Case: Management of Hindustan Steel Limited Vs. Workmen &amp; Others

normal or ordinary sense in an existing or continuous industry by adopting a simple yard-stick of the length of service of the retrenched workmen doing away with the perplexing variety of factors for determining the appropriate relief in each case.In Hari Prasad Shiv Shankar Shukla v. A. D. Divekar, 1957 SCR 121 = (AIR 1957 SC 121 )it was held that this section was not intended by the Legislature to be applicable to bona fide closure of business. This decision led to amendment of the Act by the Parliament. In 1957 S. 25FFF was inserted in order to give benefit of S. 25F to the retrenched workmen where an undertaking is closed down "for any reason whatsoever". We need not refer to the amendment of S. 25FFF because that section does not directly concern us. According to sub-s. (2) of S. 25FFF it is quite clear that in case of closure of the categories of undertakings as mentioned therein, no workman employed in those undertakings can claim compensation under cl. (b) of S. 25F. The language of S. 25FFF (2) is plain and unambiguous. Indeed, the learned counsel for the respondent also did not dispute that if it were to be held in this case that the undertaking had been closed down then cl. (b) of Section 25F would not be attracted and Shri Naidu would not be entitled to claim relief under that clause. According to Shri Madan Mohan, however, the present was not a case of closure of the undertaking. His submission was that only the work of the Housing Project at Ranchi had been completed. It was argued that unless the entire undertaking of the appellant was closed down S. 25FFF (2) could not apply. This submission is, in our opinion, not acceptable.10. The word undertaking as used in S. 25FFF seems to us to have been used in its ordinary sense connoting thereby any work, enterprise, project or business undertaking. It is not intended to cover the entire industry or business of the employer as was suggested on behalf of the respondents. Even closure or stoppage of a part of the business or activities of the employer would seem in law to be covered by this sub-section. The question has indeed to be decided on the facts of each case. In the present case the Ranchi Housing Project was clearly a distinct venture undertaken by the appellant and it had a distinct beginning and an end. Separate Office was apparently s up for this venture and on the completion of the project or enterprise that undertaking was closed down. The Tribunal has actually so found. Its conclusion has not been shown to be wrong and were have no hesitation in agreeing with its view. There is no cogent ground for reopening the Tribunals conclusion under Article 136 of the Constitution. It is also noteworthy that Shri Naidu had been recruited to the work-charged establishment of the Ranchi Housing Project. In Workmen of the Indian Leaf Tobacco Development Co. Ltd. v. Management, (1969) 2 SCR 282 =(AIR 1970 SC 860 ) closure of eight out of 21 depots of the company though not amounting to closure of its entire business was considered to amount to a closure within the contemplation of Section 25-FFF. In Parry and Co. Ltd. v. P. C. Lal, (1969) 2 SCR 976 = (AIR 1970 SC 1334 ) it was observed that it was within the managerial discretion of an employer to organise and arrange his business in the manner he considers best and that if a bona fide scheme for such re-organisation results in surplusage of employees, no employer is expected to carry on the burden of such economic deadweight and retrenchment has to be accepted as inevitable however unfortunate. The reasoning and ratio of these decisions support the appellants argument.11. Now, under Sec. 25-FFF (1) which creates a statutory fiction, all that Shri Naidu was entitled to, was notice and compensation in accordance with the provisions of Section 25-F as if he had been retrenched. Retrenchment notice, Ex. 7, dated June 29, 1968, quite clearly complies with this requirement. On behalf of the respondent, as already noticed, it is not disputed that there has been no failure to give notice as required by Section 25F, in case Clause (b) is held inapplicable.12. It is also clear that the respondent had not specifically raised any plea of defect in the notice given to Shri Naidu. The Tribunal, however, allowed the objection of the notice Ex. 7 being conditional to be argued on the view that the notice was infirm on the face of it and that the objection was covered by the general plea in the written statement filed on behalf of Shri Naidu, to the effect that the grounds given in the retrenchment notice were all false and cooked up. On this view the notice was held to be conditional and, therefore, invalid and Shri Naidu was held entitled to be reinstated.13. In our view, Shri Setalvad was fully justified in submitting that the management had been taken by surprise and that the Tribunal was in error in holding the general ground in the written statement to cover the specific plea of infirmity of the notice because of its being conditional. The plea of the statutory defect in the notice should, in our opinion, have been reasonably specific and precise so as to enable the appellant to meet it. The general plea could not serve the object of putting the appellant on guard about the precise case to be met at the trial and tell the management the precise nature of the plea with respect to the defect in the notice, to enable them to meet it. In our view, if Clause (b) of Section 25-F is excluded from consideration and the plea relating to infirmity of the notice is ruled out, as we hold on these two points in agreement with Shri Setalvad, then, the impugned order is clearly insupportable.

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

Explanation:
1[ds]We need not refer to the amendment of S. 25FFF because that section does not directly concern us. According to sub-s. (2) of S. 25FFF it is quite clear that in case of closure of the categories of undertakings as mentioned therein, no workman employed in those undertakings can claim compensation under cl. (b) of S. 25F. The language of S. 25FFF (2) is plain and unambiguous. Indeed, the learned counsel for the respondent also did not dispute that if it were to be held in this case that the undertaking had been closed down then cl. (b) of Section 25F would not be attracted and Shri Naidu would not be entitled to claim relief under that clause.The word undertaking as used in S. 25FFF seems to us to have been used in its ordinary sense connoting thereby any work, enterprise, project or business undertaking. It is not intended to cover the entire industry or business of the employer as was suggested on behalf of the respondents. Even closure or stoppage of a part of the business or activities of the employer would seem in law to be covered by this sub-section. The question has indeed to be decided on the facts of each case. In the present case the Ranchi Housing Project was clearly a distinct venture undertaken by the appellant and it had a distinct beginning and an end. Separate Office was apparently s up for this venture and on the completion of the project or enterprise that undertaking was closed down. The Tribunal has actually so found. Its conclusion has not been shown to be wrong and were have no hesitation in agreeing with its view. There is no cogent ground for reopening the Tribunals conclusion under Article 136 of the Constitution. It is also noteworthy that Shri Naidu had been recruited to the work-charged establishment of the Ranchi Housing Project.Now, under Sec. 25-FFF (1) which creates a statutory fiction, all that Shri Naidu was entitled to, was notice and compensation in accordance with the provisions of Section 25-F as if he had been retrenched. Retrenchment notice, Ex. 7, dated June 29, 1968, quite clearly complies with this requirement. On behalf of the respondent, as already noticed, it is not disputed that there has been no failure to give notice as required by Section 25F, in case Clause (b) is held inapplicable.12. It is also clear that the respondent had not specifically raised any plea of defect in the notice given to Shri Naidu. The Tribunal, however, allowed the objection of the notice Ex. 7 being conditional to be argued on the view that the notice was infirm on the face of it and that the objection was covered by the general plea in the written statement filed on behalf of Shri Naidu, to the effect that the grounds given in the retrenchment notice were all false and cooked up. On this view the notice was held to be conditional and, therefore, invalid and Shri Naidu was held entitled to be reinstated.13. In our view, Shri Setalvad was fully justified in submitting that the management had been taken by surprise and that the Tribunal was in error in holding the general ground in the written statement to cover the specific plea of infirmity of the notice because of its being conditional. The plea of the statutory defect in the notice should, in our opinion, have been reasonably specific and precise so as to enable the appellant to meet it. The general plea could not serve the object of putting the appellant on guard about the precise case to be met at the trial and tell the management the precise nature of the plea with respect to the defect in the notice, to enable them to meet it. In our view, if Clause (b) of Section 25-F is excluded from consideration and the plea relating to infirmity of the notice is ruled out, as we hold on these two points in agreement with Shri Setalvad, then, the impugned order is clearly insupportable.