Civil Appeal No 3563 of 1979
Appeal by special leave from the Award dated 9 7 1978 of the Presiding Officer Central Government
Industrial Tribunal Cum 886 Labour Court New Delhi in ID No 90 of 1977 published in Gazette of India on 11 8 1979
MK Ramamurthi and Romesh C Pathak for the Appellant
Dr Anand Parkash Adarsh Kumar Mrs Laxmi Anand Parkash and Jagat Arora for the Respondent
The Judgment of the Court was delivered by CHINNAPPA REDDY J
Santosh Gupta the appellant Workman a woman was employed in the State Bank of Patiala the Mall Patiala from July 13 1973 till August 21 1974 when her services were terminated
Though there were some breaks in service for a few days those breaks are not relevant for the purpose of deciding this case though we may have to advert to them in another connection
Despite the breaks the workman had admittedly worked for 240 days in the year preceding August 21 1974
According to the workman the termination of her services was retrenchment  within the meaning of that expression in section 2OO of the  since it did not fall within any of the 3 excepted cases mentioned in section 2OO
Since there was retrenchment  it was bad for non compliance with the provisions of section 25 F of the 
On the other hand the contention of the management was that the termination of services was not due to discharge of surplus labour
It was due to the failure of the workman to pass the test which would have enabled her to be confirmed in the service
Therefore it was not retrenchment within the meaning of section 2OO of the  section 25 F prescribes that no workman employed in any industry who has been in continuous service for not less than one year shall be retrenched by the 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 b the workman has been paid at the time of retrenchment compensation which shall be equivalent to fifteen days average pay for every completed year of continuous service or any part thereof in a excess of six months andc notice in the prescribed manner is served on the appropriate Government or any such authority as may be specified by the appropriate Government by notification in the official Gazette
There is a proviso to clause a which dispenses with the necessity for the notice contemplated by the clause if the retrenchment is under an agreement which specifies the date for the termination of service
887 The expression retrenchment is specially defined by section 2OO of the Act and is as follows 2OO retrenchment  means the termination by the employer of the service of a workman for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action but does not include a voluntary retirement of the workman or b retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf or c termination of the service of a workman on the ground of continued ill health In Hariprasad Shivshankar Shukla vs A D Divikar the Supreme Court took the view that the word retrenchment  as defined in section 2OO did not include termination of services of all workmen on a bonafide closure of an industry or on change of ownership or management of the industry
In order to provide for the situations which the Supreme Court held were not covered by the definition of the expression retrenchment  the Parliament added section 25 FF and section 25 FFF providing for the payment of compensation to the workmen in case of transfer of undertakings and in case of closure of undertakings respectively
If the definition of retrenchment  is looked at unaided and unhampered by precedent one is at once struck by the remarkably wide language employed and particularly by the use of the words termination for any reason whatsoever
The definition expressly excludes termination of service as a punishment inflicted by way of disciplinary action 
The definition does not include so it expressly says voluntary retrenchment of the workman or retrenchment of the workman on reaching the age of superannuation or termination of the service of the workman on the ground of continuous ill health
Voluntary retrenchment of a workman or retrenchment of the workman on reaching the age of superannuation can hardly be described as termination by the employer of the service of a workman
Yet the Legislature took special care to mention that they were not included within the meaning of termination by the employer of the service of a workman for any reason whatsoever
This in our opinion emphasizes the broad interpretation to 888 be given to the expression retrenchment 
In our view if due weight is given to the words the termination by the employer of the service of a workman for any reason whatsoever and if the words for any reason whatsoever  are understood to mean what they plainly say it is difficult to escape the conclusion that the expression retrenchment  must include every termination of the service of a workman by an act of the employer
The underlying assumption of course is that the undertaking is running as an undertaking and the employer continues as an employer but
where either on account of transfer of the undertaking or on account of the closure of the undertaking the basic assumption disappears there can be no question of retrenchment  within the meaning of the definition contained in section 2OO
This came to be realised as a result of the decision of this Court in Hariprasad Shivshanker Shukla vs AD Divikar Supra
The Parliament then stepped in and introduced 25 FF and 25FFF by providing that compensation shall be payable to workmen in case of transfer or undertaking or closure of undertaking as if the workmen had been retrenched
We may rightly say that the termination of the service of a workman on the transfer or closure of an undertaking was treated by Parliament as deemed retrenchment 
The effect was that every case of termination of service by act cf employer even if such termination involved was a consequence of transfer or closure of the undertaking was to be treated as retrenchment  for the purposes of notice compensation etc
Whatever doubts might have existed before Parliament enacted 25FF and 25FFF about the width of 25F there cannot now be any doubt that the expression termination  of service for any reason whatsoever now covers every kind of termination of service except those not expressly included in section 25F or not expressly provided for by other provisions of the Act such as Ss 25FF and 25FFF
In interpreting these provisions ie 25F 25FF and 25FFF one must not ignore their object
The manifest object of these provisions is to so compensate the workman for loss of employment as to provide him the wherewithal to subsist until he finds fresh employment
The non inclusion of voluntary retrenchment of the workmen retirement of workmen on reaching the age of superannuation termination or the service of a workman on the ground of continued ill health  in the definition of retrenchment clearly indicate and emphasise what we have said about the true object of 25F 25FF and 25FFF and the nature of the compensation provided by those provisions
The nature of retrenchment compensation has been explained in Indian Hume Pipe Co Ltd vs the Workmen as follows  889 As the expression retrenchment compensation indicates it is compensation paid to a workman on his retrenchment and it is intended to give him some relief and to soften the rigour of hardship which retrenchment inevitably causes
The retrenched workmens suddenly and without his fault thrown on the street and has to face the grim problem of unemployment
At the commencement of his employment a workmen naturally expects and looks forward to security of service spread over a long period but retrenchment destroys his hopes and expectations
The object of retrenchment compensation is to give partial protection to the retrenched employee and his family to enable them to tide over the hard period of unemployment
Once the object of 25F 25FF and 25FFF is understood and the true nature of the compensation which those provisions provide is realised it is difficult to make any distinction between termination of service for one reason and termination of service for another
Dr Anand Prakash wants us to hold that notwithstanding the comprehensive language of the definition of retrenchment in section 2 OO the expression continues to retain its original meaning which was according to the counsel discharged from service on account of surplusage 
It is impossible to accept his submission
If the submission is right there was no need to define the expression retrenchment  and in such wide terms
We cannot assume that the Parliament was undertaking an exercise in futility to give a long winded definition merely to say that the expression means what it always meant
Let us now examine the precedents of this Court to discover whether the true position in law is what has been stated by us in the previous paragraphs
The earliest of the cases of this Court to which our attention was invited was Harprasad Shivashankar Shukla vs A D Divikar supra
That was a case which was decided before Ss 25FF and 25FFF were brought on the statute book
In fact it was as a consequence of that decision that the had to be amended and these two provisions came to be introduced into the Act
The question which arose for decision in that case was stated by the learned judges themselves as follows The question however before us is does this definition merely give effect to the ordinary accepted notion of retrenchment in an existing or running industry by 890 embodying the notion in apt and readily intelligible words or does it go so far beyond the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bonafide closure or discontinuance of his business by the employer The question so stated was answered by the learned judges in the following way  In the absence of any compelling words to indicate that the intention was even to include a bonafide closure of the whole business it would we think be divorcing the expression altogether from the context to give it such a wide meaning as is contended for by learned counsel for the respondents it would be against the entire scheme of the Act to give the definition clause relating to retrenchment such a meaning as would include within the definition termination of service of all workmen by the employer when the business itself ceases to exist
It is true that there are some observations which if not properly understood with reference to the question at issued seemingly support the submission of Dr Anand Prakash that termination of service for any reason whatsoever  means no more and no less than discharge of a labour force which is a surplus age
The misunderstanding of the observations and the resulting confusion stem from not appreciating 1 the lead question which was posed and answered by the learned judges and 2 that the reference to discharge on account of surplus age  was illustrative and not exhaustive and by way of contrast with discharge on account of transfer or closure of business
Management of Ms Willcox Buckwell India Ltd vs Jagannath and Ors
and Employers in Relation to Digwadih Colliery vs Their Workmen were both cases where the termination of the Workman from service was on account of surplusage and therefore the cases were clear cases of retrenchment
They do not throw any light on the question now at issue
In State Bank of India vs Shri N Sundaramoney a Bench of three judges of this Court consisting of Chandrachud J as be then was Krishna Iyer J and Gupta J considered the question whether section 25F of the was attracted to a case where the order of appointment carried an automatic cessation of service 891 the period of employment working itself out by efflux of time and not by an act of employer Krishna Iyer J who spoke for the Court observed
Termination  for any reason whatsoever  are the key words
Whatever the reasons every termination spells retrenchment
So the sole question is has the employee s service been terminated  Verbal apparel apart the substance is decisive A termination takes place where a term expires either by the active step of the master of the running out of the stipulated term
To protect the weak against the strong this policy of comprehensive definition has been effectuated
Termination embraces not merely the act of termination by the employer but the fact of termination howsoever produced
True the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract section 25F and automatic extinguishment of service be effluxion of time cannot be sufficient
Words of multiple import have to be winnowed judicially to suit the social philosophy of the statute
So screened we hold that the transitive and intransitive senses are covered in the current context
Moreover an employer terminates employment not merely by passing an order as the service runs
He can do so by writing a composite orders one giving employment and the other ending or limiting it
A separate subsequent determination is not the sole magnetic pull of the provision
A preemptive provision to terminate is struck by the same vice as the post appointment termination
Dexterity of diction cannot defeat the articulated conscience of the provision
In Hindustan Steel Ltd vs the Presiding Officer Labour Court Orissa and Ors
the question again arose whether termination of service by efflux of time was termination of service within the definition of retrenchment in section 2 OO of the 
Both the earlier decisions of the Court in Hariprasad Shivshankar Shukla vs AD Divikar and State Bank of India vs section Sundaramoney supra were considered
There was also a request that N Sundaramoney s case conflicted with the decision in Hariprasad Shivshankar Shukla vs A D Divikar and therefore required reconsideration
A Bench of three judges of this Court consisting of Chandrachud J as he then was Goswami J and Gupta J held that there was nothing in Huriparsad Shivshankar Shukla vs AD Divikar which was inconsistent with the decision in N Sundaramoney s case
They held that the decision in 892 Hariparsad Shivshankar s case that the words for any reason whatsoever used in the definition of retrenchment would not include a bonafide closure of the whole business because it would be against the entire scheme of the Act
The learned judges then observed that on the facts before them to give full effect to the words for any reason whatsoever would be consistent with the scope and purpose of section 25 of the and not contrary to the scheme of the Act
In Delhi Cloth and General Mills Ltd vs Shambhunath Mukharjee and Ors
Goswami Shinghal and Jaswant Singh JJ held that striking off the name of a workman from the rolls by the management was termination of the service which was retrenchment within the meaning of section 2OO of the 
Dr Anand Prakash cited before us the decision of a Full Bench of the Kerala High Court in L Rober D Souza vs Executive Engineer Southern Railway and Anr
and some other cases decided by other High Courts purporting to follow the decision of this Court in Hariparsad Shivshankar Shukla vs AD Divikar s case Shukla s case we have explained
The ratio of Shukla s case in fact has already been explained in Hindustan Steel Ltd vs the Presiding Officer Labour Court Orissa and Ors
The decisions in Hindustan Steel Ltd vs the Presiding Officer Labour Court Orissa and Ors and State Bank of India vs N Sundaramoney have in our view properly explained Shukla s case and have laid down the correct law
The decision of the Kerala High Court in L Robert D Souza vs Executive Engineer Southern Railway  Anr
and the other decisions of the other High Courts to similar effect viz
The Managing Director National Garages vs J Gonsalve Goodlas Nerolac Paints vs Chief Commissioner Delhi and Rajasthan State Electricity Board
vs Labour Court are therefore over ruled
We hold as a result of our discussion that the discharge of the workman on the ground she did not pass the test which would have enabled her to be confirmed was retrenchment  within the meaning of section 2OO and therefore the requirements of section 25F had to be complied with
The order of the Presiding Officer Central Govt
Industrial Tribunal cum Labour Court new Delhi is set aside and the appellant is directed to be reinstated with full back wages
The appellant is entitled to her cost
SR Appeal allowed


Summary:
The appellant was employed in the State Bank of Patiala The Mall Patiala from July 13 1973 till August 21 1974 when her services were terminated
Despite some breaks in service for a few days the appellant had admittedly worked for 240 days in the year preceding August 21 1974
According to the workman the termination of her service was retrenchment within the meaning of that expression in Section 2OO of the  since it did not fall within any of the excepted cases mentioned in Section 2OO
Since there was retrenchment it was bad for non compliance with the provisions of section 25 F of the 
On the other hand the contention of the management was that the termination of services was not due to discharge of surplus labour
It was due to the failure of the workman to pass the test which would have enabled him to be confirmed in the service
Therefore it was not retrenchment within the meaning of section 2OO of the 
The Presiding Officer Central Government Industrial Tribunal cum Labour Court accepted the management s contention and decided against the workman appellant
Hence the appeal by special leave
Allowing the appeal the Court  HELD i The discharge of the workman on the ground that she did not pass the test which would have enabled him to be confirmed was retrenchment within the meaning of section 2OO and therefore the requirements of section 25F had to be complied with
892 F G ii Section 2OO of the uses a wide language particularly the words termination for any reason whatsoever
The definition retrenchment expressly excludes termination of service as a punishment inflicted by way of disciplinary action
It does not include voluntary retrenchment of the workman or retrenchment of the workman on reaching the age of superannuation or termination of the service of the workman on the ground of continuous ill health
The Legislature took special care to mention that these were not included within the meaning of termination by the employer of the service of a workman for any reason whatsoever
This emphasises the broad interpretation to be given to the expression retrenchment
887 E H 888 A 2
If due weight is given to the words the termination by the employer of the service of a workman for any reason whatsoever and if the words for any reason whatsoever are understood to mean what they plainly say it is difficult to escape the conclusion that the expression retrenchment  must include every termination of the service of a workman by an act of the employer
The underlying assumption of course is that the undertaking is running as an under 885 taking and the employer continues as an employer but where either on account of transfer of the undertaking or on account of the closure of the undertaking the basic assumption disappears there can be no question of retrenchment  within the meaning of the definition contained in section 2OO of the Act
888 A C Hariprasad Shivshankar Shukla vs AD Divakar 1957 SCR 121 applied
By introducing section 25 FF and Section 25 FFF Parliament treated the termination of the service of a workman on the transfer or closure of an undertaking as deemed retrenchment
The effect was that every case of termination of service by act or employer even if such termination was a consequence of transfer or closure of the undertaking was to be treated as retrenchment  for the purposes of notice compensation etc
 The expression termination of service for any reason whatsoever now covers every kind of termination of service except those not expressly included in section 25F or not expressly provided or by other provisions of the Act as 25 FF And 25 FFF
888 C F 4
The manifest object of Section 25 FF and section 25 FFF is to so compensate the workman for loss of employment as to provide him the wherewithal to subsist until he finds fresh employment
The non inclusion of voluntary retirement of the workmen retirement of workmen on reaching the age of superannuation termination of the service of a workman on the ground af continued ill health  in the definition of retrenchment  clearly indicate and emphasise the true object of 25F 25 FF and 25 FFF and the nature of the compensation provided by those provisions 888 F H Indian Hume Pipe Co Ltd vs The Workman  followed
The submission that notwithstanding the comprehensive language of the definition of retrenchment  in section 2OO the expression continues to retain its original meaning namely discharge from service on account of surplus age is not correct
It cannot be assumed that Parliament was undertaking an exercise in futility to give a long winded definition merely to say that the expression means what it always meant
889 D E Hariprasad Shivshankar Shukla vs AD Divakar 1957 SCR 121 Hindustan Steel Ltd vs The Presiding Officer Labour Court Orissa  Ors  State Bank of India vs Shri N Sundaramoney  Delhi Cloth and General Mills Ltd vs Shambunath Mukherjee  Ors
  explained and followed
Management of Ms Willcose Buckwell India Ltd vs Jagannath  Ors
AIR 1974 SC 1164 Employees in Relation vs Digmoden Colliery vs Their Workmen   distinguished
L Robert D Souza vs Executive Engineer Southern Railway and Anr
1979 KLJ Kerala 211 The Managing Director National Garage vs J Gonsalves 1962 KLJ 56
Goodlas Nerolac Paints vs Chief Commissioner Delhi  Rajasthan State Electricity Board vs Labour Court  over ruled