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PETITIONER: MOHAN LAL

       Vs.

RESPONDENT: MANAGEMENT OF M/S BHARAT ELECTRONICS LTD.

DATE OF JUDGMENT21/04/1981

BENCH: DESAI, D.A. BENCH: DESAI, D.A. GUPTA, A.C.

CITATION:  1981 AIR 1253            1981 SCR  (3) 518  1981 SCC  (3) 225        1981 SCALE  (1)872  CITATOR INFO :  R          1982 SC 854  (5,6)  RF         1983 SC1320  (11)  RF         1984 SC 500  (2)  F          1984 SC 502  (2)  RF         1986 SC 458  (3)  RF         1986 SC1680  (4)

ACT:      Retrenchment-Section 2(oo)  of the  Industrial  Dispute Act-Whether termination of the services of a workman who has put in  240 working days within a period of one year amounts to retrenchment  and whether  for  non-compliance  with  the provisions of  section 25F  the termination of service is ab initio  void-Sections   25A  and  25B,  scope  of-Effect  of termination  of   service  which   is  ab  initio  void  and inoperative, explained.

HEADNOTE:      The appellant  was  employed  with  the  respondent  as Salesman at  its Delhi  Sales Depot on a salary of Rs. 520/- per month  from 8th December, 1973. His service was abruptly terminated by  letter dated  12th October,  1974 with effect from 19th October, 1974. Consequent upon his termination, an industrial dispute  was raised  and referred  to the  Labour Court, Delhi,  on 24th  April, 1976.  The Labour  Court,  on evaluation of  evidence both oral and documentary, held that the termination  of the  service was  in accordance with the standing orders  justifying the  removal of  the employee on unsuccessful probation during the initial or extended period of probation  and,  therefore,  the  termination  would  not constitute retrenchment  within the meaning of section 2(oo) read with  section 25F  of the  Industrial Dispute  Act. The Labour Court  accordingly  held  that  the  termination  was neither illegal  nor improper  nor unjustified and the claim of the  appellant was negatived. Hence the appeal by special leave.      Allowing the appeal, the Court ^      HELD: 1.  The termination  of service  of the appellant was ab  initio void  and inoperative.  His  case  not  being covered by  any  of  the  excepted  or  excluded  categories referred  to   under  section  2(oo)  and  he  has  rendered

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continuous service  for one  year, the  termination  of  his service would constitute retrenchment. The pre-condition for a valid retrenchment has not been satisfied in this case and therefore he will be entitled to all benefits including back wages etc. (534F G, 535-C-D)      2. Where  the termination  is illegal  especially where there is  an ineffective  order of  retrenchment,  there  is neither  termination   nor  cessation   of  service   and  a declaration follows  that the workmen concerned continues to be in  service with  all consequential  benefits. It  is  no doubt true  that the  Supreme Court  had  held  that  before granting reinstatement  the court  must weigh  all the facts and  exercise   discretion   properly   whether   to   grant reinstatement or to award compensation. 519 Here, no  case has  been made  out for  departure  from  the normally accepted  approach of  the courts  in the  field of social justice. (535A C)      Ruby General  Insurance  Co.  Ltd.  v.  Chopra  (P.P.), (1970) 2  Labour Law  Journal, 63  and Hindustan Steel Ltd., Rourkela v.  A.K. Roy  and  Others,  [1970]  3  S.C.R.  343, referred to.      3:1. Niceties  and semantics  apart, termination by the employer  of  the  service  of  a  workman  for  any  reason whatsoever in  section 2(oo)  of the Industrial Dispute Act, would constitute  retrenchment except  in cases  excepted in the section itself. The excepted or excluded cases are where termination is  by way  of punishment  inflicted by  way  of disciplinary action,  voluntary retirement  of the  workman, retirement  of   the  workman   on  reaching   the  age   of superannuation if  the contract  of employment  between  the employer and the workman concerned contains a stipulation in that behalf,  and termination of the service of a workman on the ground of continued illhealth. (524 E-F)      3:2. It  was not  open to  the Labour Court to record a finding that  the service  of the  appellant was  terminated during  the   period  of   probation  on   account  of   his unsatisfactory work  which  did  not  improve  in  spite  of repeated warnings  when there  was not even a whisper of any period of  probation in  the appointment  order  or  in  the rules. The  termination of service being, for a reason other than  the   excepted  category,  it  would  indisputably  be retrenchment within  the meaning  of section  2(oo)  of  the Industrial Dispute Act.(523 G-H, 524A, 525Z)      Pipraich Sugar  Mills  Ltd.  v.  Pipraich  Sugar  Mills Mazdoor Union,  [1956] S.C.R.  172;  Hariprasad  Shivshankar Shukla v,  A. D. Divikar, [1957] S.C.R. 121; State of Bombay and Ors.  v. The  Hospital Mazdoor  Sabha and  Ors. [1960] 2 S.C.R. 866  at 872; State Bank of India v. N. Sundara Money, [1976] 3  S.C.R. 160;  Hindustan Steel Ltd. v. The Presiding Officer, Labour  Court, Orissa  and Ors., [1977] S.C.R. 586; Santosh Gupta  v. State Bank of Patiala, [1980] 3 S.C.R. 340 and Delhi  Cloth and  General Mills  Ltd.  v.  Shambhu  Nath Mukerjee, [1978] 1 S.C.R. 591, explained and followed.      4. Before  a workman can complain of retrenchment being not in consonance with section 25F of the Industrial Dispute Act, he  has to  show that he has been in continuous service for not  less than  one year  under that  employer  who  has retrenched him from service. (529 C)      5:1. The  language employed in sub-sections (1) and (2) of section  25B does not admit of any dichotomy, namely, (a) sub-section (1)  providing for uninterrupted service and (b) sub-section (2) comprehending a case where the workman is in continuous service.  Sub-sections (1)  and (2)  introduce  a deeming fiction  as to in what circumstances a workman could

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be said  to be  in continuous  service for  the purposes  of Chapter V-A. (530 G H)      5:2. Sub-section  (1) provides  deeming fiction in that where a  workman is in service for a certain period for that period even if service is interrupted on account of sickness or authorised  leave or an accident or a strike which is not illegal or a lockout or a cessation of work which is not due to any fault on the 520 part  of   the  workman.   Sub-section  (1)   mandates  that interruptions therein  indicated are  to be  ignored meaning thereby that  on account  of such  cessation an  interrupted service  shall  be  deemed  to  be  uninterrupted  and  such uninterrupted service  shall for the purposes of Chapter V-A be deemed to be continuous service. (530H, 531A, C-D)      5:3.  Sub-section   (2)  incorporates  another  deeming fiction for  an entirely  different  situation.  It  is  not necessary for  the purposes  of sub-section (2) (a) that the workman should be in service for a period of one year. If he is in  service for  a period  of one  year and  that if that service is  continuous service  within the  meaning of  sub- section (1)  his case  would be  governed by sub-section (1) and his  case need  not be  covered by sub-section (2). Sub- section (2)  envisages a  situation  not  governed  by  sub- section (1).  And sub-section  (2) provides for a fiction to treat a  workman in  continuous service  for a period of one year despite the fact that he has not rendered uninterrupted service for a period of one year but he has rendered service for a  period of  240 days  during the period of 12 calendar months counting  backwards and  just proceeding the relevant date being date of retrenchment.                                             (531D-E. 532A-B)      Both on  principle  and  on  precedent  section  25B(2) comprehends the situation where workman is not in employment for a  period of 12 calendar months but has rendered service for a  period of  240 days  within the period of 12 calendar months commencing  and counting  backwards from the relevant date that  is the  date of retrenchment, if he has, he would be deemed  to be  in continuous  service for a period of one year for  the purpose of section 25B and Chapter V-A. In the instant case, the appellant’s case indisputably falls within section 25  B(2) (a)  and  he  shall  be  deemed  to  be  in continuous service  for a period of one year for the purpose of Chapter V-A. (534B-D)      Sur  Enamel  and  Stamping  Works  (P)  Ltd.  v.  Their Workmen, [1964] 3 S.C.R. 616. explained and distinguished.      Surendra  Kumar   and  Ors.   v.   Central   Government Industrial-cum Labour Court, New Delhi and Another, [1981] 1 S.C.R. 789 followed.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 364 of 1981.      Appeal by  special leave  from the Award dated the 31st May,  1980   of  the   Additional  Labour  Court,  Delhi  in Industrial I.D. No. 62 of 1976.      V. M.  Tarkunde, Hemant Sharma and P. H. Parekh for the Appellant.      S. Markendaya for the Respondent.      The Judgment of the Court was delivered by      DESAI, J. The appellant Mohan Lal was employed with the respondent M/s Bharat Electronics Limited as Salesman at its Delhi

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521 Sales Depot  on a  salary of  Rs. 520  per  month  from  8th December, 1973.  His  service  was  abruptly  terminated  by letter  dated  12th  October  1974  with  effect  from  19th October,  1974.   Consequent  upon   this  termination,   an industrial dispute  was raised and the Delhi Administration, by its  order dated  24th April, 1976 referred the following dispute to the Labour Court, Delhi for adjudication:           "Whether the termination of services of Shri Mohan      Lal is  illegal and/or  unjustified and  if so, to what      relief is he entitled and what directions are necessary      in this respect?"      As the  respondent management  at one  stage failed  to participate in  the proceedings, the reference was heard ex- parte and  the Labour  Court made  an award on 2nd May, 1977 directing reinstatement  of the appellant with continuity of service and full back wages at the rate of Rs. 520 per month from   the   date   of   termination   till   reinstatement. Subsequently, respondent  moved for  setting aside  the  ex- parte award  and seeking  permission to  participate in  the proceedings, which  motion was granted. The respondent inter alia contended  that the  appellant was a salesman appointed on probation  for six  months and subsequently on the expiry of the  initial period, the period of probation was extended upto 8th  Sept., 1974  and on  the expiry  of this  extended period of  probation, his  service was  terminated by letter dated 12th  October, 1974,  as he was not found suitable for the post to which he was appointed.      The Labour  Court, on  evaluation of evidence both oral and documentary,  held that  the termination  of the service was in  accordance with  the standing  orders justifying the removal of the employee on unsuccessful probation during the initial or  extended period  of probation; and therefore the termination in  this case,  according to  the Labour  Court, would not  constitute retrenchment  within  the  meaning  of section 2(oo)  read  with  section  25F  of  the  Industrial Dispute Act.  Accordingly it  was held  that the termination was neither  illegal nor  improper nor  unjustified and  the claim of  the appellant was negatived. Hence, this appeal by special leave.      The only point for determination is whether even in the circumstances, as  pleaded by  the respondent termination of service of the appellant would amount to retrenchment within the meaning of the expression as defined in section 2(oo) of the Industrial  Dispute Act,  1947 (‘Act’ for short)? If the answer is  in affirmative,  the consequential  question will have to be answered whether in view of 522      the admitted  position that the mandatory pre-condition prescribed by  section 25F  for a  valid retrenchment having not been  satisfied, the  appellant  would  be  entitled  to reinstatement  with  back  wages  or  as  contended  by  Mr. Markandey in  the special  facts of  this  case,  the  Court should not  direct reinstatement  but award  compensation in lieu of reinstatement.      An apparent  contradiction which  stares in  the eye on the stand  taken by  the respondent  is  overlooked  by  the Labour Court  which  has  resulted  in  the  miscarriage  of justice. In  this  context  the  facts  as  alleged  by  the respondent may  be taken  as true. Says the respondent, that the appellant  was appointed  by order  dated July 21, 1973. The relevant  portion of  the order  of which  notice may be taken is paragraph 2. It reads as under:           "This appointment  will be  temporary in the first      instance but is likely to be made permanent."

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Paragraph 4  refers  to  the  consequences  of  a  temporary appointment, namely,  that the  service would  be terminable without notice  and without  any  compensation  in  lieu  of notice  on  either  side.  Paragraph  6  provides  that  the employment of  the appellant  shall be  governed  by  rules, regulations and standing orders of the company then in force and which  may be  amended, altered or extended from time to time and  the acceptance  of the  offer carries  with it the necessary agreement  to obey all such rules, regulations and standing orders.  There is  not even a whisper of any period of  probation   prescribed  for   the  appointment  nor  any suggestion  that   there  are   some  rules   which   govern appointment of  the appellant  which would  initially be  on probation. Thus,  the appointment was temporary in the first instance and  there was  an inner  indication  that  it  was likely to  be made permanent. Even if this promise of likely to be made permanent is ignored, indubitably the appointment was temporary.  The respondent, however, says that note 3 at the foot of the appointment order intimates to the appellant that in the event of his permanent appointment the temporary service  put   in  by   him  will  be  counted  as  part  of probationary period  of service as required under the rules. This consequence  would follow  in the  event  of  permanent appointment  being  offered  and  this  is  clear  from  the language employed  in note  3. In  this  case  no  permanent appointment having  been offered, the consequence set out in note 3  could not have emerged. Assuming, however, that this note incorporates all the necessary rules and regulations in the contract of employment, it was incumbent upon 523 the respondent  to show  that even  when appointment  is not shown to  be on  probation in  the order  of appointment, in view of the rules governing the contract of employment there shall always  be a  period of probation for every appointee. Witness Bawdekar  who appeared  on behalf  of the respondent stated in his evidence that the appellant was appointed as a probationary salesman.  Even  according  to  him  prescribed period of  probation was  six months. He then stated that by the letter  dated July  10, 1974,  respondent  informed  the appellant that  his service  should have  been terminated on the expiry  of initial  period of probation, i.e. on June 8, 1974. However,  as a  special case  the probation period was extended upto  September 8, 1974. No rule was pointed out to us enabling  the respondent  to extend the initial period of probation. Assuming even then that such was the power of the respondent, on  September 9,  1974, the  period of probation having not  been further extended nor termination of service having been ordered during or at the end of the probationary period on  the ground  of unsuitability,  the consequence in law is  that either  he would  be a  temporary employee or a permanent employee  as per  the rules governing the contract of employment  between the  appellant  and  the  respondent. Admittedly  his  service  was  terminated  by  letter  dated October 12,  1974, with  effect from October 19, 1974. It is not the  case of  the respondent  that there was any further extension of  the probationary  period. Thus, if the initial appointment which  was described  as temporary is treated on probation, even  according to  the respondent  the period of probation was  six months,  it expired on June 8, 1974. Even if by  the  letter  dated  July  10,  1974,  the  period  of probation was  said to  have been extended, on its own terms it  expired  on  September  8,  1974.  The  service  of  the appellant was  terminated with effect from October 19, 1974. What  was  the  nature  and  character  of  service  of  the appellant from September 8, 1974 when the extended period of

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probation expired  and termination of his service on October 19, 1974?  He was  unquestionably not  on probation.  He was either temporary  or permanent but not a probationer. How is it open  then to  the Labour  Court to record a finding that the service  of the  appellant  was  terminated  during  the period of  probation on  account of  his unsatisfactory work which did  not improve  in spite  of repeated  warnings? The Labour Court  concluded that  notwithstanding the  fact that the appellant was not shown to have been placed on probation in the  initial  appointment  letter  but  in  view  of  the subsequent orders there was a period of probation prescribed for the appellant and that his service was terminated during the extended period of 524 probation. This  is gross  error apparent on the face of the record which,  if  not  interfered  with,  would  result  in miscarriage of justice.      If  on  October  19,1974,  the  appellant  was  not  on probation and  assuming maximum  in favour of the respondent that he  was a  temporary employee, could termination of his service. even according to the respondent, not as and by way of punishment  but  a  discharge  of  a  temporary  servant, constitute retrenchment within the meaning of section 2(oo), is the core question. Section 2(oo) reads as under:           "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  superannuation   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."      Niceties  and   semantics  apart,  termination  by  the employer  of  the  service  of  a  workman  for  any  reason whatsoever would  constitute retrenchment  except  in  cases excepted in  the section  itself. The  excepted or  excluded cases  are   where  termination  is  by  way  of  punishment inflicted  by   way  of   disciplinary   action,   voluntary retirement of  the workman,  retirement of  the  workman  on reaching the  age  of  superannuation  if  the  contract  of employment between  the employer  and the  workman concerned contains a  stipulation in  that behalf,  and termination of the service  of a  workman on  the ground  of continued ill- health.  It   is  not   the  case  of  the  respondent  that termination in  the instant  case was a punishment inflicted by way  of disciplinary  action. If  such  a  position  were adopted,  the  termination  would  be  ab  initio  void  for violation  of  principle  of  natural  justice  or  for  not following the  procedure prescribed for imposing punishment. It is  not even  suggested that this was a case of voluntary retirement  or   retirement   on   reaching   the   age   of superannuation or  absence  on  account  of  continued  ill- health. The  case does  not fall  under any  of the excepted categories. There is thus termination of 525 service for  a reason  other than  the excepted category. It would indisputably be retrenchment within the meaning of the word as defined in the Act. It is not necessary to dilate on the point  nor to  refer to  the earlier  decisions of  this Court in  view of the later two pronouncements of this Court to both  of which one of us was a party. A passing reference

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to the earliest judgment which was the sheet anchor till the later pronouncements  may not be out of place. In Hariprasad Shivshankar Shukla  v.  A.D.  Divikar,  after  referring  to Pipraich Sugar  Mills Ltd.  v. Pipraich  Sugar Mills Mazdoor Union, a  Constitution  Bench  of  this  Court  quoted  with approval the following passage from the aforementioned case:           "But  retrenchment   connotes  in   its   ordinary      acceptation that the business itself is being continued      but that  a portion of the staff or the labour force is      discharged  as   surplusage  and   the  termination  of      services of  all the workmen as a result of the closure      of the  business cannot therefore be properly described      as retrenchment." This observation  was made  in the context of the closure of an undertaking  and being  conscious of  this position,  the question of  the correct interpretation of the definition of the expression  ‘retrenchment’ in  section 2(oo)  of the Act was left  open. Reverting  to that  question, the  view  was reaffirmed but  let it  be remembered  that the  two appeals which were  heard together  in Shukla’s  case were  cases of closure, one  Barsi Light  Railway Company Ltd., and another Shri Dinesh  Mills Ltd.  Baroda With  specific reference  to those cases,  in State  Bank of  India v.  N. Sundara Money, Krishna  Iyer   J.  speaking   for  a  three  judges  bench, interpreted  the  expression  ‘termination..for  any  reason whatsoever’ as under:           "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 pro- 526      tect  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 section 25F      and   section    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 section  25F(b) is  inferable from  the proviso to      section   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 section  25F  and      automatic extinguishment  of service  by  effluxion  of      time cannot be sufficient."      It would  be advantageous to refer to the facts of that case to  appreciate the  interpretation placed by this Court on the  relevant section.  State Bank of India appointed the respondent by an order of appointment which incorporated the two relevant terms relied upon by the Bank at the hearing of the case.  They  were:  (i)  the  appointment  is  purely  a temporary one  for a  period of 9 days but may be terminated

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earlier, without assigning any reason therefor at the Bank’s discretion; (ii)  the employment, unless terminated earlier, will automatically  cease at  the expiry  of the period i.e. 18.11.1972. It  is in  the context  of these  facts that the Court  held   that  where   the  termination   was   to   be automatically effective  by a certain date as set out in the order of  appointment it would nonetheless be a retrenchment within the  meaning section  2(oo) and  in  the  absence  of strict compliance  with the  requirements  of  section  25F, termination was held to be invalid.      Continuing this  line of  approach, in  Hindustan Steel Ltd. v.  The Presiding  Officer, Labour  Court,  Orissa  and Ors.,  a   bench  of  three  judges  examined  the  specific contention that  the decision  in Sundara  Money’s case runs counter to  the construction  placed on  that section  by  a Constitution Bench and, therefore, the decision is 527 per incuriam.  This Court  analysed in  detail Shukla’s case and Sundara  Money’s case and ultimately held that the Court did not find anything in Shukla’s case which is inconsistent with what has been held in Sundara Money’s case. In reaching this conclusion  it was  observed that  in Shukla’s case the question arose in the context of closure of the whole of the undertaking while  in Hindustan  Steel’s  case  and  Sundara Money’s case the question was not examined in the context of closure of  whole undertaking  but individual termination of service of  some employees  and it  was held  to  constitute retrenchment within  the meaning  of  the  expression.  This question again  cropped up in Santosh Gupta v. State Bank of Patiala. Rejecting  the contention  for  reconsideration  of Sundara Money’s case on the ground that it conflicted with a Constitution Bench  decision in  Shukla’s case  and adopting the ratio  in Hindustan  Steel’s case that there was nothing in the  two aforementioned  decisions which  is inconsistent with each  other and  taking note  of the  decision in Delhi Cloth and General Mills Ltd. v. Shambu Nath Mukerjee wherein this Court  had held that striking off the name of a workman from the  rolls by the management was termination of service which was  retrenchment within the meaning of section 2(oo), the Court  held that  discharge of the workman on the ground that she  had not  passed the test which would enable her to obtain confirmation  was retrenchment  within the meaning of section 2(oo)  and, therefore,  the requirements  of section 25F had  to be  complied with. It was pointed out that since the decision in Shukla’s case, the Parliament stepped in and introduced section  25FF and section 25FFF by providing that compensation shall be payable to workman in case of transfer or closure  of the  undertaking, as  if the workmen had been retrenched. The  effect of the amendment was noticed as that every case of termination of service by act of employer even if such  termination was  as a  consequence of  transfer  or closure  of   the  undertaking   was  to   be   treated   as ‘retrenchment’ for  the purposes  of  notice,  compensation, etc. The Court concluded as under:           "Whatever  doubts   might  have   existed   before      Parliament enacted  sections 25FF  and 25FFF  about the      width of section 25F there cannot be any doubt that the      expression  ‘termination  of  service  for  any  reason      whatsoever’ now  covers every  kind of  termination  of      service except those not 528      expressly provided  for by  other provisions of the Act      such as sections 25FF and 25FFF."      Reverting to  the facts  of this  case, termination  of service of  the appellant  does not  fall within  any of the

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excepted, or to be precise, excluded categories. Undoubtedly therefore the  termination would constitute retrenchment and by a  catena of decisions it is well settled that where pre- requisite for valid retrenchment as laid down in section 25F has not  been complied  with,  retrenchment  bringing  about termination of service is ab initio void. In State of Bombay and Ors. v. The Hospital Mazdoor Sabha and  Ors., this Court held that  failure to comply with the requirement of section 25F which  prescribes a  condition  precedent  for  a  valid retrenchment renders  the order  of retrenchment invalid and inoperative. In  other words,  it does  not  bring  about  a cessation  of   service  of  the  workman  and  the  workman continues to  be in  service. This  was not  even  seriously controverted before us.      It  was,   however,  urged  that  section  25F  is  not attracted in this case for an entirely different reason. Mr. Markendaya contended that before section 25F is invoked, the condition of  eligibility  for  a  workman  to  complain  of invalid retrenchment  must be  satisfied. According  to  him unless the  workman has  put in  continuous service  for not less than one year his case would not be governed by section 25F. That  is substantially  correct  because  the  relevant provision of section 25F provides as under:           "25F. "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;      Provided that  no such notice shall be necessary if the retrenchment is  under an  agreement which  specifies a date for the termination of service; 529           (b)  the workman  has been  paid, at  the time  of                retrenchment,  compensation  which  shall  be                equivalent of  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)." Before a  workman can  complain of retrenchment being not in consonance with section 25F, he has to show that he has been in continuous  service for not less than one year under that employer who has retrenched him from service. Section 25B is the dictionary  clause for  the expression  ‘continuous’. It reads as under;                "25B (1) a workman shall be paid 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 lockout  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

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         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; 530           (b)  for a  period of  six months, if the workman,                during  a   period  of  six  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)  ninety-five  days,  in  the  case  of  a                     workman employed below ground in a mine;                     and                (ii) one hundred  and  twenty  days,  in  any                     other case. Explanation-   For the purposes of clause (2), the number of                days on  which a  workman has actually worked                under an  employer shall  include the days on                which-                (i)  he has  been laid-off under an agreement                     or as  permitted by standing orders made                     under    the    Industrial    Employment                     (Standing Orders)  Act, 1946,  or  under                     this  Act   or  under   any  other   law                     applicable     to     the     industrial                     establishment;                (ii) he has  been on  leave with  full wages,                     earned in the previous years;                (iii)he has  been  absent  due  to  temporary                     disablement caused  by accident  arising                     out  of   and  in   the  course  of  his                     employment; and                (iv) in the case of a female, she has been on                     maternity leave;  so, however,  that the                     total period  of  such  maternity  leave                     does not exceed twelve weeks.      Mr. Markendaya  contended that  clauses (I)  and (2) of section 25B provide for two different contingencies and that none of  the clauses  is  satisfied  by  the  appellant.  He contended that  sub-section (I)  provides for  uninterrupted service and  sub-section (2)  comprehends a  case where  the workman is  not in continuous service. The language employed in  sub-sections   (1)  and  (2)  does  not  admit  of  this dichotomy. Sub-sections  (1) and  (2)  introduce  a  deeming fiction as  to in what circumstances a workman could be said to be  in continuous service for the purposes of Chapter VA. Sub-section (1)  provides a  deeming fiction in that where a workman is in service 531 for a  certain period he shall be deemed to be in continuous service for  that period  even if  service is interrupted on account of  sickness or authorised leave or an accident or a strike which  is not  illegal or a lockout or a cessation of work which  is not  due to  any fault  on the  part  of  the workman. Situations  such as  sickness, authorised leave, an accident, a  strike not illegal, a lockout or a cessation of work  would   ipso  facto   interrupt   a   service.   These interruptions have  to be  ignored to  treat the  workman in

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uninterrupted  service   and  such  service  interrupted  on account of  the aforementioned  causes which would be deemed to be  uninterrupted would  be continuous  service  for  the period for  which  the  workman  has  been  in  service.  In industrial employment  or for  that matter  in any  service, sickness, authorised  leave, an  accident, a strike which is not illegal,  a lockout  and a  cessation of work not due to any fault  on the part of the workman, are known hazards and there are  bound to  be interruptions  on that account. Sub- section (I)  mandates that  interruptions therein  indicated are to  be ignored  meaning thereby  that on account of such cessation an  interrupted service  shall  be  deemed  to  be uninterrupted and  such uninterrupted  service shall for the purposes of  Chapter VA  be deemed to be continuous service. That is only one part of the fiction.      Sub-section (2)  incorporates another  deeming  fiction for  an  entirely  different  situation.  It  comprehends  a situation where  a workman  is  not  in  continuous  service within the  meaning of  sub-section (1)  for a period of one year or  six months,  he shall be deemed to be in continuous service under  an employer  for a  period of one year or six months, as the case may be, if the workman during the period of 12 calendar months just preceding the date with reference to which  calculation is  to be  made, has  actually  worked under that  employer for not less than 240 days. Sub-section (2) specifically  comprehends a situation where a workman is not  in  continuous  service  as  per  the  deeming  fiction indicating in  sub-section (1)  for a  period of one year or six months.  In such a case he is deemed to be in continuous service for  a period  of  one  year  if  he  satisfies  the conditions in  clause (a) of sub-section (2). The conditions are  that  commencing  the  date  with  reference  to  which calculation is  to be made, in case of retrenchment the date of retrenchment,  if in  a period of 12 calendar months just preceding such  date the  workman has rendered service for a period of  240 days,  he shall be deemed to be in continuous service for a period of one year for the purposes of Chapter VA. It  is not necessary for the purposes of sub-section (2) (a) that the workman should be in service 532 for a  period of  one year. If he is in service for a period of one  year and  that if that service is continuous service within the  meaning of  sub-section (1)  his case  would  be governed by sub-section (1) and his case need not be covered by sub-section  (2). Sub-section  (2) envisages  a situation not  governed   by  sub-section  (1).  And  sub-section  (2) provides for  a fiction  to treat  a workman  in  continuous service for  a period  of one  year despite the fact that he has not  rendered uninterrupted  service for a period of one year but  he has  rendered service  for a period of 240 days during the  period of  12 calendar months counting backwards and just  preceding the  relevant date  being  the  date  of retrenchment. In other words, in order to invoke the fiction enacted in  sub-section 2(a)  it is  necessary to  determine first the  relevant date,  i.e., the  date of termination of service which  is complained  of as retrenchment. After that date is  ascertained, move backward to a period of 12 months just preceding  the date  of retrenchment and then ascertain whether within  the period  of 12  months, the  workman  has rendered service  for a  period of  240 days. If these three facts are  affirmatively answered  in favour  of the workman pursuant to  the deeming fiction enacted in sub-section 2(a) it will have to be assumed that the workman is in continuous service for  a period  of one  year and  he will satisfy the eligibility qualification  enacted in section 25F. On a pure

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grammatical  construction   the  contention  that  even  for invoking sub-section  (2) of section 25B the workman must be shown to  be in  continuous service for a period of one year would render  sub-section (2) otiose and socially beneficial legislation would  receive a  set back by this impermissible assumption. The contention must first be negatived on a pure grammatical construction  of sub-section  (2).  And  in  any event, even  if there  be any  such thing  in favour  of the construction, it  must be  negatived on  the ground  that it would render  sub-section (2)  otiose. The  language of sub- section (2) is so clear and unambiguous that no precedent is necessary to  justify the  interpretation we  have placed on it. But  as Mr.  Markandaya referred to some authorities, we will briefly notice them.      In Sur  Enamel and  Stamping Works  (P) Ltd.  v.  Their Workmen, referring to section 25B as it then stood read with section 2(eee)  which defined continuous service, this Court held as under:           "The position therefore is that during a period of      employment for less than 11 calendar months these two 533      persons worked  for more  than 240 days. In our opinion      that would  not satisfy the requirement of section 25B.      Before a  workman can  be considered  to have completed      one year  of continuous  service in an industry it must      be shown first that he was employed for a period of not      less than  12 calendar  months and,  next  that  during      those 12  calendar months  had worked for not less than      240 days.  Where, as  in the  present case, the workmen      have not  at all  been employed  for  a  period  of  12      calendar  months  it  becomes  unnecessary  to  examine      whether the  actual days  of work  numbered 240 days or      more. For, in any case, the requirements of section 25B      would not  be satisfied  by the mere fact of the number      of working days being not less than 240 days." If section  25B had  not been  amended,  the  interpretation which it  received  in  the  aforementioned  case  would  be binding on  us. However, section 25B and section 2(eee) have been the  subject-matter  of  amendment  by  the  Industrial Disputes (Amendment)  Act, 1964.  Section 2(eee) was deleted and section  25B was  amended. Prior to its amendment by the 1964 amendment Act, section 25B read as under:           "For the purposes of ss. 25C and 25F a workman who      during the  period of  12 calendar  months has actually      worked in an industry for not less than 240 days, shall      be deemed  to have  completed one  year  of  continuous      service in the industry."      We  have   already  extracted  section  25B  since  its amendment and  the change  in language  is  the  legislative exposition of which note must be taken. In fact, we need not further dilate  upon this  aspect because  in Surendra Kumar Verma and  Ors. v.  Central Government Industrial-cum-Labour Court, New  Delhi  and  Anr.,  Chinnappa  Reddy.  J.,  after noticing the  amendment and referring to the decision in Sur Enamel and Stamping Works (P) Ltd case, held as under:           "These changes  brought about  by Act  36 of  1964      appear to be clearly designed to provide that a workman      who has actually worked under the employer for not less 534      than 240 days during a period of twelve months shall be      deemed to  have been in continuous service for a period      of one  year whether or not he has in fact been in such      continuous service  for a  period of  one year.  It  is      enough that  he has  worked for 240 days in a period of      12 months, it is not necessary that he should have been

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    in the service of the employer for one whole year." In  a   concurring  judgment  Pathak  J.  agreed  with  this interpretation  of   section  25B(2).   Therefore,  both  on principle and  on precedent  it must  be held  that  section 25B(2) comprehends  a situation  where a  workman is  not in employment for  a period  of 12  calendar  months,  but  has rendered service  for a period of 240 days within the period of 12 calendar months commencing and counting backwards from the relevant date, i.e. the date of retrenchment. If he has, he would  be deemed to be in continuous service for a period of one year for the purpose of section 25B and Chapter VA.      Reverting to  the facts  of this  case, admittedly  the appellant was employed and was on duty from December 8, 1973 to October  19, 1974  when his  service was  terminated. The relevant date  will be  the date  of termination of service, i.e. October 19, 1974 Commencing from that date and counting backwards, admittedly  he had  rendered service for a period of 240  days within a period of 12 months and, indisputably, therefore, his  case falls  within section 25B(2) (a) and he shall be  deemed to be in continuous service for a period of one year for the purpose of Chapter VA.      Appellant  has  thus  satisfied  both  the  eligibility qualifications  prescribed   in  section  25F  for  claiming retrenchment compensation. He has satisfactorily established that his  case is  not covered  by any  of the  excepted  or excluded categories  and he  has rendered continuous service for one  year. Therefore,  termination of  his service would constitute  retrenchment.   As  pre-condition  for  a  valid retrenchment has  not  been  satisfied  the  termination  of service is ab initio void, invalid and inoperative. He must, therefore, be deemed to be in continuous service.      The last  submission was  that looking to the record of the appellant  this Court should not grant reinstatement but award compensation.  If the  termination of  service  is  ab initio  void  and  inoperative,  there  is  no  question  of granting reinstatement  because there  is  no  cessation  of service and a mere declaration follows that 535 he  continues  to  be  in  service  with  all  consequential benefits. Undoubtedly,  in some decisions of this Court such as Ruby  General Insurance  Co. Ltd  v. Chopra  (P.P.),  and Hindustan Steel Ltd. Rourkela v. A. K. Roy and Others it was held that the Court before granting reinstatement must weigh all the  facts and  exercise discretion  properly whether to grant reinstatement or to award compensation. But there is a catena of decisions which rule that where the termination is illegal especially  where there  is an  ineffective order of retrenchment, there  is neither termination nor cessation of service and a declaration follows that the workman concerned continues to  be in service with all consequential benefits. No case  is  made  out  for  departure  from  this  normally accepted approach  of the  Courts in  the  field  of  social justice and we do not propose to depart in the case.      Accordingly, this  appeal is  allowed and  the Award of the Labour  Court dated  May 31, 1980, is set aside. We hold that the  termination of  service of  the appellant  was  ab initio void  and inoperative  and a declaration is made that he  continues  to  be  in  service  with  all  consequential benefits, namely,  back wages in full and other benefits, if any. However,  as the  Award is  to be  made by  the  Labour Court, we  remit the  case to  the Labour  Court to  make an appropriate Award  in the  light of  the  findings  of  this Court. The  respondent shall  pay the costs of the appellant in this  Court quantified at Rs. 2000 within four weeks from the date  of this judgment and the costs in the Labour Court

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have to be quantified by the Labour Court. S.R.      Appeal allowed. 536