T.L.VENKATARAMA AYAR, J.

(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. During this period, the sugar industry was passing through a crisis owing to shortage of sugarcane, and in consequence, the government assumed control of its production and supply. The quota which was allotted to the appellants Mill 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. After several unsuccessful attempts at setting a larger supply, the management wrote to the government on 11/05/1950, 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. 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. It should be mentioned that the appellant was also carrying on negotiations with the purchaser, for itself dismantling the machinery and erecting it at Madras for a lump consideration, expecting to perform the contract through its own workmen.

(2) WHEN the workmen became aware of the agreement of sale, their reaction to it was thoroughly hostile, and acting through their union, the respondent herein, they decided to prevent the transaction going through, as otherwise they would be thrown out of employment. With that object, 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 26/12/1950, to go on strike from 12/01/1951, and communicated the same to the appellant. This led to correspondence between the parties, and as that is the foundation of the claim for compensation put forward by the respondent and awarded by the tribunal, it becomes necessary to set it out with sufficient fulness. On 3/01/1951, the Managing Director offered through the Manager of the Mills, to allot 25 per cent. 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 and today, so that arrangement of work could be made`. To this, the reply of the Union on 5/01/1951, was as follows: `With reference to the assurance given by the Managing Director, communicated by your goodself to us under your No. 975 dated 4/01/1951, asking us to withdraw the notice of strike, we regret to inform you that our fight is with the government, which is not solved with this only. Our members are bent upon keeping the Sugar mills here at any cost, either by strike, satyagrah, etc., or through any other means guided by our federation, otherwise there is no assurance of employment of thousands of creatures`. Then the letter proceeded to take exception to some of the terms, and finally wound up by stating that the workmen were waiting for their President Kashinath Pandey to advise them in the matter. Replying to the objections raised by the respondent to some of the terms, the management wrote on 8/01/1951, that they were ready to reconsider them, but insisted on the withdrawal of notice of strike as `the chief point`. On 9/01/1951, Kashinath Pandey came to Pipraich, and discussed the matter with the management, and following upon it, the General Manager wrote to the respondent on 10/01/1951, that `in case the strike notice was withdrawn at once he would accede to the following po