Case: Hotel Ambassador Vs. Its Workmen and Others

Gajendragadkar, J.1. This appeal raises a very short question about the correctness and validity of the direction issued by the tribunal calling upon the appellant, the management of Hotel Ambassador, to reinstate its employee Ram Singh I with consequential reliefs. It appears that the appellant had retrenched four of its employees one of whom did not raise any dispute, but the other three did : they are Ram Singh I, painter, Ram Singh II, painter and Sadhu Ram, upholsterer. This dispute was referred for adjudication to the industrial tribunal, Delhi. The tribunal has held that the retrenchment of Ram Singh II and and Sadhu Ram was justified, but not that of Ram Singh I. That is why it has given the said employee the main relief of reinstatement and other consequential reliefs as to wages for the period during which he had been retrenched. It is against this order that the appellant has come to this Court by special leave.2. Mr. Ram Lal Anand contends that the order passed by the tribunal is manifestly erroneous. He has referred to the fact that the tribunal, in substance, has upheld the plea of the appellant that at the time when the retrenchment was effected in October 1960, the appellant had to face a somewhat depressing financial position, and so, it became necessary for the appellant to effect economy in its expenditure. It appears that the retrenchment workmen did the work of painting, whitewashing and polishing up-holstering work. The appellants case was that he had abolished this department and distributed the work amongst the other members of the staff. The tribunal, in fact, has found that in addition to their other work Budhram and Bhagat Singh are now doing the work which the retrenched workmen used to do before, and it has held that since Budhram was a senior employee, it could not be said that the appellant was in error in retaining him in preference to the three retrenched employees. It, however, held that Bhagat Singh might have been retrenched and not Ram Singh I. It is on this ground that the tribunal has directed the reinstatement of Ram Singh I. Mr. Ram Lal Anand points out that the tribunal was in error because like Budhram, Bhagat Singh was a senior employee and could not have been retrenched in preference to Ram Singh I. Evidence shows that both Budhram and Bhagat Singh were drawing Rs. 150 each per month at the relevant time, and so, what applies to Budhram applies equally to Bhagat Singh. In our opinion, this contention is well-founded and must be upheld.Mr. Janardhan Sharma for the respondents attempted to support the finding of the tribunal that the appellant had acted improperly in not applying the principle of S.25G of the Industrial Disputes Act, 1947 (Act 14 of 1947). Section 25G requires that the retrenchment should be effected category-wise; and that in effecting retrenchment, the principle of last come first go must be applied. The difficulty in accepting this argument, however, is that in the present case the appellant has altogether closed the special department for painting, whitewashing and polishing upholstering work, and it is not possible to find fault with the appellant, because one of the ways in which economy in expenditure could be effected obviously was to close this department and distribute the work of the said department among some of the pre-existing employees. That being so, it is not possible to hold that S. 25G has been contravened. Once it is conceded that there was an occasion for effecting economy, the conclusion is inescapable that the conduct of the appellant in closing the department and dividing its work amongst its other employees cannot be reasonably characterized as improper, or as amounting to an unfair labour practice. It is true that Ram Singh I appears to have been a vice-president of the union and no doubt, the respondents contended before the tribunal that the retrenchment of Ram Singh I was really an act of victimization. The tribunal has not made a finding in favour of the respondents on this ground. It has merely held that since Bhagat Singh was not retrenched but Ram Singh I was, that is improper and not bona fide. This conclusion, in our opinion, cannot be upheld.

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

Explanation:
1[ds]Evidence shows that both Budhram and Bhagat Singh were drawing Rs. 150 each per month at the relevant time, and so, what applies to Budhram applies equally to Bhagat Singh. In our opinion, this contention isand must be upheld.Mr. Janardhan Sharma for the respondents attempted to support the finding of the tribunal that the appellant had acted improperly in not applying the principle of S.25G of the Industrial Disputes Act, 1947 (Act 14 of 1947). Section 25G requires that the retrenchment should be effectedand that in effecting retrenchment, the principle of last come first go must be applied. The difficulty in accepting this argument, however, is that in the present case the appellant has altogether closed the special department for painting, whitewashing and polishing upholstering work, and it is not possible to find fault with the appellant, because one of the ways in which economy in expenditure could be effected obviously was to close this department and distribute the work of the said department among some of theemployees. That being so, it is not possible to hold that S. 25G has been contravened. Once it is conceded that there was an occasion for effecting economy, the conclusion is inescapable that the conduct of the appellant in closing the department and dividing its work amongst its other employees cannot be reasonably characterized as improper, or as amounting to an unfair labour practice. It is true that Ram Singh I appears to have been aof the union and no doubt, the respondents contended before the tribunal that the retrenchment of Ram Singh I was really an act of victimization. The tribunal has not made a finding in favour of the respondents on this ground. It has merely held that since Bhagat Singh was not retrenched but Ram Singh I was, that is improper and not bona fide. This conclusion, in our opinion, cannot be upheld.