Appeal by special leave from the award dated December 29, 1960, of the Industrial Trinal Bihar it Patna in Reference No. 4 of 1960. K. Daphtary, Solicitor General of India. and Sardar Bhadur, for the appellants. P. Maheshwari, for the respondents. 1962. March 9. The Judgment of the Court was delivered by GAJENDRAGADKAR,J.-This appeal by special leave, is directed against the order passed by the Industrial Tribunal,Patna, directing the appellant, the Tatanagar Foundry Co., to pay to the respondents, its workmen, 75 of the consolidated wages as compensation for having laid them off for a period of 45 days commencing from December 1.5, 1959. it is common around that the appellant laid off the respondents for the said period. The appellants case was that it had paid the respondents the statutory compensation for the said lay-off as prescribed by s.25C of the Industrial Disputes Act (No. 14 of 1947) (hereinafter called the Act).
The respondents, however, contended that the lay-off was not justified and so the statutory compensation paid by the appellant did not satisfy the ends of justice. It was this dispute between the parties which was referred for adjudication by the Government of Bihar to the Industrial Tribunal on February 9, 1960. On this reference, the Tribunal has held that the lay-off could not be held to be altogether justified. That is why it has awarded compensation to the respondents in excess of the amount statutorily fixed in that behalf. The appellant contends that the award thus made by the Tribunal is contrary to law Before dealing with the merits of the contentions raised by the appellant, it would be necessary to state some relevant facts which led to the lay-off. The appellant is a Public Limited Company and has its factory in Jamshedpur.
It manufactures cast iron sleepers, pipes, general engineering casting and non-ferrous castings in the said factory. The raw materials mainly required for the manufacture of sleepers are pig-iron, coke, limestone and moulding sand. The Railway Board is the only buyer of sleepers and the sleepers are, therefore, manufactured only on receipt of orders upon tenders from the said Board, and not otherwise. The normal procedure for procuring raw material was that after an order was received from the Railway Board, the appellant submitted its requirement of pig iron to ,the Iron Steel Controller of the Government of India who allocates the quantity for the said commodity to the various manufactures, such as Tata Iron Steel Co. Ltd. and Indian Iron Steel Co. Ltd. Formerly, supply of pig iron used to come from the said two concerns to the appellant and the appellant used to pay cash to Tata Iron Steel Co. Ltd. for the pig iron supplied by it and by a Letter of credit to the Indian Iron Steel Co. Ltd. on which the said Company used to supply the raw material made by it. In 1959, both the companies stopped supply of pig iron in spite of the order issued in that behalf by the Controller, and they wrote to the appellant suggesting that the appellant should request the Controller to cancel his order and place the same with some other suppliers. Correspondence followed between the said companies and the appellant and finally in November, 1959, the appellant was informed by the said companies that they could not supply its requirements of raw material. In June, 1959, the Bhilai Steel Works made their first shipment of pig iron addressed to, the appellant. In August, 1959, the said Works despatched some wagons of pig iron to the appellant, but out of 20 wagons of the consignment, 14 were lost completely, and the rest misdelivered and were subsequently found somewhere in Gomoh and some in Tatanagar and they never reached the appellant in time. In May, 1959, the appellant arranged for Letter of Credit for a sum of Rs. 1,00,000/- for the Bhilai Steel Works. In August, there was a supply of 440 tons and in September, followed a supply of 36 wagons Containing pig iron to the extent of 20 to 21 tons each roughly. In all, this latter supply came to about 760 tons.
In the two subsequent months, no supply was received from Bhilai. The Letter of Credit which the appellant had opened for Bhilai Steel Works was revolving, with the result that as soon as one transaction was completed, the said letter was ready for the subsequent transaction. The effect of this revolving letter was that the value of credit of Rs.1,00,000/- continued to be outstanding all the time. In spite of this revolving letter, the Bhilai Steel Works failed to supply pig iron in the two months October and November. The appellant reminded the Works that no supply of pig iron was received from them and yet no advice of any despatch of pig iron was received from the Works after July 27, 1959. Even the 20 wagons which had been sent in August and September did not arrive at the factory. These wagons, it was later learnt, had been delivered to K. P. Docks and some other destinations. In regard to the supply of pig iron from Rourkela, the appellant arranged for finance on cash basis. In fact, between August and December a total advance of Rs. 1,75,000/- was made to the Rourkela Steel Works. A supply of pig iron worth about Rs. 1,64,000/- was received by the appellant, but the balance of Rs. 11,000/- was still outstanding.,In addition to the cash advances, the appellant also opened a Letter of Credit for Rs. 1,00,000/- in November, 1959, for financing the purchase of steel from the said Works. As early as 1959, TISCO informed the appellant that it regretted that it would not be possible for it to supply the requirements of the company regularly, while in regard to the supply from IISCO, the position was still worse. The appellant kept its employees and the Assistant Labour Commissioner fully informed of these unfortunate developments from time to time. Both the Assistant Labour Commissioner and Mr. John, President of the respondents Union, did what they could by moving the Government to assist the appellant in securing the raw material. Even so, when the situation did not show any signs of improvement and the appellant found that no raw material was available with which its foundry could carry on the manufacture of sleepers, it issued a notice on December 15,- 1959, and laid off the workers of the Sleeper Factory. This lay-off con- tinued until September, 11, 1960 and from September 12, 1960, the appellant closed the Sleeper Foundry department and issued notice of retrenchment. Subsequently, retrenchment compensation was duly paid to the workmen who had been retrenched. That, in short, is the background of the lay-off, the validity of which formed the subject-matter of the present reference. It appears that before the Tribunal it was urged by the respondents that the appellant had deliberately brought about a situation which led to the lay-off in order to divert the relevant orders for sleepers to its Belur factory. The argument was that at Belur, the appellant gets its work done at cheaper cost with the help of contract labour. Now, if this contention had been established then it would clearly have been a case of malafides on the part of the appellant and a claim for additional compensation may have been justified. But the Tribunal has rejected this contention and has hold that no evidence had been adduced to prove such a malafide intention on the part of the appellant. It was also urged by the respondents that even in the absence of pig iron, the manufacture of sleepers could have been carried on by utilising a substitute, and in support of this case, four witnesses were examined by the respondents. The Tribunal has rejected this case also. It has found that the evidence given by the four witnesses was unreliable and unsatisfactory and the statement made by the General Manager in cross-examination on this point was sufficient to show that in the absence of pig iron, castings with scrap iron and tin could not have been made. In fact, the General Manager categorically stated that the appellant had not casted any sleeper without pig iron at any time. Thus, the alternative plea raised by the respondents to suggest that if the appellant had so desired, it could have avoided to lay-off its workmen, has also been rejected by the Tribunal. The Tribunal, however, was inclined to take the view that if the management had been more foresighted, it could have avoided the unfortunate position which it had to face at the relevant time and because the Tribunal thought that the situation which faced the appellant at the relevant time was partly due to its negligence, it reached the final conclusion that the lay-off was not altogether justified. The Tribunals view appears to be that if reasonable care had been exercised by the appellant, the situation could have been avoided. It is this part, of its finding that is seriously disputed before us by the appellant. Under a. 2 (kkk), lay-off means, inter alia, the failure, or inability of an employer on account of shortage of raw materials to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched. As we have already seen, there is no doubt that raw materials wore not available to the appellant at the relevant time and so, the lay-off which is the subject-matter of the present dispute satisfies the test prescribed by the definition. Section 25C provides for the right of workmen laid-off for compensation, and it is common ground that compensation, equal to 50 of the total of the basic wages and dearness allowance, as therein prescribed has been paid by the appellant to the respondents. The issue referred to the Tribunal was whether the action of the management in laying off the workmen was justified. If not, to what relief were, the respondents entitled ? In other words, the reference shows that it was only if the Tribunal came to the conclusion that the lay-off wag not justified that the question of considering what additional compensation should be paid to the respondents could arise. If the lay-off is justified and it satisfies the requirements of the definition under s. 2(kkk), the only relief to which the workmen laid off are entitled is the statutory relief prescribed by a. 25C. There is no doubt or dispute about this position. It is also not in dispute that if the lay-off is malafide in the sense that the employer has deliberately and maliciously brought about a situation where lay off became necessary, then it would not be a lay-off which is justified under s. 2(kkk) and the relief provided to the laid-off workmen under a. 25C would not be the only relief to which they are entitled. Malafides of the employer in declaring a lay-off really mean that no lay-off, as contemplated by the definition, has in law taken place and so, a finding as to malafides of the employer in declaring a lay-off naturally takes the lay-off out of the definition of s. 2(kkk) and as such a. 25C cannot be held to be applicable to it so as to confine the workmens right to the compensation therein prescribed. If the lay-off has been declared in order to victimise the workmen or for some other ulterior purpose, the position would be the same. It would Dot be a lay-off as contemplated by a. 2(kkk). But when dealing with a lay-off like the one with which we are concerned in the present appeal it would not be open to the Tribunal to enquire whether the appellant could have avoided the lay off if he had been more diligent, more careful or more far-sighted. That is a matter relating to the management of the undertaking and unless malafides are alleged or proved, it would be difficult to assume that the Industrial Tribunal has jurisdiction to sit in judgment over the acts of management of the employer and investigate whether a more prudent management could have avoided the situation which led to lay- off. The danger involved in permitting such jurisdiction to the Tribunal is illustrated by the present award itself. The Tribunal has found that the appellant was in financial difficulties at the relevant time it has found that the appellant was not actuated by any malafide intention, it has come to the conclusion that the lay-off was not the result of any uleriort motive, and yet it has finally come to the conclusion that if the affairs of the appellant it had been better managed and more foresight had been shown by the appellant prior to the time when the crisis was reached, pig iron could have been secured and lay-off could have been avoided. Apart from, the fact that this conclusion does not appear to be borne out by any evidence on record, it seems to us that the Tribunal exceeded its jurisdiction in trying to decide whether better. management could have avoided the crisis. The appellant is, no doubt, expected to manage its affairs prudently, but it would, we think, not be reasonable or fair to hold that if the employer is faced with a situation under which for lack of raw materials he has to lay-off his workmen, it is necessary that he must submit to an enquiry by the Industrial Tribunal about the prudence of the management and the forethought displayed by it in anticipating and avoiding the difficulties.
That is why we think in embarking upon an enquiry as to whether the appellant had shown sufficient foresight in managing its affairs, the Tribunal has exceeded its jurisdiction. Besides, as we have just indicated, its finding on the question of negligence is not supported by any evidence on record nor by probabilities in the case. In that connection, it is significant that subsequently the section in question has been closed and the retrenched workmen have been paid retrenchment compensation due to them.
DECISION ??

If the lay-off is justified and it satisfies the requirements of the definition under s. 2(kkk), the only relief to which the workmen laid off are entitled is the statutory relief prescribed by a. 25C.

the alternative plea raised by the respondents to suggest that if the appellant had so desired, it could have avoided to lay-off its workmen, has also been rejected by the Tribunal.

retrenchment compensation was duly paid to the workmen who had been retrenched.

It would Dot be a lay-off as contemplated by a. 2(kkk).

In that connection, it is significant that subsequently the section in question has been closed and the retrenched workmen have been paid retrenchment compensation due to them.

This lay-off con- tinued until September, 11, 1960 and from September 12, 1960, the appellant closed the Sleeper Foundry department and issued notice of retrenchment

Subsequently, retrenchment compensation was duly paid to the workmen who had been retrenched

Ltd. on which the said Company used to supply the raw material made by it

In May, 1959, the appellant arranged for Letter of Credit for a sum of Rs. 1,00,000/- for the Bhilai Steel Works

These wagons, it was later learnt, had been delivered to K. P. Docks and some other destinations.

It is this part, of its finding that is seriously disputed before us by the appellant.

If the lay-off is justified and it satisfies the requirements of the definition under s. 2(kkk), the only relief to which the workmen laid off are entitled is the statutory relief prescribed by a. 25C.

Tribunal exceeded its jurisdiction in trying to decide whether better. management could have avoided the crisis.

That is a matter relating to the management of the undertaking

this conclusion does not appear to be borne out by any evidence on record

But the Tribunal has rejected this contention and has hold that no evidence had been adduced to prove such a malafide intention on the part of the appellant.

it had paid the respondents the statutory compensation for the said lay-off as prescribed by s.25C of the Industrial Disputes Act

The appellant reminded the Works that no supply of pig iron was received from them and yet no advice of any despatch of pig iron was received from the Works after July 27, 1959.

Even the 20 wagons which had been sent in August and September did not arrive at the factory. These wagons, it was later learnt, had been delivered to K. P. Docks and some other destinations.


Petition for Review of this Courts Judgment and order dated May 4, 1962, in C. A. No. 533 of 1960. C. Chatterjee, Udaya Pratap Singh, Anil Kumar, R.K, Garg, P. Singh, S.C. Aggarwal and M.K. Ramamurthi, for the petitioners. K. Saran, S. K. Mehta and K. L. Mehta for the respondents. 1962. December 10. The judgment of the Court was delivered by RAGHUBAR DAYAL, J.-We allowed Civil Appeal No. 533 of 1960 on May 4, 1962, by our judgment dealing with the facts of the, case and giving the reasons for the opinion expressed. It is not necessary to repeat them. Suffice it to say that the appeal was allowed on the ground that the respondents bad lost their right to recover possession from the appellants on their estate vesting in the State of Bihar by virtue of se. 3 and 4 of the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950), hereinafter called the Act, and their having no subsisting right to recover possession from the appellants. It was also hold that they could not get advantage of the provisions of cl. (c) of sub-s. (1) of s. 6 of the Act as amended by the Bihar Land Reforms (Amendment) Act, 1959 (Act XVI of 1959) as no mortgage subsisted on the date of vesting. The amended cl. (c) read a, follows (c) lands used for agricultural or horti. cultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof. It is contended for the respondents, who applied for the review of our judgment, that our view that the mortgage was not subsisting on the date of vesting was wrong. The contention is that even though the respondents-mortgagors had paid up the mortgage money in 1943, the mortgage continued to subsist till the date of vesting as by that time the right of redemption given by s. 60 of the Transfer of Property Act had not come to an end. That right, according to the respondents contention, would not come to an end so long as the mortgagors right to ask the mortgagees to perform any of the acts mentioned in s. 60 continues. In sup. port of the contention that the mortgage continues till the right of redemption comes to an end, reliance is placed on the case reported as Thota China Subba Rao v. Mattapalli Roju. (1) We do not agree with these contentions. Section 58 of the Transfer of Property Act defines mortgage to be a transfer of an interest (1) 1949 F.C.R. 484, 498. in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. It also defines various varieties of mortgage and, in clause (d) defines ,usufructuary mortgage thus Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage- money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest, or in payment of the mortgage money, or partly in lieu of interest or partly in payment of the mortgagemoney, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee. When the mortgage money is paid by the mortgager to the mortgagee, there does not remain any debt due from the mortgagor to the mortgagee, and therefore the mortgage can no longer continue after the mortgage money has been paid. The transfer of interest represented by the mortgage .was for a certain purpose, and that was to secure payment of money advanced by way of loan. A security cannot exist after the loan had been paid up. If any interest in the property continues to vest in the mortgagee subsequent to the payment of the mortgage money to him, it would be an in- terest different from that of a mortgagees interest. The mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan must come to an end on the payment of the mortgage money Further, the definition of usufructuary mort gage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up. The usufructuary mortgage, by the terms of its definition, authorises the mortgagee to retain possession only until payment of the mortgage money, and. to appropriate the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or partly in lieu of interest or partly in lieu of payment of the mortgage money. When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise. It is clear therefore that on the payment of the mortgage money by the mortgagor to the mortgagee the mortgage comes to an end and the right of the mortgagee to remain in possession also comes to an end. The relevant portion of s. 60 on which the respondents rely reads
 At any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place of the mortgage-money, to require the mortgagee to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in the possession of power of the mortgagee where the mortgagee is in possession of the mortgaged property,, to deliver possession thereof to the mortgagor, and at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct,. or to execute and (where the mortgage has been effected by a registered instrument to have registered an acknowledg- ment in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished Provided that the right conferred by this section has not been extinguished by the act of the parties or by decree of a Court. The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption. x x x x It is to be noted that these provisions do not. state when a mortgage ceases to be a mortgage. They simply describe the right of a mortgagor to redeem. Now, what is this right and, in what circumstances does it arise? The right arises oh the principal money, payment of which is secured by the mortgage deed, becoming due. The right entitles the mortgagor, on his paying or tendering to the mortgagee the mortgage money to ask him (i) to deliver to him the mortgage deed and other documents relating to the mortgaged property to deliver possession to the mortgagor, if the mortgagee is in possession and (iii) to re-transfer the mortgaged property in accordance with the desire of the mortgagor.
If the mortgagee receives the money and does not perform any of the three acts required of him to be done,, the question arises whether this non-compliance with the demands will make the mortgage continue. The provisions of the section do not say so and there appears no good reason why the mortgage should continue. If the mortgagee is not to perform these acts, the mortgagor is not to pay the amount. If, however, the mortgage money has been received by the mortgagee and thereafter he refuses to perform the acts he is bound to do, the mortgagor can enforce his right to get back the mortgage document, the possession of the mortgaged property and the reconveyance of that property through Court. A new right to get his demands enforced through the Court thus arises as a result of the provisions of s. 60 of the Act. If the mortgage money has been paid and then the mortgagor goes to Court to enforce his demands, that would not be to enforce his right of redemption which was really his right to make those demands on payment of the mortgage money. The right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money. This is also clear from the decree for redemption. Order XXXIV, r. 7, C.P.C. provides for the preliminary decree in a redemption suit and the preliminary decree is to order that the account be taken of what was due to the defendant, viz., the mortgagee, at the date of the decree, for principal and interest on the mortgage and other matters. Rule 9 provides that if on such accounting, any sum be found due to the mortgagor, the decree would direct the mortgagee to pay such amount to the mortgagor. If the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgagee in full discharge of the mortgage deed, no occasion for such accounting arises and therefore any suit to enforce the return of the mortgage deed and to get back the possession of the mortgaged property cannot be a suit for redemption.
What Thota China Subba Raos Case (1), referred to by learned counsel for the respondents, lays down is simply this that, the right of redemption continues so long as the mortgage is alive. The case does not deal with the circumstances in which the mortgage ceases to exist. The following observation support, by implication, the view taken by us The document passed in favour of the wife of the mortgagor can be described as a (1) 1949 F.C.R. 484, 498. reward promised to her for bringing about the willingness of her husband to agree to convey the mortgaged lands to the mortgagees. That can in no event be considered as extinguishing the equity of redemption. The mortgagor was not even a party to that document. The second document executed by the mortgagor is a agreement to convey the lands after three months. There is however no document or evidence to show that the mortgagees agreed to accept these lands in full satisfaction of their claims or promised to pay the sum of Rs. 100 mentioned therein. This was only an agreement to convey the lands after three months, and, if at ail the question of extinction of the equity of redemption could arise on the conveyance being executed but not before. There are other oases also which throw a light on this question And go against the contention of the respondents. In Samar Ali v. Karim-ul-lah (1) it was said Now, as I have said, the contract of mortgage in the present case being subject to the provisions of the Regulation, the charge would have been redeemed as soon as the principal mortgage money with twelve percent interest had been realised by the mortgagee from the profits of the property. In Muhammed Mahmud Ali v. Kalyan Das (2) it was said It cannot be disputed that the right of redemption pre-supposes the existence of a mortgage on certain property which at the (1) (1886) I.L.R. 8 All. 402, 405. (2) (1895) I.L.R. 18 All. 189,192. time of redemption is security for the money due to the mortgagee. It therefore follows that the only property which a second or other subsequent mortgagee may redeem is the property on which the first mortgagee is entitled to enforce his security. From the very necessity of things the right of redemp- tion can be exercised in respect of such pro- perty only as is subject to a mortgage capable of enforcement. There can be nothing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money. In Balakrishna v.Rangnath (1) it was said Now the right to redeem can only be extinguished by act of parties or by a decree of a Court. (See the proviso to section 60 of the Transfer of Property Act). But when it is by act of parties the Act must take the shape and observe the formalities which the law prescribes. One Method is by payment in cash. In that event nothing is necessary beyond the payment. In Ram Prasad v. Bishambhar Singh (2) the question formulated for determination was whether the suit being a suit to recover possession of the mortgaged property after the mortgage money had been paid off was a suit against the mortgagee to redeem or to recover possession of immovable property mortgaged. Braund J., said Now, it is quite obvious that that section (s. 60 of the Transfer of Property Act) can only refer to a case in which a mortgagor under a subsisting mortgage approaches the Court to establish his right to redeem and to I.L.R. 1950 Nag. 618, 621. (2) A.I.R. 1946. All. 400,402. have that redemption carried out by the pro- cess of the various declarations and orders of the Court by which it effects redemption. In other words. s. 60 contemplates a cage in which the mortgage is still subsisting and the mortgagor goes to the Court to obtain the return of his property on repayment of what is still due. Section 62, on the other hand, is in marked contract to s. 60. Section 62 says that in the case of a usufructuary mortgage the mortgagor has a right to recover possession of the property when (In a case in which the mortgagee is authorised to pay himself the mortgage money out of the rents and ,profits of the property) the principal money is paid off. As we see it, that is not a case of redemption at all. At the moment when the, rents and profits of the mortgaged property sufficed to discharge the principal secured by th e mortgage, the mortgage came to an end and the correlative right arose in the mortgagor to recover possession of the property.
The framers of the Transfer of Property Act have clearly recognised the distinction between the procedure which follows a mortgagors desire to redeem a subsisting mortgage and the procedure which follows the arising of a usufructuary mortgagors right to get his property back after the principal has been paid off. We therefore hold that the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943. and that the respondents cannot get the advantage of s. 6(1)(c) of the Act.
DECISION ??

We therefore hold that the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943. and that the respondents cannot get the advantage of s. 6(1)(c) of the Act.

It is clear therefore that on the payment of the mortgage money by the mortgagor to the mortgagee the mortgage comes to an end and the right of the mortgagee to remain in possession also comes to an end

the right of redemption continues so long as the mortgage is alive. The case does not deal with the circumstances in which the mortgage ceases to exist.

This was only an agreement to convey the lands after three months, and, if at ail the question of extinction of the equity of redemption could arise on the conveyance being executed but not before

But when it is by act of parties the Act must take the shape and observe the formalities which the law prescribes. One Method is by payment in cash. In that event nothing is necessary beyond the payment

In other words. s. 60 contemplates a cage in which the mortgage is still subsisting and the mortgagor goes to the Court to obtain the return of his property on repayment of what is still due.

We therefore hold that the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943. and that the respondents cannot get the advantage of s. 6(1)(c) of the Act.

It was also hold that they could not get advantage of the provisions of cl

(c) of sub-s. (1) of s. 6 of the Act as amended by the Bihar Land Reforms (Amendment) Act, 1959 (Act XVI of 1959) as no mortgage subsisted on the date of vesting

The amended cl. (c) read a, follows (c) lands used for agricultural or horti. cultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof.

the contract of mortgage in the present case being subject to the provisions of the Regulation, the charge would have been redeemed as soon as the principal mortgage money with twelve percent interest had been realised by the mortgagee from the profits of the property

It cannot be disputed that the right of redemption pre-supposes the existence of a mortgage on certain property which at the (1) (1886) I.L.R. 8 All. 402, 405. (2) (1895) I.L.R. 18 All. 189,192. time of redemption is security for the money due to the mortgagee.

the right to redeem can only be extinguished by act of parties or by a decree of a Court

The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption. x x x x It is to be noted that these provisions do not. state when a mortgage ceases to be a mortgage. They simply describe the right of a mortgagor to redeem.

It was also hold that they could not get advantage of the provisions of cl. (c) of sub-s. (1) of s. 6 of the Act as amended by the Bihar Land Reforms (Amendment) Act, 1959 (Act XVI of 1959) as no mortgage subsisted on the date of vesting.

This is also clear from the decree for redemption.

The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption. x x x x It is to be noted that these provisions do not. state when a mortgage ceases to be a mortgage.

They simply describe the right of a mortgagor to redeem. Now, what is this right and, in what circumstances does it arise? The right arises oh the principal money, payment of which is secured by the mortgage deed, becoming due.

What Thota China Subba Raos Case (1), referred to by learned counsel for the respondents, lays down is simply this that, the right of redemption continues so long as the mortgage is alive.

The mortgagor was not even a party to that document.

In Balakrishna v.Rangnath (1) it was said Now the right to redeem can only be extinguished by act of parties or by a decree of a Court.

See the proviso to section 60 of the Transfer of Property Act). But when it is by act of parties the Act must take the shape and observe the formalities which the law prescribes. One Method is by payment in cash.

In that event nothing is necessary beyond the payment.

In other words. s. 60 contemplates a cage in which the mortgage is still subsisting and the mortgagor goes to the Court to obtain the return of his property on repayment of what is still due. Section 62, on the other hand, is in marked contract to s. 60.

There are other oases also which throw a light on this question And go against the contention of the respondents.

The provisions of the section do not say so and there appears no good reason why the mortgage should continue.

The right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money.

There can be nothing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money.

s. 60 contemplates a cage in which the mortgage is still subsisting and the mortgagor goes to the Court to obtain the return of his property on repayment of what is still due.

the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943

When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise.

The right arises oh the principal money, payment of which is secured by the mortgage deed, becoming due.

If the mortgage money has been paid and then the mortgagor goes to Court to enforce his demands, that would not be to enforce his right of redemption which was really his right to make those demands on payment of the mortgage money.

Further, the definition of usufructuary mort gage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up.

It is to be noted that these provisions do not. state when a mortgage ceases to be a mortgage.

The mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan must come to an end on the payment of the mortgage money


Appeal by special leave from the Award dated September 13, 1961, of the Second Labour Court, West Bengal, in Case No. VIII-C-40 of 1960. M .C Setalvad, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant. K. Daphtary, Solicitor General of India and Janardhan Sharma, for the respondent No. 1 1963. February 15. The judgment of the Court was delivered by GAJENDRAGADKAR J.--Mr. R. K. Banerjee had been employed by the appellant, the Tata Oil Mills Co. Ltd.as a Salesman on April 3, 1956, as a probationer and he was confirmed on November 5, 1956. On December 5, 1959, his services were terminated and he was informed that the appellant had lost confidence in him, and so, it bad decided to discharge him. Accordingly, in lieu of notice, he was paid a months salary and was told that he ceased to be the employee of the appe- llant as from the date next after he received the order from the appellant.
The discharge of Mr. Banerjee was resented by the Union to which he belonged and the Union took up his case. Since the dispute could not be settled amicably, the Union succeeded in persuading the Government of West Bengal to refer the dispute for adjudication to the Second Labour Court on the ground that the said discharge was not justified. That is how the discharge of Mr. Banerjee became an industrial dispute between the appellant and the respondents, its workmen represented by their Union. The Labour Court which tried the dispute came to the conclusion that the appellant had failed to justify the discharge of Mr. Banerjee and so, it has directed the appellant to reinstate him and pay him full emoluments from the date of his discharge up to the date of his reinstatement. It is this order which is challenged by the appellant by its present appeal brought to this Court by special leave. The material facts leading to the termination of Mr. Banerjees services lie within a very narrow compass. in November, 1959 Mr. Banerjee was working in the Assam area and as such, had to work as a Salesman at Dhubri, Bongaigoan, Rangia and Tejpur. The appellant expected that as its Salesman Mr. Banerjee should visit dealers in his area and carry on intelligent and intensive propaganda to popularise the sale of the appellants products. The appellant has a Sales ice in Calcutta and the manager of the said ice visits the areas within his jurisdiction to inspect the work of Salesmen.
Accordingly Mr. Gupta who was then the manager of the Calcutta ice visited the area assigned to Mr. Banerjee, in the last week of October. He found that Mr. Banerjee was networking satisfactorily as a Salesman. In particular, he noticed that whereas Mr. Banerjee had reported to the ice that the Bongaigoan Stockists had 20 boxes of dried up and deshaped 501 Special Soap which could not be distributed in the market he had in fact not opened a single box and had not cared to satisfy himself that the soaps had either dried up or had been deshaped. In fact, Mr. Gupta found that the boxes were intact and he opened them and discovered that five boxes contained soap which had dried up and had become deshaped, whereas the 15 other boxes were in good condition. Thereupon, Mr. Gupta made a report to the zonal Manager on November 2, 1959, adversely commenting on Mr. Banerjees work. The said report was in due course forwarded to the Head ice in Bombay. The Head ice then instructed the Calcutta Sales ice by telephone to send for Mr. Banerjee and call for his explanation. Accordingly, Mr. Banerjee was sent for and his explanation taken Mr. Gupta then made another report expressing his dissatisfaction with the explanation given by Mr. Banerjee. This report was sent on November 24, 1959. The Head ice accepted this report and on December 5, 1959, issued to Mr, Banerjee the order terminating his services. That, in brief, is the case set out by the appellant in support of the action taken by it against Mr. Banerjee. The appellant had alleged that the termination of Mr. Banerjees services was not dismissal but was a discharge simpliciter, and according to it, the discharge was justified by the terms of contract between the appellant and Mr. Banerjee as embodied in Rule 40 (1) of the Service Rules of -the appellant. The appellant, therefore, urged that the Labour Court had no jurisdiction to consider the propriety of the appellants action in discharging Mr. Banerjee. The respondents, on the other hand, contended that the discharge was not discharge simpliciter but was, in substance, dismissal, and so, it was urged that the Labour Court was entitled to consider the propriety of the appellants action. Basing themselves on the plea that the discharge amounted to dismissal, the respondents pleaded that the failure of the appellant to hold an enquiry against Mr. Banerjee introduced a serious infirmity in the order passed against him and they argued that the conduct of the appellant was malafide and the dismissal of Mr. Banerjee amounted to victimisation. The Labour Court has found that according to the terms of contract under which Mr. Banerjee was employed by the appellant, the appellant was entitled to discharge Mr. Banerjee from its employment under Rule 40 (1) of the Service Rules but it held that merely because the order served on Mr. Banerjee purported to be an order of discharge, that would not exclude the jurisdiction of the Labour Court to examine the substance of the matter. In fact, Mr. joshi who appeared for the appellant conceded before the Labour Court that an adjudicating Court can look into the reasons behind the discharge of an employee. That is why evidence was led by- both the parties before the Labour Court. Having considered that evidence, the Labour Court has found that the respondents plea about the mala fides of the appellant was not proved and it held that the termination of Mr. Banerjees services could not be said to amount to an act of victimisation or an unfair labour practice. Even so, it held that the discharge was not justified, and so, it,has directed the appellant to reinstate Mr. Banerjee. It is the validity of this order that is challenged before us by Mi. Setalvad on behalf of the appellant. The true legal position about the Industrial Courts jurisdiction and authority in dealing with cases of this kind is no longer in doubt. It is true that in several cases, contract of employment or provisions in Standing Orders authorise an industrial employer to terminate the service, of his employees. after giving notice for one month or paying salary for one month in lieu of notice, and normally, an employer may, in a proper case, -be entitled to exercise the said power. But where an order of discharge passed by an employer gives rise to an industrial dispute. the form of the order by which the employees services are terminated, would not be decisive industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in fact discharge simpli- citer or it amounts to dismissal which has put on the cloak of a discharge simpliciter. If the Industrial Court is satisfied that the order of discharge is punitive, that it is malafide, or that it amounts to victimisation or unfair labour practice, it is competent to the Industrial Court to set aside the order and in a proper case, direct the reinstatement of the employee.
In some cases, the termination of the employees services may appear to the Industrial Court to be capricious or so unreasonably severe that an inherence may legitimately and reasonably be drawn that in terminating the services, the employer was not acting bonafide. The test always has to be whether the act of the employer is bonafide or not. If the act is malafide, or appears to be a colourable exercise of the powers conferred on the employer either by the terms of contract or by the standing orders, then notwithstanding the form of the order, industrial adjudication would examine the substance and would direct reinstatement in a fit case. This position was recognised by the Labour Appellate Tribunal as early as 1951 in Buckingham and Carnatic Co. Ltd., v. Workers of the Company, (1), and since then, it has been consistently followed vide Chartered Bank, Bombay, v. Chartered Bank Employees Union (2) , and U. B. Dutt Co. (Private) Ltd. v. Its Workmen (3). In the present case, the Labour Court has made a definite finding in favour of -the appellant that its action in terminating the services of Mr. Banerjee was not malafide and did not amount to victimisation. Even so, it proceeded to examine the propriety of the said action and came to the conclusion that Mr. Banerjees discharge from employment did not appear to it to be justified. In coming to this conclusion, the Labour Court has given some reasons which are clearly unsupportable. It has observed, for instance, that the appellant has not produced any documentary evidence in support of its allegation against the efficiency of Mr. Banerjee. This is clearly wrong because the two reports made by Mr. Gupta in respect of Mr. Banerjees conduct do amount to documentary evidence which cannot be lightly brushed aside. It has then commented on the fact that the allegations made by Mr. Gupta against Mr. Banerjee on six counts are of a general character. This comment again cannot be justified because Mr. Gupta stated in clear terms the defects in Mr. Banerjees work which had come to his notice. These defects are specific and it is idle to refuse to give importance to this evidence merely on the ground that no specific instances had been cited. In regard .to the question as to whether the 20 boxes had been opened by Mr. Banerjee before he made his report (1) (1951) 11 L.L J. 314. (2) (1960) 11 L.L.J. 221. (3) (1962)1 L.L J. 374. to the Zonal ice, the Labour Court has observed that on this point there is the evidence of Mr. Banerjee against that of Mr. Gupta and there was no particular reason to believe one in preference to the other. Now, it is clear that such an -observation is hardly of any help because it was necessary for the Labour Court to express its conclusion on this point it might have believed either Mr. Banerjee or Mr. Gupta, but by saying that there is no reason why one should be believed rather than the other, the Labour Court left this part of the dispute entirely undecided. Similarly, the Labour Court has accepted the fact that Mr. Gupta that called for and received Mr. Banerjees explanation and to that extent it has rejected Mr. Banerjee suggestion that he had not given any explanation a all but even so, the Labour Court has not considered the effect of this conclusion on the main controversy between the parties.
In our opinion, therefore, the-reasons given by the Labour Court in support of its conclusion that the discharge of Mr. Banerjee was not justified are wholly unsatisfactory and so, it has become necessary for us to examine the evidence ourselves. The first report made by Mr. Gupta expressly states six grounds on which Mr. Banerjees work was found to be unsatisfactory. Mr. Gupta took the view that Mr. Banerjee was very slow in his work as a Salesman, that he was not able to judge the capacity of the dealers and to give them sufficient stocks in time, that he took no steps to put the products of the appellant on prominent view in the dealers shops, that he wag not looking after the pasting of the posters, in fact in one place the poster was pasted upside down, that he was not educating the stockists and dealers as he could have done and that he was reluctant to put hard and intelligent work. It is remarkable that when Mr. Banerjee was asked about this report in cross-examination, he frankly stated that Mr. Gupta was not unfriendly towards him and he was really unable to say why Mr. Gupta should have made these adverse comments against his work. In fact, the Labour Court itself has found that the appellant was not actuated by any ulterior considerations in discharging Mr. Banerjee. This report was made by Mr. Gupta soon after he inspected Mc. Banerjees work and there is no reason, whatever, why the Labour Court should have been reluctant to accept this report. Confining ourselves to the main complaint against Mr. Banerjee that he had not examined even a single box before he reported that the contents of the said boxes were not marketable, Mr. Gupta expressly stated that he had seen the 20 boxes and found that none of them had been opened at all. They were intact in the companys packing with the straps on them. Mr Gupta got them opened and found that the contents to the extent of 5 cases were really damaged and that the remaining contents were alright and could be marketed at the companys prices. Mr. Banerjee stated in his evidence that he had all the cases opened and he added, as he. had to, that the said cases were repacked for avoiding further deterioration. When he was asked how that could be done, he agreed that the metal straps had to be removed for opening of the boxes, but he added that he had arranged to have them restrapped and nailed. It is clear that the strapping is done in a factory by machines. Mr. Banerjee, however, suggested that he could manage to get the straps put and nailed with hands.
This evidence is patently unreliable. Besides, it is significant that when he gave his explanation to Mr. Gupta Mr. Banerjee admitted that he had opened only 5 or 6 out of the 20 boxes in question though his report suggested that he had opened all the 20 boxes. Therefore, there can be no doubt that Mr. Guptas statetment is absolutely true and that Mr. Banerjee had made his report about the unsatisfactory condition of the contents of the 20 boxes without as much as opening any one of them. That being so, it is difficult to understand how the Labour Court could -have come to the conclusion that the order of discharge was not justified. The learned Solicitor-General, however, attempted to argue that there was nothing on the record to show that the 20 boxes which Mr. Gupta got opened were the same boxes in respect of which Mr. Banerjee had made his report. We do not think that having regard to the evidence given by Mr. Gupta and Mr. Banerjee and the explanation offered by the latter when he was called to Calcutta by Mr. Gupta, there is any room for such an ingenious suggestion. Both parties knew that they were talking about the same 20 boxes and so,, it is futile now to suggest that the 20 boxes which Mr. Gupta examined were different from the boxes in respect of which Mr. Banerjee had made his report. It was also suggested on behalf of the respondents that Mr. Gupta did not admit that he had received some letters from Mr. Banerjee in which he had complained that owing to heavy rains, conditions were not favourable for effective work in the area entrusted to him. It is true that when Mr. Gupta was asked about these letters, he said he did not remember if he had received them. We do not think that the answers given by Mr. Gupta in respect of these letters can be of any assistance to the respondents in discrediting Mr. Guptas evidence in any manner. On the whole, we have no hesitation in holding that the appellant acted bonafide in discharging Mr. Banerjees services when it accepted Mr. Guptas report and concurred with his conclusions that the explanation given by Mr. Banerjee was not satisfactory.
DECISION ??

In our opinion, therefore, the-reasons given by the Labour Court in support of its conclusion that the discharge of Mr. Banerjee was not justified are wholly unsatisfactory and so, it has become necessary for us to examine the evidence ourselves.

Mr. Banerjee stated in his evidence that he had all the cases opened and he added, as he. had to, that the said cases were repacked for avoiding further deterioration. When he

Besides, it is significant that when he gave his explanation to Mr. Gupta Mr. Banerjee admitted that he had opened only 5 or 6 out of the 20 boxes in question though his report suggested that he had opened all the 20 boxes.

It is this order which is challenged by the appellant by its present appeal brought to this Court by special leave.

The respondents, on the other hand, contended that the discharge was not discharge simpliciter but was, in substance, dismissal, and so, it was urged that the Labour Court was entitled to consider the propriety of the appellants action.

Even so, it proceeded to examine the propriety of the said action and came to the conclusion that Mr. Banerjees discharge from employment did not appear to it to be justified. In coming to this conclusion, the Labour Court has given some reasons which are clearly unsupportable

Banerjee on six counts are of a general character. This comment again cannot be justified because Mr. Gupta stated in clear terms the defects in Mr

Banerjees work which had come to his notice. These defects are specific and it is idle to refuse to give importance to this evidence merely on the ground that no specific instances had been cited.

Gupta and there was no particular reason to believe one in preference to the other. Now, it is clear that such an -observation is hardly of any help because it was necessary for the Labour Court to express its conclusion on this point it might have believed either Mr.

Banerjee or Mr. Gupta, but by saying that there is no reason why one should be believed rather than the other, the Labour Court left this part of the dispute entirely undecided.

Similarly, the Labour Court has accepted the fact that Mr. Gupta that called for and received Mr. Banerjees explanation and to that extent it has rejected Mr

Banerjee was not justified are wholly unsatisfactory and so, it has become necessary for us to examine the evidence ourselves

Mr. Banerjee, however, suggested that he could manage to get the straps put and nailed with hands.
This evidence is patently unreliable

Both parties knew that they were talking about the same 20 boxes and so,, it is futile now to suggest that the 20 boxes which Mr. Gupta examined were different from the boxes in respect of which Mr. Banerjee had made his report

It is true that when Mr. Gupta was asked about these letters, he said he did not remember if he had received them. We do not think that the answers given by Mr. Gupta in respect of these letters can be of any assistance to the respondents in discrediting Mr

On the whole, we have no hesitation in holding that the appellant acted bonafide in discharging Mr. Banerjees services when it accepted Mr. Guptas report and concurred with his conclusions that the explanation given by Mr. Banerjee was not satisfactory

The Labour Court has found that according to the terms of contract under which Mr. Banerjee was employed by the appellant, the appellant was entitled to discharge Mr

That is why evidence was led by- both the parties before the Labour Court. Having considered that evidence, the Labour Court has found that the respondents plea about the mala fides of the appellant was not proved and it held that the termination of Mr.

Banerjees services could not be said to amount to an act of victimisation or an unfair labour practice. Even so, it held that the discharge was not justified, and so, it,has directed the appellant to reinstate Mr. Banerjee

It is the validity of this order that is challenged before us

In the present case, the Labour Court has made a definite finding in favour of -the appellant that its action in terminating the services of Mr. Banerjee was not malafide and did not amount to victimisation.

The first report made by Mr. Gupta expressly states six grounds on which Mr. Banerjees work was found to be unsatisfactory

This report was made by Mr. Gupta soon after he inspected Mc. Banerjees work and there is no reason, whatever, why the Labour Court should have been reluctant to accept this report.

On December 5, 1959, his services were terminated and he was informed that the appellant had lost confidence in him, and so, it bad decided to discharge him.

Since the dispute could not be settled amicably, the Union succeeded in persuading the Government of West Bengal to refer the dispute for adjudication to the Second Labour Court on the ground that the said discharge was not justified. That is how the discharge of Mr.

Banerjee became an industrial dispute between the appellant and the respondents, its workmen represented by their Union

Accordingly Mr. Gupta who was then the manager of the Calcutta ice visited the area assigned to Mr. Banerjee, in the last week of October. He found that Mr. Banerjee was networking satisfactorily as a Salesman

Accordingly, Mr. Banerjee was sent for and his explanation taken Mr. Gupta then made another report expressing his dissatisfaction with the explanation given by Mr. Banerjee

This report was sent on November 24, 1959. The Head ice accepted this report and on December 5, 1959, issued to Mr, Banerjee the order terminating his services. That, in brief, is the case set out by the appellant in support of the action taken by it against Mr. Banerjee

R. K. Banerjee had been employed by the appellant, the Tata Oil Mills Co. Ltd.as a Salesman on April 3, 1956, as a probationer and he was confirmed on November 5, 1956

Banerjees services was not dismissal but was a discharge simpliciter, and according to it, the discharge was justified by the terms of contract between the appellant and Mr. Banerjee as embodied in Rule 40 (1) of the Service Rules of -the appellant.

It is this order which is challenged by the appellant by its present appeal brought to this Court by special leave.

The appellant, therefore, urged that the Labour Court had no jurisdiction to consider the propriety of the appellants action in discharging Mr. Banerjee.

The respondents, on the other hand, contended that the discharge was not discharge simpliciter but was, in substance, dismissal, and so, it was urged that the Labour Court was entitled to consider the propriety of the appellants action.

The Labour Court has found that according to the terms of contract under which Mr.

Having considered that evidence, the Labour Court has found that the respondents plea about the mala fides of the appellant was not proved and it held that the termination of Mr. Banerjees services could not be said to amount to an act of victimisation or an unfair labour practice.

Even so, it held that the discharge was not justified, and so, it,has directed the appellant to reinstate Mr. Banerjee.

It is the validity of this order that is challenged before us by

Workers of the Company, (1), and since then, it has been consistently followed vide Chartered Bank, Bombay, v.

In coming to this conclusion, the Labour Court has given some reasons which are clearly unsupportable.

It has observed, for instance, that the appellant has not produced any documentary evidence in support of its allegation against the efficiency of Mr. Banerjee. This is clearly wrong because the two reports made by Mr.

Banerjees conduct do amount to documentary evidence which cannot be lightly brushed aside. It has then commented on the fact that the allegations made by Mr. Gupta against Mr. Banerjee on six counts are of a general character.

This comment again cannot be justified because Mr. Gupta stated in clear terms the defects in Mr. Banerjees work which had come to his notice.

These defects are specific and it is idle to refuse to give importance to this evidence merely on the ground that no specific instances had been cited.

Similarly, the Labour Court has accepted the fact that Mr.

Gupta that called for and received Mr. Banerjees explanation and to that extent it has rejected Mr. Banerjee suggestion that he had not given any explanation a all but even so, the Labour Court has not considered the effect of this conclusion on the main controversy between the parties.

In our opinion, therefore, the-reasons given by the Labour Court in support of its conclusion that the discharge of Mr.

Banerjee was not justified are wholly unsatisfactory and so, it has become necessary for us to examine the evidence ourselves.

In fact, the Labour Court itself has found that the appellant was not actuated by any ulterior considerations in discharging Mr.

Mr. Banerjee, however, suggested that he could manage to get the straps put and nailed with hands.

Therefore, there can be no doubt that Mr.

Guptas statetment is absolutely true and that Mr. Banerjee had made his report about the unsatisfactory condition of the contents of the 20 boxes without as much as opening any one of them.

That being so, it is difficult to understand how the Labour Court could -have come to the conclusion that the order of discharge was not justified. The learned Solicitor-General, however, attempted to argue that there was nothing on the record to show that the 20 boxes which Mr.

Gupta got opened were the same boxes in respect of which Mr. Banerjee had made his report.

We do not think that having regard to the evidence given by Mr. Gupta and Mr.

Banerjee and the explanation offered by the latter when he was called to Calcutta by Mr. Gupta, there is any room for such an ingenious suggestion.

Both parties knew that they were talking about the same 20 boxes and so,, it is futile now to suggest that the 20 boxes which Mr. Gupta examined were different from the boxes in respect of which Mr.

Banerjee had made his report. It was also suggested on behalf of the respondents that Mr.

Gupta did not admit that he had received some letters from Mr. Banerjee in which he had complained that owing to heavy rains, conditions were not favourable for effective work in the area entrusted to him.

It is true that when Mr. Gupta was asked about these letters, he said he did not remember if he had received them.

We do not think that the answers given by Mr. Gupta in respect of these letters can be of any assistance to the respondents in discrediting Mr.

Guptas evidence in any manner. On the whole, we have no hesitation in holding that the appellant acted bonafide in discharging Mr.

Banerjees services when it accepted Mr. Guptas report and concurred with his conclusions that the explanation given by Mr.

In fact, Mr. joshi who appeared for the appellant conceded before the Labour Court that an adjudicating Court can look into the reasons behind the discharge of an employee.

In the present case, the Labour Court has made a definite finding in favour of -the appellant that its action in terminating the services of Mr.

Banerjee was not malafide and did not amount to victimisation. Even so, it proceeded to examine the propriety of the said action and came to the conclusion that Mr. Banerjees discharge from employment did not appear to it to be justified.

Gupta and there was no particular reason to believe one in preference to the other.

The first report made by Mr. Gupta expressly states six grounds on which Mr. Banerjees work was found to be unsatisfactory.

Besides, it is significant that when he gave his explanation to Mr. Gupta Mr. Banerjee admitted that he had opened only 5 or 6 out of the 20 boxes in question though his report suggested that he had opened all the 20 boxes.

punitive, that it is malafide, or that it amounts to victimisation or unfair labour practice

The test always has to be whether the act of the employer is bonafide or not.

the-reasons given by the Labour Court in support of its conclusion that the discharge of Mr. Banerjee was not justified are wholly unsatisfactory

there can be no doubt that Mr. Guptas statetment is absolutely true and that Mr. Banerjee had made his report about the unsatisfactory condition of the contents of the 20 boxes without as much as opening any one of them.

we have no hesitation in holding that the appellant acted bonafide in discharging Mr. Banerjees services when it accepted Mr. Guptas report and concurred with his conclusions that the explanation given by Mr. Banerjee was not satisfactory.

Even so, it proceeded to examine the propriety of the said action and came to the conclusion that Mr. Banerjees discharge from employment did not appear to it to be justified. In coming to this conclusion, the Labour Court has given some reasons which are clearly unsupportable.

Having considered that evidence, the Labour Court has found that the respondents plea about the mala fides of the appellant was not proved and it held that the termination of Mr. Banerjees services could not be said to amount to an act of victimisation or an unfair labour practice.

If the Industrial Court is satisfied that the order of discharge is punitive, that it is malafide, or that it amounts to victimisation or unfair labour practice, it is competent to the Industrial Court to set aside the order and in a proper case, direct the reinstatement of the employee.

In the present case, the Labour Court has made a definite finding in favour of -the appellant that its action in terminating the services of Mr. Banerjee was not malafide and did not amount to victimisation.

when he gave his explanation to Mr. Gupta Mr. Banerjee admitted that he had opened only 5 or 6 out of the 20 boxes in question though his report suggested that he had opened all the 20 boxes.

Banerjee should visit dealers in his area and carry on intelligent and intensive propaganda to popularise the sale of the appellants products.

the two reports made by Mr. Gupta in respect of Mr. Banerjees conduct do amount to documentary evidence which cannot be lightly brushed aside.

Mr. Gupta stated in clear terms the defects in Mr. Banerjees work which had come to his notice. These defects are specific and it is idle to refuse to give importance to this evidence merely on the ground that no specific instances had been cited.

there is no reason, whatever, why the Labour Court should have been reluctant to accept this report.

It is clear that the strapping is done in a factory by machines. Mr. Banerjee, however, suggested that he could manage to get the straps put and nailed with hands.
This evidence is patently unreliable.

Gupta made a report to the zonal Manager

Mr. Gupta then made another report expressing his dissatisfaction with the explanation given by Mr. Banerjee.

when Mr. Banerjee was asked about this report in cross-examination, he frankly stated that Mr. Gupta was not unfriendly towards him

Labour Court itself has found that the appellant was not actuated by any ulterior considerations in discharging Mr. Banerjee.

Both parties knew that they were talking about the same 20 boxes and so,, it is futile now to suggest that the 20 boxes which Mr. Gupta examined were different from the boxes in respect of which Mr. Banerjee had made his report.


Special leave granted.
 Respondent 1 was suspended by order dated 28 7 1998 on the same day when disciplinary proceedings were initiated against him. He filed a writ petition in the High Court challenging the order of suspension.
 By the impugned order the High Court noted that Respondent I had been empanelled for promotion to the post of Joint Commissioner on 28 5 1998 and the disciplinary proceedings commenced on 28 7 1998 and on the same day i.e 28 7 1998 he was suspended. From this the High Court concluded that the act of suspension was an after thought. Consequently the High Court directed that no effect should be given to the order of suspension and the select list for promotion should be given effect to forthwith.
 We are at a loss the understand as to how the High Court could pass such an order. Admittedly the disciplinary proceedings had commenced on 28 7 1998. Even if before that date the said respondent had been empanelled for promotion the Government cannot be prohibited from starting disciplinary proceedings if there are reasons for doing so. The High Court has not quashed the disciplinary proceedings and looking at the charges leveled against the respondent it cant of be said that there was any ulterior motive for the respondent being put under suspension. Furthermore where disciplinary proceedings are pending we are doubtful whether it was appropriate for the High Court to have directed that the select list for promotion should be given effect to forthwith especially when the High Court in the said order has permitted the disciplinary proceedings to continue. It is also difficult to appreciate the High Court holding that even though disciplinary proceedings could continue but no final order should be passed. No reasons for coming to this conclusion have been given.
 We therefore have no hesitation in set ting aside the impugned judgment of the High Court. The effect of this would be that Respondent 1 who was reinstated pursuant to an order passed by the High Court during the proceedings for contempt which are stated to have been initiated by the respondent would be placed under suspension forthwith till the conclusion of the disciplinary proceedings or the withdrawal of the suspension order by the Government.
DECISION ?


An Industrial unit run by M s. Diamond Marbles Pvt. Ltd respondent No 4 was brought to sale in terms of Section 29 of the State Financial Corporation Act 1951 for short the State Act by Rajasthan Financial Corporation respondent No 3. Appellant before us participated in auction and its bid having been accepted took possession of the said unit on 28 8 1987 pursuant to the agreement entered into between them. On 4 12 1987 the Additional Collector of Central Excise adjudicated in a proceeding arising out of show cause notice issued under Section 11A of the Central Excise Act to respondent No 4 in relation to certain goods that are said to have been removed between 13 8 1986 and 23 8 1986 and excise duty of Rs 1 04 586.17 and penalty of Rs 3 lakhs was levied and demanded.
A letter was sent by the Central Excise Department to the appellant demanding a sum of Rs 4 07 291.75 pursuant to the adjudication order made against respondent No 4 The appellant in his letter to the Department contended that it had no liability to pay the excise dues of respondent No 4. The Department not having acceded to it a writ petition was filed in the High Court challenging the recovery proceedings initiated by the Department. However the said amount was paid. In the writ petition several contentions were raised including the question that the liability is only that of respondent No 4 and not of the appellant that appellant having taken over the unit from the third respondent had no liability to pay the excise dues that Rule 230 2 of the Central Excise Rules 1944 has no application to the present case. The High Court disagreed with these submissions and took the view that in terms of the said Rule it is open to the Department to proceed against the plants and machinery of the owner from whom it was transferred and made it clear that it is open to the appellant to agitate against the erstwhile owner respondent No 3 but had to pay the dues to the Department and thereby dismissed the writ petition. Hence this appeal by special leave.
In this appeal Ms. Radha Rangaswamy learned Counsel for the appellant very strenuously contended that in view of Section 46B of the State Act it would prevail over the Central Excise Act and relied upon the decision of this Court in Sitani Textiles Fabrics P Ltd v. Asstt. C of Cus C.E Hyderabad 1999 106 E.L.T 296. She submitted that as the State Act is a special enactment and Central Excise Act is a general enactment the State Act would prevail over the same. It is brought to our notice that this aspect is under consideration in another matter before this Court. It is also submitted that as held in N.B Sanjana Assistant Collector of Central Excise Bombay and Ors v. The Elphinstone Spinning and Weaving Mills Co. Ltd 1978 2 E.L.T J 399 the penalty was not attracted in the present case at all. She also relied upon the decision of this Court in Isha Marbles v Bihar State Electricity Board and Anr to contend that in case of sales effected under Section 29 1 of the State Act the recovery of dues of previous owner from the auction purchaser could not be made.
Now taking the last contention first we may notice that this Court in Isha Marbles considered the scope of Section 24 of the Electricity Act and held that there is no charge over the property in question and when a premises comes to be owned or purchased by the auction purchaser he cannot be called upon to clear the past arrears when such purchaser seeks supply of electric energy or it is made clear in that decision that what matters is the contract entered into by the erstwhile consumer with the Board and the Board cannot seek the enforcement of contractual liability against the third party. Therefore this decision in Isha Marbles cannot be taken advantage of by the appellant at all in this case.
In this case the liability arises under the Central Excise Act and Rule 230 2 of the Central Excise Rules. The said Rule clearly indicates that it is a mode of recovery of the excise dues from the assets owned by a predecessor and on his liabilities being assessed could be recovered even from the successor.
The argument advanced by the appellant that sale having taken place under the State Act free of encumbrances and the transferor s rights or liabilities cannot be that of transferee does not hold good. Section 29 2 of the State Act makes it clear that the property pledged mortgaged hypothecated or assigned to the Financial Corporation can be brought to sale and such a sale if resulted in transfer of property shall vest in the successor all rights in the property transferred as if the transfer has been made by the owner of the property. When sale made by the corporation is deemed to be a sale made by the owner of the property necessarily Rule 230 2 of the Central Excise Rules would be attracted.
We are not impressed with the argument that the State Act is a special enactment and the same would prevail over the Central Excise Act. Each of them is a special enactment and unless in the operation of the same any conflict arises this aspect need not be examined. In this case no such conflict arises between the corporation and the Excise Department. Hence it is unnecessary to examine this aspect of the matter.
DECESION ?


Leave granted.
 The appellant A2 Azeez along with two others i.e. A1 Khalid and A3 Babu was tried by the Judicial Magistrate First Class I Aluva for offences punishable under Sections 457 and 380 read with Section 34 of the Indian Penal Code for short the IPC . By order dated 15 12 2000 learned Magistrate convicted the appellant under Section 457 of the IPC and sentenced him to undergo rigorous imprisonment for one year. The appellant was further convicted for offence under Section 380 of the IPC and sentenced to undergo rigorous imprisonment for two years. The substantive sentences were ordered to run concurrently. A1 Khalid and A3 Babu were acquitted.
 The appellant challenged the said order before the Additional Sessions Judge Ernakulam. Learned Sessions Judge by his order dated 28 11 2002 confirmed the conviction and sentence and dismissed the appeal. Being aggrieved by the said conviction and sentence the appellant filed a criminal revision petition in the Kerala High Court. By the impugned judgment the High Court dismissed the revision petition. Hence this appeal by special leave is filed against the said judgment.
 According to the prosecution the appellant along with A1 Khalid and A3 Babu with an intention of committing theft entered the house of PW1 Radha at Karumalloor Village on 12 11 1995 at 4.00 a.m through the door which was kept open. They entered the bedroom where PW2 Renuka Devi was sleeping and committed theft of a gold chain weighing 14 grams worth Rs7 500 which PW2 was wearing while she was sleeping. A1 and A3 assisted the appellant in committing the offence. They gave the gold chain to the appellant for selling. The appellant sold the gold chain and the accused divided the sale proceeds and thereby committed the offence.
 This case presents rather unusual facts. PW7 the Circle Inspector stated that he arrested the accused on 28 11 1995 at 1 a.m near the parking area Municipal Buildings Aluva while they were moving in suspicious circumstances. On questioning them it was revealed that they had committed the offence involved in this case hence they proceeded to the house of PW1 at Aduvathuruthu and recorded her F.I.R Ext.P1 .
 PW1 in her evidence stated that her daughter PW2 was sleeping in her room on the night of 12 11 1995. PW2 was wearing Thara fashion gold chain. The gold chain was stolen but no complaint was lodged at the police station because PW2 did not realize that her gold chain was stolen. It is only on 28 11 1995 when the police came to their house along with the accused and the gold chain was shown to her that she realized that the gold chain was stolen. She identified the gold chain MO1. FIR Ext.P1 was then lodged. PW2 the daughter stated that on 12 11 1995 at about 11 p.m. she went to sleep. On the next day morning the gold chain was not seen. On 28 11 1995 when the police came to her house with the accused and showed her the chain she realized that her chain was stolen. She identified the chain.
 Evidence of PWs 1 and 2 raise several question marks. If gold chain worn by PW2 was removed by the accused at night it is unbelievable that she would not realize it in the morning. Even PW1 the mother did not realize that the chain worn by PW2 was not around her neck. Assuming this to be true PWs 1 and 2 would at least realize the loss on the next day or a day thereafter. They did not realize that the chain was stolen till 28 11 1995 when the police came to their house with the accused and showed them the chain. At that time they realized that chain was stolen. It is on 28 11 1995 that PW1 lodged her complaint. Thus the complaint came to be lodged about sixteen days after the incident that too after the police came to PW1s house with the chain. The sequence of events is not convincing and does not stand to reason.
 According to the prosecution the appellant made a discovery statement to PW7 the Circle Inspector and pursuant to that statement PW7 went to the shop of PW8 Pradeep along with the appellant. The appellant is stated to have pointed out to PW8 as the man to whom he had sold the chain. However PW8 has not supported the prosecution case. The courts below have while convicting the appellant placed reliance on the evidence of PW7 the Circle Inspector and PW3 the Head Constable who sought to corroborate the version of PW7 regarding recovery of chain at the instance of the appellant from the shop of PW8. We find it difficult to do so. Trial Court has observed that offence under Section 457 of the IPC is not made out because according to PW1 the thieves entered the door which was kept open. The Trial Court therefore acquitted the appellant of the offence punishable under Section 457 of the IPC. The Trial Court also acquitted A1 and A3 of the offence punishable under Section 457 read with Section 34 of the IPC. The Trial Court however observed that from the evidence of PWs 1 and 2 it is seen that theft had taken in the room in which PW2 was sleeping the thief entered the house and committed theft of gold chain which PW2 was wearing and therefore this act will be covered by Section 451 of the IPC i.e. house trespass in order to commit offence punishable with imprisonment. The Trial Court further held that since the recovery of gold chain was effected on the basis of statement given by the appellant the only inference that can be drawn is that he committed the theft of gold chain and therefore the case is covered by Section 380 of the IPC i.e theft in a dwelling house. After observing that there is nothing in the evidence of PWs 1 to 8 to connect A1 and A3 with the crime the Trial Court acquitted them of all the offences. This view is affirmed by the Sessions Court and the High Court.
 We find it difficult to uphold the above view so far as it relates to the appellant. As we have already noted that FIR was registered after about sixteen days from the date of alleged theft. PWs 1 and 2 did not even realize that the chain was stolen. It is only when the accused were brought to their house after about sixteen days that they realized that the chain was stolen and FIR was lodged. The chain in question was being worn by PW2. It is stated to have been stolen while she was sleeping. It is inconceivable that she would not realize that she had lost her chain. The incident in our view is not unfolded truthfully. A1 and A3 have been rightly acquitted because nothing links them to the offence. But similar is the case with the appellant. The only evidence against him is the alleged recovery of gold chain at his instance. That cannot connect the appellant to the theft. The Trial Court has stated that since chain was recovered at the instance of the appellant the only inference which can be drawn is that he committed the theft. Drawing such inference in the facts of this case would be totally unjust.
DECISION ?

hey gave the gold chain to the appellant for selling.

Ws 1 and 2 did not even realize that the chain was stolen.

ut similar is the case with the appellant.

W2 was wearing Thara fashion gold chain.

t is on 28 11 1995 that PW1 lodged her complaint.

owever PW8 has not supported the prosecution case.

he chain in question was being worn by PW2.

t is stated to have been stolen while she was sleeping.

1 and A3 assisted the appellant in committing the offence.

hey gave the gold chain to the appellant for selling.

vidence of PWs 1 and 2 raise several question marks.

n the next day morning the gold chain was not seen.


These appeals are directed against the judgment and order passed by the High Court of Judicature for Rajasthan Jaipur Bench Jaipur in Criminal Appeal No 130 of 2000 dated 03.06.2005. The High Court while affirming the judgment of the Trial Court in Sessions Case No 49 99 dated 15.03.2000 has convicted Shri Ram A 1 under Section 302 read with Section 34 of the Indian Penal Code the IPC for short and reversed the judgment of the Trial Court and acquitted Shobha Ram A 2. It is the acquittal of A 2 which is called in question by the appellant  State of Rajasthan in Criminal Appeal No 592 of 2008.
 Criminal Appeal No 593 of 2008 is preferred by Shri Ram A 1 being aggrieved by the order of conviction and sentence passed by the Trial Court and confirmed by the High Court.
 The facts in brief are The incident occurred on 16.02.1999 at about 5.30 p.m. PW 1 Mohanlal who is the brother of the deceased Trilokchand had lodged the FIR before S.H.O Police Station Chechat regarding the alleged assault on the deceased by the accused persons. On the fateful day the appellants on account of their past enmity over the well located in their lands formed common intention to cause death of Trilokchand since deceased and in furtherance of their common intention they caused injuries to the deceased with stones resulting in his death. The FIR was registered and after the completion of the investigation the investigating agency had filed a charge sheet against A 1 and A 2 under Section 302 read with Section 34 of the IPC. The accused persons denied the charge and pleaded false implication and therefore the Trial had commenced against both the accused A 1 and A 2.
 During the Trial the prosecution in order to prove the guilt of the accused persons had examined several witnesses including PW 1 and PW 2 Smt. Manoharbai wife of the deceased PW 3 Bhawanishankar PW 4 Kalulal PW 6 Basantilal and other witnesses. Prosecution had projected PW 2 and PW 6 as eye witnesses to the incident.
 The Trial Court after appreciating the evidence of the eye witnesses and others has come to the conclusion that the testimony of PW 2 does not corroborate with the FIR and other material available on record and therefore it could be safely concluded that PW 2 had not seen the occurrence of actual incident and therefore the evidence at the most can only be an hearsay evidence. However the Trial Court has believed the evidence of PW 6 who in his evidence has categorically stated that A 1 was assaulting the deceased with the stones and A 2 was sitting on the chest of the deceased. The Trial Court placing reliance on the evidence of PW 6 has convicted and sentenced the accused persons under Section 302 read with Section 34 of the IPC to suffer imprisonment for life and to pay a fine of Rs1000 each and in default to undergo simple imprisonment for a further period of six months.
 Aggrieved by the order of conviction and sentence passed by the Trial Court the accused persons had filed appeals before the High Court. The High Court has confirmed the conviction and sentence of A 1 passed by the Trial Court. However the High Court has acquitted A 2 only on the ground that A 2 had not actively participated in the commission of the offence and therefore the Trial Court was not justified in convicting A 2 for an offence punishable under Section 302 read with Section 34 of the IPC.
 It is the correctness or otherwise of the judgment and order passed by the High Court which is called in question by the appellants in this appeal.
 We will first take up the appeal of A 1. The Trial Court and the High Court has convicted A 1 based on the evidence of the sole eye witness namely PW 6. In order to satisfy ourselves we have once again carefully analyzed the evidence on record and the conviction of A 1 by the Trial Court with the aid of the sole eye witness of PW 6. In his evidence PW 6 has stated A 2 was acting in concert with A 1 in causing the murder of the deceased wherein A 1 was assaulting the deceased with stones and A 2 had facilitated the execution of the common design by sitting on the chest of the deceased. Despite cross examination at length PW 6 has maintained his version thereby not leaving any scope for the defense to elicit anything against the prosecution witness. Therefore in our opinion the evidence of the said witness is of sterling quality and therefore reliable and trustworthy leaving us with no other alternative but to accept his evidence. Therefore we decline to interfere with the finding and conclusion reached by the Trial Court insofar as convicting A 1 is concerned. Therefore we reject the appeal filed by A 1 and confirm the orders passed by the Trial Court and the High Court.
 While considering the appeal filed by the State of Rajasthan we have carefully perused the judgment and order passed by the High Court. The High Court has acquitted A 2 only on the ground that merely sitting on the chest of the deceased rules out the possibility of active participation by A 2 in the commission of offence and therefore has acquitted him from the charges under Section 302 read with Section 34 of the IPC.
 The nuances of Section 34 of the IPC has been explained by this Court in several decisions but we will only refer to the decision in the case of Nadodi Jayaraman and others vs. State of Tamil Nadu 1992 3 SCC 161 and Saravanan and Another vs. State of Pondicherry 2004 13 SCC 238 . In the case of Nadodi Jayaraman and others Supra the Court has observed  9. Section 34 of IPC enacts that when a criminal act is done by several persons in furtherance of the common intention of all each of such persons is liable for that act in the same manner as if it were done by him alone. The section thus lays down a principle of joint liability in the doing of a criminal act. The essence of that liability is found in the existence of common intention animating the accused leading to the doing of a criminal act in furtherance of such intention. The section is intended to meet a case in which it is difficult to distinguish between the act of individual members of a party and to prove exactly what part was played by each of them. It therefore enacts that once it is found that a criminal act has been committed by several persons in furtherance of the common intention of all each of such persons is liable for the criminal act as if it were done by him alone. It is thus an exception to the general rule of criminal jurisprudence that it is the primary responsibility of the person who actually commits a crime and only that person can be held guilty and punished in accordance with law for his individual act. 15. It is thus clear that the criminal act referred to in Section 34 IPC is the result of the concerted action of more than one person if the said result was reached in furtherance of the common intention and each person must be held liable for the ultimate result as if he had done it himself.
 A perusal of Section 34 of the IPC would clearly indicate that there must be two ingredients for convicting a person with the aid of Section 34 of the IPC. Firstly there must be a common intention and secondly there must be participation by the accused persons in furtherance of the common intention. If the common intention is proved it may not be necessary that the acts of the several persons charged with commission of an offence jointly must be the same or identically similar. The acts may be different in character but must be arising out of the same common intention in order to attract the provision. The said principle is reiterated in a three judge bench decision in Suresh Anr vs. State of U.P 2001 3 SCC 673 and Ramaswami Ayyangar and others vs. State of Tamil Nadu 1976 3 SCC 779 wherein the court has stated that the acts committed by different confederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise for instance one may only stand guard to prevent any person coming to the relief of the victim or to otherwise facilitate the commission of crime. Such a person also commits an act as much as his co participants actually committing the planned crime. In the case of an offence involving physical violence the person who instigates or aids the commission of the crime must be physically present and such presence of those who in one way or the other facilitate the execution of the common design is itself tantamount to actual participation in the criminal act
 Insofar as common intention is concerned it is a state of mind of an accused which can be inferred objectively from his conduct displayed in the course of commission of crime and also from prior and subsequent attendant circumstances. As observed in Hari Ram vs.State of U.P 2004 8 SCC 146 the existence of direct proof of common intention is seldom available and therefore such intention can only be inferred from the circumstances appearing from the proved facts of the case and the proved circumstances. Therefore in order to bring home the charge of common intention the prosecution has to establish by evidence whether direct or circumstantial that there was plan or meeting of mind of all the accused persons to commit the offence before a person can be vicariously convicted for the act of the other.
 The facts in the present case in the light of the evidences on record are that A 1 and A 2 are brothers having an old enmity with the deceased resulting in a constant skirmish over the well located in their lands. On the said date of incident the animosity culminated to an assault on the deceased by the accused persons when the deceased was nearing his land. It has come in the evidence of PW 6 that A 1 was assaulting the deceased with stones and A 2 was sitting on the chest of the deceased. The aforesaid chain of events gives a clear picture of the whole incident that had taken place on that fateful day. The evidence of PW 6 when seen in entirety and in its proper perspective we can conclude that both the accused persons i.e. A 1 and A 2 had a common intention to assault and kill the deceased person with A 2 as a participant in the crime with the intention of lending weight to the commission of an offence pursuant to a pre concerted plan.
DECISION ?

anoharbai wife of the deceased PW 3 Bhawanishankar PW 4 Kalulal PW 6 Basantilal and other witnesses.

he Trial Court placing reliance on the evidence of PW 6 has convicted and sentenced the accused persons

he said principle is reiterated in a three judge bench decision in Suresh Anr vs.

uch a person also commits an act as much as his co participants actually committing the planned crime.

he incident occurred on 16.02.1999 at about 5.30 p.m.

he acts may be different in character but must be arising out of the same common intention in order to attract the provision.

he Trial Court and the High Court has convicted A 1 based on the evidence of the sole eye witness namely PW 6.

he aforesaid chain of events gives a clear picture of the whole incident that had taken place on that fateful day.

he incident occurred on 16.02.1999 at about 5.30 p.m.

rosecution had projected PW 2 and PW 6 as eye witnesses to the incident.

he nuances of Section 34 of the IPC has been explained by this Court in several decisions

he section thus lays down a principle of joint liability in the doing of a criminal act.

uch a person also commits an act as much as his co participants actually committing the planned crime.

he High Court has confirmed the conviction and sentence of A 1 passed by the Trial Court.

xistence of common intention animating the accused leading to the doing of a criminal act in furtherance of such intention.

aving an old enmity with the deceased resulting in a constant skirmish over the well located in their lands.