Case comment on D.N Banerjee v P.R Mukherjee and Ors (1953)

Author: Anushka Gurnani, a third year student pursuing BBA LLB( Hons) at School of Law, CHRIST( Deemed to be University), Bengaluru.

This article analyses the landmark case of D.N Banerjee v P.R Mukherjee & Ors, wherein the court dealt with the issue of whether the Industrial Disputes Act of 1947 would be applicable to a municipality.

Citation: 1953 AIR 58; 1953 SCR 302
Court: Supreme Court of India
Bench: Sastri, M. Patanjali (CJ), Mukherjea, B.K., Aiyar, N. Chandrasekhara, Bose, Vivian, Hasan, Ghulam

FACTS

In this case, the head clerk and the sanitary inspector, both of whom belonged to the Municipal Workers’ Union, were fired by the chairman of Budge municipality in Kolkata. The Municipal Workers’ Union contended that these two employees should be reinstated and questioned the legality of their dismissal. The State of West Bengal then referred this case to the Industrial Tribunal for resolution in accordance with the Industrial Disputes Act. The suspension and punishment of the two employees were determined by the Tribunal to be “victimisation” and the Tribunal ordered their reinstatement in their respective offices. By filing a petition for a writ of certiorari (in accordance with Article 226[i] and Article 227[ii] of the Constitution of India), the Municipality brought the present matter before the High Court of Calcutta. The petition included requests for the Tribunal’s procedures to be halted, the award to be revoked, and an injunction prohibiting the authorities from implementing the judgement and acting in accordance with it. Moreover, under the High Court’s direction, an additional application was also filed under Article 227 of the Constitution of India. This matter was heard and decided by Hon’ble Justice Harries and Hon’ble Justice S.N Banerjee. Although, the High Court of Calcutta negated/ dismissed the petitions of the appellants who contended that a municipality does not fall under the ambit of an “industry” under the Industrial Disputes Act, 1947, it granted the appellants a leave under Article 132 (1)[iii] of the Constitution, who then approached the Supreme Court of India.

ISSUES

The following issues were considered by the Court in this case:

Whether a “municipality” falls under the ambit of an “industry” as defined in Section 2(j) of the Industrial Disputes Act, 1947? or Whether the Industrial Disputes Act, 1947 would be applicable to a municipality?

Whether the Sanitary Inspector and Head Clerk of a Municipality fall under the ambit of “workmen” as defined under Section 2(s) of the Industrial Disputes Act, 1947?

LAW

The following are the legal provisions that were examined by the court for deciding the case at hand:

Section 2(j) of the Industrial Disputes Act, 1947 which defines “industry” as “any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen;”[iv]

Section 2(k) of the Industrial Disputes Act, 1947 which defines “industrial dispute” as “any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person.”[v]

Section 2(s) of the Industrial Disputes Act, 1947 which defines “workmen” as “any person employed (including an apprentice) in any industry to do any skilled or unskilled manual or clerical work for hire or reward and includes, for the purposes of any proceedings under this Act in relation to an industrial dispute, a workman discharged during that dispute, but does not include any person employed in the naval, military or air service of the Government.”[vi]

Article 226 of the Constitution of India which deals with the “Power of High Courts to issue certain writs.”[vii]

Article 227 of the Constitution of India which deals with the “Power of superintendence over all courts by the High Court.”[viii]

Article 132 of the Constitution of India which deals with “Appellate jurisdiction of the Supreme Court in appeals from High Courts in certain cases.”[ix]

ANALYSIS

CONTENTIONS OF THE APPELLANT

The Budge Municipality of Kolkata challenged the award given by the Industrial Tribunal based on the following contentions:

The dispute in question does not fall under the ambit of “industrial dispute” and hence it cannot be referred to any Tribunal under the provisions of the Industrial Disputes Act, 1947.
Disagreements/ Disputes with municipalities were not covered under the aforementioned Act.
Treating municipalities as an ‘industry’ would be ultra vires of Section 2 (j) of the Industrial Disputes Act, 1947.
The award given by the Tribunal was flawed as the Tribunal did not have any authority to order the reinstatement of the employees dismissed by the Municipality’s chairman.

CONTENTIONS OF THE RESPONDENT

The respondents i.e., the Municipal Workers’ Union, challenged the contentions of the appellant based on the following grounds:

The dispute in question falls under the ambit of “industrial dispute” (as defined in Section 2(k) of the Industrial Disputes Act, 1947) and hence it can be referred to a Tribunal under the provisions of the Industrial Disputes Act, 1947.
Municipality is an industry as per Section 2(j) of the Industrial Disputes Act, 1947 and hence disagreements/ disputes with municipalities are covered by the aforementioned Act.
The award given by the Tribunal was valid/ meritorious as the Tribunal had complete authority to order the reinstatement of the employees dismissed by the Municipality’s chairman.

JUDGEMENT

Firstly, the court noted that if the Industrial Disputes Act, 1947 applies to Municipalities and their employees, a Tribunal under the Act would have the authority to reinstate fired employees.[x] The authority of the Chairman and Commissioners of Municipalities to hire and fire personnel (under sections 66 and 67 of the Bengal Municipal Act) will however remain unaffected. However, The Industrial Disputes Act of the central government would not be invalidated by this intrusion into provincial law as appropriate consideration must be given to the challenged Act’s core provisions when determining if there is a contradiction between the two jurisdictions. Moreover, the court also observed that the Tribunal is largely responsible for determining whether an employee’s dismissal was warranted or not given the circumstances of a particular case. In this case, the Tribunal found that the dismissals were clearly victimisation cases and were, thus, unlawful. Hence Articles 226 and 227 of the Constitution prohibit the High Court from interfering unless there was a grave injustice or breach of the law.

Secondly, for the purpose of ascertaining whether the dispute in question falls under the ambit of ‘industrial dispute’ as defined under Section 2(k) of the Industrial Disputes Act, 1947, the court examined the meaning and scope of Section 2 (j), Section 2 (k) and Section 2 (s) of the Industrial Disputes Act, 1947 which defines ‘industry’, ‘industrial dispute’ and ‘workmen’ respectively. The Court observed that although according to laymen’s interpretation , an ‘industry’ means a business/ undertaking involved in the production and distribution of goods/ service for the purpose of earning profits, there is nothing stopping a statute ( i.e. the Industrial Disputes Act, 1947 in the present case) from giving a broader/wider interpretation to the words “industry” and “industrial dispute” in order to maintain industrial peace and harmony and to protect the interest of both the employers as well as the workman employed in the industrial sector. The court opined that “Social evolution is a process of constant growth” and hence it is the duty of the State to take appropriate steps (by means of law) to address the significant issues/disputes that develop/arise in the industrial sector on a daily basis. Hence based on this reasoning, the court held that “Though the word “undertaking” in the definition of industry under Section 2(j) of the Industrial Disputes Act, 1947 has been wedged in between business and trade on the one hand, and manufacture on the other, there would have been no need to use the word “undertaking” separately if it meant only a business or trade”. Hence the term ‘undertaking’ must be interpreted in a wide/broader sense. Moreover, even if the second half of the definition is looked into (which includes “industrial occupation or a vocation of workmen” under the definition of ‘industry’), it can be observed that the term “undertaking” should be interpreted to mean much more than an ordinary trade/business activity. Hence, the court observed that “Municipality” is an “industry” as it falls under the ambit of “undertaking” mentioned in Section 2(j) of the Industrial Disputes Act, 1947.

CONCLUSION

Hence the Supreme Court of India upheld the decision/ judgement of the Calcutta High Court and dismissed the appeal as the court was unable to find any ground on the basis of which the Sanitary Inspector and Head Clerk of a Municipality should not be considered workmen under Section 2(s) of the Industrial Disputes Act, 1947. Hence, in this case the court gave a very broad/wide interpretation to the term ‘industry’ defined under section 2(j) of the Industrial Disputes Act, 1947 and held that municipalities would be considered to be industries for the purpose of the aforementioned Act. Hence, the court held that the term “industrial dispute” in the Industrial Disputes Act of 1947 includes disagreements/disputes between municipalities and their workmen in areas of work that could be compared to running a business or trade,[xi] and if the undertaking generated a profit during the relevant trading period, then the workers would also be entitled to bonus as a matter of right. This decision/judgement was followed by the decision in Corporation of city of Nagpur v. its workmen, 1960[xii], which drew a distinction between Regal and Municipal functions of an industry and held that the Industrial Disputes Act, 1947 would only apply to municipal functions and not regal functions.

[i] INDIA CONST. Art.226.

[ii] INDIA CONST. Art.227.

[iii] INDIA CONST. Art.132 cl.1.

[iv] The Industrial Disputes Act, 1947, Act No. 14, Acts of Parliament, § 2(j), (India).

[v] The Industrial Disputes Act, 1947, Act No.14, Acts of Parliament, § 2(k), (India).

[vi] The Industrial Disputes Act, 1947, Act No.14, Acts of Parliament, § 2(s), (India).

[vii] INDIA CONST. Art.226.

[viii] INDIA CONST. Art.227.

[ix] INDIA CONST. Art.132.

[x] Western India Automobile Association v. Industrial Tribunal, Bombay and Ors, (1949) 51 BOMLR 894.

[xi] INDIAN KANOON, https://indiankanoon.org/doc/1785601/?type=print (last visited Jan. 6, 2023).

[xii] Corporation of city of Nagpur v. Workmen of corporation of city of Nagpur, AIR 1960 SC 675.