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PETITIONER: PARRY & CO. LTD.

       Vs.

RESPONDENT: P.C. PAL & ORS.

DATE OF JUDGMENT: 27/11/1968

BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. BHARGAVA, VISHISHTHA VAIDYIALINGAM, C.A.

CITATION:  1970 AIR 1334            1969 SCR  (2) 976  CITATOR INFO :  F          1973 SC 878  (10)  R          1973 SC1156  (9,10)

ACT: Industrial   Dispute-Decision   to   Reorganise    business- Retrenchment in consequence-Propriety of Tribunal to go into question. West Bengal Industrial Disputes Rules, 1958, rr.77( 1 )  and proviso-Notice given 2 days prior, if proviso applicable. Constitution of India, Art. 226-Certiorari-When can lie.

HEADNOTE: In  pursuance of its policy of reorganising its business  by concentrating   more  on  manufacturing  side  than   agency business,  the appellant company gave up more than  half  of its  agencies in Calcutta and some agencies in other  places including Madras.  The Union representing the workmen  wrote to the Labour Commissioner to intervene stating that due  to the  company’s  said  policy it  feared  retrenchment.   The company  served  notices  on  some  of  the  employees   for retrenchment  to   take effect two  days  thereafter.   Also notice  was  given  to  the  Labour  Commissioner  and   the Conciliation  Officer  as required under s. 25F (c)  of  the Industrial Disputes Act.  On reference of the dispute to the Industrial Tribunal, the company justified the  retrenchment and  the Manager of the Calcutta branch gave  evidence  that retrenchment  was  done  in pursuance  of  the  said  policy decision  taken by the company.  The Tribunal held  that   a good  case  for retrenchment was not made  out  and  ordered reinstatement.  The  Tribunal did not accept  the  manager’s evidence  holding that the development on the  manufacturing side   of   the   company’s  business   should   have   been contemporaneous with the surrender of agencies in  Calcutta. The Tribunal also held that the policy decision was actuated by  parochial considerations for transferring the  company’s resources from Calcutta to Madras, that there was   overload of  work on the  remaining employees; that the  retrenchment could  have  been  avoided by  transferring  the  retrenched employees to other branches specially as their conditions of service  included  the liability of being  transferred;  and that  the  retrenchment was in breach of a.  25F(c)  as  the

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notice of retrenchment was two days prior to the date of the retrenchment  and not with immediate effect, the proviso  to r. 77(1) of the West Bengal/ndustrial Disputes Rules,  1958, did not apply and a notice of one month, as required by sub- el.  (1) of that rule, was necessary.  The company  filed  a petition for a writ of certiorari.  The Single Judge of  the High Court set aside the. award and remanded the case to the Tribunal  only for enforcing the retrenchment  according  to the  principle of "last  come first go". The Division  Bench of the High Court in appeal, agreed with the findings of the Tribunal and held that the Single Judge was not competent to interfere with those findings.  In appeal this Court,     HELD:  Some of the findings arrived at by  the  Tribunal and which influenced its verdict were beyond its competence. The rest were either speculative or contrary to the evidence on record and were consequently liable to be set aside in  a writ petition for certiorari.     (i)  A  writ of certiorari is generally granted  when  a court  has  acted without or in excess of its  jurisdiction. It is available,  in  those  cases 977 where  a  tribunal  though  competent  to  enter  upon    an enquiry,   acts   in  flagrant disregard  of  the  rules  of procedure  0r  violates the principles  of  natural  justice where  no particular procedure  is prescribed.  But  a  mere wrong  decision cannot be corrected by a writ of  certiorari as  float  would be using it as the cloak of  an  appeal  in disguise  but a manifest error apparent on the face  of  the proceedings  based on a clear ignorance or disregard of  the provisions  of law or absence of or excess of  jurisdiction, when shown, can be so corrected. [985]     Basappa  v.  Nagappa, [1955] S.C.R.  250,  Dharangadhara Chemical  Works Ltd. v. State of Saurashtra,  [1957]  S.C.R. 152  and Andhra Pradesh & Ors. v. Sree Ram Rao, A.I.R.  1963 S.C. 1723, followed.     (ii)   The  Tribunal  wrongly  rejected  the   company’s evidence  on the ground that the policy decision  being  the function  of  the Board of Directors, the  Manager  was  not competent to depose about it and that if the company, wanted to establish it, it should have produced a resolution of the Board.   In its letter to the Labour Commissioner  and  also during  conciliation proceedings the union had assumed  that the  company had taken the said decision, that consequently, retrenchment   was  apprehended  and  that  therefore   that officer-  should  intervene.  In  these  circumstances,  the finding that the company had failed to establish its  policy was  not  only beyond the scope of the  enquiry  before  the Tribunal but totally invalid. [987 D---F] 1.  K. Iron and Steel Co. v. Iron and Steel  Mazdoor  Union, [1956] L.L.J. 227, followed.     (iii)  It  is  within the managerial  discretion  of  an employer to organise and arrange his business in the  manner he considers best.  So long as that is done bona fide it  is not competent for a tribunal to question its propriety.   If a scheme for such reorganisation  results  in surplusage  of employees,  no employer is expected to carry the  burden  of such  economic tribuanaldead weight and retrenchment has  to be  accepted as inevitable. however unfortunate it is.   The Legislature  therefore, provided by s.  25F compensation  to soften  the  blow of hardship resulting  from  ’an  employee being thrown out of employment through no fault of his.  The Tribunal having come to the conclusion that the said  policy was  not actuated by any motive of victimisation  or  unfair labour   practice   and  therefore  was   bona   fide,   any consideration  as to its  reasonableness or   propriety  was

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clearly extraneous.  It is not the function of the Tribunal, to go into the question whether such ’a scheme is profitable or  not  and  whether it should have  been  adopted  by  the employer.     So long as retrenchment carried out is bona fide and not vitiated  by any consideration for victimisation  or  unfair labour  practice and  the employer comes to the  ’conclusion that  he  can  carry  on  his  undertaking  with  reasonable efficiency  with  the number of employees retained   by  him after  retrenchment,  the Tribunal ought not  ordinarily  to interfere with such decision.  The fact that in the  earlier year  some  temporary  appointments were made  or  that  the Union’s  Secretary deposed that work had  accumulated  would not mean that the surplus age calculated by the manager  was unjustified.   Accumulation  of work at a  given  point   of time,  unless  it  is constant, may be seasonal  or  due  to various  reasons  and not necessarily because there  Was  no surplusage. [987 G, 989 D-F]     (iv)   While  reorganising  its  business,  it  is   not incumbent on a company to develop its manufacturing side  at the  very  place  where it  has  surrendered  its  agencies, namely, Calcutta, nor to do so at the very same time.  These considerations which the Tribunal took into  account were 978 totally  extraneous to the issue beore it and  the  Tribunal ought not to have allowed its mind to be influenced by  such consideration and thereby disabling itself from viewing  the issue from proper perspective.     The  finding  that the policy decision was  actuated  by parochial  considerations,  namely,  for  transferring   the company’s  resources from Calcutta to Madras at the cost  of the   former,  was  without  evidence   and   was   entirely speculative.   Even  assuming that the  company  decided  to concentrate  its activity in Madras there is nothing in  the Industrial  Law  to compel it to continue  its  business  in Calcutta. [988 D, G]     D. Marcropollo & Co. v.  Their Employees Union  [1958] 2 L.L.J.  492, Ghatge & Patil Concern’s Employee’s   Union  v. Ghatge & Patil (Transport) (P) Ltd. [1968] 1 S.C.R. 300, and Workmen  of Subong Tea Estate v. The Outgoing Management  of Subong Tea Estate, [1964] 5 S.C.R. 602, followed.     (v)  The liability of an employee to be transferred  and the  right of the company to transfer him did not mean  that there  was  a  corresponding obligation on  the  company  to transfer the  employee to  another branch.  No evidence  was led  by  the Union to show that if  transferred,  these  men could have been absorbed at other places, or that there were vacancies or that the work there was the same as was done by them  at  Calcutta.   There was  no  evidence  whether  wage scales,  dearness allowance and other conditions of  service were the same in Madras and other centres.  It is true  that the  company  had  started   developing   its  manufacturing business  in  Madras  but the  Tribunal  made_  no   enquiry whether  these  employees  could have  been  fitted  in  the manufacturing  work when they had done  only  administrative and  ’other duties connected with the agency  business,  yet the  Tribunal drew the conclusion that because  the  company failed   to  transfer  these  employees  to  other   centres retrenchment was not justified. [989 G--990 A]     (vi) Rule 77(1) of the West Bengal  Industrial  Disputes Rules, provides that when an employer finds it necessary  to retrench  any workmen he shall, at least _one  month  before the date of actual retrenchment, give notice thereof to  the Labour  Commissioner  and  the  Conciliation  Officer.   The proviso  to it states that where an employer retrenches  any

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workman   with immediate effect by paying him wages in  lieu of notice he shall immediately after such retrenchment  give notice  thereof to the said officers.  Though the notice  of retrenchment   was   not   given   immediately   after   the retrenchment  but  two  days  before  it,  the  company  had substantially complied with the requirements of the  proviso to r. 77(1). The object of the proviso clearly is that where it is not possible for an employer to give one months notice to   the  two  authorities  concerned  by  reason   of   his retrenching the employees with immediate effect, information should  be supplied to the two  officers  immediately  after such  retrenchment.    instead of  giving  such  information after  the  retrenchment  it is given two  days  before  the retrenchment  takes place it is hardly possible to say  that the requirement of the proviso was not carried out. So  long as  the object underlying the proviso was satisfied  it  did not make any difference that information was given a  little earlier than the date when retrenchment took place. [990 C]

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 284 of 1967. 979     Appeal  from the judgment ,and order dated December  23. 1964  of  the Calcutta High Court in  Appeal  From  Original Order No. 90 of 1964.     S.V.  Gupte,  K.P.  Bhandare and  D.N.  Gupta,  for  the appellant. A.1. S.R. Chari and fanardan Sharma, for respondeat No. 3. P.K. Chatterjee and P.C. Chakravarti, for respondeat No. 4. The Judgment of the Court was delivered by     Shelat,  J.  This  appeal  by  certificate  is  directed against the judgment and order of the Division Bench of  the High  Court of Calcutta setting aside the order of a  Single Judge  of that High Court in a writ petition under Art.  226 of the Constitution.     The  facts relevant for this judgment may first  be  set out. The appellant company was at the relevant time carrying on business at various places in India including Calcutta as merchants, selling agents and manufacturers. Its  registered office is at Madras. Its business at Calcutta was two  fold: (1)  as  selling  agents of certain companies,  and  (2)  of conducting an engineering workshop at Kidderpore.  According to  the  company its agency business began to  decline  from 1954  and  it  had,  therefore,  to  retrench  some  of  its employees  in  that year. The company  consequently  decided upon a policy of reorganising its business by giving  accent to  its  manufacturing  activities’and  of  giving  up   the agencies’  held by it. In pursuance of the said policy,  the company relinquished between April 1, 1960 and September 30, 1961, 13 agencies in Bombay, 11 in Delhi, 8 in Madras and 11 in  Calcutta.   It  also closed down 3 of  its  branches  in Northern  India  and  11 in South India.   The  total  staff engaged  at  Calcutta  consisted  of  75  employees  in  the workshop at Kidderpore and 225 in the Branch office.     Apprehending  that  the  said  policy  would  result  in retrenchment, the third respondent union wrote to the Deputy Labour Commissioner requesting him to intervene stating that the  Board of Directors and the company had  declared  their policy  of surrendering agencies and that in the result  the union  feared that about 60 employees would  be  retrenched. The  Deputy  Commissioner  called for the  comments  of  the company’s  manager,  who in his reply dated  June  17,  1961 affirmed that the company had taken the said policy decision

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in consequence of which some of the employees would have  to be  retrenched.  On June 20,.. 1961 the Deputy  Commissioner held conciliation proceedings during which also the  manager made   it  clear  that  in  pursuance  of  the   policy   of reorganising its business the company had decided to give up cer- 980 tain  agencies.   On  June 23, 1961 the union  sent  to  the company  its  demands  inter  alia  claiming  (a)  that  the retrenchment must be fully justified,  and (b) that transfer of  service  to other places in the  company’s  organisation should  be offered to those who are willing to  accept  such transfer.  Neither in its letter to the Deputy  Commissioner nor  in the conciliation proceedings, nor in the demands  of the  union disputed the fact that the company had taken  the said  policy decision and that the decision would result  in retrenchment.  Indeed, the said demands accepted the  policy decision but called upon the company to pay certain  amounts to  those retrenched, to retrench only to the  extent  fully justified and to offer transfer to those retrenched. On June 28,  1961  the  company ’sent its comments  on  the  union’s demands  stating inter alia that (1) the company  would  pay one  month’s  wages in lieu of notice as  also  retrenchment compensation,  (2)  that  25  permanent  and  17   temporary employees  would  be  retrenched with effect  from  July  1, 1961, (3) that re-employment of retrenched workmen would  be governed  by  the provisions of sec. 25H, and (4)  that  the company’s  policy  being  to recruit local  persons  at  its branches,  transfer from one place to another had  not  been frequently  resorted  by the company but the  company  would consider transfer of the employees concerned after employees retrenched  at other branches had first been  absorbed.   On June  29, 1961 the company_ gave the notice of  retrenchment to   the   employees  concerned,  also  a  notice   to   the Commissioner  of Labour and the Conciliation  Officer  under sec.  25F(c),  paid  one  month’s  wages  to  the  employees concerned   in   lieu  of  notice  and   also   retrenchment compensation.  The State Government by its order dated  July 31, 1961 referred for adjudication to the Second  Industrial Tribunal, Calcutta, the question whether retrenchment of the said 52 employees was’ justified and to what relief, if any, they were entitled. In its statement of claim the union inter alia pleaded  that the  company had in a spirit of vindictiveness and to  break the  union  retrenched the said. employees, that  with  that mala fide end in view it gave up in the name of a policy  of reorganisation  agencies  although  they  were   profitable, creating  thereby  an artificial condition to show  fall  in business  and surplus age in staff, that the company’s  mala fides were apparent in that it gave up agencies in  Calcutta only,  that  the  company being dominated  by  persons  from Madras its real object was to divert its resources to Madras from  parochial  and anti-union considerations,  that  as  a result of giving up the agencies the company had suffered in profits,  that the work-load of the remaining employees  had increased,  that there was in fact no real  surplusage,  and lastly, that the company had not followed while  retrenching the principle of "last come. first go". The cornpany’s reply was that retrenchment was bona fide and in 981 accordance  with  law,  that it  had  relinquished  all  the pharmaceutical agencies, general sales agencies except  one, and a number of other agencies not only in Calcutta but also in  Bombay, Delhi and Madras, that it had absolute right  to decide  which business it should continue and which to  give

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up,  that as a matter of business policy it had  decided  to discontinue  the  agency  business  with  the  result   that retrenchment  had  become  inevitable, that  the  union  had indulged   in   incorrect,  irrelevant   and   irresponsible allegations,  that though the actual surplusage was  66,  it had retrenched only 52 employees of whom 17 were  temporary, and that the question whether the workload on the  remaining employees  had increased or not was irrelevant.  In  support of its reply the company produced two statements. Ex. D  and E,  showing  the number of and places  where  branches  were closed  and the agencies relinquished. The  Calcutta  branch had  at the time 21 agencies out of which 11 were given  up. Prima facie, the surrender of so many agencies would  result in  surplusage  of employees.  On these  pleadings  and  the issues  arising  therefrom  the  only  question  before  the Tribunal,   therefore,  was  whether  retrenchment   of   52 employees was justified.     However, the union challenged not only the legality  and propriety  of  the retrenchment but also the  propriety  and reasonableness of the said policy decision alleging  absence of  good  reason.  for relinquishing  agencies  and  further alleging  that  an  artificial  surplusage  was  caused  for weakening  the  union  and  parochial  considerations.   The Tribunal  thought that these questions required  elucidation by the company.  It held that though 11 agencies in all.  in Calcutta  were  given up, since two of them  were  given  up July  1,  1961  and  the third on August  1,  1961,  only  8 agencies  were given up before the notice  of  retrenchment. The  Tribunal,  however, failed to observe that  notices  of giving up these three agencies were served by the company as early as May 1, 1961.     The Tribunal held that though agencies were  surrendered in  places  other  than Calcutta also, the  company  led  no evidence that the staff was retrenched in these places  also and  whether  such retrenched staff was  absorbed  in  those places. In the union’s statement of claim, however, no  such question was raised, the only question raised being that  no agencies were given up in places other than Calcutta.  Next, the Tribunal rejected the company’s case about its policy of reorganising  its  business.  The manager  of  the  Calcutta branch  gave  evidence and also produced an extract  from  a speech  of the managing director, East India Distilleries  & Sugar  Factores  Ltd. of which the  appellant-company  is  a subsidiary.  The  manager also gave  certain  other  reasons which  led  the company to give up  certain  agencies.   The Tribunal, however, rejected this evidence on the ground that the manager could not give 982 evidence about the policy decision as that was the  function of  the Board of Directors, that the extract from  the  said speech  reflected the policy of the East India  Distilleries Co.  but not necessarily of the appellant company  and  that the additional reasons given by the manager showed that  the real  reasons for giving up the agencies were those  reasons and not the policy decision.  The rejection of the manager’s evidence  was totally unwarranted and the finding  that  the pokey  decision was not proved was contrary to the  evidence on  record.  As akeady stated, in the union’s letter to  the Labour  Commissioner,  the union had based its  request  for intervention on the footing that it apprehended retrenchment as  a result of the company’s said policy decision.   During conciliation proceedings also the manager had clarified that retrenchment  was inevitable on account of the  said  policy decision. Besides, there was no reason why the manager could not   depose   about  the  company’s   said_decisiOn.    The

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additional reasons given by the manager were the reasons  to show why of the 21 agencies the particular 11 agencies  were surrendered.   The  finding  of  the  Tribunal  that   those agencies were not given up on account of the company’s  said policy  was  not only unwarranted but was  contrary  to  the evidence  on record.  The further reasoning of the  Tribunal that  there could be no such policy decision because  though the  agencies were given up no corresponding development  in manufacturing  activities  was  taken up  was  also  without foundation..  The  evidence  of the manager  was  that  such development  had already been launched in Madras and,  about the  time of his giving evidence, also at Kidderpore.   That evidence  was not accepted as according to the Tribunal  the development  on  the  manufacturing side  of  the  company’s business should have been contemporaneous with the surrender of the agencies in Calcutta.  The fact that such  activities were also not undertaken in Kidderpore could not possibly be a reason for disbelieving the company’s case about the  said policy.  To  disbelieve the company’s case   on  the  ground ’that  no  ,such ,manufacturing activity was  undertaken  in Calcutta was altogether unjustified. The Tribunal next found that there could not be any real surplus age in the staff as the  company had during the year 1960 made 17  appointments. The   Tribunal   accepted  the  union’s   case   that   this circumstance   indicated   that  there  was   no   need   of retrenchment.   It rejected the company’s  explanation  that until  retrenchment was decided upon and  calculations  were made   about   the  extent   of’   retrenchment,   temporary appointments had to be made in place of those who retired or left  the company’s service. Even though the  agencies  were given up winding-up work in connection with them would still require  the  same staff.  Besides, all.  the  17  temporary employees  were’  included in ,the list  of  the  retrenched employees.   As   regards  the  statement  Ex.   G   showing surplusage. of 66’ employees, the. Tribu- 983 nal  questioned its correctness on the ground that  although four agencies were given up in 1960 no retrenchment was made during that year, that on the other hand 17 temporary  hands were  engaged,  that the evidence of the  union’s  secretary showed that after the retrenchment workload of the remaining employees had increased, and lastly, that retrenchment could have been avoided by transferring the employees concerned to other  branches of the company.  Though the Tribunal gave  a clear   finding  that  the  company  had  not  resorted   to retrenchment  with  the intention of victimisation,  yet  it held  that  "the  allegations  made  by  the  union  (as  to parochial  considerations) do not appear to be unfounded  or unreasonable".  The reasons given for this observation  were that  the  company’s  head office was at  Madras,  that  the chairman  and the directors of the company were from  Madras and that the agencies given up in Madras were less in number than  in Calcutta. On these findings the Tribunal held  that the   scheme   of  reorganisation   was   not   sufficiently established, that mere surrender of agencies was no proof of such  a scheme that therefore, a good case for  retrenchment was not made out,. that the company had failed to  establish the  exact  number of surplus employees and  the  extent  of retrenchment,  that it failed to observe the principle  laid down  in sec. 25G, that the said notice dated June 29,  1961 was  not  in  accordance with rule 77  of  the  West  Bengal Industrial  Disputes Rules, 1958 as the notice was  of  June 29, 1961 while retrenchment was to take effect from, July 1, 1961.   The Tribunal held that the retrenchment,  therefore, was not with immediate effect, the proviso. to that rule did

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not apply and a notice of one month, aS required by  sub-cl. 1 of’ that rule, was necessary and that not having been done the  retrenchment  was invalid as being in  breach  of  sec. 25F(c).  In  accordance  with these  findings  the  Tribunal ordered  reinstatement  and payment to the 52  employees  of back wages as from July 1, 1961.     Aggrieved  by  this  order  the  company,filed  a   writ petition for certiorari which was heard by a learned  Single Judge  of  the High Court.  The learned  Single  Judge  held that’  an employer has the right to reorganise his  business in  ’any  manner  he likes for the  purpose  of  economy  or convenience,.  that a Tribunal, therefore,  cannot  question its’ propriety, the only limitation being that it should  be bona fide and not with the object of victimising  employees. He  observed  that though the-Tribunal had  found  that  the union  had failed to establish victimisation or  any  unfair labour  practice,  it  had, yet,  come  to  an  inconsistent finding that the probability that the union’s activity would be weakened by large scale retrenchment could not be ignored or  overlooked.  The learned Judge found that in  coming  to this  finding  the Tribunal acted not upon evidence  but  on mere  conjectures.   He  also held  that  interview  of  the evidence the Tribunal Was in patent error in 984 rejecting  the company’s case of relinquishment of  agencies and  the resultant retrenchment.  He further held  that  the finding  of the Tribunal that the policy  of  reorganisation was  not bona fide but was for parochial  consideration  was based  on  inferences  for which there  were  no  justifying premises.  Lastly, he held that the Tribunal’s finding  that the  company did not establish retrenchment of 52  employees was  not  justified as the ground given by it,  namely,  (1) that  retrenchment could have been avoided  by  transferring the  employees  concerned  to other centres,  (2)  that  the principle of "last come first go" was not followed, and  (3) that  the procedure under sec. 25F(c) was not observed  were not warranted by the evidence.     As regards the first ground, the learned Judge held that that ground was not sustainable.  As to the second ground he held  that  that  being  a finding  of  fact  he  could  not substitute  his own opinion in place of the  Tribunal’s  and remanded  that part of the case to the Tribunal for  further consideration.   Regarding the third ground, he  found  that the Tribunal was in error in holding that el. 1 of r. 77  of the said rules applied and that a month’s notice not  having been given thereunder the retrenchment was invalid.’ He  set aside  the award and remanded the case to the  Tribunal  for the  limited purpose of enforcing retrenchment according  to the principle of "last come first go".     In appeal against the said judgment, a Division Bench of the High Court held that the High Court could interfere in a writ  petition for certiorari with the  Tribunal’s  findings only  within  well-recognized  limits, such  as,  where  the inferior   tribunal  has acted without  jurisdiction  or  in excess of it or where it has acted illegally as when it acts in  breach  of the principles of natural  justice  or  where there  is an error of law apparent on record.  The  superior court  in such cases acts in supervisory and  not  appellate jurisdiction  and therefore, cannot review findings of  fact however  erroneous they are.  The Division Bench found  that the findings of the Tribunal that the company had failed  to prove  its scheme of reorganisation, that  retrenchment  was effected in Calcutta only, that the company was actuated  by parochial considerations, and therefore retrenchment was not bona  fide could not be said not to have been  supported  by

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evidence and that therefore the learned Single Judge was not competent to interfere with those findings.     Counsel  for the company raised three  contentions:  (1) that  since  the  Tribunal  had  held  that  there  was   no victimisation,   its   jurisdiction  was  limited   to   the consideration  only  whether the employees  were  retrenched within the meaning of sec. 2(00) of the Act and whether  the employer’s  obligations  under  ss. 25F, 25G  and  25H  were complied with, (2) that the Tribunal had no juris- 985 diction to consider the question whether the  reorganisation scheme was for parochial considerations or otherwise,  i.e., whether  the  scheme had merits, which opinion  is  entirely managerial,  and  (3)  that  some of  the  findings  of  the Tribunal  were  without  legal evidence and  based  on  mere surmises and therefore perverse. The contention on behalf of the  union,  on  the  other hand,  was  that  the  scope  of interference by the High Court in a certiorari petition  was limited and only on certain well-recognised grounds and that the  learned  Single Judge was not correct in  allowing  the petition, for, that meant interfering with findings of  fact arrived at by the Tribunal. The  grounds  on  which interference by the  High  Court  is available  in  such writ petitions have by now  been   well- established. In Basappa v. Nagappa(1) it was observed that a writ  of  certiorari is generally granted when a  court  has acted  without  or  in excess of its  jurisdiction.   It  is available in those cases where a tribunal, though  competent to enter upon an enquiry, acts in flagrant disregard of  the rules  of  procedure or violates the principles  of  natural justice  where no particular procedure is prescribed. But  a mere  wrong  decision  cannot  be corrected  by  a  writ  of certiorari  as  that would be using it as the  cloak  of  an appeal in disguise but a manifest error apparent on the face of  the proceedings based on a clear ignorance or  disregard of  the  provisions  of  law or  absence  of  or  excess  of jurisdiction,   when   shown,  can  be  so   corrected.   In Dharangadhara Chemical Works Ltd. v. State of  Saurashtra(2) this  Court  once  again observed that  where  the  Tribunal having jurisdiction to decide a question comes to a  finding of  fact, such a finding is not open to question under  Art. 226 unless it could be shown to be wholly unwarranted by the evidence.  Likewise, in the State of Andhra Pradesh  &  Ors. v.S.  Sree  Ram Rao(3) this Court observed  that  where  the Tribunal  has disabled itself from reaching a fair  decision by  some considerations extraneous to the evidence  and  the merits of the case or where its conclusion on the very  face of  it  is  so  wholly  arbitrary  and  capricious  that  no reasonable  person can ever have arrived at that  conclusion interference  under  Art.  226  would  be  justified.    The question for our determination,  therefore,  is whether  the learned   Single  Judge  was  within  the   aforesaid   well recognised  limits  when  he set aside  the  award.  Before, however,  we  examine that aspect of the case we  may  first consider  the scope of the Tribunal’s jurisdiction in  cases of retrenchment arising under see. 25F of the Act.     In D. Macropollo & Co. v. Their Employees’ Union(4) this Court  held  that  if a scheme of  reorganisation  has  been adopted (1) [1955] S.C.R. 250.                (2) [1957] S.C.R. 152. (3)  A.I.R. 1963 S.C. 1723.            (4) [1958]  2  L.L.J. 492. 986 by an employer for reasons of economy or convenience and  it has  been introduced in all the areas of its  business,  the

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fact that its implementation would lead to the discharge  of some of the employees would have no material bearing on  the question  as  to  whether  the scheme  was  adopted  by  the employer   bona  fide  or  not  In  the  circumstances,   an industrial  tribunal  considering  the  issue  relating   to retrenchment,  should  not  attach  any  importance  to  the consequences of reorganisation.  The resulting discharge and retrenchment   would   have   to   be   considered   as   an inevitable,  though  unfortunate,  consequence  of  such   a scheme.   It also held that where the finding of a  tribunal is  based  on  wrong and ’erroneous  assumption  of  certain material  facts, such a finding would be perverse. A  recent decision  in  Ghatge & Patil Concern’s Employees’  Union  v. Ghatge  &  Patel (Transport) (P) Ltd.(x) was a  case  of  an employer   reorganising  his  business  from  conducting   a transport business himself through employees engaged by  him to  conducting it through a contract system where  under  he let out his motor trucks to persons who, before this change, were  his employees.  Admittedly, this was done  because  he could  not  implement some of the provisions  of  the  Motor Transport Workers Act, 1961. The change over to the contract system  was held by the Tribunal not to have  been  effected for   victimising   the  employees.    The   employees   had voluntarily  resigned  and hired the  employer’s  trucks  on contract  basis.   It  was  held  that  a  person  must   be considered free to so arrange his business that he avoids  a regulatory  law  and its penal consequences  which  he  has, without  the  arrangement, no proper means  of  obeying.  In Workmen     Subong Tea Estate v. The Outgoing Management  of Subong  Tea  Estate(a). this Court laid down  the  following propositions:  (1)  that  the management  can  retrench  its employees only for proper reasons, which means that it  must not be actuated by any motive of victimisation or any unfair labour practice, (2) that it is for the management to decide the strength of its labour force, for the number of  workmen required to carry out efficiently the work in his industrial undertaking  must  always be left to be  determined  by  the management in its discretion, (3) if the number of employees exceeded  the  reasonable   and   legitimate  needs  of  the undertaking  it is open to the management to retrench  them, (4)   workmen   may  become  surplus  on   the   ground   of rationalisation  or economy reasonably or bona fide  adopted by  the management or on the ground of other  industrial  or trade  reasons,  and (5) the right  to  affect  retrenchment cannot  normally be challenged but when there is  a  dispute about   the   validity   of   retrenchment   the    impugned retrenchment must be shown as’justified on proper  reasons,- i.e.,  -that’  it  was not capricious or  without  rhyme  or reason. (1) [1968] 1: S.C R., 300.,              (2) [1964] 5 S.C.R. 602. 987     Since this is an appeal arising from a writ petition for certiorari we also would not interfere with the  conclusions arrived  at by the Tribunal except on grounds on  which  the High   Court  could have done.  Mr. Gupte’s  contention  was that   the  findings  of  the  Tribunal  were   beyond   its jurisdiction,  that  they were unwarranted  by  evidence  on record  and were based either on wrong assumptions  or  mere conjectures  without  any foundation in  the  evidence,  and therefore,  this is a fit case for our interference.  It  is not  in  dispute that the company gave up 11 out of  its  21 agencies in Calcutta, that is, more than half of its  agency business was given up during the years 1960 and 1961.  There was   clear and unchallenged evidence that certain  agencies

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were  likewise  given up in other places  including  Madras. The manager gave evidence that this was done in pursuance of the  policy decision taken by the company to reorganise  its business  by  concentrating more on its  manufacturing  side than  its  agency business as the company found  the  agency business unprofitable on account of import restrictions  and other reasons. The Tribunal, however, rejected this evidence on the ground that the policy decision being the function of the  Board  of Directors, the manager was not  competent  to depose about it and that if the company wanted to  establish it it should have produced a resolution of the Board and  on that  ground held that the company had failed to  prove  the said policy. In the first place we fail wholly to appreciate the Tribunal’s view that the said policy could not be proved through the manager. In the second place, in the very  first letter  of the union to the Deputy Labour  Commissioner,  as also  during  the conciliation proceedings, it  was  assumed that   the   company  had  taken  such  a   decision,   that consequently retrenchment was apprehended and that therefore that officer should intervene.  In these circumstances,  the finding that the company had failed to establish its  policy was  not  only beyond the scope of the  enquiry  before  the Tribunal  but  totally invalid.  As held in  J.K.  Iron  and Steel  Co. v. Iron and Steel Mazdoor Union(x)  the  Tribunal had  to  confine  itself to the  pleadings  and  the  issues arising therefrom and it was,  therefore, not open to it  to fly off at the tangent disregarding the pleadings and  reach any conclusions that it thought as just and proper.     It is well established that it is within the  managerial discretion  of  an  employer to  organise  and  arrange  his business in the manner he considers best. So long as that is done bona fide it is not competent of a tribunal to question its  propriety. If a scheme for such reorganisation  results in surplusage of employees no employer is expected to  carry the burden of such economic dead weight and retrenchment has to  be  accepted as inevitable, however unfortunate  it  is. The   Legislature  realised  this  position  and   therefore provided by sec. 25F compensation to soften the blow (1)[1956] 1 L.L.J. 227. 988 of  hardship resulting from an employee being thrown out  of employment through no fault of his.  It is not the  function of  the  Tribunal,  therefore,  to  go  into  the   question whether  such  a scheme is profitable or not and whether  it should  have been adopted by the employer.  In  the  instant case, the Tribunal examined the propriety of  reorganisation and held that the company had not proved to its satisfaction that it was profitable. The Tribunal then held (a) that  the scheme  was’  not  reasonable  inasmuch  as  the  number  of agencies given up in Madras was less than that in  Calcutta, (b)  that though development of manufacturing  activity  was taken  up  in  Madras, no such activity  was  undertaken  in Kidderpore,  and (c) that the company should have  developed its manufacturing activity in Kidderpore simultaneously with the  surrender  of the agencies.  It is obvious  that  while reorganising its business it is not incumbent on the company to develop its manufacturing side at the very place where it has surrendered its agencies, namely, Calcutta, nor to do so at  the  very  same time.  These  considerations  which  the Tribunal  took into account were totally extraneous  to  the issue  before it and the Tribunal ought not to have  allowed its mind to be influenced by such considerations and thereby disabling   itself  from  viewing  the  issue  from   proper perspective.  It was also beyond its competence to go.  into the  question  of  propriety of the  company’s  decision  to

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reorganise its business.  Having come to the conclusion that the   said  policy  was  not  actuated  by  any  motive   of victimisation  or unfair labour practice and  therefore  was bona  fide,  any consideration as to its  reasonableness  or propriety  was clearly extraneous.  Therefore,  its  finding that  the  company  had  failed to  establish  that  it  was profitable was incompetent. It is for the employer to decide whether a particular policy in running his business will  be profitable,  economic  or  convenient  and  we  know  of  no provision  in the industrial law which confers any power  on the  tribunal to inquire into such a decision so long as  it is  not actuated by any consideration for  victimisation  or any such unfair labour practice.     The  finding  that the policy decision was  actuated  by parochial  considerations,  namely,  for  transferring   the company’s  resources from Calcutta to Madras at the cost  of the   former,   was  without  evidence  and   was   entirely speculative.  Even assuming that the company had decided  to concentrate  its activity in Madras there is nothing in  the industrial  law  to compel it to continue  its  business  in Calcutta.  As regards the Tribunal’s finding that there  was no  surplusage in spite of the company having given up  more than  half  of  its  agencies,  the  manager  produced   the statement,  Ex. G, showing ’that on his  calculations  there would  be  a  surplusage  of  66  employees.   The  Tribunal rejected the case of surplusage on the grounds that though 4 agencies were given up 989 in Calcutta in 1960 the company had during that year engaged 17  temporary employees, that there was overload of work  on the   remaining  employees  after  retrenchment   and   that retrenchment  could  have been avoided by  transferring  the retrenched  employees to other branches especially as  their conditions  of   service  included the  liability  of  being transferred.  It is  true  that  no retrenchment was carried out in 1960 and there was evidence of the union’s  secretary that  work  had  accumulated when he gave  his  evidence  in January 1962.  These facts, however, would not by themselves mean that there was no surplusage and that retrenchment  was unjustified.   As  laid  down  in  Workmen  of  Subong   Tea Estate(x),  it  is  for  the  management   to   decide   the strength  of its labour force to carry out  efficiently  the working   of   its  undertaking.   If,  as   a   result   of reorganisation,   the  number  of  its  existing   employees exceeded   the  reasonable  and  legitimate  needs  of   the undertaking the management, subject to its obligation to pay compensation,   can   effect  retrenchment.   So   long   as retrenchment  carried out is bona fide and not  vitiated  by any   consideration  for  victimisation  or  unfair   labour practice  and the employer comes to the conclusion  that  he can carry on his undertaking with reasonable efficiency with the number of employees retained by him after  retrenchment, the  Tribunal  ought not ordinarily to interfere  with  such decision.,  The fact that in 1960 17 temporary  appointments were  made or that the union’s secretary deposed  that  work had   accumulated  would  not  mean  that   the   surplusage calculated  by the manager was unjustified. Accumulation  of work at a given point of time, unless it is constant, may be seasonal  or  due  to various reasons  and  not  necessarily because there was no surplusage.  The management had  worked out the surplusage which would occur in consequence of their giving  up the agency business.  Barring the bare  statement of  the union secretary that work had accumulated  and  that employees  were doing overtime work there was no rival  data available   to  the  Tribunal  to  come  to  the   startling

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conclusion  that  there would be no surplusage at  all  even though  a little more than half of the agency  business  was given up.  Such a conclusion could be arrived at only on the assumption  that  the accumulation of  work  was  permanent, which assumption could not follow from the evidence.     As  regards  the  company’s  refusal  to  transfer   the retrenched  employees,  the Tribunal’s finding  was  clearly against law.  The liability of an employee to be transferred and  the right of the company to transfer him did ,not  mean that there was a corresponding obligation on the company  to transfer the employee to another branch. No evidence was led by  the  union to show that if  transferred,  these  workmen could  have  been absorbed at other places,  either  because there were vacancies or that the work there (1) [1964] 5 S.C.R. 602. 990 was  the  same as was done by them at  Calcutta.  There  was equally no evidence whether wage-scales, dearness  allowance and other conditions of service were the same in Madras  and other  centres.  It  is true that the  company  had  started developing  its  manufacturing business in  Madras  but  the Tribunal made no enquiry whether these employees could  have been  fitted  in the manufacturing work when they  had  done only  administrative  and other duties  connected  with  the agency business, yet, the Tribunal drew the conclusion  that because  the company failed to transfer these  employees  to other centres retrenchment was not justified.     Equally the Tribunal’s decision on rule 77 was  contrary to its provisions.  The rule by sub-cl. 1 provides that when an  employer finds it necessary to retrench any  workman  he shall  at  least  one  month  before  the  date  of   actual retrenchment give notice thereof to the Labour  Commissioner and to the Conciliation ’Officer.  The proviso to it  states that where an employer retrenches any workman with immediate effect  by  paying  him wages in lieu  of  notice  he  shall immediately  after such retrenchment give notice thereof  to the  said officers.  Obviously, sub-cl. 1 did not  apply  to the  facts  of this case.  It is true that  the  notice  was given  two days before the actual retrenchment and  was  not given  "immediately".  But the Tribunal could  not  conclude that  since  the  notice was  not  given  immediately  after retrenchment  the proviso did not apply, and  therefore,  it would  be sub-cl. 1 which would be applicable and since  one month’s  notice was not given the retrenchment was  invalid. In  our  view such a conclusion was not only  incorrect  but contrary  to  the  very  object of  the  rule.   We  are  in agreement  with  the learned Single Judge  that  though  the notice was not given immediately after the retrenchment  but two  days before it, the company had substantially  complied with  the  requirements of the proviso.  The object  of  the proviso clearly is  that  where  it is not  possible, for an employer  to  give one month’s notice to the two authorities concerned  by reason of his retrenching the  employees  with immediate effect, information should be supplied to the  two officers immediately after such retrenchment.  H instead  of giving  such information after the retrenchment it is  given two  days before the retrenchment takes place it  is  hardly possible to say that the requirement of the proviso was  not carried  out.  So long as the object underlying the  proviso was   satisfied  it  did  not  make  any   difference   that information  was given a little earlier than the  date  when retrenchment took place.     We  have no doubt in our mind that some of the  findings arrived at by the Tribunal and which influenced its  verdict were   beyond   its  competence.   The  rest   were   either

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speculative  or contrary to the evidence on record and  were consequently liable to 991 be  set  aside  in  a writ  petition  for.  certiorari.  The Division  Bench      of the High Court, therefore,  was  not correct in its view that the learned Single Judge could  not interfere with those findings or that such findings did  not fall  under one or  the other recognized grounds  justifying the High Court’s interference.     In  the result we allow the appeal, set aside the  order passed by the Division Bench and restore the order passed by the  learned Single Judge including his order of  remand  to the  Tribunal to prepare a list of 52 persons liable  to  be retrenched  in accordance with the principle of  "last  come first  go". In the circumstances of the case we do not  make any order as to costs. y.p.                                     Appeal allowed. L6Sup. 992