D.R. Dhanuka, J.
1. The petitioners - Employees have filed these writ petitions impugning the validity of order dated 22nd December, 1988 passed by the Presiding Officer, 7th Labour Court, Bombay. By the said order, the Labour Court held that the Employees of Retail Cloth Shops were not governed by Bombay Industrial Relations Act, 1946 and the relevant notification as conducting of retail cloth shop was not necessary for running of a Spinning and Weaving Mill and the activity of running a retail cloth shop could not be considered as integral to the department of Spinning and Weaving.
2. These petitions involve interesting and important questions of law of public importance affecting employees of retail cloth shops conducted by the Textile Mills in the City of Bombay and concern interpretation of the relevant provisions contained in Bombay Industrial Relations Act, 1946, and the Notification No. 2847/34-A dated 30th May, 1939 issued by the then Government of Bombay in exercise of powers conferred on it under the Bombay Industrial Disputes Act, 1938, and continued in force by the Government of Maharashtra after coming into force of tile abovereferred Act of 1946. The following questions arise for consideration of this Court in these Writ Petitions:-
(a) Whether the retain cloth shops run by Finlay Mills Co. Ltd. upto 18th Oct. 1983 and thereafter by the National Textile Corporation Ltd. at Chowpatty and/or Sri P.M. Pherozeshah Mehta Road in Greater Bombay are liable to be considered as part and parcel of activity of Spinning and Weaving concern on the footing that its activity of marketing the Mills' products is incidental to the manufacturing activity and is in any event reasonably connected with the manufacturing activity ?
(b)Whether the abovereferred retail cloth shops are, therefore, covered under the abovereferred Notification dated 30th May, 1939 and the Bombay Industrial Relations Act, 1946?
(c) Whether the abovereferred retail cloth shops are a department of the Mill undertaking forming an 'integral part' of the concern engaged in the business of Spinning and Weaving and is, therefore, in any event covered under later part of Sub-clause (d) of the above-referred Notification dated 30th May, 1939 as amended so as to attract the application of Bombay Industrial Relations Act, 1946?
(d)Whether the Petitioners are 'employees' of the Textile undertaking of Fin-lay Mills Co. Ltd. now managed by the National Textile Corporation Ltd. with effect from 18th October, 1983 so as to attract Section 3(13) of Bombay Industrial Relations Act, 1946 and other relevant provisions.
3. The facts of Writ Petition Nos. 899 of 1989 and 898 of 1989 are almost identical. I shall, therefore, summarise the facts pertaining to the petitioner in one of the writ petitions only i.e. Writ Petition No. 899 of 1989. The relevant facts and circumstances leading to the filing of Writ Petition No. 899 of 1989 are in brief as under:-
(a) Finlay Mills Ltd. owned a Textile undertaking known as 'Finlay Mills' situate in the City of Bombay. The said Company used to run retail cloth shops in the City of Bombay and elsewhere to market the cloth manufactured by it. The said Company also has its retail cloth shop at Hyderabad. The Court is not concerned in this petition with the retail cloth shop of the Company situate at Hyderabad. This petition concerns only the retail cloth shops run by the Company in City of Bombay to market its products manufactured in the Mill.
(b) For the last several years prior to 18th October, 1983, the petitioner was working as a Cashier in the retail cloth shop of the Mill situate in the City of Bombay, The said retail cloth shop was run by Finlay Mills Ltd. to market the cloth manufactured by it as one of its departments.
(c) The said retail cloth shop was registered as an establishment under the Bombay Shops and Establishments Act, 1948.
(d) On 18th October, 1983 the President of India issued an Ordinance known as 'The Textile Undertakings Taking over of ment Ordinance, 1983'. The said Ordinance was replaced by the replacing Act passed by Parliament soon thereafter. By virtue of the said Ordinance, the Central Government took over the management of the Textile Undertaking specified in the Schedule thereto, including the Textile Undertaking of Finlay Mills Ltd. and all its assets. The National Textile Corporation Ltd. as an additional custodian of the said undertaking took charge of the various retail cloth shops in the City of Bombay on the footing that the said retail cloths were part of the assets of the said Textile Undertaking. The said Ordinance and the replacing Act permits the custodian to take charge only of the assets of Textile Undertaking and not the other assets of tile company owing the Textile Undertaking.
(e) The petitioner worked in the retail cloth shop situate at Chowpatty during the period commencing from 18th October, 1983 until 23rd January, 1985. During this period the petitioner was paid his salary and other emoluments by the National Textile Corporation Ltd. Since about January, 1985, the petitioner was not permitted to work in the said retail cloth shop managed by the National Textile Undertaking.
(f) On 10th February, 1985, the petitioner addressed a letter to Shri Ratanlal Muljee, Chairman, Finlay Mills Ltd. (Respondent No. 2 herein), as well as the Custodian-of Finlay Mills Ltd. i.e. National Textile Corporation Ltd. under Section 42(4) of the Bombay Industrial Relations Act, 1946, calling upon the management to reinstate the petitioner with continuity of service and full back wages and other benefits with effect from 23rd January, 1985. It was alleged by the petitioner in the said letter that the services of the petitioner were discontinued by Respondent No. 1 without any notice or payment of terminal benefits in lieu thereof. It was stated in the said letter that the said termination was illegal and mala fide,
(g) On 12th April, 1985, the petitioner filed his application before the Labour Court at Bombay, numbered as Application (LCB) No. 518 of 1985, under Sections 78 and 79 of the Bombay Industrial Relations Act, 1946. By the said application, the petitioner sought a declaration that the termination of services of the petitioner on and from 23rd January, 1985 was illegal and improper. By the said application, the petitioner claimed various reliefs, including the relief of reinstatement, continuity of service, etc. The petitioner filed the said application before the Labour Court under Sections 78 and 79 of the Bombay Industrial Relations Act on the footing that the said retail cloth shop wherein the petitioner was employed was covered by and under the abovereferred Notification dated 30th May, 1939 and the provisions of the Bombay Industrial Relations Act. Finlays Mills Ltd. as well as the National Textile Corporation Ltd. filed their respective written statements. The National Textile Corporation (South Maharashtra) Limited (Respondent No. 2 herein) inter alia contended in its written statement that the provisions of the Bombay Industrial Relations Act could not be invoked by the petitioner as the petitioner was an employee of the retail cloth shop which was an establishment registered under the Bombay Shops and Establishments Act, 1948. Thus the Respondent No. 2 disputed the jurisdiction of the Labour Court to entertain the said application. The Labour Court framed several issues at the hearing of the said application. The said issues are as under-
'(1) Whether the provisions of BIR Act, 1946 are applicable to the retail shop in which the applicant was employed?
(ii) Whether the application filed by the applicant under Sections 78 & 79 of the B.I.R. Act, 1946, is tenable?
(iii) Does the applicant prove that his services came to be terminated by Opponent No. 2 (i.e. the Custodian of Finlay Mills Ltd.) on and from 23.1.1985 as alleged by him?
(iv) Whether the said termination is legal and proper?
(v) Whether the applicant is entitled to any relief? If yes, what relief?
(vi) What order?'
The Labour Court held in its impugned order dated 22nd December, 1988 that the provisions of the Bombay Industrial Relations Act were not applicable to the retail cloth shop in which the petitioner was employed and the said application was, therefore, not maintainable. In Paragraph 20 of his judgment, the learned Presiding Officer of the Labour Court held as under:-
'After taking into consideration the various operations which are carried out in the Mill, it cannot be said that conducting a retail shop is necessary for running a Spinning or Weaving Mill or that the work of Spinning or Weaving would be incomplete unless there is a retail shop.'
In view of the abovereferred conclusion to the effect that conducting of a retail shop was not 'necessary', for running of Spinning or Weaving Mill, the learned Presiding Officer dismissed the said application as not maintainable
4. It shall be of some relevance to refer to the Legislative history of the Bombay Industrial Disputes Act, 1938. Notification issued thereunder in respect of Cotton Textile Industry and the Bombay Industrial Relations Act, 1946. Some of the relevant aspects of the Legislative history are as under.
(a) On 14th March, 1939, 'the Bombay Industrial Disputes Act,' 1938 came into force. The Bombay Industrial Disputes Act, 1938 was enacted to make provision for promotion of peaceful and amicable settlement of industrial disputes by conciliation and arbitration, etc. The said Act received the assent of the Governor General. The said Act was published in the Bombay Govt. Gazette on 24th February, 1939.
(b)In exercise of the powers conferred on it by Sub-section (1) of Section 2 of the Bombay Industrial Disputes Act, 1938, the then Govt. of Bombay, issued its Notification No. 2847/34-I dated 14th March, 1939. By the said notification, it is provided that the various provisions of the said Act shall come into force from various dates in the entire province of Bombay as specified therein.
(c) On 30th May, 1939, the notification under consideration was issued by the then Government of Bombay in exercise of the powers conferred on it by Sub-section (3) of Section 2 of the Bombay Industrial Disputes Act, 1938. By the said notification, it was provided that the Bombay Industrial Disputes Act, 1938, shall apply to the 'Cotton Textile Industry' as specified below:
(i) All concerns using power and employing twenty or more workers which are engaged in cotton spinning;
(ii) All concerns using power and employing twenty or more workers which are engaged in cotton weaving with or without an admixture of silk, rayon, artificial silk or one or more of these.
(d) Sometime in 1945, Sub-clause (c) was incorporated in the said Notification dated 30th May, 1939. It was thereby provided that all mechanics' shops, whether situate within or outside the precincts of and forming integral part of the concerns falling under Clause (a) or (b) were also covered by the said Act i.e. the Bombay Industrial Disputes Act, 1938. The abovereferred Clause (c) was later on amended sometime in the year 1950 by bringing, dyeing, bleaching and printing departments within the scope and ambit of the notification.
(e) Sometime in the year 1947, the Maharashtra Act No. XI of 1947, also known as the Bombay Industrial Relations Act, 1946 came into force. ThisAct also received the assent of the Governor- General on 9th April, 1947. Section 122 of the Bombay Industrial Relations Act, 1946 provided that theBombay Industrial Disputes Act, 1938 was repealed, subject to the saving clause contained therein. By virtue of the said saving clause, the abovereferred Notification dated 30th May, 1939continued and continues to be in force. The said Notification has been amended from time to time. The saidNotification dated 30th May, 1939 was deemed to be a Notification issued under the Bombay Industrial RelationsAct, 1946, and the said Notification continues to operate. Section 2(4) of the said Bombay Act No. XI of 1947empowered the State Government to extend the provisions of the said Act to all or any other industries.
(f) Section 3(13) of the said Act, i.e. the Bombay Industrial Relations Act, 1946, defines the expression 'employee'. Section 3(14) of the said Act; defines the expression 'employer' -Section 3(19) of the said Act defines the expression 'industry'. Section 3(37) of the said Act defines the expression 'undertaking'.
(g) On 2nd February, 1960, the then Government of Bombay issued Notification No. BIR-3459-I incorporating Clause (d) in the abovereferred Notification dated 30th May, 1939. The said additional Clause (d) as incorporated on 2nd February, 1960 reads as under:
(d) 'All the offices, whether situated within or outside the precincts of the concerns failing under Clause (a) or (b)'.By a Notification dated 4th October, 1962 the newly incorporated Clause (d) in the said notification was deleted.
(h) On 26th May, 1966, the following clause was newly added in the said Notification as Clause (d). The said Clause (d) as incorporated by the amending Notification dated 26th May, 1966 is still in force. The said clause reads as under:
(d)(i) All departments engaged in silk or artificial silk, weaving, manufacture of hosiery or other knitted articles made out of cotton yarn or man-made fibre, manufacture of blankets with cotton waste with or without admixture of cotton and wool, weaving with admixture of man-made fibre, such as Terylene, Nylon, Decron, Orion. (ii) All departments doing winding, warping, drawing-in, sizing, reeling, doubling.
(iii) All departments manufacturing leather cloth and departments doing folding including calendaring and baling. 'Whether situated within or outside the precincts of the concerns falling under Clause (a) or Clause (b), provided such departments form an integral part of such concerns.'
(i) On 2nd February, 1968, Clause (e) was added in the said Notification dated 30th May, 1939. We are not concerned with Clause (e) of the said Notification in this case.
5. It is obvious from the plain and simple terminology of Notification dated 30th May, 1939 that the said Notification dated 30th May, 1939 is not applicable to the 'Cotton Textile Industry' in entirety. The words used in the opening part of the said Notification are 'shall apply to the Cotton Textile Industry' as specified below:-
If the said Notification is construed to be applicable to Cotton Textile Industry in entirety such a construction will do violence to the language of the said Notification, viz., the expression 'as specified below'. The abovereferred words are words of limitation to some extent. The Legislative history of this very notification and the language used by the framers of the notification in Clause (d) of the notification itself indicates that the entire Cotton Textile Industry as such is not taken within the sweep of the notification. The relevant portion of Clause (d) reads as under:-
'Whether situated within or outside the precincts of the concerns falling under Clause (a) or Clause (b) provided such departments form an integral part of such concerns'. It is, therefore, quite clear that the said notification is applicable only to activities specified therein, activities which reasonably incidental thereto and the activities which form an integral part of Spinning and Weaving and other activities specified in the notification. It is, therefore, not possible to accept the extreme submission of Mr. S.H. Kapadia, the learned counsel for the petitioner, to the effect that the petitioners are covered by the Act of 1946, merely because of retail cloth shop coming within the definition of expression 'industry' under Section 3(19) of the Act without anything more.
6. Several cases have been cited by the learned counsel on either side and written submissions have also been filed by the counsel. In my opinion, it is necessary in the first instance, to refer to the relevant judgments of the Hon'ble Supreme Court. Mr. Patel, the learned counsel for the petitioners, heavily relied upon the judgment of the Hon'ble Supreme Court in the case of The Ahmedabaa Mfg. & Calico Co. Ltd. v. Ram Tahel Ramanand and Ors. reported in 1972 II LLJ 165. In this case, the employees of the appellant company (i.e. the respondents therein) made the necessary applications before the Labour Court under Section 79 of the Bombay Industrial Relations Act, 1946, relying upon the same very notification i.e. Notification No. 2847/34-A dated 30th May, 1939. The respondents were working as malis employed by the contractors looking after the bungalows of the officers of the appellant company. The High Court of Gujarat in a writ petition filed under Article 227 of the Constitution of India rejected the contention of the learned counsel for the appellant-company that the application of the Bombay Industrial Relations Act must be restricted only to those workers who were directly engaged in the manufacture of textile fabrics. Both before the High Court of Gujarat as well as before the Hon'ble Supreme Court, the question arose as to whether the activity undertaken by the employees could be considered as a part of the Mill undertaking within meaning of the abovereferred Notification dated 30th May, 1939. It will be clear from the observations made in paragraph 8 of the abovereferred judgment that in this case also learned counsel for the appellants-employers had contended that having regard to Section 2(3) of the Bombay Industrial Relations Act, read with the above-referred Notification dated 30th May, 1939, the said Act applied only to Cotton Spinning and Cotton Weaving department, mechanics shops, dyeing and bleaching and printing departments and to no other activities of the appellant-company. This judgment does not concern itself with interpretation of Clause (d) of the said Notification as such. It was held by the Hon'ble Supreme Court that the activity in question was reasonably attributable to the textile undertaking in its ordinary course of business. It was held that the Court must adopt a realistic and pragmatic approach for resolving the controversy. It was observed by the High Court of Gujarat in the judgment under appeal that the activity undertaken by the undertaking, apart from its manufacturing activity, may nave been taken voluntarily or as a result of its statutory duty. Relying upon the observations made by the Hon'ble Supreme Court in the case of J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. Badri Mali and Ors.. reported in 1916 II LLJ 436. It was held by the Hon'ble Supreme Court in the abovereferred case that me bungalows and the gardens on which the malis worked were a kind of amenity supplied by the appellant-Mills to its officers and the malis were thus engaged in operations incidentally connected with the main industry carried on by the employer. It is, therefore, clear that if the activity in which the applicant is engaged is reasonably connected with the main industry carried on by the employer, such activity is liable to be considered as an integral part of the concern engaged in the manufacturing activity of the undertaking. Every Mill Undertaking may not run a retail cloth shop and may not market its products through its retail shop. It is immaterial that a retail cloth shop is not absolutely essential for running of a Textile Undertaking. Since the business of running the retail cloth shop can be considered as a business reasonably and incidentally connected with the manufacturing activity of the concern, it will have to be treated as integral part of the Spinning and Weaving activity or an activity which is incidental to an activity of Spinning and Weaving referred to in Clause (a) and (b) of the said notification.
7. In the abovereferred judgment, the Hon'ble Supreme Court also heavily relied upon the observations made by Gajendra-gadkar J, speaking on behalf of the Hon'ble Supreme Court in J.K. Cotton Spg. & Wvg. Mill's case (supra) at Page 740. In this case also the question before the Court was whether the malis looking after the bungalows and the gardens of the textile industry could be considered as workers within the meaning of Section 2 of the Uttar Pradesh Industrial Disputes Act, 1947. In other words, the question before the Court was as to what was the nature of the activity in which the malis (the respondents therein) were engaged. It was held by the Hon'ble Supreme Court that the malis were engaged in the activity connected with the mam industry carried on by the employer (the appellants therein). It was held that the case of malis was similar to that of the bus drivers. It was held that the relation of the work carried on by the malis with the industry was not remote, indirect or farfetched. In paragraph 15 of the abovereferred judgment of the Hon'ble Supreme Court in The Ahmedabad Mfg. & Calico Ptg. Co. 's case (supra) , it was inter alia observed as under:-'As observed in J.K. Cotton Spg. & Wvg. Mill's case : [1964]3SCR724 , the problem has to be looked at from the considerations of social justice which has become an integral part of our industrial law. It demands a realistic and pragmatic approach for resolving the controversy between capital and labour by weighing it on an even scale with the consciousness that industrial operations in modern times have become complex and complicated and for the efficient and successful functioning of an industry various amenities for those working in it are deemed as essential for a peaceful and healthy atmosphere. The High Court has left open for the decision by the Industrial Court the question as to the nature of the work done by the respondents for determining whether or not. In view of the fact that they are employed through a contractor and not directly, their case falls within Section 3(13) of the Bombay Industrial Relations Act, 1946'.
8. It is now necessary to refer to the judgments of the Hon'ble Supreme Court relied upon by the learned Counsel on either side, applying the test of functional integrality in different situations. The judgment of the Hon'ble Supreme Court in the case of Associated Cement Companies Limited, Chaibassa Cement Works, Jhinkpani v. Their Workmen reported in : (1960)ILLJ1SC appears to be quite helpful and directly in point. In this case, the question before the Court was as to whether the workers of the appellant Cement factory were entitled to lay-off compensation or not. Section 25-E of the Industrial Disputes Act, 1947, provided that no compensation shall be paid to a workman who had been laid-off if such laying-off was due to a strike on the part of workmen in another part of the establishment. It was the contention of the management that the workers had resorted to strike in the limestone quarry on which the appellant-cement factory depended exclusively for the supply of limestone, the question before the Court, therefore, was as to whether the quarry could be considered as another part or the same establishment. At page 716 S.K. Das J., speaking for the Bench of the Hon'ble Supreme Court, observed that it was perhaps impossible to lay down any one test as an absolute and invariable test of 'functional integrality'. It was held that several tests were required to be considered before the issue of functional integrality was answered one way or the other. Some of such tests referred to in this judgment are as under:-
(a) Geographical proximity.
(b) Unity of ownership,
(c) Unity of employment,
(d) General Unity of purpose, etc.
It was held by the Hon'ble Supreme Court that the unity of ownership, management and control was an important test. It is possible that some of these tests are satisfied in a given situation and some other tests are not satisfied. In this case, it was held by the Hon'ble Supreme Court that the quarry was part of the same establishment and the abovereferred tests were satisfied. In our case, the test of geographical proximity is satisfied. In our case, the test of unity of ownership, management and control is also satisfied. The only dispute is about the alleged conclusiveness of the test formulated by the learned counsel for the employer as under:-
'Whether the Mill can exist without a retail cloth shop?'
The learned counsel submitted that if the Mill could exist without a retail cloth shop and the closure of retail shop did not necessarily lead to the closure of the Mill, it followed that the test of functional integrality between the Mill and the retail cloth shop was not satisfied. It is not possible to accept this submission or to apply this test in isolation, ignoring several other tests of functional integrality based on practical and pragmatic considerations in light of different situations. Is it absolutely necessary for a textile undertaking to employ mails and to provide gardens or bungalows for its employees? Is it absolutely necessary for Textile Mills to provide canteens. Is it absolutely necessary for the Mill to open separate offices in the vicinity to procure raw material or market its manufactured products. It may be a matter of discretion for the management to market its products without opening of a retail cloth if it so decides. The test to be applied is as to whether there is a reasonable business connection between the manufacturing activity referred to in Clause (a) or Clause (b) of the said Notification dated 30th May, 1939 and the marketing of the goods by the company at its own retail cloth shop. If there is a reasonable business connection between the two and the activities of the Mill and the retail cloth shop are reasonably interconnected, that is sufficient in my opinion for the purpose of satisfying the test of functional integrality in so far as the interpretation of the said Notification dated 30th May, 1939 is concerned. Having regard to the concept of social economic justice and the object of the Act and the decided cases which have extended the benefit of the labour legislation to all employees who are engaged in incidental and ancillary activities, it is desirable to adopt a construction which will promote the legislative mission rather than to take a view which would frustrate the same.
9. A reference may now be made to another judgment of the Hon'ble Supreme Court in the case of the Saraspur Mills Co. Ltd. v Ramanlal Chimanlal and Ors. reported in : (1973)IILLJ130SC . In this case, it was held that the appellant Mills was required by statute to maintain a canteen for its employees. The canteen was run by a co-operative society. It was held that the employees of that society were employees of the appellant Mills for the purpose of emoluments and other ancillary benefits. In this case also, the ratio of the judgment of the Hon'ble Supreme Court in the case of The Ahmedabad Mfg. and Calico Pig. Co. Ltd v. Ramtahel Ramanand and Ors. reported in : (1972)IILLJ165SC was applied. It has been argued by the learned counsel for the Respondent No. 2 Mrs. Doshi that the cases interpreting Section 3(13) of the Bombay Industrial Relations Act, 1946 cannot be useful for the purpose of interpreting and applying Clauses (a), (b) or (d) of the said Notification dated 30th May, 1966. In my judgment, the definition of the expression 'employee' set out in the Bombay Industrial Relations Act, 1946, is necessarily interlinked with the question pertaining to determination of nature of activity carried on by the employee. In the matter before the Hon'ble Supreme Court in The Ahmedabad Mfg. & Calico Pig. Co. 's case reported in 1972 II LLJ 165 (supra), the question considered was not merely about the status of the mails. The question considered was not merely about the application of Section 3(13) of the Bombay Industrial Relations Act. The question considered also was as to whether the activity in which the malis were engaged could be considered as ancillary or incidental to the activity of the main industry. Whether such ancillary activity was carried on by the company under compulsion of a statute or was undertaken voluntarily makes no difference. It is specifically so stated by the Apex Court in the judgment. It was so observed by the Hon'ble Supreme Court in the abovereferred case : (1972)IILLJ165SC (supra), which was followed in The Saras'pur Mills Co. 's case (supra).
10. It is also necessary to refer to the judgment of the Hon'ble Supreme Court in the case of S.G. Chemical and Dyes Trading Employees' Union v. S.G. Chemicals and Dyes Trading Ltd. and Anr. reported in : (1986)ILLJ470Kant . In this case, the question arose as to whether Churchgate Division of the 1st Respondent Company was liable to be treated as 'one establishment' under Section 25(0) of the Industrial Disputes Act, 1947. The Trombay factory of the 1st Respondent-Company carried on the work of manufacturing and processing dyes. The Churchgate Division of the 1st Respondent-Company looked after the purchases of raw materials required for the Trombay factory. The Churchgate Division also looked after the marketing and manufacturing of the goods processed at the Trombay factory. The question before the Court was as to whether the Trombay factory and the Churchgate Division constituted one establishment. As a matter of fact, marketing and selling of the products of the Ration factory belonging to Ambalal Sarabhai Enterprises Ltd. was also looked after by the Churchgate Division of the 1st Respondent-Company. It was held by the Hon'ble Supreme Court that there was a complete functional integrality between the Trombay factory and the Churchgate Division of the 1st Respondent-Company. It was held in this case that the Trombay factory could not have conveniently existed and functioned without the Churchgate Division. It is, therefore, not correct to state that department of the textile undertaking cannot be considered as integral to the manufacturing concern if the manufacturing concern can exist on closure of the department. In this case also, the Trombay factory could exist and make some other arrangements for purchase of the raw materials earlier purchased from the factory itself or by placing its order in some other manner. The test which was applied by the Court was a practicable, realistic and pragmatic test to determine the main question as to whether there was a functional integrality and whether, as a matter of convenience also, the Churchgate Division could be considered as integral to the factory. It was held by the Court in this case that the fact that the Churchgate Division marketed the goods of some other company was irrelevant.
11. The learned counsel for Respondent No. 2 invited my attention also to the judgment of the Hon'ble Supreme Court in the case, Isha Steel Treatment, Bombay v. Association of Engineering Workers, Bombay and Anr. reported in : (1987)ILLJ427SC in support of her contention regarding the test to be applied for the purpose of determining the question of functional integrality to units. In this case, the management closed down one of their units. The Industrial Disputes was thereafter raised by the workmen who claimed that Section 25-G of Industrial Disputes Act, 1947 was attracted as the two units of the same employer had functional integrality and were liable to be treated for all purposes as one establishment. Having regard to the facts of that case, it was held by the Supreme Court that Section 25-G had no application to the case merely because both the units were controlled by the same employer. It was also observed in this case that the other unit continued to function normally notwithstanding closure of one of the two units and as such it could not be said that the other unit could not function after the closure of the unit. Whether one of the units can function after the closure of the other unit is undoubtedly one of the several tests for the purpose of considering the question of functional integrality under Section 25-G of Industrial Disputes Act, 1947. This test however is not the only test and at any rate the retail cloth shop cannot function if the Mill is closed. It is obvious from Paragraph 7 of the judgment in this case that the ratio of the judgment of the Supreme Court in the case of S.G. Chemicals & Dyes Trading Employees' Union v. S.G. Chemicals & Dyes Trading Ltd. continues to be good law. In my judgment, the ratio of the judgment in the case of S.G. Chemicals & Dyes Ltd. is more in the point having regard to the facts of this case. It must also be not forgotten that cases interpreting similar expressions under another statute have limited relevance and cases interpreting the provisions of the same statute are directly relevant. Having regard to the ratio of the judgment of the Supreme Court in the case of The Ahmedabad . v. Ram Tahel Ramanand and Ors. reported in 1972 II LLJ 165, and certain other judgments, including the judgment of the Hon'ble High Court of Gujarat, which was approved in the above-referred Supreme Court case of The Ahmedabad Mfg. & Calico Printing Co. Ltd. I am of the opinion that in this case the test of functional integrality between the retail textile shop in the city opened, by the textile undertaking to market its own manufactured product and the Mill itself is more than satisfied and the employees of the retail cloth shop cannot be deprived of the benefit of Labour Welfare Legislation merely by registering such a retail cloth shop under the Shops and Establishments Act.
12. It cannot be totally ignored that the 2nd Respondent-Corporation took charge of the retail shops also and the petitioners continued to be the employees of the Textile Corporation at least for some time till the disputes arose which led to the filing of this application. In my judgment, the test formulated by the Labour Court in this case to the effect that conducting of a retail shop was not necessary for running a Spinning or Weaving Mill as criteria for non-applicability of the Act is not a correct test. Running of a retail cloth shop may not be absolutely necessary for running the textile undertaking. It may be convenient and desirable what was not necessary many years ago may become necessary in later years. The question to be asked is as to whether from the point of view of business efficacy the relevant test is satisfied. In other words, if the department whether head office, any other office or the retail shop can be considered as reasonably connected with the undertaking and if there is a functional integration between the two in the practical sense of the term for purpose of achieving better business results, can the employees engaged in such integral and connected activity be still deprived of the benefits of Labour Welfare Legislation? It is obvious that the answers must be in negative.
13. I must now refer to some of the judgments of the Labour Appellate Tribunal and the Industrial Court. Reference was made to the judgments of the Labour Appellate Tribunal in the case of The Elphinstone Spinning and Weaving Mills Company Ltd. v. Sri S.M. Sambie and 9 Ors. clerks (The Bombay Textile Clerks' Union) reported in 1953 I LLJ 752. It was held in this case that the employees of a grain shop in a Textile Mill, though employed by me contractor, were the employees within the meaning of the Bombay Industrial Relations Act, 1946. It was observed in this case that even though a grain shop could not be previously regarded as 'ordinary part of the undertaking', times and conditions had changed ever since food scarcity had raised a problem and the employees of the grain shop were liable to be treated as the employees covered under the Bombay Industrial Relations Act, because the activity in question bad by this time acquired the character of ordinary part of the undertaking. The question to be asked is as to whether the retail cloth shop run by the appellant-Mill itself to market the goods manufactured by it is anything else other than business activity of the undertaking in ordinary course of running the Mill. Reference was made to another judgment of the Labour Appellate Tribunal in the case of Simplex Mills Company Ltd. v. Their Workmen reported in 1955 II LLJ 46. In this case, the question before the Tribunal was as to whether the head office of a Textile Mill could be treated as a 'concern' within the meaning of the said expression used in Clause (a) or Clause (b) of the abovereferred Notification, dated 30th May, 1939, as it then stood. It was held by the Tribunal that the word 'concern' used in Clause (a) or Clause (b) of the said notification was not intended to be used in the comprehensive sense. It was observed in this case that if the expression 'concern' used in Clause (a) or Clause (b) of the said notification was intended to be used in the comprehensive sense, it would have been necessary to incorporate Clause (c) in the said notification by an amendment. The expression 'concern' used in Clause (a) or Clause (b) of the said notification will nave to be interpreted as manufacturing concern. The activity referred to in Clause (a) or Clause (b) of the said notification will have to be restricted to the activity specified therein plus such other activity which can be recognised reasonably connected or incidental, as explained by the Hon'ble Supreme Court in the judgment : (1972)IILLJ165SC (supra). In this case, there was no question of interpreting the later part of Clause (d) of the said notification, which addition added new dimensions to the width of the said notification. Functional integrality in actual working is now sufficient for considering new department of the manufacturing concern as covered under the Bombay Industrial Relations Act and the said Notification. It may be that in a given case the head office of a Mill or a Company situated at a far-away place from the location of the Mill undertaking, cannot be considered as a department integral to the Mill. It may be that several other activities are conducted at the head office, including the activities of several other concerns under the same group of management. No assistance can, therefore, be derived from this case for the purpose of interpreting the Notification dated 30th May, 1939.
14. Now let me refer to the judgment of the Industrial Court, Bombay in a case directly concerning the retail cloth shop. The Industrial Court, Bombay, decided this question in the case of Devjibhai M. Chokshi v. Ahmedabad . reported in 1958 II LLJ 126. It was held in this case that the retail cloth shop could not be considered as covered under Clause (a) or Clause (b) of the said Notification dated 30th May, 1939. At that time, Clause (d), newly incorporated in this notification, was not a part of this notification. It was held by the Industrial Court that the normal mode of disposal of cloth made in a Mill was through agents and retail cloth shops were not necessary to the running of Spinning and Weaving concern. I have already held that the test of 'not necessary' or 'necessary' is not a valid test to be applied for the purpose of interpreting the abovereferred notification. It may be that the activity of a particular department is not necessary for the textile undertaking, as the textile undertaking may look after that activity in the Mill premises itself. It may be that a separate department can be started by opening of a retail cloth shop at some convenient place in the city. Therefore, the relevant question cannot be answered by applying the test as to whether that department is necessary or not necessary for running of the undertaking. In my judgment, this case does not lay down the law correctly and in any event it stands overruled by the later judgment of the Hon'ble Supreme Court : [1964]3SCR724 (supra) followed in the judgment of the Hon'ble Supreme Court : (1972)IILLJ165SC (supra). In any event, I expressly disagree with the ratio of this judgment and overrule the same.*/
15. In the abovereferred judgment of the Industrial Court, a reference is to be found to a Notification dated 1st October 1952 issued by the then Government of Bombay pertaining to the Sugar Industry. To that notification a note was appended clarifying that all services or emoluments connected with the conduct of the industry shall be deemed to be a part of the industry when engaged in or by an employer engaged in that industry. It was held in this case by the Industrial Court that no such note is incorporated in the Notification dated 30th May, 1939. It is not possible to interpret Notification dated 30th May, 1939 by comparing it with same other notification containing a note incorporated therein for abundant caution.
16. In this case, Mrs. Doshi the learned, counsel for the Respondent No. 2 has invited my attention to several notifications issued by the then Government of Bombay before the issuance of the said Notification dated 1st October, 1952 where such a note or explanation is found appended. It has been submitted by the learned counsel that the legislative intention was therefore clear. According to the learned counsel in the absence of such note, operation of clauses (a) and (b) of the said Notification dated 30th May, 1939 cannot be extended by implication, particularly having regard to the use of the words 'As specified below' in the opening part of the said Notification. Sometimes notes and explanations are appended to the Notifications as a matter of abundant caution. If the test of functional integrality is satisfied in this case or if the activity in question is liable to be considered as 'reasonably, ancillary and incidental to the main activity of the industry, the employees cannot be deprived of the benefit of the provisions contained in the Bombay Industrial Relations Act, 1946, merely by comparing of the notification issued in respect or other industries. Such an exercise is irrelevant for ascertaining true meaning of the notification. I have no hesitation in holding that the entire reasoning of the Industrial Court, with respect in the abovereferred cases is indirect conflict with the cases reported in 1964 SCR at page 724 (supra) and 1972 II LLJ 165 (supra). The view taken by the Industrial Court is incorrect and it runs counter to the test laid down in the judgments of the Hon'ble Supreme Court in the subsequent cases to which I have already made a reference.
17. Mrs. Doshi, learned counsel for the Respondent No. 2 also invited my attention to the judgments of this Court in the cases arising under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. My attention was invited to the Division Bench judgment of Kanade and Pendse JJ, in the case of Kerala Rubber Company Pvt. Ltd. v. The Regional Provident Fund Commissioner and Ors. (Special Civil Application No. 198 of 1978) and also the judgment of Bharucha J, in The Premier Mills (CBE) Limited v. N.C. Desai, Regional Provident Funds Commissioner, Maharashtra and Goa, Bombay and Ors. (Writ Petition No. 415 of 1981) delivered on 3rd August, 1981 and 2nd November, 1984. In the first instance, the scheme and object of the Employees' Provident Funds and Miscellaneous Provisions Act is totally different. It was observed by Bharucha J, in the abovereferred case that the crucial aspect was as to whether one establishment could survive or exist even though the other was closed. A retail cloth shop cannot survive if the Mill is closed. What is emphasised by the learned counsel is that the only thing to be inquired into is that the Mill need not be closed if the retail shop is closed. With respect, I do not agree that application of this test can conclude the issue. As observed by S.K. Das, J. in the case : (1960)ILLJ1SC (supra), no one test can answer the question: There cannot be a single uniform test for the purpose of deciding as to whether there was functional integrality or not. Various tests are to be taken into consideration and if after applying the majority of these cases a practical and reasonable person would say that there is functional integrality between the two sources, that would be sufficient. In the abovereferred two judgments the Hon'ble Courts have not held that this test about survival of the one without the other is the only test and even if this test is to be applied, it is not held that the question cannot be asked as to whether the department in question can survive independently of the main industry or not. If the main industry is closed, the department cannot survive. That also is one of the relevant tests, though not the sole test. It must be stated that in the abovereferred judgment in Special Civil Application No. 198 of 1978 (supra) Pendse J., speaking for the Bench, in terms applied the various tests laid down in the case : (1960)ILLJ1SC (supra). The abovereferred judgments of the Hon'ble Supreme Court in the case : (1960)ILLJ1SC (supra) and also the recent judgment of Madon J, in the case reported in 1986 LIC 863 (supra) continue to operate in the field. These cases do not lay down that if it was not necessary for the Mill to have a retail cloth shop, the retail cloth shop cannot be considered as integral to the Mill. These cases do not support the submission of the employer.
18. I think I have discussed enough. Even if two views were possible, keeping the observations of the Hon'ble Supreme Court in the judgment of Gajendragadkar J., in : [1964]3SCR724 (supra) in mind and the exhortation to apply the law so as to ensure social and economic justice, I must lean in favour of the employees. If there was only one possible view as canvassed for by Mrs. Doshi, the learned counsel for the Respondent No. 2 I would have been duty bound to uphold that view and dismiss that petition. In my humble opinion, that is not so.
19. Having regard to the above discussion, I make the rule absolute and quash and set aside the orders passed by the Labour Court. It is unfortunate that the application of the petitioners is still at the threshold and the matter will have to be gone into on merits. The Labour Court is directed to dispose of the application expeditiously and as far as possible within a period of ten months from today.
20. Since the operation of this judgment and order shall remain stayed for a period of twelve weeks from today, if the respondents file an appeal against this judgment, they shall serve one week's notice on the Advocate for the petitioners.
21. I cannot part with this case without observing that I am thankful to the learned counsel on both sides who have given their valuable assistance to me and cited all relevant case law and invited by attention to the relevant history of the Labour Legislation and the said Notification dated 30th May, 1939 in great detail.
22. Having regard to the facts and circumstances of these cases, there shall be no order as to costs of these petitions.