PETITIONER:
STATE BANK OF INDIA
Vs.
RESPONDENT:
SHRI N. SUNDARA MONEY
DATE OF JUDGMENT16/01/1976
BENCH:
KRISHNAIYER, V.R.
BENCH:
KRISHNAIYER, V.R.
CHANDRACHUD, Y.V.
GUPTA, A.C.
CITATION:
1976 AIR 1111 1976 SCR (3) 160
1976 SCC (1) 822
CITATOR INFO :
F 1977 SC 31 (2,4)
R 1979 SC 170 (17)
F 1980 SC1219 (11,12,13)
RF 1981 SC 422 (5)
RF 1981 SC1253 (7,8)
R 1982 SC 854 (5,6)
D 1983 SC 865 (6)
E 1983 SC1320 (7,8,9,11,12)
R 1984 SC 500 (2)
R 1984 SC 684 (50)
RF 1986 SC 132 (7)
RF 1986 SC1680 (4)
E&D 1990 SC1808 (5)
ACT:
Constitution of India-Art. 133(1)-Scheme of -Conditions
precedent for the issue of a certificate under in exercise
of power under Art. 136 of the Constitution on such a
certificate.
Industrial Disputes Act. 1947 (Act 14 of 1947)-Section
25F read with ss. 2(oo) and 25(B) (2)-Scope of the concept
of retrenchment under s.2(oo).
Statutory construction of social welfare legislation-
Guidelines.
Words and phrases-Meaning of the words
"termination.....for any reason whatsoever" includes
automatic extinguishment of service by virtue of a
preemptive provision to terminate in the appointment order
itself.
HEADNOTE:
Section 25(F)(b) of the Industrial Disputes Act, 1947,
provides that no workman employed in any industry who has
been in continuous service for not less than one year under
an employer shall be retrenched by that employer until he
has been paid at the time of the retrenchment, compensation
which shall be equivalent to 15 days' average pay for every
completed year of service or any part thereof in excess of
six months Section 2(oo) of the Act defines 'retrenchment'
as meaning the termination by the employer of the service of
a workman for any reasons whatsoever, otherwise than as a
punishment inflicted by way of disciplinary action. In the
"Hospital Mazdoor Sabha's" the Supreme Court held that the
statutory requirement of the payment of compensation under
s. 25(F)(b) of the Industrial Disputes Act, 1947 is a
condition precedent for the retrenchment of a workman and
any retrenchment without payment at the time of the
retrenchment makes the retrenchment order invalid and
inoperative
As the automatic extinguishment of his service
consequent to the preemptive provision in his appointment
order as to the temporariness and the period of his
employment was covered by the words "termination . for any
reasons whatsoever" occurring in s. 2(oo) of the Act, in an
application under Art. 226 of the Constitution by the
respondent claiming that by virtue of his deemed continuous
service of one year within the meaning of s. 25B(2) of the
Industrial Disputes Act, he was entitled to be reinstated
for non-compliance of s. 25F of the Act. The High Court of
Madras allowing the writ made the rule nisi
absolute. The writ appeal filed by the appellant respondent
also failed. However, the High Court granted a certificate
under Art. 133(1)(c) of the Constitution.
Dismissing the appeals and negativing the contentions
of the appellant, the Court.
^
HELD: (1) The grant of a Constitutional passport to the
Supreme Court by the High Court is not a matter of easy
insouciance but anxious advertence to the dual vital
requirements built into Art. 133(1) by specific amendment. A
substantial question of law of general importance is a sine
quo non to certify fitness for hearing by the apex court.
Nay, more; the question, however, important and substantial,
must be of such pervasive import and deep significance that
in the High Court's judgment it imperatively needs to be
settled at the national level by the highest bench. Failure
here stultifies the scheme of the Article and floods this
court with cases of lesser magnitude with illegitimate
entry.
[162 C-E]
Union of India v. Hafiz Mohmd. Said, ILR [1973] II
Delhi 673, 676, approved.
(2) While exercising the vital powers under Art. 136
the Supreme Court must have due regard to the constitutional
limitations of Art. 133(1) and owe allegiance to those
restraints save in exceptional cases. [163 A]
161
(3) If the workman swims into the harbour of s. 25F of
the Industrial Disputes Act, 1947, he cannot be retrenched
without payment, at the lime of retrenchment, compensation
computed as prescribed therein read with s. 25B(2)
[164 D]
State of Bombay and others v. Hospital Mazdoor Sabha &
others [1960] (2) S.C.R. &66. applied.
(4) Statutory construction, when courts consider
welfare legislation with an economic justice bias, cannot
turn on cold print, glorified as grammatical construction,
but on teleological purpose and protective intendment.
Sections 25F, 25B and 2(oo), of the Industrial Disputes
Act, 1947 have a workers' mission and the input of Part IV
of the Constitution also underscores this benignant
approach. while canons of traditional sanctity cannot wholly
govern, courts cannot go hay wire in interpreting
provisions, ignoring the text and context. Words of multiple
import have to be winnowed judicially to suit the social
philosophy of the statute. Dictionaries are not dictators of
statutory construction where the benignant mood of a law
and, more emphatically, the definition clause furnish a
different denotation. Section 2(00) is the master of the
situation and the Court cannot truncate its amplitude. The
words "for any reason whatsoever" in s. 2(00) of the
Industrial Disputes Act are very wide and almost admit of no
exception.
[163 G, 164 H, 165 B, 166 B]
(5) A breakdown of s. 2(00) unmistakably expands the
semantics of retrenchment. "Termination .. for any reason
whatsoever" are the key words. Every termination spells
retrenchment. A termination takes place where a term expires
either by the active step of the master or the running out
of the stipulated term. To protect the weak against the
strong this policy of comprehensive definition has been
effectuated. Termination embraces not merely the act of
termination by the employer, but the fact of termination how
soever produced. Retrenchment is no longer terra incognita
but area covered by an expansive definition. It means 'to
end' conclude, cease'. That to write into the order of
appointment the date of termination confers no moksha from
s. 25F(b) is inferable from the proviso to s. 25F(1). A
separate subsequent termination of the service is not the
sole magnetic pull of the provision. A preemptive provision
to terminate is struck by the same vice as a post
appointment termination. Dexterity of diction cannot defeat
the articulated conscience of the provision. [165 B-C, D, E,
166 C]
Observation:-Social justice has two sides and
occasionally one party or he other makes myopic mistakes
resulting in further litigation. [166 G]
[The Court reiterated its views held out in Trustees of
Port, Bombay's case, namely, where the law is not free from
obscurity and needs this Court's pronouncement and one of
the affected parties is weak, being a worker, the costs must
come out of public funds and suggested the constitution by
the State of a "Suitors Fund" which will take care of
hardships and public interest in the area of necessary
litigation.]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 933
and 934 of 1975.
From the judgment and orders dated the 24th and 25th
March, 1975 of the Madras High Court at Madras in writ
appeal No. 231 of 1973 and writ petition No. 5062 of 1973.
F. S. Nariman, M/s. 1. N. Shroff and H. S. Parihar, for
the appellant.
M. K. Ramamurthi and J. Ramamurthi, for the respondent.
The Judgment of the Court was delivered by
KRISHNA 1 YEAR, J.-The appellant employer, undaunted by
a double defeat at both tiers in the High Court, has
appealed against the ad verse judgments, by certificate, on
the only ground that there was no retrenchment of the
respondent-employee (within the meaning of
162
Of s. 2(00) of the Industrial Disputes Act, 1947 (Act XIV of
1947) hereinafter called the Act) and, consequently the
latter was ineligible to-the statutory compensation the non-
payment of which, along with the termination of service,
nullified the termination itself. The end result was that
the Division Bench of the Court ruled that the respondent
‘was entitled to retrenchment compensation’ which, not
having been paid, ‘the termination would be invalid’. The
subtle r legal issue, substantial in its financial impact,
is whether s. 25F read with s. 2(00), vis a vis a short
employment, casts a lethal spell on the cessation of service
for non-compliance with the condition precedent set out in
the provision.
The Certificate
The certificate issued by the High Court under
Art.133(1) is bad on its face, according to counsel for the
respondent and the appeal consequently incompetent. We are
inclined to agree that the grant of a constitutional
passport to the Supreme Court by the High Court is not a
matter of easy insouciance but anxious advertence to the
dual vital requirements built into Art. 133(1) by specific
amendment. Failure here stultifies the scheme of the Article
and floods this Court with cases of lesser magnitude with
illegitimate entry. A substantial question of law of general
importance is a sine qua non to certify fitness for hearing
by the apex court. Nay, . more; the question, however
important and substantial, must be of such pervasive import
and deep significance that in the High Court’s judgment it
imperatively needs to be settled at the national level by
the highest bench. The crux of the matter has been correctly
set out in a decision(l) of the Delhi High Court in words
which find our approval:
“A certificate can be granted only if the case involves
a question of law:- .
(i) which is not only substantial but is also of
general importance; and
(ii) the said question, in our opinion, needs to
be decided by the Supreme Court. r _
It has to be noted that all the above requirements
should be satisfied before a certificate can be
granted. It means that it is not sufficient if the case
involves a substantial question of law of general
importance but in addition to it the High Court should
be of the opinion that such question needs to be
decided by the Supreme Court. Further, the word ‘needs’
suggests that there has to be a necessity for a ”
decision by the Supreme Court on the question, and such
a necessity can be said to exist when, for instance,
two views are possible regarding the question and the
High Court takes one of the said views. Such a
necessity can also said to exist when a different view
has been expressed by another High Court.
(1) Union of India v. Hafiz Mohd. Said: ILR [1973] II
Delhi 673, 676.
163
It is but fair to add an implied but important foot
note that while exercising the wider power under Art. 136
this Court must have due regard to the constitutional
limitations on Art. 133(1) and owe allegiance to those
restraints save in exceptional cases.
This view o f the certificate would have put the lid on
this appeal but on hearing counsel we feel that the omission
of the High Court to assess the case explicitly from this
angle does not disable us from B. granting special leave, if
applied for. So much so counsel have proceeded to argue on
the merits, the penumbral area of industrial law covered by
the subject matter being one which cannot be left in legal
twilight.
The facts
One of the two employees involved in these appeals has
been re-absorbed in service and his case is therefore of
lesser import, but the other is still out in the cold and
his legal fate falls for examination in the matrix of facts
which we proceed to state. This respondent was appointed as
cashier, off and on, by the state Bank of India between July
31, 1973 and August 29, 1973. The intermittent breaks
notwithstanding, his total number of days of employment
answered the test of ‘deemed’ continuous service within s.
258(2) and both sides accept that fact situation. But the
order of appointment, which bears in its bosom the ‘good
bye’ to the employee after a few days, calls for
construction in the light of s.2(oo) and s. 25F and we may
as well read it here:
“(1) The appointment is purely a temporary one for
a period of 9 days but may be terminated
earlier, without assigning any reason
therefor at the bank’s discretion;
(2) The employment, unless terminated earlier,
will automatically cease at the expiry of the
period i.e., 1972.”
This nine days’ employment, tacked on to what has gone
before, Fr has ripened to a continuous service for a year on
the antecedent arithmetic of 240 days of broken bits of
service.
The legal issue
The skiagram of the employment order must now be.
studied to ascertain which of the rival meanings counsel
have pressed deserves preference. Statutory construction,
when courts consider welfare legislation with an economic
justice bias, cannot turn on cold print glorified as
grammatical construction but on teleological purpose and
protective intendment. Here s. 25F, 25B and 2(oo) have a
workers’ mission and the input of Part IV of the
Constitution also underscores this benignant approach. While
canons of traditional sanctity can not wholly govern, courts
cannot go haywire in interpreting provisions, ignoring the
text and context. With these guidelines before us, we seek
to decode the implications of the order of appointment. But
before doing so, an analysis of the legal components of s.
25F will facilitate the diagnostic task.
164
The leading case on this facet of law is The Hospital
Mazdoor Sabha(1). Gajendragadkar, J. (as he then was)
observed:
“Section 25F(b) provides that no workman employed
in any industry who has been in continuous service for
not less than one year under an employer shall be
retrenched by that employer until he has been paid at
the time of retrenchment compensation which shall be
equivalent to fifteen days’ average pay for every
completed year of service or any part thereof in excess
of six months. Clauses (a) c and (e) of the said
section prescribe similar conditions but ” we are not
concerned with them. On a plain reading of s. 25F(b) it
is clear that the requirement prescribed by it is a
condition precedent for the retrenchment of the work
man. The section provides that no workman shall be .1,
retrenched until the condition in question has been
satisfied. It is difficult to accede to the argument
that when the P section imposes in mandatory terms a
condition precedent, non-compliance with the said
condition would not render the impugned retrenchment
invalid …. failure to comply with the said provision
renders the impugned orders invalid and inoperative.”
Without further ado, we reach the conclusion that if
the workman swims into the harbour of s. 25F, he cannot be
retrenched without payment, at the time of retrenchment,
compensation computed as prescribed therein read with s.
25B(2). But, argues the appellant all these obligations flow
only out of retrenchment, not termination outside that
species of snapping employment. What, then, is retrenchment
? The key to this vexed question is to be found in s. 2(oo)
which reads thus:
“2(oo) “retrenchment” means the termination by the
employer of the service of a workman for any
reason whatsoever, otherwise than as a
punishment inflicted by way of disciplinary
action, but does not include- –
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching
the age of supera-annuation if the
contract of employment between the
employer and the workman concerned
contains a stipulation in that behalf;
or
(c) termination of the service of a workman
on the ground of continued ill-health;
for any reason whatsoever-very wide and almost admitting of
no exception. Still, the employer urges that when the order
of appointment carries an automatic cessation of service,
tho period of employment works itself out by efflux of
times, not by act of employer.
(1) [1960] 2 S.C.R. 866, 871-872.
165
Such cases are outside the concept of ‘retrenchment’ and
cannot entail the burdensome conditions of s. 25F. Of
course, that a nine-days’ employment, hedged in with an
express condition of temporariness and automatic cessation,
may look like being in a different street (if we may use a
colloquialism) from telling a man off by retrenching him. To
retrench is to cut down. You cannot retrench without
trenching or cutting. But dictionaries are not dictators of
statutory construction where the benignant mood of a law
and, more emphatically, the definition clause furnish a
different denotation. Section 2(oo) is the master of the
situation and the Court cannot truncate its amplitude.
A break-down of s. 2(oo) unmistakably expands the
semantics of retrenchment. ‘Termination… for any reason
whatsoever’ are the key words. Whatever the reason, every
termination spells retrenchment. So the sole question is-has
the employee’s service been terminated ? Verbal apparel
apart, the substance is decisive. A termination takes place
where a term expires either by the active step of the master
of the running out of the stipulated term. To protect the
weak against the strong this policy of comprehensive
definition has been effectuated. Termination embraces not
merely the act of termination by the employer, but the fact
of termination howsoever produced. May be, the present may
be a hard case, but we can visualise abuses by employers, by
suitable verbal devices, circumventing the armour of s.25F
and s.2(oo). Without speculating on possibilities, we may
agree that ‘retrenchment’ is no longer terra incognita but
area covered by an expansive definition. It means ‘to end,
conclude, cease’. In the present case the employment ceased,
concluded, ended on the expiration of nine days
automatically may be, but cessation all the same. That to
write into the order of appointment the date of termination
confers no moksha from s.25F(b) is inferable from the
proviso to s. 25F(1). True, the section speaks of
retrenchment by the employer and it is urged that some act
of volition by the employer to bring about the termination
is essential to attract s. 25F and automatic extinguishment
of service by effluxion of time cannot be sufficient. An
English case R. v. Secretary of State(l) was relied on where
Lord Denning MR observed:
“I think that the word ‘terminate’ or
‘termination’ is by itself ambiguous. It can refer to
either of two things either to termination by notice or
to termination by effluxion of time. It is often used
in that dual sense in landlord and tenant and in master
and servant cases. But there are several indications in
this paragraph to show that it refers here only to
termination by notice.
Buckley L.C., concurred and said:
“In my judgment the words are not capable of
bearing that meaning. As counsel for the Secretary of
State has point- ed out, the verb ‘terminate’ can be
used either transitively or
1973] 2 All E.R. 103.
166
intransitively. A contract may be said to terminate
when it s comes to an end by effluxion of time, or it
may be said to be terminated when it is determined at
notice or otherwise by some act of one of the parties.
Here in my judgment the 7 word ‘terminated’ is used in
this passage in para 190 in the transitive sense, and
it postulates some act by somebody which is to bring
the appointment to an end, and is not applicable to a
case in which the appointment comes to end merely by
effluxion of time.”
Words of multiple import have to be winnowed judicially to
suit the c social philosophy of the statute. So screened we
hold that the transitive and intransitive senses are covered
in the current context. Moreover, an employer terminates
employment not merely by passing an order as the service
runs. He can do so by writing a composite order, one giving
employment and the other ending or limiting it. A separate,
subsequent determination is not the sole magnetic pull of
the provision. A pre-emptive provision to terminate is
struck by the same vice as the post-appointment termination.
Dexterity of diction cannot defeat the articulated
conscience of the provision.
What follows ? Had the State Bank known the law and
acted on it, half-a-month’s pay would have concluded the
story. But that did not happen. And now, some years have
passed and the Bank has to pay, for no service rendered.
Even so, hard cases cannot make bad law. Re-instatement is
the necessary relief that follows. At what point ? In the
particular facts and circumstances of this case, the
respondent shall be put back where he left off, but his new
salary will be what he would draw where he to be appointed
in the same post today de novo. As for benefits, if any,
flowing from service he will be rank below all permanent
employees in that cadre and will be deemed to be a temporary
hand upto now. He will not be allowed to claim any
advantages in the matter of seniority or other priority
inter se among temporary employees on the ground that his
retrenchment is being declared invalid by this Court. Not
that we are laying down any general proposition of law, but
make this direction in the special circumstances of the
case. As for the respondent’s emoluments, he will have to
pursue other remedies, if any.
We substantially dismiss the appeal (C.A. 934 of 1975)
subject to the slight modification made above. There was
some intervening suggestion for settlement of the dispute
but it fell through. We are persuaded to make the
observation based on that circumstance that social justice
has two sides and, occasionally, one party or the other
makes r myopic mistakes resulting in further litigation.
Subject to the above observations, the appeal is
dismissed. The parties will bear their costs throughout,
although, in cases like this, where the law is not free from
obscurity and needs this Court’s pronouncement and one of
the affected parties is weak, being a worker, the costs must
come out of public funds as suggested in Trustees of Port,
Bombay(1). The State, we hope, will constitute a suitors’
fund
(1) [1974] 4 S.C.C. 710.
167
which will take care of hardships and public interest in the
area of necessary litigation.
In C.A. 933 of 1975 the respondent has been re-employed
by the appellant although in his case also we declare, for
reasons already given and subject to the same term till his
absorption that the retrenchment is invalid. The costs, in
this appeal, will be borne by each of the parties.
S.R. Appeal dismissed .
12-L390SCI/76
168