PETITIONER: CENTRAL BANK OF INDIA Vs. RESPONDENT: S.SATYAM & ORS. DATE OF JUDGMENT: 31/07/1996 BENCH: VERMA, JAGDISH SARAN (J) BENCH: VERMA, JAGDISH SARAN (J) VENKATASWAMI K. (J) CITATION: JT 1996 (7) 181 1996 SCALE (5)567 ACT: HEADNOTE: JUDGMENT:
THE 31ST DAY OF JULY,1996
Present:
Hon’ble Mr.Justice J.S.Verma
Hon’ble Mr.Justice K.Venkataswami
G.B.Pai, Sr.Adv. Mrs.Meera Mathur and O.C.Mathur, Advs. with
him for the appellant
T.A.Ramachandran, Sr.Adv. Ms.Asha Nair and K.Ram Kumar,
Advs, with him for the Respondents.
J U D G M E N T
The following Judgment of the Court was delivered:
Central Bank of India
V.
S. Satyam & Ors.
J U D G M E N T
J.S. VERMA, J. :
The short question is : whether the re-employment of
retrenched workmen required by Section 25-H of the
Industrial Disputes Act, 1947 (for short the Act’) is
confined only to the category of retrenched workmen covered
by Section 25-F who have been in continuous service for not
less than one year? The controversy arises in view of the
wide meaning of “retrenchment” given in its definition
contained in Section 2(oo) of the Act to cover all kinds of
terminations for any reason whatsoever. This wide meaning is
settled by the decision of this Court in Punjab Land
Development and Reclamation Corporation Ltd., Chandigarh
etc.etc. Vs. Presiding Officer, Labour Court, Chandigarh &
Ors. etc.etc., 1990 (3) SCC 682. On behalf of the appellant
(employer) it is contended that the meaning given in the
definition of retrenchment contained in Section 2(oo) is to
be read subject to the context and the context in Section
25-H indicates that the word “retrenched” in Section 25-H
has the same meaning as it has in Section 25-F and 25-G,
reading Section 25-F along with Section 25-B since they all
form a part of the same scheme in Chapter V A of the Act.
It was argued by Shri Pai, learned senior counsel for
the appellant that the object of providing for re-employment
of retrenched workmen by enacting Section 25-H was merely to
provide for the category of retrenched workmen covered by
Section 25-F who had been in continuous service for not Less
than one year and not those who had served for a lesser
period and to whom Section 25-F did not apply. The present
case relates to workmen who admittedly do not fall in the
category of retrenched workmen covered by Section 25-F since
they had all worked for a much lesser period. For this
reason, Shri Pai contended that this factor alone excludes
the applicability of Section 25-H to the respondents
(workmen) in the present case. The grant of relief to them
by the High Court is challenged primarily on this ground.
Alternatively, Shri Pai contended that the respondents were
employed only for short periods between 1974 to 1976 and
therefore, grant of relief to them in the Writ Petition
filed long thereafter in 1982 is unjustified on the ground
of laches as well as prejudice to the other workmen employed
during the intervening period who are not impleaded. Shri
Pai also referred to the Rules 77 and 78 of the Industrial
Disputes (Central) Rules, 1957 (for short the Rules’) in
support of his submission.
In reply Shri Ramachandran, learned counsel for the
Respondents, contended that the wide meaning of the word
retrenchment’ given in the definition contained in Section
2(oo) cannot be curtailed by the effect of Section 25-F read
with Section 25-B since Section 25-F merely prescribes the
conditions precedent for retrenchment of the workmen covered
thereby and not all the retrenched workmen. He argued that
there are no words of limitation in Section 25-H to confine
its application only to the retrenched workmen covered by
Section 25-F. His reply to the alternative submission was
that it is not a fit case to interfere with the limited
relief granted by the High Court.
There is no dispute on facts and the question for
decision is only one of construction, mainly of Section 25-H
of the Act. the controversy relating to the meaning and
scope of retrenchment’ defined in Section 2(oo) is settled
by the decision of the Constitution Bench in Punjab Land
Development and Reclamation Corporation Ltd. (supra). It was
held :
“While naturally and
ordinarily it meant discharge of
surplus labour, the defined meaning
was termination of service of a
workman for any reason whatsoever
except those excluded in the
definition itself.”
The kind of termination of service of a workman excluded
from the definition is specified in Clauses (a) to (c) and
it is not disputed before us that none of these exceptions
applies in the present case. Shri Pai argued the case on the
basis that the termination of service of these workmen
amounted to retrenchment’ as defined in Section 2(oo). It
is, therefore, clear that if the definition of
retrenchment’ given in Section 2(oo) is to be applied for
the construction of Section 25-H then the requirement of re-
employment of retrenched workmen thereby cannot be confined
only to the retrenched workmen of the category covered by
Section 25-F, under which category the respondents,
admittedly, do not fall. The question is whether there is
any reason to curtail this definition of retrenchment’ while
construing the meaning of the expression retrenched workmen’
in Section 25-H. In other words, is the provision for re-
employment of retrenched workmen confined only to the
category covered by Section 25-F and cannot be extended to
all retrenched workmen including those not covered by
Section 25-F, like the respondents? It is for this purpose,
the appellants relied on Rules 77 and 78 framed under the
Act, to suggest that the wider meaning could not be intended
in Section 25-H.
The relevant provisions are as under :
“CHAPTER V – A
25-B. Definition of continuous
service For the purposes of this
Chapter, –
(1) a workman shall be said to be
in continuous service for a period
if he is, for that period, in
uninterrupted service, including
service which may be interrupted on
account of sickness or authorised
leave or an accident or a strike
which is not illegal, or a lock-out
or a cessation of work which is not
due to any fault on the part of the
workman;
(2) where a workman is not in
continuous service within the
meaning of clause (1) for a period
of one year or six months, he shall
be deemed to be in continuous
service under an employer –
(a) for a period of one year,
if the workman, during a period of
twelve calendar months preceding
the date with reference to which
calculation is to be made, has
actually worked under the employer
for not less than –
(i) one hundred and ninety
days in the case of a workman
employed below ground in a mine;
and
(ii) two hundred and forty
days, in any other case;
XXX XXX XXX
25-F. Conditions precedent to
retrenchment of workmen – 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 – .
(a) the workman has been given
one month’s notice in writing
indicating the reasons for
retrenchment and the period of
notice has expired, or the workman
has been paid in lieu of such
notice, wages for the period of the
notice;
(b) the workman has been paid,
at the time of retrenchment,
compensation which shall be
equivalent to fifteen days’
average pay for every completed
year of continuous service or any
part thereof in excess of six
months; and
(c) notice in the prescribed
manner is served on the appropriate
Government or such authority as may
be specified by the appropriate
Government by notification in the
Official Gazette.
xxx xxx xxx
25-G. Procedure for retrenchment –
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.
25-H. Re-employment of retrenched
workmen – Where any workmen are
retrenched, and the employer
proposes to take into his employ
any persons, he shall, in such
manner as may be prescribed, give
an opportunity to the retrenched
workmen who are citizens of India
to offer themselves for re-
employment, and such retrenched
workmen who offer themselves for
re-employment shall have preference
over other persons.”
“INDUSTRIAL DISPUTES (CENTRAL)
RULES, 1957
77. Maintenance of seniority list
of workmen – The employer shall
prepare a list of all workmen in
the particular category from which
retrenchment is contemplated
arranged according to the seniority
of their service in that category
and cause a copy thereof to be
pasted on a notice board in a
conspicuous place in the premises
of the industrial establishment at
least seven days before the actual
date of retrenchment.
78. Re-employment of retrenched
workmen-(1) At least ten days
before the date on which vacancies
are to be filled, the employer
shall arrange for the display on a
notice board in a conspicuous place
in the premises of the industrial
establishment details of those
vacancies and shall also give
intimation of those vacancies by
registered post to every one of all
the retrenched workmen eligible to
be considered therefor, to the
address given by him at the time of
retrenchment or at any time
thereafter:
Provided that where the number
of such vacancies is less than the
number of retrenched workmen, it
shall be sufficient if intimation
is given by the employer
individually to the seniormost
retrenched workmen in the list
referred to in Rule 77 the number
of such seniormost workmen being
double the number of such
vacancies:
Provided further that where
the vacancy is of a duration of
less than one month there shall be
no obligation on the employer to
send intimation of such vacancy to
individual retrenched workmen:
Provided also that if a
retrenched workman, without
sufficient cause being shown in
writing to the employer, does not
offer himself for re-employment on
the date or dates specified in the
intimation sent to him by the
employer under this sub-rule, the
employer may not intimate to him
the vacancies that may filled on
any subsequent occasion.
(2) Immediately after complying
with the provisions of sub-rule
(1), the employer, shall also
inform the trade union connected
with the industrial establishment,
of the number of vacancies to be
filled and names of the retrenched
workmen to whom intimation has been
sent under that sub-rule:
Provided that the provisions
of this sub-rule need not be
complied with by the employer in
any case where intimation is sent
to every one of the workmen
mentioned in the list prepared
under Rule 77″.
On the rival contentions, the real question for
decision is : whether the provision for re-employment of
retrenched workmen made in Section 25-H should be confined
only to the category of retrenched workmen covered by
Section 25-F by restricting the meaning of `retrenchment’ in
Section 2(oo) for this purpose? Chapter V-A containing
Sections 25-A to 25-J was inserted by Act No.43 of 1953
with effect from 24.10.1953. This Chapter relates to `Lay-
off and Retrenchment’. Section 25-F prescribes the
conditions precedent to retrenchment of workmen. It applies
only to the retrenchment of a workman employed in any
industry who has been in continuous service for not less
than one year and not to any work mall who has been in
continuous service for less than one year. Section 25-B
defines continuous service for the purposes of this Chapter
and it says, inter alia, that a workman shall be deemed-to
be in continuous service under an employer for a period of
one year, if the workman, during a period of twelve calendar
months preceding the date with reference to which
calculation is to be made, has actually worked under the
employer for not less than 240 days. In other words, tho
expression ‘continuous service for not less than one year’
in section 25-F has to be so construed by virtue of Section
25-B. the benefit of applicability of Section 25-F can,
therefore, be claimed by a workman only if he has been in
continuous service for not less than one year as defined in
Section 25-B. Any other retrenched workman who does not
satisfy this requirement of continuous service for not less
than one year cannot avail the benefit of Section 25-F which
prescribes the conditions precedent to retrenchment of
workman of this category. Section to retrenchment of workman
of this category. Section 25-G prescribe the procedure for
retrenchment and ordinarily applies the principles of ‘last
come first go’.
Section 25-H then provides for re-employment of
retrenched workmen. It says that when the employer proposes
to take into his employ and persons, he shall, in such a
manner as may be prescribed, give an opportunity to the
retrenched workmen who are citizens of India to offer
themselves for re-employment, and such retrenched workmen
who offer themselves for re-employment shall have preference
over other persons. Rules 77 and 78 of the Industrial
Disputes (Central) Rules, 1957 prescribe the mode of re-
employment. Rule 77 requires maintenance of seniority list
of all workmen in a particular category from which
retrenchment is contemplated arranged according to seniority
of their service in that category and publication of that
list. Rule 78 prescribe and mode of re-employment of
retrenched workmen. The requirement in Rule 78 is of notice
in the manner prescribed to every one of all the retrenched
workmen eligible to be considered for re-employment. Shri
Pai contends that Rules 77 and 78 are unworkable unless the
application of Section 25-H is confined to the category of
retrenched workmen to whom Section 25-F applies. We are
unable to accept this contention.
Rule 77 requires the employer to maintain a seniority
list of workmen in that particular category from which
retrenchment is contemplated arranged according to the
seniority of their service. The category of workmen to whom
Section 25-F applies is distinct from those to whom it is in
applicable. There is no practical difficulty in maintenance
of seniority list of workmen with reference to the
particular category to which they belong. Rule 77,
therefore, does not present any difficulty. Rule 78 speaks
of retrenched workmen eligible to be considered for filling
the vacancies and here also the distinction based on. The
category of workmen-can be maintained because those falling
in the category of Section 25-F are entitled to be placed
higher than those who do not fall in that category. It is no
doubt true that persons who have been retrenched after a
longer period of service which places them higher in the
seniority list are entitled to be considered for re-
employment earlier than those placed lower because of a
lesser period of service. In this manner a workman falling
in the lower category because of not being covered by
Section 25-F can claim consideration for re-employment only
if an eligible workman above him in the seniority list is
not available. Application of Section 25-H to the. Other
retrenched workmen not cove-red by Section 25-f does not, in
Any manner, prejudice those covered by Section 25-F because
the question of consideration of any retrenched workman not
covered by Section 25-F would arise only, if and when, no
retrenched workman covered by Section 25-F is available for
re-employment. There is, thus, no reason to curtail the
ordinary meaning of ‘retrenched workmen’ in Section 25-H
because of Rules 77 and 78, even assuming the rules framed-
under the Act could have that effect.
The plain language of Section 25-H speaks only of re-
employment of ‘retrenched workmen’. The ordinary meaning of
the expression ‘retrenched workmen must relate to the wide
meaning of ‘retrenchment’ given in Section 2(oo). Section
25-F also uses the word ‘retrenchment’ but qualifies it by
use of the further words ‘workman’ who has been in
continuous service for not less than one year’. Thus,
Section 25-F does not restrict the meaning of retrenchment
but qualifies the category of retrenched workmen covered
therein by use of the further words workman. Who has been in
continuous service for not less than one year. It is clear
that Section 25-F applies to the retread a workman who has
been in continuous service for not less: one year and not to
any workman who has bean in continuous service for less than
one year; and it does not restrict or curtail the meaning of
retrenchment merely because the provision therein is made
only for the retrenchment of a workman who has been in
continuous service for not less the one year. Chapter V-A
deals with all retrenchments while Section 25-F is confined
only to the mode of retrenchment of workmen in continuous
service for not less than one year. Section 25-G prescribes
the principle for retrenchment and applies ordinarily the
principle of ‘last come first so’ which is not confined only
to workmen who have been in continuous service for not less
than one year, covered by Section 25-F.
The next provision is Section 25-H which is couched in
wide language and is capable of application to all
retrenched workmen not mere; covered by Section 25-F. It
does not requirement of the ordinary meaning of the word
‘retrenchment’ used therein. The Provision for re-employment
of retrenched workmen merely gives performance to a
retrenched workmen in the matter of re-employment over other
persons. It is enacted for the benefit of the retrenched
workmen and there in no reason to restrict its ordinary
meaning which promotes the object of the enactment without
causing any prejudice to a better placed retrenched workman.
Chapter V-A providing for retrenchment is not enacted
only for the benefit of the workmen to whom Section 25-F
applies but for all cases of retrenchment and, therefore,
there is no reason to restrict application of Section 25-H
therein only to one category of retrenched workmen. We are,
therefore, unable to accept the contention of Shri Pai that
a restricted meaning should be given to the word
retrenchment’ in Section 25-H. This contention is,
therefore, rejected.
The other submission of Shri Pai, however, merits
acceptance. All the retrenched workmen involved in the
present case were employed for short periods. Between 1974
to 1976. It was only in 1982 that a writ petition was filed
by them to claim this benefits. The other persons employed
in the industry during the intervening period of several
years have not been impleaded. Third party interests have
arisen during the interregnum. These third parties are also
workmen employed in the industry during the intervening
period of several years. Grant of relief to the writ
petitioners (respondents herein) may result in displacement
of those other workmen who have not been impleaded in these
proceedings, if the respondents have any claim for re-
employment. The laches leading to the long delay after which
the writ petition was filed in 1982 is sufficient to
disentitle them to the grant of any relief in the writ
petition. Moreover there is not even a suggestion made or
any material produced to show that on the construction we
have made of Section 25-H, the respondents would be entitled
to get any relief in the highly belated writ petition after
the lapse of several years by way of preference over any
person employed during the intervening period. In our
opinion, this alone was sufficient for the High Court to
decline any relief to them. It was urged by learned-counsel
for the respondents that only a limited relief has been
granted to the respondents which need not be disturbed. In
our opinion, the lapse of a long Period of several years
prior to the filing of the writ petition is sufficient to
decline any relief to the respondents.
We allow the civil appeal for the reason given by us
and set aside the High Court judgments resulting in
dismissal of the writ petition filed in the High Court by
the respondents.