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Issues Involved:
1. Validity of the notification dated November 16, 1951, referring the dispute to the adjudication of the Industrial Tribunal. 2. Existence of a concluded and binding agreement to pay the workmen 25% of the profits from the sale transaction. 3. Entitlement of the workmen to compensation for termination of services on the closure of the business. Detailed Analysis: Issue 1: Validity of the Notification Dated November 16, 1951 The appellant contended that the notification issued by the U.P. Government under Section 3 of the U.P. Industrial Disputes Act was ultra vires, arguing that there was no "industrial dispute" as defined in Section 2(k) of the Industrial Disputes Act, since the business had been closed and the employer-employee relationship had ceased. The court held that the entire scheme of the Act assumes the existence of an industry and provides for various steps when a dispute arises in that industry. The court cited previous judgments, emphasizing that the provisions of the Act apply only to existing industries. However, the court clarified that the power of the State to make a reference under Section 3 should be determined with reference to the date on which the right, which is the subject-matter of the dispute, arises, and not the date on which the reference is made. Therefore, the notification dated November 16, 1951, was valid as the dispute arose when the industry was still operational. Issue 2: Existence of a Concluded and Binding Agreement The Tribunal initially found that there was no concluded agreement between the parties based on the correspondence. The appellant's offer to pay 25% of the profits was contingent on the withdrawal of the strike notice, which the workmen did not formally accept. The Tribunal noted that the workmen's actions did not constitute acceptance of the offer. Despite this, the Tribunal later concluded that the workmen's continued service till the end of February 1951 provided consideration for the promise, making it a binding agreement. The Supreme Court found this reasoning flawed, stating that the question of consideration arises only if there was a concluded agreement, which was not the case here. Therefore, there was no binding agreement to pay the workmen a share of the profits. Issue 3: Entitlement to Compensation for Termination of Services The court addressed whether the termination of services on the closure of the business constituted "retrenchment" under Section 2(oo) of the Industrial Disputes Act. The court noted that retrenchment typically implies the continuation of business with a reduction in staff, not a complete closure. The court referenced previous judgments and held that the definition of retrenchment does not include discharge due to the closure of business. The court also mentioned that the relevant provisions of the Industrial Disputes (Amendment) Act, 1953, which might support the workmen's claim, did not have retrospective effect. Consequently, the workmen were not entitled to compensation under the law as it stood in March 1951. The Tribunal's opinion that the workmen should not be awarded compensation due to their conduct was upheld. Conclusion: The Supreme Court allowed the appeal, setting aside the award of compensation to the workmen. The court emphasized that the notification referring the dispute to the Industrial Tribunal was valid, there was no concluded agreement for profit-sharing, and the termination of services on the closure of the business did not constitute retrenchment under the applicable law. The parties were directed to bear their own costs throughout.
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