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PETITIONER: GAMON INDIA LIMITED

       Vs.

RESPONDENT: NIRANJAN DASS

DATE OF JUDGMENT05/12/1983

BENCH: DESAI, D.A. BENCH: DESAI, D.A. MISRA, R.B. (J) MISRA RANGNATH

CITATION:  1984 AIR  500            1984 SCR  (1) 959  1984 SCC  (1) 509        1983 SCALE  (2)863

ACT:      Industrial  Disputes   Act   1947,   Section   2   (oo) retrenchment-What  is-Services   terminated  on  account  of recession   in    work-Termination   whether    amounts   to retrenchment.

HEADNOTE:      The respondent was employed by the appellant-Company as a Senior  Clerk till  he received  a notice  terminating his services. The  notice stated that on account of reduction in volume of  the business  of  the  Company  as  a  result  of recession, his services were being terminated.      On  a   reference  by   the  Government,   whether  the retrenchment of  the respondent  was unjustified  or illegal the Industrial Tribunal held that since the conditions for a valid  retrenchment   have  not   been  complied  with,  the respondent continued to be in service.      In a  petition under  Article 226,  a Single Judge held that since  the termination  of the  services was consequent upon the  closure of  the Delhi  office, the  case would  be governed by  Section 25  FFF of  the Industrial Disputes Act 1947 which  does not  prescribe payment of compensation as a condition precedent to a valid termination of service by way of retrenchment.      In the  Letters Patent  Appeal, the  Division Bench set aside the  judgment of  the Single  Judge on the ground that the reference  to the  Industrial Tribunal  was to  consider whether the  retrenchment was  illegal  or  unjustified  and therefore it was not open to the Single Judge to come to the conclusion that  the case  was one  of closure  governed  by Section 25  FFF. The  Division Bench  therefore restored the Tribunal’s award.      Dismissing the Appeal of the Company, ^      HELD: 1.  The award  of the  Tribunal was  correct  and unassailable. The  respondent had  become surplus on account of  reduction   in  volume  of  work  and  that  constitutes retrenchment even in the traditional sense of the term                                                      [963 H]      Pipraich Sugar  Mills  Ltd.  v.  Pipraich  Sugar  Mills Mazdoor Union,  [1956] SCR  172; State  Bank of  India v. N.

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Sundara Money, [1976] 3 SCR 160; Hindustan Steel Ltd. v. The Presiding Officer, Labour Court, Orissa and others, [1977] 1 SCR 586;  Santosh Gupta  v. State  Bank of Patiala, [1980] 3 SCR 340; Delhi Cloth and 960 Genral Mills Ltd. v. Shambu Nath Mukerjee, [1978] 1 SCR 591; Mohan Lal  v. Management  of  M/s  Bharat  Electronics  Ltd. [1981] 3  SCR  518;  L.  Robert  D’suoza  v.  The  Executive Engineer, Southern Railway & Anr. [1982] 3 SCR 251, referred to.      2. The  pre-requisite for  a valid retrenchment as laid down in  Section 25  F  has  not  been  complied  with,  and therefor the  retrenchment  bringing  about  termination  of service is ab initio void. [964 E]      In the  instant case,  the notice  recites  that  as  a result of  the recession  in the  volume of  the work of the company,  the  services  of  the  respondent  would  not  be required by the company after October 14, 1967 and that this notice contemplated by section 25F (a). Not even one word is stated in the notice that the office to which the respondent was attached was in the process of being closed down, so his services would no more be required. [963 D-E]      3. The termination of service for the reasons mentioned in the  notice is not covered by any of the Clauses (a), (b) and (c)  of Section 2 (oo) which defines retrenchment and it is now  well-settled that  where the  termination of service does not  fall within  any of  the excluded  categories, the termination would  be ipso  facto retrenchment.  It was  not even attempted  to be  urged that the case of the respondent would  fall  in  any  of  the  excluded  categories.  It  is therefore, indisputably a case of retrenchment. [964 C-D]      4 (i).  The appellant  will have  to establish the fact that the  respondent has  reached the  age of superannuation and that physical reinstatement is not possible. [965 A]      (ii). The  respondent will be entitled to all backwages including benefit  of revised  wages or  salary if  there is revision  of   pay-scales  with  yearly  increment,  revised dearness allowance  or variable  dearness allowance  and all terminal  benefits   if  he   was   reached   the   age   of superannuation such  as Provident  Fund, Gratuity  etc. Back wages should be calculated as if the respondent continued in service uninterrupted. [965 B-C]      (iii). The  respondent has  been unlawfully kept out of service. The  appellant-company shall  therefore pay all the arrears with  12 per  cent interest from the date the amount became due and payable till realisation. [965 D]

JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1741 of 1980.      From the Judgment and Order dated 16th January, 1980 of the High  Court of  Delhi at  New Delhi,  in Letters  Patent Appeal No. 25 of 1970.      U.R. Lalit,  V.N. Ganpule  and Mrs. V.D. Khanna for the Appellant. 961      Jitendra Sharma for the Respondent.      The Judgment of the Court was delivered by      DESAI, J. Respondent Shri Niranjan Dass was employed as a  Senior   Clerk  by   the  appellant-company  as  per  the appointment order  contained in  the letter  dated April 10, 1962. The letter of appointment inter alia provided that the respondent may be posted any where in India or abroad as per

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the requirements  of the  company and  it was  signed by its Zonal Manager,  Central Zone, Delhi. Respondent continued to serve in  that capacity  when on  September 14, 1967, he was served with  a notice  terminating his  services. The notice reads as under:           "Due to the reduction in the volume of business of      the Company  as a  result of  the  recession  in  (sic)      services will  not be required by the company after the      14th  October,   1967,  and  this  may  be  treated  as      statutory notice  of one  month of  termination of your      service.           Your leave  shall run concurrently with the notice      period, and  you may avail of leave due to you, if any,      during the notice period.           Personnel Section at Head Office have been advised      to settle  your dues,  and you may write to them in the      matter.           We take  this opportunity  to thank  you for  your      past services,  and it  is very  unfortunate  that  the      present circumstances  have compelled  us to issue this      notice.           Should it be possible for us to offer you a job at      any of  our works  sites at a later date, we shall make      you a fresh offer at that time." Respondent raised  an industrial dispute and the appropriate Government by  the order  dated May  30, 1968  referred  the industrial  dispute   for  adjudication  to  the  Industrial Tribunal.  The   reference  was  couched  in  the  following language. 962           "Whether the retrenchment of Shri Niranjan Dass is      unjustified or  illegal and  if so, what directions are      necessary in this respect."      By the  award dated  February 25,  1969. the Industrial Tribunal held  that the  retrenchment of  the respondent was illegal and  unjustified and  gave  a  declaration  that  he continues to  be in  service of the appellant-company and is entitled to  his  wages  till  he  is  lawfully  retrenched. Appellant-company challenged the award in Civil Writ No. 462 of 1969  filed by  it in  the High Court of Delhi. A learned Single Judge held that as the Delhi office of the appellant- company was  closed, the  case of  the respondent  would  be governed by  Sec. 25FFF  being termination  consequent  upon closure, and  therefore payment  of compensation  was not  a condition precedent  and  the  termination  of  service  was valid, The learned Judge accordingly set aside the award and remitted  the   matter  to   the  Tribunal  to  decide  what directions, if any, are necessary in respect of retrenchment of the  respondent in  the light  of the  discussion in  the judgment Respondent  preferred Letters  Patent Appeal No. 25 of 1970  against the decision of the learned Single Judge. A Division Bench  of Delhi  High Court held that the reference made by  the appropriate  Government required the Industrial Tribunal to consider whether the retrenchment was illegal or unjustified and  therefore it  was implicit in the reference itself that it was a case of retrenchment, validity of which to be  examined in  the reference  and therefore  it was not open to the learned Single Judge to change the ’base’ of the reference and  to come  to the  conclusion that the case was one of  closure of  the   industrial undertaking governed by Sec. 25FFF  of the  Industrial Disputes Act. Approaching the matter from  this angle,  the Division  Bench set  aside the decision of  the learned Single Judge and restored the award made by  the Industrial  Tribunal. Hence  this appeal by the company by special leave.

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    The  Industrial   Tribunal  held  that  respondent  was retrenched from  service  by  the  appellant  and  the  pre- conditions for  a valid  retrenchment were not complied with and therefore  the respondent  was entitled to a declaration that he  continues to  be in  service with  all the benefits flowing from the said declaration. A learned Single Judge of the High  Court interfered  with this award holding that the appellant-company had  closed its Delhi office and therefore the termination  of service  was consequent upon the closure and even  if it  constitutes retrenchment, the case would be governed by  Sec. 25FFF  which does not prescribe payment of compensation as a 963 condition-precedent to a valid termination of service by way of  retrenchment.  In  the  Letters  Patent  Appeal  at  the instance of the respondent, the Division Bench set aside the judgment of the learned Single Judge holding that it was not open to  the learned Single Judge to hold that it was a case of closure  covered by Sec. 25FFF because it was implicit in the reference  that the case was one of retrenchment and the only question  with the  Industrial Tribunal was called upon to decide  was whether  the retrenchment  was unjustified or illegal. It  is not  necessary to examine the view expressed by  the  Division  Bench  of  the  High  Court  whether  the assumption   underlying    an   order    of   reference   is unquestionable  at   the  hearing   of  the  reference.  The question, however,  is whether the learned Single Judge, who interfered with  the award  of the Tribunal was justified in coming to  the conclusion  that the  case was one of closure covered by  Sec. 25FFF  or the Industrial Tribunal was right in holding that it is a case of retrenchment covered by Sec. 25F of  Industrial Disputes  Act. This point can be answered by mere  reference to  the notice  served by  the appellant- company  on  the  respondent  intimating  to  him  that  his services will no more be required effective from October 14, 1967. The notice as a whole has been extracted hereinbefore. The notice  recites that  as a  result of  recession in  the volume of  work of  the company,  services of the respondent would no  more be  required by the company after October 14, 1967 and this notice may be treated as a statutory notice as contemplated by  Sec. 25F(a). There is not even a whisper in the notice  that as  the Delhi  office is being closed down, the services  of the  respondent would  not be  required. An attempt  was   made  while   leading  evidence   before  the Industrial Tribunal  to show  that the Zonal office at Delhi was closed on January 31, 1968 while the Central Zone office was closed  somewhere in  October, 1967.  If  by  September, 1967, the appellant company had resolved to close the office at Delhi  to  which  the  respondent  was  attached,  it  is unthinkable that  aspect would not be recited in the notice. The necessity  for termination  of service of the respondent recited in  the notice  was recession in the work handled by the company.  Not even one word is stated in the notice that the office  to which  the respondent was attached was in the process of  being closed down, so his services would no more be required.  On a true construction of the notice, it would appear that  the respondent had become surplus on account of reduction  in   volume  of   work   and   that   constitutes retrenchment even  in the  traditional sense  of the term as interpreted in  Pipraich Sugar  Mills Ltd. v. Pipraich Sugar Mills 964 Mazdoor Union(1) though that view does not hold the field in view of  the recent decisions of this Court in State Bank of India v.  N. Sundara  Money(2)   Hindustan Steel Ltd. v. The

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Presiding  Officer,  Labour  Court,  Orissa  and  Others;(3) Santosh Gupta  v. State  Bank of Patiala;(4) Delhi Cloth and General Mills  Ltd. v. Shambu Nath Mukerjee;(5) Mohan Lal v. Management of  M/s Bharat  Electronics Ltd(6)  and L. Robert D’souza  v.  The  Executive  Engineer,  Southern  Railway  & Anr.(7) The  recitals and  averments in  the notice leave no room for  doubt that  the  service  of  the  respondent  was terminated for  the reason  that on account of recession and reduction in  the volume  of work of the company, respondent has become surplus. Even apart from this, the termination of service for  the reasons  mentioned in  the  notice  is  not covered by any of the clauses (a), (b) and (c) of Sec. 2(oo) which defines  retrenchment and  it is  by now  well-settled that where  the termination  of service does not fall within any of  the excluded  categories, the  termination would  be ipso facto  retrenchment. It  was not  even attempted  to be urged that  the case  of the respondent would fall in any of the excluded  categories. It is there indisputably a case of retrenchment. It is  not disputed  that  the  pre-requisite  for  a  valid retrenchment as  laid down in Sec. 25f has not been complied with  and   therefore  the   retrenchment   bringing   about termination of  service is  ab initio void. Viewed from this angle, the  award of the Industrial Tribunal was correct and unassailable and  the learned  Single Judge  was in error in interfering with  the same.  Undoubtedly, the Division Bench of the  High Court  has set  aside the  order of the learned Single Judge  and restored the award for reasons of its own. However, for  the reasons  herein indicated, the decision of the Division  Bench in  Letters Patent Appeal No. 25 of 1970 is upheld  and confirmed and this appeal must therefore fail and accordingly it is dismissed.      In the  course of hearing of this appeal, it was stated that the  respondent has  reached the  age of superannuation therefore physical reinstatement in service is not possible. Appellant will have to 965 establish that  fact but  in the  event, the appellant shows that under a valid rule, respondent has reached the stage of superannuation and  therefore physical  reinstatement is not possible, it  is hereby  declared that  the respondent shall continue to  be in  service uninterruptedly from the date of the attempted  termination  of  service  till  the  date  of superannuation. Respondent  would be  entitled to  all  back wages including  the benefit  of revised  wages or salary if during the  period there  is  revision  of  pay-scales  with yearly increment,  revised dearness  allowance  or  variable dearness allowance  and all  terminal  benefits  if  he  has reached the  age of  superannuation such  as Provident Fund, Gratuity etc.  Back wages  should be  calculated as  if  the respondent continued  in service  uninterrupted. He  is also entitled to  leave encashment  and bonus if other workmen in the same  category were  paid the  same. It appears that the respondent  has   been  unlawfully   kept  out  of  service, therefore it  is but  just that  the appellant-company shall pay  all   the  arrears   as  calculated  according  to  the directions herein  given with 12% interest from the date the amount became  due and  payable till  realisation. Appellant shall also  pay costs  to the  respondent quantified  at Rs. 5,000. The appellant is directed to pay the amount as herein directed to be paid within 3 months from today.      Mr. Jitendra Sharma, learned counsel for the respondent stated that  the costs  awarded to the respondent be paid to the Legal  Aid Cell  set up by Indian Association of Lawyers in collaboration with Womens’ Council.

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    Order accordingly. N.V.K.                                     Appeal dismissed. 966