{"id":241343,"date":"1973-01-12T00:00:00","date_gmt":"1973-01-11T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/management-of-hindustan-steel-ltd-vs-the-workmen-ors-on-12-january-1973"},"modified":"2017-01-23T17:52:06","modified_gmt":"2017-01-23T12:22:06","slug":"management-of-hindustan-steel-ltd-vs-the-workmen-ors-on-12-january-1973","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/management-of-hindustan-steel-ltd-vs-the-workmen-ors-on-12-january-1973","title":{"rendered":"Management Of Hindustan Steel Ltd vs The Workmen & Ors on 12 January, 1973"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Management Of Hindustan Steel Ltd vs The Workmen & Ors on 12 January, 1973<\/div>\n
Equivalent citations: 1973 AIR 878, \t\t 1973 SCR (3) 303<\/div>\n
Author: I Dua<\/div>\n
Bench: Dua, I.D.<\/div>\n
           PETITIONER:\nMANAGEMENT OF HINDUSTAN STEEL LTD.\n\n\tVs.\n\nRESPONDENT:\nTHE WORKMEN & ORS.\n\nDATE OF JUDGMENT12\/01\/1973\n\nBENCH:\nDUA, I.D.\nBENCH:\nDUA, I.D.\nALAGIRISWAMI, A.\nVAIDYIALINGAM, C.A.\n\nCITATION:\n 1973 AIR  878\t\t  1973 SCR  (3) 303\n 1973 SCC  (3) 564\n CITATOR INFO :\n F\t    1974 SC1132\t (31)\n R\t    1979 SC 170\t (18)\n R\t    1987 SC1478\t (8)\n\n\nACT:\nIndustrial  Disputes Act 1947 Ss. 25 F(b) and 25  FFF-Notice\nof  retrenchment-In  case of closure of\t an  undertaking  s.\n25FFF applies and not s. 25F(b)-Undertaking, what is-Closure\nof  part  of business may amount to closure  of\t undertaking\nwithin meaning of s. 25FFF-Plea as to defect in notice\tmust\nbe specific and precise.\n\n\n\nHEADNOTE:\nThe Hindustan Steel Ltd. undertook in 1960 a project  called\nthe  Ranchi Housing Project.  The project was  completed  in\n1966.\tAfter  the  completion of  the\tresiduary  work\t the\nservices  of certain employees including N were\t terminated.\nThe   relevant\tnotice\tsaid  that  N  could   receive\t his\nretrenchment  compensation from the cashier within two\tdays\nfrom  the date of termination of his employment\t subject  to\nthe  production\t by him of no demand certificates  from\t the\nconcerned  branches  mentioned\tin the\tnotice.\t  N  pleaded\nbefore\tthe Industrial Tribunal inter alia that\t the  notice\ndid not comply with the terms of s. 25F(b) of the Industrial\nDisputes  Act  1947, because the compensation was  not\tpaid\nimmediately at the time of effecting the retrenchment.\t The\ninfirmity  in the notice being apparent on its face, in\t the\nopinion\t of  the  Tribunal,  N\twas  held  entitled  to\t  be\nreinstated  and\t also  to his wages  and  other\t dues.\t The\nTribunal  further held that this plea though  not  expressly\ntaken  by  N  in his written statement was  covered  by\t the\ngeneral grounds taken therein.\tAppeal against the award  of\nthe Tribunal was filed by the Management of Hindustan  Steel\nLtd.,  by  special  leave granted by  this  Court.   It\t was\ncontended  on  behalf  of the  appellant  that\tthe  Section\napplicable  to the case was not 25F(b) but 25FFF(2) and\t the\nTribunal erred in basing the award on the former section.\nHELD: (i) In the case of Hari Prasad Shiv Shankar Shukla, it\nwas held by this    Court  that s. 25F was not\tintended  by\nthe legislature to be applicable   to, bona fide closure  of\nbusiness. In 1957 s. 25FFF was inserted in   order  to\tgive\nbenefit\t of  s.\t 25F  to the  retrenched  workmen  where  an\nundertaking  is\t closed down for  \"any\treason\twhatsoever\".\nAccording to sub-s.(2) of s. 25FFF it is quite clear that in\ncase  of  closure  of  the  categories\tof  undertakings  as\nmentioned therein, no workman employed in those undertakings\ncan claim compensation under cl. (b) of s. 25F. [310C-E]\nHari  Prasad  Shiv Shankar Shukla v. A. D.  Divekar,  [1957]\nS.C.R. 121, referred to.\n(ii) The word undertaking as used in s. 25FFF seems to\thave\nbeen used in its ordinary sense connoting thereby any  work,\nenterprise,  project  or business undertaking.\t It  is\t not\nintended  to  cover the entire industry or business  of\t the\nemployer.   Even  closure  or  stoppage of  a  part  of\t the\nbusiness or activities of the employer would seem in law to\nbe  covered  by this sub-section.  The question\t has  to  be\ndecided on the facts of each case.  In the present case\t the\nRanchi\tHousing\t Project  was  clearly\ta  distinct  venture\nundertaken by the appellant and it had a distinct  beginning\nand  an\t end.\tThe  Tribunal  rightly\theld  that  on\t the\ncompletion of the project the undertaking was closed down.\n[310G-311B]\n304\nWorkmen\t of the Indian Leaf Tobacco Development Co. Ltd.  v.\nManagement,<\/a>  [1969] 2 S.C.R. 282 and Parry & Co. Ltd. v.  P.\nC. Lal,<\/a> [1969] 2 S.C.R. 976, referred to.\n(iii)\t  Under\t s.  25FFF(1)  which  creates  a   statutory\nfiction,  all  that  N\twas  entitled  to  was\tnotice\t and\ncompensation  in accordance with the provisions of s.25F  is\nif be had been retrenched.  The retrenchment notice given to\nhim quite clearly complied with the requirement. [311E-F]\n(iv) The Tribunal was in error in holding the general ground\nin  the\t written  statement to cover the  specific  plea  of\ninfirmity  of the notice because of its\t being\tconditional.\nThe  plea  should have been specific and precise  so  as  to\nenable the appellant to meet it. [311F-G]\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 175 of 1971.
\nAppeal\tby special leave from the Award dated July 20,\t1970
\nof the, Industrial Tribunal.  Bihar.  Patna in-Reference No.
\n52 of 1969 published in the Bihar Gazette dated 28-10-1970.
\nM.   C.\t Setalvad, Santosh Chatterjee and G. S.\t Chatterjee,
\nfor  the  appellant.  Madan Mohan and Ram  Das\tChadha,\t for
\nrespondents Nos.  1 and 2.\n<\/p>\n
The Judgment of the Court was delivered by
\nDUA,  J.-The  Management  of Hindustan\tSteel  Ltd.,  Ranchi
\nchallenges in this appeal by special leave the award made by
\nthe Industrial Tribunal, Bihar, Patna dated July 29, 1970 on
\na reference of the following industrial dispute between\t the
\nmanagement and their workmen represented by Hindustan  Steel
\nLtd.  Employees’ Union, Ranchi
\n\t      “Whether the retrenchment of Shri\t Venkatesan,
\n\t      Ex-Overseer,   Housing   Colony\tConstruction
\n\t      Scheme  of  Hindustan Steel  Ltd.,  Ranchi  is
\n\t      proper and justified ?  If not, what relief is
\n\t      he entitled to?”\n<\/p>\n
According  to the written statement filed by the  Management
\nShri R. Venkatesan Naidu, the workman concerned (hereinafter
\nto  be\treferred as Shri Naidu) was recruited to  the  work-
\ncharged\t  establishment\t of  the  Ranchi   Housing   Project
\nundertaken  in\t1960 on a consolidated salary of  Rs.  250\/-
\np.m. He. was recruited in March, 1960 and it was made  clear
\nto  him\t that  the  post was  purely  temporary\t subject  to
\ntermination with or without notice.  Shri Naidu joined\tduty
\non  March  15, 1960 after accepting  those  conditions.\t  He
\nlater  applied\tfor  the  post\tof  Overseer  in  the\tsame
\nestablishment  of the Ranchi Housing Project in response  to
\nan  advertisement  and an offer for his\t appointment  as  an
\nOverseer  was made to him on June 15, 1960, clearly  stating
\nthat his
\n 305<\/span>
\nappointment  would  continue upto March 31, 1961  though  it
\nwould  be extended in case his services were to be  required
\nbeyond\tthat date.  This appointment was also stated  to  be
\npurely\ttemporary terminable at any time  without  assigning
\nany  reason  and  without giving  any  notice.\t Shri  Naidu
\nassumed\t charge\t of the post of Overseer on June  20,  1960.
\nThe  construction and the connected residuary work  relating
\nto  the Ranchi Housing Project were over by the end  of\t the
\nyear  1966  and it was decided to wind up this\tproject\t and
\nretrench 13 workmen employed in four categories with  effect
\nfrom  December\t31,  1966 after giving\tnotices\t and  paying
\ncompensation  to  the workmen concerned.   The\tservices  of
\nthree  executives  and two Overseers (Shri  Naidu  and\tShri
\nVerghese)  were retained for some time in order to  finalise
\naccounts  and to carry on some residuary work in  connection
\nwith  the  said\t project.  The management  tried  to  secure
\nemployment to those five persons in the sister units of\t the
\nHindustan  Steel Ltd., or sister public under takings  like
\nBokaro\tSteel Ltd., but without success.  Shri Naidu, it  is
\nstated,\t did not possess any basic qualifications laid\tdown
\nby Bokaro Steel Ltd.  The tenure of the posts held by  these
\nfive   persons\twas  extended  upto  June  30,\t1968.\t The
\ndepartmental   committee  consisting  of   senior   officers
\nconsidered  their cases for absorption in suitable posts  in
\nthe  Central Engineering and Design Bureau.  As\t Shri  Naidu
\nhad  read upto Class IX only and did not possess  any  tech-
\nnical  qualification he, could not be taken in any  concern.
\nIt  was\t in  these  circumstances  that\t according  to\t the
\nmanagement Shri Naidu’s services were retrenched with effect
\nfrom  the  afternoon  of  June\t22,  1963.   The   financial
\nconcurrence  for  the  continuance  of\tthe  Ranchi  Housing
\nProject (Residuary work) also expired on the same date\twith
\nthe  result  that it was not possible any longer  to  retain
\nShri  Naidu’s services and his retrenchment  was  necessary.
\nIt was denied that big bosses of Hindustan Steel Ltd.,\tdid
\nnot  like Shri Naidu because he had refused to\toblige\tthem
\nwhenever  they\tmade dishonest requests.  Shri\tNaidu’s\t re-
\ntrenchment  was\t accordingly  stated  to  be  quite  proper,
\njustified and legal and the action taken quite fair and bona
\nfide.\t‘Mere  was  thus no question of\t any  unfair  labour
\npractice or victimisation of Shri Naidu.
\nThe  case  on behalf of the workmen was represented  by\t the
\nGeneral Secretary of the Union.\t It was pleaded on behalf of
\nthe  workmen that prior to joining Hindustan  Steel.   Ltd.,
\nShri Naidu had been serving as a construction foreman in the
\nDamodar\t Valley Corporation Ltd., during the period 1950  to
\n1957  and  that\t on  February 18, 1960\the  applied  to\t the
\nHindustan  Steel Ltd., for a technical post  mentioning\t his
\nqualifications for the post applied for.  He was interviewed
\nand after testing his merits for the job of Works Supervisor
\nhe was offered the same on
\n306<\/span>
\nMarch 10, 1960.\t Later he was offered the job of an Overseer
\nand  he\t joined\t that  post on\tMay  20,  1960.\t  He  worked
\nefficiently  to\t the satisfaction of all concerned  but\t was
\nserved\twith a charge-sheet on June 10, 1964 on\t the  ground
\nthat  there  was  some shortage of  steel  rods.   After  an
\nenquiry\t he was found guilty and on the\t recommendations  of
\nthe  enquiry  committee he was dismissed  with\teffect\tfrom
\nJanuary\t 13,  1965.   Shri Naidu  approached  the  Presiding
\nOfficer, Labour Court, Ranchi under S. 25 of the Bihar Shops
\nand   Establishments  Act,  1963  complaining  against\t his
\ndismissal  and the Presiding Officer on April 13, 1966\theld
\nthe  order  of\tdismissal as  unjustified  and\tillegal\t and
\nordered his reinstatement.  He resumed his duties on receipt
\nof the office order on 7\/10 May, 1966.\tBut some big  bosses
\nof  the\t management  were  not\thappy  on  account  of\t his
\nreinstatement  with  the result that he\t was  again  charge-
\nsheeted\t on May 12, 1966 on the ground that he\thad  falsely
\nstated that he had passed the Senior Cambridge\tExamination.
\nShri  Naidu  filed a civil suit for a declaration  that\t the
\nproceedings  initiated by the employer were mala fide.\t But
\nduring\tthe  pendency  of that suit he\twas  served  with  a
\nretrenchment  order  dated June 29, 1968  purporting  to  IV
\nunder\tS.  25F\t of  the  Industrial  Disputes\t Act,\t1947
\n(hereinafter called the Act) which, according to Shri  Naidu
\nwas mala fide and unjustified.\n<\/p>\n
According  to the Tribunal there was no\t controversy  ‘about
\nthe following facts :\n<\/p>\n
Shri  Naidu had filed an application Ex. 1 on  February\t 18,
\n1960  with the Construction Engineer of the Hindustan  Steel
\nLtd., for a technical post and he had mentioned therein that
\nhe had studied upto Senior Cambridge standard but had served
\nfor  a period of 23 years in other concerns.  On  March\t 10,
\n1960  he  was  offered the post of  Works  Supervisor  on  a
\nconsolidated  salary of Rs. 250\/- p.m. in  the\twork-charged
\nestablishment of the Ranchi Housing Project but it was\tmade
\nclear to him that the post was purely temporary and  subject
\nto termination with or without notice.\tIn response to\tthis
\noffer Shri Naidu submitted joining report on March 15, 1960.
\nOn  April  18, 1960 Shri Naidu applied for the\tpost  of  an
\nOverseer   and\tmentioned  in  the  column  meant  for\t the
\nparticulars  of the examination passed\t“Cambridge  Senior”.
\nBy  office order dated 14\/15 June, 1960 he was\toffered\t the
\ntemporary  post\t of over  on the terms and  conditions\tmen-
\ntioned\tin that order.\tAccording to term 5 his\t appointment
\nwag upto March 31, 1961 but it could be extended beyond that
\ndate  in case the company so desired It was  also’-mentioned
\nthat his appointment would be purely temporary terminable at
\nany  time without any reason and without giving any  notice.
\nHe was asked to report for duty as soon as possible but\t not
\nlater than June 30,
\n307<\/span>
\n1960.  He joined as Overseer within the scheduled time.\t The
\nwork  of  construction\tundertaken  by\tthe  Ranchi  Housing
\nProject came to a close by the end of the year 1966 with the
\nresult\tthat  13 workmen were retrenched  though  Naidu\t was
\nallowed\t to  continue  as an  Overseer\tfor  finishing\tsome
\nresidual work.\n<\/p>\n
Thereafter;  according to the management the  residual\twork
\nwas  completed\tand the Ranchi Housing Project wound  up  in
\n1968.  Shri Naidu having been rendered surplus notice Ex.  7
\nfor  his retrenchment was given because it was not  possible
\nto  offer him any alternative employment in any other  unit.
\nHis services were retrenched with effect from June 29, 1968.
\nAccording  to the award the Ranchi Housing Project  and\t the
\nMaintenance  Division  of  the Hindustan  Steel\t Ltd.,\twere
\nseparate  departments the Housing Project being a  temporary
\nproject\t  whereas  the\tmaintenance  division  was   to\t  be
\nmaintained   throughout.   Both\t these\t departments   were,
\nhowever,  controlled by the Central Engineering\t &  Division
\nBureau.\t  The  award further held that\tthe  management\t had
\ndecided\t to  wind  up the establishment\t of  Ranchi  Housing
\nProject\t with  effect from March 31, 1968 and  that  serious
\nattempts were made to absorb Shri Naidu but without success.
\nThe   Ranchi  Housing  reject  having  been  wound  up\t the
\nManagement  was fully justified in retrenching\tshri  Naidu.
\nThe  management was also held to have made genuine and\tbona
\nfide efforts to absorb Shri Naidu in other units but it- did
\nnot  succeed in its attempt.  The plea of mala fides on\t the
\npart  of the management in retrenching Shri Naidu  was\talso
\nrepelled by the Tribunal.  It was also observed that he\t had
\nfailed\tto  substantiate that there was\t any  unfair  labour
\npractice  or  victimisation.  The further  point  raised  on
\nbehalf\tof Shri Naidu that the principle of “&St  come\tlast
\ngo” or “last come first go” was not adhered to was also\t not
\naccepted  IV the Tribunal.  Shri Naidu’s  appointment  being
\ntemporary  terminable  by the Company at  any  time  without
\nassigning any reason and without giving any notice was\theld
\nto  be an agreement contrary to the said principle  and\t the
\nprovisions of S. 258 of the Act were held inapplicable.\t The
\nsubmission on behalf of the management that it was for\tthem
\nto decide from time to time the strength of labour  required
\nfor  that purpose was accepted and it was observed that\t the
\nconduct\t of  the management in closing\tone  department\t and
\ndividing  its work amongst the other employees could not  be
\nreasonably  characterised as improper or as amounting to  an
\nunfair\tlabour practice.  The last point urged on behalf  of
\nShri  Naidu was that the notice of retrenchment was  not  in
\naccordance with the provisions of s. 25F of the Act  because
\nthe retrenchment compensation was to be paid immediately  at
\nthe  time of effecting the retrenchment and it could not  be
\ndeferred.  According to the notice Shri Naidu
\n308<\/span>
\nwas  merely informed that he could receive the\tretrenchment
\ncompensation from the cashier within two days from the\tdate
\nof termination of his employment and that this would also be
\nsubject\t to the production by him of no demand\tcertificates
\nfrom  the  concerned branches which were  mentioned  in\t the
\nnotice, Ex. 7. This plea prevailed with the Tribunal.  After
\nreferring  to certain decisions of this Court  the  Tribunal
\nheld that the notice was defective on the face of it because
\nit  did not comply with cl. (b) of s. 25F of the  Act.\t The
\noffer in the notice to pay the retrenchment compensation  on
\nthe  production of no demand certificate from the  concerned
\nbranches  according to the Tribunal clearly shows  that\t the
\nmanagement  did not intend to pay retrenchment\tcompensation
\nat the time of retrenchment.  The objection on behalf of the
\nmanagement that this defect in the notice was not pleaded in
\nthe  written  statement filed on behalf of the\tworkman\t was
\nrejected with the observation that in para 13 of the written
\nstatement  it  was  averred that the grounds  given  in\t the
\nretrenchment notice were all false and cooked up and in para
\n15  of\tthe  written  statement\t it  was  pleaded  that\t the
\nretrenchment of the employee was mala fide, unjustified\t and
\nagainst law.  The infirmity in the notice being apparent  on
\nits  face,  in the opinion of the Tribunal, Shri  Naidu\t was
\nentitled  to be reinstated and also to his wages  and  other
\ndues.\tOn  this reasoning the impugned award  was  made  in
\nfavour of Shri Naidu.\n<\/p>\n
Before\tus  Shri  Setalvad,  the  learned  counsel  for\t the
\nappellant, the Management of Hindustan Steel Ltd., submitted
\nthat this case is really governed by s. 25FFF of the Act and
\ns. 25F(b) is inapplicable.  It was pointed out that cl.\t (b)
\nof  s.\t25F which has been held by the award  to  have\tbeen
\nviolated  by  the  appellant  in the  present  case  is\t not
\nattracted to the facts.\t The counsel questioned the legality
\nof  the\t view taken by the Tribunal and\t submitted  that  S.
\n25FFF(2)  is the real provision which applies (to the  facts
\nof the present case.\n<\/p>\n
The  short question thus requiring determination is  whether
\nS.  25F(b)  or s. 25FFF(2) of the Act is  attracted  to\t the
\nfacts of this case.  In order to appreciate the true  scheme
\nand scope of these sections it would be helpful to reproduce
\nthem
\n\t      “25F.  Conditions precedent to retrenchment of
\n\t      workmen :\n<\/p>\n
\t      No  workman  in any industry who has  been  in
\n\t      continuous service for not less than one year.
\n\t      under an employer shall be retrenched by\tthat
\n\t      employer until-\n<\/p>\n
\t      (a)   the\t workman has been given one  month’s
\n\t      notice  in writing indicating the reasons\t for
\n\t      retrenchment
\n\t       309<\/span>
\n\t      and  the period of notice has expired, or\t the
\n\t      workman has been paid in lieu of such  notice,
\n\t      wages for the period of the notice :\n<\/p>\n
\t      Provided\tthat no such notice shall he  neces-
\n\t      sary if the retrenchment is under an agreement
\n\t      specifies\t a  date  for  the  termination\t  of
\n\t      service;\n<\/p>\n
\t      (b)   the\t workman has been paid, at the\ttime
\n\t      of  retrenchment compensation which  shall  be
\n\t      equivalent  to fifteen days’ average  pay\t for
\n\t      every completed year of continuous service  or
\n\t      any part thereof in excess of six months; and\n<\/p>\n
\t      (c)   notice  in\tthe  prescribed\t manner\t  is
\n\t      served  on the appropriate Government or\tsuch
\n\t      authority\t  as   may  be\tspecified   by\t the
\n\t      appropriate Government by notification in\t the
\n\t      Official Gazette.”\n<\/p>\n
\t      “25FFF.\tCompensation to workmen in  case  of
\n\t      closing down of undertakings :\n<\/p>\n
\t      (1)   Where an undertaking is closed down\t for
\n\t      any  reason whatsoever, every workman who\t has
\n\t      been  in continuous service for not less\tthan
\n\t      one  year\t in  that  undertaking\t immediately
\n\t      before  such  closure shall,  subject  to\t the
\n\t      provisions of sub-section (2), be entitled  to
\n\t      notice and compensation in accordance with the
\n\t      provisions  of section 25F, as if the  workman
\n\t      had been retrenched
\n\t      Provided that where the undertaking is  closed
\n\t      down  on account of unavoidable  circumstances
\n\t      beyond  the  control  of\tthe  employer,\t the
\n\t      compensation  to be paid to the workman  under
\n\t      clause (b) of section 25F shall not exceed his
\n\t      average pay for three months.\n<\/p>\n
\t      Explanation.-An  undertaking which  is  closed
\n\t      down    by   reason   merely   of\t   financial
\n\t      difficulties  (including financial losses)  or
\n\t      accumulation  of undisposed of stocks  or\t the
\n\t      expiry  of  the  period of the  lease  or\t the
\n\t      licence granted to it where the period of\t the
\n\t      lease of the licence, expires on or after\t the
\n\t      first  day of April, 1967 shall not be  deemed
\n\t      to  have\tbeen  closed  down  on\taccount\t  of
\n\t      unavoidable  circumstances beyond the  control
\n\t      of  the  employer within the  meaning  of\t the
\n\t      proviso to this subsection.\n<\/p>\n
\t      (2)   Where  any\tundertaking set up  for\t the
\n\t      construction  of\tbuildings,  bridges,  roads,
\n\t      canals,  dams  or other construction  work  is
\n\t      closed  down on account of the  completion  of
\n\t      the work within two years from the date on
\n\t       310<\/span>
\n\t      which  the  undertaking had been\tset  up,  no
\n\t      workman employed therein shall be entitled  to
\n\t      any  compensation under clause (b) of  section
\n\t      25F,  but if the construction work is  not  so
\n\t      completed\t within\t two  years,  he  shall\t  be
\n\t      entitled to notice and compensation under that
\n\t      section for every completed year of continuous
\n\t      service  or any part thereof in excess of\t six
\n\t      months.”\n<\/p>\n
Both of these sections occur in Ch.  V-A of the Act  dealing
\nwith  “Lay-off\tand  Retrenchment”  inserted  in  1953.\t  In
\nenacting s. 25F the Legislature standardised the payment  of
\ncompensation to workmen retrenched in the normal or ordinary
\nsense  in an existing or continuous industry by\t adopting  a
\nsimple yard-stick of the length of service of the retrenched
\nworkmen\t doing away with the perplexing variety\t of  factors
\nfor  determining  the appropriate relief in each  case.\t  In
\nHari  Prasad Shiv Shankar Shukla v. A. D. Divekar(1) it\t was
\nheld  that this section was not intended by the\t Legislature
\nto  be\tapplicable to bona fide closure of  business.\tThis
\ndecision led to amendment of the Act by the Parliament.\t  In
\n1957  S. 25FFF was inserted in order to give benefit  of  s.
\n25F to the retrenched workmen where an undertaking is closed
\ndown “for any reason whatsoever”.  We need not refer to\t the
\namendment of S. 25FF because that section does not  directly
\nconcern us.  According to sub-s.(2) of s. 25FFF it is  quite
\nclear  that  in\t case  of  closure  of\tthe  categories\t  of
\nundertakings  as mentioned therein, no workman\temployed  in
\nthose  undertakings can claim compensation under cl. (b)  of
\nS.   25F.   The\t language  of  s.  25FFF(2)  is\t plain\t and
\nunambiguous.  Indeed, the learned counsel for the respondent
\nalso did not dispute that if it were to be held in this case
\nthat the undertaking had been closed down then cl. (b) of S.
\n25F  would  not\t be attracted and Shri Naidu  would  not  be
\nentitled  to claim relief under that clause.   According  to
\nShri  Madan  Mohan, however, the present was not a  case  of
\nclosure\t of the undertaking.  His submission was  that\tonly
\nthe  work  of  the  Housing  Project  at  Ranchi  had\tbeen
\ncompleted.  It was argued that unless the entire undertaking
\nof the appellant was closed down not\tacceptable.
\nThe word undertaking as used in S. 25FFF seems to us to have
\nbeen used in its ordinary sense connoting thereby any  work,
\nenterprise,  project  or business undertaking.\t It  is\t not
\nintended  to  cover the entire industry or business  of\t the
\nemployer  ‘as  was suggested on behalf\tof  the\t respondent.
\nEven  closure  or  stoppage of a part  of  the\tbusiness  or
\nactivities  of the employer would seem in law to be  covered
\nby this sub-section.  The question has indeed to, be decided
\non  the\t facts of each case”,,,.  In the  present  case\t the
\nRanchi
\n(1)  [1957] S.C.R. 121.\n<\/p>\n
 311<\/span><\/p>\n
Housing Project was clearly a distinct venture undertaken by
\nthe  appellant and it had a distinct beginning and  an\tend.
\nSeparate  office was apparently set up for this venture\t and
\non  the\t completion  of\t the  project  or  enterprise\tthat
\nundertaking  was closed down.  The Tribunal has actually  so
\nfound.\tIts conclusion has not been shown to be wrong and we
\nhave  no hesitation in agreeing with its view.\tThere is  no
\ncogent\tground for reopening the Tribunars conclusion  under
\nArt.  136 of the Constitution.\tIt is also  noteworthy\tthat
\nShri   Naidu   had  been  recruited  to\t  the\twork-charged
\nestablishment of the Ranchi Housing Project.  In Workmen  of
\nthe   Indian   Leafs  Tobacco  Development   Co.   Ltd.\t  v.
\nManagement<\/a>(1)  closure\tof  eight out of 21  depots  of\t the
\ncompany\t though\t not  amounting to, closure  of\t its  entire
\nbusiness  was considered, to amount to a closure within\t the
\ncontemplation  of  s. 25FFF.  In Parry & Co. Ltd. v.  P.  C.
\nLal<\/a>(2)\tit  was observed that it was within  the  managerial
\ndiscretion  of\tan  employer to\t organise  and\tarrange\t his
\nbusiness in the manner he considered best and that if a bona
\nfide  scheme for such re-organisation results in  surplusage
\nof employees, no employer is expected to carry on the burden
\nof  such  economic  deadweight and retrenchment\t has  to  be
\naccepted as inevitable, however unfortunate.  The  reasoning
\nand  ratio  of\tthese  decisions  support  the\t appellant’s
\nargument.\n<\/p>\n
Now,  under S. 25FFF(1), which creates a statutory  fiction,
\nall  that  Shri\t Naidu\twas  entitled  to,  was\t notice\t and
\ncompensation in accordance with the provisions of s. 25F  as
\nif  he\thad been retrenched.  Retrenchment  notice,  Ex.  7,
\ndated  June  22,  1968, quite clearly,\tcomplies  with\tthis
\nrequirement.   On  behalf  of  the  respondent,\t as  already
\nnoticed,  it is not disputed that there has been no  failure
\nto  give notice as required, by s. 25F, in ease, cl. (b)  is
\nheld inapplicable.\n<\/p>\n
It  is also clear that the respondent had  not\tspecifically
\nraised any plea of defect in the notice given to Shri Naidu.
\nThe  Tribunal, however, allowed the objection of the  notice
\nEx.  7 being conditional to be argued on the view  that\t the
\nnotice\twas infirm on the face of it and that the  objection
\nwas  covered  by the general plea in the  written  statement
\nfiled  on  behalf  of Shri Naidu, to  the  effect  that\t the
\ngrounds given in the retrenchment notice were all false\t and
\ncooked\tup.   On  this\tview  the  notice  was\theld  to  be
\nconditional and, therefore, invalid and Shri Naidu was\theld
\nentitled to be reinstated.\n<\/p>\n
In our view, Shri Setalvad was fully justified in submitting
\nthat the management had been taken by surprise and that\t the
\nTribunal  was in error in holding the general ground in\t the
\nwritten statement to cover the specific plea of infirmity of
\nthe notice because of its
\n(1) [1963] 2 S.C.R. 282.\n<\/p>\n
(2) [1969] 2 S.C.R. 976.\n<\/p>\n
312<\/span><\/p>\n
being conditional.  The plea of the statutory defect in\t the
\nnotice should, in our opinion, have been reasonably specific
\nand  precise so as to enable the appellant to meet it.\t The
\ngeneral\t plea  could  not serve the object  of\tputting\t the
\nappellant  on guard about the precise case to be met at\t the
\ntrial and tell the management the precise nature of the plea
\nwith respect to the defect in the notice, lo enable them  to
\nmeet it. in our view, if cl. (b) of s. 25F is excluded\tfrom
\nconsideration  and  the plea relating to  infirmity  of\t the
\nnotice\tis  ruled  out, as we hold on these  two  points  in
\nagreement  with Shri Setalvad, then, the impugned  order  is
\nclearly\t insupportable.\t We are, therefore,  constrained  to
\nallow  the appeal, set aside .the impugned award  and  hold
\nthat   the  retrenchment  of  Shri  Naidu  was\tproper\t and
\njustified.  In the circumstances of the case there would  be
\nno order as to costs.\n<\/p>\n
G.C.\t\t\t\t Appeal allowed.\n313<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Management Of Hindustan Steel Ltd vs The Workmen & Ors on 12 January, 1973 Equivalent citations: 1973 AIR 878, 1973 SCR (3) 303 Author: I Dua Bench: Dua, I.D. PETITIONER: MANAGEMENT OF HINDUSTAN STEEL LTD. Vs. RESPONDENT: THE WORKMEN & ORS. DATE OF JUDGMENT12\/01\/1973 BENCH: DUA, I.D. BENCH: DUA, I.D. ALAGIRISWAMI, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-241343","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nManagement Of Hindustan Steel Ltd vs The Workmen & Ors on 12 January, 1973 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/management-of-hindustan-steel-ltd-vs-the-workmen-ors-on-12-january-1973\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Management Of Hindustan Steel Ltd vs The Workmen & Ors on 12 January, 1973 - 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