A) ABSTRACT / HEADNOTE

The case revolves around two key disputes between Messrs. Shalimar Works Limited and its workmen—(1) revision of the profit-sharing bonus scheme and (2) reinstatement of 250 former employees discharged after an illegal sit-down strike in 1948 while an industrial dispute was pending adjudication. The Supreme Court of India examined whether reinstatement could be granted in light of the delayed and vague reference made to the Industrial Tribunal, and whether such discharge, though in breach of Section 33 of the Industrial Disputes Act, 1947, could be ignored under the peculiar circumstances. The Court also addressed the revision of the bonus scheme proposed by the Industrial Tribunal and modified by the Appellate Tribunal. The Court held that although the discharge order technically violated Section 33, the workmen’s failure to invoke Section 33-A, coupled with the unreasonable delay (over four years) in making the reference and the absence of a clear list of affected employees, justified denying reinstatement. The Court noted that reinstatement in cases involving wholesale discharge must be sought promptly to prevent industrial dislocation. For the bonus dispute, the Court accepted the Industrial Tribunal’s revised scheme with mutual consent of both parties and removed the Appellate Tribunal’s condition linking it to the Full Bench Formula in Mill Owners’ Association, Bombay v. Rashtriya Mill Mazdoor Sangh, Bombay. Ultimately, reinstatement was denied for all except four workmen, whom the company voluntarily agreed to re-employ as a humanitarian gesture.

Keywords: Industrial Dispute, Illegal Strike, Reinstatement, Section 33 Industrial Disputes Act, Bonus Scheme, Delay in Reference, Vague Reference, Section 33-A Remedy, Labour Appellate Tribunal, Supreme Court of India.

B) CASE DETAILS

i) Judgement Cause Title:
Messrs. Shalimar Works Limited v. Their Workmen

ii) Case Number:
Civil Appeals Nos. 317 & 318 of 1956

iii) Judgement Date:
8 May 1959

iv) Court:
Supreme Court of India

v) Quorum:
Justice B. P. Sinha, Justice P. B. Gajendragadkar, Justice K. N. Wanchoo

vi) Author:
Justice K. N. Wanchoo

vii) Citation:
(1960) 1 SCR 150

viii) Legal Provisions Involved:

• Section 33, Industrial Disputes Act, 1947 – Conditions for alteration of service conditions during pendency of proceedings.

• Section 33-A, Industrial Disputes Act, 1947 – Complaint against contravention of Section 33.

ix) Judgments Overruled by the Case (if any):
None explicitly overruled.

x) Case is Related to which Law Subjects:

• Labour Law / Industrial Law

• Employment Law

• Law of Industrial Disputes

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The dispute stemmed from the long-standing industrial relations conflict between Messrs. Shalimar Works Limited and its workforce, represented by unions. While an earlier industrial dispute was under adjudication before the Major Engineering Tribunal in West Bengal, the workmen initiated an illegal sit-down strike on 23 March 1948. The company reacted by closing operations indefinitely and subsequently issuing a mass discharge notice on 6 April 1948, terminating all workers who participated in the strike. The company later reopened on 6 July 1948, offering re-engagement to former employees applying before 21 July 1948; most complied, but 250 allegedly did not return.

Years later, in 1952, the Government referred the issue of reinstatement to the Industrial Tribunal, along with a dispute over revising the profit-sharing bonus scheme. The reinstatement dispute was plagued by lack of specificity—no list of the 250 names was provided until after hearings concluded, and even then, the list was incomplete and inaccurate.

The Supreme Court was called to decide two key issues—(1) whether the delay and vagueness of the reference justified denying reinstatement despite the technical illegality of the discharge under Section 33, and (2) what bonus scheme should apply going forward.

D) FACTS OF THE CASE

• The company and workmen were already in dispute before the Major Engineering Tribunal in 1947.

• On 23 March 1948, workmen demanded immediate resolution of pending issues; upon refusal, they commenced an illegal sit-down strike.

• The strike lasted until 27 March 1948, when police removed or persuaded workers to leave the premises.

• On 6 April 1948, the company issued a public notice discharging all strike participants without individual service, in breach of Section 33 of the Industrial Disputes Act, 1947.

• The works remained closed until July 1948; reopening came with a notice offering re-employment to old workers who applied before 21 July 1948.

• Most workmen returned within that window; 250 did not.

• In November 1949, a union complained to the Assistant Labour Commissioner; no action followed.

• The first reference regarding reinstatement was made in October 1952, more than four years after the dispute arose.

• The Industrial Tribunal, lacking an accurate list, ordered a general notice for reinstatement.

• The Labour Appellate Tribunal narrowed reinstatement to 15 workers, rejecting claims of 100 others who had withdrawn provident fund benefits.

• The Supreme Court reviewed both parties’ appeals—one challenging the reinstatement, the other seeking broader reinstatement.

E) LEGAL ISSUES RAISED

i) Whether reinstatement should be granted when a mass discharge, though in breach of Section 33, was followed by a delay of over four years before reference and was supported by an incomplete list of affected employees.

ii) Whether the profit-sharing bonus scheme required modification in accordance with the Industrial Tribunal’s recommendations or the Appellate Tribunal’s additional condition linking it to the Full Bench Formula.

F) PETITIONER / APPELLANT’S ARGUMENTS

i) The company argued that the illegal sit-down strike justified discharge and that both lower tribunals found the strike unjustified.

ii) It contended that the four-year delay in making a reinstatement reference, coupled with the absence of a definitive list of employees, rendered the reference defective and prejudicial to industrial stability.

iii) It asserted that the defect under Section 33 could be ignored because the workmen did not pursue their statutory remedy under Section 33-A.

iv) Regarding bonus, the company accepted the Industrial Tribunal’s revision but objected to the Appellate Tribunal’s condition tying the scheme to the Full Bench Formula.

G) RESPONDENT’S ARGUMENTS

i) The workmen argued that the discharge violated Section 33, making it illegal, and reinstatement was the only appropriate remedy.

ii) They claimed the lack of individual service of the discharge notice and the insufficiency of the re-employment notice meant the workers were denied fair opportunity to return.

iii) On bonus, they pressed for their proposed more generous scheme and objected to attendance conditions (minimum 100 days for any bonus, 275 days for full bonus) as arbitrary.

H) RELATED LEGAL PROVISIONS

i) Section 33, Industrial Disputes Act, 1947 – Restricts changes in conditions of service during pendency of industrial disputes without tribunal permission.

ii) Section 33-A, Industrial Disputes Act, 1947 – Provides for complaints by workmen against contravention of Section 33.

I) JUDGEMENT

a. RATIO DECIDENDI

• Delay in reference (over four years) in wholesale discharge cases justifies denial of reinstatement to avoid industrial dislocation.

• Technical breach of Section 33 can be overlooked if workers do not invoke Section 33-A and circumstances indicate lack of interest in reinstatement.

• References lacking specificity (no clear list of affected workers) are defective and cannot ground reinstatement orders.

• Parties can agree to revised bonus schemes without additional conditions imposed by appellate bodies.

b. OBITER DICTA

• Disputes involving large-scale discharge must be referred promptly after conciliation fails to preserve industrial harmony.

• Withdrawing provident fund benefits can imply acceptance of termination.

c. GUIDELINES

1. Prompt Reference Requirement – Wholesale discharge disputes should be referred soon after they arise.

2. Section 33 & 33-A Application – Breach of Section 33 must be pursued via Section 33-A remedies.

3. Specificity in References – Tribunals require precise identification of affected workers to issue effective awards.

4. Bonus Scheme Revision – Industrial Tribunal awards, if mutually acceptable, should stand without additional external conditions unless necessary.

J) CONCLUSION & COMMENTS

The Supreme Court’s decision balances strict legal compliance with practical industrial realities. While recognising the company’s breach of Section 33, the Court placed significant weight on the workmen’s prolonged inaction, procedural defects, and industrial stability. This case reinforces that labour remedies must be pursued with diligence, and that tribunals must be given clear, timely references to act upon.

K) REFERENCES

1. Punjab National Bank Ltd. v. Employees of the Bank, [1953] SCR 680.

2. Mill Owners’ Association, Bombay v. Rashtriya Mill Mazdoor Sangh, Bombay, 1950 LLJ 147.

3. Industrial Disputes Act, 1947 – Sections 33, 33-A.