25 August 2004
Supreme Court
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KRISHNA BAHADUR Vs M/S. PURNA THEATRE .

Bench: N. SANTOSH HEGDE,S.B. SINHA
Case number: C.A. No.-007251-007251 / 2001
Diary number: 14143 / 2000
Advocates: BIJAN KUMAR GHOSH Vs AVIJIT BHATTACHARJEE


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CASE NO.: Appeal (civil)  7251 of 2001

PETITIONER: Krishna Bahadur                                                  

RESPONDENT: M/s Purna Theatre & Ors.                                         

DATE OF JUDGMENT: 25/08/2004

BENCH: N. Santosh Hegde & S.B. Sinha

JUDGMENT: J U D G M E N T

S.B. SINHA, J :

       The workman is in appeal before us being aggrieved by and  dissatisfied with the judgment and order dated 13.10.2000 passed by the  Division Bench of the High Court of Calcutta in Appeal No.434 of 1996.   

       The case at hand has a chequered  history.  The appellant herein was  appointed  in the post of Messenger-cum-Bearer in the establishment of the  respondent herein, a Cinema House, on 31.3.1978.  He was subsequently  confirmed on the said post.  A disciplinary proceeding was initiated against  him wherein he was found guilty, whereupon he was dismissed from  services.  The said order of dismissal was the subject-matter of an industrial  dispute. The Industrial Tribunal by reason of an award set aside the said  order of dismissal with full back-wages and compensation.  On or about  1.5.1991, the appellant was permitted to join his duties but back-wages were  not paid.  He was, however, retrenched from  services within one month  from his joining i.e. 30.5.1991.  A sum of Rs.9,030/- was paid as  retrenchment compensation which the appellant is said to have received  under protest.  A trade union known as Bengal Motion Pictures Employees  Union took up the cause of the Appellant, inter alia, on the ground of  contravention of the legal requirements as contained in Section 25-G of the  Industrial Disputes Act, 1947 as also insufficiency of the amount of  compensation paid to the appellant in terms of Section 25-F(b) thereof.  An  industrial dispute as regard his retrenchment was raised before the Assistant  Labour Commissioner which failed; whereupon the Industrial Tribunal was  approached by the Appellant.  In the meanwhile, the appellant had also  initiated a proceeding under Section 33-C(2) of the Industrial Disputes Act,  1947 which ended in an amicable settlement in terms whereof the Appellant  allegedly agreed to receive a sum of Rs.39,000/- as full and final settlement.   He had accepted a cheque for the aforementioned sum of Rs.9,030/- issued  by the management allegedly as part payment of  his compensation of  Rs.39,000/- which was deducted from the aforementioned settled amount of  Rs.39,000/-. The Industrial Tribunal by its order dated 28.12.1995 held :

"Having regard to the facts and circumstances and  in consideration of the evidence and record I hold  that the retrenchment of the concerned workman  was illegal and as such he should be deemed to be  in continuous service with all benefits.  The  issues  are answered accordingly."       

       A writ petition was filed by the respondent herein questioning the  correctness or otherwise of the said award before the Calcutta High Court  which was marked as  Writ Petition No.1872 of 1996.  The said writ petition  was dismissed by a learned Single Judge, holding :

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"Thus, regarding (sic regard) being had the  principles of law discussed above in the light of  the fact and circumstances of the instant case, I  have no hesitation to hold that the impugned  retrenchment was effected without complying with  the mandatory requirements of Section 25F(b) of  the Industrial Disputes Act and that the Tribunal  was well within its jurisdiction in recoding a  finding to that effect.  Such a retrenchment must,  accordingly, be held to be void ab intio and  consequently, the respondent must be deemed to  be in service and entitled to all consequential  benefits.  I, therefore, find no justification for  quashing the impugned Award.  In such view of  the matter, the petitioner is not entitled to any  relief and the instant writ application fails.  The  writ application is, accordingly, dismissed without,  however, any order as to costs."          The respondent herein preferred an appeal thereagainst before a  Division Bench of the Calcutta High Court which was marked as Appeal  No.434 of 1996.  A  plea as regard substantial compliance of the  requirements of law  on the part of the workman was raised for the first time.  Accepting the said plea, the Division Bench by reason of  the impugned  judgment allowed the appeal  holding :

       "So, the fact remains that the employer bona  fidely paid the said amount of Rs.9030.30 along  with the notice of retrenchment and the workman  duly accepted the said amount.  Hence, the plea of  waiver  in a case of this nature as argued by the ld.  Advocate for the appellant can be upheld.  Above  all, when the employer bona fidely paid the major  part of retrenchment compensation after a bona  fide calculation, not opposed by anybody till the  argument before the Tribunal, we fail  to  understand as to why the employer can be  punished by ordering him to pay the entire  backwages with the privilege of immediate  reinstatement as ordered in the award.  Following  the principle adopted by the Apex Court in 1980  (II) LLJ 124 (SC) (Workman of Sudder Workshop  of Jhorhat Tea Company \026 vs. The Management),  we deem, it proper not to punish the employer as  above only for an alleged shortfall of Rs.552..87  which was not pleaded in the written statement of  the workman.  We do not think that non-payment  of Rs.552.87 as calculated in the award at the  argument stage only, can make the retrenchment  order nugatory.  On the other hand, we take the  view, following the principle adopted in Workmen  of Coimbatore Pioneer ’B’ Ltd. (supra) that for  non non-payment of the short compensation of  Rs.552.87, a substantial amount can be paid as  compensation.

Accordingly, in setting aside the award and  allowing this appeal, the appellant is directed to  pay a sum of Rs.552.87 (rounded off to Rs.553)  along with a compensation of Rs.6634.50  (equivalent to wages for six months) to the  workman \026 the respondent no.4 within six weeks."

       The workman, thus, is in appeal before us from the said judgment.   The respondent management has not appeared despite service of notice.  

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       Mr. Bijan Kumar Ghosh, learned counsel appearing on behalf of the  appellant, would submit that the Division Bench of the High Court  committed a manifest error in passing the impugned judgment and order  insofar as it failed to take into consideration that Section 25-F(b) of the  Industrial Disputes Act is imperative in character.  Keeping in view the fact  that admittedly the said legal requirements thereof had not been complied  with and furthermore plea of waiver having not been raised before the  Tribunal or before the learned Single Judge, it was impermissible for the  Division Bench to pass the impugned judgment.  

We may usefully refer to the submissions made on behalf of the  respondent \026 management in writ proceedings as had been noticed by the  learned Single Judge of the High Court in his judgment:

       "Mr. Arunava Ghosh, ld. Advocate  appearing for the petitioner company, raised the  following points.

       First, it was urged that the Tribunal fell into  error of law in coming to a conclusion that there  was non-compliance of requirements of Sec.25- F(b) in as much as such a plea was never put  forward on behalf of the workman in his written  statement nor was it substantiated by any evidence.   Secondly it was contended that when the  Workman did neither raised any plea of  inadequacy of the retrenchment compensation nor  adduce any evidence in this regard, the Tribunal  should not have embarked upon an inquiry for the  purpose of ascertaining whether the compensation  money was adequate or not.  Thirdly, it was  contended that as there was neither any pleading  nor any evidence regarding the shortfall in the  payment of retrenchment compensation, the  Tribunal could not go into that question at the  stage of argument.  Fourthly, it was urged  that  omission to maintain seniority list under Rule 77A  does not render the retrenchment illegal or bad in  law, particularly when there was clear admission  on the part of the workman in his evidence that he  was the last person to be employed in the category  of workman to which he belonged and as such the  Tribunal’s finding, if there be any, regarding the  observance of the principles of ’last come first go’  as contemplated under Section 25G was perverse  and was not based on evidence.  Mr. Ghosh cited a  number of decisions in support of his contentions."

       It is, therefore,  evident  that the question of a bona fide action on the  part of the employer or waiver on the part of the appellant herein had not  been raised.  The respondent before the learned Single Judge was although  very emphatic as regard compliance of requirements of Section 25-F(b) of  the Industrial Disputes Act but no contention as regard the plea of waiver  was raised.  Even the question of substantial compliance or bonafide action  on the part of the said respondent was not raised.   

       The principle of waiver although is akin to the principle of estoppel;   the difference between the two, however, is that whereas estoppel is not a  cause of action; it is a rule of evidence; waiver is contractual and may  constitute a cause of action; it is an agreement between the parties and  a  party fully knowing of its rights has agreed not to assert a right for a  consideration.            A right can be waived by the party for whose benefit certain

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requirements or conditions had been provided for by a statute subject to the  condition that no public interest is involved therein.  Whenever waiver is  pleaded it is for the party pleading the same to show that an agreement  waiving the right in consideration of some compromise came into being.   Statutory right, however, may also be waived by his conduct.   

In   Bank of India and Others etc. vs. O.P. Swarnakar and Others etc.  [(2003) 2 SCC 721], it was noticed :

"115.The Scheme is contractual in nature.  The  contractual right derived by the employees  concerned, therefore, could be waived.  The  employees concerned having accepted a part of the  benefit could not be permitted to approbate and  reprobate nor can they be permitted to resile from  their earlier stand."   

It is neither in doubt nor in dispute that the provision of Section 25- F(b) is imperative in character.  The provision postulates the fulfillment of  the following three conditions :

(i)     One month’s notice in writing indicating the reasons for  retrenchment or wages in lieu of such notice; (ii)    Payment of compensation equivalent to fifteen days, average  pay for every completed year of continuous service or any part  thereof in excess of six months; and (iii)   Notice to the appropriate Government in the prescribed manner.

The requirement to comply with the provision of Section 25-F(b) has  been held to be mandatory before retrenchment of a workman is given effect  to.  In the event of any contravention of the said mandatory requirement, the  retrenchment would be rendered void ab initio.

In Workmen of Sudder Workshop of Jorehaut Tea Co. Ltd. vs. The  Management [(1980) 2  L.L.J. 124], whereupon reliance had been placed by  the Division Bench,  this Court held :

"\005That apart, if there be non-compliance with S.  25F, the law is plain that the retrenchment is  bad\005."

In that case, however, compensation had been computed on the basis  of wages previously paid and not on the basis of the Wage Board Award.   The retrenchment took place on  5.11.1986.  No plea as regard non-payment  of compensation calculated on the basis thereof was taken before the  Tribunal.  Even the award did not proceed on that basis.   

The new plea based on the facts was not permitted to be raised by the  High Court.  This Court noticed that the Wage Board Award was subsequent  to the retrenchment;  although it was applied retrospectively i.e. with effect  from 1.4.1966.   In that situation, it was observed :

"\005In the  absence of any basis for this new plea  we are unable to reopen an ancient matter of 1966  and, agreeing with the High Court, dismiss the  appeal.  But the 16 workmen, being eligible  admittedly for the Wage Board scale, will be paid  the difference for the period between 1.4.1966 to  5.11.1966."

We may furthermore notice that the learned Industrial Tribunal  interfered with the retrenchment of the appellant not only on the ground of

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non-compliance of the provisions of Section 25-F(b) of the Industrial  Disputes Act but also on the ground of contravention of Rule 77-A of the   West Bengal Industrial Disputes Rules, stating :

       "Moreover the company has not shown by  means of a seniority lists that the concerned  workman was the junior most amongst the same  category of workers.  When there is such a  controversy and when no such lists was maintained  by the company although maintaining of such lists  can be said to be a compulsory compliance of the  rules framed under the Industrial Disputes Act on  the part of the Company (Vide 77A of the West  Bengal Industrial Disputes Rules) it must be held  that the retrenchment was illegal.  Mere evidence  to show the seniority of the workman of a  particular category is not enough to justify a  retrenchment of a workman on the ground of  surplus hand."

After a detailed reference to the evidence adduced on behalf of the  Management, the Tribunal held  :

"I do not understand why the company keeps  lacuna in observing the legal procedure provided  by the rules framed under the statute to maintain  peace and harmony.  In the industry particularly  which are very  much formal and not at all difficult  to be maintained and can be done with least effort.   This has been very much necessary and essential in  this case in its peculiar background when the  concerned workman is going to be retrenched  within a very short period after his reinstatement  with full back wages and incidental benefits by  virtue of an award by  the Seventh Industrial  Tribunal in an earlier reference Case No.1647- I.R./IR/11L-24/85 corresponding to Case NO.VIII- 152/86 after he was dismissed from service.  The  Company should have maintained the seniority  lists as required under the rule to show from  impartial attitude  towards the workman in the      category to which Krishna Bahadur belongs.  That  having not been done the action of the Company  suffers from informative (sic for infirmities) and it  deserves to be nullified."

       It would appear from the judgment of the learned Single Judge dated  25.9.1996 in Writ Petition No.1872 of 1996 that correctness or otherwise of  the finding of the Industrial Tribunal as regard non-compliance of the  provisions of Rule 77A of the West Bengal Industrial Disputes Rules had  been questioned.  The said contention must be held to have negatived by the  learned Single Judge also keeping in view the provisions analogous to  Explanation-V appended to Section 11 of the Code of Civil Procedure.  The  Division Bench of the High Court unfortunately did not address itself to the  said question at all.

       For the reasons aforementioned, the impugned judgment of the  Division Bench cannot be upheld.  It is set aside accordingly and the  judgment of the learned Single Judge upholding the award passed  by the  Industrial Tribunal is restored.  The appeal is allowed.  In the facts and  circumstances of the case, there shall be no order as to costs.