http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12  

PETITIONER: KRISHNA DISTRICT CO-OPERATIVE MARKETINGSOCIETY LIMITED, VIJA

       Vs.

RESPONDENT: N.V. PURNACHANDRA RAO & ORS.

DATE OF JUDGMENT03/08/1987

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) SINGH, K.N. (J)

CITATION:  1987 AIR 1960            1987 SCR  (3) 728  1987 SCC  (4)  99        JT 1987 (3)   197  1987 SCALE  (2)175

ACT:     Andhra  Pradesh Shops and Establishments Act, 1966:  ss. 40    &    41:    Retrenchment    of    workmen    by    the establishment--Nature of proceedings under the  Act--Employ- er--Whether to comply with s. 25F of the Industrial Disputes Act.     Industrial    Disputes    Act,   1947:   ss.    25F    & 25J--Workmen-Services terminated under s. 40, A.P. Shops and Establishments  Act-Whether  entitled to  relief  under  the Central Act.     Constitution  of India, Art 254(2):  Repugnancy  between the  special  provisions  contained in an  earlier  law  and general provisions of later law--Implications of.

HEADNOTE:      Sub-section (1) of s. 40 of the Andhra Pradesh Shops and Establishments Act, 1966 interdicts the employer governed by the Act from terminating the services of an employee without complying  with the conditions laid therein. Section 25F  of the  Industrial  Disputes  Act, 1947  lays  down  conditions precedent  to  retrenchment of  workmen  noncompliance  with which will be fatal to any order of retrenchment.     The petitioner-society retrenched the respondents on the ground  that the business of the management did not  warrant the  continuance  of its heavy establishment. In  an  appeal under s. 41(1) of the Act the appellate authority set  aside the  orders and directed reinstatement of  the  respondents. The  Labour  Court  set aside the orders  of  the  appellate authority in respect of some of the respondents.     A Single Judge of the High Court found that the respond- ents were ’workmen’ and the management was an ’industry’  as defined  in  the Industrial Disputes Act but  dismissed  the writ petition holding that they could not claim the  benefit of  s.  25F of the Industrial Disputes Act in  a  proceeding under  s. 41 of the State Act, being of the view that  there was  no scope either in the language of s. 40 of  the  State Act  or  its implication making it obligatory  to  read  the condition of s. 25F of the Central Act as 729 part of s. 40 of the State Act, that the statutory  authori- ties,  created under s. 41(1) and s. 41(3) of the State  Act

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12  

being  creatures of the statute, had no right to  apply  the provisions  of  s.  25F of the Central  Act  to  proceedings before  them and that whereas the rights under  the  Central Act  could be agitated by a reference to a Labour Court  the right  agitated under s. 41(1) and s. 41(3) was  a  personal right.     The  Division  Bench on appeal by the  respondents  held that  the orders of termination were unsustainable. It  took the  view that the question of their retrenchment  was  gov- erned by s. 25F.     In the special leave petition it was contended on behalf of  the management that the provisions of s. 40, which  deal with  termination  of  service in a  shop  or  establishment contained  in  the State Act, which is a  later  Act,  being repugnant to the provisions contained in Chapter V-A of  the Central Act, which is an earlier law, should prevail as  the assent of the President has been given to the State Act. Dismissing the special leave petition,     HELD:  1.1 The High Court was right in holding  that  s. 25F of the Industrial Disputes Act having not been  complied with,  all  the terminations were illegal.  The  respondents were,  therefore. entitled to be reinstated in service  with full back wages. [743A]     1.2 If the employees are ’workmen’ and the management is an ’industry’ as defined in the Industrial Disputes Act  and the  action  taken by the management amounts  to  ’retrench- ment’,  then the rights and liabilities of the  parties  are governed  by provisions of Chapter V-A of that Act  and  the said  rights  and liabilities may be  adjudicated  upon  and enforced  in  proceedings before the  authorities  under  s. 41(1)  and s. 41(3) of the Andhra Pradesh Shops  and  Estab- lishments  Act. In the instant case the Single Judge of  the High Court had found that the respondents were ’workmen’ and the  management was an ’industry’ as defined in the  Central Act. [741H-742A, 738C]     1.3 Sub-section (1) of s. 25J of the Industrial Disputes Act  lays down that Chapter V-A shall have  effect  notwith- standing  anything inconsistent therewith contained  in  any other  law. The proviso to that sub-section, however,  saves any  higher  benefit available to a workman under  any  law, agreement or settlement or award. Sub-section (2) of s. 25J, which makes a distinction between any machinery provided  by any State law for settlement of industrial disputes and  the substantive 730 rights  and  liabilities arising under Chapter  V-A  of  the Central  Act,  provides that while that  section  would  not effect the provisions in a State law relating to  settlement of  industrial disputes, the rights and liabilities  of  em- ployers  and workmen insofar as they relate to lay  off  and retrenchment shall be determined in accordance with  Chapter V-A  of the Central Act. It is thus apparent that  s.  41(1) and s. 41(3) of the State Act prescribe alternative authori- ties  to  settle a dispute arising out  of  a  retrenchment. Those authorities may exercise their jurisdiction under  the State Act but they have to decide the rights and liabilities arising  out of retrenchment in accordance with  the  provi- sions  of Chapter V-A. The said rights can be enforced by  a workman  personally  by himself filing an  appeal  under  s. 41(1) of the State Act. It is not necessary that a reference should be sought under the Central Act by collective  action of workers. [739A-E]     Sawatram  Ramprasad Mills Co. Ltd. v.  Baliram  Ukandaji and  Another, [1966] 1 SCR 764 and Pest Control  India  Pvt. Ltd.  v.  The  Labour Court, Guntur and  Another,  [1984]  1

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12  

Andhra Weekly Reporter 277, referred to.     2.1  There  is no repugnancy between the two  Acts.  The State  Act, which is a later law, does not contain  any  ex- press provision making the provisions relating to  retrench- ment  in the Central Act ineffective insofar as Andhra  Pra- desh is concerned. [740E]     2.2 Where there is a conflict between the special provi- sions contained in an earlier law dealing with  retrenchment and the general provisions contained in a later law general- ly  dealing with terminations of service, the  existence  of repugnancy  between the two laws cannot easily be  presumed. [740H]     Chapter  V-A  of the Central Act, which is  the  earlier law,  deals with rights and liabilities arising out of  lay- off and retrenchment. Section 25J of that Act deals with the effect of the provisions of Chapter V-A on other laws incon- sistent  with  that Chapter. Sub-section (2) of  s.  25J  is quite  emphatic about the provisions relating to the  rights and liabilities arising out of lay-off and retrenchment.  By enacting that provision Parliament intended that such rights and liabilities should be uniform throughout India where the Central  Act was in force and did not wish that  the  States should  have  their own laws inconsistent with  the  Central law.  These are special provisions and they do not apply  to all kinds of termination of services. If the State  Legisla- ture intended that it should have a law of its own regarding the rights and liabilities arising 731 out of retrenchment it would have expressly provided for It. The  State Legislature had not done so in the instant  case. Section 40 of the State Act deals with termination of  serv- ice  generally. In such a situation it cannot be  said  that there was any implied repugnancy between the Central law and the State law. [740F, 741F, 740G, 741FG]     Maxwell on the Interpretation of Statutes, 12th Edn.  p. 196 referred to.     [The  Act should be suitably amended making it  possible to  an individual workman to seek redress in an  appropriate forum  regarding  illegal termination of service  which  may take the form of dismissal, discharge, retrenchment etc.  or modification  of punishment imposed in a  domestic  enquiry. There  is  also  a great need to review and  to  bring  into existence an all-India Labour Appellate Tribunal with powers to hear appeals against the decisions of all Labour  Courts, industrial  Tribunals  and even of  authorities  constituted under  several labour laws enacted by the States so  that  a body  of uniform and sound principles of labour law  may  be evolved for the benefit of both industry and labour through- out India.] [742B-G]

JUDGMENT:      CIVIL  APPELLATE  JURISDICTION: Special  Leave  Petition (Civil) Nos. 6887-88 of 1987.     From  the  Judgment  and Order dated 5.2.  1987  of  the Andhra Pradesh High Court in Writ Appeal Nos. 892 and 893 of 1983.     P.R. Ramachandra Rao, Dr. D.Y. Chandrachud, P.H.  Parekh and M.K.S. Menon for the Petitioner. V.J. Rao and Y. Prabhakara Rao for the Respondents. The Order of the Court was delivered by     VENKATARAMIAH,  J. The question arising for decision  in this  case  is whether an employer  whose  establishment  is governed  by the Andhra Pradesh Shops & Establishments  Act,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12  

1966  (hereinafter  referred to as ’the State Act’)  is  re- quired,  while  retrenching any worker, to comply  with  the provisions  of section 25F of the Industrial  Disputes  Act, 1947 (hereinafter referred to as’ the central act’) or  with section  40 of the State Act. The petitioner in this case is a co-operative society carry- ing on 732 business  at Vijayawada in the State of Andhra  Pradesh.  It retrenched  nine of its clerks--Respondents 1 to  9  herein. Respondents 1 to 4 Were retrenched on 1.10.1978 and Respond- ents 5 to 9 were retrenched on 22.9. 1978 on the ground that the business of the management did not warrant the  continu- ance  of its heavy establishment. All the respondents  chal- lenged  the orders terminating their services in  an  appeal filed under section 41(1) of the State Act before the appel- late authority. The appellate authority set aside the orders of  retrenchment  by nine separate  judgments  delivered  on August  1,  1979 and directed the reinstatement of  the  re- spondents with full back wages. Aggrieved by the decision of the  appellate  authority  the  management,  the  petitioner herein,  filed nine appeals before the Labour Court,  Guntur under  section  41(3)  of the State Act.  The  Labour  Court allowed the appeals filed against Respondents 5 to 9 and set aside  the orders which had been passed by the first  appel- late  authority.  It, however, dismissed the  appeals  filed against  Respondents 1 to 4 holding that the orders  of  re- trenchment  were bad in law since employees junior to  these respondents  had  been  retained in  service.  It,  however, directed  that  any  amount paid to Respondents 1  to  4  as notice  pay and gratuity etc. under section 40 of the  State Act  on account of the termination of their services may  be deducted  from the back wages payable to them. Aggrieved  by the  decision of the Labour Court Respondents 5 to  9  filed Writ Petition No. 163 of 1981 on the file of the High  Court of Andhra Pradesh and the management, the petitioner herein, filed  Writ Petition No. 6151 of 1980 before the High  Court against  Respondents  1 to 4. The learned Single  Judge  who heard  the said two writ petitions dismissed  Writ  Petition No. 163 of 1981 filed by Respondents 5 to 9 and allowed Writ Petition  No. 6151 of 1980 filed by the  management  against Respondents  1 to 4. The learned Single Judge took the  view that  Respondents  5  to 9 could not claim  the  benefit  of section  25F  of the Central Act in a  proceeding  initiated under  section 41 of the State Act and dismissed their  writ petition.  He, however, allowed the writ petition  filed  by the management and remanded the case to the Labour Court  to reheat  the  case  after permitting Respondents 1  to  4  to implead four other employees, namely, Seetharamaiah, Rajago- pal Rao, Krishna Murthy and Khader Hussain, who were alleged to be seniors to Respondents 1 to 4 and hearing them on  the question  of  inter se seniority between them and  the  said four  other employees. The learned Judge, however,  observed that if section 25F of the Central Act was applicable to the cases  ’I  have no doubt that these  orders  of  termination would  have to be set aside, because section 25F denies  the rights  of the employer to terminate the service of  an  em- ployee  without  payment of retrenchment  compensation’  and that compensation had 733 not  been paid in accordance with section 25F. But he  found that  section 25F of the Central Act was not  applicable  to proceedings  under the State Act. Aggrieved by the  decision of the learned Single Judge Respondents 1 to 4 and  Respond- ents  5 to 9 filed Writ Appeal Nos. 892 Of 1983 and  893  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12  

1983  respectively  before the Division Bench  of  the  High Court.  The  common contention urged by both the  groups  of employees,  who  were appellants in these two  appeals,  was that  the  question of their retrenchment, was  governed  by section  25F  of  the Central Act and since  the  orders  of retrenchment  had  not been passed in  conformity  with  the provisions of section 25F of the Central Act the said orders were  liable  to be Set aside and they were entitled  to  be reinstated. The Division Bench accepted the above contention of  Respondents 1 to 9 and allowed both the appeals  holding that the orders of termination were unsustainable. Aggrieved by the decision of the Division Bench of the High Court  the petitioner  has  filed these Special Leave  Petitions  under Article 136 of the Constitution.     The  only  question which arises for  decision  in  this case, as mentioned above, is whether the retrenchment of  an employee  in an establishment governed by the State  Act  is governed by the provisions of section 40 of the State Act or by  the provisions of Chapter V-A of the Central  Act  which deals with lay-off and retrenchment. For purposes of conven- ience section 40 of the State Act is set out below:               "40. Conditions for terminating the   services               of an employee and payment of  gratuity:---(1)               No  employer shall without a reasonable  cause               and except for misconduct terminate the  serv-               ice of an employee who has been in his employ-               ment  continuously  for a period of  not  less               than six months without giving such  employee,               at  least  one month’s notice  in  writing  or               wages  in  lieu thereof and in respect  of  an               employee  who has been in his employment  con-               tinuously  for a period of not less than  five               years,  a gratuity amounting to fifteen  days’               average  wages  for each  year  of  continuous               employment.                Explanation:--  For the purpose of this  sub-               section,                       (a)  the expression ’wages’  does  not               include overtime                        wages;                         (b)  the expression ’average  wages’               means the daily average of wages for the  days               an employee actually worked during the  thirty               days immediately preceding the date of  termi-               nation of service;               734                         (c) an employee in an  establishment               shall  be  deemed to have been  in  continuous               employment  for a period of not less than  six               months, if he has worked for not less than one               hundred and twenty days in that  establishment               within  a  period of  six  months  immediately               preceding  the  date  of  termination  of  the               service of that employee;                         (d)   where  the  total   continuous               employment  is  for a fraction of  a  year  or               extends over a fraction of a year in  addition               to  one or more completed years of  continuous               employment,  such fraction, if it is not  less               than a half year shall be counted as a year of               continuous employment in calculating the total               number  of years for which the gratuity is  to               be given.                         (2)  Where  a  gratuity  is  payable               under sub-section (1) to an employee, he shall

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12  

             be entitled to receive his wages from the date               of  termination of his service until the  date               on  which the gratuity so payable is  actually               paid  subject  to a maximum of wages  for  two               months.                         (3). An employee, who has  completed               the age of sixty years or who is physically or               mentally  unfit having been so declared  by  a               medical certificate, or who wants to retire on               medical grounds or to resign his service,  may               give  up  his employment after giving  to  his               employer  notice of at least one month in  the               case of an employee of sixty years of age, and               fifteen days in any other case; and every such               employee and the dependant of an employee  who               dies  while  in service shall be  entitled  to               receive a gratuity as provided in  sub-section               (1). He shall be entitled to receive the wages               from  the  date of giving  up  the  employment               until  the date on which the gratuity so  pay-               able is actually paid, subject to a maximum of               wages for two months.                        (4) The services of an employee shall               not  be terminated for misconduct except,  for               such  act or omissions and in such manner,  as               may be prescribed."     Sub-section (1) of section 40 of the State Act imposes a restriction on the right of the employer of an establishment governed  by the State Act to terminate the services  of  an employee.  It  says  that an employer shall  not  without  a reasonable causes (except for miscon- 735 duct)  terminate the service of an employee who has been  in his  employment continuously for a period of not  less  than six  months  without  giving such  employee,  at  least  one month’s  notice in writing or wages in lieu thereof  and  in respect  of on employee who has been in his employment  con- tinuously for a period of not less than five years, a gratu- ity  amounting to fifteen days’ average wages for each  year of continuous employment. In the case of misconduct  neither one  month’s  notice or wages in lieu thereof  nor  gratuity need  be paid on the termination of his services. There  are no  other  restrictions on the right of  the  management  to terminate  the services of an employee in  an  establishment governed  by  the State Act which is enacted  by  the  State legislature in exercise of the powers conferred on it  under Entry  No.  22 of List III of the Seventh  Schedule  to  the Consititution.  The Central Act was enacted by  the  Central Legislature before the commencement of the Constitution  and it is also traceable to an Entry in the Government of  India Act,  1935 corresponding to Entry No. 22 of List III of  the Seventh  Schedule to the Constitution. When the Central  Act was originally enacted, it merely provided for investigation and  settlement  of industrial disputes  by  establishing  a machinery for collective bargaining, mediation and concilia- tion,  investigation,  arbitration, adjudication  and  other allied  matters.  Chapter  V-A---lay-off  and  retrenchment, making  provision for payment of compensation  for  lay-off, retrenchment and closure and on transfer of undertakings was not there. It was introduced by way of amendment in the year 1953.  Sections  25F, 25G, 25H and 25J of  the  Central  Act which  are relevant for purposes of this case read  as  fol- lows:-               "25F. Conditions   precedent   to    retrench-               ment  workmen.--No  workman  employed  in  any

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12  

             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;                         (b)  the workmen has been  paid,  at               the  time of retrenchment, compensation  which               shall be equivalent to fir-               736               teen  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 he specified by  appro-               priate  Government  by  notification  in   the               Official Gazette."                        "25G.         Procedure           for               retrenchment.--Where any workman in an  indus-               trial  establishment,  who  is  a  citizen  of               India, is to be retrenched and he belongs to a               particular category of workmen in that  estab-               lishment,  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."                        "25H.  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."                        "25J.  Effect  of  laws  inconsistent               with  this Chapter.(1) The provisions of  this               Chapter  shall  have  effect   notwithstanding               anything  inconsistent therewith contained  in               any other law [including standing orders  made               under  the  Industrial  Employment   (Standing               Orders) Act, 1946].                        Provided that where under the  provi-               sions  of  any  other Act  or  rules,  orders,               notifications  issued thereunder or under  any               standing  orders or under any award,  contract               of service or otherwise, a workman is entitled               to benefits in respect of any matter which are               more favourable to him than those to which  he               would be entitled under this Act, the  workman               shall  continue  to be entitled  to  the  more               favourable benefits in respect of that matter,               no  withstanding that he receives benefits  in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12  

             respect of other matter under this Act.                 737                         (2) For the removal of doubts, it is               hereby declared that nothing contained in this               Chapter  shall be deemed to affect the  provi-               sions  of any other law for the time being  in               force  in any State insofar as that  law  pro-               vides  for the settlement of  industrial  dis-               putes,  but  the  rights  and  liabilities  of               employers and workmen insorfar as they  relate               to  lay-off and retrenchment shall  be  deter-               mined  in  accordance with the  provisions  of               this Chapter."     Section 25F of the Central Act deals with the conditions precedent  to  retrenchment of workmen  non-compliance  with which  will be fatal to any order of  retrenchment.  Section 25G  of  the Central Act prescribes the  procedure  for  re- trenchment  and  under it an employer shall  ordinarily  re- trench a workman in accordance with the rule of ’last  come, first  go’  unless for reasons to be recorded  the  employer retrenches any other workman. Section 25H of the Central Act requires  the  management to show preference  to  retrenched workmen over others, where any workman is retrenched and the management proposes to take into its employ any person again for  work, where the retrenched workman offers  himself  for re-employment.  This indeed is a substantial right.  Section 25J  of the Central Act which is very material for our  pur- pose provides that provisions of Chapter V-A of the  Central Act shall have effect notwithstanding anything  inconsistent therewith  contained  in any other  law  including  standing orders  made under the Industrial Employment  (Standing  Or- ders)  Act, 1946. The proviso to sub-section (1) of  section 25J of the Central Act provides that where under the  provi- sions  of  any  other Act or  rules,  orders,  notifications issued thereunder or under any standing orders or under  any award, contract of service or otherwise, a workman is  enti- tled  to  benefits in respect of any matter which  are  more favourable  to him than those to which he would be  entitled under  the  Central Act, the workman shall  continue  to  be entitled to the more favourable benefits in respect of  that matter, notwithstanding that he receives benefits in respect of  other matter under the Central Act. Sub-section  (2)  of section  25J of the Central Act is more categorical  as  re- gards  the effect of Chapter V-A of the Central Act  on  any other  law which may be in force in any State.  It  provides that  nothing  contained in Chapter V-A of the  Central  Act shall  be deemed to affect the provisions of any  other  law for the time being in force in any State insofar as that law provides for the settlement of industrial disputes, but  the rights  and liabilities of employers and workmen insofar  as they relate to lay-off and retrenchment shall be  determined in  accordance  with the provisions of Chapter  V-A  of  the Central Act. 738     The learned Single Judge who decided the writ  petitions formulated  three points for his consideration, namely,  (i) whether Respondents 1 to 9 were ’workmen’, (ii) whether  the management  could  be  treated as an  ’industry’  and  (iii) whether the three conditions laid down by section 25F of the Central Act would be applicable to the proceedings under the State  Act. He found that both the authority  under  section 41(1) of the State Act and the authority under section 41(3) of  the State Act had proceeded on the assumption  that  the Central  Act was applicable to proceedings under  the  State Act. On a consideration of the submissions made on behalf of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12  

the  management, the learned Single Judge felt that  it  was not possible to hold that Respondents 1 to 9 were not  ’wor- kmen’  and, the management was not an ’industry’ as  defined in the Central Act. Having said so the learned Single  Judge proceeded  to decide the third question namely whether  sec- tion  25F  of the Central Act could be  enforced  under  the provisions  of the State Act. The learned Single Judge  held that ’there is no scope either in the language of section 40 or  its implication making it obligatory to read the  condi- tion of section 25F as a part of section 40 of the Shops and Establishments  Act.’ Then he proceeded to hold  that  since the  conditions under section 40 of the State Act  had  been fulfilled in the case of the Respondents 5 to 9, the  termi- nation  was  legal. But in the case of Respondents  1  to  4 since  it had been alleged that their juniors had  been  al- lowed to continue in service the learned Judge felt that the matter required further consideration and hence remanded the case because he was of the view that the above question  had to  be  decided before recording a finding on  the  question whether  the  termination was for a  reasonable  cause.  The learned Single Judge was however of the view that if section 25F of the Central Act was applicable ’I have no doubt  that these  orders  of  termination would have to  be  set  aside because  section  25F denies the right of  the  employer  to terminate  the  services of an employee without  payment  of retrenchment  compensation.’ The learned Single  Judge  gave the  following reasons for holding that section 25F was  not applicable to proceedings under the State Act: (i) that  the statutory  authorities created under section 41(1) and  sec- tion  41(3) of the State Act being creatures of the  statute had  no right to apply the provisions of section 25F of  the Central Act to proceedings before them, and (ii) that where- as  the rights under the Central Act could be agitated by  a reference  to a Labour Court, the right agitated under  sec- tion  41(1) and section 41(3) was a personal right. We  find it difficult to agree with the learned Single Judge on  both these  grounds. It is already seen that the  learned  Single Judge has found that the Respondents were ’workmen’ and  the management  was an ’industry’ as defind in the Central  Act. We have explained earlier 739 the  effect of section 25J of the Central  Act.  Sub-section (1) of section 25J of the Central Act lays down that Chapter V-A shall have effect notwithstanding anything  inconsistent therewith  contained in any other law. The proviso  to  that sub-section however saves any higher benefit available to  a workman  under  any law, agreement or settlement  or  award. Sub-section  (2) of section 25J however makes a  distinction between any machinery provided by any State law for  settle- ment  of industrial disputes and the substantive rights  and liabilities  arising  under Chapter V-A of the  Central  Act where  a  lay off or retrenchment takes place.  It  provides that while section 25J would not affect the provisions in  a State law relating to settlement of industrial disputes, the rights  and liabilities of employers and workmen insofar  as they relate to lay off and retrenchment shall be  determined in  accordance  with Chapter V-A of the Central Act.  It  is thus seen that section 41(1) and section 41(3) of the  State Act  prescribe alternative authorities to settle  a  dispute arising  out of a retrenchment. Those authorities may  exer- cise their jurisdiction under the State Act but they have to decide  such  dispute in accordance with the  provisions  of Chapter V-A. The learned Single Judge omitted to notice  the effect of section 25J of the Central Act. Sub-section (2) of section 25J of the Central Act which makes the procedure for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12  

securing relief under section 41(1) and (3) of the State Act available  to a workman emphasises that the rights  and  li- abilities  arising out of retrenchment shall be  decided  in accordance  with  Chapter V-A of the Central Act.  The  said rights  can be enforced by a workman personally  by  himself filing an appeal under section 41(1) of the State Act. It is not  necessary that a reference should be sought  under  the Central  Act by collective action of workers. The effect  of section  25J(2)  of the Central Act has been  considered  by this Court in Sawattain Ramprasad Mills Co. Ltd. v.  Baliram Ukandaji and Another, [1966] 1 S.C.R. 764. In that case  the question for decision was whether the C.P. and Berar  Indus- trial Disputes (Settlement) Act, 1947 was applicable to  the case involving the determination of the rights and  liabili- ties of the management and workmen in the case of lay-off or whether  the  provisions of Chapter V-A of the  Central  Act were  applicable.  The Court found that the C.P.  and  Berar Industrial  Disputes  (Settlement) Act,  1947  contained  no provisions either for recovery of money or for  compensation for  lay-off and held that if a workman had a claim  arising in  a lay-off it could only be dealt with under the  Central Act.  In that case no question similar to the  one  involved here was however in issue.     In  Pest  Control India Pvt. Ltd. v. The  Labour  Court, Guntur and Another, [1984] 1 Andhra Weekly Reporter 277  the Andhra Pradesh 740 High  Court has very recently laid down that in  considering whether the termination of service of an employee by way  of retrenchment  is legal or justified, it is open to  the  au- thority  under  section  41 of the State  Act  to  determine whether section 25F and section 25G of the Central Act  were complied with or not and to set aside the orders of termina- tion  and  to grant appropriate relief if it is  found  that there  was  no compliance with sections 25F and 25G  of  the Central  Act.  The Division Bench of the  High  Court  while reversing  the  decision  of the learned  Single  Judge  has relied on the above decision.     We  shall  now  proceed to consider the  merits  of  the contention that the State Act which is a later Act and which has received the assent of the President should prevail over the provisions of Chapter V-A of the Central Act. The  above contention  is based on Article 254(2) of  the  Constitution and the argument is that the provisions of section 40  which deal with termination of service, in a shop or an establish- ment  contained  in the State Act which is  enacted  by  the State  Legislature in exercise of its powers under Entry  22 of  List  III of the Seventh Schedule  to  the  Constitution being  repugnant to the provisions contained in Chapter  V-A of the Central Act which is an earlier law also traceable to Entry  22  of the List II1 of the Seventh  Schedule  to  the Constitution  should prevail as the assent of the  President has  been given to the State Act. It is true that the  State Act  is  a later Act and it has received the assent  of  the President  but  the question is whether there  is  any  such repugnancy between the two laws as to make the provisions of the Central Act relating to retrenchment ineffective in  the State of Andhra Pradesh. It is seen that the State Act  does not  contain  any express provision  making  the  provisions relating  to  retrenchment in the  Central  Act  ineffective insofar  as Andhra Pradesh is concerned. We shall then  have to consider whether there is any implied repugnancy  between the  two laws. Chapter V-A of the Central Act which  is  the earlier  law  deals with cases arising out  of  lay-off  and retrenchment. Section 25J of the Central Act deals with  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12  

effect of the provisions of Chapter V-A on other laws incon- sistent with that Chapter. Sub-section (2) of section 25J is quite emphatic about the supremacy of the provisions  relat- ing to the rights and liabilities arising out of lay-off and retrenchment.  These are special provisions and they do  not apply to all kinds of termination of services. Section 40 of the  State Act deals generally with termination  of  service which may be the result of misconduct, closure, transfer  of establishment  etc. If there is a conflict between the  spe- cial  provisions  contained in an earlier law  dealing  with retrenchment and the general provisions contained in a later law  generally  dealing with terminations  of  service,  the existence  741 of  repugnancy  between the two laws cannot be  easily  pre- sumed.  In Maxwell on the Interpretation of Statutes,  (12th Edn. ) at page 196 it is observed thus:               "Now if anything be certain it is this,  "said               the  Earl of Selborne L.C. in The  Vera  Cruz,               (1884)  10 App. Cas, 59 at p. 68  "that  where               there are general words in a later Act capable               of reasonable and sensible application without               extending  them  to subjects  specially  dealt               with  by earlier legislation, you are  not  to               hold  that  earlier  and  special  legislation               indirectly  repealed,  altered,  or  derogated               from  merely by force of such  general  words,               without any indication of a particular  inten-               tion  to  do so." In a  later  case,  Viscount               Haldane said: "We are bound  .......  to apply               a rule of construction which has been  repeat-               edly  laid down and is firmly established.  It               is  that  wherever Parliament  in  an  earlier               statute  has  directed  its  attention  to  an               individual case and has made provision for  it               unambiguously, there arises a presumption that               if  in  a subsequent statute  the  Legislature               lays  down a general principle,  that  general               principle  is not to be taken as meant to  rip               up  what the Legislature had  before  provided               for individually, unless an intention to do so               is  specially declared. A merely general  rule               is  not enough even though by its terms it  is               stated  so  widely  that it  would,  taken  by               itself, cover special cases of the kind I have               referred to."     We  respectfully  agree with the  rule  of  construction expounded  in the above passage. By enacting section  25J(2) Parliament,  perhaps, intended that the rights and  liabili- ties  arising  out  of lay-off and  retrenchment  should  be uniform throughout India where the Central Act was in  force and  did not wish that the State should have their own  laws inconsistent  with  the  Central law. If  really  the  State Legislature  intended that it should have a law of  its  own regarding  the  rights and liabilities arising  out  of  re- trenchment  it  would  have expressly provided  for  it  and submitted  the  Bill for the assent of  the  President.  The State  Legislature has not done so in this case. Section  40 of the State Act deals with terminations of service general- ly. In the above situation we cannot agree with the  conten- tion based on Article 254(2) of the Constitution since it is not  made out that there is any implied  repugnancy  between the Central law and the State law. The result of the above discussion is that if the  employees are

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12  

742 ’workmen’ and the management is an ’industry’ as defined  in the  Central  Act  and the action taken  by  the  management amounts to ’retrenchment’ then the rights and liabilities of the parties are governed by the provisions of Chapter V-A of the  Central Act and the said rights and liabilities may  be adjudicated  upon  and enforced in  proceedings  before  the authorities  under  section 41(1) and section 41(3)  of  the State Act.     We may incidentally observe that the Central Act  itself should be suitably amended making it possible to an individ- ual workman to seek redress in an appropriate forum  regard- ing  illegal termination of service which may take the  form of  dismissal, discharge, retrenchment etc. or  modification of punishment imposed in a domestic enquiry. An amendment of the  Central Act introducing such provisions will  make  the law simpler and also will reduce the delay in the  adjudica- tion  of industrial disputes. Many learned authors of  books on  industrial law have also been urging for such an  amend- ment.  The State Act in the instant case has to some  extent met the above demand by enacting section 41 providing for  a machinery  for settling disputes arising out of  termination of  service which can be resorted to by an individual  work- man. In this connection we have one more suggestion to make. The nation remembers with gratitude the services rendered by the  former  Labour Appellate Tribunal which was  manned  by some  of our eminent Judges by evolving great legal  princi- ples  in the field of labour law, in particular with  regard to domestic enquiry, bonus, gratuity, fair wages, industrial adjudication etc. The Industrial Disputes (Appellate  Tribu- nal)  Act,  1950 which provided for an  all-India  appellate body  with  powers to hear appeals against  the  orders  and awards  of Industrial Tribunals and Labour Courts  in  India was repealed in haste. If it had continued by now the labour jurisprudence  would  have developed perhaps  on  much  more satisfactory  lines than what it is today. There is a  great need  today  to revive and to bring into existence  an  all- India Labour Appellate Tribunal with powers to hear  appeals against  the  decisions  of all  Labour  Courts,  Industrial Tribunals and even of authorities constituted under  several labour laws enacted by the States so that a body of  uniform and  sound principles of Labour law may be evolved  for  the benefit  of both industry and labour throughout India.  Such an  appellate authority can become a very efficient body  on account of specialisation. There is a demand for the revival of such an appellate body even from some workers’  organisa- tions. This suggestion is worth considering. All this we are saying because we sincerely feel that the Central Act passed forty  years ago needs a second look and requires a  compre- hensive amendment. 743     It  is not disputed that section 25F of the Central  Act has not been complied with in this case and hence the  Divi- sion  Bench of the High Court was right in holding that  all the  terminations  were illegal. All  the  respondents  are, therefore,  entitled to be reinstated in service  with  furl back  wages as held by the authority under section 41(1)  of the State Act.        These petitions are dismissed. P.S.S                                Petitions dismissed. 744