A) ABSTRACT / HEADNOTE
This case addresses a pivotal industrial dispute between The Rashtriya Mill Mazdoor Sangh and The Apollo Mills Ltd. & Others, arising out of partial mill closures due to a government-mandated electricity curtailment under the Bombay Electricity (Special Powers) Act, 1946. The Government of Bombay curtailed the power supply due to monsoon failure in 1951, which forced mills to reduce operations, causing wage losses to workers. The key legal question was whether workers were entitled to compensation for wage losses due to a government-induced closure, or if such claims were barred under statutory Standing Orders or protected under the immunity provisions of Section 11(1) of the Bombay Electricity Act, 1946. The Industrial Court ruled in favor of the workers, but the Appellate Tribunal reversed the decision, relying heavily on the precedent set in Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union ([1955] 1 SCR 991). However, the Supreme Court reinstated the Industrial Court’s award, holding that the Appellate Tribunal erred in applying Muir Mills and misinterpreted the reach of the Standing Orders and statutory immunity provisions. It also affirmed that Section 73 of the Bombay Industrial Relations Act, 1946, empowered the government to refer disputes of this nature, and social justice principles justified partial compensation to workers even in absence of strict contractual entitlements.

Keywords: Industrial Dispute, Compensation for Closure, Electricity Curtailment, Bombay Industrial Relations Act, Standing Orders, Section 11 Immunity, Social Justice

B) CASE DETAILS

i) Judgement Cause Title:
The Rashtriya Mill Mazdoor Sangh, Parel, Bombay and Another v. The Apollo Mills Ltd. and Others

ii) Case Number:
Civil Appeal No. 419 of 1956

iii) Judgement Date:
March 10, 1960

iv) Court:
Supreme Court of India

v) Quorum:
S.K. Das, A.K. Sarkar, M. Hidayatullah JJ.

vi) Author:
Justice M. Hidayatullah

vii) Citation:
Rashtriya Mill Mazdoor Sangh v. Apollo Mills Ltd., (1960) 3 SCR 231

viii) Legal Provisions Involved:

• Bombay Industrial Relations Act, 1946: Sections 40(1), 40(2), 42(4), 73, 78

• Bombay Electricity (Special Powers) Act, 1946: Sections 6A(1), 11(1)

• Model Standing Orders: Orders 16 and 17

• Schedule I & III of Bombay Industrial Relations Act, 1946

ix) Judgments overruled by the Case:
Digambar Ramachandra v. Khandesh Mills, (1949) 52 Bom LR 46 – disapproved.

x) Case is Related to which Law Subjects:
Labour Law, Constitutional Law, Administrative Law, Public Utilities Regulation, Industrial Law

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The case stemmed from an economic crisis triggered by the 1951 monsoon failure. This climatic disaster led to water scarcity in the Tata Hydro-Electric System, compelling the Bombay Government to impose power restrictions under Section 6A(1) of the Bombay Electricity (Special Powers) Act, 1946. Consequently, textile mills in Bombay reduced working hours or closed partially, causing wage losses. Workers’ unions claimed compensation. Employers contested this citing statutory immunity and Standing Orders. The Industrial Court accepted the workers’ claim and awarded 50% compensation for wage loss. The Labour Appellate Tribunal reversed the award, relying on Muir Mills case. The Supreme Court had to decide if Section 11(1) barred claims, whether Standing Orders limited jurisdiction, and if compensation was due on equitable grounds. The Court reinstated the Industrial Court’s award, emphasizing social justice and statutory latitude under Section 73.

D) FACTS OF THE CASE

Due to monsoon failure in 1951, electricity production from the Tata Hydro-Electric system dropped. The Bombay Government exercised its authority under Section 6A(1) of the Bombay Electricity (Special Powers) Act, 1946, and directed textile mills to reduce power consumption. Consequently, mills curtailed weekly working hours from 48 to 40 over 30 weeks (Nov 1951–July 1952). Some mills operated at reduced capacity; others closed completely on certain days. Workers, represented by Rashtriya Mill Mazdoor Sangh, demanded wages or compensation for loss of work. The Industrial Court, under Section 73 of the Bombay Industrial Relations Act, 1946, ruled in favor of compensation. Employers appealed to the Labour Appellate Tribunal, which reversed the decision citing statutory immunity and the applicability of Standing Orders. The case then reached the Supreme Court.

E) LEGAL ISSUES RAISED

i) Whether Section 11(1) of the Bombay Electricity (Special Powers) Act, 1946, barred compensation claims by workers for mill closures directed by government orders.

ii) Whether Standing Orders 16 and 17 precluded any further claim for compensation by employees.

iii) Whether the Industrial Court had jurisdiction under Section 73 to entertain the compensation claim.

iv) Whether the Tribunal’s reliance on Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, Kanpur was justified.

v) Whether social justice principles could justify compensation in absence of contractual obligation.

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The counsels for Rashtriya Mill Mazdoor Sangh submitted that:

• Standing Orders 16 and 17 only dealt with compensation in lieu of notice, not for loss of wages due to unforeseen closure. These Standing Orders did not cover this claim under Schedule I, Item 9 [1].

• The Government’s reference under Section 73 was valid despite statutory Standing Orders since it was invoked under a non-obstante clause, giving the Industrial Court broad jurisdiction [2].

• The bar under Section 11(1) of the Bombay Electricity Act applied only to suits and prosecutions against those enforcing power restrictions, not to claims between private parties such as workers and employers [3].

• They emphasized that the Muir Mills case dealt with bonus claims, not compensation for closure, making it inapplicable [4].

• They advocated for compensation based on social justice principles, arguing that shared losses should be equitably distributed when neither party is at fault [5].

G) RESPONDENT’S ARGUMENTS

i) The counsels for Apollo Mills Ltd. & Others submitted that:

• The reduction in work stemmed from a government directive, hence Section 11(1) immunized them from any legal liability [6].

• Standing Orders 16 and 17 comprehensively governed matters relating to temporary closures due to force majeure like power failures. Thus, they claimed immunity from compensation beyond what those Standing Orders prescribed [7].

• They asserted that the Industrial Court had no jurisdiction as the Standing Orders were determinative under Section 40(1) read with Schedule I [8].

• They cited the High Court ruling in Digambar Ramachandra v. Khandesh Mills, arguing that the Industrial Court could not go beyond the scope of the Standing Orders [9].

• They relied on Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union ([1955] 1 SCR 991), to argue that no additional financial obligation can be imposed when mills already incurred losses and workers had received bonuses [10].

H) RELATED LEGAL PROVISIONS

i) Bombay Electricity (Special Powers) Act, 1946

• Section 6A(1) – Enabled government to control energy supply

• Section 11(1) – Provided immunity for good faith actions under the Act

ii) Bombay Industrial Relations Act, 1946

• Section 40(1) – Standing Orders are determinative

• Section 40(2) – Enables dispute reference to Labour Court

• Section 73 – Allows government to refer industrial disputes to Industrial Court

• Section 78 – Empowers courts to adjudicate industrial disputes

• Schedule I, Item 9 – Temporary closures

• Schedule III, Item 7 – Non-employment, reinstatement, compensation for closure

I) JUDGEMENT

a. RATIO DECIDENDI

i) The Supreme Court ruled that Section 11(1) did not bar proceedings between employers and workers. It only protected those acting under government orders from prosecution [11].

ii) The Court found Standing Orders 16 and 17 addressed compensation for notice period, not wage loss from forced closure, and thus could not bar the workers’ claim [12].

iii) The Industrial Court had jurisdiction under Section 73, which overrides Standing Orders where broader public policy is involved [13].

iv) The Muir Mills precedent, which focused on bonus based on profits, did not apply to the issue of compensation for non-employment caused by external governmental forces [14].

v) The Court affirmed that social justice demanded equitable loss sharing. Awarding 50% compensation was a fair solution to balance interests of workers and employers [15].

b. OBITER DICTA 

i) The Court commented that Standing Orders cannot bar new forms of relief arising from novel factual situations like governmental power cuts.

ii) It reiterated that social justice principles can guide courts in industrial arbitration, even when contracts or statutes are silent.

c. GUIDELINES 

• Section 11(1) protections are limited to governmental actors and not applicable to employer-employee disputes.

• Standing Orders must be narrowly construed and cannot limit worker claims outside their express scope.

• Industrial Courts can exercise wide discretion under Section 73 to enforce equity and fairness in disputes.

• Tribunals must distinguish between compensation for closure and contractual benefits like bonus or wages.

• Courts can invoke social justice as a legal standard where both employers and workers suffer losses from external causes.

J) CONCLUSION & COMMENTS

This judgment reaffirmed the judiciary’s commitment to labour welfare through a social justice framework. The Supreme Court balanced statutory interpretation with equitable considerations. It maintained that legal immunities for government compliance cannot extinguish legitimate worker grievances. The Court clarified that compensation for closure is conceptually distinct from wages or bonus, and cannot be denied on procedural technicalities or misapplied precedents. The ruling protects the vulnerability of industrial labour in uncertain economic and environmental conditions.

K) REFERENCES

a. Important Cases Referred
[1] Digambar Ramachandra v. Khandesh Mills, (1949) 52 Bom LR 46
[2] Muir Mills Co. Ltd. v. Suti Mills Mazdoor Union, [1955] 1 SCR 991
[3] Western India Automobile Association v. Industrial Tribunal, [1949] FCR 321
[4] Anglo-Iranian Oil Co. v. Petroleum Workers’ Union, [1951] 2 LLJ 770
[5] Crompton Parkinson v. Its Workmen, [1959] Supp 2 SCR 933
[6] Textile Labour Association, Ahmedabad v. Ahmedabad Millowners’ Association, 1946-47 ICR 87

b. Important Statutes Referred
[7] Bombay Electricity (Special Powers) Act, 1946, Sections 6A(1), 11(1)
[8] Bombay Industrial Relations Act, 1946, Sections 40, 42, 73, 78; Schedule I & III
[9] Model Standing Orders, Orders 16 and 17