The Industrial Tribunal does not have jurisdiction to enquire into the management's foresight and diligence in avoiding a lay-off.

Headnote:
INDUSTRIAL DISPUTES ACT, 1947 - S. 2(KKK), 25C - LAY-OFF - JUSTIFICATION - JURISDICTION OF INDUSTRIAL TRIBUNAL TO ENQUIRE INTO MANAGEMENT'S FORESIGHT AND DILIGENCE.
Fact of the Case:

The appellant, Tatanagar Foundry Co., laid off the respondents, its workmen, for a period of 45 days due to shortage of raw materials. The respondents contended that the lay-off was not justified and sought additional compensation beyond the statutory compensation paid by the appellant. The Industrial Tribunal found that the lay-off was not altogether justified and awarded additional compensation to the respondents.
Finding of the Court:

The Supreme Court held that the Industrial Tribunal exceeded its jurisdiction in enquiring into the prudence of the management and the forethought displayed by it in anticipating and avoiding the difficulties that led to the lay-off. The Court found that there was no evidence to support the Tribunal's finding of negligence on the part of the appellant.
Issues: 1. Whether the Industrial Tribunal had jurisdiction to enquire into the management's foresight and diligence in avoiding the lay-off. 2. Whether the Tribunal's finding of negligence on the part of the appellant was supported by evidence.
Ratio Decidendi: 1. The definition of "lay-off" under Section 2(kkk) of the Industrial Disputes Act, 1947 does not include an enquiry into the management's foresight and diligence in avoiding the lay-off. 2. The Industrial Tribunal exceeded its jurisdiction in embarking upon an enquiry as to whether the appellant had shown sufficient foresight in managing its affairs. 3. The Tribunal's finding of negligence was not supported by any evidence on record or by probabilities in the case.
Final Decision: The Supreme Court allowed the appeal and set aside the order of the Industrial Tribunal awarding additional compensation to the respondents.

Judgment

GAJENDRAGADKAR, J. : This appeal by special leave is directed against the order passed by the Industrial Tribunal, Patna, directing the appellant, the Tatanagar Foundry Co., to pay to the respondents, its workmen, 75 per cent of the consolidated wages as compensation for having laid them off for a period of 45 days commencing from December 15, 1959. It is common ground that the appellant laid off the respondents for the said period. The appellants case was that it had paid the respondents the statutory compensation for the said lay-off as prescribed by S. 25C of the Industrial Disputes Act (No. 14 of 1947) (hereinafter called the Act). The respondents, however, contended that the lay-off was not justified and so the statutory compensation paid by the appellant did not satisfy the ends of justice. It was this dispute between the parties which was referred for adjudication by the Government of Bihar to the Industrial Tribunal on February 9, 1960. On this reference, the Tribunal has held "that the layoff could not be held to be altogether justified." That is why it has awarded compensation to the respondents in excess of the amount statutorily fixed in that behalf. The appellant contends that the award thus made by the Tribunal is contrary to law.

2. Before dealing with the merits of the contentions raised by the appellant, it would be necessary to state some relevant facts which led to the lay-off. The appellant is a public Limited Company and has its factory in Jamshedpur. It manufactures cast iron sleepers, pipes, general engineering casting and non-ferrous castings in the said factory. The raw materials mainly required for the manufacture of sleepers are pig-iron, coke, limestone and mouding sand. The Railway Board is the only buyer of sleepers and the sleepers are, therefore, manufactured only on receipt of orders upon lenders from the said Board, and not otherwise. The normal procedure for procuring raw material was that after an order was received from the Railway Board, the appellant submitted its requirement of pig-iron to the Iron and Steel Controller of the Government of India who allocates the quantity for the said commodity to the various manufacturers, such as Tata Iron & Steel Co. Ltd. and Indian Iron & Steel Co. Ltd. Formerly, supply of pig iron used to come from the said two concerns to the appellant and the appellant used to pay cash to Tata Iron & Steel Co. Ltd. for the pig iron supplied by it and by a Letter of Credit to the Indian Iron and. Steel co. Ltd. on which the said Company used to supply the raw material made by it. In 1959, both the companies stopped supply of pig-iron in spite of the order issued in that behalf by the Controller, and they wrote to the appellant suggesting that the appellant should request the Controller to cancel his order and place the same with some other suppliers. Correspondence followed between the said companies and the appellant and finally in November, 1959. the appellant was informed by the said companies that they could not supply its requirements of raw material.

3. In June, 1959, the Bhilai Steel Works made their first shipment of pig iron addressed to the appellant. In August, 1959, the said works dispatched some wagons of pig iron to the appellant, but out of 20 wagons of the consignment, 14 were lost completely and the rest misdelivered and were subsequently found somewhere in Gomoh and some in Tatanagar and they never reached the appellant in time. .

4. In May, 1959, the appellant arranged for Letter of Credit for a sum of Rupees 1,00,000/- for the Bhilai Steel Works. In August, there was a supply of 440 tons and in September, followed a supply of 36 wagons containing pig iron to the extent of 20 to 21tons each roughly. In all, this latter supply came to about 760 tons. In the two subsequent months no supply was received from Bhilai. The Letter of Credit which the appellant had opened for Bhilai steel Works was revolving, with the result that as soon as one tran

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