Holding

The question of whether the workmen were employees after 30 October 1971 had been finally decided by the first tribunal, and therefore res judicata barred re‑litigation; the second award is quashed.

Summary

The Bharat Barrel Company gave a closure notice effective 1 November 1971, but terminated the services of its workmen on 30 October 1971 under a standing order amid violent unrest. The first Industrial Tribunal (IT No. 325 of 1971) held that the workers were validly discharged before the closure and therefore were not entitled to compensation under s.25FFF; its award became final. A second tribunal (IT No. 245 of 1975) later treated the same workers as still employed, awarded retrenchment compensation under s.25F and back wages, and rejected the defence of res judicata, declaring the discharge notice invalid. The management appealed, arguing that the issue of the workers' employment status had already been finally decided and could not be re‑agitated. The Supreme Court held that the principle of res judicata applies to industrial tribunal awards and that the question of whether the workers were employees after 30 October 1971 had been finally decided, so the second award was void. The Court set aside the award of 20 March 1980, ordered distribution of Rs.48,00,000 among the 440 workers, and directed refund of Rs.1,63,000 to the appellant.

Issues considered

Whether the doctrine of res judicata applies to subsequent industrial tribunal proceedings concerning the same parties and the same question of employment status.
Whether the second Industrial Tribunal could re‑examine the validity of the discharge notice dated 30 October 1971.
Whether the workers were entitled to retrenchment compensation under s.25F and back wages in view of the earlier tribunal's finding.

Legislation cited

Industrial Disputes Act, 1947s. 19(6), s. 25F, s. 25FFF, s. 33-C(i)

Subjects

res judicataindustrial disputeretrenchment compensationIndustrial Disputes Actclosure of factorytermination of servicestanding ordersback wagesSupreme Court

Judgment

BHARAT BARREL & DRUM MANUFACTURING
COMPANY PVT. LIMITED A
v.
BHARAT BARREL EMPLOYEES UNION
1I
APRIL 9, 1987
B
[E.S. VENKATARAMIAH AND
SABYASACHI MUKHARJI, JJ.]

Industrial Disputes Act, 1947-Ss. 10, 25F & 25FFF-Res
judicata-Doctrine of-Applicability to industrial disputes-Whether a
- ~- person is or not an employee cannot be reagitated in a later industrial
dispute if it has been finally decided in an earlier dispute. C

In the factory of the appellant-Company there were about 1100
~ permanent as well as temporary workmen. On account of non-avail-
, ability of raw materials and other compelling circumstances the
appellant-Company issned a 'closure notice' dated September 30, 1971 D
intimating all its workmen that their services would stand terminated
due to the closure of the factory with effect from November 1, 1971 and
that they would be paid compensation under s. 2SFFF of the Industrial
Disputes Act, 1947. Thereafter, the workmen indulged in go slow tact-
ics and various acts of sabotage rendering the running of factory and
y office virtually impossible and.an atmosphere of terror, intimidation E
and vilific.l!tion prevailed. On October 30, 1971 the workers and mem-
bers of the staff became more and more aggressive and after threaten-
ing the managerial staff resorted to acts of rioting, hooliganism and
destroyed considerable part of the Company's properties. To control
the situation police had to be summoned. The workers became more
). violent and prevented the Directors and Senior Officers from leaving the F
factory and threw missiles on them and the police. A good number of
·f Police Officers and Constables were injured and the police the!l
arrested about 183 workers.

The Company terminated the services of the workmen with
immediate effect by its notice dated October 30, 1971 issued under the G
Standing Orders applicable to its employees and the notice was duly
published.

Thereafter, the workmen raised an industrial dispute which was
referred for adjudication to the Industrial Tribunal being I. T. No. 325
of1971. H

825
826 SUPREME COURT REPORTS [1987] 2 S.C.R.

A
The faetory was completely closed down from November 1, 1971
and there was no production till May, 1972. Pursuant to notice dated y
June 7, 1972 hy the appellant, many workmen rejoined the factory.

Before the Tribunal the case of the Union and the workers was
that the services of the workers were terminated due to closure and
B although the Tribunal cannot go into the question of legality or illegality
of the closure, yet they would be entitled to compensation under
s. 25FFF of the Industrial Dipsutes Act, 1947. The contention of the f-
appellant-company was that the workers were validity discharged on

•
October 30, 1971 under Standing Order 21 i.e. before the alleged ~-
closure became operative and that it was not liable to pay compensation -
under s. 25 FFF.
c
The question before the Tribunal was whether the workmen con-
~-
tinned to be in employment till the closure took effect on November 1,
1971 or whether they ceased to be the employees of the appellant on
October 30, 1971 or October 31, 1971 by virtue of the notice of the
D discharge issued under Standing Order 21.

The Tribunal held that the workers were validly discharged on
30th October, 1971 before their services could he terminated due to
closure and, therefore, could not he said to have been retrenched due to
closure; that the workers' services stand to have been terminated at. 'i
E least from 10.30 a.m. on October 31, 1971 when the order of discharge
became effective; that thereafter the workers were not in service of the
company and also were not in .the service at the time of the alleged
closure and that since the termination of services of the workers is not
connected with the closure, they would not be entitled to any compensa-
tion due to closure. The reference was rejected by the Tribunal by its
f
F order dated October 30, 1974. The award remained unchallenged and \;-
became final.

Thereafter at the instance of 440 workers another reference being
IT No. 245 of 1975 was made. The Tribunal held that the workmen
included in the Schedule to the reference should be deemed to have been
G retrenched on March 20, 1980 i.e. the date of the Award, that they were
entitled to retrenchment compensation under s. 25 F of the Act and they 'r-
were entitled to reoover 75% of their hack wages from October 31, 1971
till March 20, 1980. The Tribunal rejected the contention of the
management that the present case was barred by the principle of res
judicata and held that the termination of the services of workers under
H the notice of discharge dated October 30, 1971 was invalid.
BHARAT BARREL CO. v. UNION 827

The management challenged the latter award in a writ petition A
before the High Court. The petition was dismissed by a Single Judge.
The Division Bench dismissed the appeal.

In the appeal, to this Court on behalf of the appellant manage-
ment it was submitted that the latter Industrial Tribunal was in error in
treating the workmen in question as being in the employment of the B
management until it made the Award even though t!ie fir's! Tribunal
had held that the workmen had been validly discharged by the notice
dated October 30, 1971 issued under Standing Order 21 and the
enquiry into the very same question between the same parties was
barred by the principle of res judicata.

Allowing the Appeal and disposing of the Special Leave Petition,
c
HELD: 1. That the rule of res judicata applies to proceedings
before the Industrial Tribunals is beyond question. However, it is not
that a question which is once decided can never he re-agitated. There
are certain classes of cases like disputes regarding wage structure, service D
conditions etc. which arise as circumstances change and new situations
arise which may not be barred by the rule of res-judicata. [834F; 8360-E)

Burn & Co., Calcutta v. Their Employees, [1956) S.C.R. 781;
Workmen of the Straw Board Manufacturing Company Limited v. Mis
Straw Board Manufacturing Company Limited, [1974) 3 S.C.R 703; E
Workmen of Balmer Lawrie and and Co. v. Balmer Lawrie and Co.
[1964] 5 S.C.R. 344 and Associated Cement Staff Union and another v.
Associated Cement Company and others, [1964] Vol. 1 L.L.J. 12,
followed.

2. The question whether the workmen concerned were entitled to F
retrenchment compensation under s. 25F as on the date of the Award
and payment of back wages from October 31, 1971 to March 20, 1980
depends upon their right to be in service from the date on which they
ceased to work in the factory upto the date of the Award. In the first
reference the workmen specifically prayed for payment of compensa-
tion under s. 25 FFF on the ground that the factory had been closed G
with effect from November 1, 1971 as per notice of closure thereby
accepting the position that they bad ceased to be the employees of the
management on November 1, 1971. That claim was resisted by the
management on the footing that the workmen had been discharged
pursuant to the notice of discharge dated October 30, 1971. Even though
the first Tribunal had observed that it had considered the question of H
828 SUPREME COURT REPORTS [19&71 2 S.C.R.

A
discharge as an "incidental qnestion in view of the defence taken by the y
Company" the case was decided only on the basis of its finding that1he
workmen had been validly discharged by the notice dated October 30,
1971. Though the said Tribunal had observed "that there is nothing on
the record to show at this stage that the discharge order is not proper",
it did not mean that the validity of the discharge order could be re-
B agitated later on because the first Tribunal further observed, "it would
then be evident that all the workers of the Company-were discharged by, f.
the Company on 30th October, 1971 before the closure could become
effective". [836F-H; 837A-B] ~·
-
3. The one and the only ground on which the claim of the work-
men for compensation under s. 25 FFF was rejected was that the work-
c men bad ceased to be employees of the appellant by reason of the notice
of discharge dated October 30, 1971. The validity of that notice of discharge ~
was directly and substantially in issue in the first reference. [837B-C]

4. Before the first Tribunal the workmen could have urged that
D the discharge was invalid and, therefore, they continued to be in service
till November, 1, 1971 and hence were entitled to compensation under
s. 25 FFF. The case of the workmen that they were entitled to compen-
sation under s. 25 FFF was negatived by the first Tribunal holding that
'j
the workmen had been validly discharged by the notice dated October
30, J971. The decision of the first Tribunal may be erroneous and could
E have been set right if its Award had been challenged but it was allowed
to become final. The decision of the first Tribunal was not one rendered
without jurisdiction nor can it be characterised as a nullity on any
ground known to law. [837D-F] ~
•
F
5. The question whether a person was or was not an employee
under a management after a particular date is one which cannot be
t
re-agitated in a subsequent case if it has already been decided finally by
an industrial 1'ribunal of competent jurisdiction in an earlier case
where the said question necessarily arose for decision. [837F]

Buran & Co., Calcutta v. Their Employees, [1956] S.C.R. 781 and
G Workmen of the Straw Board Manufacturing Company Limited v. Mis ~·
Straw Board Manufacturing Company Limited, [1974] 3 S.C.R. 703,
followed.

6. The workmen did not claim before the first Tribunal the relief
of reinstatement or compensation under s. 2SF even though the factory
H had been reopened in 1972 before the first Award was passed but only
BHARAT BARREL CO. v. UNION [VENKATARAMIAH, J.] 829

conf'med their relief to compensation under s. 25 FFF. The workmen A
) could not have, therefore, been permitted to re-agitate the said matter
I
before the second Tribunal which decided the second reference and to
contend that they had continued to be employees of the management on
the ground that the notice of discharge and the notice of closure were
both invalid, The second Tribunal should have rejected the said conten-
tions by holding that the validity of notice of discharge dated October B
-~\ 30, 1971 was not open to question before it. The second Tribunal was in
error in re-examining the issue relating to the validity of the notice of
discharge and in expressing a contrary view. The Award dated March
20, 1980 passed by the second Tribunal is, therefore, liable to he
quashed, [837G-H; 838A-C]

[The Court appreciated and accepted tile submission of the
c
appellant-management that it would give up its right to claim the
refund of Rs.48,00,000 lying with the Commissioner of Labour even
though the Award is set aside and the same may he distributed ex-gratia
amongst the 440 workmen involved in the second reference equally and
issued necessary directions in that behalf. The Court also directed that D
the amount of Rs.J ,63,000 realised by the Collector shall he refunded to
the appellant.]

Y CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1463
of 1986 etc.
E
From the judgment and Order dated 26.3.1985 of the Bombay
High Court in Appeal No. 264 of 1985.

F.S. Nariman, A. Sande, S. Sukumaran, S.C. Sharma, Miss
Godbole and D.N. Mishra for the Appellant.
F
Dr. Y.S. Chitale, N.B. Shetye, P.H. Parekh, Dr. B.Y. Chandra-
chud and P.K. Manohar for the Respondent.

The Judgment of the Court was delivered by

VENKATARAMIAH, J. This appeal by special leave is filed G
against the judgment of the High Court of Bombay in Appeal No. 264
of 1985 dated March 26, 1985 affirming the decision of the learned
Single Judge of that Court in Writ Petition No. 867 of 1980 dated
January 18, 1984.

The appellant is a company engaged in the business of manu- H
830 SUPREME COURT REPORTS [1987] 2 S.C.R.

facturing barrels and drums at its factory in Bombay. In the year 1971
A
it had engaged about 1100 workmen-about 600 permanent workmen
and 500 temporary workmen. It is alleged that since 1968 the factory
was working intermittently and that the situation had worsened on
account of non-availability of raw materials and other compelling
circumstances. By 1971 the company could see no other alternative but
B tq close down its factory and accordingly it issued a 'closure notice'
dated September, 30, 1971 which was duly displayed on the Notice
Board and that it also intimated all its workmen that their services
would stand terminated due to the closure of the factory with effect
from November 1, 1971. The workmen also were informed that they
would be paid compensation under section 25 FFF of the Industrial
c Disputes Act, 1947 {hereinafter referred to as 'the Act'). The appel-
lant alleges that soon after the display of lhe 'closure notice' dated
September 30, 1971 the workmen indulged in go slow tactics and vari-
ous acts of sabotage rendering the running of the factory and office
virtually impossible. The whole work was paralysed. It is alleged that
during the month of October there were meetings of workmen and an
D atmosphere of terror, intimidation and vilification prevailed. On
October 30, 1971 with the commencement of the first shift i.e. practi-
cally on the eve of the effective date of the closure on November 1,
1971 in terms of the 'closure notice' a very grave and tense atmosphere
prevailed on the premises of the factory of the appellant and by the
afternoon all the workers and members of the staff became more and
E more aggressive and after threatening the managerial staff resorted to
acts of rioting, hooliganism and destroyed considerable part of the
appellant's properties. The situation further aggravated by the work-
men of the second shift joining the said workmen of the first shift. The ~·
workmen of the first shift continued to remain in the precincts of the
factory and squatted in the passage leading to the office of the appel- :;,-
F lant where the directors and senior officers were present and thus
blocked the passage. The union leaders addressed the workers using
inflammatory and defamatory language against the directors and offi-
cers. At that stage the management requested the assistance of the
police. The police force arrived accordingly. The Assistant Commis-
sioner of Police S.N. Minocher Homji appealed to the workers not to
G prevent the directors and senior officers from leaving the factory. }--·
Ignoring the said appeal, the union leaders "gheraoed" the directors
and senior officers and when the police tried to assist the directors and
senior officers to leave, the workers pounced upon the police party
and tried to attack them. When the police tried to resist the workers
became more violent and threw missiles like nuts, grinding wheels,
H soda water bottles, stones, brick bats etc. at the police and the,
BHARAT BARREL CO. v. UNION [VENKATARAMIAH, J.] 831

directors and officers including their cars and the police van. One
sharp missile struck the eye of the Assisstant Commissioner of Police A
and he lost his eye. About 26 Police Officers and constables were
injured. A grinding wheel thrown at the car of the director would have
caused fatal injury but only the car was badly damaged. Machinery to
the tune of Rs.6,50,000 was damaged. The police then arrested 183
workers while the rest of them fled aw~y. B

In view of the grave law and order situation, the company
decided to terminate the services of the workmen with immediate
effect by its notice dated October 30, 1971 issueounder the Standing
Orders applicable to the employees of the appellant. The said notice
was duly published on the Notice Board as well as in the daily news- C
paper 'Navshakti' and 'Free Press Journal' both dated November 1,
1971.

Thereafter the workmen raised an industrial dispute and the
Government of Maharashtra by its order of reference dated November
9, 1971 referred the dispute for adjudication by the Industrial Tribunal D
of Shri G.K. Patankar. The terms of reference were:

"(i) Whether the nature of closure declared by the
y '
company by its notice dated September 30, 1971 is for
temporary period and to defeat the pending claims of the
workmen before the various authorities. E

(ii) Whether the said closure is legal and bonafide, if
not what further relief be given to the workmen in addition
to wages for the p~riod of enforced unemployment?
j
(iii) In case the closure is legal and bonafide whether F
the workmen are entitled to compensation in accordance
with the provisions of section 25 F of the Industrial Dis-
putes Act, 1947 or under the provisions of section 25 FFF."

The above reference was numbered as I. T. No. 325 of 1971. It is
alleged by the management that the factory was completely closed G
down from November 1, 1971 and there was no production till May,
1972. During this period there used to be meetings of the workmen
and skirmishes near the factory. In may, 1972 the High Court of Delhi
by its order dated May 19, 1972 in a writ petition filed by the appellant
directed Mis Hindustan Steel Ltd. to resume forthwith supply of steel
sheets to the appellant~. In view of this order the appellant put up a H
832 SUPREME COURT REPORTS [1987] 2 S.C.R.

notice dated June 7, 1972 both on the Notice Board in the office as well
A
as at the main gate of the factory advising the ex-workers who desired
to offer themselves for employment to intimate the same to the appel-
lant. It also stated that preference would be given to such of the ex-
employees who may abide to work peacefully. This notice was
followed by two more such notices dated August 10, 1972 and October
B 13, 1972. Many workmen rejoined the factory.

Now, we shall revert to the reference ma~e to the Tribunal in
LT. No. 325 of 1971. In that case although various pleas were taken by
the parties in their pleadings at the hearing it was the case of the "union
that the services of the workers were terminated due to closure
whereas the company contended that they were discharged before the
c alleged closure became operative (Page 147 of the Paper Book). On
behalf of the workmen it was contended "that the services of the
workers stand teniiinated due to closure and although the Tribunal
cannot go into the question of legality or illegality of the closure, yet
when the services of the workers are terminated due to closure they
D would be entitled to compensation under section 25 FFF of the ID
Act" (P. 150 of the Paper Book). The management reiterated before
the Tribunal that it was not liable to pay compensation under section
25 FFF of the Act as the workmen had been discharged on October 30,
1971 under Standing Order 21. In the above situation the Tribunal was
required to decide whether the workmen continued to be in employ-
E ment till the closure took effect on November, l, 1971 or whether they
ceased to be the employees of the management on October 30, 1971 or
October 31, 1971 by virtue of the notice of discharge issued under
Standing Order 21. On the above question the Tribunal recorded its
findings. We shall state them in its own words. The Tribunal observed:
"It would then follow that the workers were discharged before their
F services could be terminated due to closure. The workers, therefore,
cannot be said to have been retrenched due to closure in the existing
circumstances" (Page 155 of the Paper Book). "The said ruling is
applicable and the workers' services, therefore, stand to have been
terminated at least from 10.30 a.m. on October 31, 1971 due to the
order of discharge" (Page 155 of the Paper Book). "The discharge
G order, therefore, in any case became effective from 10.30 a.m. on
October 31, 1971. The workers, therefore (were) not in service of the
company thereafter and also were not in service at the time of the
alleged closure" (Page 159 of the Paper Book). "The fact remains that
the services of the workers were terminated because they were validly
discharged and hence as mentioned above, they would not be entitled
H for any relief due to closure even if it is assumed that there was closure
BHARAT BARREL CO. v. UNION [VENKATARAMIAH, J.] 833

as alleged" (underlining by us) (Page 159 of the Paper Book). "The A
point as to whether the workers would have been entitled to compen-
sation under section 25 FFF .......... The same was argued for the
union by Shri Kamerkar and I agree with the fact that if the services of
the workers had been terminated due to closure, then they would have
been entitled for compensation under section 25 FFF of the ID Act.
1947. It has however already been found that the services of the work- B
ers were not terminated due to closure and hence question of compen-
sation would not arise" (Page 162 of the Paper Book). "It would then
be evident that all the workers of the company were discharged by the
company on the 30th October, 1971 before the closure could become
effective (Page 164 of the Paper Book). "Since the termination of
services of the workers is not connected with the closure the workers
would not be entitled to any compensation due to closure" (Page 165
c
of the Paper Book). With these findings the reference was rejected by
the Industrial Tribunal by its order dated October 30, 1974. The above
Award made in I.T. No. 325 of 1971 remained unchallenged and
became final. Thereafter at the instance of 440 workers only another
reference was made by the Government of Maharashtra on July 10, D
1975 to the same Industrial Tribunal.Shri G.K. Patankar under section
IO(l)(d) of the Act which was numbered as reference (LT.) 245 of
1975 and this time the points of dispute referred were as follows:

"(1) All employees whose names are mentioned at
Annexure 'A' be reinstated with full back wages and con- E
tinuity of service, restoring their status, rights and privi-
leges as if there was no break in service.

(2) These employees should be paid one year's wages
as an interim relief till the final disposal of the case."
F
In the Schedule to the reference the names of 440 workmen, who
were employees prior to their discharge on October 30, 1971/0ctober
31, 1971 were included. They were workmen on whom the earlier
Award passed in I.T. No. 325 of 1971 was binding. By the time the
second reference, ~eference (I.T.) 245 of 1975, was disposed of the
membership of the Tribunal had changed and Shri M.A. Deshpande G
had been appointed in the place of Shri G.K. Patankar. Shri M.A.
Deshpande passed his Award on March 20, 1980. He held that the
workmen included in the Schedule to the reference should be deemed
to have been retrenched on March 20, 1980 i.e. the date of the Award,
that they were entitled to the retrenchment compensation as laid down
in section 25F of the Act and that they were entitled to recover 75% of H
834 SUPREME COURT REPORTS [1987] 2 S.C.R.

their back wages from October 31, 1971 till March 20, 1980. The above y
A
Award was passed by the Tribunal rejecting the contention that the
present case was barred by the principle of res judicata and holding
that the termination of the services of workers under the notice of
discharge dated October 31, 1971 was invalid. It is not necessary to
refer to all other findings at this stage since the only point which
B requires to be examined in this case is whether the decision on the
question of res judicata is correct or not. f.
Aggrieved by the latter Award dated March 20, 1980 the -4!
management filed a writ petition before the High Court in Writ Peti-
tion No. 867 of 1980. The learned Single Judge who heard the said
petition dismissed it on January 18, 1984 and an appeal filed against his
c decision in Appeal No. 264 of 1985 was dismissed by the Division
Bench of the High Court on March 26, 1980. This appeal by special
'r· '
leave is filed by the management against the said decision of the High
Court.

D The. principal question which is urged before us by the manage-
ment is that the latter Industrial Tribunal (Shri M.A. Deshpande) was
in error in treating the workmen in question as being in the employ-
ment of the management until it made the Award even though the first
Tribunal (Shri G .K. Patankar) had held that the workmen had been
validly discharged by the notice dated October 30, 1971 issued under
E Standing Order 21 and the enquiry into the very same question bet-
ween the same parties was barred by the principle of res judicata.

That the rule of res judicata applies to proceedings before the -~
Industrial Tribunals is beyond question. In Burn & Co., Calcutta v.

F
Their Employees, [1956] S.C.R. 781 at pages 789-90 this Court has
observed thus:
\
"Are we to hold that an award given on a matter in con-
troversy between the parties after full hearing ceases to
have any force if either of them repudiates it under section
19(6), and that the Tribunal has no option, when the matter
G is again referred to it for adjudication, but to proceed to try
it de novo, traverse the entire ground once again, and come
to a fresh decision. That would be contrary to the well
recognised principle that a decision once rendered by a
competent authority on a matter in issue between the
parties after a full enquiry should not be permitted to be
H re-agitated. It is on this principle that the rule of res judi-
BHARAT BARREL CO. v. UNION [VENKATARAMIAH, l.l 835

cata enacted in section 11 of the Civil Procedure Code is A
based. That section is, no doubt, in terms inapplicab(e to

'I
the present matter, but the principle underlying it, expres-
sed in the maxim "interest rei publicae ut sit finis litium", is
founded on sound public policy and is of universal ' applica-
tion. (vide Broom's Legal Maxims, Tenth Edition, page
218). "The rule of res judicata is dictated" observed Sir B
Lawrence Jenkins, C.J. in Sheoparsan Sif!_gh v. Ramnandan
~\ Prasad Singh, (1916] L.R. 43 I.A. 91. "by a wisdom which
is for all time". And there are good reasons why this princi-
~ pie should be applicable to decisions of Industrial Tribunals
•
also. Legislation regulating the relation between Capital
and Labour has two objects in view. It seeks to ensure to
the workmen who have not the capacity to treat with capi-
c
ta! on equal terms, fair returns for their labour. It also
seeks to prevent disputes between employer and emp-
loyees, so that production might not be adversely affected
and the larger interests of the society might not suffer.
·Now, if we are to hold that an adjudication loses its force D
when it is repudiated under section 19(6) and that the
whole controversy is at large, then the result would be that
far from reconciling themselves to the award and settling
down to work it, either party will treat it as a mere stage in
-t the prosecution of a prolonged struggle, and far from
bringing industrial peace, the awards would turn out to be E
- but truces giving the parties breathing time before resum-
ing hostile action with renewed vigour. On the other hand,
if we are to regard them as intended to have long term
} operation and at the same time hold that they are liable to
be modified by change in the circumstances on which they
-;. were based, both the purposes of the legislature would be F
served. That is the view taken by the Tribunals themselves
in The Army & Navy Stores Ltd., Bombay v. Their Work-
men, (1951] 2 L.L.J. 31 and Ford Motor Co. of India Ltd.
v. Their Workmen, (1951] 2 L.L.J. 231., and we are of
opinion that they lay down the correct principle, and that
there were no grounds for the Appellate Tribunal for not G
--4 \
following them."

Same view is expressed in Workmen of the Straw Board
Manufacturing Company Limited v. Mis Straw Board Manufacturing
Company Limited, (1974] 3 S.C.R. 703. This Court has observed this
at page 717: H
836 SUPREME COURT REPORTS [1987] 2 S.C.R.

"It is now well established that, although the entire Civil
A Procedure Code is not applicable to industrial adjudica-
.y·
tion, the principles of res judicata laid down under section
, 11 of the Code of Civil Procedure, however, are applicable,
wherever possible, for very good reasons. This is so since
multiplicity of litigation and agitation and re-agitation of
B the same dispute at issue between the same employer and his
employees will not be conducive to industrial peace which
is the principal object of all labour legislation bearing on ).-.
industrial adjudication. But whether a matter in dispute in
a subsequent case and earlier been directly and substan-
. __.,, ~

tially in issue between the same parties and the same had
been heard and 'finally decided by the Tribunal will be of
c pertinent consideration and will have to be determined be-
fore holding in a particular case that the principles of res ~
judicata are attracted".

We would hasten to add that the above observations do not mean
D that a question which is once decided can never be re-agitateci. There are
certain classes of cases like disputes regarding wage structure, service
conditions etc. which arise as circumstances change and new situations
arise which may not be barred by the rule of res judicata. The disputes
which arose for consideration in Workmen of Balmer Lawrie and Co. ·l
v. Balmer Lawrie and Co., [1964] 5 S.C.R. 344 and in Associated
E Cement Staff Union and another v. Associated Cement Company and
others, [ 1964] Vol. 1 L.L.J. 12 belong to this category of cases. -
In the instant case we are concerned with the question whether
the workmen concerned were entitled to retrenchment compensation
under section 25F of the Act as on the date of the Award and payment
+'·
F of back wages from October 31, 1971 to March 20, 1980. This question ~\
depends upon their right to be in service from the date on which they
ceased to work in the factory upto the date of the Award. In the first
reference I.T. No. 325 of 1971 the workmen specifically prayed for
payment of compensation under section 25FFF of the Act on the
ground that the factory had been closed with effect from November 1,
G 1971 as per notice of closure thereby accepting the position that they
had at any rate ceased to be the employees of the management of
November 1, 1971. That claim was resisted by the management on the
r--
footing that the workmen had been discharged pursuant to the notice
of discharge dated October 30, 1971. Even though in the course of its
Award. the Isl Tribunal had observed that it had considered the ques-
H tion of;discharge as an "incidental question in view of the defence
BHARAT BARREL CO. v. UNION [VENKATARAMIAH, J.I 837

taken by the company" the case was decided only on the basis of its A
finding that the workmen had been validly discharged by the notice

'I dated October 30, 1971. It is true that the said Tribunal had observed
"that there is nothing on the record to show at this stage that the
discharge order is not proper." But it did not mean that the validity of
the discharge order could be re-agitated later on because in the very
next sentence the !st Tribunai observed: "It would then be evident B
that all the workers of the company were discharged by the company on
--\ 30th October, 1971 before the closure could become effective." The
one and the only ground on which the claim of the workmen for
4 ~ compensation under section 25FFF of the Act was rejected was that
the workmen had ceased to be employees of the appellant by reason of
the noti~e of discharge dated October 30, 1971. The validity of that
notice of discharge was directly and substantially in issue in the first
c
~ reference. The above observations of the !st Tribunal on which the
learned Single Judge has relied, therefore, do not carry the case of the
workmen any further. Before the !st Tribunal it was open to the work-
men to urge that the discharge was invalid and, therefore, the work-
men continued to be in the service till November 1, 1971 and hence D
were entitled to compensation under section 25FFF of the Act. Their
case that they were entitled to compensation under section 25FFF of
the Act was negatived by the !st Tribunal on its firm conclusion that
y the workmen had been validly discharged by the notice dated October
30, 1971. It may be that the decision of the !st Tribunal was erroneous
and could have been set right if its Award had been challenged before E
Higher Courts. But it was allowed to become final. The decision of the
Ist Tribunal was not one rendered without jurisdiction. Nor can it be
characterised as a nullity on any ground known to law. The question
) whether a person was or was not an employee under a management
t after a particular date is one which cannot be re-agitated in a subse-
-f q uent case in the circumstances which are referred to above if it has F
already been decided finally by an Industrial Tribunal of competent
jurisdiction in an earlier case where the said question necessarily arose
for decision. This case falls within the scope of the decision in Burn &
Co. 's case (supra) and in the case of Straw Board Manufacturing Co.
Ltd. (supra). We have extracted above the several passages from the
Award of the !st Tribunal which leave no scope for re-agitating the G

~ issue relating to the validity of the notice of discharge dated October
30, 1971. It is significant that the workmen did not claim before the !st
Tribunal the relief of reinstatement or compensation under section
25F of the Act even though the factory had been reopened in 1972
before the first Award was passed but only confined their relief to
compensation under section 25FFF of the Act. The workmen could H
838 SUPREME COURT REPORTS [1987] 2 S.C.R.

not have, therefore, been permitted to re-agitate the said matter
A
before the Second Tribunal which decided the second reference and to y
contend that they had continued to be employees of the management
on the ground that the notice of discharge and the notice of closure
were both invalid. The Second Tribunal should have rejected the said
contentions by holding that the validity of notice of discharge dated
B October 30, 1971 was not open to question before it. The second
Tribunal was in error in re-examining the issue relating to the validity
of the notice of discharge and in expressing a contrary view. The ~ -
Award dated March 20, 1980 passed by the second Tribunal Shri M.A.
Deshpande is therefore liable to be quashed and it is accordingly
quashed.
....' ~

'
c Before concluding we should refer to a concession made by the
management before us. When the writ petition filed against the Award ,._
dated March 20, 1980 was pending before the High Court, the work-
men proceeded to enforce it under section 33-C(i) of the Act before
the Assistant Commissioner of Labour. He issued a certificate for
D recovery of Rs.96,98,492.48 against the management. When the Col-
lector took steps to recover the above amount, the appellant filed a
writ petition before the High Court in Writ Petition No. 2081 of 1983
against the order passed under section 33-C(l) of the Act. That peti-
lion was dismissed in limine. An appeal filed against that order before 'j.
the Division Bench in Appeal No. 394 of 1984 wrs dismissed on June
E 27, 1984. Against that order the management filed a special leave
petition before this Court in Special leave Petition (Civil) No. 9337 of
1984. When that petition came up for hearing, this Court issued notice
on the petition and also issued an order or stay of recovery of the
amount for which 11 certificate had been issued on August 27, 1984
subject to the appellant depositing Rs.48,00,000 (Rupees Forty-eight
t
F lakhs) in instalments on the dates specified in that order. The manage-
~
ment deposited the entire sum of Rs.48,00,000 though not on the dates
specified above and the said sum ultimately came into the possession
of the Commissioner of Labour, Commerce Centre, Tardeo Bombay.
Out of the said sum, some amount has already been distributed
amongst some of the workmen (or their legal representatives, where-
G ver the workman was dead) at whose instance the second reference
was made as per interim order passed by this Court. The learned
counsel for the appellant-management has submitted before us that it
>--
would give up its right to claim the' refund of the said amount of
Rs.48,00,000 even though the Award is set aside and that the said
amount of Rs.48,00,000 (less expenses, if any,) may be distributed
H ex-gratia amongst the 440 workmen involved in the second reference
BHARAT BARREL CO. v. UNION [VENKATARAMIAH, J.] 839

equally. He also prayed that the sum of Rs.1,63,000 recovered sepa- A
rately by the Collector may be refunded to the appel!ant. We very
( much appreciate the submission made on behalf of the management.
This brings substantial relief to the workmen concerned since the sum
of Rs. 48,00,000 now offered is equivalent to a little more than three
times the amount which the workmen would have got under section B
25FFF of the Act, if they had succeeded in the Ist Reference. It is
stated that under section ~5FFF of the Act they would have been
_..( entitled to get in 1971 about Rs.14,00,000 and even if interest cal-
\ culated at a reasonab<e rate till today on that sum is added, the total
w ~. amount payable would be less than Rs.48,00,000. The amount of
Rs.48,00,000 now offered is, therefore, on the liberal side. We, there-
fore, direct that the sum of Rs.48,00,000 which is with the .Commis- c
sioner of Labour shal! be distributed equal!y amongst the 440 work-
men. If any of the workmen or their legal representatives have already
--{ received any amount out of it, that amount shal! be adjusted against
the amount due to them. If any workman has received the whole of the
amount due to him under this order then nothing more need be paid to D
him. There appears to be some dispute about the identity of the work-
men. The Commissioner of Labour shal! publish the names of al! th~
440 workmen in a local newspaper informing that they would be
entitled to the amounts to be distributed under this order and he shall
. ,,,
'
disburse the amount after fully satisfying himself about the identify of
the workmen as ordered by this Court on March 13, 1986 in C.M.P. E
No. 7068 of 1986. He shal! meet the cost of publicatioll"in the news-
' paper from the amount available with him and only the balance shall
be equal!y distributed as directed above. If the entire amount is not
distributed as per this order on account of the non-availability of the

l
:..
concerned workmen, the amount shall not be refunded to the manage-
men!. The Commissioner of Labour shall seek directions of this Court F
~
as to how the balance of the amout should be appropriated. !ti any
event the management shall not get back any part of it. This order is
passed in full settle.men! of all the claims of all the workers who were
employed before October 30, 1971. Nobody else shall be permitted to
raise any dispute of this kind. The amount of Rs.1,63,000 realised by
the Collector shall, however, be refunded to the appellant. G

-~ The appeal is accordingly allowed and the Award dated March
20, 1980 in reference (LT.} 245 of 1975, the judgment of the Single
'
Judge and of the Division Bench of the High Court are set aside
subject to the above directions. No costs.
H
840 SUPREME COURT REP9RTS [1987] 2 S.C.R.

A Special Leave Petition (Civil) No. 9337 of 1984 referred to above
is also disposed of by this judgment. It is, however, evident that the y·
recovery proceedings pursl\ant to the certificate issued by the
Assistant Commissioner of Labour cannot be proceeded with since the
Award itself has been quashed by this judgment.
B
A.P.J: Appeal allowed.

-