Case: Hariprasad Shivshankar Shukla Vs. A.D. Divelkar

the intention of Congress at the dates the several Acts were passed, but the later Acts should also be regarded as legislative interpretations of the prior ones."This general rule is not an inflexible rule, and as stated in (1942) 315 U.S. 262 (L)"We are not limited to the lifeless words of the statute and formalistic canons of construction in our search of the intent of Congress (Parliament in our case) and in construing a statute, we may with propriety recur to the history of the times when it was passed."That history shows indubitably the aim and purpose of the enactment of S. 25-FF. As Lord Atiknson pointed out in his speech in 1928 A.C. 143 at p.164 (J),"an Act of Parliament does not after the law by merely betraying an erroneous opinion of it".Legislation founded on a mistaken or erroneous assumption has not the effect of making that the law which the legislature had erroneously assumed to be so. In the cases before us, the legislature proceeded on the basis of the judicial decisions then available to it, and on that basis enacted S. 25-FF. We do not think that the general principle of parliamentary exposition or subsequent legislation as an aid to construction of prior Acts can be called in aid for construing the definition clause and S.25-F of the Act.19. For the reasons given above, we hold, contrary to the view expressed by the Bombay High Court,that retrenchment as defined in S.2 (00) and as used in S.25-F has no wider meaning than the ordinary, accepted connotation of the word: it means the discharge of surplus labour or staff by the employer for any reasons whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and it has no application where the services of all workmen have been terminated by the employer on a real and bona fide closure of business as in the case of Shri Dinesh Mills Ltd. or where the services of all workmen have been terminated by the employer on the business or undertaking being taken over by another employer in circumstances like those of the Railway Company.Mr. Mehta, appearing for respondents Nos. 4 and 5 in Civil Appeal No.105 of 1956, tried to make a distinction between transfer of ownership with continuation of employment (which according to him did not come within the definition) and termination of service on closure of business. There is in fact a distinction between transfer of business and closure of business; but so far as the definition clause is concerned, both stand on the same footing if they involve termination of service of the workmen by the employer for any reason whatsoever, otherwise than as a punishment by way of disciplinary action. On our interpretation, in no case is there any retrenchment, unless there is discharge of surplus labour or staff in a continuing or running industry.20. We have so far dealt with the question of construction of the definition clause and S.25-F of the Act. On behalf of the appellants a further question as to the constitutional validity of S.25-F has been raised. The argument on that question has proceeded from two points of view: one of which is based on the point of view that retrenchment includes termination of service on closure of business and the other even in respect of running or continuing business. Under Act 19 (1), sub-cls. (f) and (g) of the Constitution, all citizens have the right to acquire, hold and dispose of property and to practice any profession, or to carry on any occupation, trade or business. Under cls.(5) and (6) of the said Article, the right is, inter alia, subject to reasonable restrictions in the interests of the general public. The right to carry on a business, it is contended, has three facets - (a) the right to start a business, (b) the right to continue a business and (c) the right to close a business. Section 25-F of the Act, it is argued, imposes a restriction on that right, if the section is so widely interpreted as to include a closure of business. The restriction, it is submitted, is not a reasonable restriction in the interests of the general public, because (a) it is unrelated to the capacity of the employer to pay and (b) unrelated to the needs of the employee. From the other point of view, the argument is that even in respect of a running or continuing industry, S.25-F imposes an unreasonable restriction. Reasonableness, it is submitted, has to be considered with regard to the object of the legislation and if the direct and immediate object of S. 25-F is relief against involuntary unemployment, then the restriction imposed is excessive, because a provision for such relief unrelated to the period of unemployment and other relevant factors is over-simplification of a complex problem. Such over simplification, it is stated, itself amounts to an unreasonable restriction.21. On the construction which we have adopted of the definition clause and of S.25-F of the Act, we are relieved of the task of making any final pronouncement on this constitutional question. On our construction, S.25-F has no application to a closed or dead industry and the constitutional arguments based on a different construction need not be considered in these appeals. So far as a running or continuing industry is concerned, an obvious answer may be that unemployment relief is not the only purpose or object of S.25-F. We have pointed out earlier that it is reasonable to assume that standardisation of retrenchment compensation and doing away with a perplexing variety of factors for granting retrenchment compensation may well have been the purposes of S.25-F though the basic consideration must have been the granting of unemployment relief. However, on our view of the construction of S.25-F, no compensation need be paid by the appellants in the two appeals. It is unnecessary therefore to decide whether, in other cases of a different character, S. 25-F imposes a reasonable restriction or not.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In our opinion it does. When a portion of the staff or labour force is discharged as surplusage in a continuing business, there are (a) termination of the service of a workman; (b) by the employer; (c) for any reason whatsoever; and (d) otherwise than as a punishment inflicted by way of disciplinaryagree that the adoption of the ordinary meaning gives to the expression for any reason whatsoever a somewhat narrower scope; one may say that it gets a colour from the context in which the expression occurs; but we do not agree that it amounts to importing new words in the definition. What after all is the meaning of the expression for any reason whatsoever? When a portion of the staff or labour force is discharge as surplusage in a running or continuing business, the termination of service which follows may be due to a variety of reasons; eg. for economy, rationalisation in industry, installation of a new labour saving machinery etc. The legislature in using the expression, for any reason whatsoever says in effect: "It does not matter why you are discharging the surplus; if the other requirements of the definition are fulfilled, then it is retrenchment". In the absence of any compelling words to indicate, that the intention was even to include a bona fide closure of the whole business, it would, we think, be divorcing the expression altogether from its context to give, it such a wide meaning as is contended for by learned counsel for the respondents. What is being defined is retrenchment, and that is the context of the definition. It is true that an artificial definition may include a meaning different from or in excess of the ordinary acceptation of the word which is the subject of definition but there must then be compelling words to show that such a meaning different from or in excess of the ordinary meaning is intended.Where, within the framework of the ordinary acceptation of the word, every single requirement of the definition clause is fulfilled, it would be wrong to take the definition as destroying the essential meaning of the wordview of these observations, 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. Learned counsel for the appellants in the p73 two appeals have pointed out that the definition clause is inartistically drawn up and sub-cls. (a) and (b) of S. 2 (00) are not easily intelligible with reference to one of the essential requirements of the definition; namely, that the termination of service of the workman must be by the employer. It has been submitted that voluntary retirement of the workman cannot be termination of service by the employer.We do not, however, think that sub-cls. (a), (b) and (c) are conclusive of the question before us; they, no doubt apply to a running or continuing business only, but whether inserted by way of abundant caution or on account of excessive anxiety for clarity, they merely exclude certain categories of termination of service from the ambit of the definition. They do not necessarily show what is to be included within theagree that if it is conceded that definition clause includes cases closure of business, no difficulty is presented by Ss. 25-G andpoint to be emphasised in that connection is that there is no provision (except perhaps S 25-FF inserted in 1956 by Act 41 of 1956 to which we shall presently refer) which can be said to bring a closed or dead industry within the purview of the Act. The provisions of the Act, almost in their entirety, deal with an existing or continuing industry. All the provisions relating to lay off in Ss. 25-A to 25-E are also inappropriate in a deadthink that no such compelling reasons are available from the provisions of the Act; on the contrary, they point really one way - that the Act contemplates an existing or continuing industry and not a deadclosely examined, none of those decisions show, however, that discharge of workmen on bona fide closure of business was held to fall within the meaning of normalconsider it unnecessary to examine all the decisions on this point and it is enough to indicate what we consider to be the correct position in the matter. Retrenchment means discharge of surplus workmen in an existing or continuing business; it had acquired no special meaning so as to include discharge of workmen onbona fideclosure of business, though a number of Labour Appellate Tribunals awarded compensation to workmen on closure of business as an equitable relief for a variety of reasons.It is reasonable to assume that in enacting S. 25-F, the legislature standardised the payment of compensation to workmen retrenched in the normal or ordinary sense in an existing or continuing industry; the legislature did away with the perplexing variety of factors for determining the appropriate relief in such cases and adopted a simple yard stick of the length of service of the retrenched workmen. If the intention of the legislature was to given statutory effect to those decisions which awarded compensation on real andbona fideclosure of business, the legislature would have said so instead of being content by merely adding a definition clause, every requirement of which is fulfilled by the ordinary, accepted meaning of the wordagree with learned counsel for the appellants that the aim or object of the enactment was to supersede partially the effect of the aforesaid judicial decisions, at least with regard to the urgent matter of charge of ownership or management of a business undertaking which is of quite frequent occurrence,rather than parliamentary exposition of the pre-existing law, the general question of closure of business, of a lesser degree of urgency, was naturally left to be dealt with, if necessary, after the appeals had been disposedare fortified in this view by an examination of the provisions of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956. Be it noted that this Act was passed on August 28,1956-only about seven days before the enactment of S.25-FF. Section 29 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act 1956, inserts new schedules to the Act, and item 10 of the Third Schedule (Matters within the jurisdiction of Industrial Tribunals) is : "Retrenchment of workmen and closure of establishment"; in the Fourth Schedule, item 10 is: "Rationalisation, standardisation or improvement of plant or technique which is likely to lead to retrenchment of workmen." It is true that these new Schedules have not yet come into force, but the wording of the items mentioned therein shows that the legislature clearly envisaged a distinction between retrenchment and closure and retrenchment did not include closure of business; item 10 of the Fourth Schedule almost clinches the issue, because it shows how retrenchment of surplus labour may occur in a running industry. If we are to choose between the two amending Acts of 1956 on the point of parliamentary exposition, we unhesitatingly hold that the Industrial Disputes Amendment and Miscellaneous Provisions Act, 1956 (Act 36 of 1956) is more in the nature of parliamentary exposition than the Industrial Disputes (Amendment) Act, 1956 (Act 41 of 1956) which merely supersedes the effect of certain judicial decisions. We are aware that on the narrower interpretation of the definition clause on the basis of the ordinary, accepted connotation of retrenchment, S. 25-F will apply to a continuing or running business only and S. 25-FF will become largely unnecessary. We do not think that consideration need cause any difficulty; the judicial decisions on the basis of which S.25-FF was enacted being held to be erroneous by us, no hardship is caused if S. 25-FF is rendered superfluous, because its aim is served by the correct interpretation now given of the definition clause and of the provisions of S. 25-F, both of which are on that interpretation brought into harmony with the rest of thefounded on a mistaken or erroneous assumption has not the effect of making that the law which the legislature had erroneously assumed to be so. In the cases before us, the legislature proceeded on the basis of the judicial decisions then available to it, and on that basis enacted S. 25-FF. We do not think that the general principle of parliamentary exposition or subsequent legislation as an aid to construction of prior Acts can be called in aid for construing the definition clause and S.25-F of the Act.19. For the reasons given above, we hold, contrary to the view expressed by the Bombay High Court,that retrenchment as defined in S.2 (00) and as used in S.25-F has no wider meaning than the ordinary, accepted connotation of the word: it means the discharge of surplus labour or staff by the employer for any reasons whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and it has no application where the services of all workmen have been terminated by the employer on a real and bona fide closure of business as in the case of Shri Dinesh Mills Ltd. or where the services of all workmen have been terminated by the employer on the business or undertaking being taken over by another employer in circumstances like those of the Railway Company.Mr. Mehta, appearing for respondents Nos. 4 and 5 in Civil Appeal No.105 of 1956, tried to make a distinction between transfer of ownership with continuation of employment (which according to him did not come within the definition) and termination of service on closure of business. There is in fact a distinction between transfer of business and closure of business; but so far as the definition clause is concerned, both stand on the same footing if they involve termination of service of the workmen by the employer for any reason whatsoever, otherwise than as a punishment by way of disciplinary action. On our interpretation, in no case is there any retrenchment, unless there is discharge of surplus labour or staff in a continuing or running industry.On the construction which we have adopted of the definition clause and of S.25-F of the Act, we are relieved of the task of making any final pronouncement on this constitutional question. On our construction, S.25-F has no application to a closed or dead industry and the constitutional arguments based on a different construction need not be considered in these appeals. So far as a running or continuing industry is concerned, an obvious answer may be that unemployment relief is not the only purpose or object of S.25-F. We have pointed out earlier that it is reasonable to assume that standardisation of retrenchment compensation and doing away with a perplexing variety of factors for granting retrenchment compensation may well have been the purposes of S.25-F though the basic consideration must have been the granting of unemployment relief. However, on our view of the construction of S.25-F, no compensation need be paid by the appellants in the two appeals. It is unnecessary therefore to decide whether, in other cases of a different character, S. 25-F imposes a reasonable restriction or not.