CENTRAL BANK OF INDIA v.

S. SATYAM AND OTHERS

JULY 31, 1996

[J.S. VERMA AND K. VENKATASWAMY, JJ.]

Labour Laws :

Industrial Disputes Act, 1947-Sections 25-H, 25-F; 25-B, L5-G and C 2(oo}-Scope and applicability of-Held, the object is to benefit the retrenched workmen and is applicable to all retrenched workmen and not only to those covered by Section 25-F read with Section 25-B.

Principle of "last come first go" appearing in Sectio1i 25-G-Applicability of-Held, not confined only to wo1ionen who were in continuous D service for one year and above.

Re-employment-P1ioiity of claims-Retrenched workmen covered by Section 25-F-Held, entitled to p1i01ity in re-employment over retrenched workn1en not so covered.

Sections 25-H and 2(oo) read with Industrial Disputes (Central) Rules, 1957, Rules 77 & 78-Plea for restricted inte1pretation of the word 'retrenched' occuning in Section 25-H and the contention that application of the wide nteaning of 'retrenclunent' contained in Section 2( oo) and Section 25-H would render Rules 77 & 78 unworkable.

Constitution of India :

A1ticle 226-Delay/lac11es-Wiit petition by retrenched workmen against the employer after a long delay of about six years without impleading the persons employed dwing that peiiod-Maintainability of

Writ petition was filed by the retrenched workmen after a long delay of about six years before the High Court for reemployment. It was allowed by the High Court. Hence this appeal.

The appellant contended that the definition of 'retrenchment' con- H tained in Section 2(oo) of the ID Act has to be curtailed in its application 214

CENTRALBANKOFIND!Av. S.SATYAM 215

to Section 25-H and that.the word 'retrenched' in section 25-H the same A meaning as it has in Section 25-F read with Section 25-B and 25-G as they all formed part of the same scheme in Chapter V-A of the Act. It was further contended that unless the application of Section 25-H was confined to the workmen covered by Section 25-F, Rules 77 and 78 of the ID (Central) Rules would become unworkable.

Allo\\ing the appeal, this Court B

HELD : 1. The plain language of Section 25-H of the Industrial Disputes Act speaks only of re-employment of 'retrenched workmen'. The ordinary meaning of the expression 'retrenched workmen' must relate to C the wide meaning of 'retrenchment' given in Section 2(00). Section 25-F does not restrict the meaning of retrenchment but qualifies the category of retrenched workmen covered therein by use of the further words "workman ...... who has been in continuous service for not less than one year". Section 25-G prescribes the principle for retrenchment and applies ordinarily the principle of "last come first go" which is not confined only D to workmen who have been in continuous service for not less than one year, covered by Section 25-F.

Section 25-H is capable of application to all retrenched workmen, not merely those covered by Section 25-F. It does not require curtailment E of the ordinary meaning of the word 'retrenchment' used therein. The provision for re-employment of retrenched workmen gives preference to a retrenched workmen in the matter of re-employment over other persons.

It is enacted for the benefit of the retrenched workmen and there is no reason to restrict its ordinary meaning which promotes the object of the enactment without causing any prejudice to a better placed retrenched F workmen. Chapter V-A, in which Section 25-H occurs, provides for

retrenchent and is not enacted only for the benefit of the workmen to whom Section 25-F applies but for all cases of retrenchment and, therefore, there is no reason to restrict the application of Section 25-H therein only to one category of retrenched workmen. [224-A-G] G

Pu11jab La11d Developmel!t and Reclamatio11 a11d Corporatio11 Ltd.

Chandigarh Etc. Etc. v. Presiding Officer, Labour Cowt Chandigarh & Ors.

Etc. Etc., [1990] 3 SCC 682, relied on,

2. Rule 77 requires the employer to maintain a seniority list of H

A workmen in that particular category for which the retrenchment is contemplated arranged according to the seniority of their service. Th.e category of workmen to whom Section 25-F applies is distinct from fhose to whom it is inapplicable. There is no practical difficulty in maintenance of seniority list of workmen with reference to the particular category to

B which they belong. Rule 77, therefore, does not present any difficulty, Rule 78 speaks of retrenched workmen eligible to be considered for filling the vacancies and here also the distinction based on the category of workmen can be maintained because those falling in the category of section 25-F are entitled to be placed higher than those who do not fall in that category. Jt is no doubt true that persons who have been retrenched after a longer C period of service which place them higher in the seniority list are entitlled to be considered for the employment earlier than those placed lower because of a lesser period of service. In this manner a workman falling in the lower category because of not being covered by Section 25-F can claim consideration for reemployment only if an eligible workmen above him D in the seniority list is not available. Application of Section 25-H to the other retrenched workmen not covered by Section 25-F does not, in any manner, prejudice those covered by Section 25-F because the question of consideration of any retrenched workman not covered by Section 25:-F would arise only, if and when, no retrenched workmen covered by Section 25-F is available for re-employment. There is, thus, no reason to curtail E the ordinary meaning of 'retrenched workmen' in section 25-H because of Rules 77 &nd 78, even assuming the Rules framed under the Ad could have that effect. [223-D-H]

3. All the retrenched workmen involved in the present case were employed for short periods between 1974 to 1976. It was only in 1982 that a writ petition was filed by them to claim the benefit of re-employment. The other persons employed in the industry during the intervening period of several years have not been impleaded. Third party interests have arisen during the interregnum. These third parties are also workmen employed in the industry during the intervening period of several years. Grant of relief G to the respondents may result in displacement of those other workmen who

have not been impleaded in these proceedings, if the respondents have any claim for re-employment. The !aches leading to the long delay after which the writ petition was filed in 1982 is sufficient to disentitle them to the grant of any relief in the writ petition. Moreover, there is not even a suggestion made or any material produced to show that on the construction now made H

CENTRALBANKOFIND!Av. S.SATYAM[J.S. VERMA, J.] 217

of Section 25-H, the respondents would be entitled to get any relief in the A highly belated writ petition after a lapse of several years by way of preference over any person employed during the intervening period. The lapse of long period of several years prior to the filing of the writ petition is sufficient to decline any relief to the respondents. [225-A-E)

CIVIL APPELLATE .JURISDICTION: Civil Appeal No. 1811 of B 1992.

From the Judgment and Order dated 28.11.86 of the Andhra Pradesh High Court in W.A. No. 791 of 1986.

G.B. Pai, Mrs. Meera Mathur and O.C. Mathur for the Appellant.

T.A. Ramachandran, Ms. Asha Nair and K. Ram Kumar for the Respondents.

The .Judgment of the Court was delivered by

J.S. VERMA, J. The short question is : whether the re-employment of retrenched workmen required by Section 25-H of the Industrial Disputes Act, 1947 (for short 'the Act') is confined only to the category of relrenched workmen covered by Section 25-F who have been in continuous service for not less than one year ? The controversy arises in view of the \vide n1eaning of "retrenchment 1 ' given in its definition contained in Section 2( oo) of the Act to cover all kinds of terminations for any reason what - soever. This wide meaning is settled by the decision of this Court in Punjab Land Developnient and Rec/a1i1ation Co1poration Ltd.1 Chandigarh Etc. Etc.

v. Presiding Officei; Labour Court, Chandigarh & Ors. Etc. Etc., [1990] 3 SCC

682. On behalf of the appellant (employer) it is contended that the meaning given in the definition of retrenchment contained in Section 2( oo) is to be read subject to the context and the context in Section 25-H indicates that the word

11retrenched 11 in Section 25-H has the same meaning as it has in Section 25-F and 25-G, reading Section 25-F along with Section 25-B since they all form a part of the same scheme in Chapter V A of the Act.

It was argued by Shri Pai, learned senior counsel for the appellant that the object of providing for re-employment of retrenched workmen by enacting Section 25-H was merely to provide for the category of retrenched workmen covered by Section 25-F who had been in continuous service for

not less than one year and not those who had served for a lesser period H

A and to whom Section 25-F did not apply. The present case relates to workmen who admittedly do not fall in the category of retrenched workmen . covered by Section 25-F since the had all worked for a much lesser period.

For this reason, Shri Pai contended that this factor alone excludes the applicability of Section 25-H to the respondents (workmen) in the present

case. The grant of relief to them by the High Court is challenged primarily on this ground. Alternatively, Shri Pai contended that the respondents were employed only for short periods between 1974 to 1976 and therefore, grant of relief to them in the Writ Petition filed long thereafter in 1982 is unjustified on the ground of !aches as well as prejudice to the other workmen employed during the intervening period who are not impleaded.

Shri pai also referred to the Rules 77 and 78 of the Industrial Disputes (Central) Rules, 1957 (for short 'the Rules') in support of his submission.

In reply shri Ramachandran, learned counsel for the Respondents, contended that the wide meaning of the word 'retrenchment' given in the definition contained in Section 2( oo) cannot be curtailed by the effect of D Section 25-F read with Section 25-B since Section 25-F merely prescribes the conditions precedent for retrenchment of the '"orkmen covered thereby and not all the retrooched workmen. He argued that there are no words of limitation in Section 25-H to confine its application only to the retrenched workmen covered by Section 25-F. His reply to the alternative E submission was that it is not a fit case to interfere with the limited relief granted by the High Court.

There is no dispute on facts and the question for decision is only one of construction, mainly of Section 25-H of the Act. The controversy relating to the meaning and scope of 'retrenchment' defined in Section 2(oo) is settled by the decision of the Constitution Bench in Punjab Land Development and Reclamation C01poration Ltd. (supra). It was held :

"While naturally and ordinarily it meant discharge of surplus labour, the defined meaning was termination of service of a workman for any reason whatsoever except those excluded in the definition itself. 11

The kind of termination of service of a workman excluded from the definition is specified in Clauses (a) to (c) and it is not disputed before us that none of these exceptions applies in the present case. Shri Pai argued H the case on the basis that the termination of service of these workmen

CENTRALBANKOFIND!Av. S.SATYAM [J.S. VERMA, J.] 219

amounted to 'retrenchment' as defined is Section 2(00). It is, therefore, A clear that if the definition of 'retrenchment' given in Section 2( oo) is to be applied for the construction of Section 25-H then the requirement of re-employment of retrenched workmen thereby cannot be confined only to the retrenched workmen of the category covered by Section 25-F, under which category the respondents, admittedly, do not fall. The question is whether there is any reason to curtail this definition of 'retrenchment' while construing the meaning of the expression 'retrenched workmen' in Section 25-H. In other words, is the provision for re-employment of retrenched workmen confined only to the category covered by Section 25-F and cannot be extended to all retrenched workmen including those not covered by Section 250F, like the respondents ? It for this purpose, the appellants relied on Rules 77 and 78 framed under the Act, to suggest that the wider meaning could not be intended in Section 25-H.

The relevant provisions are as under :

"CHAPTER V - A

25-B. Definition of continuous se1Vice - For the purposes of this Chapter, -

(i) a workman shall be said to be in continuous service for a period E if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;

(2) where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer -

(a) for a period of one year, if the workman, during a period G of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than -

(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and H

(ii)' two hundred and forty days, in any other case;

xxx xxx

25-F. Conditions precedent to retrenchment of workmen - No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that 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 excess of six months; and

(c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.

E xxx xxx xxx

25-G. Procedure for retrenchment - 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 irn 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.

25-H. Re-employment of retrenched workmen - Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re-employment, and such retrenched workmen who offer themselves for re-employment shall have preference over other persons."

CENlllALBANKOFINDIAv. S. SATYAM[J.S. VERMA, J.] 221

"INDUSTRIAL DISPUTES (CENTRAL) RULES, 1957

77. Maintenance of seniority list of wo1k111e11 - The employer shall prepare a list of all workmen in the particular category from which retrenchment is contemplated arranged according to the seniority of their service in that category and cause a copy thereof to be pasted on a notice board in a conspicuous place in the premises of the industrial establishment at least seven days before the actual date of retrenchment.

78. Re-employment of retrenched workmen - (l) At least ten days before the date on which vacancies are to be filled, the employer C shall arrange for the display on a notice board in a conspicuous place in the premises of the industrial establishment details of those vacancies and shall also give intimation of those vacancies by registered post to every one of all the retrenched workmen eligible to be considered therefore, to the address given by him at the time of retrenchment or at any time thereafter : D

Provided that where the number of such vacancies is less than the number of retrenched workmen, it shall be sufficient if intimation is given by the employer individually to the senior-most retrenched workmen in the list referred to in Rule 77 the nuMber E of such senior-most workmen being double the number of such vacancies :

Provided further that where the vacancy is of a duration of less than one month there shall be no obligation on the employer to send intimation of such vacancy to individual retrenched workmen: F

Provided also that if a retrenched workman, without sufficient cause being shown in writing to the employer, does not offer himself for re-employment on the date or dates specified in the intimation sent to him by the employer under this sub-rule, the G employer may not intimate to him the vacancies that may be filled on any subsequent occasion.

(2) Immediately after complying with the provisions of sub-rule (1), the employer, shall also inform the trade union connected with the industrial establishment, of the number of vacancies to be filled H

and names of the retrenched workmen to whom intimation has been sent under that sub-rule :

Provided that the provisions of this sub-rule need not be complied with by the employer in any case where intimation is sent to every one of the workmen mentioned in the list prepared under Rule 77".

On the rival contentions, the real question for decision is : whether the provisions for re-employment of retrenched workmen made in Section 25-H should be confined only to the category of retrenched workmen C covered by Section 25-F by restricting the meaning of 'retrenchment' in Section 2(oo) for this purpose? Chapter Y-A containing Sections 25-A to 25-J was inserted by Act No. 43 of 1953 with effect from 24.10.1953. This Chapter relates to 'Lay-off and Retrenchment'. Section 25-F prescribes the conditions precedent to retrenchment of workmen. It applies only to the D retrenchment of a workman employed in any industry who has been in continuous service for not Jess than one year and not to any workman who has been in continuous service for less than one year. Section 25-B defines continuous service for the purposes of this Chapter and it says, inter alia, that a workman shall be deemed to be in continuous service under an employer for a period of one year, if the workman, during a period of E twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than 240 days. In other words, the expression 'continuous service for not less than one year' in Section 25-F has to be so construed by virtue of Section 25-B. The benefit of applicability of Section 25-F can, therefore, p be claimed by a workman only if he has been in continuous service for not less than one year as defined in Section 25-B. Any other retrenched workman who does not satisfy this requirement of continuous service for not less than one year cannot avail the benefit of Section 25-F which prescribes the conditions precedent to retrenchment of workman of this category. Section 25-G prescribes the procedure for retrenchment and G ordinarily applies the principle of 'last come first go'.

Section 25-H then provides for re-employment of retrenched workmen. It says that when the employer proposes to take into his employ any persons, he shall in such manner as may be prescribed, give an H opportunity to the retrenched workmen who are citizens of India to offer

CENTRALBANKOFJND!Av. S.SATIAM [J.S. VERMA, J.] 223

themselves for re-employment, and such retrenched workmen who offer A themselves for re-employment shall have preference over other persons.

Rules 77 and 78 of the Industrial Disputes (Central) Rules, 1957 prescribe the mode of re-employment. Rule 77 requires maintenance of seniority list of all workmen in particular category from which retrenchment is contemplated arranged according to seniority of their service in that category B and publication of that list. Rule 78 prescribes the mode of re-employment of retrenched workmen. The requirement in Rule 78 is of notice in the manner prescribed to every one of all the retrenched workmen eligible to be considered for re-employment. Shri Pai contends that Rules 77 and 78 are unworkable unless the application of Section 25-H is confined to the category of retrenched workmen to whom Section 25-F applies. We are C unable to accept this contention.

Rule 77 requires the employer to maintain a seniority list of workmen in that particular category from which retrenchment is contemplated arranged according to the seniority of their service. The category of workmen D to whom Section 25-F applies is distinct from those to whom it is inapplicable. There is no practical difficulty in maintenance of seniority list of workmen with reference to the particular category to which they belong.

Rule 77, therefore, does not present any difficulty. Rule 78 speaks of retrenched workmen eligible to be considered for filling the vacancies and here also the distinction based on the category of workmen can be maintained because those falling in the category of Section 25-F are entitled to E

be placed higher than those who do not fall in that category. It is no doubt true that persons who have been retrenched after a longer period of service which places them higher in the seniority list are entitled to be considered for re-employment earlier than those placed lower be\i.ause of a lesser period of service,_. In this manner a workman falling in the lower category because of not being covered by Section 25-F can claim consideration for re-employment only if an eligible workman above him in the seniority list

is not available. Application of Section 25-H to the other retrenched workmen not covered by Section 25-F does not, in any manner, prejudice tlrose covered by Section 25-F because the question of consideration of any G retrenched workman not covered by Section 25-F would arise only, if and when, no retrenched workman covered by Section 25-F is available for re-employment. There is, thus, no reason to curtail the ordinary meaning of 'retrenched workmen' in Section 25-H because of Rule 77 and 78, even assuming the rules framed under the Act could have that effect.

The plain language of Section 25-H speaks only of re-employment of 'retrenched workmen'. The ordinary meaning of the expression 'retrenched workmen' must relate to the wide n1eaning of 'retrenchment' given in Section 2(00). Section 25-F also uses the word 'retrenchment' but qualifies it by use of the further words 'workman ....... who has been in continuous service for not less than one year'. Thus, Section 25-F does not restrict the meaning of retrenchment but qualifies the category of retrenched \Vorkmen covered therein by use of the further words 'workman ............ who has been in continuous service for not less than one year'-. It is s:lear that Sectilon 25-F applies to the retrenchment of workman who has been in continuous service for not less than one year anc! not to any workman who has been C in continuous service for less thar1 one year; and it does not restrict or curtail the meaning of retrenchment merely because the provision therein is made only for the retrenchment of a workman who has been in continuous service for not less than one year. Chapter V-A deals with all retrenchments while Section 25-F is confined only to the mode of retrenchment of workmen in continuous service for not less than one year. Section 25-G prescribes the principle for retrenchment and applies ordinarily the principle of 'last come first go' which is not confined only to workmen who have been in continuous service for not less than one year, covered by Section 25-F.

The next provision is Section 25-H which is couched in wide language and is capable of application to all retrenched workmen, not merely those covered by Section 25-F. It does not require curtailment of the ordinary meaning of the word 'retrenchment' used therein. The provision for reemployment of retrenched workmen merely gives preference to a retrenched workman in the matter of re-employment over other persons.

It is enacted fot' the benefit of the retrenched workmen and there is no reason to restrict its ordinary meaning which promotes the object of the enactment without causing any prejudice to a better placed retrenched workman.

Chapter V-A providing for retrenchment is not enacted only for t.!ic benefit of the workmen to whom Section 25-F applies but for all cases of retrenchment and, therefore, there is no reason to restrict application of Section 25-H therein only to one category of retrenched workmen. We are, therefore, unable to accept the contention of Shri Pai that a restricted H meaning should be given to the word 'retrenchment' in Section 25-H. This

CEN1RALBANKOFin >Av. S.SATIAM [J.S. VERMA, J.] 225

contention is, therefore, rejected.

The other submission of Shri Pai, however, merits acceptance. All the rctrenchec workmen involved in the present case were employed for short periods between 1974 to 1976. It was only in 1982 that a writ petition was filed by them to claim this benefit. The other persons employed in the industry during the intervening period of several years have not been implcaded. Third party interests have arisen during the interregnum. These third parties are also workmen employed in the industry during the intervening period of several years. Grant of relief to the writ petitioners (respondents herein) may result in displacement of those other workmen who have not been impleaded in these proceedings, if the respondents have any claim for re-employment. The laches leading to the long delay after which the writ petition was filed in 1982 is wfficient to disentitle them to the grant of any relief in the writ petition. Moreover, there is not even a suggestion made or any material produced to show that on the construction

we have made of Section 25-H, the respondents would be entitled to get any relief in the highly belated writ petition after the lapse of several years D by way of preference over any person employed during the intervening period. In our opinion, this alone was sufficient for the High Court to decline any relief to them. It was urged by learned counsel for the respondents that only a limited relief has been granted to the respondents which need not be disturbed. In our opinion, the lapse of a long period of several E years prior to the filing of the writ petition is sufficient to decline any relief to the respondents.

We allow the civil appeal for the reason given by us and set aside the High Court judgments resulting in dismissal of the writ petition filed in the High Court by the respondents.

R.K.S.

Appeal allowed.