the employees even if it was wrongful did not give them a right to claim TV instatement and that to hold otherwise would be to give retrospective operation to section 16 of the State Act which became applicable to the Mills on and from April 4, 1961 by reason of the withdrawal of the exemption.
in the result, the High Court confirmed the finding of the State Industrial Court that the employees had 663 no right to file applications under section 16 of the State Act and the applications filed by them before the Assistant Commissioner were not maintainable.
Now it is contended by Mr. V. Sathe on behalf of the employees that though the industry was exempt from the operation of certain sections including section 16 of the Act, on the date when the appellants were dismissed, there was an existing industrial dispute relating to an industrial matter between the employees and the Mills on April 4, 1961, when the notification withdrawing the exemption in favour of the Mills from the operation of section 16 of the State Act was issued by the Government, that on the date when the employees filed an application under section 16 before the Commissioner of Labour, the period of six months provided by that section had not elapsed and that therefore the employees could invoke the provisions of section 16 and claim reinstatement.
The learned counsel for the Mills, Mr. Phadke, has endeavoured to support the judgment of the High Court and the reasons on which its conclusions were rested.
The questions which arise for determination in this appeal are : 1.
Whether the right of a dismissed employee to claim reinstatement, in appropriate cases, exists.
de hors section 16 of ' the State Act ? 2.
Whether by reason of the State Government 's exemption of the industry from the operation of section 16 on the date when the employees were dismissed from service, their right to apply for reinstatement ceased to exist ? For a proper determination of the above questions, it is necessary to refer to the material statutory provisions.
The State Act became law on June 2, 1947.
section 15 of the State Act empowers the State Government to appoint any person as Labour Commissioner for the State and he shall exercise all or any of the powers of the Labour Commissioner.
Now section 16 of the State Act as it stood at the relevant date provides as follows: "(1) Where the State Government by notification so directs, the Labour Commissioner shall have power to decide an industrial dispute touching the dismissal, discharge, removal or suspension of an employee working in any industry in general or in any local area as may be specified in the notification.
664 .lm15 (2) Any employee, working in an industry to which the notification under sub section (1) applies, may, within six months from the date of such dismissal, discharge, removal or suspension, apply to the Labour Commissioner for reinstatement and payment of compensation for loss of wages.
The different powers that could be exercised by the Labour Commissioner are then set out in sub section
(3) : "On receipt of such application, if the Labour Commissioner, after such enquiry as may be prescribed, finds that the dismissal . was in contravention of any of the provisions of this Act or in contravention of a standing order. he may direct that the employee shall be reinstated forthwith or by a specified date and paid for the whole period from the date of dismissal . to the date of the order of the Labour Commissioner".
It is common ground that section 16 is made applicable to the textile industry with effect from.
March 1, 1951 by a notification dated February 22, 1951.
The provisions of section 16 were thus applicable to the Mills till March 25, 1960, on which date, however, the State Government issued a notification in exercise of the powers conferred under sections 3 and 4 of the Bombay Act declaring the Mills to be a 'relief undertaking '.
The notification directed that the provisions of section 16 of the State Act and Chapter V A of the Industrial Disputes Act (XIV of 1947) (Lay off and Retrenchment) shall not apply to the Mills and that it shall be exempt therefrom.
This notification was extended by the State Government on March 8, 1961 for a further period of one year.
A subsequent notification dated April 4, 1961 issued by the State of Bombay amended the earlier notification by withdrawing the exemption in so far as it related to section 16 of the State Act.
The alleged participation by the employees in an illegal strike occurred on December 15, 1960 and the 1st respondent dismissed the employees in and by his order dated January 6, 1961.
It was during the period between March 25, 1960 and April 4, 1961 when the exemption was in force that the incident which resulted in the Mills framing a charge against the employees happened and the subsequent orders of dismissal were passed.
It is submitted by the learned counsel on behalf of the Mills that the right of an employee to claim reinstatement has been granted by section 16 of the State Act and since the Mills were exempt 665 from the provisions of that section on the material dates the employee had no right to claim reinstatement.
The Industrial Disputes Act (XIV of 1947) came into force on April 1, 1947.
For our present purposes, it is not necessary to consider whether the right to claim reinstatement by a dismissed employee existed before the Central Act became law.
The question about the jurisdiction of an Industrial Tribunal to direct reinstatement of a dismissed employee was raised as early as 1949, before the Federal Court in Western India Automobile Association vs Industrial Tribunal, Bombay(1).
In that case, the Federal Court considered the larger question about the powers of industrial tribunals in all its aspects and rejected the argument of the employer that to invest the tribunal with jurisdiction to order reinstatement amounts to giving it authority to make a contract between two persons when one of them is unwilling to enter into a contract of employment at all.
This argument, it was observed, "overlooks the fact that when a dispute arises about the employment of a person at the instance of a trade union or a trade union objects to the employment of a certain person, the definition of industrial dispute would cover both those cases.
In each of those cases, although the employer may be unwilling to, do, there will be jurisdiction in the tribunal to direct the employment or non employment of the person by the employer".
The Federal Court also added "The disputes of this character being covered by the definition of the expression 'industrial disputes ', there appears no logical ground to exclude an award of rein statement from the jurisdiction of the Industrial Tribunal.
For nearly two decades the decision of the Federal Court has been accepted without question.
Therefore, after the , at any rate, the right of a dismissed employee to claim reinstatement in proper cases has been recognised.
It is no doubt true that under the Central Act the right to claim reinstatement has to be enforced in the manner laid down by that statute, whereas under the State Act it is open to an employee to claim reinstatement without the intervention of the appropriate Government.
This would not however make any difference.
It is argued that by reason of the exemption granted by the Bombay State when it declared the Mills to be a relief undertaking, rights and obligations which accrued to the employees or were incurred by the Mills during the period of exemption, stood (1) 666 abrogated.
This takes us to the question as to the legal effect of 'the exemption granted by the State of Bombay.
The notification issued by the State of Bombay is in the following terms : "The Government of Bombay hereby directs that in relation to the said relief undertaking and in respect of the said period of one year for which that relief undertaking continues as such, the provisions of (i) Sections 16, 31 and 37, section 40 (in so far as it relates to lock out) and section 51 and section 61 [in so far as it relates to clauses (b) and (c) of Rule 36 of the Central Provinces and Berar Industrial Disputes Settlement Rules, 1949] Central Provinces and Berar Act No. XXIII of 1947 and (ii) Chapter V A of the (XIV of 1947) shall not apply and the said relief undertaking shall be exempt from the aforesaid provisions of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947 (Central Provinces and Berar Act No. XXIII of 1947) and the (XIV of 1947).
" The contention urged on behalf of the Mills proceeds on the assumption that the right to claim reinstatement has been granted by section 16 of the State Act.
As we have already stated, section 16 only recognises the right of a dismissed employee, in appropriate cases, to claim reinstatement but does not confer the right.
The section provides the procedure for enforcing the right.
In this view, the right of the dismissed employee to claim reinstatement was in existence even during the period of exemption, but only it could not be enforced under section 16.
Once the exemption is withdrawn the status quo ante is restored and it is open to the employee to file an application for reinstatement provided, however, his application is within the period of six months from the date of his dismissal.
Under section 4 ( 1 )(a), on a notification being made, the industry becomes a relief undertaking and the laws enumerated in the Schedule to the Bombay Act shall not apply.
The Schedule specifies Chapter V A of the and section 16 of the State Act.
Section 4 ( 1 )(a) (i) also provides that the relief undertaking shall be exempt from the operation of the Acts mentioned in the Schedule.
Learned counsel drew a distinction between the expressions exemption ' and 'suspension ' by relying upon the meanings given to these words in the Oxford Dictionary. 'Exempton ' means 667 'immunity from a liability ' whereas the word 'suspension ' means 'put it off '.
Basing himself on the dictionary meanings, learned counsel for the Mills has contended that the word 'exemption ' is of a wider connotation than 'suspension ' and means that the industry shall be immune from the liabilities arising under the statutes specified in the Schedule and that the order of dismissal having been passed while the exemption was in force, the Mills were immune from liability to reinstate the employees on their dismissal being held to be wrongful.
The order dismissing the employees was passed on January 6, 1961 when the notification was in force.
The employees filed applications before the Commissioner of Labour on April 25, 1961.
On the date of their applications, the exemption granted to the Mills by the State Government was no longer in operation.
The decision in Birla Brothers, Ltd. vs Modak(1) has firmly established the principle that for a dispute which originated before the came into force but was in existence on the date when that Act became law, the Act applied to the dispute since it was in existence and continuing on that date and no question of giving retrospective effect to the Act arose.
At p. 22 1, the learned Chief Justice, Harries, who spoke for the Court stated thus : "In my judgment, the Act of 1947 clearly applies to the present dispute without any question arising of giving the Act any retrospective effect.
It is true the dispute arose before the Act was passed, but on April 1, 1947, when the Act came into force, the dispute was in existence and continuing.
The employees were on strike and the strike actually continued until May 19, that is, five days after the Government made the order referring the dispute to arbitration.
In my judgment, the Act must apply to any dispute existing after it came into force, no matter when that dispute commenced.
There is nothing in the Act to suggest that it should apply only to disputes which originated after the passing of the Act.
On the contrary, the opening words of s.10 of the Act make it clear that the Act would apply to all disputes existing when it came into force.
The opening words of section 10(1) are If any industrial dispute exists or is apprehended, the appropriate Goverment may, by order in writing etc.
(1) L.L.R. 668 It seems to me that these words make it abundantly clear that the Act applies to any industrial dispute existing when it came into force and, therefore, the Act applies to this dispute.
" It is argued by Mr. Phadke that the, notification dated April 4, 1961 withdrawing the exemption is only prospective and no retrospective effect can be given to it.
This argument proceeds on a fallacy.
There is no question of the notification withdrawing an exemption being prospective or retrospective.
It is finally submitted by learned counsel for the Mills that the validity of the order passed by the Factory Manager dismissing the employees from service has not been determined by the High Court and that the matter must be remitted to that Court for a consideration of that question.
We may point out that the Assistant Commissioner of Labour has held that the dismissal is wrongful.
This conclusion is affirmed by the Industrial Court.
The validity of the dismissal was therefore finally concluded in favour of the employees.
There is therefore no question of the validity of the dismissal order now being considered by the High Court.
We may now summarise the conclusions reached by us as a result of the above discussion.
The right of an employee to claim reinstatement on a wrongful dismissal exists de hors section 16 of the State Act.
Section 16 provides a forum for a dismissed employee to claim reinstatement but does not create a right.
The effect of an exemption granted by the notification issued under the Bombay Act is not to destroy the right but to suspend the remedy prescribed by section 16 for enforcing that right during the period when the exemption remains in force.
The right can be enforced by a dismissed employee by resorting to the provisions of section 16 of the Act provided he makes the application within six months from the date of his dismissal.
In the present case, the appellants filed their applications within the period specified in section 16 of the State Act.
The High Court was in error in holding that the applications were not maintainable.
In the result the judgment of the High Court and the order of the Industrial Court are set aside and the award made by the Assistant Commissioner of Labour is restored.
The appeal is allowed and the appellants will have their costs in this Court paid by respondent No. 1.
Appeal allowed.

dataset_name: IN-Abs

summary:
The State of Bombay by a notification under the Bombay Relief Undertakings (Special Provisions) Act 1958 declared a Mill a 'relief undertaking ' and exempted it from the applicability of section 16 of the C.P. and Berar Industrial Dispute& Settlement Act, 1947.
During the period the exemption was in force, the appellants employees of the Mill abstained from work and were dismissed for joining an illegal strike.
After the exemption was withdrawn and was no longer in operation, the employees filed applications before the Labour Commissioner claiming reinstatement with back wages.
The Labour Commissioner allowed the applications.
The Mill preferred revisions to the Industrial Court which were allowed.
In writ petitions filed by the employees, the High Court confirmed the finding of the Industrial Court, that the employees had no right to file applications under section 16 and the applications filed by them before the Labour Commissioner were not maintainable.
In appeal to this Court.
HELD : The High Court was in error in holding that the applications were not maintainable.
The right of an employee to claim reinstatement on a wrongful dismissal existed de hors section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act.
Section 16 provides a forum for a dismissed employee to claim reinstatement but does not create a right.
The effect of an exemption granted by the notification issued under the Bombay Relief Undertakings (Special Provisions) Act, is not to destroy the right but to suspend the remedy prescribed by section 16 for enforcing that right during the period when the exemption remains in force.
The right can be enforced by a dismissed employee by restoring to the provisions of section 16 of the Act provided he makes the application within six months from the date of his dismissal.
[668 E]


judgement:
Civil Appeal No. 95 of 1964.
Appeal from the judgment and order dated April 14, 1961 of the Punjab High Court in Income tax Reference No. 23 of 1958.
section T. Desai, R. Ganapathy Iyer, Gopal Singh, B.R.G.K. Achar and R. N. Sachthey, for the appellant.
A. V. Viswanatha Sastri, T. A. Ramachandran, O. C. Mathur for the respondent.
The Judgment of the Court was delivered by Shah, J.
Hakam Mal Tani Mal a Hindu undivided family was assessed to tax under the Indian Income tax Act, 1918, in respect of income from business, inter alia, in timber at Abdullapur.
In 1934 there was a partition of the Hindu undivided family, and five members of that family entered into a partnership to carry on in the name of M/s Hakam Mal Tani Mal the business which was originally carried on by the undivided family.
Accounts of this firm were settled till March 31, 1939, and the firm was dissolved.
The timber business of the firm was taken over by two partners of the firm Gajjan Mal and Jodha Mal, who entered into an agreement of partnership to carry on the business in the name of R. B. Jodha Mal Kuthiala hereinafter called 'assessee '.
An instrument of partnership recording the terms of the partnership and reciting the dissolution of the earlier partnership was executed on June 29, 1939.
The assessee was dissolved in March 1943.
In assessment proceedings for 1943 44 the assessee contended that the firm Messrs Hakam Mal Tani Mal was dissolved on March 31, 1939, before the Income tax (Amendment) Act 7 of 1939 had come into force and the first succession to the business after April 1, 1939 was in March 1943, when the assessee was dissolved and on that account the assessee was entitled to relief under section 25(3), or in the alternative under section 25(4) of the Indian Income tax Act, 1922.
The Income tax Officer completed the assessment without giving to the assessee the benefit of sub sections
(3) or (4) of section 25 of the Indian Income tax Act, 1922.
The Appel 647 late Assistant Commissioner confirmed the order holding that succession to the family firm Messrs. Hakam Mal Tani Mal took place on April 1, 1939, and that firm alone was entitled to relief under section 25(4) and to the second succession which took place on April 1, 1943, after Act 7 of 1939 was brought into force relief under section 25(4) was not admissible.
The Income tax Appellate Tribunal agreed with the view of the Appellate Assistant Commissioner.
Thereafter as directed by the High Court of Punjab under section 66(2) of the Indian Income tax Act, 1922, the Tribunal drew up a statement of the case and submitted the following ques tion of law for the opinion of the High Court : "Whether in the facts and the circumstances of the case, the Tribunal is correct in law in holding that the assessee firm (R. B. Jodha Mal Kuthiala, Abdullapur Depot, Simla) was not entitled to the benefit provided in Section 25 (3) or 25 (4) of the Income tax Act, in relation to the assessment in question ?" The High Court held that the assessee was carrying on business when Act 7 of 1939 was brought into operation and was on that account entitled to the benefit of section 25 (4) of the Act.
With certificate granted by the High Court, this appeal has been preferred.
Sub section (4) was inserted in section 25 of the Indian Incometax Act, 1922, by the Income tax (Amendment) Act 7 of 1939.
It provides : "Where the person who was at the commencement of the Indian Income tax (Amendment) Act, 1939 (VII of 1939), carrying on any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income tax Act, 1918, is succeeded in such capacity by another person, the change not being merely a change "in the constitution of a partnership, no tax shall be payable by the first mentioned person in respect of the income, profits and gains of the period between the end of the previous year and the date of such succession, and such person may further claim that the income, profits and gains of the previous year shall be deemed to have been the in come, profits and gains of the said period.
Where any such claim is made, an assessment shall be made on the basis of the income, profits and gains of the said 648 period, and, if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on the basis of such assessment, a refund shall be given of the difference : Provided. . .
There is no dispute that the Hindu undivided family of Hakam Mal Tani Mal was taxed under the Indian Income tax Act, 1918, in respect of the, timber business and Messrs. Hakam Mal, Tani Mal succeeded to that business in 1934.
Accounts of Messrs. Hakam Mal Tani Mal were settled on March 31, 1939, and the business in timber which was carried on by that firm was taken over by the assessee.
The departmental authorities held that the assessee was at the commencement of the Indian Incometax (Amendment) Act 7 of 1939 not carrying on business, and that it succeeded to the business on April 1, 1943.
The High Court disagreed with that view and opined that the assessee was at the commencement of Act 7 of 1939 carrying on business, and correctness of that opinion is challenged in this appeal.
The Indian Income tax (Amendment) Act 7 of 1939 was brought into force on April 1, 1939.
Section 5 (3) of the General Clauses Act 10 of 1897 provides that unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement.
Act 7 of 1939 must therefore be deemed to have come into operation at a point of time immediately on the expiration of March 31, 1939.
The assessee contends, and the contention has found favour with the High Court, that the assessee was carrying on business at the commencement of the Indian Income tax (Amendment) Act 7 of 1939.
In support of the plea of the assessee reliance was placed only upon the instrument of partnership which was executed on June 29, 1939.
The question in dispute must, therefore, be determined on a true interpretation of the terms of the instrument of partnership.
Insofar as it is material, the instrument recites : "We, R. B. Jodha Mal Kuthiala son of Lala Gopi Mal Sahib Sud of the one part and Gajjan Mal Kuthiala son of Lala Hakam Mal Sahib Sud Kuthiala of the other part, residents of Haroli, District Hoshiarpur.
and presently of Simla.
649 Whereas we, the deponents, were partners and shareholders in the firm of Lala Hakam Mal Tani Mal Simla and all the partners of firm Lala Hakam Mal Tani Mal understood and settled their accounts upto the 31st of March 1939, on the 31st of March, 1939, and all the partners have become separate from the 1st of April, 1939, and the business at Abdullapur in the name of firm Hakam Mal Tani Mal and R. B. Jodha Mal Kuthiala has fallen to our share to run which we have by means of an oral agreement constituted a separate partnership styled R. B. Jodha Mal Kuthiala,, Abdullapur from the 1st of April, 1939.
Now the said oral (agreement) is being reduced to writing and we agree that :" The instrument of partnership in the first instance recites that the accounts of Messrs. Hakam Mal Tani Mal were settled on March 31, 1939 and upto March 31, 1939.
It is then recited that all the partners had become separate from April 1, 1939.
This is an ambiguous recital : it may mean that the dissolution had taken place on April 1, 1939 i.e., the business had continued for the whole or a part of the day on April 1, 1939, or it may mean that from the end of March 31, 1939, there had been separation.
When a deed recites that a transaction is effective from a particular date it has to be determined in the context in which that expression occurs, whether the date mentioned has to be excluded or to be included.
The recitals in the instrument that the accounts were settled upto March 31, 1939, and that the partners had become separate, would imply that the firm of Messrs Hakam Mal Tani Mal did not do business after March 31, 1939.
no date of the oral agreement constituting a separate partnership of the assessee is not set out in the instrument, and there is no other evidence in that behalf.
But the assessee was constituted to carry on the timber business allotted to it at the time of dissolution from April 1, 1939.
The timber business was an old and a running business, and an intention to maintain continuity of the business and its transactions may reasonably be attributed to the assessee.
It must therefore be held that the assessee commenced doing business immediately after the dissolution of the firm Messrs Hakam Mal Tani Mal become effective.
In the absence of other evidence, it may be held that the business of Messrs. Hakam Mal Tani Mal continued till the midnight of March 31, 1939, and immediately thereafter the business of the assessee commenced.
650 The partnership therefore came into being at the precise point of time at which the Indian Income tax (Amendment) Act 7 of 1939 came into force and it could not be said that the assessee was not carrying on business at the commencement of the Indian Income tax (Amendment) Act 7 of 1939.
The High Court was, therefore, in our judgment, right in holding that the assessee was entitled on the dissolution of that firm in March 1943 to the benefit of section 25(4) of the Indian Income tax Act.
The appeal fails and is dismissed with costs.
Appeal dismissed.

summary:
A Hindu undivided family was assessed to tax under the Indian Income tax Art 1918 in respect of its business, inter alia, in timber.
In 1934 there was dissolution of the family and five of its members entered into a partnership to carry on the business.
Ibis firm was dissolved on March 31, 1939 and its accounts were settled on and up to that date.
The timber business of the dissolved firm was taken over by the assessee firm.
An instrument of partnerhip for the new firm was drawn up on June 29, 1939 in which the facts relating to the dissolution of the earlier firm were also recited.
The new firm the assessee was also dissolved in March 1943.
In assessment proceedings for 1943 44 the assessee claimed benefit under section 25(3) or in the alternative section 25(4) of the Indian Income tax Act, 1922.
The claim was rejected by the assessing and appellate authorities but in reference, the High Court allowed the claim under section 25(4).
The Commissioner of Income tax, with certificate, appealed to the Supreme Court.
The material question for determination was whether the assessee was carrying on business at the commencement of Act 7 of 1939 so as to be entitled to the benefit under section 25(4).
HELD: The Indian Income tax (Amendment) Act 7 of 1939 was brought into force on April 1. 1939.
Section 5(3) of the General Clauses Act (10 of 1897) provides that unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into being on the expiration of the day preceding its commencement.
Act 7 of 1939 must therefore be deemed to have come into operation at a point of time immediately on the expiration of March 31, 1939.
[648 D E] Whether the assessee was carrying on business at the point of time which Act 7 of 1939 came into force had to be decided from the recitals in the partnership deed executed by the respondents on June 29, 1939.
The recitals in the instrument that the accounts were settled up to March 31, 1939 and that the erstwhile partners had become separate would imply that the firm formed in 1934 did not do business after March 31, 1939, the assessee was constituted to carry on the timber business allotted to it at the time of dissolution from April 1, 1939.
The timber business was an old and running business and an intention to maintain continuity of the business and its transactions may reasonably be attributed to the assessee.
It must therefore be held that the assessee commenced doing business immediately after the dissolution of the firm of 1934 become effective.
The business of that firm continued up to the midnight of March 31, 1939, and immediately thereafter the business of the assessee commenced.
[649 E H; 650 A] 646 The new partnership therefore came into being at the precise period of time at which Act 7 of 1939 came into force and it could not be said that the assessee was not carrying on business at the commencement of the Act.
The High Court was therefore right in holding that the assessee was entitled on the dissolution of the firm in March 1943 to the benefit of section 25(4) of the Indian Income tax Act, 1922.


judgement:
Civil Appeal No. 814 of 1964.
Appeal by special leave from the judgment and order dated October 24, 1961 of the Madhya Pradesh High Court in Misc.
Petition No. 125 of 1958.
I.N. Shroff, for the appellants.
C.B. Agarwala and C. P. Lal, for the respondent.
The Judgment of the Court was delivered by Subba Rao, J.
This appeal by special leave raises the question of the intepretation of Item No. 39 of the Notification 753 No. 58, dated October 24, 1953, hereinafter called the 'Notification ', issued by the Government of Madhya Bharat under the Madhya Bharat Sales Tax Act, Samvat 2007 (Act No. 30 of 1950), hereinafter called the Act.
The facts are as follows : Hiralal, the respondent, is the: manager of a joint Hindu family carrying on business in the name and style of "Messrs. Tilokchand Kalyanmal".
The joint family owns a re rolling mill situated in Indore City called the Central India Iron and Steel Company.
The said family purchases scrapiron locally and imports iron plates from outside and after converting them into bars, flats and plates in the Mills sells them in the market.
The respondent made a default in furnishing the returns prescribed by section 7(i) of the Act for the period April 1, 1954, to March 31, 1955.
On February 27, 1956, the Sales tax.
Officer, Indore, determined the taxable turnover at Rs. 2,26,000and the sales tax payable thereon at Rs. 8,000; and he also imposed a penalty of Rs. 1,000 under section 14 (1) (c) of the Act.
On the same day he issued demand notices to the respondent for the payment of the said sales tax and the penalty.
On September 10, 1956, the respondent filed a petition in the High Court of Madhya Bharat (afterwards Madhya Pradesh) under articles 226 and 227 of the Constitution for the issue of appropriate writs quashing, the assessment of tax and penalty and to restrain the State from giving effect to the said orders of the Sales tax Officer.
A Divi sion Bench of the High Court held that the iron bars, flats and ' plates sold by the respondent were exempted from sales tax under the Notification.
In that view, the orders of the Sales tax Officer were quashed.
The state has filed the present appeal, by special ' leave.
The only question in this appeal is whether the said iron bars, flats and plates are not iron and steel within the meaning of ' Item No. 39 of the Notification.
Parliament enacted Essential Goods (Declaration and Regulation of Tax on Sales or Purchases) Act, 1952 (Act No. 52 of ' 1952), which came into force on August 9, 1952.
In Schedule I of the said Act, iron and steel were declared essential for the life of the community.
Thereafter, the Government of Madhya.
Bharat, in exercise of the powers conferred by section 5 of the Act, issued the Notification as also Notification No. 59, dated October 24, 1953.
The material part of Schedule I of Notification 58 reads 754 "No tax shall be payable on the sale of the following goods S.No.
Description of goods.
39 Iron and steel.
Notification No. 59 described the goods sales of which were taxable at particular rates.
Schedule IV thereof reads : "List of articles under section 5 of the Madhya Bharat Sales Tax Act, 1950, on the assessable sale proceeds of which sales tax at the rate of Rs. 3/2/ per cent.
shall be payable, showing the nature of articles on which the tax is payable.
Name of article Stage of sale in Madhya Bharat at which the tax is payable.
9 . goods prepared from any Sale by imported or pro metal sale by importer or producer.
ducer.
other than gold and silver. .
Learned counsel for the State contends that the expression "iron and steel" means iron and steel in the original condition : and not iron and steel in the shape of bars, flats and plates.
In our view, this contention is not sound.
A comparison of the said two Notifications brings out the distinction between rawmaterials of iron and steel and the goods prepared from iron and steel : while the former is exempted from tax, the latter is taxed. 'Therefore, iron and steel used as raw material for manufacturing other goods are exempted from taxation.
So long as iron and steel continue to be raw materials, they enjoy the exemption.
Scrap iron purchased by the respondent was merely re rolled into bars,flats and plates.
They were processed for convenience of sale.
The raw materials were only re rolled to give them attractive and acceptable forms.
They did not in the process lose their character as iron and steel.
The dealer sold "iron and steel" in the shape of bars, flats and plates and the customer purchased "iron and steel" in that shape.
We, therefore, hold that the bars, flats and plates sold by the assessee are iron and steel exempted under the Notification.
The conclusion arrived at by the High Court is ,correct.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.

summary:
The respondent as head of a joint Hindu family owned a re rolling mill at which scrap iron locally purchased, and iron plate , imported from outside, were converted into bars, flats and plates in the Mills and thereafter sold in the market.
The sales tax authorities held that iron bars, flats and plates sold by the respondent were not 'iron and steel ' exempted by notification No. 58 dated October 1953 issued under the Essential Goods (Declaration and Regulation of Sales and Purchasees) Act, 1952.
In a petition under articles 226 and 227 filed by the respondent challenging the said assessment the High Court decided that iron bars, flats and plates were exempted under the notification.
The State appealed to this Court.
HELD : Goods prepared from metals other than gold and silver are made taxable by notification No. 59 whereas notification No. 58 exempts iron and steel from tax.
A comparison of the said two notifications brings out the distinction between raw materials of iron and steel and the goods prepared from iron and steel.
While the former is exempted from tax the latter is taxed.
Therefore iron and steel used as rawmaterial for manufacturing other goods are exempted from taxation.
So long as iron and steel continue to be raw materials, they enjoy the exemption.
Scrap iron purchased by the respondent was merely rerolled into bars, flats and plates for convenience of sale.
The rawmaterials were only re rolled to give them attractive and acceptable forms.
They did not in the process lose their character as iron and steel.
The bars, flats and plates sold by the respondent were therefore iron and steel exempt under the notification.
[754 D G]