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PETITIONER: WORKMEN OF SUDDER WORKSHOP OF JOREHAUT TEA CO. LTD.

       Vs.

RESPONDENT: ITS MANAGEMENT AND VICE-VERSA

DATE OF JUDGMENT01/05/1980

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. REDDY, O. CHINNAPPA (J)

CITATION:  1980 AIR 1454            1980 SCR  (3) 966  1980 SCC  (3) 406

ACT:      New Plea-Article  136 of the Constitution-Supreme Court cannot accept new plea not taken earlier.      Industrial Disputes  Act, Sections  25F and  25G, scope of-Back wages payment of.

HEADNOTE:      The Management  Tea Co. Ltd. appellant in C. A. 1538/71 retrenched on  November 5, 1966, 23 workmen, 16 of whom were paid retrenchment compensation allegedly in terms of section 25F of  the Industrial Disputes Act based on wages obtaining prior to  Wage Board  Award, which came into force on 1-4-66 retroactively and  in the  order of  ’last come,  first go’, while the  services of other seven were terminated, although on payment of retrenchment compensation, allegedly in breach of Section  25G of  the Act,  i.e. out  of turn. The dispute that was raised was decided by the Tribunal which upheld the validity of  the retrenchment  of the  16, but set aside the termination of  the other  seven. The High Court agreed with the Tribunal’s  Award and  hence the  appeals  both  by  the workmen and the management after obtaining special leave.      Dismissing both the appeals, the Court ^      HELD: 1.  The plea  that the  amount  paid  by  way  of retrenchment compensation  envisaged in  Section 25F  of the Industrial Disputes Act, not having been computed as per the revised pay  scales as  per the Wage Board Award, fell short of what  was legally  due and hence there was non-compliance is not  tenable because  before the Tribunal this contention was neither  pleaded nor  proved. There was no hint of it in the Award.  In the  High Court  this new  plea based  on the facts was  not permitted. Further the Wage Boards’ Award was subsequent  to   the  retrenchment   although  retroactively applied  and  the  workmen  had  accepted  the  retrenchment compensation on  the wages  prevalent at  the  time  of  the retrenchment. In  the absence of any basis for this new plea Supreme Court  cannot reopen  an ancient matter of 1966. But the 16 Workmen, being admittedly eligible for the Wage Board scale, would  be paid  the difference for the period between 1-4-66 to 5-11-66. [969 A-E]      2.  Section   25G  of   the  Industrial   Disputes  Act postulates that ordinarily the ’last come, first go’ will be

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the methodology  of retrenchment.  Of course,  it is  not an inflexible rule  and extra-ordinary  situations may  justify variations. There  must be  valid reason  for this decision, and,  obviously,   the  burden   is  on  the  Management  to substantiate the special ground for departure from the rule. Surely, valid and justifiable reasons are for the management to make  our, and if made out, s. 25G will be vindicated and not violated,  varying the ordinary rule of ’last come first go.’ There  is none  made out here, nor even alleged, except the only plea that the retrenchment was done in compliance 967 with s.  25G grade-wise.  Absence of mala fides by itself is no absolution  from the  rule in  s.25G. Affirmatively, some valid  and   justifiable  grounds  must  be  proved  by  the Management to  be exonerated  from the  ’last come first go’ principle. The above rule can be applied category wise. That is to  say those  who fell in the same category shall suffer retrenchment only  in accordance  with the principle of last come first go. [969 E, H, 970 A, B, D-F]      M/s. Om  Oil &  Oil Seeds Exchange Ltd., Delhi v. Their Workmen, [1966] Suppl. S.C.R. 74, followed.      3. Grading  for purposes  of scales  of  pay  and  like considerations will  not create  new categorisation. It is a confusion  or  unwarranted  circumvention  to  contend  that within the  same category if grades for scales of pay, based on length of service etc., are evolved, that process amounts to creation of separate categories. In the instant case, the seniority List  is the  same which is a telling circumstance to show that they fell in the same category. [971 C-E]      4. Supreme  Court cannot  sympathise with  a party  who gambles in  litigation to put off the evil day and when that day arrives prays to be saved from his own gamble. The Award had given  convincing reasons  for  reinstatement  and  even reduced the  back wages  to half.  Still, the  workmen  were dragged to  the High  Court and,  worse, when worsted there, were driven  from Assam  to Delhi  to defend their pittance. The logistics of litigation for indigent workmen is a burden the management  tried to  use by  a covert blackmail through the  judicial   process.  Misplaced  sympathy  is  a  mirage justice. [971 G-H, 972 A-B]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeals Nos. 1303 of 1972 and 1538 of 1971.      Appeals by  Special Leave  from the Judgment and Orders dated 13-4-1971  of the  Assam and  Nagaland High  Court  in Civil Rule No. 368/68 and 174/68.      M. N.  Phadke and  S. N. Choudhary for the appellant in CA. No. 1538 and Respondent in CA No. 1303/72.      P. R. Mridul and K. P. Gupta for Respondent No. 1 in CA 1538 and Appellant in CA No. 1303/72.      The Judgment of the Court was delivered by      KRISHNA IYER,  J. These  two appeals,  turning  on  the validity of the retrenchment of 23 workmen way back in 1966, are amenable  to common  disposal. Mr. Phadke, appearing for the Management,  argued straight  to the  point; so did Shri Mridul, with  the result  that we  could get the hang of the case without  much wrestling  with time  or  getting  paper- logged. Since,  in  substance,  we  are  inclined  to  leave undisturbed the  Award of the Industrial Tribunal, affirmed, as it  were, by  the High  Court, both these appeals will be given short shrift with brief reasons. 968

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    The facts,  to the  extent necessary  to appreciate the issues  canvassed,  are  brief.  The  Management  of  a  tea plantation by  name Jorehaut  Tea Co.,  Ltd., retrenched  23 workmen, 16  of whom  were  paid  retrenchment  compensation allegedly in  terms of  s.25F of the Industrial Disputes Act (for short,  the Act)  and in the order of ’last come, first go’, while  the services of the other seven were terminated, although on  payment of retrenchment compensation, allegedly in breach  of s.  25G of  the Act,  i.e. out  of  turn.  The dispute that  was raised  was decided  by the Tribunal which upheld the  validity of  the retrenchment  of the 16 but set aside the  termination  of  the  other  7.  Consequently  it directed their reinstatement with some back wages. The Award granted the following relief:           In respect  of the  workmen, viz.,  Sri  Bhogeswar      Saikia  Sri   Nandeswar  Bora,   Sri  Gunai  Bora,  Sri      Premodhar Sarma,  Sri Alimuddin  Ahmed, Sri Deven Sarma      and Shri  Harlal Biswas  whose  retrenchment  has  been      found  to   be  not  justified  they  are  entitled  to      reinstatement with continuity of service. These workmen      have  not  come  forward  to  say  that  they  remained      unemployed from  the date of their retrenchment. In the      circumstances of  the case,  I think  they may be given      wages at  half the  rate from  the date of retrenchment      till the  date of  publication  of  the  award  in  the      Gazette.      We may first dispose of the workers’ appeal. In all, 23 persons were  retrenched. In respect of 16 the rule of ’last come, first  go’ was  applied. Thus homage was paid to s.25G of the Act. But then, the workmen in their appeal, contended before us  that s. 25F had been breached and, therefore, the termination was  bad in  law. The Management’s case is that, as a  fact, all  or most  of them  had been  reinstated when fresh vacancies  had arisen,  although neither party is able to assert  with certainty  this case  of reinstatement. That apart, if  there be  non-compliance with  s.25F, the  law is plain that  the retrenchment  is bad.  However, when  probed further as  to how  s.25F had  been  violated,  Shri  Mridul argued  that   the  amount   paid  by  way  of  retrenchment compensation envisaged  in s.25F  fell  short  of  what  was legally due  and hence  there was non-compliance. Under more searching  interrogation,   Shri  Mridul   stated  that  the compensation  had  been  computed  on  the  basis  of  wages previously paid  and in  derogation of  the Wage Board Award which had  been implemented  by the  Management with  effect from 1-4-1966.  The retrenchment  was on  November 5,  1966, i.e. months after April 1, 1966. Therefore, the revised pay- scales as  per the Wage Board Award should have been adopted in calculating  the retrenchment  compensation. This  spinal flaw rendered 969 the tender  of compensation insufficient and, therefore, the retrenchment itself  was invalid.  Maybe, there  is apparent force in  this contention.  But Shri  Phadke countered it by saying that  it was  not open  to the  workmen to  spring  a surprise on  the Management especially when the question was one of fact. He urged that before the Tribunal no plea based on the  Wage Board  Award was made and it was quite possible that the Management would have adequately met the contention if such  a plea had been raised. The fact is that before the Tribunal  the  contention  pressed  before  us  was  neither pleaded nor  proved. There is no hint of it in the Award. In the High  Court this  new plea  based on  the facts  was not permitted. Had  there been  some foundation laid at least in the written  statement of  the workmen,  we might  have been

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inclined to  explore the  tenability of the plea, especially because there  is no  dispute about the Wage Board Award and the fact  that it had been given effect to from 1-4-1966 and the further  fact that  in the retrenchment notice the wages were not  calculated according to the Wage Board’s Award. It must be remembered, however, that the Wage Board’s Award was subsequent  to   the  retrenchment   although  retroactively applied  and  the  workmen  had  accepted  the  retrenchment compensation on  the wages  prevalent at  the  time  of  the retrenchment. In  the absence of any basis for this new plea we are  unable to  reopen an  ancient matter  of  1966  and, agreeing with the High Court, dismiss the appeal. But the 16 workmen, being eligible admittedly for the Wage Board scale, will be  paid the difference for the period between 1-4-1966 to 5-11-1966.      Now, we  will take  up the  merits of  the Management’s appeal which  relates to  the retrenchment of seven workmen. Admittedly, the  rule in  s.25G of the Act, which postulates that ordinarily  the ’last  come,  first  go’  will  be  the methodology of  retrenchment, has  not  been  complied  with provided we  treat all  the workmen  in the  category as one group. It  makes for  better appreciation of the point if we read s. 25G at this stage:           Where any  workman in an industrial establishment,      who is  a citizen  of India, is to be retrenched and he      belongs to  a particular  category of  workmen in  that      establishment, in  the absence of any agreement between      the employer  and  the  workman  in  this  behalf,  the      employer shall  ordinarily retrench the workman who was      the last person to be employed in that category, unless      for reasons  to be recorded the employer retrenches any      other workman.      The key-note  thought of  the provision, even on a bare reading, is  evident. The  rule is  that the  employer shall retrench the  workman who  came last, first, popularly known as ’last come first go’. Of 970 course it  is not  an  inflexible  rule  and  extra-ordinary situations may  justify variations.  For instance,  a junior recruit who  has  a  special  qualification  needed  by  the employer may  be retained  even though another who is one up is retrenched.  There  must  be  a  valid  reason  for  this deviation, and obviously, the burden is on the Management to substantiate the special ground for departure from the rule.      Shri Phadke  brought to  our notice the decision in M/s Om Oil  & Oilseeds  Exchange Ltd., Delhi v. Their Workmen to make out  that it  was not a universal principle which could not be  departed from by the Management that the last should go first.  The Management had a discretion provided it acted bona fide and on good grounds. Shah, J. in that very ruling, while agreeing  that a  breach of  the  rule  could  not  be assumed as  prompted by  mala fides  or  induced  by  unfair labour practice  merely because of a departure or deviation, further observed  that the Tribunal had to determine in each case whether  the Management  had acted  fairly and not with ulterior motive. The crucial consideration next mentioned by the learned  Judge is  that  the  Management’s  decision  to depart from  the rule  must be  for  valid  and  justifiable reasons,  in   which  case   "the  senior  employee  may  be retrenched before  his junior  in employment." Surely, valid and justifiable  reasons are for the Management to make out, and if made out, s. 25G will be vindicated and not violated. Indeed, that  very decision stresses the necessity for valid and good  ground for varying the ordinary rule of ’last come first go’.  There is  none made  out here, nor even alleged,

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except the  only plea  that the  retrenchment  was  done  in compliance with  s. 25G grade-wise. Absence of mala fides by itself  is   no  absolution   from  the   rule  in  s.  25G. Affirmatively, some  valid and  justifiable grounds  must be proved by  the Management  to be  exonerated from  the ’last come first go’ principle.      It must be remembered that the above provision which we have quoted insists on the rule being applied category-wise. That is  to say,  those who  fall in the same category shall suffer retrenchment only in accordance with the principle of last come first go. The short point raised is that the seven workmen are  not in  the same  category. The  finding of the Tribunal, concurred  in by  the High Court is that they fell in the same category. We quote the award:           "It will  be seen that when there is no trade test      or anything  to mark  efficiency, there is no basis for      placing the  workmen in  different grades  and when all      the workmen  of the  same category  are to  do the same      work inasmuch as by the management’s own evidence there      is no gradewise allo- 971      cation of  duty within  the same  category. Although in      the evidence  the Management  wanted to  justify  their      departure from  the principle  of ’last  come first go’      there is  nothing  to  show  that  such  a  reason  was      recorded for  deviating  from  the  principle.  In  the      circumstances of  the case  it cannot  be said that the      management’s selection  of  persons  to  be  retrenched      leaving the  juniormost in  some category was justified      and the  reason now  adduced  for  deviating  from  the      principle cannot  be accepted  in the  absence  of  the      reason being  not recorded at the time of retrenchment.      Further it  will be also noticed that although there is      classification of  workmen into  grades (?)  within the      category, there  is nothing  to distinguish one workman      of one  grade from  another workman  of  another  Grade      inasmuch as  there is  no allocation  of duties amongst      the workmen of different Grades in the category." The  seniority   list  is  the  same,  which  is  a  telling circumstance to  show   that they fell in the same category. Grading  for   purposes  of   scales   of   pay   and   like considerations will  not create  new categorisation. It is a contusion  or  unwarranted  circumvention  to  contend  that within the  same category if grades for scales of pay, based on length of service etc., are evolved, that process amounts to creation  of separate  categories. This  fallacy has been rightly negatived by a detailed discussion in the Award. The High Court  has avoided the pitfall and we decline to accept the submission.  The result is that the Award must hold good in regard to the illegally retrenched seven workmen.      What remains to be considered is the last submission of Shri Phadke that the engineering establishment wherein these seven  workmen   are  to  be  reinstated  is  no  longer  in existence. Further,  he pleads that on account of long lapse of time  on account  of the  pendency of  the appeal is this Court the  compensation payable  by way  of full  wages  may amount to  a huge  sum disproportionate to the deviance from the law.  He, therefore, pleads for moulding the relief less harshly.      We cannot  sympathise  with  a  party  who  gambles  in litigation to put off the evil day and when that day arrives prays to  be saved  from his own gamble. The Award had given convincing reasons  for reinstatement  and even  reduced the back wages  to half.  Still, the workmen were dragged to the High Court  and, worse, when worsted there, were driven from

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Assam to  Delhi to  defend their  pittance. The logistics of litigation for  indigent workmen  is a burden the Management tried to  use by  a covert  blackmail through  the  judicial process. 972 Misplaced sympathy  is mirage justice. We cannot agree. Even so, we  take note  of  the  inordinate  delay  due  to  long pendency which  is  part  of  the  pathology  of  processual justice in  the Supreme  Court. So  we direct  that half the back  wages   between  the  date  of  retrenchment  and  the publication of  the Award  shall be paid, as directed in the Award itself.  For the post-Award period, full wages will be paid  until   the  High  Court’s  judgment  on  13-4-71  and thereafter 75% of the wages will be paid until 30-4-1980.      Counsel contends  that the Workshop is not in existence now and  reinstatement is physically impossible. Sri Mridul, for the workmen, states that a just solution by the court in the given  circumstances is  acceptable. We  direct that, in lieu of  reinstatement, one  year’s wages  calculated on the scale sanctioned  by the Wage Board recommendations for each such workman be paid. All the sums, if not paid before 15-5- 80, shall  carry 12%  interest. And  upto 15-5-80 they shall carry 9% interest in supersession of the interim order dated 5-5-72.  Rough   and  ready   justice,  for   want  of  full information, is not satisfactory but cannot be helped.      We dismiss  the workmen’s  appeal. No costs. We dismiss the Management’s  appeal, subject  to the  above directions, with costs quantified at Rs. 5,000/-. S. R.                                     Appeals dismissed. 973