The financial difficulties faced by an employer, which are not beyond its control and do not fall within the specified reasons under Standing Order 8(a)(i), do not justify a lay-off under the Standing Orders or under the common law right recognized by S. 25c of the Industrial Disputes Act, 1947.

Judgment-

GAJENDRAGADKAR

( 1 ) , J. : This appeal by special leave arises from an industrial dispute between the respondent, the Management of 11 Tea Estates and the appellants, their workmen. It appears that the appellants raised a dispute against the respondent in regard to the lay-off declared by them in the 11 estates in question in February, 1959. The said lay-off lasted for 45 days and the appellants contention was that the lay-off was not justified, and so, they were entitled to their full wages for the period of the lay-off. The respondents Managing Agents for the nine Companies that run the 11 tea estates in question, resisted this claim on the ground that the lay-off was justified and they alleged that the appellants were not entitled to anything more than the compensation prescribed by S. 25c of the Industrial Disputes Act, 1947 (hereinafter called the Act ). This dispute was REFERRED TO to the adjudication of the Industrial Tribunal by the Governor of Assam under S. 10 (1) (d) of the Act. The 11 tea estates which are concerned with this dispute were described in Appendix A to the order of reference. It is common ground that these 11 tea estates are run by nine Companies and M/s. Macneill and Barry Ltd. and the Managing Agents of all these companies.

( 2 ) THE case for the respondent was that the tea estates in question which are all situated in Cachar District had to face a long period of depression in trade by reason of the poor prices generally commanded by the tea produced by them. In 1959, the management faced a very difficult financial position and it took the view that in the interests of the employees and its own business, it would be appropriate to lay off the workmen for a certain period in order to avoid closure of business. The circumstances which caused financial depression were beyond the control of the management and lay-off was therefore, inevitable and fully justified.

( 3 ) ON the other hand, the appellants urged that there were other tea estates in the district of Cachar which had to face similar problems; the labour costs incurred by the respondent were not higher than the corresponding costs incurred by the other tea estates, the burden of taxes was the same for all the tea estates in the district and the quality of the tea produced was relatively similar. They contended that the difficulty which the respondent had to face was partly the result of its mismanagement and neglect. They pleaded that the workmen employed by the respondent had been promised continuous work throughout the year and the declaration of layoff for such a long period as 45 days exposed them to the risk of semi-starvation. The appellants also urged that depression in trade or financial difficulties which may be characterised as trade reasons did not justify the lay-off under the relevant Standing Order, and so, they justified their claim for full wages during the period of the lay off.

( 4 ) THE Tribunal has held that the relevant Standing Order No. 8 justified the lay off. The trade reasons resulting from the depression in trade and financial liabilities arising therefrom fell within the scope of the Standing Order; it has also held that the last clause in the Standing Order which was general in terms could be relied upon by the respondent in support of its plea that the lay off was justified. In the alternative, the Tribunal thought that even if the lay off was not justified by the relevant clause in the Standing Order, the respondent had a common-law right to declare a lay off and this right was recognised by S. 25c of the Act. According to the Tribunal, S. 25c recognises this common-law right and since it is a statutory provision, it overrides the relevant clause in the Standing Order. Having thus found that the lay off was justified, the Tribunal proceeded to examine the question as to whether the trade reasons on which the respondent relied had been proved. It then considered the relevant documentary evidence bearing on