PETITIONER:
WORKMEN OF SUDDER WORKSHOP OF JOREHAUT TEA CO. LTD.
Vs.
RESPONDENT:
ITS MANAGEMENT AND VICE-VERSA
DATE OF JUDGMENT01/05/1980
BENCH:
KRISHNAIYER, V.R.
BENCH:
KRISHNAIYER, V.R.
REDDY, O. CHINNAPPA (J)
CITATION:
1980 AIR 1454 1980 SCR (3) 966
1980 SCC (3) 406
ACT:
New Plea-Article 136 of the Constitution-Supreme Court
cannot accept new plea not taken earlier.
Industrial Disputes Act, Sections 25F and 25G, scope
of-Back wages payment of.
HEADNOTE:
The Management Tea Co. Ltd. appellant in C. A. 1538/71
retrenched on November 5, 1966, 23 workmen, 16 of whom were
paid retrenchment compensation allegedly in terms of section
25F of the Industrial Disputes Act based on wages obtaining
prior to Wage Board Award, which came into force on 1-4-66
retroactively and in the order of 'last come, first go',
while the services of other seven were terminated, although
on payment of retrenchment compensation, allegedly in breach
of Section 25G of the Act, i.e. out of turn. The dispute
that was raised was decided by the Tribunal which upheld the
validity of the retrenchment of the 16, but set aside the
termination of the other seven. The High Court agreed with
the Tribunal's Award and hence the appeals both by the
workmen and the management after obtaining special leave.
Dismissing both the appeals, the Court
^
HELD: 1. The plea that the amount paid by way of
retrenchment compensation envisaged in Section 25F of the
Industrial Disputes Act, not having been computed as per the
revised pay scales as per the Wage Board Award, fell short
of what was legally due and hence there was non-compliance
is not tenable because before the Tribunal this contention
was neither pleaded nor proved. There was no hint of it in
the Award. In the High Court this new plea based on the
facts was not permitted. Further the Wage Boards' Award was
subsequent to the retrenchment although retroactively
applied and the workmen had accepted the retrenchment
compensation on the wages prevalent at the time of the
retrenchment. In the absence of any basis for this new plea
Supreme Court cannot reopen an ancient matter of 1966. But
the 16 Workmen, being admittedly eligible for the Wage Board
scale, would be paid the difference for the period between
1-4-66 to 5-11-66. [969 A-E]
2. Section 25G of the Industrial Disputes Act
postulates that ordinarily the 'last come, first go' will be
the methodology of retrenchment. Of course, it is not an
inflexible rule and extra-ordinary situations may justify
variations. There must be valid reason for this decision,
and, obviously, the burden is on the Management to
substantiate the special ground for departure from the rule.
Surely, valid and justifiable reasons are for the management
to make our, and if made out, s. 25G will be vindicated and
not violated, varying the ordinary rule of 'last come first
go.' There is none made out here, nor even alleged, except
the only plea that the retrenchment was done in compliance
967
with s. 25G grade-wise. Absence of mala fides by itself is
no absolution from the rule in s.25G. Affirmatively, some
valid and justifiable grounds must be proved by the
Management to be exonerated from the 'last come first go'
principle. The above rule can be applied category wise. That
is to say those who fell in the same category shall suffer
retrenchment only in accordance with the principle of last
come first go. [969 E, H, 970 A, B, D-F]
M/s. Om Oil & Oil Seeds Exchange Ltd., Delhi v. Their
Workmen, [1966] Suppl. S.C.R. 74, followed.
3. Grading for purposes of scales of pay and like
considerations will not create new categorisation. It is a
confusion or unwarranted circumvention to contend that
within the same category if grades for scales of pay, based
on length of service etc., are evolved, that process amounts
to creation of separate categories. In the instant case, the
seniority List is the same which is a telling circumstance
to show that they fell in the same category. [971 C-E]
4. Supreme Court cannot sympathise with a party who
gambles in litigation to put off the evil day and when that
day arrives prays to be saved from his own gamble. The Award
had given convincing reasons for reinstatement and even
reduced the back wages to half. Still, the workmen were
dragged to the High Court and, worse, when worsted there,
were driven from Assam to Delhi to defend their pittance.
The logistics of litigation for indigent workmen is a burden
the management tried to use by a covert blackmail through
the judicial process. Misplaced sympathy is a mirage
justice. [971 G-H, 972 A-B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 1303
of 1972 and 1538 of 1971.
Appeals by Special Leave from the Judgment and Orders
dated 13-4-1971 of the Assam and Nagaland High Court in
Civil Rule No. 368/68 and 174/68.
M. N. Phadke and S. N. Choudhary for the appellant in
CA. No. 1538 and Respondent in CA No. 1303/72.
P. R. Mridul and K. P. Gupta for Respondent No. 1 in CA
1538 and Appellant in CA No. 1303/72.
The Judgment of the Court was delivered by
KRISHNA IYER, J. These two appeals, turning on the
validity of the retrenchment of 23 workmen way back in 1966,
are amenable to common disposal. Mr. Phadke, appearing for
the Management, argued straight to the point; so did Shri
Mridul, with the result that we could get the hang of the
case without much wrestling with time or getting paper-
logged. Since, in substance, we are inclined to leave
undisturbed the Award of the Industrial Tribunal, affirmed,
as it were, by the High Court, both these appeals will be
given short shrift with brief reasons.
968
The facts, to the extent necessary to appreciate the
issues canvassed, are brief. The Management of a tea
plantation by name Jorehaut Tea Co., Ltd., retrenched 23
workmen, 16 of whom were paid retrenchment compensation
allegedly in terms of s.25F of the Industrial Disputes Act
(for short, the Act) and in the order of ‘last come, first
go’, while the services of the other seven were terminated,
although on payment of retrenchment compensation, allegedly
in breach of s. 25G of the Act, i.e. out of turn. The
dispute that was raised was decided by the Tribunal which
upheld the validity of the retrenchment of the 16 but set
aside the termination of the other 7. Consequently it
directed their reinstatement with some back wages. The Award
granted the following relief:
In respect of the workmen, viz., Sri Bhogeswar
Saikia Sri Nandeswar Bora, Sri Gunai Bora, Sri
Premodhar Sarma, Sri Alimuddin Ahmed, Sri Deven Sarma
and Shri Harlal Biswas whose retrenchment has been
found to be not justified they are entitled to
reinstatement with continuity of service. These workmen
have not come forward to say that they remained
unemployed from the date of their retrenchment. In the
circumstances of the case, I think they may be given
wages at half the rate from the date of retrenchment
till the date of publication of the award in the
Gazette.
We may first dispose of the workers’ appeal. In all, 23
persons were retrenched. In respect of 16 the rule of ‘last
come, first go’ was applied. Thus homage was paid to s.25G
of the Act. But then, the workmen in their appeal, contended
before us that s. 25F had been breached and, therefore, the
termination was bad in law. The Management’s case is that,
as a fact, all or most of them had been reinstated when
fresh vacancies had arisen, although neither party is able
to assert with certainty this case of reinstatement. That
apart, if there be non-compliance with s.25F, the law is
plain that the retrenchment is bad. However, when probed
further as to how s.25F had been violated, Shri Mridul
argued that the amount paid by way of retrenchment
compensation envisaged in s.25F fell short of what was
legally due and hence there was non-compliance. Under more
searching interrogation, Shri Mridul stated that the
compensation had been computed on the basis of wages
previously paid and in derogation of the Wage Board Award
which had been implemented by the Management with effect
from 1-4-1966. The retrenchment was on November 5, 1966,
i.e. months after April 1, 1966. Therefore, the revised pay-
scales as per the Wage Board Award should have been adopted
in calculating the retrenchment compensation. This spinal
flaw rendered
969
the tender of compensation insufficient and, therefore, the
retrenchment itself was invalid. Maybe, there is apparent
force in this contention. But Shri Phadke countered it by
saying that it was not open to the workmen to spring a
surprise on the Management especially when the question was
one of fact. He urged that before the Tribunal no plea based
on the Wage Board Award was made and it was quite possible
that the Management would have adequately met the contention
if such a plea had been raised. The fact is that before the
Tribunal the contention pressed before us was neither
pleaded nor proved. There is no hint of it in the Award. In
the High Court this new plea based on the facts was not
permitted. Had there been some foundation laid at least in
the written statement of the workmen, we might have been
inclined to explore the tenability of the plea, especially
because there is no dispute about the Wage Board Award and
the fact that it had been given effect to from 1-4-1966 and
the further fact that in the retrenchment notice the wages
were not calculated according to the Wage Board’s Award. It
must be remembered, however, that the Wage Board’s Award was
subsequent to the retrenchment although retroactively
applied and the workmen had accepted the retrenchment
compensation on the wages prevalent at the time of the
retrenchment. In the absence of any basis for this new plea
we are unable to reopen an ancient matter of 1966 and,
agreeing with the High Court, dismiss the appeal. But the 16
workmen, being eligible admittedly for the Wage Board scale,
will be paid the difference for the period between 1-4-1966
to 5-11-1966.
Now, we will take up the merits of the Management’s
appeal which relates to the retrenchment of seven workmen.
Admittedly, the rule in s.25G of the Act, which postulates
that ordinarily the ‘last come, first go’ will be the
methodology of retrenchment, has not been complied with
provided we treat all the workmen in the category as one
group. It makes for better appreciation of the point if we
read s. 25G at this stage:
Where any workman in an industrial establishment,
who is a citizen of India, is to be retrenched and he
belongs to a particular category of workmen in that
establishment, in the absence of any agreement between
the employer and the workman in this behalf, the
employer shall ordinarily retrench the workman who was
the last person to be employed in that category, unless
for reasons to be recorded the employer retrenches any
other workman.
The key-note thought of the provision, even on a bare
reading, is evident. The rule is that the employer shall
retrench the workman who came last, first, popularly known
as ‘last come first go’. Of
970
course it is not an inflexible rule and extra-ordinary
situations may justify variations. For instance, a junior
recruit who has a special qualification needed by the
employer may be retained even though another who is one up
is retrenched. There must be a valid reason for this
deviation, and obviously, the burden is on the Management to
substantiate the special ground for departure from the rule.
Shri Phadke brought to our notice the decision in M/s
Om Oil & Oilseeds Exchange Ltd., Delhi v. Their Workmen to
make out that it was not a universal principle which could
not be departed from by the Management that the last should
go first. The Management had a discretion provided it acted
bona fide and on good grounds. Shah, J. in that very ruling,
while agreeing that a breach of the rule could not be
assumed as prompted by mala fides or induced by unfair
labour practice merely because of a departure or deviation,
further observed that the Tribunal had to determine in each
case whether the Management had acted fairly and not with
ulterior motive. The crucial consideration next mentioned by
the learned Judge is that the Management’s decision to
depart from the rule must be for valid and justifiable
reasons, in which case “the senior employee may be
retrenched before his junior in employment.” Surely, valid
and justifiable reasons are for the Management to make out,
and if made out, s. 25G will be vindicated and not violated.
Indeed, that very decision stresses the necessity for valid
and good ground for varying the ordinary rule of ‘last come
first go’. There is none made out here, nor even alleged,
except the only plea that the retrenchment was done in
compliance with s. 25G grade-wise. Absence of mala fides by
itself is no absolution from the rule in s. 25G.
Affirmatively, some valid and justifiable grounds must be
proved by the Management to be exonerated from the ‘last
come first go’ principle.
It must be remembered that the above provision which we
have quoted insists on the rule being applied category-wise.
That is to say, those who fall in the same category shall
suffer retrenchment only in accordance with the principle of
last come first go. The short point raised is that the seven
workmen are not in the same category. The finding of the
Tribunal, concurred in by the High Court is that they fell
in the same category. We quote the award:
“It will be seen that when there is no trade test
or anything to mark efficiency, there is no basis for
placing the workmen in different grades and when all
the workmen of the same category are to do the same
work inasmuch as by the management’s own evidence there
is no gradewise allo-
971
cation of duty within the same category. Although in
the evidence the Management wanted to justify their
departure from the principle of ‘last come first go’
there is nothing to show that such a reason was
recorded for deviating from the principle. In the
circumstances of the case it cannot be said that the
management’s selection of persons to be retrenched
leaving the juniormost in some category was justified
and the reason now adduced for deviating from the
principle cannot be accepted in the absence of the
reason being not recorded at the time of retrenchment.
Further it will be also noticed that although there is
classification of workmen into grades (?) within the
category, there is nothing to distinguish one workman
of one grade from another workman of another Grade
inasmuch as there is no allocation of duties amongst
the workmen of different Grades in the category.”
The seniority list is the same, which is a telling
circumstance to show that they fell in the same category.
Grading for purposes of scales of pay and like
considerations will not create new categorisation. It is a
contusion or unwarranted circumvention to contend that
within the same category if grades for scales of pay, based
on length of service etc., are evolved, that process amounts
to creation of separate categories. This fallacy has been
rightly negatived by a detailed discussion in the Award. The
High Court has avoided the pitfall and we decline to accept
the submission. The result is that the Award must hold good
in regard to the illegally retrenched seven workmen.
What remains to be considered is the last submission of
Shri Phadke that the engineering establishment wherein these
seven workmen are to be reinstated is no longer in
existence. Further, he pleads that on account of long lapse
of time on account of the pendency of the appeal is this
Court the compensation payable by way of full wages may
amount to a huge sum disproportionate to the deviance from
the law. He, therefore, pleads for moulding the relief less
harshly.
We cannot sympathise with a party who gambles in
litigation to put off the evil day and when that day arrives
prays to be saved from his own gamble. The Award had given
convincing reasons for reinstatement and even reduced the
back wages to half. Still, the workmen were dragged to the
High Court and, worse, when worsted there, were driven from
Assam to Delhi to defend their pittance. The logistics of
litigation for indigent workmen is a burden the Management
tried to use by a covert blackmail through the judicial
process.
972
Misplaced sympathy is mirage justice. We cannot agree. Even
so, we take note of the inordinate delay due to long
pendency which is part of the pathology of processual
justice in the Supreme Court. So we direct that half the
back wages between the date of retrenchment and the
publication of the Award shall be paid, as directed in the
Award itself. For the post-Award period, full wages will be
paid until the High Court’s judgment on 13-4-71 and
thereafter 75% of the wages will be paid until 30-4-1980.
Counsel contends that the Workshop is not in existence
now and reinstatement is physically impossible. Sri Mridul,
for the workmen, states that a just solution by the court in
the given circumstances is acceptable. We direct that, in
lieu of reinstatement, one year’s wages calculated on the
scale sanctioned by the Wage Board recommendations for each
such workman be paid. All the sums, if not paid before 15-5-
80, shall carry 12% interest. And upto 15-5-80 they shall
carry 9% interest in supersession of the interim order dated
5-5-72. Rough and ready justice, for want of full
information, is not satisfactory but cannot be helped.
We dismiss the workmen’s appeal. No costs. We dismiss
the Management’s appeal, subject to the above directions,
with costs quantified at Rs. 5,000/-.
S. R. Appeals dismissed.
973