Summarize the following court judgment. Civil Appeal No. 483 of 1958. Appeal by special leave from the decision dated March 20	 1956	 of the Labour Appellate Tribunal of India	 Madras	 in Appeal No. Bom. 90 of 1952 arising 145 out of the Award dated December 28	 1951	 of the Industrial Tribunal	 Madras	 in Industrial Dispute No. 48 of 1951. February 11	 12. M. C. Setalvad	 Attorney General of India	 B. Ganapathy lyer and G. Gopalkrishnan	 for the appellants. This appeal arises from an Industrial Dispute between M/s. Swadesamitran and their workmen. Three items of dispute were referred for adjudication to the Industrial Tribunal at Madras. One of them being whether the retrench ment of 39 workmen affected by the appellant in May 1951	 was justified	 and if not	 what relief the retrenched workmen were entitled to. The modified award directed the reinstatement of 15 of the retrenched workmen and the question is whether such direction is correct. It has to be remembered that the direction was given on March 28	 1956	 in respect of retrenchment made in May 1951	 with half their back wages. The Tribunal erred in applying the rule "last come first go " as if it were an inflexible rule. The management is the best Judge as to who were fit to be retained and who should be sent out. No doubt	 if the selection of persons disclosed that the management was guilty of any unfair labour practice	 that would have been ground for interference. Tribunal and the Appellate Tribunal found that the action of management in selecting the personnel was not at all malafide. It cannot be said to be unreasonable if persons are selected for discharge because they had reached an age which would affect their efficiency and so fit for being retrenched. It cannot be the rule that once a workmen is entertained he should be kept on for ever. Moreover	 the evidence shows that a committee of three sat for the purpose of making a	 selection and they applied their minds to the problem and took into account all factors	 viz. length of service	 efficiency	 defect in eye sight with regard to very small types and general aptitude for the new kind of work on lino machines. Further	 the workmen had themselves settled accounts with the management and drawn whatever was due to them and their claims having been satisfied it was unfair 19 146 and unjust to direct that they should be reinstated in their old jobs with back wages. The others were found inefficient and irregular in attendance and therefore the selection by the management should not have been interfered with at all by the Tribunal. Principles of social justice do not compel an employer to keep an inefficient or unsuitable and superannuated workman in his service. The principle of I last come first go ' should not have been so strictly applied on the facts of this case. The Labour Appellate Tribunal erred in law in directing reinstatement when it did not differ from the conclusion of the Industrial Tribunal that the strike of the respondents was unjustified and that the appellants had acted bona fide in coming to the conclusion that retrenchment of 39 workmen was necessary. It is only if the Industrial Tribunal was satisfied that in retrenching its employees the appellant had acted malafide that it would be open to the Tribunal to interfere with the order of retrenchment passed by the appellant. The order of reinstatement in substance is inconsistent with the findings about the bona fides of the appellant. The Tribunal further erred in preparing a pooled seniority list to determine the seniority. The management must be given the discretion to run the business in its best interests and it is not for the Tribunal to say that the work done in the several sub sections of composing department was similar and the workmen can be inter shifted. Merely because no record was maintained as to the fitness or otherwise of each individual worker prior to the retrench ment	 it was not right to infer that there was no material for the management to judge of the comparative fitness of the workmen under it. In entertaining the grievance of the workmen against their order of retrenchment the Labour Appellate Tribunal has exceeded its jurisdiction. Retrenchment is and must	 be held to be a normal management function and privilege	 and as soon as a case for retrenchment has been made out liberty and discretion must be left to the employer to select which employee should in fact be retrenched. In holding an enquiry about the Validity of reasonableness of retrenchment of certain 147 specified persons the appellate tribunal had trespassed on the management function and as such exceeded its jurisdiction. C. Anthoni Pillai	 (President	 City Printing Press Workers ' Union)	 for the respondents was not called upon to reply. March	 1. The Judgment of the Court was delivered by GAJENDRAGADKAR	 J. This appeal by special leave arises from an industrial dispute between Messrs. Swadesamitran Ltd.	 Madras (hereinafter called the appellant) and their workmen (hereinafter called the respondents). On November 3	 1951	 three items of dispute were referred for adjudication to the Industrial Tribunal at Madras by the Madras Government under section 10(1)(c) of the (Act XIV of 1947) (hereinafter called the Act). One of these items was whether the retrenchment of 39 workmen effected by the appellant in May 1951 was justified	 and if not	 what relief the retrenched workmen were entitled to. It would be relevant to mention briefly the material facts leading to this dispute. It appears that on August 26	 1950	 the respondents addressed a charter of demands to the appellant in which eleven demands were made	 and they intimated to the appellant that	 if the said demands were not granted	 they would go on strike. The appellant pointed out to the respondents that it was working at a loss and that proposals for retrenchment and rationalisation were then under its active consideration. It promised the respondents that as soon as its financial condition improved their demands would be Sympathetically considered. Thereupon the demands were withdrawn; but on January 24	 1951	 another communication was addressed by the respondents making as many as thirteen demands coupled with the same threat that if the said demands were not granted the respondents would go on strike. A copy of this communication was sent to the State Govern ment which was requested to refer the said demands for adjudication to the industrial tribunal. The Government	 however referred the matter to the Conciliation Officer who found that the demands were 148 not justified. He accordingly made a report on February 22	 1951. Immediately thereafter the respondents wrote to the Government repeating their request for reference	 but on April 24	 1951	 the Government ordered that no case for reference had been made. Meanwhile the appellant was taking steps to effect retrenchment in the staff owing to the steep rise in the prices of newsprint and scarcity of supplies	 the imposition by the Government of India of a price page schedule and the progressive introduction of mechanisation in the composing section by installation of lino type machines. When the respondents came to know about this their Union called for a strike ballot and as a result of the ballot the respondents decided to go on strike. A notice in that behalf was issued on May 9	 1951. The appellant then appealed to the respondents not to precipitate matters	 promised to consider their demands as soon as its financial position improved and warned them that	 if they refused to report for work in accordance with the strike notice	 it would deem to amount to resignation of each one of the strikers of his job. The Conciliation Officer who was approached by the appellant also advised the respondents not to go on strike. Nevertheless the respondents went on strike on May 30	 1951. Before the respondents thus went on strike services of 39 members of the staff had been terminated by a notice as a measure of retrenchment with effect from May 18	 1951. It is the retrenchment of these 39 workmen which led to the industrial dispute with which we are concerned in the present appeal. Before this dispute was thus referred for adjudication the respondents had filed a writ petition in the Madras High Court asking for a writ calling upon the Government to make a reference under section 10(1)(c) of the Act. This writ application was allowed; but on appeal the Court of Appeal modified the order issued by the original court by substituting a direction that the Government should discharge its duties under section 12(5) of the Act. On June 12	 1951	 the strike was called off by the respondents and they offered to resume work; but by then the appellant had engaged 149 new hands and so it was able to re engage only some of the respondents who offered to resume work. The failure of the appellant to take into service all its workmen is another item of dispute between the parties; but with the said dispute the present appeal is not concerned. It was as a result of the order passed by the Madras High Court that the present dispute was ultimately referred for adjudication to the industrial tribunal. The tribunal held that the strike declared by the respondents was not justified and that the appellant was justified in retrenching 39 workmen in question. According to the tribunal	 though in retrenching 39 workmen the principle of I last come first go ' was not strictly followed	 the appellant was justified in departing from the said principle because it was entitled to give preference to " persons mechanically inclined and having good eyesight. " That is why the tribunal rejected the respondents ' plea that in effecting retrenchment the appellant had indulged in any unfair labour practice. Since the tribunal was satified that the retrenchment of 39 workmen was effected in the usual course for good and sufficient reasons it ordered that the said retrenched workmen were not entitled to any relief. The respondents challenged this award by an appeal before the Labour Appellate Tribunal. The appellate tribunal was satisfied that the impugned finding about the bona fides and the validity of the retrenchment was not justified. It	 therefore	 remanded the proceedings to the industrial tribunal for deciding afresh the four points formulated by it. Two of these points are relevant for our purpose. One was whether the formula I last come first go ' had been complied with	 and if it was not	 the tribunal was asked to scrutinise in relation to each individual whether the reasons for breaking the said rule were sufficient in his case; and the other was whether the management was motivated by any unfair labour practice or victimisation. Pursuant to this order of remand the industrial tribunal allowed an opportunity to the appellant to lead evidence	 and	 on considering the evidence	 it came to the conclusion that the appellant had made 150 out a case of necessity for retrenchment and that it had justified the extent of retrenchment as pleaded by it. No mala fides in that behalf had been established according to the tribunal. It	 however	 held that the principle of 'last come first go ' had not been observed in selecting the personnel for retrenchment; and it rejected the explanation given by the appellant in retrenching 15 out of the said 39 workmen. That is why it ordered the.appellant to reinstate the said 15 workmen without any back wages. In regard to the remaining 24 workmen no order was made by the tribunal in respect of any compensation payable to them. On receipt of the findings recorded by the tribunal the matter went back to the Labour Appellate Tribunal. Both parties had filed objections against the findings in question. The appellate tribunal considered these objections and held that the appellant had made out a case for retrenching 39 of its employees; but it agreed with the industrial tribunal that the principle of 'last come first go ' had not been observed and that no case had been made out to depart from the said principle. That is why it confirmed the finding of the tribunal that the 15 named employees should be reinstated and added that they should be given half the amount of their back wages. In regard to the remaining 24 workmen who had been retrenched	 the appellate tribunal directed that they should be awarded compensation at the rate of half a month 's wages including dearness allowance for each year of service. It is against this decision that the present appeal has been preferred by special leave. The first point which the learned Attorney General has raised before us in this appeal on behalf of the appellant is that the Labour Appellate Tribunal erred in law in directing reinstatement when it did not differ from the conclusion of the industrial tribunal that the strike of the respondents was unjustified and that the appellant had acted bona fide in coming to the conclusion that retrenchment of ' 39 workmen was necessary. It is urged that it is only if the industrial tribunal is satisfied that in retrenching its employees the appellant had acted mala fide that it would be open to the 151 tribunal to interfere with the order of retrenchment passed by the appellant; and the argument is that s the order of reinstatement in substance is inconsistent with the findings about the bona fides of the appellant. In our opinion this argument is misconceived. There are two aspects of the question with which the appellate tribunal was concerned in the present proceedings: Was the appellant justified in coming to the conclusion in exercise of its management function and authority that 39 workmen had to be retrenched; if yes	 has the retrenchment been properly carried out ? The first question has been answered in favour of the appellant by both the tribunals below. It has been found that the respondents ' strike was unjustified and that for the reasons set out by the appellant retrenchment to the extent pleaded by it was also called for and justified. It is in regard to this aspect of the matter that the appellant 's bonafides have Do doubt been found; but the bonafides of the appellant in coming to the conclusion that 39 workmen had to be retrenched have no material bearing nor have they any relevance in fact with the question as to whether the appellant acted fairly or reasonably in selecting for retrenchment the 39 workmen in question. It is in regard to this latter aspect of the matter that concurrent findings have been recorded against the appellant that it acted without justification and the retrenchment of the 15 workmen in question amounts to an unfair labour practice. Therefore	 it is not possible to accept the argument that there is any inconsistency in the two findings. They deal with two different aspects of the matter and so they cannot be said to conflict with each other at all. It is then urged that in entertaining the grievance of the respondents against their order of retrenchment the Labour Appellate Tribunal has exceeded its jurisdiction. The	 case presented before us on this ground assumes that retrenchment is and must be held to be a normal management function and privilege	 and as soon as a case for retrenchment had been made out liberty and discretion must be left to the employer to select which employees should in fact be retrenched. In holding an enquiry about the.validity 152 or reasonableness of retrenchment of certain specified persons the appellate tribunal has trespasser on the management function and as such has exceeded its jurisdiction. We are not impressed by this argument. It may be conceded that if a case for retrenchment is made out it would normally be for the employer to decide which of the employees should be retrenched; but there can be no doubt that the ordinary industrial rule of retrenchment is I last come first go '	 and where other things are equal this rule has to be followed by the employer in effecting retrenchment. We must	 however	 add that when it is stated that other things being equal the rule I last come first go ' must be applied	 it is not intended to deny freedom to the employer to depart from the said rule for sufficient and valid reasons. The employer may take into account considerations of efficiency and trustworthy character of the employees	 and if he is satisfied that a person with a long service is inefficient	 unreliable or habitually irregular in the discharge of his duties	 it would be open to him to retrench his services while retaining in his employment employees who are more efficient	 reliable and regular though they may be junior in service to the retrenched workmen. Normally	 where the rule is thus departed from there should be reliable evidence preferably in the recorded history of the workmen concerned showing their inefficiency	 unreliability or habitual irregularity. It is not as if industrial tribunals insist inexorably upon compliance with the industrial rule of retrenchment; what they insist on is on their being satisfied that wherever the rule is departed from the departure is justified by sound and valid reasons. It	 therefore	 follows that	 wherever it is proved that the rule in question has been departed from	 the employer must satisfy the industrial tribunal that the departure was justified; and in that sense the onus would undoubtedly be on the employer. In dealing with cases of retrenchment it is essential to remember that the industrial rule of I last come first go ' is intended to afford a very healthy safeguard against discrimination of workmen in the matter of retrenchment	 and so	 though the employer may depart from the rule	 he should able to justify 153 the departure before the industrial tribunal whenever an industrial dispute is raised by retrenched workmen on the ground that their impugned retrenchment amounts to unfair labour practice or victimisation. It appears that in 1946 the Government of India	 in its Department of Labour	 formulated certain rules for retrenchment and commended	 them to the attention of all employers of labour and trade unions so that disputes on that score may be minimised. Rule 4 amongst the said rules was that as a rule discharge of personnel who are still surplus to requirements should be in accordance with the principles of short service	 that is to say	 last man engaged should be the first man to be discharged. Due notice or wages in lieu thereof should be given. The same principle has been accepted and applied by industrial tribunals on several occasions (Vide : Indian Navigation & Industrials	 Alleppey And Certain Workmen (1); Cuttack Electric Supply Co. Ltd. And Their Workmen (2) ; and Shaparia Dock and Steel Company And Their Workers (3) ). We ought to add that the same principle has. now been statutorily recognised by section 25(g) of the Act. This section provides inter alia that where any workman in an industrial establishment	 who is a citizen of India	 is to be retrenched	 the employer shall ordinarily retrench the workman who was the last person to be employed in the same category	 unless	 for reasons to be recorded	 the employer retrenches any other workman; in other words	 by this section a statutory obligation is imposed on the employer to follow the rule	 and if he wants to depart from it to record his reason for the said departure. In support of his contention that the Labour Appellate Tribunal has exceeded its jurisdiction in examining the merits of the retrenchment effected by the appellant	 the learned Attorney General has relied upon certain observations made by this Court in the case of J. K. Iron & Steel Co. Ltd. vs Its Workmen (4). Dealing with the argument of the appellant that the order of retrenchment should be left to the management and that the decision by the management that (1) (1952) II L.L.J. 611. (2) (3) (1954) II L.L.J. 208. (4) Civil Appeal No	 266 of 1958 decided on 11 2 1960. 20 154 some employees are better qualified than others should not be questioned by the adjudicator unless he came to the conclusion that the preferential treatment was deemed to be malafide	 this Court observed that the proposition involved in the argument was unexceptionable	 it was added	 that	 if the preferential treatment given to juniors ignores the well recognized principles of industrial law of 'first come last go without any acceptable or sound reasoning a tribunal or an adjudicator will be well justified to hold that the action of the management is not bona fide. We do not see how either of the two propositions set out in this judgment can support the appellant 's argument before us. The position under the industrial law seems to us to be fairly clear. The management has the right to retrench the workmen provided retrenchment is justified. In effecting retrenchment the management normally has to adopt and give effect to the industrial rule of retrenchment. For valid reasons it may depart from the said rule. If the departure from the said rule does not appear to the industrial tribunal as valid or satisfactory	 then the action of the management in so departing from the rule can be treated by the tribunal as being mala fide or as amounting to unfair labour practice; in other words	 departure from the ordinary industrial rule of retrenchment without any justification may itself	 in a proper case	 lead to the inference that the impugned retrenchment is the result of ulterior considerations and as such it is mala fide and amounts to unfair labour practice and victimisation. That is precisely what this Court has held in the case of J. K. Iron & Steel Co. Ltd. (4). We are	 therefore	 satisfied that there is no substance in the appellant 's contention that the tribunals below have exceeded their jurisdiction in enquiring into the validity of the retrenchment of the 39 workmen in question. There is one more point which may briefly be mentioned in this connection. After the matter was remanded the industrial tribunal has carefully considered the evidence given by the appellant. In fact it is clear from the record that at the original enquiry no evidence had been led by the appellant to justify (1) Civil Appeal No. 266 of i958 decided on 11 2 6o. 155 the departure from the rule even though it was conceded that the rule had not been followed. The Labour Appellate Tribunal	 therefore	 fairly gave a chance to the appellant to justify the said departure	 and accordingly evidence was led by the appellant. This evidence consists of the testimony of Mr. Lakshminarasimlian	 who has been working with the appellant for 32 years. He works as an Assistant Editor	 and in addition attends to press work. He stated that he was having a personal supervision of the entire work and that when retrenchment was actually effected a committee was appointed consisting of himself	 the Manager Mr. Ayyangar and the Press Manager Mr. Rajagopala Ayyangar. At the time of the enquiry the Manager was dead. According to the. witness the committee took the advice of the Foremen of various sections in deciding which workmen should be retained and which should be retrenched. The witness gave evidence about the defects in the cases of the 39 workmen who were retrenched; and in support of his oral testimony he filed two statements T 1 and T 2 giving material particulars in respect of all the said workmen. It is admitted that no records were made at the time when the cases of these workmen were examined and so the witness was driven to give evidence merely from memory. The tribunal has held that having regard to the nature of the defects attributed to the several workmen to which the witness deposed it was impossible to accept his testimony as satisfactory	 and the tribunal was also not satisfied that it was likely that the witness should have any personal knowledge in regard to the said defects. In the result the tribunal rejected this testimony. It also examined some cases 'in detail	 and it was satisfied that the reasons given for retrenching them were demonstrably unsatisfactory. It is on these findings that 'the tribunal came to the conclusion that the appellant had not shown any valid or reasonable ground for departing from the usual rule	 and this finding has been accepted by the Labour Appellate Tribunal. In such a case we do not see how in the present appeal the appellant can successfully challenge the correctness of the conclusion that in substance the retrenchment 156 of the 15 workmen amounts to an unfair labour practice and victimisation. That leaves two minor questions which were formulated for our decision by the learned Attorney General. He contended that	 even if the impugned retrenchment of the 15 workmen in question was not justified	 reinstatment should not have been directed ; some compensation instead should have been ordered; and in the alternative he argued that the order directing compensation to the remaining 24 retrenched work men was also not justified. We do not see any substance in either of these two contentions. Once it is found that retrenchment is unjustified and improper it is for the tribunals below to consider to what relief the retrenched workmen are entitled. Ordinarily	 if a workman has been improperly and illegally retrenched he is entitled to claim reinstatement. The fact that in the meanwhile the employer has engaged other workmen would not necessarily defeat the claim for reinstatement of the retrenched workmen ; nor can the fact that protracted litigation in regard to the dispute has inevitably meant delay	 defeat such a claim for reinstatement. This court has consistently held that in the case of wrongful dismissal	 discharge or retrenchment	 a claim for reinstatement cannot be defeated merely because time has lapsed or that the employer has engaged fresh hands (Vide: The Punjab National Bank Ltd. vs The All India Punjab National Bank Employees ' Federation (1); and National Trans.port and General Co. Ltd. vs The Workmen (2). Then as to the compensation awarded to the 15 and 24 workmen respectively	 it is a matter of discretion and as such is not open to challenge in the present appeal. In the result the appeal fails and is dismissed with costs. Appeal dismissed (1) [1960] I S.C.R. 806.

The management by a notice terminated the services Of 39 workmen as a measure of retrenchment. The workmen went on strike which led to an industrial dispute. The Industrial Tribunal interalia held that the strike was not justified and that the management had made out of a case of necessity for retrenchment and no malafides had been established; but the principle of last come first go had not been observed in selecting the personnel for retrenchment and ordered the reinstatement Of 15 out of the 39 workmen retrenched. The Appellate Tribunal confirmed the findings of the Industrial Tribunal with certain modifications by way of compensation. The management came up in appeal by special leave. Held	 that where a case of retrenchment is made out the employer has normally to follow the industrial rule of retrenchment last come and first go; for valid reasons he may however depart from the said rule; in that case he has to show by reliable evidence	 preferably from the recorded history of the workmen concerned showing their inefficiency	 unreliability or habitual irregularity and can satisfy the Tribunal that the departure from the rule was justified by sound and valid reasons; otherwise the departure from the rule could be treated as being malafidc or amounting to unfair labour practice. Held	 further that once it was found that retrenchment was unjustified and improper it is for the Tribunal to consider to what relief the retrenched workmen will be entitled; ordinarily retrenched workmen would be entitled to claim reinstatement	 and the fact that in the meantime the employer has engaged other workmen would not necessarily defeat the claim for reinstatement	 nor would the fact that protracted litigation in regard to the dispute has inevitably meant delay defeat such a claim for reinstatement. Therefore the conclusion that 15 workmen were improperly retrenched cannot be sucessfully challenged.