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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

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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

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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

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         (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

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    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

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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

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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

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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.