civil appellate jurisdiction civil appeal number 87 of 1958.
appeal by special leave from the award dated october 10
1956 of the industrial tribunal bihar patna in reference
number 6 of 1956.

j. kolah s. n. andley and rameshwar nath for the
appellants. c. ghose and p. k. chatterjee for the respondents. 1959. september 11. the judgment of the companyrt was
delivered by

k. das j.-this appeal by special leave from an award
dated october 10 1956 made by the industrial tribunal
bihar raises an important question of interpretation in the
matter of a disqualification for lay-off companypensation under
s. 25e read with s. 25c of the industrial disputes act 1947
 hereinafter called the act  and so far as we knumber this is
the first case of its kind in which the expression in
anumberher part of the establishment occurring in cl.  iii
of s. 25e has companye up for an authoritative interpretation. the facts are simple and are shortly set out below. the
associated cement companypanies limited hereinafter called the
company have a number of cement factories in different
states of the indian union as also in pakistan. there are
two such factories in the state of -bihar one at khelari
and the other at a place called jhinkpani in the district of
chaibasa in bihar. the latter factory is companymonly knumbern as
the chaibasa cement works. there is a limestone quarry
owned by the same companypany situate about a mile and a half
from-the chaibasa cement works the quarry being knumbern as
the rajanka limestone quarry. limestone is the principal
raw material for the manufacture of cement and the chaibasa
cement works depended exclusively for the supply of
limestone on the said quarry. at the time relevant to this
appeal there were two classes of labourers at the quarry
those employed by the companypany through the management of the
chaibasa cement works and others who were engaged by a
contractor. there was one union knumbern as the chaibasa
cement workers union hereinafter called the union of
which the companypanys labourers both at the cement works and
the quarry were members. there was anumberher union companysisting
of the companytractors labourers which was knumbern as the a. c.

limestone companytractors mazdoor union. on january 3
1955 the union made certain demands on the management on
behalf of the labourers in the limestone quarry but these
were rejected by the management. then by a subsequent
letter dated february 18
1955 the general secretary of the union gave a numberice to
the manager of the chaibasa cement works to the effect that
the union proposed to organise a general stay-in-strike in
the limestone quarry from march 1 1955 if certain demands
details whereof are unnecessary for our purpose were number
granted on or before february 281955. a similar numberice was
also given on behalf of the a.c.c. limestone companytractors
mazdoor union. these numberices led to certain efforts at
conciliation which however failed. on february 24 1955
the management gave a numberice to all employees of the
chaibasa cement works in which it was stated that in the
event of the strike materialising in the limestone quarry
it would be necessary for the management to close down
certain sections of the factory at jhinkpani on account of
the number-supply of limestone the numberice further stated that
in the event of such closure it would be necessary to lay
off the workers number required during the period of closure
for the sections companycerned. the strike companymenced on march
1 1955 and lasted till july 4 1955. on march 25 1955
the management wrote to the general secretary of the union
intimating to him that the workers in certain departments
referred to in an earlier letter dated march 19 1955 would
be laid-off with effect from april 1 1955. on march 28
1955 the management gave the lists of employees who were to
be laid-off with effect from april 1 1955 and they were
actually laid-off from that date. during the period of the
strike fresh efforts at companyciliation were made and
ultimately the strike came to an end on july 5 1955 when
the central government referred the dispute between the
management and the workers of the limestone quarry to the
central industrial tribunal at dhanbad. this reference was
however withdrawn by mutual companysent in terms of a
settlement arrived at on december 7 1955. the details of
this settlement are number relevant to this appeal. thereafter a demand was made by the union for payment of
lay-off companypensation to those workers of chaibasa cement
works who had been laid-off for the period april 1 1955 to
july 4 1955. this demand
was refused by the management. this gave rise to an
industrial dispute which was referred by the government of
bihar under s. 10 of the act to the industrial tribunal
bihar. the terms of reference set out the dispute in the
following words-
whether the workmen of the chaibasa cement works are
entitled to companypensation for lay-off for the period from
april 1 1955 to july 4 1955.
the parties filed written statements before the industrial
tribunal and the only witness examined in the case was mr.
dongray manager of the chaibasa cement works jhinkpani. at this point it is necessary to read the two sections of
the act which relate to the right of workmen to lay-off
compensation and the circumstances in which they are
disqualified for the same. the right is given by s. 25c and
the disqualification is stated in three clauses of s. 25e
of which the third clause only is important for our purpose. we number proceed to read ss. 25c and 25e so far as they are
material for our purpose. s. 25c.  1  whenever a workman  other than a badli
workman or a casual workman  whose name is borne on the
muster rolls of an industrial establishment and who has
completed number less than one year of companytinuous service under
an employer is laid-off he shall be paid by the employer
for alldays during which he is so laid-off except for such
weekly holidays as may intervene companypensation which shall
be equal to fifty per cent. of the total of the basic wages
and dearness allowance that would have been payable to him
had he number been so laid-off. s. 25e. numbercompensation shall be paid to a workman who
has been laid-off-
 i
 ii

if such laying-off is due to a strike or slowing-
down of production on the part of workmen in anumberher part of
the establishment. number the central point round which the companytroversy between
the parties has raged is this. was the lay-off of the
workers in certain sections of the chaibasa cement works due
to a strike on the part of workmen in anumberher part of the
establishment within the meaning of cl.  iii  of s. 25e ? in
other words was the limestone quarry at rajanka part of the
establishment knumbern as the chaibasa cement works? the
contention of the management was and is that the cement
works and the limestone quarry form one establishment within
the meaning of cl.  iii  aforesaid. the companytention on
behalf of the workmen is that they are number parts of one
establishment but are separate establishments. the learned
chairman of the industrial tribunal held for reasons which
we shall presently discuss that the limestone quarry was
number part of the establishment knumbern as the chaibasa cement
works and the workmen in the latter were number disentitled to
lay-off companypensation by reason of cl.  iii  of s. 25e. the
correctness of this view is the principal point for decision
in this appeal. on behalf of the respondent workmen it has been companytended
that the companyclusion of the industrial tribunal that the
factory at jhinkpani and the limestone quarry at rajanka are
number parts of one establishment is a finding of fact and this
appeal should be disposed of on that footing. we do number
think that this companytention is companyrect and we shall presently
deal with it. we propose however to examine first the
relation between the limestone quarry at rajanka and the
cement factory at jhinkpani in the light of the evidence
given before the tribunal and the findings arrived at by it
because they will show the process of reasoning by which the
tribunal came to its final companyclusion. the evidence was really one sided and the only witness
examined was mr. dongray manager of the chaibasa cement
works. number the relation between the limestone quarry and
the factory can be companysidered from several points of view
such as  1  ownership  2  companytrol and supervision  3
finance  4  management and employment  5  geographical
proximity and  6  general unity of purpose and functional
integrality
with particular reference to the industrial process of
making cement. on all that above points mr. dongray gave
evidence. it was number disputed that the companypany owned the
limestone quarry as also the factory and there was unity of
ownership. mr. dongrays evidence further showed that there
was unity of companytrol management and employment. he said
that the limestone quarry was treated as a part and parcel
of the chaibasa cement works that is as a department
thereof and he as the manager was in overall charge of both
though there was a quarry manager in charge as a
departmental head under him. on this point mr. dongray
said-
there is a manager appointed for the quarries. the manager is working under me. the cement works itself
has about eight or nine departments under it. there are
heads of each department. the manager of the quarry has the
same status as the heads of other departments at the cement
works. this was supported by a circular letter dated march 11
1952 which said that the entire factory and the associated
quarries were under the sole companytrol of the manager who was
responsible for maintaining full output at econumberic companyt up
to the expected standard. the circular letter further
stated that all orders and companytracts were to be issued by
the manager for the working of the factory and quarries and
the relevant bills were to be passed by him. as to finance
and companyditions of employment mr. dongray said-
all requirements of the quarry are sent by the manager
there to the office of the cement. works and if they are
available in the cement works stores they are issued from
there otherwise i indent them from the bombay office or
purchase them locally. there is numberaccount office in the
quarries and their account is maintained in the cement
works office. i as manager of the chaibasa cement works
make payment for the indents or requirements of the quarries
stated above. the quarry has numberseparate banking account. the quarry manager is number entitled to operate banking
account apart from myself at the quarries there are daily-
rated workers and monthly-paid staff. to the daily-paid workers in the quarries the cashier of
the cement works or his assistant makes payment when
required. the monthly-paid staff of the quarries companye to
the cement office for receiving payment. in the cement
works we have got a system of allocation of work for
different jobs every day. it is done by the departmental
heads. same system prevails in the quarries also. the
quarry manager does the distribution as head of that
department. attendance register is maintained at the quarry
in the same way as it is done in the different departments
of the cement works. there is only one companymon pay sheet for
all the monthly-paid staff whether he is at the factory or
in the quarries. for the daily-rated workers we have got
different sheets department-wise and there is one such sheet
for the daily workers of the quarry as well. there is one
summary sheet of the payment showing the payment of all the
departments including the payment in the quarries as well. i have to send statutory intimation to the authorities under
the mines act regarding the quarries for working faces and
other accidents etc. the staff and workers working in the
quarries are transferable to the cement works according to
the exigencies of the work and also vice versa. there have
been a few instances of such transfers. the terms and
conditions of service for instance t. a. leave provident
fund gratuity etc. are same for workers in the cement
works as also the workers in the quarries. we got the
application of the statutory provident fund rules extended
to our department in the quarries also. the report of the
working of the quarry companyes to me from the manager there
from time to time. i as manager of the cement marks make
payments of royalties in in respect of limestones raised
from the quarries. payments for companypensation maternity
benefits accidents etc. in the quarry are made under my
authority by the factory office and number by the quarry
manager. exhibits 1 to 26 filed on behalf of the management which
showed the working of the quarry and the
factory supported the aforesaid evidence of mr. dongray
they showed as has been observed by the tribunal itself
that the management was maintaining one companymon account and
the final authority on the spot in respect of the quarry as
also in respect of other departments of the factory was mr.
dongray the manager. there were also other documents to
show that the transfer of members of the staff from the
quarry to the factory and vice versa was made by mr. dongray
according to the exigencies of service. it is worthy of
numbere here that the union itself gave numberice to the manager
of the factory with regard to the intended strike in the
limestone quarry. the geographical proximity of the
limestone quarry was never in dispute. it was adjacent to
the factory being situate within a radius of about a mile. as to general unity of purpose -and functional integrality
this was also number seriouly in dispute. mr. dongray said
that limestone was the principal raw material for the
manufacture of cement and the cement factory at jhinkpani
depended exclusively on the supply of limestone from the
quarry at rajanka. his evidence numberdoubt disclosed that
some excess limestone was sent to the factory at khelari as
well. on this point mr. dongray said-
limestone from this quarry is at times sent to the khelari
cement works but that is very rare and in small quantity. it is done only in cases of emergency. mr. dongray explained that the numbermal number of departmental
workers in the quarry before the strike was in the
neighbourhood of 250 but there were about 1000 workers
employed by companytractors. the number of daily-rated workers
was in the neighbourhood of 950 and the total monthly-paid
staff varied from 100 to 105. the wages paid to the workers
in the quarry were debited to limestone account of the
cement works and in the matter of companyting the amount spent
on limestone was also debited. the bank accounts however
were in the name of the companypany and the persons who were
entitled to operate on those accounts were mr. dongray the
manager the chief engineer and the chief chemist of the
cement works. all the aforesaid evidence oral and documentary was
apparently accepted by the tribunal as companyrect for the
learned chairman summarised the evidence of mr. dongray
without any serious adverse companyment. he then referred to
certain companytentions urged on behalf of the union which he
said were number without force. we may number state those
contentions. the first companytention was that under the
provisions of the act the appropriate authority in respect
of the factory at jhinkpani was the state government of
bihar whereas the appropriate authority in respect of the
limestone quarry which was a mine as defined in the mines
act 1952 was the central government. the second company-
tention was that there were two sets of standing orders one
for the workmen of the factory and the other for the workmen
in the limestone quarry. the third companytention was that the
limestone quarry had an office of its own and a separate
attendance register and the fourth companytention was that
under the provisions of the mines act 1952 mr. dongray was
an agent in respect of the limestone quarry and there was a
separate manager who was responsible for the companytrol
management and direction of the mine under the provisions of
s. 17 thereof. the learned chairman referred to certain
criticisms made in respect of the evidence of mr. dongray. one criticism was that though the companypany was the owner of
both the factory and the limestone quarry it had also
factories and limestone quarries at other places in india
and pakistan and if the test of one ownership were the
determining test then all the factories and limestone
quarries of the companypany wherever situtate would be one
establishment. this criticism was number however pertinent
because the companypany never claimed that all its factories in
different parts of india and pakistan formed one
establishment by reason of unity of ownership only. the
other criticism was that mr. dongray admitted that if
necessary in the interest of service the workmen at the
chaibasa cement works companyld be transferred to some other
factory of the companypany and therefore transferability was number
a sure test. this criticism was also number germane because
the companypany
never claimed that transferability was the only sure test. a third criticism also advanced on behalf of the workmen was
that mr. dongray admitted that all the accounts of the
different factories and limestone quarries of the companypany
were ultimately companysolidated into one profit and loss
account a criticism which in our view was equally number
pertinent to the question at issue. the learned chairman
then expressed his final finding in the following words-
from these and other admissions made by mr. dongray it
would appear that it is only for econumbery and companyvenience
that he was given charge of the companytrol of both the companycerns
but his capacity was dual. while he was companytrolling the
cement works as it works manager he had the companytrol of the
quarries as its agent under the mines act. it has also to
be numbered that if both these establishments which are
inherently different by their very nature are treated as one
and the same anumberalous position may arise in dealing with
the employees in the quarries in matters of misconduct and
such other things if there is a pendency of a dispute in the
cement works and vice versa. obviously the employees of
the cement works have to be dealt with by the state tribunal
while the employees of the quarries by the central tribunal. this also nullifies the force of the managements companytention
that both are parts of the same establishment. companysidering
these it has to be held that the companytention of the
management fails and that of the union must prevail. we number revert to the companytention urged on behalf of the
respondent that this appeal should be disposed of on the
footing that the final companyclusion of the industrial tribunal
is a finding of fact. the judgment of the tribunal itself
shows that the final companyclusion was arrived at by a process
of reasoning which involved a companysideration of several
provisions of the act and some provisions of the mines act
1952. the tribunal accepted a major portion if number all of
the evidence of mr. dongray but it felt companypelled to hold
against the appellant despite that evidence by reason of an
anumberalous position which it thought would arise if the
factory and the quarry were held to be one establishment. the question before the tribunal and this is also the
question before us was the true scope and effect of cl. of s. 25e of the act with particular reference to the
expression in anumberher part of the establishment
occurring therein. that question was number a pure question of
fact as it involved a companysideration of the tests which
should be applied in determining whether a particular unit
is part of a bigger establishment. indeed it is true that
for the application of the tests certain preliminary facts
must be found but the final companyclusion to be drawn
therefrom is number a mere question of fact. learned companynsel
for the respondent is number therefore justified in asking us
to adopt the short cut of disposing of the appeal on the
footing that a finding of fact should number be-disturbed in an
appeal by special leave. in this case we cannumber relieve
ourselves of the task of determining the true scope and
effect of cl.  iii  of s. 25e by adopting the short cut
suggested by learned companynsel. we proceed number to companysider what should be the proper tests
in determining what is meant by one establishment . learned companynsel for the respondent has suggested that the
test has been laid down by the legislature itself in the
explanation to s. 25a of the act. that explanation states-
in this section and in sections 25c 25d and 25e
industrial establishment means-

a factory as defined in clause  m  of section 2 of the
factories act 1948 or

a mine as defined in clause  j  of section 2 of the
mines act 1952 or

a plantation as defined in clause  f   of section
2 of the plantations labour act 1951.
the argument is that the explanation states in clear terms
what an industrial establishment means in certain sections
of the act including s. 25e and on a proper companystruction it
negatives the idea of a factory and a mineforming parts of
one establishment. curiously enumbergh s. 25e does number
contain the
expression industrial establishment. it uses the word
establishment only. we agree however that if s. 25e is
read with s. 25c and the definition of layoff in s. 2
 kkk  of the act as it must be read the word
establishment in s. 25e has reference to an industrial
establishment. on the footing that the word establishment
in s. 25e means an industrial establishment what then is
the effect of the explanation ? the companytention of the
respondent is that an industrial establishment may be either
a factory as defined in clause  m  of s. 2. of the factories
act 1948 or a mine as defined in cl.  j  of s. 2 of the
mines act 1952 or a plantation as defined in cl.  f  of s.
2 of the plantations labour act 1951 but it cannumber be a
combination of any two of the aforesaid categories
therefore a factory and a mine together as in the present
case cannumber form one establishment. this argument proceeds
on the assumption that the explanation while stating what
undertakings or enterprises companye within the expression
industrial establishment necessarily lays down the test of
one establishment also. we do number think that there is any
warrant for this assumption. the explanation only gives the
meaning of the expression industrial establishment for
certain sections of the act it does number purport to lay down
any test as to what companystitutes one establishment. let
us take for example a factory which has different
departments in which manufacturing processes are carried on
with the aid of power. each department if it employs ten
or more workmen is a factory within the meaning of cl.  m
of s. 2 of the factories act 1948 so is the entire factory
where 1000 workmen may be employed. the explanation merely
states that an undertaking of the nature of a factory as
defined in cl.  m  of s. 2 of the factories act 1948 is an
industrial establishment. it has numberbearing on the question
if in the example taken the factory as a whole or each
department thereof should be treated as one establishment. that question must be determined on other companysiderations
because the explanation does number deal with the question of
one establishment. in our view the true scope and effect
of the explanation is that it explains what categories
factory mine or plantation companye within the meaning of the
expression industrial establishment it does number deal
with the question as to what companystitutes one establishment
and lays down numbertests for determining that question. we
cannumber therefore accept the argument of learned companynsel
for the respondent that a factory and a mine a mine which
supplies the raw material to the factory can never be one
establishment under the act that we do number think is the
effect of the explanation to s. 25a. the act number having prescribed any specific tests for
determining what is one establishment we must fall back
on such companysiderations as in the ordinary industrial or
business sense determine the unity of an industrial
establishment having regard numberdoubt to the scheme and
object of the act and other relevant provisions of the mines
act 1952 or the factories act 1948. what then is one
establishment in the ordinary industrial or business sense
? the question of unity or oneness presents difficulties
when the industrial establishment companysists of parts units
departments branches etc. if it is strictly unitary in the
sense of having one location and one unit only there is
little difficulty in saying that it is one establishment. where however the industrial undertaking has parts
branches departments units etc. with different locations
near or distant the question arises what tests should be
applied for determining what companystitutes one
establishment. several tests were referred to in the
course of arguments before us such as geographical
proximity unity of ownership management and companytrol unity
of employment and companyditions of service functional
integrality general unity of purpose etc. to most of these
we have referred while summarising the evidence of mr.
dongray and the findings of the tribunal thereon. it is
perhaps impossible to lay down any one test as an absolute
and invariable test for all cases. the real purpose of
these tests is to find out the true relation between the
parts branches units etc. if in their true relation they
constitute one integrated whole we say
that the establishment is one if on the companytrary they do
number companystitute one integrated whole each unit is then a
separate unit. how the relation between the units will be
judged must depend on the facts proved having regard to the
scheme and object of the statute which gives the right of
unemployment companypensation and also prescribes
disqualification therefor. thus in one case the unity of
ownership management and companytrol may be the important test
in anumberher case functional integrality or general unity may
be the important test and in still anumberher case the
important test may be the unity of employment. indeed in a
large number of cases several tests may fall for company-
sideration at the same time. the difficulty of applying
these tests arises because of the companyplexities of modern
industrial organisation many enterprises may have
functional integrality between factories which are
separately owned some may be integrated in part with units
or factories having the same ownership and -in part with
factories or plants which are independently owned. in the
midst of all these companyplexities it may be difficult to
discover the real thread of unity. in an american decision
 donald l. numberdling v. ford motor companypany  1   there is an
example of an industrial product companysisting of 3800 or
4000 parts about 900 of which came out of one plant some
came from other plants owned by the same companypany and still
others came from plants independently owned and a shutdown
caused by a strike-or other labour dispute at any one of the
plants might companyceivably cause a closure of the main plant
or factory. fortunately for us such companyplexities do number present
themselves in the case under our companysideration. we do number
say that it is usual in industrial practice to have one
establishment companysisting of a factory and a mine but we
have to remember the special facts of this case where the
adjacent limestone quarry supplies the raw material almost
exclusively to the factory the quarry is indeed a feeder
of the factory and without limestone from the quarry the
factory cannumber function. ours is a case where all the tests
are fulfilled
 1   1950  28 a.l.r. 2d. 272.
as shown from the evidence given on behalf of the appellant
to which we have earlier referred. there are unity of
ownership unity of management supervision and companytrol
unity of finance and employment unity of labour and
conditions of service of workmen functional integrality
general unity of purpose and geographical proximity. we
shall presently deal with the legal difficulties at which
the tribunal has hinted and which have been elaborated by
learned companynsel for the respondent. but apart from them
the only fair companyclusion from the facts proved in the case
is that the chaibasa cement works companysisting of the factory
and the limestone quarry form one establishment. the
existence of two sets of standing orders and a separate
attendance register for the limestone quarry have already
been adverted to. they have been sufficiently explained by
mr. dongray particularly the existence of two sets of
standing orders by reason of the statutory requirement of
approval by different authorities-one set by the labour
commissioner bihar and other by the relevant central
authority. we proceed number to companysider the legal difficulties which
according to learned companynsel for the respondent stand in the
way of treating the limestone quarry and the factory as one
establishment. the tribunal has merely hinted at these
difficulties by saying that an anumberalous position will arise
if the quarry and the factory are treated as one
establishment. it is necessary to refer briefly to the
scheme and object of lay-off companypensation and the
disqualifications therefor as envisaged by the relevant
provisions in chapter va of the act. that chapter was
inserted by the industrial disputes  amendment  act 1953
 43 of 1953  which came into effect from october 24 1953.
the right of workmen to lay-off companypensation is obviously
designed to relieve the hardship caused by unemployment due
to numberfault of the employee involuntary unemployment also
causes dislocation of trade and may result in general
econumberic insecurity. therefore the right is based on
grounds of humane public policy and the statute which gives
such right should be
liberally companystrued and when there are disqualifying
provisions the latter should be companystrued strictly with
reference to the words used therein. number s. 25 gives the
right and there are three disqualifying clauses in s. 25e. they show that the basis of the right to unemployment
compensation is that the unemployment is involuntary in
other words due to numberfault of the employees themselves
that is why numberunemployment companypensation is payable when
suitable alternative employment is offered and the workman
refuses to accept it as in cl.  1  of s. 25e or the work-
man does number present himself for work at the establishment
as in cl.  ii  or when the laying-off is due to the strike
or slowing down of production on the part of workmen in
anumberher part of the establishment as in cl.  iii . obviously the last clause treats the work men in one
establishment as one class and a strike of slow-down by some
resulting in the laying-off of other workmen disqualifies
the workmen laid-off from claiming unemployment
compensation the reason being that the unemployment is number
really involuntary. it is against this background of the scheme and object of
the relevant provisions of the act that were must number
consider the -legal difficulties alleged by the respondent. the first difficulty is said to arise out of s. 17 of the
mines act 1952. that section says in effect that every
mine shall be under a manager having prescribed
qualifications who shall be responsible for the companytrol
management and direction of the mine it is then pointed out
that the word agent in relation to a mine means a person
who acts as the representative of the owner in respect of
the management of the mine and who is superior to a manager. the argument is that the limestone quarry at rajanka had a
manager under the mines act 1952 and mr. dongray acted as
the agent that is representative of the owner viz. the
company and this arrangement which was in companysonance with
the provisions of the mines act 1952 it is argued made
the factory and the quarry two separate establishments. we
are unable to accept this argument as companyrect. we do number
think that s. 17 of the mines act 1952 has any relevance
to the question whether the limestone quarry was part of a
bigger establishment. it prescribes the appointment of a
manager for purposes of the mines act 1952 and does number
deal with the question of one establishment within the
meaning of cl.  iii  of s. 25e of the act. the fact that
the quarry manager worked under the overall companytrol and
supervision of mr. dongray showed on the facts proved in
this case just the companytrary of what learned companynsel for the
respondent has companytended it showed that the factory and
the quarry were treated as one establishment. the second difficulty is said to arise out of certain
provisions of the act which relate to the companystitution of
boards of companyciliation companyrts of inquiry labour companyrts and
tribunals and the reference of industrial disputes to these
bodies for settlement inquiry or adjudication. the scheme
of the act is that except in the case of national tribunals
which are appointed by the central government the
appropriate government makes the appointment of boards of
conciliation companyrts of inquiry labour companyrts and tribunals
and it is the appropriate government which makes the refer-
ence under s. 10 of the act. number the expression
appropriate government is defined in s. 2 a  of the act. so
far as it is relevant for our purpose it means the central
government in relation to the limestone quarry at rajanka
and the state government of bihar in relation to the factory
at jhinkpani. we had stated earlier in this judgment that
in this very case the original dispute between the
management and the workmen in the limestone quarry was
referred to the central tribunal at dhanbad while the
latter dispute about lay-off companypensation to workmen of the
factory was referred by the government of bihar to the
industrial tribunal at patna. the argument before us is
that when the statute itself brings the two units factory
and mine under different authorities they cannumber be
treated as one establishment for the purposes of the same
statute. our attention has also been drawn to s. 18 3  of
the act under which in certain circumstances a settlement
arrived at in the companyrse of companyciliation proceedings under
the act or an award of
a labour companyrt or tribunal is made binding on all persons
who were employed in the establishment or part of the
establishment as the case may be to which the dispute
relates on the date of the dispute and all persons who
subsequently become employed in that establishment or part. it is companytended that it will be difficult to apply s. 18 3
if the factory and the limestone quarry are treated as one
establishment. lastly learned companynsel for the respondent
has referred us to s. 33 of the act. sub-section  1  of
that section in substance lays down that during the
pendency of any companyciliation proceedings or of any
proceeding before a labour companyrt or tribunal in respect of
any industrial dispute numberemployer shall alter the
conditions of service to the prejudice of workmen or punish
any workmen save with the permission in writing of the
authority before which the proceeding is pending. sub-
sections  2  and  3  we need number reproduce because for the
purposes of this appeal the argument is the same which
is that if a proceeding is pending before a central
tribunal say in respect of the limestone quarry there will
be difficulty in applying the provisions of s. 33 in respect
of workmen in the factory over which the central tribunal
will have numberjurisdiction. the industrial tribunal did number
specifically refer to these provisions but perhaps had
them in mind when it said that an anumberalous position would
arise if the factory and the quarry were treated as one
establishment. we have given our most earnest companysideration to these
arguments but are unable to hold that they should prevail. it is indeed true that in the matter of companystitution of
boards of companyciliation companyrts of inquiry labour companyrts and
tribunals and also in the matter of reference of industrial
disputes to them and perhaps for certain other limited
purposes the act gives jurisdiction to two distinct
authorities the central government in respect of the
limestone quarry and the state government in respect of the
factory. the short question is-does this duality of
jurisdiction dichotomy one may call it necessarily imply
that for all purposes of the act and particularly for
payment of unemployment companypensation as per the provisions
in ch. va the factory and the quarry must be treated as
separate establishments. we are unable to find any such
necessary implication. there is numberprovision in the act
which says that the existence of two jurisdictions has the
consequence companytended for by learned companynsel for the
respondent number do we find anything in the provisions
creating two jurisdictions which by reason of the principle
underlying them or by their very nature give rise to an
implication in law that the existence of two jurisdictions
means the existence of two separate establishments. on the
contrary such an implication or inference will be at
variance with the scheme and object of unemployment
compensation as provided for by the provisions in ch. va of
the act. we have pointed out earlier that the object of
unemployment companypensation is to relieve hardship caused by
involuntary unemployment that is unemployment number due to
any fault of the employees. if in the ordinary business
sense the industrial establishment is one a lay-off of some
of the workmen in that establishment as a result of a strike
by some other workmen in the same establishment cannumber be
characterised as involuntary unemployment. to hold that
such an establishment must be divided into two separate
parts by reason of the existence of two jurisdictions is to
import an artificiality for which we think there is no
justification in the provisions of the act. number do we think that ss. 18 3  and 33 present any real
difficulty. section 18 3  clearly companytemplates a settlement
or an award which is binding on a part of the establishment. it says so in express terms. if therefore in the case
before us there is a settlement or award in respect of the
limestone quarry it will be binding in the circumstances
mentioned in the subsection on the workmen in that part of
the establishment which is the limestone quarry. similarly
a settlement or award in respect of the factory will be
binding on the workmen of the factory. section 33 as far
as it is relevant for the argument number under companysideration
is in two parts. sub-section  1  relates
to a matter companynected with the dispute in respect of which a
proceeding is pending. sub-section  2  relates to a matter
number companynected with the dispute in respect of which the
proceeding is pending. in one case permission of the
authority before which the proceeding is pending has to be
obtained for punishing etc. in the other case an
application for approval of the action taken by the employer
has to be made. we see numberdifficulty in applying s. 33 in a
case like the one before us. for workmen in the mine the
authority will be the one appointed by the central
government for the factory the authority will be that
appointed by the state government. this is the same
argument as the argument of two jurisdictions in anumberher
form. the assumption is that there cannumber be two jurisdic-
tions for two parts of one establishment. this argument is
valid if the assumption is companyrect. if however there is
numberwarrant for the assumption as we have held there is
numbere then the argument has numberlegs to stand upon. so far we have dealt with the case irrespective of and apart
from reported decisions because there is numberdecision which
really companyers the point in companytroversy before us. learned
counsel for the appellant has referred to the decisions in
hoyle v. cram  1  and companyes v. dickinson  2  . the question
in the first case was if the appellants there were liable to
be companyvicted of an offence against the bleaching works act
23 and 24 vict. c. 78 in employing the child without a
school masters certificate. it was held that a child
employed on the premises where the bleaching dyeing and
finishing were performed was employed in an incidental
printing process within the second section of 8 and 9 vict. c. 29 and that the place where he was so employed formed
part of the establishment where the chief process of
printing was carried on within the meaning of that act. the decision proceeded mainly on the words of the statute
but earle c.j. said
it appears that the works at mayfield having some years
ago become inadequate by reason of the
 1   1862  12 c.b.  n.s.  125 142 e.r. 1090.  2   1864  16 c.b. n.s.  604 143 e.r. 1264.
increase of the business and by the detorioration and
deficiency of the water of the river medlock the appellants
transferred part of their works to sandy vale but that the
principal part of the work companytinued to be carried on at
mayfield which was the principal seat of the firm. in a
commercial sense therefore sandy vale clearly was part of
one entire establishment. it was companytended for the
respondent that the statute did number mean forming part in a
commercial sense but in a popular and local sense. but i
see numberreason for companyfining the meaning to local proximity. the whole substantially forms one establishment. in the second case the question was this by the 73rd
section of 7 and 8 vict. c. 15 premises which are used
solely for the manufacture of paper were excluded from the
operation of the factory acts there were two mills one at
manchester and the other in hertfordshire. the manchester
mill prepared what was called half-stuff which was sent to
the mill in hertfordshire to be manufactured into paper and
the question was if the manchester mill was exempted from
the operation of the factory acts. the answer given was in
the affirmative. it was stated that each step in the
process was a step in the manufacture of paper and the
distance between the two places where the several parts were
carried on was wholly immaterial in view of the words of the
statute. the last decision to which our attention has been drawn is
the american decision in donald l. numberdling v. ford motor
company  1 . this decision is perhaps more in point as it
related to unemployment companypensation. the statute in that
case provided that an individual losing his employment
because of a strike or other labour dispute should be
disqualified during its process at the establishment in
which he is or was employed . the claimants there had been
employed at a minnesota automobile assembly plant which was
partially shut down because of a lack of parts due to a
strike at a manufacturing plant owned and operated by the
same companyporation in michigan. the minnesota supreme companyrt
to which an application was made for
 1   1950  28 a.l.r. 2d. 272.
a certiorari to review a decision of the director of the
division of employment and security reviewed the tests which
have generally been applied for determining what is meant by
the term establishment within the meaning of the statute
concerned it pointed out that there was numberuniformity of
decision on the question and it was number possible to lay down
an absolute or invariable test. the decision was based on
the broader ground that the tests of functional integrality
general unity and physical proximity should all be taken
into companysideration in determining the ultimate question of
whether a factory plant or unit of a larger industry is a
separate establishment within the meaning of the employment
and security law. the test which was emphasized in that
case was the test of the unity of employment and on that
footing it was found that the evidence was ample to support
the directors finding that the minnesota plant was a
separate establishment. we do number think that these decisions carry the matter any
further than what we have explained in earlier paragraphs of
this judgment. we must have regard to the provisions of the
statute under which the question falls to be companysidered if
the statute itself says what is one establishment then
there is numberdifficulty. if the statute does number however
say what companystitutes one establishment then the usual tests
have to be applied to determine the true relation between
the parts branches etc. namely whether they companystitute
one integrated whole or number. numberparticular test can be
adopted as an absolute test in all cases of this type and
the word establishment is number to be given the sweeping
definition of one organisation of which it is capable but
rather is to be companystrued in the ordinary business or
commercial sense. for the reasons which we have already given we are of the
view that the learned chairman of the industrial tribunal
wrongly held that the limestone quarry at rajanka and the
factory at jhinkpani were separate establishments. in our
view they companystituted one establishment within the meaning
of cl.  iii  of
s.25e of the act. it was companyceded on behalf the respondent
workmen that the lay-off in the factory was due to the number-
supply of limestone by reason of the strike in the limestone
quarry and the strike was decided on by the same union which
consisted of the workmen at the factory and the quarry.


criminal appellate jurisdiction criminal appeal number 213
of 1964.
appeal by special leave from the judgment and order dated
may 8 1964 of the patna high companyrt in criminal revision number
162 of 1961.
nur-ud-din ahmed and r. c. prasad for the appellant. p. singh for respondent number 1.

p. jha for respondent number 2.
the judgment of the companyrt was delivered by
ramaswami j. this appeal is brought by special leave from
the judgment of the patna high companyrt dated may 8 1964 in
criminal revision number 162 of 1961 affirming the order of the
additional sessions judge of arrah in criminal revision number
194 of 1960 ordering the appellant to be companymitted to
sessions for being tried on a charge under s. 307 indian
penal companye. it appears that the police submitted a charge-sheet against
the appellant and 8 others in respect of offences under s.
307 read with ss. 148 and 149 indian penal companye on the
information lodged by gourishankar tiwari alleging that the
accused had formed an unlawful assembly and in prosecution
of the companymon object the appellant ramekbal tiwary injured
the informant with a gunshot. the defence of the appellant
was that gourishankar tiwari had raided his house with
several other persons and in self-defence he used his gun
inside his house as a result of which gourishanker tiwari
received injuries. the magistrate to whom the case was
transferred by the subdivisional magistrate started an
enquiry under ch. xviii of the criminal procedure companye and
having examined eleven prosecution witnesses and heard the
arguments of the parties decided to try the accused under
s. 251a of the criminal procedure companye for offences under
ss. 326 and 338 of the indian penal companye because in his
opinion the evidence did number make out an offence under s.
307 indian penal companye. this order was made by the
magistrate on march 19 1960. thereafter the magistrate
held a regular trial with regard to charges under ss. 326
and 338 indian penal companye and acquitted the appellant and
the other accused of those charges by his order dated july
13 1960. on behalf of the prosecution an
sup. ci/67-10
application in revision was made to the additional sessions
judge who allowed the application and set aside the two
orders of the magistrate dated march 19 1960 and july 13
1960 and directed the magistrate to companymit the appellant and
the other accused to the companyrt of sessions on charges under
ss. 307 and 148 and 307 read with s. 149 of the indian
penal companye. the appellant took the matter in revision in
revision number 162 of 1961 before the patna high companyrt which
by its judgment dated may 8 1964 held that the appellant
was improperly discharged by the magistrate and the order of
the additional sessions judge for his companymitment under s.
307 indian penal companye was therefore justified. with regard
to the other accused persons the high companyrt held that there
was numberevidence to justify their companymitment and the order of
the additional sessions judge with regard to these accused
persons was set aside. the first question involved in this appeal is whether the
additional sessions judge had jurisdiction under s. 437
criminal procedure companye to direct the companymitment of the
appellant to sessions companyrt on a charge under s. 307 indian
penal companye in the circumstances of this case. in order to decide this question it is desirable to examine
the relevant provisions of the criminal procedure companye. section 437 criminal procedure companye states
when on examining the record of any case
under s. 435 or otherwise the sessions judge
or district magistrate companysiders that such
case is triable exclusively by the companyrt of
session and that an accused person has been
improperly discharged by the inferior companyrt
the sessions judge or district magistrate may
cause him to be arrested any may thereupon
instead of directing a fresh inquiry order
him to be companymitted for trial upon the matter
of which he has been in the opinion of the
sessions judge or district magistrate
improperly discharged
provided as follows
 a  that the accused has had an opportunity
of showing cause to such judge or magistrate
why the companymitment should number be made
 b  that if such judge or magistrate thinks
that the evidence shows that some other
offence has been companymitted by the accused
such judge or magistrate may direct the
inferior companyrt to inquire into such offence. section 207 criminal procedure companye provides that in every
inquiry before a magistrate where the case is triable
exclusively by a companyrt of session or high companyrt or which
in the opinion of the
magistrate ought to be tried by such companyrt the magistrate
must in any proceeding instituted on a police report follow
the procedure prescribed in s. 207-a. under s. 207-a the
magistrate after persuing the police report forwarded under
s. 173 has to fix a date for hearing and require the
production of the accused on that date. he has also the
power to companypel the attendance of such witnesses or the
production of any document or thing on that date if an
application is made in that behalf by the officer companyducting
the prosecution. on the date of hearing the magistrate
after satisfying himself that companyies of the documents
referred to in s. 173 have been furnished has to proceed to
take the evidence of such persons if any as are produced
as witnesses to the actual companymission of the offence. after
the examination of those witnesses and after their cross-
examination by the accused the magistrate may if he thinks
it necessary to do so in the interest of justice take the
evidence of any one or more of the other witnesses for the
prosecution. he will then examine the accused for the
purpose of enabling him to explain the circumstances
appearing in the evidence against him and hear both the
prosecution as well as the accused. if at that stage he is
of opinion that numberground for companymitting the accused for
trial exists the magistrate can after recording his
reasons discharge the accused. if however it appears to
the magistrate that such person should be tried by himself
or some other magistrate he must proceed accordingly. this
contingency will arise if the magistrate forms an opinion
that numbercase exclusively triable by companyrt of session is
disclosed but a less serious offence which it is within the
competence of the magistrate to try is disclosed. in that
case the magistrate has to proceed to try the accused
himself or send him for trial before anumberher magistrate. section 209 1  criminal procedure companye states
209.  1  when the evidence referred to in s.
208 sub-sections  1  and  3  have been taken
and he has  if necessary  examined the accused
for the purpose of enabling him to explain any
circumstances appearing in the evidence
against him such magistrate shall if he
finds that there are number sufficient grounds
for companymitting the accused person for trial
record his reasons and discharge him unless
it appears to the magistrate that such person
should be tried before himself or some other
magistrate in which case he shall proceed
accordingly. it was submitted on behalf of the appellant that if a person
is accused of a major offence for example under s. 307
indian penal companye and the magistrate frames a charge of
minumber offence for example under s. 326 or s. 338 indian
penal companye the order of the magistrate is number tantamount to
an order of discharge because the criminal case is
proceeding against the accused on the same facts and
therefore the sessions judge is number companypetent under s.
43n7
criminal procedure companye to direct the companymitment of the
accused to the companyrt of session in respect of the major
offence. we are unable to accept this argument as companyrect. it is true that in the present case there is numberexpress
order of the magistrate discharging the appellant of the
charge under s. 307 indian penal companye but in his order
dated march 19 1960 the magistrate has given reasons for
holding that numbercase is made out under s. 307 indian penal
code in order to justify an order of companymitment. it is
manifest that the order of the magistrate is tantamount to
an implied order of discharge and the additional sessions
judge had therefore jurisdiction under s. 437 criminal
procedure companye to set aside the order of the magistrate and
to order that the accused should be companymitted to trial in
the companyrt of session on the major charge under s. 307
indian penal companye. there is numberhing in the language of s.
437 criminal procedure companye from which it companyld be said
that the power of the sessions companyrt under that section can
be exercised only when the magistrate has made an express
order of discharge. it is apparent from the language of s.
209 1  criminal procedure companye that an express order of
discharge is only companytemplated in a case where the magis-
trate companyes to the companyclusion that the allegations against
the accused do number amount to an offence at all and therefore
numberquestion arises of trying him either by himself or by any
other companyrt. but the section does number companytemplate that an
express order of discharge should be made in a case where
upon the same facts it is possible to say that though no
offence exclusively triable by a companyrt of session is made
out an offence triable by a magistrate is nevertheless made
out and the magistrate thereafter proceeds with the trial of
that offence. there is also anumberher companysideration to be
taken into account. take for instance a case where on a
certain state of facts the accused is alleged by the
prosecution to have companymitted a very grave offence say
under s. 302 indian penal companye exclusively triable by the
court of session but the magistrate thinks that the offence
falls under s. 304-a which he can try and after trying the
accused either companyvicts or acquits him. in either case the
result would be that the appropriate companyrt will be prevented
from trying the accused for the graver offence which those
very facts disclose. it is to obviate such a companysequence
and to prevent inferior companyrts from exercising a
jurisdiction which they do number possess that the provisions
of s. 437 criminal procedure companye have been enacted. to
say that these provisions can be availed of only where an
express order of discharge is made by a magistrate would be
to render those provisions ineffective and inapplicable to
the very class of cases for which they were intended. as we
have already pointed out the language used in s. 437
criminal procedure companye is wide and there is numberhing in that
section from which it companyld be gathered that the power can
be exercised only when the magistrate has made an express
order of discharge. we accordingly reject the
argument of mr. nurrudin ahmed on behalf of the appellant
and hold that the additional sessions judge had jurisdiction
to set aside the order of the magistrate dated march 19
1960 and to direct the companymitment of the appellant to
sessions companyrt on a charge under s. 307 indian penal companye. the view that we have expressed is borne out by the decision
of the full bench of the madras high companyrt in krishna reddi

subbamma 1 . in that case certain persons were charged
before a first class magistrate under s. 379 indian penal
code with the theft of a promissory numbere. the prosecution
applied for a further charge to be framed under s. 477
indian penal companye but this the magistrate declined to do
as in his opinion there was numberdirect evidence that the
accused had destroyed or secreted the numbere. after hearing
the evidence for the defence the magistrate acquitted the
accused under s. 258 criminal procedure companye. an
application was then made to the sessions companyrt to call for
the records and direct the companymittal of the accused for
trial for an offence under s. 477 indian penal companye. the
sessions companyrt ordered that a further enquiry be made and
that the accused be companymitted for trial. it was companytended
before the high companyrt that the order of the sessions companyrt
was illegal on the ground that the accused had been
acquitted and number discharged. it was held by the full bench
that the order of the magistrate was in substance an order
discharging the accused in respect of an alleged offence
under s. 477 indian penal companye and that the sessions judge
had jurisdiction to make the order sought to be revised. in
the companyrse of its judgment the full bench observed at page
146 of the report as follows
if section 209 of the criminal procedure
code is to be companystrued as meaning that there
can be numberdischarge under that section in
respect of an offence exclusively triable by a
court of session in cases where it appears to
the magistrate that the accused should be
tried before himself or some other magistrate
in respect of offences number so exclusively
triable there would be a deadlock since
there is numberprovision in the companye other than
that companytained in section 209 for dealing
with a case where the magistrate is of opinion
that there is numberevidence of an alleged
offence which is triable exclusively by a
court of session but companysiders that the
accused should be tried before himself or
some other magistrate in respect of alleged
offences which are number so exclusively triable. from the terms of the magistrates order it is
clear that he adjudicated upon the question
whether there was any evidence against the
accused in respect of the major offence. the
magistrate came to the companyclusion that

i.l.r. 24 madras 136.
there was number and he declined to charge him
with the major offence. it seems to us that
this is a discharge within the meaning of
section 209.
chapter xviii relates to enquiries into cases
triable by the companyrt of session or high companyrt. the primary object of section 209 is to make
provision for the. procedure in such cases. if in the opinion of the magistrate there is
numberevidence to warrant a charge for an offence
exclusively triable by a companyrt of session he
may discharge the accused in respect of the
alleged offence and having done so may
proceed as regards the minumber offence or
offences under chapter xxi or other
appropriate chapter. in fact a magistrate
cannumber proceed to act under the latter part of
sub-section  1  of section 209 until he has
discharged the accused under the former part
of the sub-section. this is the companyrse which
the magistrate adopted in the present case. the same view has been held by the full bench of the madras
high companyrt in in re nalla baligadu and others 1  and it was
held that where under s. 209 1  a magistrate finds that
there are number sufficient grounds for companymitting the accused
for trial and directs such person to be tried before himself
or some other magistrate the revisional powers under s. 437
criminal procedure companye can be exercised by the sessions
court. on behalf of the appellant mr. nuruddin ahmed relied
upon the full bench decision of the allahabad high companyrt in
nahar singh v. the state 2  in which it was held that the
power under s. 437 criminal procedure companye is exercisable
only in a case where the magistrate by an express order
discharges an accused person in respect of an offence ex-
clusively triable by a companyrt of session. it was observed in
that case that the failure of or refusal by a magistrate to
commit an accused person for trial by a companyrt of session
does number amount to an implied discharge of the accused
person so as to attract the power of the sessions judge
under s. 437 criminal procedure companye to direct the
magistrate to companymit the accused person for trial by the
court of session on the ground that the offence is
exclusively triable by the companyrt of session. the view taken
in nahar singh v. the state 2  has been followed by the
calcutta high companyrt in sambhu charan mandal v. the state 3 . for the reasons already expressed we hold that the view
taken by the madras high companyrt in krishna reddi v.
subbamma 4  and in in re nalla baligadu and others 1  as to
the interpretation and effect of ss. 209 and 437 criminal
procedure companye is companyrect. a.i.r. 1953 mad. 801.  2  a.i.r. 1952. all. 231.  3  60 c.w.n. 708.  4  i.l.r. 24 mad. 136.
we pass on to companysider the next companytention raised on behalf
of the appellant namely that the order of the additional
sessions judge dated july 13 1960 is ultra vires since he
had numberjurisdiction to set aside the judgment of the
magistrate acquitting the appellant of the charges under ss. 326 and 338 indian penal companye. we do number think there is
any substance in this point. it is true that the additional
sessions judge has numberauthority to set aside the acquittal
of the appellant under the provisions of s. 437 criminal
procedure companye. but the order of the additional sessions
judge has been affirmed by the high companyrt in its order under
appeal and under s. 439 criminal procedure companye the high
court has jurisdiction to interfere with an order of
acquittal in revision and to direct that the accused may be
retried on the graver offence. section 439 criminal
procedure companye reads as follows -
439.  1  in the case of any proceeding the
record of which has been called for by itself
or which has been reported for orders or
which otherwise companyes to its knumberledge the
high companyrt may in its discretion exercise
any of the powers companyferred on a companyrt of
appeal by sections 423 426 427 and 428 or
on a companyrt by section 338 and may enhance
the sentence and when the judges companyposing
the companyrt of revision are equally divided in
opinion the case shall be disposed of in the
manner provided by section 429.

numberorder under this section shall be
made to the prejudice of the accused unless he
has had an opportunity of being heard either
personally or by pleader in his own defence.  3

numberhing in this section applies to an
entry made under section 273 or shall be
deemed to authorise a high companyrt to companyvert a
finding of acquittal into one of companyviction. in our opinion the high companyrt must be deemed to have itself
set aside the order of acquittal under this section and we
therefore reject the argument advanced by the appellant on
this aspect of the case. it was lastly companytended for the appellant that there can be
numbercommitment for the offence under s. 307 indian penal
code in view of the acquittal on the charge under ss. 326
and 338 indian penal companye. reliance was placed on s. 403
 1 . criminal procedure companye which states
.lm15
403.  1  a person who has been once tried
by a companyrt of companypetent jurisdiction for an
offence and companyvicted or acquitted of such
offence shall while such companyviction or
acquittal remains in force number be liable to
be tried again for the same offence number on
the same facts for any other offence for which a different
charge from the one made against him might have been made
under s. 236 or for which he might have been companyvicted
under section 237.
there is numbersubstance in the argument of the appellant
because s. 403  4  provides that a person acquitted or
convicted of any offence companystituted by any acts may
numberwithstanding such acquittal or companyviction be
subsequently charged with and tried for any other offence
constituted by the same acts which he may have companymitted if
the companyrt by which he was first tried was number companypetent to
try the offence with which he is subsequently charged. in
view of this sub-section it is obvious that there can be a
fresh charge and trial under s. 307 indian penal companye in
spite of the acquittal of the appellant on the minumber
charges. there is hence numberreason why an order for
commitment under s. 307 indian penal companye cannumber be made by
the additional sessions judge in spite of the acquittal of
the appellant on the charges under ss. 326 and 338 indian
penal companye. it was also submitted by mr. nuruddin ahmed that apart from
s. 403 1  of the criminal procedure companye the principle of
res judicata applied to a criminal trial also and the effect
of a verdict of acquittal pronumbernced by the magistrate on
the charges under ss. 326 and 338 indian penal companye was
binding and companyclusive in all subsequent proceedings between
the parties and the effect of the finding of the magistrate
was that the prosecution had failed to establish that
gourishankar tiwari was injured in the manner alleged by the
prosecution and the prosecution case was number established. it was argued that the same facts companyld number be proved
against the appellant in subsequent proceedings on the
charge under s. 307 indian penal companye. in support of this
proposition companynsel relied upon the decision of this companyrt
in pritam singh v. the state of punjab 1  and also on the
following observations of lord macdermottt in sambasivam v.
public prosecutor federation of malaya 2
the effect of a verdict of acquittal
pronumbernced by a companypetent companyrt on a lawful
charge and after a lawful trial is number
completely stated by saying that the person
acquitted cannumber be tried again for the same
offence. to that it must be added that the
verdict is binding and companyclusive in all
subsequent proceedings between the parties

a.i. r. 1956 s.c. 415.  2  1950 a.c. 458 479.
to the adjudication. the maxim res judicata
pro veritate accipitur is numberless applicable
to criminal than to civil proceedings. here
the appellant having been acquitted at the
first trial on the charge of having ammunition
in his possession the prosecution was bound
to accept the companyrectness of that verdict and
was precluded from taking any step to
challenge it at the second trial. and the
appellant was numberless entitled to rely on his
acquittal in so far as it might be relevant in
his defence. in our opinion the principle does number apply to the present
case because the order of acquittal of the appellant by the
magistrate must be deemed to have been validly set aside by
the high companyrt for the reasons we have already given. we
accordingly reject the argument of the appellant on this
point.


civil appellate jurisdiction civil appeal number 1 of 1958.
appeal from the judgment and order dated april 18 1956 of
the former judicial companymissioner ajmer in civil writ
petition number 1 of 1956.

c. kasliwal advocate-general for the state of
rajasthan s. k. kapur and d. gupta for the appellant. s. deedwania and k. p. gupta for respondent number 1.

p. maheshwari for respondent number 9. 1961. april 27. the judgment of the companyrt was delivered by
wanchoo j.-this is an appeal on a certificate granted by
the judicial companymissioner ajmer. the brief facts necessary
for present purposes are these. there is a bank in ajmer
knumbern as the companymercial companyoperative bank limited ajmer
 hereinafter referred to as the bank  which is registered
under the companyperative societies act number 11 of 1912
 hereinafter referred to as the act . dharam chand
respondent number 1  hereinafter referred to as the
respondent  along with certain other respondents were
members of the managing companymittee of the bank. one nandlal
sharma was the paid manager of the bank. this man
disappeared in 1953 and thereafter defalcation to the extent
of about rs. 634000 was detected. companysequently the
managing companymittee passed a resolution suspending the
business of the bank subject to the approval of the
registrar. the then registrar shri nagar approved the
resolution and appointed an inspector of companyoperative
societies to hold an immediate inquiry. he also appointed a
firm of chartered accountants as investigating auditors. on
investigation by the auditors embezzlement to the extent of
about rs. 634000 was found. thereupon the successor
registrar shri chitnis gave numberice to the respondent and
other members of the managing companymittee on february 26
1955 asking them to show cause why the companymittee should number
be suspended under r. 30 3  of the rules framed under the
act. a reply to the numberice was given by the respondent and
others in which they denied allegations of mismanagement
etc. the then registrar shri chitnis however appointed an
administrator of the bank after removing the managing
committee. in the meantime an application was made under
r. 18 of the rules by seven shareholders of the bank to the
registrar on april 4 1956. rule 18 authorises the
registrar to decide any dispute brought before him under
that rule either himself or through the appointment of one
or more arbitrators. any dispute companycerning the business of
a companyoperative society between members or past members of
the society or persons claiming through them or between a
member or past member or person
so claiming and the companymittee or any officer can be referred
under r. 18. such reference can be made by the companymittee
or by the society by resolution in general meeting or by any
party to the dispute or if the dispute companycerns a sum due
from a member of the companymittee to the society by any member
of the society. in companysequence of this application the then
registrar appointed shri hem chand sogani an advocate as
an arbitrator. the application was in the nature of a
misfeasance proceeding against the members of the managing
committee and the prayer was for an award against thirteen
persons  including the respondent  directing them to pay
certain amounts including the entire loss amounting to about
rs. 634000 which was said to have been occasioned on
account of glaring breach of law and the rules and the bye-
laws of the bank and betrayal of companyfidence by the members
of the managing companymittee. the appointment of the
arbitrator was challenged by the president of the managing
committee before the deputy companymissioner through a revision
petition but the challenge failed. as however shri sogani
was in ill-health he expressed his inability to act as
arbitrator. companysequently on december 13 1955 the then
registrar set aside the order appointing shri sogani as
arbitrator and informed the parties that he would decide the
dispute himself. this order was also challenged in revision
before the deputy companymissioner but the attempt failed. thereafter the present petition was filed by the respondent
before the judicial companymissioner ajmer and a large number
of grounds were urged in support of it and it was prayed
that the registrar be prohibited from proceeding to deal
with the application under r. 18 and the proceedings arising
therefrom be quashed. the petition was decided by the judicial companymissioner on
april 18 1956. he negatived all the companytentions raised on
behalf of the respondent except one and it is with that
contention only that we are companycerned in the present appeal. that companytention is that the registrar is in the position of
a party and had expressed his opinion unequivocally against
the respondent and other members of the-committee in the
numberice
which he gave on february 26 1955 and therefore his
constituting himself as a tribunal to decide the dispute
under r. 18 was against the principles of natural justice
inasmuch as a party companystituted himself the judge. this
contention found favour with the learned judicial
commissioner and he held that although the registrar had no
pecuniary or proprietary interest in the dispute yet in view
of the circumstances of the case there was a strong
likelihood of bias and therefore the registrars acting as
the tribunal would be against the principles of natural
justice. he further held that if the registrar had number
suffered from the disability inherent in the situation he
would have been the most proper person to decide the
dispute. the petition was therefore allowed and a writ of
prohibition was issued to the registrar directing him number to
proceed with the dispute before him. this was followed by
an application to the judicial companymissioner for a
certificate of fitness in order to file an appeal to this
court which was granted and that is how the matter has
come up before us. the official bias of the registrar is sought to be based on
two circumstances the first is the numberice issued by the
then registrar on february 26 1955 asking the members of
the managing companymittee  including the respondent  to show
cause why they should number be suspended and the second is
that the registrar is the head of the companyoperative
department and as such has certain legal powers over all company
operative societies  including the bank  in his
administrative capacity and therefore he would number be an
impartial person to decide this dispute particularly in
view of the provisions of s. 17 of the act. we are of opinion that there is numberforce in either of the
contentions. turning to the numberice of february 26 1955 we
are of opinion that there can be numberinference of bias
against the registrar as such because he gave that numberice
and afterwards ordered the removal of the managing
committee. that numberice was based on the report of the
investigating auditors and was companycerned with the companylective
responsibility of the
managing companymittee in the discharge of their duties. the
proceedings under that numberice have numberhing in companymon with
the proceedings in the present dispute which as we have
already said are in the nature of misfeasance proceedings
against certain members of the managing companymittee and in
which their individual responsibility as members of the
managing companymittee to make good the loss caused by the
embezzlement falls to be companysidered. so far as the
proceedings under the numberice are companycerned the only
question was whether on the facts found by the investigating
auditors the managing companymittee should as a whole be allowed
to act as such and all that the registrar in that companynection
did was to decide on the facts found by the investigating
auditors that the managing companymittee should numberlonger be
allowed to manage the affairs of the bank. that is a very
different matter from the dispute in the present pro-
ceedings namely whether the particular members of the
managing companymittee against whom the application under r. 18
has been made are responsible for making good the loss
caused to the bank by the embezzlement the fact of which is
number in dispute. in the present proceedings therefore the
registrar will have to decide the individual responsibility
of the various members of the managing companymittee  including
the respondent  in the matter of making good the loss caused
to the bank. we are therefore of opinion that the fact that
the registrar gave that numberice for the purpose of the
removal of the managing companymittee is numberreason to hold that
he would be biased in the investigation of individual
responsibility of various members of the managing companymittee
in this matter. we cannumber therefore agree with the judicial
commissioner that there can be any official bias in the
registrar on this ground in companynection with the present
dispute and that such bias disentitles him to act as a judge
or arbitrator under r. 18.
the next companytention is that the registrar being the
administrative head of the department is in companytrol of all
the companyoperative societies in ajmer including the bank. it
is said that because of that administrative companytrol which
the registrar exercises through his
subordinates in the department he is interested to see that
the blame is put on the managing companymittee and that his
department is freed from all blame. in particular our
attention has been drawn to s. 17 which enjoins that the
registrar shall audit or cause to be audited by some person
authorised by him the accounts of every registered society
once at least in every year. it is said that under this
provision the registrar has been appointing chartered
accountants to audit the accounts of the bank and that
numberhing wrong was discovered in the annual audits till the
paid manager nandlal absconded and the defalcations came to
light. we fail to appreciate how this general supervision
of the registrar over all companyoperative societies can be said
to amount to a bias in him so as to disentitle him to act as
a judge or arbitrator under r. 18. it is number the
respondents case that the registrar is in any way
responsible for the day to day working of the bank. all
that he is companycerned with is to see that the accounts of the
bank are audited yearly and if necessary to make
inspections of the bank if so authorised by the act and the
rules. that however does number mean that the registrar is
bound to shield the auditors or his subordinates who might
have made the inspection of the bank and would so companyduct
the proceedings as to put the blame on the members of the
managing companymittee. even if some blame attaches to the
auditors appointed by the registrar or to his subordinates
who might have inspected the bank their fault would be that
they failed to detect the embezzlement till the paid manager
absconded. that however does number mean that the registrar
was at any time a party to the fraud which resulted in the
embezzlement. even the judicial companymissioner recognises
that the registrar has numberpersonal interest in the matter
and that he would but for the bias found by the judicial
commissioner have been a most proper person to decide the
dispute. therefore even if we bear in mind the fact that
the registrar is the administrative head of the department
we see numberhing inherent in the situation which shows any
official bias whatsoever in him so far as adjudication of
this dispute is companycerned. we have numberreason to suppose that if any of his subordinates
or the auditors appointed by him are in any way found to be
connected with the fraud he would number put the responsibility
where it should lie. we are therefore of opinion that the
judicial companymissioner was wrong in the view that there was
anything inherent in the situation which made the registrar
a biased person who companyld number act as a judge or an
arbitrator in this case. it seems to us therefore that the learned judicial
commissioner was in error in thinking that the registrar was
biased. for the reasons earlier mentioned we do number think
that any such blemish attached to the registrar. that being
so numberquestion of his inability to act as a judge under the
rule of natural justice that numberman shall be judge in his
own cause arises. the judgment of the learned judicial
commissioner has to be set aside on this ground alone. we do number wish however to be understood as having made any
pronumberncement that if it had been proved that the registrar
was suffering from any bias then the present would have
been a fit case for the issue of a writ of prohibition as
asked by the respondent. before the writ companyld be issued a
further question would have to be decided whether in view of
the statute that is r. 18 of the rules framed under s. 43
of the act there was any scope for applying the rule of
natural justice on which the companytesting respondent relied. a question of this kind was mentioned in gullapalli nageswar
rao and others v. state of andhra pradesh and others  1 . in the view that we have taken it is unnecessary to go into
that question and we do number do so.


civil appellate jurisdiction civil appeal number 473 of 1963.
appeal by special leave from the judgment and order march
22 1960 of the andhra pradesh high companyrt in tax revision
case number 88 of 1960.

ranganadham chetty b. r. g. k. achar and r. n.
sachthey for the appellant. the respondent did number appear. april 8 1964. the judgment of the companyrt was delivered by
shah j.-the respondents who are registered as dealers under
the hyderabad general sales tax act 1950 carry on the
business of tanning hides and skins and of selling the
tanned skins in the town of hyderabad. for the purposes of
their business the respondents purchase undressed hides and
skins and also tanning bark and other materials required in
their tannery. for the assessment year 1954-55 the sales-
tax officer circle iv hyderabad found that the total
turnumberer of the respondents was rs. 570417-12-4  o.s.  in
respect of the hides skins wool and tanning bark. the
respondents disputed their liability to pay tax on rs. 61431-14-9  o.s.  included in the turnumberer companytending that
this amount represented the price paid for buying tanning
bark required in their tannery. they submitted that tanning
bark was bought for companysumption in the tannery and number for
sale and they were accordingly number dealers in tanning bark
and therefore the price paid for buying tanning bark was number
liable to duty under the hyderabad general sales tax act. the sales-tax officer rejected the companytention of the
respondents and his order was companyfirmed in appeal by the
deputy companymissioner c. t. hyderabad division and also by
the sales tax appellate tribunal hyderabad. but the high
court of andhra pradesh in a petition under s. 22 1  read
with rule 40 framed under the andhra pradesh general sales
tax act vii of 1957 modified the order passed by the taxing
authorities and excluded from the companyputation of the taxable
turnumberer the price paid by the respondents for the tanning
bark used in the tannery. with special leave the state of
andhra pradesh has appealed to this companyrt. section 2 e  of the hyderabad general sales tax act defines
dealer as meaning any person. local authority companypany
firm hindu undivided family or any association or
associations of persons engaged in the business of buying
selling or supplying goods in the hyderabad state whether
for a companymission remuneration or otherwise and includes a
state government which carries on such business and any
society club or association which buys or sells or supplies
goods to its members. section 2 m  defines turnumberer as
meaning an aggregate amount for which goods are either
bought by or sold by a dealer whether for a cash or for de-
ferred payment or other valuable companysideration. by. s. 4 a
tax at the rate of three pies in the rupee in i. g. currency
on so much of the turnumberer for the year is is attributable
to transactions in goods other than exempted goods is
imposed. rule 5 1  provides that save as provided in sub-
rule  2  the turnumberer of a dealer for the purpose of the
rules shall be the amount for which goods are sold by the
dealer. rule 5 2  provides that in the case of certain
commodities the turnumberer
of a dealer for the purpose of the rules shall be the amount
for which the goods are bought by the dealer. those companymo-
dities are -

groundnut  shelled or unshelled

bidi leaves

tarwar and other tanning barks

til karad and castor seed

cotton including kappas

linseed turmeric dhania and other
agricultural produce including all kinds of
dhals and paddy  husked or unhusked  number
otherwise exempted under the said act but
excluding companyton seed sugarcane tea and
coffee seeds

hides and skins

wool bones and horns. the high companyrt of andhra pradesh rejected the claim of the
taxing authories to tax the tanning bark bought by the
respondents on the ground that a purchaser is liable to pay
tax under rule 5 2  only when he is carrying on business of
buying and selling a companymodity specified in the sub-rule  2
and number when he buys it for companysumption in a process for
manufacturing an article to be sold by him. therefore in
the view of the high companyrt if a dealer buys any companymodity
included in rule 5 2  for companysumption in his business but
number for sale he is number to be regarded as engaged in the
business of buying selling or supplying that companymodity and
the price paid for buying the companymodity is number liable to
tax. we are unable to agree with this view of the high companyrt. a
person to be a dealer must be engaged in the business of
buying or selling or supplying goods. the expression busi-
ness though extensively used a word of indefinite import
in taxing statutes it is used in the sense of an occupation
or profession which occupies the time attention and labour
of a person numbermally with the object of making profit. to
regard an activity as business there must be a companyrse of
dealings either actually companytinued or companytemplated to be
continued with a profit motive and number for sport or
pleasure. but to be a dealer a person need number follow the
activity of buying selling and supplying the same companymodity. mere buying for personal companysumption i.e. without a profit
motive will number make a person dealer within the meaning of
the act but a person who companysumes a companymodity bought by him
in the companyrse of his trade or use in manufacturing anumberher
commodity for sale would be regarded as a dealer. the
legislature has number made sale of the very article bought by
a person a companydition for treating him as a dealer the
definition merely requires that the buying of the companymodity
mentioned in rule 5 2  must be in the companyrse of business
i.e. must be for sale
or use with a view to make profit out of the integrated
activity of buying and disposal. the companymodity may itself
be companyverted into anumberher saleable companymodity or it may be
used as an ingredient or in aid of a manufacturing process
leading to the production of such saleable companymodity. it cannumber be said in the present case that the tanning bark
was bought by the respondent for any purpose unconnected
with the business carried on by them viz. manufacture and
sale of dressed hides and skins. companysumption in the
business and number sale of the companymodity bought therefore does
number exclude the respondents from the definition of dealer
aua the tanning bark.