Holding

The right to wages for holidays under s.3 and s.5(1) is subject to the employer’s right under s.5(2); if the strike is illegal or unjustified, the employer is not required to pay wages for the holiday.

Summary

Madura Coats Ltd., an industrial establishment in Tamil Nadu, faced a strike by its workmen from 21 January to 5 February 1976 over a bonus dispute. The strike included 26 January, a national holiday, for which the employer withheld wages. The Inspector of Factories ordered payment of wages for that day under the Tamil Nadu Industrial Establishments (National and Festival Holidays) Act, 1958, and the Madras High Court upheld the order. On appeal, the Supreme Court examined whether the employer’s liability to pay wages for holidays under s.3 read with s.5(1) is subject to the employer’s right under s.5(2) to call workers to work on such holidays. The Court held that the non‑obstante clause in s.5(2) overrides the right to wages when the strike is illegal or unjustified, and therefore the employer was not obliged to pay for the holiday. Consequently, the High Court’s decision was reversed and the writ petition was allowed. The appellant agreed to pay the wages for 26 January irrespective of the judgment.

Issues considered

Whether an employer is statutorily bound to pay wages for national or festival holidays that fall during a strike, under s.3 and s.5(1) of the Tamil Nadu Industrial Establishments (National and Festival Holidays) Act, 1958, in view of s.5(2).
Whether the strike by the workmen was illegal or unjustified, affecting the applicability of the wage liability.

Legislation cited

Factories Act, 1934s. 49-B(1)
Industrial Disputes Act, 1947s. 22
Tamil Nadu Industrial Establishments (National and Festival Holidays) Act, 1958s. 3, s. 5(1), s. 5(2)

Subjects

national holidayfestival holidaystrikewage liabilitynon obstante clauseillegal strikeindustrial disputeemployment contract

Judgment

302

A MADURA COATS LIMITED
v.
INSPECTOR OF FACTORIES, FIRST CIRCLE,
MADURAI & ANR.

B December 2, 1980
[A. C. GUPTA AND A. P. SEN, JJ.]

Tan1ilnadu Industrial Establishments (l\:atio11al a11d Festh·al Holida:"s 1 Act
1958, SS. 3 and 5(1) and (2)-Scope of.
)
Workn1en going on strike-Natural holiday interrening-Liability of !tfanar;e-
c mcnt to pay H'l1ges for the 1Vational holidoy-When arises.

The Ta111il Nadu Industrial Establishment (National and Festival l-folidays)
Act, 1958 wns a legislation intended to provide for national and festival {
holidays in industrial establishments in the State of Tamil Nadu. Section 3
of the Act provides that every employee in an industrial estab-
liE>h:nent shall be entitl ::d to four national and five festival holidays
D in each calender year. Sub-section (1) of section 5 provides that
'nohvithstanding any contract to the contrary every employee shall be paid
wages for each of the holidays allowed to hin1 under section 3. Sub-section
(2) of sccti.on 5 confers upon the en1.ployer the right to call upon the 'A-:orkn1en
to come rind \\'Ork on such holidays on the fulfilment of the· conditions se' out
therein.
E The oppellant was <in industrial establishment owning textile mills in the
State of Tamil Nadu. In respect of a claim for bonus for the year 1974-75
there was a dispute behveen the management and its workmen. This resulted
in a strike by the workmen, from January 21, 1976 to February 5, 1976 which
was called off by the worktnen on Febn1ary 6, 1976. The management paid
the workmen wages for the month of January 1976 after excluding therefrom
the wages payable for the period of strike during January namely January 21
.F to January 31, 1976. The Management having withheld the wages pnyable for
January 26, 1976 the first respondent addressed a communication stating that
in vie~' of section ·5 of the Act payment of \·r,:ages for January 26, 1976 had
to be made.

The n1anagement challenged the order by A Writ Petition in the High Court.
The High Court held that having regard to the pro\iisions contained in section
3 and sub-section ( 1) of section 5 of the Act, the appellant was bound to pay
the workn1en wages for January 26, 1976 even though the workmen \\'Cr~ nn
strike on that dote an<l dis111issed the Writ Petition.

Allowing the tt·ppeal to this Court

I-TELD: (1) The liability of t'he Management to pay wages for !hl! national
and festival holidays under section 3 read with sub-section (1) of section 5 of
the Act is subject to the rights under sub-section (2) of section 5 of the Act
to c;i\1 upon the \vorkmen ro come and 'vork on such holidays.
'
MADURA COATS v. INSPECTOR OF FACTORIES 303

(2) The construction placed by the High Court on sub-section (2) of sec- A
tion 5 of the Act cannot be accepted. Under the schen1e of the Act the
workmen are entitled ro wages for the national and festival holidays under
section 3 read \Vi th sub-section ( 1) of section 5, but this right of theirs' is
subject to the right of management given under sub-section (2) of bCCtion 5
to call upon the workmen to come and work on such holidays. Any other
construction would make the provisions contained in sub-section (2) of section
5 wholly nugatory. [308H; 309A] B

( 3) Both sub-sections ( 1) and (2) of section 5 contain non ob stante
clauses. While the 11011 obJlante clause in sub-section ( 1) of secl'ion 5 gives
to the \\orkn1en the right to clain1 \vages for snch holidays 'notwithstanding
any contract to the contrary' the 11011 ohstarlle clause in sub-section (2) of
section 5 subordinates the right of the \vorkmen to claim wages for the national
or festival holidays 'notwithstanding anything contained in section 3'. Sub- c
sections (1) nnd (2) of section 5 have been enacted with separate and distinct
objects and they operate on different planes. [306H; 307AJ

Vasudevan, R.M.S. U11ion v. Lotus Mills Ltd. [1977] II LLJ 483 overruled.

( 4) It \VOuld depend on the facts and circun1stances of each case whether
or not wages become payable in the context of strike. When a strike is D
neither illegal being not in contravention- of any statutory provisiont nor un-
justified having been lodged a<; a protest aga1nst the unreasonable attitude of

- the man<igen1ent, there is no reason to deprive the workmen of their wages.
[309B]

Bucld11ghan1 and Car11aric Co. Ltd. v. TVorkt'rs of the Buckingha1n and
C'arnatlc ('o. Ltd. [19531 SCR 219 and 1i-Ia11agenient of Chandramalai Estate, E
Ernakularn v. lts Workn1en [1960] 3 SCR 451 referred to.

Jn the instant case the \Vorkrnen went on strike without serving a notice
under section 22 of the Industrial Dispute Act 1947. That, being so the strike
resorted to by the workmen was wholly unjustified if not illegal. When the
workmen themselves brought about a situation by going on a strike they can-
not be permitted to claim wages under sub-section (1) of section 5 of the Act F
since the management were deprived of their right nnder sub-section (2) of
r section 5 of the Act [309E]

CIVIL APPELLATE JURISDICTJON : Civil Appeal No. 34 of 1980.
From the Judgment and Order dated 7-11-1979 of the Madras High
G
Court in Writ Petition No. 2886/76.
Safi J. Sorabjee. D. N. Gupta and H. K. Dutt for the Appellant.
R. K. Garg and V. J. Francis for the Respondent.

The Judgment of the Court was delivered by H
SEN, J. This appeal on certificate, from the judgment of the
Madras High Court raises a question of some complexity. The ques-

fTDf.Tif:i··1T· T
304 SUPREME COURT REPORTS [198!] 2 S.C.R.

A tion is, whether an employer is statutorily bound to pay wages if the
workmen are on strike, for any of the national or festival holidays
falling within the period of strike, under s.3 read with sub-s.(l) of
s.5 of the Tamil Nadu Industrial Establishments (National and
Festival Holidays) Act, 1958 (hereinafter referred to as 'the Act').
B The facts of the case are not in dispute. Messrs Madura Coats
Limited are an industrial establishment within the meaning of s.2(e)
of the Act, owning textile mills at Madurai, Ambasarnudram and
Tulicorin in the State of Tamil Nadu. The cotton textile industry
had been declared to be a public utility service for purposes of the
C Industrial Disputes Act, 194 7. In respect of daim for bonus for
the year 1974-75 a settlement was entered into which stood super- •
seded by the Payment of Bonus Ordinance, 1975. The management
accordingly took the view that no bonus was payable for the year
in question, since its payment would be against the provisions of the
Act, as amended by the Ordinance. This resulted in a strike by
D the workmen of the concerned mills. The workmen were on strike
from January 21, 1976 to February 5, 1976. The strike was called
off by the workmen on February 6, 1976 due to the intervention
of the Commissioner of Labour, Madras, who brought about a
settlement. The proceedings of the Commissioner of Labour dated
February 5, 1976 show that the parties, i.e., the management and
E the workmen, had agreed to abide by his decision in the matter.
The terms of the settlement were, in/er alia, that the strike was to
be called off forthwith and the workmen would commence work on
February 6, 1976, that the management's proposal to make a penal
cut of eight days' wages of the workmen for going on an iUegal strike
would be waiv•"d and that there would be no wages payab:e for the
F period of the strike. In accordance therewith, the workmen resumed
work on February 6, 1976 and the management paid them wages
for the month of January, 1976 after excluding therefrom the wages
payable for the period of strike during January, namely, for ~he
period from January 21 to 31, 1976. The management havmg
withheld the wages payable for January 26, 1976, the Inspector of
G Factories, 1st Circle, Madurai addressed a communication dated
May 22, 1976 stating that in view of s.5 of the Act, payment of
wages for January 26, 1976 had to be made. The management
challenged the order by a writ petition but the High Court declined
to interfere. It held that the appellant was bound to pay to the
workmen wages for January 26, 1976, having regard to the provi-
H sions contained in s.3 and sub-s.(1) of s.5 of the Act, even though
the workmen were on strike on that day. The correctness of that
decision is in question.
MADURA COATS V. INSPECTOR OF FACTORIES (S~n, J.) 305

It is urged firstly that in view of the term 'wages' in s.2(g) of A
the Act, no wages were payable to the workmen for January 26,
1976, in terms of the contract of employment since they were not
available for work and thereby the management were deprived of
the right given to them under sub-s.(2) of s.5 of the Act, to call
upon the workmen to come and do the work; and secondly, the right
of the workmen to receive wages for the national or festival holidays B
under s.3 of the Act, is subject to the right of the management under
sub-s.(2) of s.5 to call upon them to come and work on such
holidays. It is said that when a person creates a situation by going
on a strike whereby he is not available for work, the terms of employ-
{ ment cannot be fulfilled and, therefore, a fortiori no wages are payable.
)

It is suggested that the right of the workmen to wages is not
c
dependent on their status as such, but on the fulfihnent of the
contract of employment.

It would be convenient in the first instance to set out the
relevant provisions of the Act. In the Act the term 'wages' as D
dellned in s.2(g), insofar as relevant, is in these terms:

- "2(g) "Wages" means all remuneration capable of being
expressed i.n terms of money, which would, if the terms of
employment, express or implied, were fulfilled, be payable
E
to an employee in respect of his employment or of the work
done by him in such employment ........ ".

Section 3 of the Act provides as follows:
"3. Grant of National and Festival holidays-Every
employee shall be allowed in each calendar year a holiday F
of one whole day on the 26th January, the first May, the
-~ 15th August and the 2nd October and five other holidays
each of one whole day for such festivals as the Inspector
may, in consultation with the employer and the employees,
specify in respect of any industrial establishment."
G
Sub-sections (1) and (2) of s.5 of the Act provide:

"5. Wages-(1) Notwithstanding any contract to the con-
trary, every employee shall be paid wages for each of the
holidays allowed to him under section 3.
H
(2) (a) Notwithstanding anything contained in section 3,
any employee may be required by the employer to work on
•
30~ SUPRHIE COURT REPORTS [1981] 2 S.C.R,

A any holiday allowed under that section if the employer has,
not less than twenty-four hours before such holiday,-

(i) served in the prescribed manner on the employee a
notice in writing requiring him to work as aforesaid; and

B (ii) send to the Inspector having jurisdiction over the
area in which the industrial establishment is situated and
displayed in the prentises of the industrial establishment a
copy of such notice.

(b) Where an employee works on any holiday allowed
c under section 3, he shall, at his option, be entitled to-

(i) twice the wages; or
•
(ii) wages for such day and to avail himself of a sub-
stituted holiday with wages on one of the three day<
D immediately before or after the day on which he so works."

The legislation is intended to provide for national and festival
holidays in industrial establishments in the State. Section 3 of the
Act provides that every employee in an industrial establishment shall
E be entitled to four national and five festival holidays in each calendar
year. Sub-section (1) of s.5 provides that 'notwithstanding any
contract to the contrary' every employee shall be paid wages for each
of the holidays allowed to him under s.3. The matter is thus taken
out of the realm of contract. There is a statutory obligation cast
on the employer and a corresponding benefit conferred on the
F employees. The word 'allowed' in sub-s. ( l) of s.5 means holidays
allowed under s.3. In other words, the employer has no option in
the matter. There can be no contracting out of the liability to pay ~
wages for snch holidays.
'
G It will be noticed that both sub-ss. (1) and (2) of s.5 contain
non obstante clauses. While the non obstante clause in sub-s. (1)
of s.5 gives to the workmen the right to claim wages for such holidays
'notwithstanding any contract to the contrary', the non obstal!fe clause
in sub-s. (2) of s.5 subordinates the right of the workmen to claim
wages for the national or festival holidays 'notwithstanding anything
H contained in s.3'. Sub-sections (l) and (2) of s.5 have been enacted
with separate and distinct objects and they operate on different planes.
Snb-section (2) of s.S confers npon the employer the right to call
MADURA COATS v. JNSPECTOR OF FACTORIES (Sen, J.) 307

upon the workmen to come and work on such holidays on the fulfil- A
ment of the conditions set out therein.

As a matter of construction, the non obstante clause contained
in sub-s. (2) of s.5 has an overriding effect over s.3. The right of
the workmen to claim wages under sub-s. (1) of s.5 for any of the
national and festival holidays under s.3 is, therefore, co-extensive with B
the right of the management under sub-s.(2) of s.5 to call upon the
workmen to come and work on such holidays subject to the compliance
with the conditions laid down therein.

On the construction of sub-s.(2) of s.5 of tJie Act and its impact
on s.3 and sub-s. (J) of s.5 of the Act, there is a conflict of opinion c
in the High Court. In Vasudevan, R.M.S. Union v. Lotus Mills
Ltd.(1) Koshal J. in dealing with a case where the workers of a textile
mill went on a strike, and in-between there were two paid holidays,
held that wages for the holidays in question were payable despite the
strike since sub-s.( 1) of s.5 was absolute and unconditional and
gave to the employees the right to stay away from work. He was D
of the view that s.3 and sub-s. (1) of s.5 opetate independently
without reference to sub-s. ( 2) of s.5 and as such, even if the
management had no opportunity to call upon the workmen to come
•
and work on national and festival holidays as provided for in sub-
s.(2) of s.5, they were bound to declare such national and festival
E
holidays under s.3 and pay wages for these holidays to the workmen
as provided by sub-s.(l) of s.5. In substance, Koshal J. was uf the
view that the legislature never intended to give to sub-s.(2) of s.5
an overriding effect so as to make the fulfilment of the tenm of con-
tract of employment and of the work done a condition prerequisite
for the payment of wages for the national or festival holidays. F
When the matter came before Natarajan J., he expressed his
doubts about the correctness of the view taken in Lotus Mills case.
In his view the benefit conferred on the workmen under s.3 and
sub-s.(l) of s.5 cannot be taken to be independent of sub-s.(2) of
s.5 which confers a special right on the management to call upon
G
the workmen to come and work on national and festival holidays
declared under s.3, and so long as that right of the management
could not be exercised as the workmen were on strike on these days,
the benefits cannot be enforced by the workmen. He, accordingly,
referred the case to a Division Bench for a reconsideration of the deci-
sion in Lotus Mills case. The Division Bench (Ramanujam and
H
Padmanabhan JJ.), however, disagreed with him and preferred to
(!) [1977] II LU 483 .
•
308 SUPREME COURT REPORTS [198 J) 2 S.C.R.

A follow the view taken by Koshal J. expressed in Lotus Mills ewe.
The question is which of the two views is in accord with the provisions
of the Act. •
Ramanujam J., speaking for the Division Bench, while accepting
that 'sub-s.(2) of s.5 conferred a special right on the management,
which is somewhat inconsistent with s.3 and sub-s.(1) of s.5, com-
ments that 'these provisions confer two benefits on the employees,
viz., (1) not to work on a holiday, and (2) to get wages from the
management for such holiday', and observes :
"If the right conferred on the management under section
c 5(2) is intended to override the right given to the employees
under section 3 and 5 (1), the legislature would have specifi-
cally said so by giving an overriding effect to section 5(2).
But so long as section 5(2) does not specifically override
sections 3 and 5 ( 1), it is not possible for us to say tbat sec-
tions 3 and 5 ( 1) are subject to section 5 (2). The right
conferred on the management under section 5(2) and the
right conferred on employees under sections 3 and 5 ( 1)
should be taken to be independent of each other."
(Emphasis supplied)
This observation virtually renders sub-s. (2) of s.5 a mere super-
£ fluity. Furthermore, the assumption that the Act confers the right
not to work on a holiday' appears to be unwarranted.
The ultimate conclusion of the High Court was that the contract
of service continues even during the period of strike and, therefore,
though in the instant case the employees were on strike, tbey still
continued to enjoy the benefits of the Act and must be paid their
wages for 26th January, 1976 even though they were on strike.
In our judgment, the construction placed by the High Court on
sub-s. (2) of s.5 of the Act cannot be accepted. It is apparently
wrong in observing that 'if the legislature intended such a result, the
language used would have been different'. That precisely is tbe
effect of the non obstante clause in sub-s.(2) of s.5 which clearly
has an overriding effect over s.3. Under the scheme of the Act, the
workmen are entitled to wages for the national and festival holidays
under s.3 read with sub-s. (1) of s.5, but this right of theirs' is
subject to the right of the management given under sub-s.(2) of s.5,
tH
to call upon tbe workmen to come and work on such holidays. Any
other construction would make the provisions contained in sub-s. (2)
of s.5 wholly nugatory.
MADURA COATS v. INSPECTOR OF FACTORIES (Sen, /.) 309

1t would depend on the facts and circumstances of each case A
whether or not wages become payable in the context of strike. It
is true that where a strike is neither illegal being not in contravention
or any statutory provision, nor unjustified havin&,.been lodged as a
protest against the unreasonable attitude of the management, there
is no reason to· deprive the workmen of their wages. It must, never·
thelcss, be observed that workmen cannot resort to strike with B
impunity for any kind of demand without first exhausting reasonable
avenues for possible achievement of their object.

In the present case, the affidavit of the Inspector of Factories,
First Circle, Madurai shows that the dispute between the management
and their workmen as to payment of bonus for the year 1974-75 had c
been referred to the Special Industrial Tribunal Madras which gave
a decision in favour of the workmen. That has a bearing on the
• claim for bonus but has no relevance to the question in controversy .
It appears that the workmen went on a strike without serving a notice
under s. 22 of the Industrial Disputes Act, 1947. That being so, the
strike resorted to by the workmen was wholly unjustified if not illegal. D
When the workmen themselves brought about a situation by going on
a strike, they cannot be permitted to claim wages under sub-s. ( 1) of
> s.5 of the Act, since the management were deprived of their right
under sub-s.(2) of s.5 of the Act.

In Buckingham and Carnatic Co. Ltd. v. Workers of the Buckin· E
gham and Carnatic Co. Ltd.(I) the night-shift operatives of a textile mills
stopped work from about 4 p.m. upto al?out 8 p.m. on a certain day,
the apparent cause of the strike bcini: that the management had
expressed their inability to comply with the request of the workers to
declare the forenoon of that day as a holiday for solar eclipse. The
F
stoppage of work was the result of a concerted action and !ell within
the definition of a 'strike' in s.2(q) of the Industrial Disputes Act,
l 9~ 7. The strike was an illegal strike as the t!'xtile mills was a
public utility industry and no notice had been giY,en to the manage·
.. ._, ment, even though the refusal to work continued only for a few hours.
It was held that the continuity of service of the workers was inter- G
rupted by the illegal strike and, therefore, they were not entitled to
claim holidays with pay under s. 49-B(l) of the Factories Act, 1934.
In Management of Chandramalai Estate, Ernakulam v. Its Workmen(!)
the workmen made certain demands and the matter was referred
for conciliation. After conciliation efforts failed the workmen struck
work. The question was whether the workmen were entitled to H
(I) [1953] SCR 219.
(2) [1960]3 SCR 451.
,. 4--57 SCI}Sl

..
310 . StJPR,EME COURT REPORTS ·[198·1] 2 ·S.C.R.

A paid holidays for the period of strike. It was held, on the facts of
the case, that the strike was unjustified and the workmen were not
entitled to any wages for the period.
The question ultimately is one of fact. The liability of the
management to pay wages for the national and festival holidays under
B s.3, read with sub-s. ( 1) of s.5 of the. Act, is subject to their right
under sulJ.-s.(2) of s.5 of the Act to call upon the workmen to come
and work on such holidays. That depends upon whether or not the
strike was illegal or unjustified.
In the result, the appeal succeeds and is allowed. The judgment
c of the High Court is reversed. The writ petition filed by the appellant
is· allowed and the impugned notice issued by the Inspector of
Factories is quashed.
•
We wish to mention that the appellant has undertaken to pay· wages
to the workmen for 26th January, 1976 irrespective of the result of
the appeal.
'
D
There shall be no order as to costs.

N.V.K. Appeal allowed.

' .
.